BrightView Holdings, Inc. (BV) Earnings Call Transcript & Summary

Inaugural Investor Day event being hosted live at our headquarters in Blue Bell, Pennsylvania. I'm John Shave, Vice President of Investor Relations. And I'm very proud to be at BrightView and excited to be with all of you this morning. I would also like to thank those of you that participated in our investment community feedback study, which has allowed us to develop and incorporate content that you find most useful. Before we begin, some brief housekeeping matters. [Operator Instructions] Today's materials and webcast are available on the company's website. Additionally, the online webcast includes the presentation slides that will be referenced as part of today's discussion. Before we begin, I'd like to remind listeners that some of the comments made today, including responses to questions and information reflected on presentation slides are forward-looking and actual results may differ materially from those projected. We will also discuss certain non-GAAP financial measures, and reconciliations will be provided. I encourage everyone to refer to the company's SEC filings for more details on the risks that could impact the company's future operating results and financial condition. For those of you new to the story, BrightView is the leading and largest provider of commercial landscaping services in the United States approximately 7x our next largest competitor. For more than 80 years, BrightView has been providing commercial landscaping services ranging from landscape maintenance and enhancements to tree care and landscape development. Our network of more than 240 maintenance in development branches positions us as a single source end-to-end provider to a diverse customer base at the national, regional and local levels, which we believe represents a significant competitive advantage. We also believe our customers understand the financial and reputational risk associated with inadequate landscape maintenance and consider our services to be essential and nondiscretionary. We are very excited to kick off BrightView Investor Day 2021. And now I will turn the meeting over to BrightView's CEO, Andrew Masterman.

Good morning, everybody, and welcome to our Investor Day. I'm Andrew Masterman, Chief Executive of the company, and I'm actually thrilled to be able to go through our overall business, I share with you our thoughts and strategies about growth going forward and introduce you to many of the very talented leadership we have throughout our organization. First of all, this is my fifth year, I'm heading into my sixth year as CEO of BrightView. And I remain as optimistic as I was when I first joined the company and actually feel the strategies we have in place are positioning our company to grow at even faster rates than we have in the recent past. Again, as I said, 5 years ago, I joined the company amongst looking at not only the extraordinary growth opportunities in the market we have, but also the depth of leadership within the company. Those foundations drew me to come into the company. And as I look forward, how we're able to construct really an evolving picture of a company that is establishing itself in ways that has never been established before. In the landscaping market, a company with $2.5 billion of revenue with over 20,000 employees moving forward and growing as we see ourselves growing is something that drives excitement to the team, excitement to myself, and I really look forward to sharing with you the story. As I said, and I think you heard Brickman and ValleyCrest were 2 iconic companies in the landscaping industry that came together in 2014 to form BrightView. We created a company that has a national presence, one that exists in both the evergreen and seasonal markets, and that basically means those markets that have landscaping services that happen all year round and the seasonal market being one where it snows. We're a full service company that does more than just basic lawn mowing. In fact, we're so much more than that. We have the maintenance. We have irrigation services. We have an extensive tree care network. We provide fertilization services throughout the country as well as underpinned by our design and development groups that create leading-edge designs of iconic landscapes across the country and our development group, which is the largest installer of iconic landscapes across the country. All this underpinned by next-generation technology, which we'll be talking about later. And as I said, we do so much more than just basic landscaping. And as you can see on this slide, the different elements that we do in our maintenance group in the top and the development group on the bottom extends a broad array of different services, which beautifies properties everywhere throughout the United States. Our company today, as we look at our revenue last year, we came in at about $2.3 billion, of which about 3/4 of it was in our landscape maintenance group, and about 1/4 of it or $0.6 billion was in our Landscape Development group. You'll be hearing about these 2 areas in a few minutes later on in the day from Jamie Gollotto, who runs our Seasonal business; and Tom Donnelly, who leads our Development business. Underpinning the entire organization though, obviously, would be our vision and our mission. And I do want to say and really talk about the pride that our entire organization feels and being able to follow a vision of creating and maintaining the best landscapes on Earth. No matter where you go throughout the entire United States, you'll see iconic landscapes and beautiful places where people live, work and play. And all those have had the impression and have had the results of thousands of people thinking and engaging with our landscapes in our environment in order to really fulfill that vision. And how that vision is fulfilled is through our mission. Our mission is really creating that value through our engaged local teams. We're a local company with people engaged on the ground with customers in the communities where we serve. We have the horticultural experts and the leadership and customer service engaged teams who provide these landscaping services. And we pride ourselves that we have the best employees in the entire industry if not in the entire service industry to be able to engage and talk and support our customers in high-end landscaping where we perform, which is really towards the top end of the market. Again, I'll talk about that in a few minutes. The next topic we'll kind of jump into is what is our investment thesis. Why invest in BrightView? Well, I want to focus on 4 primary areas. First and foremost, BrightView is the #1 player in a $70 billion fragmented market. And that's in the commercial landscaping and snow removal services and the maintenance side of the business. #1 player. We're also the #1 player in the development business, which, again, Tom Donnelly will get to in a few minutes. We have a proven and experienced team. And the thing is our company is founded on the principles of ESG. And while ESG may have become a very current discussion point, the reality is we were in an environmental, social and governance company before it was even a thing. We work outside 100% of the time. And because of that, the environment that we work in is somewhere we're constantly advancing, developing and creating. We have a very attractive and scalable business model underpinned by cash generation. And this cash generation is something which has fueled families and people throughout the decades we've been in business and has been a consistent and very reliable source to deploy throughout the company. And lastly, our track record of M&A and the opportunity that we believe we have in M&A going forward. M&A has provided us with dozens of acquisitions and hundreds of opportunities that we continually evaluate and look for that make sense to work within our company. Again, we'll be getting to that in a few minutes. Let's start out with the market. The market, again, a $70 billion market. We only have about a 2.5% share. We believe that gives us extraordinary runway. Within that $70 billion, there's over 350,000 companies focused on commercial-only landscaping. And within that, the market itself grows at a modest 2% per annum rate over time. And while there may be fluctuations as we saw in 2020 with the pandemic, the viability, reliability, sustainability and resilience of this marketplace allows it to continue to move forward. We manage living assets, and that distinguishes our market versus others and the fact that as we maintain a living and breathing animal, we have less variation than you might see in other types of markets. Moving on to our leadership team. This is an extraordinary group of folks, and you're going to have a chance to meet many of them today. The leadership and depth we have across the company, whether it's the decades and decades of experience and landscaping, whether it's the diversity of experience in our corporate staff, you're going to see a leadership team that is dedicated, focused and really driving excellence to not only horticultural leadership and landscaping, but also business leadership in developing other people and delivering results to our shareholders. And as I mentioned about ESG, we are an environmental company. We plant over 100,000 trees annually, offsetting hundreds of millions of carbon. We employ over 20,000 people, and we're focused on making sure that BrightView is an entry point for people and legal immigrants who are coming into this country to provide green cards as well as just allowing people to be able to enter into a company and build a career regardless of their experience and be able to foster a very healthy and skill-based development program. Mandy Orders is going to get a little more into that in a little bit. And governance is unquestionably something we pride ourselves on as a public company and the transparency we provide is providing a foundation of confidence in how we run our business. And let's talk about value. Cash is our key financial metric. We believe this is really where significant value is created. We've delivered over $500 million of free cash flow in the last 4 years and believe that's going to be something we continue to develop and build on. You can rely on that. The cash is something, which has sustainable value creation and is our primary metric. Weather and labor may add some variability to our business. Again, we work outside, and I'm going to get to labor in a second. But these provide very short-term type fluctuations. Long term, the cash elements we have delivers a very strong result. Moving on to labor. There's no question we're in a difficult inflationary environment. Here are some of the details. We do hire 5,000 new employees every spring. It's part of the nature of our business as spring comes, we need more people, and we executed on that in 2021 despite enormous challenges. And we were short. We always have a need for more people. And in fact, just like other companies, it's a very tough labor environment, just trying to find employees to do the work. With that, we did see wage inflation in 2021 that was higher in years past. We saw about a 7% wage inflation versus about 4% wage inflation historically over the last several years. And that's put some pressure on our business. And we need to take some actions against that. We've put into place some proactive pricing initiatives. And as we go into fiscal '22, which starts in a couple of weeks, we're putting together a pricing playbook to talk about customers about the importance of being able to fund the kind of wage inflation we're seeing