APi Group Corporation (APG) Earnings Call Transcript & Summary

Great. Well, welcome to day 2 of the UBS Global Industrials and Transportation Conference. My name is Markus Mittermaier. I'm the electrical equipment and multi-industry analyst. Great to have APi Group with us this morning. To kick off the day here of Day 2, we have Russ Becker with us, the CEO; and Kevin Krumm, CFO; and in the audience, we have Olivia Walton, who heads IR. Gentlemen, welcome. Looking forward to the discussion.

And I think to kick things off, I think you've been a listed company for a couple of years now. What we find interesting about the story is that basically, Russ, over a few decades now at APi, really built a business sort of like in a roll-up fashion in the United States and recently added a big, obviously, exposure with Chubb in Europe and other regions. But maybe talk to us about how you got this business to grow at the sort of like mid-single-digit organic growth rates in a space where I would have thought and I first looked at this, this is basically GDP-type growth, right? Sort of how do you get there to grow at this mid-single-digit organic growth rates?

Well, I need to start, Markus, because when you talk about me doing this for a couple of decades, it makes me sound really old. And just for everybody in the audience, I want to level set, I'm not that old. So -- anyways, I guess, I would start by saying, number one, growth has really never been a challenge for our business. And I think for us, we want to make sure that we're centered on project selection and customer selection first and being disciplined in the opportunities that we pursue. Second, I would say that the end markets that we serve are strong and robust. Data centers, semiconductor, health care, primary drivers in our Safety Services segment. Specialty Services for us, that's infrastructure, the natural gas distribution systems, the potable water distribution systems in our country are in a tough place. Telecommunications, fiber optic, very, very strong markets. It's the race to 5g. And so I think the end markets that we serve are really strong and have been resilient, actually, right through the COVID pandemic. Next, I would say that the protective moat that is really built around the work in the services we provide in Safety Services is around the statutory requirements associated with life safety systems and facilities such as this. So the life safety system in a building like this, I don't know exactly what the codes are in New York City, but my guess is that a facility like this, life safety systems are going to be required by law to be inspected for functionality and operability probably twice a year. And we have a go-to-market strategy of selling the inspection work in the facility such as this first and -- because we know that there's going to be really great pull-through revenue from that inspection work. So in our business, we typically see $3 to $4 of pull-through revenue from every dollar of inspections that we generate. So it's a model that we think is really resilient and allows the business to proceed and work its way through more difficult economic situations.

Got it. Okay. You already mentioned a couple of end markets, data center, semiconductor. Can you maybe highlight a few sort of like what you see out there at the moment, sort of given some of the fears that are clearly in the market around sort of growth going forward? What do you see in these end markets at the moment?

Well, very strong. I mean if you look at our data center customers and -- a lot of their growth is driven by the pandemic and people working from home, et cetera. But they just continue -- their -- actually, their newbuild and expansion programs are -- remain very, very robust for us. That's a part of what we do. But we're really focused on continuing to grow the inspection and service side of that space because we believe that once we're in that facility, the next time they have an expansion, if we're really doing a good job on the inspection and service piece of it, it's going to position us for the expansion work from an installation and a project-related perspective. And that really has been holding true with many of our very, very good data center customers, our semiconductor customers. Obviously, every time you probably open up the newspaper, for those of you who actually look at a newspaper, you see -- you're going to see people still talking about from a supply chain issue, chip shortages, et cetera. And there's a significant effort to bring manufacturing back to the U.S. And so the expansion opportunities from some of our existing customers is really, really robust. And again, we want that project-based work to be the icing on the cake. We want it -- we want to be part of those projects because of the fact that we're doing the inspection and service work, and we've developed a relationship. And the reason we want that is we want our customers to see the value proposition that we bring and not be in a price-driven selection for that type of opportunity for us.

Great. Okay. Perfect. I want to come back on to a topic that you mentioned around inflation and supply chain in a second. Before that, just reminding the audience, you can ask questions by scanning the code on your table and I see them on my iPad here. So feel free to make use of that system, and I'll ask the questions for you. So before I come back to inflation, maybe just one brief update on Chubb, sort of like the acquisitions that you've done last year. I know that you spent quite some time, both you and Kevin, in Europe. Can you give us an update, where does that stand, sort of like what excites you? Where maybe challenges? Just a brief update there.

