SISTER COMPANY VALUE PROPOSITION
2018
WHY DOES APi NSG EXIST?
Our History APi National Service Group (NSG) was created in 2006 by employees at Western States Fire Protection. With the realization that many of their customers were moving to national account programs, employees of WSFP – Los Angeles had the idea that, in order to keep those customers, they could dispatch anything outside their service area to another APi Group company. Therefore, APi NSG was born. The main reason APi NSG exists is to provide profitable work to APi sister companies. Our work consists of customers who have a regional or national portfolio of properties that span beyond the reach of any single APi company. Our customers want one point of contact for their national life safety program, which NSG provides. Our margins are conservative; they are enough to only cover our operating expenses, as NSG is set up as a “break even” company (not profit). This allows maximum profitability to you, the APi life safety companies.
Our Future We will grow through the addition of profitable revenue to our family of companies. By 2023, we are seeking to achieve $80MM in revenue and over $9MM in EBITA for the APi family. APi NSG continues to grow as a company and we have exciting years ahead. Our business is dependent on a self-performance model, which means APi companies perform the work. It provides a competitive advantage, as well as a financial benefit to APi companies and employees. Our team created this document to share our goals as well as some facts and figures behind our finances, model, margins, and how truly being a partner with us benefits everyone.
NSG Growth & APi Impact
NSG Growth and APi Impact Goals
$0.00 $20,000,000.00 $40,000,000.00 $60,000,000.00 $80,000,000.00 $100,000,000.00
13.00% 14.00% 15.00% 16.00% 17.00%
2018 2019 2020 2021 2022 2023
NSG Revenue Sister company revenue from NSG work EBITA Dollars EBITA % APi NSG Rev nue ($) r APi EBITA dollars ($) APi EBITA (%)
fr APi NSG work ($)
HOW DOES PARTNERING WITH APi NSG BENEFIT YOU?
OUR SERVICES COVER OVERHEAD
Our sales and marketing teams work full time to identify, propose on, and secure profitable work on behalf of you. This reduces your sales and marketing costs associated with these accounts.
WE PROVIDE RECURRING REVENUE
We contribute to and help sustain the 50% service goal with the addition of profitable recurring service revenue .
OUR CONTRACTS ARE LONG TERM
National account work provides sustainable service revenue and longer-term contracts .
We proactively monitor our open accounts receivables with you and pay you quickly; on average 18 days , and as quickly as 7 days when paperwork is accurate.
WE PAY YOU QUICKLY
OUR WORK IS PROFITABLE
Our work is competitive with other national providers and your local work; average of 38% GM .
By performing APi NSG service orders, we are able to keep all of the margin in the APi family which contributes EBITA dollars to the bottom-line; EBITA dollars equate to higher ESOP earnings.
WE INCREASE YOUR ESOP
OUR PROCESS IS SIMPLE
The service order process mirrors your local work and we are always looking for ways to streamline, reduce waste, automate processes, and pay faster!
WE HELP IMPROVE SERVICE LEVELS
Working with us and our sophisticated customers will translate into improving service levels for your local customers.
WE HELP STRENGTHEN YOUR BRAND
Accepting work from us helps keep the work away from your competition , strengthening your brand and position in your market.
SUPPORTING FACTS & FIGURES
2017 APi NSG Average Days to Pay vs. Life Safety DSO
2017 NSGAverage Days to Pay vs. Life Safey DSO (Sister Co. Only) Average Days to Pay Life Safety DSO
80
71
71
70
70
70
70
70
70
70
70
70
70
70
60
50
40
30
21
20
20
19
17
17
17
17
17
17
16
16
20
10
0
January February March April
May
June
July
August September October November December
2017 APi NSG Average Days to Pay Sister Companies: 18 Days 2017 Average Life Safety DSO: 70 Days
Monetary Representation of the Importance of Self-Performance
ITEM & DESCRIPTION
APi SISTER COMPANY NON-APi VENDOR
A) APi NSG Sell Price to Customer
$1,000.00
$1,000.00
B) APi NSG Cost (Service Provider Price to APi NSG) $900.00
$900.00
C) APi NSG Gross Margin
$100.00 (10%)
$100.00 (10%)
D) APi Sister Company Estimated Gross Margin
$342.00 (38%)
N/A
E) Net Gross Margin to APi
$442.00
$100.00
F) Less Operating Expenses APi NSG (11%) + Sister Company (22%)
$308.00
$110.00
G) Net Estimated EBITA
$134.00 (13.4%)
- $10.00 (-1.0%)
SUPPORTING FACTS & FIGURES
Sister Company Service Margins By Branch APi NSG vs. Local • Jan 2015 - Sep 2017
Sister Co. Service Margins by Branch - NSG vs. Local (Jan. 2015 - Sept. 2017) NSG Local Work LOCAL WORK NSG
70%
63%
60%
56%
51%
49%
49%
49%
49%
48%
50%
47%
45%
43%
41%
41%
40%
40%
40%
40%
40%
39%
37%
40%
36%
36%
36%
34%
33%
32%
30%
30%
24%
20%
10%
0%
Davis-Ulmer Sprinkler Co
Delta Fire Systems Inc
Ellis Fire Suppression
Island Fire Sprinkler & Alarm
K&M Fire Protection
Security Fire Protection
USA Fire Protection, Inc
VFP FireSystemsViking Automatic Sprinkler Co.