and balancing that versus the scope of work that we do with those customers. We believe this will have an impact in the third quarter and fourth quarter as we get into the season and typically in line with how our contracts get managed. But within that, even today, our electronic time capture technology has been able to deliver a very tight management of our labor to make sure that we're deploying time on jobs where it's needed and not have excess time. Development has been impacted by material price increases that have been coming into the business that I think is widely known with the inflationary aspects that has put some pressure in the last couple of quarters, and will continue to on the margin side in the development business because of that relationship versus fixed contracts that historically had 3 to 6 months, sometimes 9-month lead times. We're currently shifting that now to really only allowing 10 to 15 days of pricing commitments in our contracts, which has completely shortened and mitigated that. We believe all these things have put some short-term pressure on the business, but are not long-term structural issues. We believe that short-term pressure will show up and it's put some pressure on the range that we have that believe will put us towards the bottom end of our range as we go into 2021, Q4 right now. But we're confident as we go forward that this is going to build back up with some of the actions we have and that in '22 and into '23, the overall structural shape of the business will continue to be strong. John Feenan, will be going into that in some more detail in the financial section of our presentation. And one thing about this, though, the investment we've been able to make with cash and the business we see, we are so optimistic about our recurring revenue. In fact, in the maintenance side of the business, we see a buoyant organic growth cycle beginning. We posted over 12% or about 12% organic growth last quarter. And we see 5% plus, and I underline the plus as we look into Q4 of this year. That recurring revenue drives profitable growth, drives a strong cash flow, and that strong cash flow we'll be using to either do M&A, reduce our leverage or perhaps do share buybacks as we see value in our stock position. Ultimately, that drives into M&A, which I'll be getting to in a second and gets back up into recurring revenue. This virtuous cycle will continue to build our growth. And in fact, as we look at the revenue of the organization, we're forecasting in our guidance that we've previously given to be at the highest level of revenue that we've seen as a company, cascading over $2.5 billion in fiscal '21. And there's more to come in '22. Underpinning this virtuous cycle is a strong, consistent strategy. A national presence, which we have in over 37 states will be accentuated by Jamie Gollotto as he goes into our maintenance business and Tom Donnelly in our development business. And our ability to continue to grow into that national presence is something which we're confident about. Our employees underpin what we do. And we focus so much of our work on making sure that we're a safe and rewarding place. Mandy Orders will be going into that a little bit. Our technology, which Brian Bruce will be talking about after myself, really underpins how we work, and we are so optimistic about how technology deployed in the marketplace is going to continue to have a significant impact on our business and how we work in the field and with our customers, leading to our customer experience. The customer experience here in 2021 is different than it was in 2016. And where we can go with using digital technology is something which is really exciting, using our HOA Connect or BV Connect software combined with just the engagement of our CRM software allows us and our folks in the field to have information at their fingertips to work closely on making sure the landscapes that we have are performing at the level they need to perform at. And that customer experience also underpinned by the training that we have and give and focus in on making sure the customer stays in the center of our culture with intense customer focus being right in the center. Again, all this leads to cash. The business we generate drives cash that funds M&A, reduces our leverage and gives us a fantastic profile of an overall business. And M&A, which I'll get to in a few minutes, we believe is a proxy for organic growth. And John Feenan will go through some of the dynamics around where investing in M&A really has a financial payback very similar to organic growth. All of this underpinned by the vision of creating the best landscapes on earth and our mission and our culture. One thing that I frequently get asked about from our investors is about what are the advantages of scale. And I really wanted to be explicit about this. There are several areas which are undisputable. Our buying power across the thousands of trucks and trailers we buy, our buying power with our hand tools we use. Those are fairly evident in what you could imagine being the largest landscaper on Earth. In addition, I've talked about national presence and our ability to engage with customers at a national level as well as a local level. However, some of the things which may not be as evident is our investment in systems and tools that we're able to create a leading edge technology, enabling a customization in the landscaping, which no other company can do. It ultimately leads to our ability to engage with customers better and manage our crews more efficiently. Professionalism is key. I'm sure many of you out there who go and see landscapers, they may not be in the kind of presence that you see when you see a BrightView landscaper in a uniform using tools that are modern and efficient and giving a professional view into a landscape. But again, where we operate, which tends to be in properties which really value a professional and very straightforward and very tight look of people and landscapes on the properties. How we get there is through a differentiated level of training that comes throughout the business. Again, Mandy Orders will go a little bit deeper into that. We feel that's something which makes the employees at BrightView and unquestionable changed agent or in a different position than we do with our competition. We have a wide local presence. When you look at the operations we have with over 270 maintenance branches, throughout the country, it allows us to be able to operate multiple branches in the same geography, which gives us an ability to maximize route density as well as having overlapping coverage in case someone is sick or ill. In our company, we have people who can come in and service when someone is absent from a particular branch. They just drive 20 miles down the road. It also allows us, as you see in times when hurricanes or disasters approach that we're able to dispatch dozens, if not hundreds of people to be able to help clean up and make sure properties recover. We saw it in the hurricanes in Florida. We see it in Texas today. Our company can deploy people from other regions to be able to come in and help and make sure those properties that we manage and service become functional and become back to normal quicker than anybody else. What this ultimately results for -- results in is superior customer stickiness and margins, which tend to be 200 to 400 bps better than our competition. And the sales we have is driven by multiple levers. And I'm really excited about this because we've seen results start and as I said before, we saw a little less than 12% organic growth in Q1 -- Q3, and we're going to be seeing 5-plus percent in Q4. And why is that? It's from a dedicated, locally driven sales force, over 200 people in that sales force driving and focused on customers and new opportunities in the marketplace. And that's also been fueled by an expansion into omnichannel and digital marketing, which Todd Chambers will get more into. This is allowing that pipeline to increase and an opportunity set that we can go after and identify and build off that growth, which we're so optimistic about. And lastly, accretive acquisitions. Our strong and strong M&A strategy is something which we've been successful at, and we know we'll continue to deliver a solid basis of growth, which will propel us forward at a pretty significant rate. About that M&A strategy. We've done 27 deals since 2017. And I want to go a little bit into that process that we look at. There's about 350,000 commercial landscaping companies. It's a huge market and can be overwhelming when you think about how many companies are in that pipeline. Throughout that pipe, throughout that 350,000, we kind of narrow it down to about 1,000 inquiries, which we've made. And we have about 100 people in the field, about 100 people who have their eyes and ears and thinking about what makes sense. Those 100 people are general managers or people who we've talked about, looking over markets. And again, Mandy will get a little more into some of that structure. But those folks are looking constantly at what companies make sense to be put within BrightView and makes sense to potentially transact with us. Those 1,000 inquiries have led to about 500 significant talks, about 300 indications of interest, ultimately resulting in the 27 deals and the dozens of deals we continue to be talking with at some stage, and we believe we'll continue to layer into an acquisition strategy and an acquisition record that has been fairly significant. That record, as you see on this slide, has been building since 2017. And I'm happy today here in September of 2021 to announce another deal, OnSite, which was a landscaping company, which we acquired in Syracuse, New York. OnSite, combined with our 2019 acquisition of Pro Scapes in Syracuse, New York, creates really a very strong presence in that Upper New York area where we feel confident will provide us a great launching pad to continue to develop our business in that region. As you can see here, we've delivered a consistent level of significant M&A and feel that in 2022, there are multiple targets we have, which will continue to deliver a very strong profile of growth through M&A. So as we look at what we have as a business, and again, we're going to be over the next several hours, really describing in-depth many areas that you're going to hopefully be very excited about seeing what we're doing and the impact we're making in the business. We've had a legacy of over 80 years as a company. We've created wealth for hundreds of people. And the investors over the long time in our business have been rewarded significantly. We stand proud and firm that the leadership team we have in this business is a leadership team that will deliver and we'll showcase how we are the leader in the business, the #1 player in a massive $70 billion market. We have an attractive scalable model, which we believe will continue to allow us to develop leading-edge and best-in-class practices throughout the business, which will differentiate us versus anyone else in the industry. And our track record of M&A success is core to our top line growth, and we'll continue to deliver as we execute on the transactions and the strategy we've developed and deployed over the last 5 years. I thank you for your time today. I hope that we're going to be engaging. I'm looking forward to continuing to our discussion about BrightView and about how -- what we do in creating the best landscapes on earth creates an exciting investment opportunity. With that, I'm going to pass on the presentation to Todd Chambers and Brian Bruce to jump into technology and digital transformation in BrightView. Todd?