Yes, happy to. It's interesting the -- as we developed our communication strategy with the Chubb employees as the closing date came close or we closed the transaction on January 3, I guess one of the common themes that we've been using with really all of our employees now is that this is a world of opportunity. And I would say that, that describes how I feel about Chubb today. I would say that the integration is on track and proceeding as we expected. But I believe that the opportunity for us to really take that business to the next level is real. And the more time I spend in the business and moving around the business, the more I see it, the more excited I get about it. There's a tremendous amount of work that needs to be done to really improve the performance of the business. So I don't want to sugarcoat that. But without question, like I can see it and I can feel it. And it really gets me excited. I think one of the bigger challenges with the business is more philosophical and maybe got this way because of the neglected status it had when it was part of both UTC and Carrier, is that from a corporate headquarters perspective, it's almost like they've built this structure where corporate presides over the business. And at APi, we fundamentally have a different view on that in our branch-led business model, in that corporate exists to support the branch and to support the men and the women that are doing the work in the field. And there's a mentality there that the men and the women in the field and the branches exist to support corporate. That's not the way it works. And we are fundamentally changing that approach and that outlook and I feel that we really understand what a good, well-functioning branch looks like. We know what sort of metrics we should be using to measure the performance of that -- of the branches. We need to simplify the reporting and how we're operating in the branches so that we get our branch leaders really focused on going out and winning new business and executing on that business and really taking ownership of their results. And I think that changing that mindset in that operating model is really going to drive the best results. Challenges. I mean we, obviously, are still evaluating leadership and COVID has still impacted our ability, like we still haven't been able to visit Hong Kong or China. Recently, a number of us were in Singapore, and we had some people in Australia. So as things open up, it creates more opportunity for us to be visible in the organization. And I really think that the employees need that, and they -- I think they're genuinely excited about the opportunity of being part of an entity that like really -- like we want to own this business. We want to -- we want this business to achieve everything that it can achieve. We're going to invest in it. We're going to invest in the people. And I think that they've been really lacking that for a long time, and that, to me, is really exciting.

Interesting. So for us as investors to basically think about that part of APi, i.e., Chubb getting to, say, life safety margins over time is not unreasonable to put into our models.

No. No, not even -- I mean this business has got all the potential to perform no differently than our Safety Services business here in North America.

Interesting. okay. Maybe sort of like as a follow-on to that around M&A, capital allocation. Maybe -- 2 questions. Maybe one, Russ for you and then maybe for Kevin sort of like on a broader capital allocation. But in Europe, sort of like is the fragmentation more or less than in the U.S.? Or can you sort of -- the historic APi model of buying smaller businesses, how do you see that evolve in Europe? And then maybe for Kevin, sort of like more broadly around capital allocation plans going forward.

Yes. So I would say that the market is equally fragmented in Western Europe as it is in the U.S. And for those of you not as familiar with the APi story, I think since 2005, we've done roughly 85 acquisitions that range from probably $2 million in revenue up to $400-plus million in revenue, excluding Chubb. And that strategy has worked very well for us over a period of time. And there's an opportunity for us to really get on that train again in both Europe and North America, which is exciting for us. And as Kevin can talk a little bit about capital allocation, but our priority needs to be on the Chubb integration and digesting that acquisition and that deal. And once we live up to some of our commitments, we'll have a greater opportunity to really get going on our tuck-in M&A strategy. So Kevin, I don't know if you want to...

Sure. Yes. From a capital allocation standpoint, I'll say that our focus right now in the near term is on delevering. We took on leverage as we closed the Chubb transaction. So certainly, our focus there is continuing to get back to the 2 to 2.5x that we've talked about somewhere in late 2023. All that said, when we get there, we've done a really good job through the years of deploying capital against M&A, as Russ said. And we're not going to walk past great opportunities right now. But our focus certainly is on hitting that -- those 2023 targets that we put out there. We think from an M&A standpoint, through the years, we've been really successful buyers of especially those smaller bolt-ons, as Russ talked about it. The Chubb business largely has not done that or I'll say, at least over the last 5 years has not deployed capital in that way. And as we look at that business, Russ talked about what excites us about that business. I'll say, investing in that business in some of those ways is pretty exciting as well.

Excellent. Great. Perfect. That's clear. Maybe coming back to some more near-term questions, particularly around inflation, supply chain challenges. Can you give us an update there? I know that there was, sort of like a few months ago, an issue around getting things like sprinkler heads and steel and so forth. But where do we stand on those sort of like more near-term issues?