Western States Fire Prot
InternationalFire Protection Inc.
Reliance Fire Protection, Inc.
W&M Sprinkler Co, Inc.
W&M Sprinkler- NYC, LLC
Sister Company Service Margins National Account vs. Local • Jan 2015 - Sep 2017
Sister Co. Service MarginsNational - Accounts vs. Local (Jan. 2015 - Sept. 2017)
Sister Co. Service MarginsNational - Accounts vs. Local (Jan. 2015 - Sept. 2017)
Sister Co. Service MarginsNational - Accounts vs. Local (Jan. 2015 - Sept. 2017)
10% 15% 20% 25% 30% 35% 40% 45% 50%
10% 15% 20% 25% 30% 35% 40% 45% 50%
39%
39% 38%
38
39
38
36
38%
38% 36%
38%
38%
36%
0% 5%
0% 5%
5% 0%
AIE APi NSG APi NSG
APi NSG Telgian AIE AIE
Telgian Local Work APi NSG TELGIAN
Local Work Te gian LOCAL WORK
Below is an analysis of tasks that occur throughout the life cycle of a job, which includes pre-work, job setup, job execution, and post-job administrative work. The list below shows tasks that your branch office can eliminate when performing work for APi NSG, saving a significant amount of time on each APi NSG order and relieving overhead for your company . NSG Does the Grunt Work PRE-WORK • Sales process/contract negotiations • Business development
JOB SETUP • Create SV and build job in Astea JOB EXECUTION • Check in & out of external IVR line
ADMIN - POST WORK • Upload backup paperwork (service work) • Submit invoice to customer • Manage collections
• Building/managing inspection schedules • Setting up Astea contracts & installed items
SUPPORTING FACTS & FIGURES
What Makes a Good National Account Customer? What to Listen For: Listen for any of these key phrases during conversations, as this may indicate the customer could be a great fit for APi NSG. A single point of contact for multiple sites
• Consolidation of vendors or wanting to “go national” • An increase in the self-performance across their facilities
• Standardizing pricing across their facilities • Utilizing discounts based on national spend
Recommended Qualities: • Large Facilities • Large Number of Facilities • Strong customer relationship
• Multiple Scopes and/or Systems Involved • Facilities Reach Multiple APi Branch Offices • Customer is Responsible for Fire and Life Safety
To talk about national account leads, email: salesteam@api-nsg.us
Case Study • USAFP
In 2013, United States Alliance Fire Protection (USAFP) was informed by their local customer, Iron Mountain, that they were planning to move to a national fire and life safety program. USAFP brought APi NSG into the conversation, and after going through the RFP process, APi NSG was awarded a contract for inspections and service at nearly 80% of Iron Mountain’s U.S. locations. Not only was this a huge win for all APi branch offices who now perform work at Iron Mountain facilities, but it was also a huge win for USAFP locally. They now perform work at more facilities than before we held the national contract, which has resulted in increased revenue for their branch. The numbers below demonstrate how USAFP’s decision to share their local customer with APi NSG has impacted their revenue.
USAFP Revenue w/ Iron Mountain • 2010-2017
USA Fire Protection Revenue w/ IronMountain | 2010-2017
$140,000.00
$120,000.00
Contract Awarded October 2013
$100,000.00
$80,000.00
$60,000.00
$40,000.00
$20,000.00
$-
2010
2011
2012
2013
2014
2015
2016
2017
Inspections Service
WHAT WE NEED FROM YOU
SHARE THE MESSAGE INTERNALLY
Share the message with your teams. Ensure everyone knows how working with us and national accounts benefit your business and APi as a whole.
Accept our work in a timely manner and execute within the service level agreement (SLA). This includes completing inspections in the month they are due and arriving for service calls within the defined window.
ACCEPT & EXECUTE OUR WORK
TREAT API NSG AS A PRIORITY
Treating NSG work orders as a priority creates a world class customer experience which helps with customer retention and will help us grow together, organically.
FOLLOW SERVICE ORDER INFO
Help NSG meet our customers’ expectations by following service order instructions including any required IVR lines, severity deadlines, and on-time inspections.
EVALUATE US AS A COMPLETE CUSTOMER
Evaluate the profitability of our work as a complete customer, rather than job to job. We understand there are some swings but please evaluate on the total book of business .
TELL US IF YOU HAVE FEEDBACK
Tell us how we can improve. Communication is key to our combined success.
KNOW YOUR METRICS & GOALS
Review and understand your metrics and work to meet or exceed our defined goals . This will help us all perform for our customers, NSG and locally.
Share leads with us. If you hear of a good customer migrating to a national account or you think there might be an opportunity, let us know. Our closing rate is highest from sister company leads, which results in growth of profitable business for our entire APi family.
SHARE LEADS WITH US
Contact Us with Questions and/or Feedback We hope you have found the information included in this document helpful. As always, we welcome your feedback. We continue to work hard every day to be a great partner, bringing profitable recurring service work to help you build your business and contribute more profit to the bottom-line.
Colleen Moselle President 651.925.8595 colleen.moselle@api-nsg.us
888.274.8595 | www.api-nsg.com | 1200 Old Highway 8 NW | New Brighton, Minnesota 55112
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