Thank you, Andrew, and good morning, everyone. I'm Todd Chambers, Executive Vice President and Chief Marketing Officer here at BrightView. And today, I'll be joined by Brian Bruce, our Executive Vice President and Chief Information Officer to introduce you to our information technology and digital transformation programs. Over the last few years, I've been a CMO for multiple companies. And before joining BrightView, I was a CMO for hire, helping companies define and deliver their marketing and growth strategies. So when I joined BrightView, I initially came on board as a consultant. And during that time, I saw firsthand what amazing work our teams did for our clients. I worked with our strong and experienced management team and I saw an amazing potential for this company. So when I was offered the position of the CMO, it was an easy decision. I took down my consulting shingle. I moved my family from Boston, now to our headquarters down here in PA. And for the last 4 years, I have been and continue to be very excited about being part of BrightView's growth. So today, Brian and I are going to share with you our focus on technology and innovation and digital transformation and how together these help us establish a strong engagement with our customers, prospects and drive operational excellence. Through these investments, we are able to increase customer retention, grow new sales, realize operational efficiencies, all of which helped drive our growth initiatives here at BrightView. So now let me introduce Brian Bruce to share with you our focus on technology.

Thank you, Todd, and good morning, everyone. As CIO at Brightview, I'm responsible for our information technology, supporting both our business teams and all of our customers. I've been with BrightView for 8 years and in that time, it has been incredible rewarding to see the evolution of tech across all of our key functions. Since our merger, we've invested heavily in many strategic technologies in order to empower our teams. For example, in the field, we deployed mobile applications and devices to all of our crew leaders, a team that previously did not use business applications. They're now part of a smart workforce in the field where we do the work collecting data and driving efficiencies, as Andrew mentioned in his opening. In addition, we've released differentiating capabilities for our customers, making it easy to do business with us. Today, I'm going to highlight some of our key technologies and talk to you about how they provide us with a competitive advantage. Let me start with our application blueprint. This provides an overview of all of our applications and how they support the business. Our strategy is to deploy best-in-breed solutions and integrate to a core. Our customer engagement solutions revolve around Salesforce, which is the hub for every customer touch point, and we'll get more into that in a minute. Our operations management solutions provide all of the back office and other functions we need to run the business and are architected around our Oracle ERP. Underlying both of those areas is our foundation of enterprise enablers. For customer engagement and operations management, I'm going to talk a little bit about those solutions and how they support the business today, but also give you a glimpse into the future and what we're going to be delivering in FY '22. Starting with our CRM and Estimating platform. As I mentioned, this is the hub for every customer touch point. With a Salesforce engine, we drive proposals and estimates all the way through delivering services and account management functions so that our teams in the field can manage every customer touch point in one place. We recently completed a customer advisory technology panel that allowed us to get input from our top customers around the country. And as part of that panel, we collected feedback on what they want to see from us next and the #1 feature that was requested is called service confirmation. This new feature is in development now and will be released in '22, will allow customers to get alerts and notifications in the way that they prefer when certain services are completed. Moving on, our mobile quality site assessment application is critical to delivering quality services in the field. This allows our account teams to walk a site with our customers, collect and mark up visual feedback, collect notes on their priorities, but also look at ancillary opportunities and build up a profile of information we need to support them better. The QSA is a critical enabler and something that drives a lot of value for our team members in the field. As part of the technology advisory panel, we also learned that it would be helpful to build these functions directly into our CRM core and Salesforce. That process is actually being rolled out right now. And QSA 2.0 takes all of the information we collect in our QSAs and fully integrates it inside of Salesforce for account manager follow-up. Next, I'd like to talk about our customer portal, which Andrew also mentioned, BrightView Connect and HOA Connect are a critical proprietary differentiator that allows our customers to work with us online. This information can be used to learn more about their services, the work schedules, but also to submit tickets directly to their account teams. And by submitting those tickets, our teams can be alerted when there are things that we need to follow up on, we can track the progress of those tickets and actually escalate, if necessary, to make sure that we're following up on time. The next iteration of our BrightView portal, BrightView Connect 2.0 is going to take those capabilities and add more things that our customers requested of us, including putting their QSAs and their proposals right online in the customer portal. What I'd like to do now is shift gears to our operations management solutions, which provide the backbone for delivering our services. First of all, operations planning is a set of analytical tools that takes the estimates and actuals for individual jobs and roll them up to a branch level and a market level and a regional level, so that we can optimize how services are planned and delivered in the field. Our ops planning tools take advantage of electronic time capture data captured for every job in the field every day and roll it up and allow us to do predictive labor planning and analytics in order to better perform and more -- deliver more efficient services in the field. The next iteration of operations planning is going to evolve those functions with more productive -- production management so that we can do scenario-based planning and help our branch leaders optimize their services. BrightView Telematics is another key element of our technology. Given that we have one of the largest fleets in the country, it's very important to optimize how those resources are used and to deliver efficient services and manage them properly. BrightView Telematics is a GPS-enabled device that allows us to track every vehicle and really focus on driver safety and the behaviors of those trucks and to provide alerts to our management team time when there's things that need to be addressed. But we can also optimize fultilization. We can look at idle time and drive time and average speeds and really make the best use of that data to optimize our fleet as they perform work on their routes. And speaking of routes, we also do route optimization. And so a branch manager can look at how a team is doing and are they taking the most appropriate and efficient routes to deliver those services on a day-to-day and week-to-week basis. In order to supplement BrightView Telematics, we're currently piloting a leading solution called Lytx which allows you to put a dash cam inside of a vehicle and provide drivers with proactive alerts if there are potential safety issues and to do real-time learning and gather that data so that we can better manage the safety of our vehicles on the road every day. And finally, underpinning all of our solutions, we have a very sophisticated business analytics solution that takes the data from those standard applications, our standard solutions and rolls it cross functionally into a data warehouse that allows our management teams to look at the analysis and the impact of the decisions they're making and to make the best use of that data, the most granular data we're collecting out in the field. The next evolution of our business analytics is going to enhance those dashboards to incorporate more cross-functional analysis, tying in finance and marketing and sales and all of the other data across our functions with the operations data that we are collecting. So today, I've given you a glimpse of some of our key technologies, how they support the business and where we're headed in FY '22. And we're really excited to see how Brightview is going to continue to use technology as a competitive advantage. Speaking of which, I'm going to hand that back to Todd now so he can talk about how technology is supporting digital transformation.