Sure. I'll take a crack at it to start. So from an inflation perspective, we're subject to the same macro conditions as other companies are right now. So we're dealing with it. Our team has been dealing with it. The price of oil and steel ran up pretty significantly last year. And so we've been on our pricing campaign, our pricing efforts to offset those increases as you would expect. The other place we see inflation show up in our business, obviously, is on material prices that go into our projects, which we pass that price on. Another lever we use is the average duration of our projects and the average size of our projects are fairly small. So it allows us to sort of price through those cycles and get that increase in prices into our projects and our proposals. So we're battling through inflation. We're managing. I think you see our margins in the first half of the quarter are evidence of that. When you start talking about supply chain, that's something that's a little more out of our control. And so what we've been doing there is especially in front of the robust growth we've been seeing, Q4 and now Q1, is making sure that we can secure supply. And so that shows up, obviously, in working capital investment and some of the things we're doing. But the availability certainly is an issue. It causes productivity issues on our job. If our product isn't there to do the work, we have folks that are not productive and, oftentimes, somebody else that's working on the same job we are, if their stuff doesn't show up on time, that also impacts our business. So we're managing through the inflationary aspects, the supply chain aspects. That's about planning and doing the best we can to secure the material that we need to get the work done.

Great. Okay. Maybe I'll ask you one follow-up, Kevin, on Chubb just on some like the synergy targets in sort of like 13% plus EBITDA margin target. Sort of what are the big levers there? How should we think about getting there?

So on the Chubb synergies, as we started basically early when we announced the Chubb transaction, we were -- we announced $20 million of synergies. That was largely due to diligence that we were doing where we saw obvious areas of overlap from a G&A perspective. As we've now been with that business and been able to spend more time with it over the first 4 to 5 months, Russ has talked already about us looking at their operating model and our operating model and thinking about pushing our branch-led operating model through their organization, we start to see areas of opportunity to take above the branch costs out of the organization. And that was really this next view and how we got to $40 million. There's some procurement in there as well, but it was really that look and further thinking about leaning out their model, especially above the branch that led us to increase our current synergy target to $40 million. I'll say on the on the 13%, we've talked broadly about APi getting to 13% by 2025. Chubb obviously comes in a little dilutive to that. But when we look at our business in total, there's the drivers that we think about for broader APi are clearly there in the Chubb business as well. So the big drivers on that, of course, today's environment are pricing. And certainly, it will be -- even as things start to subside, we need to continue our pricing efforts there to recapture some of that. Service as a percent of total revenue is a big driver in our margin expansion as well, has been on the Chubb side -- or sorry, on the legacy APi side, we were in the low to mid-40s. And as we brought in the Chubb transaction, we're now at 50%. We've moved our target there to 60% of revenue from -- coming from recurring service revenue, which comes to us at higher margins. The Chubb business, their life safety business is exactly the same way. They get much higher margins from their service revenue than they do from their project work. So that will be a big driver of it. Continuing to be diligent around customer selection and project selection, and that will happen inside the Chubb business as well, is going to drive margin expansion. We've talked about synergies. We call them value capture internally, which includes shared procurement initiatives, we think is another significant opportunity. The last space we see it is as we now have an international life safety platform, we're looking at areas where we can drive leverage across that by pulling some of that activity up and sharing it across all of our companies that as we go forward here is really going to allow us to bend the cost curve as we continue to dump in incremental organic and inorganic growth.

Interesting. Maybe one follow-up then, what you said around driving or the target of driving the services from, say, 50% to 60%. Would that also then impact cash conversion in a positive way?

Great question. So yes, when we look at our life safety businesses -- all of our businesses in general are asset-light, high free cash flow models. But our life safety, in particular, our CapEx that's required, and Chubb is no different, is much less than the average. And similar to working capital, because of the type of work in doing smaller projects, there's less of a working capital investment that's required. So as we move forward here and continuing to position our revenue further and further to the service revenue models that we have, we certainly will expect our free cash flow conversion to improve accordingly.

Great. Perfect. I actually got some questions here from the room. Can you talk a bit about how you -- and why you win in the typical RFP process? How is APi superior to the competition? And how many competitors are you typically bidding against for new business?