Thank you, Brian. I'd like to now continue with our discussion on how we're building on this technology infrastructure you just heard about to use in our digital channels to better engage with customers and prospects. Let me give you a few examples. You heard Andrew mention that we deliver our services locally. So a strong local digital presence in our markets is critically important. And as we move into new markets and offer new services, we need to continue to drive awareness of BrightView and how we're different. And as we continue to evolve our digital marketing strategies, we will be implementing the latest in digital approaches to increase lead generation and sales. So let's take a brief look at each one of these. When it comes to selling locally, bigger is not always better. Many of our customers want to work with a local landscaper, not a large corporate entity. So it's critical for us to show that we're in fact, local landscapers living and working in local communities and with a strong local presence. So when someone does a local search, it's important they come up and see our local presence, local website, regionally specific offers and even see the local teams that they'll be working with. We want our customers and prospects to know that we're part of their communities. And while at the same time, demonstrating our industry-leading resources and capabilities. Now we've been developing this approach for over 2 years now, and we're seeing great results with our website visits alone up 40% over last year. And as we continue to build our brand, awareness is key. We have to keep the market educated on our range of services and capabilities, and it's an ongoing effort. So we drive awareness and engagement in multiple ways. First of all, through broad outreach, by publishing cross-industry solutions through e-books and other promotional materials, it serves as an introduction of BrightView to the market. So think of post-COVID use of outdoor spaces for a competitive advantage or how BrightView can help you address your labor challenges through outsourcing. Next, we have a targeted outreach by focusing on specific solutions for specific markets. Using HOA Connect, which you just heard Brian mention earlier, we can better communicate and manage landscaping in large communities with HOA associations. And then lastly, staying top of mind because not everyone is looking for a solution right now. We need to remind our customers and prospects that we're here to help them when they need it, with newsletters filled with timely and topical information, ideas for them to consider like adding seasonal color to common areas or trimming back vegetation to minimize wildfires. And all of these work together to generate exposure and growth opportunities for BrightView. And as we continue to evolve our marketing, we are incorporating some of the latest digital techniques to increase effectiveness of our lead generation. We are moving to an approach that builds a better understanding of our individual audiences and that allows us to serve up more targeted messaging across a broader range of channels. This approach is referred to as omnichannel marketing, and it helps us deliver greater interaction and awareness, more impactful messaging and ultimately drives a strong desire to engage. The result is we meet -- we reach more people with more touches and can do so more effectively than other approaches, which in turn drives more valuable leads and higher opportunity dollars into our pipeline. And as you know, pipeline is the foundation for organic sales growth. So through all of our lead generation and prospecting activities, we've seen our active pipeline grow by over 50% year-over-year. And this is contributing to our creation of the most comprehensive opportunity database in our industry. So in summary, our technology enablement and digital transformation strategies are helping us fuel the growth engine here at BrightView. Stronger customer engagement delivers increased customer retention and ancillary sales growth. Our operational efficiencies deliver cost savings, along with better quality and safety. And we're launching digital marketing effectiveness through our use of local presence, broad-based awareness generation and advanced digital marketing techniques like omnichannel. And we're doing this all to make sure that we can deliver our growth goals for FY '22 and beyond. Now if you have any questions, there will be a Q&A session following all of our presentations. So thank you very much for listening. And now I'd like to introduce our next presenter, Jamie Gollotto, President of our Seasonal division.

Good morning, everybody. My name is Jamie Gollotto. I'm President of the Seasonal division. I'm delighted to be here and very proud to be a part of BrightView. I'm happiest at work when I'm out in the field with our employees, visiting clients and visiting our sites to see firsthand the beautiful landscapes that we create. This is what makes BrightView a perfect place for me to be. My background prior to BrightView was heavy in manufacturing, which is more focused on the products produced and the machines that create that product. What I find fascinating about this industry is that it's built on its people and their passion for the property's beauty and its possibilities. A few of my favorite projects at BrightView are the development of the Apple campus, the Field of Dreams project, partnering with Major League Baseball and my personal favorite, which is located in the city where I was born, and also represents the birthplace of America, Independence Hall in Philadelphia. The project was to return the ground to its original glory. Brightview crews made significant improvements on the landscape including the replacement of nearly 100,000 square feet of damaged sod as well as irrigation repairs, tree care and improvements to the gardens along the hall's perimeters. My intention today is to provide a clear picture of how the maintenance business fits into the BrightView enterprise and how we will continue to contribute to the profitable growth of the company. We will first start by discussing our services provided in the Maintenance business unit. Our 17,000-plus maintenance employees are far more than Mow & Go service provider. We apply our expertise in a comprehensive commercial landscape maintenance plan that you can see through the entire life cycle of the landscape. We are an all-season service provider, including snow removal, and we provide specialty services performed by Greg Paschal and his golf course maintenance team and Mary Cook and his sports turf team. We also improved the value of our clients' property with smart and cost-effective landscape design and property enhancements. Let's take a deeper dive into the business specifics, including our leadership. Jeff Herold, our Evergreen West President, over 40 years of experience in the industry. He leads the 7 states across the West and Southwest portions of the United States, in addition to our golf and our BrightView Enterprise Solutions business. Michael Dozier, our Evergreen East President, more than 20 years at BrightView, leads 5 states across the southeast portion of the U.S. and then myself, Jamie Gollotto, Seasonal President, 7 years at BrightView this past weekend, covering 21 states comprising the Northeast, Mid-Atlantic, Midwest and Rocky Mountain. We have physical presence in 37 states. However, we have the ability to provide services in all 50 states throughout the country. We have 270 branches as well as 80-plus golf courses served by our 17,000 team members. The tenure of our amazing people is important, and we have 470 over 20 years and almost 150 team members over 30 years with 12 of those an incredible 40 years plus with the organization. Our BrightView Enterprise Solutions business partners with over 100,000 -- 100,000 sites and services 10,000 clients. We have the best-in-class safety performance and service 23,000 sites within our maintenance business and close to 125 when you include BES, having an average site size of over 40,000 and an average satisfaction score of 88%. I'd like to take a moment to discuss how our revenue was divided up and some of our key customers. We're a broadly distributed end market. We have diversity in our portfolio, providing opportunities and balance risks in all economic conditions. An example is during the pandemic, we had growth in our residential HOA segments as pressure mounted in the corporate, retail and education markets. Our largest customer base is our residential HOA and military, where we serve over 10,000 residential communities nationwide with the goal of improving the curb appeal and increasing property values. Our next largest segment is our corporate campuses to create a beautiful environment that welcomes and inspires clients and enhances employee productivity while setting themselves apart from the competition and extending their corporate brand. Lastly, we have a strong opportunity in the healthcare and education markets and are implementing sales and marketing strategies to capture. Contract size is driven by a large portfolio of accounts with those over 100,000 annual contract value, representing 51% of our contract revenue. However, we have balance and diversity in portfolios across all levels. As you can see here, our fiscal 2020 actionable revenue of $1.7 billion, the largest piece of that being our contract book of business, which is $1.1 billion, which we'll discuss in more detail as our strategic net new objective. And rounding out the portfolio is approximately $450 million of ancillary, which is outside the contract and our $200 million of snow. We service a large number of best-in-class and most notable marquee clients. We have strong relationships and intense focus on our clients' success, a diverse mix of projects and clients support our growth at the local levels. The conversation is now going to shift to our 3 top strategic initiatives in our upcoming fiscal year. They are to develop and retain the talent as our people are our most important and greatest asset. They make the business run, drive organic growth throughout the new business and client retention to get to a 2% to 3% plus level and accelerate our price increase to offset current inflationary market conditions to retain team members and provide quality service to our clients. Let's dive into each initiative in more details. First is developing and retaining our talent, which is built around the employee life cycle. We provide enterprise solutions that support the development of BrightView talent throughout this, from recruiting and interviewing to onboarding and training with our for the field, by the field initiative to performance management and succession planning. Our priority is to enable BrightView employees to develop skills that will allow them to grow their careers within BrightView and drive employee engagement and retention. This will lead to greater client retention and organic growth. Supporting our strategies is an investment in technology solutions to automate and enable these processes. These systems will give each of us better visibility into our progress against this strategy and usage of these programs. This all will create a level of visibility and accountability to allow us to measure progress and celebrate successes with recognitions and rewards. It is my pleasure to share some of these recognition events which occur regularly throughout BrightView to reward these champions of the industry. From sponsoring green cards, approximately 250 in process, the celebrating safety with food trucks, barbecues and raffles, employee of the month recognitions, anniversary awards with equity awards at 5-year and 10-year anniversary dates, onboard welcoming packages and new uniforms and equipment. A quick story I'll tell you is it was interesting when I wanted to gather these pictures for this event, we have what we call our -- it's called Our BrightView. It's a corporate Intranet, it's sort of like Facebook. And it wasn't hard for me to find these events. This is where our own employees at a branch level or all levels of the organization could go online and post their favorite events, pictures and things that are happening at their business. I only had to go to July and August to find these great pictures, which made it very easy. Now I'd like to move into our second initiative, which is organic growth. The fundamentals of our business and our industry remain strong and are optimistic about the ability to drive sustainable organic growth. We have provided previous guidance of 2% to 3% lane contract. We're seeing signs in all maintenance verticals that the impact that pandemic is subsiding, and our business is recovering, creating optimism about our ability to drive this growth. We are confident in its ability to continue to drive this net new business which is a direct result of our expanded sales teams, sales enablement technologies, continued focus on improved retention through customer satisfaction and engagement. Our strong net new momentum will continue with a stronger focus. The first component of this is net new is sales. Over 6 years ago, we set out to create a professional sales organization evolving from sales and maintaining existing relationships at the same level. Today, we have over 200 sales leaders and business developers who established relationships to drive this new business opportunities through strategic partnerships at both a national and a local level. As with any fairly new organization, we seek to continue to strengthen this functional team through additional processes, training and development and rewards and recognition. Our investment in the sales team has driven sustainable organic growth. In addition, we are strengthening this function through the integration of marketing resources and investments. Results and goals expected are to improve our close states with our increased pipeline in all markets and increase our sales employee retention in tenure. The next component of net new is retention of our existing customers. On of the key strategic priorities of BrightView was intense customer focus and is crucial to client retention. To support this topic, we conduct a semiannual client satisfaction survey process. They get direct feedback from both our new and our existing clients. One of the questions we ask our clients is would key deliverable will drive them to be highly satisfied in our relationship. When analyzing these results, our clients have told us that their proactive behaviors and proactive communications have become the top 2 drivers of their satisfaction. In today's competitive marketplace, we must be proactive in engaging with our clients. Brightview prides itself in providing a forum for customer feedback and responding accordingly. Therefore, we have developed responses to this evolving market requirement that is driven by direct and system-driven communications. Here's a few examples: A proactive communication on labor and staffing strategies, introducing and communicating our BrightView connect and the power of proactive communications that it delivers. Our quality site assessment communication that Brian Bruce spoke about, what's itemized follow-up on action items, improved with QSA 2.0 rollout. These systems and actions will assist us in responding to this increasing market request. Shifting from our land growth actions, then we're now going to touch on our snow service. Late in 2020, a team of leaders throughout the seasonal division were brought together to develop a 3- to 5-year snow business model. This group of cross-functional leaders acknowledges the identified opportunity and the attention this business demands. The core objectives of this team were profitable growth, a quality service delivery model, strong market brand perceptions and aligned customer communication. The current actions being developed and executed are an increased snow capture rate by bundling up our snow services with our land services, incentivizing our team members to stay on board throughout the winter to self-perform more services. This will result in investment in our people and a corresponding investment in additional equipment to provide the tools needed to be successful and then capitalizing on our solid snow performance in FY '21 to grow organically. Initial results are very encouraging and very successful, as you can see on the chart. Through the strategy of bundle up as well as our growth with our national partners and an improved retention rate, we were able to grow the snow book of business almost 11%. Our goal is to mirror our landscape organic goals, which is double the industry average while bundling and building a sustainable, long-lasting infrastructure as we reward and recognize team members for growing this business. This wraps up net new targets. I would like to spend a minute discussing our pricing initiative next. Historically, wage inflation has been around 3% to 4%. We are currently experiencing 7-plus percent wage increases as well as double-digit increases in material and fuel cost. Therefore, we must react and accelerate price to ensure we retain our team members, provide quality service to our customers and protect our margins. Therefore, we created a pricing playbook to provide context on cost inflations and discuss strategies and tools to branch leadership to conduct effective price increase negotiations. These tools include reasons and evidence to support the price increase, preparation for this conversation by understanding your clients, and a framework for approaching price increase negotiations and a talking point template. This playbook has been delivered to all leaders in training and education of this playbook is well underway as we enter our renewal period. In summary, why BrightView will win. Scale of a local company with a national presence; systems and capabilities, relationships are in place; listening to customers, focusing on what they care about; training and retaining our great team members; and lastly, strong tenured leadership at executive and branch levels, all leading to driving profitable growth. Let's go back to Independence Hall, my favorite project. I'm confident the sense of pride I have in this project is similar to the pride, all my Brightview colleagues have for their own individual favorites. That's what sets BrightView apart from others. I'd like to now welcome Tom Donnelly, who is a President of our BrightView Landscape Development business.