So the word bid is not allowed to be used in the APi environment. And I saw a couple of smiles when I said that, and I'm dead serious. And it's the worst word in the industry because it means that people are only going to choose you for -- to provide those services because of your price. And that's not the environment that we want to compete and win at, and we want to compete and win not based on the value that we bring. I talked a little bit about our go-to-market strategy. But -- so we have a woman on our team by the name of Courtney Brogard that leads the growth and development of our inspection sales team, really across our North American business right now and today. And we are actively, every day, adding inspection sales leaders to our team that are going to basically be boots on the ground, calling on our customers, establishing relationships in the already built environment. And this goes back to this whole mindset of selling the inspection first. And that approach allows us to establish better relationships, closer relationships with our customers and it allows us to continue to take market share and grow the business. I've pretty regularly stated on our quarterly earnings calls that our inspection revenues have continued to grow north of 10% on a quarter-to-quarter basis, and we continue to see that result. And it's because of this -- the continuous build-out of this inspection sales team in this, our business leaders buying into the process and adding the right sales leaders to their teams. And I think that is really the biggest reason that we're able to differentiate ourselves and continue to grow that piece of the business. And again, that's -- the reason that we focus on that is because of the pull-through revenue for service and as well as it allows us to create a much more sticky relationship with the customer. So when they do have expansion needs, we're not competing for that business on price either. So I would say, typically, you're competing with a -- just a very, very small number of people. And oftentimes, when you're really focused on selling the inspection work, you're really competing with the incumbent and you're trying to take that business away from the incumbent.

Interesting. Okay. So the focus on the inspection piece reminds me of a visit I had with you guys a few weeks ago. We actually went on one of these inspections, right? And what struck me, and I want to come back to something we discussed earlier around sort of like your above GDP growth, right? So is one of these reasons that say, if you look at your workflow compared to the workflow of, say, a classic mom-and-pop operator out there, is it that what we saw there was your team had an iPad and they went sort of like room by room in a hotel and they did all the tests and all the faults were sort of like automatically uploaded in a minute to your back office. With the way I understand it is then the RFP, right, like the question in the audience, all the follow-up work is being done. So is that the big difference between your model and, say, a mom and pop who would go home at night and sort of like write the proposal and take time to get to the next inspection, is that the big difference?

Well, I mean, there's a couple of things there, Markus. So yes, technology definitely enables us. And one of the things that we've learned as we've really promoted this inspection-first mindset is that when the inspector goes and -- he or she goes and executes the inspection, the end product is what they call a deficiency report. And that deficiency report gets distributed typically to the owner of the building or the property manager, but it also goes -- a copy of it goes to, what they call, the authority having jurisdiction. And what I would say to the audience is, when I say the authority having jurisdiction, you should just envision that being the fire marshal. So there is a public record of this deficiency report. And in our case, what we've learned is that taking that deficiency report and having a dedicated person in your service department that turns that deficiency report into a service proposal increases the likelihood that you'll be turned loose to make the repairs that have been identified on that deficiency report. The faster you turn that deficiency report into a proposal, the most likely that, that client is going to say, yes, APi, we just go ahead and make those repairs and get that work done. And so for us, that's for sure a best practice. And another big thing like if you think about a small family-owned business, maybe it's doing $15 million or $20 million in sales, it is a lot easier for that company to go chase $1 million installation job and generate $1 million of revenue doing the installation work versus doing it $1,000 at a time from an inspection standpoint. They don't have the back-office infrastructure. It takes resources to get who's going to sell the inspection and then who's going to schedule and dispatch the inspectors and who is going to then turn this deficiency report into a proposal, by the way, we have to invoice it, and we have to collect it. Chasing around $1,000 receivables takes infrastructure. Well, we've built that scale in our business over time. And so we have those resources in place. And so it's easier for us to continue. It's like we've got the flywheel that's starting to turn. And we have that built and established versus smaller family-owned business. And a lot of times, they're going to take their installation. The folks that are doing their installation work and they're going to try to transfer them over to do a service job, and then they transfer them back over to the -- it doesn't work. You have to have dedicated resources for the inspections. You have to have dedicated resources for the service work, and you have to have dedicated resources for your installation work if you're really going to be effective at it and maximize your gross margins.