Well done. Thank you. Thank you. Good morning, and what an exciting moment for me to get to talk about our part of BrightView for a few minutes. I'm Tom Donnelly. I'm the President of Development Services. I'm the old guy here today. I prefer to say I've got the most experience. I got to tell you that presentation that Jamie just made was fantastic, and I really appreciate the efforts everybody at Landscape Services is contributing to this business. And I started the company in 1980, and I've been part of a steadily growing company ever since. As an opener, I want to share a few thoughts about our core beliefs. We look at the business in a 3-pronged approach. We believe in strong relationships, best solutions, of course, and unmatched delivery. Our model is project-based, and we've learned over the decades of experience that highly repeatable customers tend to be higher-margin customers for us. Using insights gained from our robust CSAT interview process, our team is focused on the client experience with solid technical solutions, delivery that's unmatched on the job and nurturing inception to completion relationships. We're proud of our legacy. I want to start with some of the projects that we've been working on. And we make projects beautiful and it seems that every year, I add another favorite to my list of one-of-a-kind projects we've been a part of. From the Apple headquarters in Northern California to the ExxonMobil headquarters in Houston, and this year, to SoFi Stadium opening up to the public in Los Angeles. It's the new home of the LA Rams and the LA Chargers. SoFi will be the site of the 2022 Super Bowl, and fans there will experience the lakes, water features, the impressive landscape our teams installed as the pandemic changed the way you'll learn to work and to stay healthy. We've earned the reputation and we are a national leader in the landscape industry. We focus on our national brand. We want to make sure that we're very humble about that and we stay as a very local company. We're proud to have 27 branch locations across the U.S. and 3 design studios. 2,400 team members nationwide, we're established in great markets as a local company, and our teams live, play and work in the communities we are part of every day. Proudly, 11% of our managers and supervisors have over 20 years' tenure. And we don't rest on being the #1 landscape and irrigation provider. And our commitment to safety of the workforce is evidenced in the industry-leading metrics for total recordable incident rates and EMR scores. Our teams consistently earn about 90% satisfied and highly satisfied customer satisfaction scores. We have 1,100 active projects with an average project size of $1 million. And when we are measured against the revenues of our other specialty contractors of all trades across the nation, we are proudly the 40th largest. Moving into our client base. Repeat marquee clients are our goal, especially through intense customer focus. As you can see, our end markets are diverse, we show a nice mix and a balanced distribution of contract sizes and verticals, including commercial, hospitality, parks and public facilities. Our sales channels include direct-to-owner and significant penetration to the general contractor segment. We have purposely increased our workload in the public sector which is a market likely to benefit from increased infrastructure spending on the horizon. I've mentioned our focus on repeat customers as core to our growth, and these logos represent just a sampling of the recurring clients we serve. Our team is quite talented and we aim to make the client experience easier. At the core, we are a landscape company and clients value the work we self-perform. Over the years, we've added additional skill sets. And with access to labor constrained and scheduled completion dates being impacted day-to-day, we aim to make the client experience easier. As we've built these capabilities, we've also expanded our share of the project wallet, including deploying our terrific design and predevelopment teams at the tip of the spear, where we engage clients early in a development process assisting with designs and budgets and technical challenges at the project level. A quick story on the image at the lower right of the slide. This is a project at LoanDepot Park in Miami, home of the Miami Marlins, where we negotiated a design-build project, replacing the game day field during the off-season of 2019 and 2020. We're not resting on our accomplishments, and we intend to stay at the leading edge of this industry. Underpinning our growth is a culture of continuous improvement and maintaining a leading edge requires innovation in the field and adopting new technologies to support production. We've established centers of excellence for estimating for procurement and project management and our field leadership is dedicated to the craft of landscape and innovative tools to get the work done. Brian spoke to you a little bit about technology and the things that are going on at his level in the IT department. We're deploying GPS for our equipment, telematics for our fleet, electronic time capture and real-time production data for supervision. All of these tools are enabling same-day decision-making opportunities and importantly, much more transparency across our team. I am firmly believing that we are positioned to grow. We have a competitive advantage, and I think our organic scaling is going to be an important part of our growth in the future. We have a history of developing leaders and a long track record of profitable growth. Our deep bench is the basis for organic growth going on today in locations like Nashville, in New York and Salt Lake City. And as Andrew mentioned, we've got a lot of M&A activity going on. And recently, some of the acquisitions that BrightView has closed on included some bolt-on opportunities for landscape development in Las Vegas and Austin and new branch operations in Reno in Charleston, and we welcome all the new team members to our BrightView Development Services team. Speaking of teams, teams really do matter and the development services team is special. We're skilled. We've got a highly trained workforce. We're 2,400 team members, 2,000 of those folks are in the field, over 400 in management and supervision. We have a commitment to provide from within that leads to significant tenure at the professional and the field ranks. We believe that we learn by doing. We can continue to attract the right people and grow our field in particular. A key success factor for us is our local operation. This representative branch structure supports our scalability throughout our markets. Our playbook is straightforward. It's been in place for a long time. And not surprisingly, this model turns out to be a great recruitment, magna, for us to attract new talent as we grow. Our branch manager is responsible for financial performance and client development, functional support for the branch managers provided by sales and estimating, project management, supervision and of course, the crews in the field. This model is stable. This model is repeatable. This model is scalable. And this model is foundational to our organic growth plans. Now moving into a few KPIs kind of interesting to see that put-in-place construction has grown to over $1.5 trillion. We think our addressable market exceeds $20 billion or about 1.5% of PIP. Population growth data from the 2020 census is an upside for us aligned with our branch footprint density in California, Arizona, Texas and Florida, in particular, but not exclusively. There's growth opportunities for us all over the country. And of course, the ABI or the Architectural Billing Index, now lifting above 50 following the pandemic declines as a leading indicator for us, and we are encouraged by the pipeline of work we are tracking across our markets. Before I get into this slide, I want to focus on this photograph for a second. That's a project in the Bronx, New York City. It's Van Cortlandt Park. If anybody is aware of that place. That is a golf course driving range that we built on top of the largest underground water filtration plant in the United States. That's about 9 acres of golf course driving ranges you see there. It's really a fantastic project. You go back to the presentation. Combined, I think the strategies I've shared with you today lead to attractive financial results. Our backlogs are robust, and we have a long tail into the future. As I shared earlier, our revenue streams are diversified. We've got a nice mix of public and private market, owner-direct and general contractor channels, and balanced segmentation and contract sizes. Supporting BrightView goals, we generate strong free cash flow. And at approximately 2% of revenue, our CapEx is an area of discipline for us. We deliver top quartile EBITDA margins as well. So in closing, our cohesive 3-pronged approach is a market strategy for nurturing highly repeatable and profitable customer relationships. We're leveraging our national footprint. However, our local teams are focused on the local markets and local relationships. Our branch managers and their teams continue to seek opportunities in their market. We are winning and own the #1 or close to #1 position in all the markets we serve while continuing seeking and delivering best solutions, importantly, informed by the client experience because their perspective matters. We use design and predevelopment as competitive advantages. And every chance we get, we want to bring landscape services into maintenance conversations early and frequently. The big blue machine is unmatched. Our highly tenured workforce has an unparalleled ability to do the work and provide the level of craftsmanship expected of our company. We have a history of on-time and on-budget performance and a history of highly repeatable and highly profitable customers. We're going to take a quick break, and we'll be back shortly. Thank you. [Break]

Welcome back, and good morning. My name is Amanda Orders, and I am the Chief Human Resources Officer here at BrightView. I'm excited to be here with you and have the opportunity to share just a small portion of the great work we are doing at BrightView. I've been with the organization for about 9.5 years. I actually started back with Brickman in 2012. It's hard to believe I've been here that long, honestly. I've been part of the evolution that brought us to BrightView. And the one thing that has continually held true is the passion this organization has for our people and our teams. If I try to correlate my role with what the organization does, we develop, maintain and enhance and grow. As the leader of people, I get the opportunity to create strategies to grow people's careers. I'm especially excited to talk to you today about our ESG initiatives. Our commitment to ESG will continue to make BrightView a great place to work and contribute to our success. As Andrew said earlier, ESG has been important to BrightView before it became an important initiative. We've always been an environmental organization, and this just allows us to expand our focus. Not only is this the right thing to do, and you're going to see that in the programs we share with you today, it truly helps the bottom line. I'm going to now introduce my coworker, Brett Urban. He is the CFO for the Maintenance division, and he will be addressing and walking you through what we're doing on carbon neutrality. Brett?

Thank you, Amanda. I am both personally and professionally excited to be here today to discuss an initiative that affects everyone on our planet. And that is our pledge to better the environment that we all live, work and play in each and every day. My name is Brett Urban, the CFO of our Landscape Services Business. And along with managing the day-to-day finances of our maintenance business, I also oversee our mergers and acquisitions department as well as our fleet and procurement departments. Now you may be wondering why a finance professionals up here today talking to you about the environment. It's a good question. Well, I personally have a passion for this project as well as in my professional responsibilities for BrightView. Overseeing the fleet and procurement departments, I have the unique ability to impact BrightView's success in this initiative as we move forward. It's an important initiative, and I'm really excited to talk about it. So let's jump right into our mission and our pledge. Our mission as the best landscaper on earth is to lead the landscaping industry to carbon neutrality. We were doing this through a few areas. One, we'll be reducing and eliminating our carbon discharge in the environment. We also look to remove and recapture carbon that's currently in our atmosphere as well as ensuring that our future practices are sustainable. All this towards our goal of carbon neutrality by 2035. So let me take you through our strategy on how we plan to accomplish this. As you can see on the page, this is our environmental strategy summed up in 1 page. And I'm really excited to take you through this today, starting with the 2:00 o'clock hour with our fleet. BrightView currently operates a top 30 commercial fleet in the United States with over 11,000 vehicles. And we plan to replace this fleet with electric and fuel-efficient vehicles moving into the future. At the 4:00 o'clock hour, with our equipment, BrightView plans to convert all of our 2-cycle gas and fuel equipment to electric power. Currently, we have roughly 50,000 pieces of this equipment that we own and operate today. At the 6:00 o'clock hour in regards to our real estate, we currently own or lease 300 parcels of real estate annually. And this is a critical piece to our environmental strategy to retrofit and build these real estate properties to support green and solar energy. At the 8:00 o'clock hour, in regards to sustainability, as Andrew mentioned before, we currently plant approximately 100,000 trees a year, but we'll look to double these efforts as we move forward and plant more and more trees into the future that will capture and restore some of the carbon that's currently in our atmosphere. We'll also look to switch our fertilization efforts to organics as well as continue to invest in irrigation technology, all towards water conservation. And lastly, stewardship, BrightView as a leader in the industry, has a unique ability to change our industry moving forward, not only for us and our landscape partners, but as our vendors and suppliers alike. So what to expect from BrightView in the coming years? In the next 12 to 24 months, we expect to deploy over 500 electric and hybrid vehicles. We've already started this in the latter half of 2021 with our first purchase of 100 fully electric vehicles that are being deployed as we speak into our management ranks. We'll also begin to convert our 2-cycle equipment as well as assess all of our real estate to build out the infrastructure to support electrification. By 2027, which is only a few short years away, we expect all management vehicles in our fleet to be converted to electric or hybrid options. This is roughly 30% of our 11,000 vehicle fleet will be converted by 2027. Additionally, in regards to our 2-cycle equipment, which is our #1 carbon output today is in our 2-cycle equipment. We plan to convert all 50,000 pieces of this equipment to electric and sustainable energy. By 2030, we plan to have upwards of 2 million trees planted, and we expect BrightView to be around 75% carbon neutral. All towards our goal of carbon neutrality by 2035. So let me take you through a few benefits. The first and it speaks for itself is Brightview's positive impact on the environment. And this is the most exciting for this initiative. The internal benefits in regards to fossil fuel, which we currently use approximately 15 million gallons of fuel and oil a year. We assume this will be reduced by approximately 90%. Additionally, in regards to our equipment maintenance, where we spend roughly $25 million to $35 million a year, we expect these costs to be reduced by upwards of 50%. But the really cool thing is when you come see us in the future and you come to one of our branches, this is what you should expect to see. This is our BrightView branch of the future. And as you look at this, you see solar panels on every roof. You see covered parking areas where our trucks are parked, being charged through electric charging stations. You see wind turbines in the background that are providing energy to our internal shops, which are charging our law mowers and charging other handheld equipment as well as bicycles where our employees can ride to and from work and trees and greenery as far as the eye can see surrounding our branches. I'm personally excited to lead this initiative for BrightView, and I look forward to reporting our success in the near future. I now turn it back to Amanda to take us through social responsibility.

On to social responsibility. The S is really about the culture we create at BrightView. Social responsibility is how we interact with our people and how we show up in our communities. Our biggest opportunity is our people. We are a human capital company. Everything we do is through a human being. In the last 80 years, we've employed over 1 million people at the crew level. And today, more than 3,000 of those crew members and crew leaders are still here with us with 10-plus years of experience, many well into the 20s. So we spent time building engaged teams. And one of the best ways we can do that is to provide ownership in the company. Today, we have over 5,600 owners from the crew level, all the way up to senior management. Many became shareholders during our IPO. All of this equals to less turnover and truly impacts Brightview's overall performance. We know this is working when we actually take a look at our retention. So we are an industry leader in retention. We've had improvement during the pandemic, while the industry overall saw a deterioration. I think we can all agree this last year has been one of the most challenging years we've all faced. We provide manager stability, and that really drives our employee engagement. There's a heightened focus for us on training and ongoing communications. And I'm going to share a little bit with you about our training. We have been building BrightView University since late 2016. This is a huge differentiator for this organization. We have career paths for all employees. It's for the field and by the field and Jamie referenced that. Every program we create is in collaboration with operations. We get the best in these roles, and they help us architect what's next for the generation behind them. Just a few stats so far on where BrightView University is today. We have over 200 branch managers that have gone through our branch management program. We have over 1,200 account managers who have gone through our account management [ 101 ] program that focuses on customer, client retention and quality, all things that tie back to what BrightView is about. If you think about this, we've trained more people at BrightView than the 5 top landscaping companies behind us so far. And as I continue talking about our continued training and development initiatives, BrightPath is our frontline on-the-job career program. This is a huge investment. It's an investment on our largest workforce population that we have. It truly is a game changer. This sets us completely apart from our peers. More than 15,000 employees over time will go through this program. This will lead to diversity through our ranks as more and more people grow in the organization and figure out what's next for them in their career. Speaking of diversity. While we are at the beginning of this journey, I think you heard what Andrew referenced in the beginning, 70% of our total population is that of ethnic minority. So we have had a deliberate focus on inclusion in celebrating diversity for quite some time. Our strategy though around this evolution will continue to show up in how we hire, how we promote and how we train our team members for the future. In addition, we need to ensure we're listening to our teams. And with that, we're creating a culture council for 2022. This is an inclusive cross-business, cross-functional leadership forum designed to give leaders involved at the local level and develop shared ownership as we continue to build out our solutions. We have to make sure we're listening to our team members as they are the experts and we need to ensure we embed their information into our strategy as we move forward. We are providing diversity, education and training to raise awareness and understanding ongoing. In addition, we've established 2 ERG groups, which are employee resource groups, to promote inclusion and engagement. Two of those so far, one is focused on women in the organization and the second is on our veteran community. Social justice is truly just how we show up in the communities in which we live and work. Our fund for social justice supports organizations and initiatives that promote equality and inclusion at the local level. Just a couple of examples of this fund for social justice are: Our partnership with HomeAid Atlanta. This is a not-for-profit that builds and renovates housing for individuals that experiences homelessness. The second one I'd like to highlight is Marjory Stoneman High School in Florida. BrightView installed a tranquility Garden, including hydroponics display and a butterfly gardening. The response within our company has been truly gratifying to me. In just a few months since inception of this fund, BrightView has already made impactful donations to over 26 charities that address the consequences of injustice. Now let's move on to the G of governance. We are the gold standard, and that is where we hold ourselves. E-Verify helps us ensure we are hiring people who are legal to work in the United States. If you look back on our history, back in early '16, we were doing this in states where it was required and then certain customers in certain locations had started the process. By the end of 2016, the entire BrightView platform was on E-Verify. Many of you probably remember the old I-9 paper form, where you showed your identification, you filled out some information. That way leaves a lot of room for air. This is important to many of our customers, and it gives us a distinct competitive advantage as well. This is the gold standard. We actually are the only landscaping company to uphold this standard across all 50 states. So E-Verify is an aspect of corporate governance. And a few other points I would like to make about governance are as follows. We are a public company, and we have been for over 3 years. We put in place a strong, best-in-class public board. We are increasing diversity and independence of our Board. We have a very broad skill set. You check out our skills matrix on our website, you see we have most of those boxes ticked off. And each Board member brings diverse perspectives with strong ethics and a great moral compass for this organization. So in closing, how we show up in our environment, in our communities, how we treat our teams has always been deeply rooted in the culture of BrightView and in our leadership, and that will not change. I look forward to any questions you may have about this important topic later, and I thank you for your time today. I'm going to hand it over to John Feenan, who is our Chief Financial Officer, and he's going to be doing a financial review, which I'm sure this is what you've all been waiting for anyway.