Perfect. That's very helpful. Time is running quickly here. So I want to ask a couple of questions on the 2022 outlook on the backlog share count. And then in the end, I want to come back to your learning program because that was something that I just want to touch on, that struck me on my visit and we have a graduate of one of your programs here today. So I want to save a few minutes for that in the end. So on 2022, you've raised your guidance by 2% between February and May, leaving adjusted EBITDA flat. So what drives that outlook? Can you just walk us through that again? And I think it implies basically second half EBITDA being sort of like up $70 million incrementally, right? So just walk us through kind of the moving pieces here.

So the guidance was organic revenue guidance that we raised for the full year. A big piece of that is how we've started the year in the first half of the year and what we're seeing. Okay. So we had very strong revenue growth as we started in Q1. We anticipate that carrying through at least for the next couple of quarters. When you get to the back half of the year, we started to see the growth that we see now late in 2021. So we anticipate lapping against that. But the primary driver of that increase in guidance is really what we've seen as we started the year and what we expect to carry through with our current demand at least through the summer. With respect to the EBITDA growth that you see first half to second half, and this is before our Chubb transaction and after our Chubb transaction. First half of the year from a seasonality standpoint is usually a smaller EBITDA performance versus the back half of the year. This is due to really Q3, the summer months, being our biggest quarter from a revenue standpoint. With the Chubb business, they have more Q4 activity than we've traditionally had, but what all that means is the back half of the year is generally a stronger from an EBITDA and revenue standpoint than the first half of the year.

Got it. Okay. Backlog, $3.6 billion at the moment. How would that sort of behave in a normal world in terms of sort of like the burn down the backlog into revenue and into the P&L versus now? I know sort of like we had record levels in backlog. How should we expect that to behave? And how would it behave in a normal world, if I can ask that?

Well, I mean, to a certain degree, it's hard to describe what a normal world is because we haven't had a normal world for a long period of time. So I would expect our backlog to hold up and be strong for the foreseeable future. And again, that goes back to, I think, the -- one of the opening questions and where I talked a little bit about the end markets that we serve. Kevin talked a little bit about our guidance, but our rough revenue guidance is roughly $6.4 billion, $6.5 billion this year, $3.6 billion in backlog. That includes our installation work and some of our -- well, not some, but our MSA work as well as some of our industrial maintenance activities. And if roughly 50% of our revenue is coming from service, you can kind of work backwards and see clearly that we have really good coverage and visibility into what the revenue outlook for the business looks like over the next 12 months or so. But when I think a little bit about our backlog and think a little bit about like what's in front of us, the pipeline remains robust and the opportunities in that pipeline remain robust. And I think from a business leader perspective with tightness in labor markets and how are you going to protect your resources, this goes back to what both I said and Kevin has said, like customer selection, project selection and being disciplined around that is -- not only is it a driver and a key contributor to our margin expansion goals, it's just really important if you're going to continue to execute for your customers, that you maintain that discipline and only take on the opportunities that you can really be successful at. And when you're protecting those resources and being selective, you're going to enhance your margins just through that whole process. So our backlog is really strong. We are in a great spot, and we need to be very disciplined in how we look at where we're going to deploy our resources as we go forward.

Got it. Can you reprice that backlog? Or how does pricing typically work once...

Well, so some of -- yes and no. I mean -- we've been preaching to our businesses for 12 months, 15 months about making sure that you're protecting yourself as you put your proposals together that if you have rapid price escalation on certain products that you're able to reprice those things from the basis that you included in your proposals, and you need to make sure you get that into your contracts. Could I look you in the eye and say that we're -- we've been 100% effective at that? The answer to that would be no. So you're going to have certain situations where you're not able to do that. You're going to have certain situations where your customers are going to say, add it to your price right now because I don't want to deal with it. And so you're going to be making your best guess and your best estimate. And so there's probably different stages of how you're able to reprice that work in your backlog. A lot of the MSA work that we do, the customer supplies the material, so you have no risk there. Our workforce is primarily union. So we have very good visibility into what the wage rates are. So we're able to -- we shouldn't miss on that. If we miss on that, that's our own fault. And -- so we have good visibility there. So we're able to -- we should be able to manage it, but we're not immune to it. That would be probably the best way to put it.

Got it. Okay. That's helpful. Before I come to the learning model, one quick one for Kevin, just around share count. Just maybe remind folks sort of around the -- what's the guided number, the 269 million, I think, versus what you might see in the Bloomberg screen like how do these numbers reconcile?

Sure. So when we guide, we're guiding to an adjusted EPS and really, the difference between what you might see on Bloomberg versus the 269 million is the conversion of our preferred layer. And we have 2 preferred series in our preferred equity. First is a Series A, it's 4 million shares. Call those the founder shares that were established at the time of the acquisition of APi Group. And those can convert to common on a one-for-one basis. And then the other component of that conversion, which moves our share count up to the 269 million is the recent Series B, $800 million that we issued at the time to fund the Chubb transaction. And so when you convert the rest of those, which is probably about $32 million, you get to the full 269 million that we use in our adjusted EPS guidance.

Got it. Just wanted to run through that because it's a question we get a lot.

Appreciate it.

Perfect. Now in the last couple of minutes we have left, Russ, when I visited you, what struck me was, as I alluded to earlier, this -- the learning center you have. And I have to admit, I always sort of like I saw this on your website, I saw you talk about it, and I thought, okay, this is great marketing, right? However, when I went there, what struck me is you have 2 buildings in a campus, the headquarter and the learning center and the learning center was bigger or at least it looked bigger.

Same size.

Same size. Okay, there you go. But it's -- I think it's sort of like the impression that it got me, it was like, okay, so this maybe is more than just putting it on your website. And we have a graduate of that program here today. So how does that make your model different? Can you talk about retention rates? Can you talk about sort of what you do there, what that does to your culture?

Yes. So -- well -- so in the audience today, we have a young leader of ours, Jennifer Miner, who is a graduate of what we call the LDP, which is the leadership development program. And that's a program where we hire young men and women into. We hire a lot of junior military officers. So Jennifer is a graduate of the Military Academy at West Point. And after she fulfilled her service obligation and was trying to find a place in the civilian world, we attend many of their hiring conferences and we try to hire someplace between 6 and 10 of those folks every single year. They spend the first year of their career rotating between 7 of APi's different businesses, getting exposed to the work we do, the individual culture of those businesses, the people, different geographies. And we have a process then that we go through to place that person in that business. So Jennifer is actually helping us start up a small branch in the Fort Lauderdale, Miami, space inside one of our life safety businesses. So it's been a great program. We have, I think, 9 of our company presidents are graduates of that program. But that's just one aspect of it -- of our -- what we're trying to do with our learning and development team. Our core purpose as a company is building great leaders. We've been on a journey of leadership development for 20 years. And early on in my career at APi, it became very obvious to me that if we were going to really move the needle and improve the performance of the business, it was going to start with the leadership. And when I talk about leadership, I'm not talking about it at, so to speak, the corporate level. Well, I am talking about it at the corporate let, but I'm also talking about it at the company level. I talk about it at the branch level, at the department level, and we've taken it even a step further where we've made a very strong statement that we believe that everyone in our company has the ability to be a leader. And therefore, we need to provide every one of those people the opportunity to grow and develop as a leader. And one of the things that I think is very unique about us is that we're taking those learning opportunities to the men and the women in the field. And we are investing in them as human beings and not giving them -- we're doing OSHA training and those types of things, but that's the company's responsibility. What's coming out of APi Group is learning and development that's around how can you be a better person, how can you be a better leader and how is that going to affect the work that you do? And how are you going to take better care of our customers? And so you will always see us put our employee first because we believe that if we put our employee first, then they're going to do a better job of taking care of our customers. And over the course of the last 5 years, we've probably invested someplace between $25 million and $30 million in all of our leaders and all of our teammates across the entire breadth of our business. And it's something that we are in the infancy of taking to Chubb. Those people are striving -- not striving, starving for investment. And I think that's something that's unique that we can bring to them. We've just rolled out an online learning module. It's a 30-minute -- 3 module, 30 minutes long learning opportunity that we've translated into 12 different languages. So it's applicable to the Chubb employees that -- it's called "I am a leader." and it's centered on leading self. And from a leadership perspective, we all need to start with leading self, and then we can graduate to leading teams and leading businesses, et cetera. But it's a huge part of our culture, and it's a huge part of who we are. And I think it's one of the reasons that you've seen us able to continue to improve the results of the business.

Great. And on that note, I'm afraid that's all the time we have. I want to thank you both, and thank Olivia for being here today and enjoy the rest of the day. I'm thinking if those 2 buildings are the same size, I need to get new glasses.

They are.

Thank you.