I am blessed to work with a really deep and talented team. And obviously, you just saw that throughout this morning. Today, I'm going to focus on several investment pillars: organic growth, margin enhancement over time, our M&A focus and the focus on inorganic growth. And then I'll also talk about cash generation and more importantly, how we're deploying that cash. First of all, let's start with the level set. BrightView is a very compelling investment opportunity. The metrics speak for themselves. Whether you look at free cash flow yield, enterprise value or P/E, we definitely trade at a significant discount relative to our peers. But more importantly, I'm going to outline today the key elements that we're going to focus on going forward, focusing on growth, margins and cash flow and what we intend to do with that. Let's start with our 2 foundational financial principles. We have made a lot of effort in rebuilding BrightView model for consistent deliverable organic growth. We've seen the early benefits of that strategy in Q2 of this year, 10% snow contract growth. We followed that up in our fiscal Q3 with double-digit land organic growth. And as Andrew alluded to, we're very confident in delivering 5% land organic growth in the fourth quarter of 2021. More importantly, we feel we're well positioned to continue this into fiscal 2022 and beyond. In addition, we have a very consistent and resilient free cash flow generation model. Since 2018, we've delivered approximately $500 million of free cash flow, and we've maintained a very steady cash conversion ratio of approximately 80%. The key is how we deploy that cash and how do we benefit BrightView shareholders. While I'm going to talk about that this morning through our accretive M&A, deleveraging our balance sheet, looking at potential share buybacks and other initiatives. Let's start with our business model. The business model creates a cycle of high free cash flow and reinvestment capacity. The recurring revenue model is where we start. That drives profitable top line growth. That, in turn, delivers strong free cash flow, which is predictable and consistent. And as I've stated historically, we will continue to focus on reducing our leverage, focusing on accretive M&A and also potentially looking at share buybacks. The other interesting thing when you look at our strategy is coupled with approximately $400 million of liquidity. This gives us tremendous optionality as we finish out fiscal 2021 and head into fiscal 2022. Let's talk about our top line growth. We feel that we can deliver 4% to 6% per annum. So let's break that down. On the maintenance side, we think we can deliver a 2% to 3% growth. We've invested heavily in our sales team. We track our net new, which has been positive. We're improving our contract growth. I'm very confident in the initiatives on the maintenance side of the house. You couple that with development of approximately 1% to 2% growth. The Development segment has proven pre-pandemic that they can grow consistently in that range of 1% to 2% factor in a stabilizing construction market, we're very confident in the development of 1% to 2%. Then you couple that with 2 to 3 of acquisitions. We have a very robust pipeline. As everybody knows, we self-fund our acquisitions with internal cash. And the key takeaway is we think this is very doable both near term and long term and allows us to grow at 2x the industry average. Let's talk about margin improvement. There is a credible path to 13% consolidated margins. In 2021, we'll delivered between 11.7% and 11.8% consolidated margins. That's an improvement over fiscal 2020. And what I would characterize as a very challenging environment. How are we going to get there? First, we'll focus on ancillary. Ancillary delivers higher margins and is key to the business. Next, in our development, we're confident we can get back to historical performance and drive very good leverage through our cost structure in the Development segment. Then you have pricing and productivity. We're very focused on the pricing. As you heard earlier today from Jamie, we're very focused on our productivity and efficiencies, leveraging the technology. And we think those elements can really help in getting margins to where they need to be. And we're realistic around labor. Right? We're experiencing labor pressure like most companies in the service industry, but we're aggressively pursuing pricing to offset and mitigate any impact on the labor pressure. What does this all mean is over time, we're confident we can deliver 12% to 13% consolidated margins, which is significantly ahead of our industry peers. Let's talk about cash. We have a stable and predictable model for free cash generation. The genesis of that is it starts with an EBITDA growth. We're focused on organic growth. We're focused on productivity and an accretive M&A model to drive that EBITDA growth. You then couple that with a very efficient management of the balance sheet through our working capital efficiencies. We're improving our DSO. We have a very efficient and well-defined payable system, and we have minimal inventory. And then you couple that with our prudent capital expenditures. We average 3% to 3.5% per annum of revenue, and the focus is ongoing growing that top line. What that all means is a stable and consistent free cash flow, where we've averaged approximately $120 million since 2018 coupled with a very high cash conversion of approximately 80% and then most importantly, deploying that cash effectively through accretive M&A, where we've been able to get our transactions consummated in the range of 5 to 7x and then coupling that with deleveraging to less than 3%. Let's talk about M&A for a couple of minutes. We feel this is a proxy for organic growth. First of all, we're very good and have gotten better at tuck-in acquisitions. I put an example on this slide of a modest example of approximately $5 million, earning 10%. We have our diligence process and our strong-on-strong strategy. So these are well vetted before they come on board. And it's really important because we get an established client base, we get proven financial results and most importantly, we get the leadership and the people that have the customer relationship. So what does that look like a year to 2 years out. Here's the same example, a $5 million business that was generating approximately 10%. And within the next year to 2, we're able to accelerate growth. We focus on pricing. We put more emphasis on ancillary. We look at the operations of the business, both in the field and in the back office. We have an enhanced procurement model, which I would argue is best-in-class in our industry. And then we look at all the detailed costs, whether it's their footprint, headcount, the real estate, how they run the business. The key here is there's no silver bullet to get the bottom line results. It's very process-driven. There's a lot of singles. It's a very detailed approach. We've refined it since we've started in 2017. And from a governance standpoint, we also include a post-mortem 1 year out on each specific deal. And you see in this example, where we've had modest growth from $5 million to $5.3 million and then improved our returns to approximately 15%. Let's take it one step further. We get a lot of questions on this, so I wanted to touch base on this today. This is an illustrative example. The top row of data is BrightView's consolidated return on invested capital. And you can see over the last 12 months, we're slightly north of 12%. In the implied M&A ROIC, the example that I've given today assumes that we purchased a company at circa 10% profitability, which would be a well-run company. And then we've implied a return of approximately 12%, which I would argue is relatively conservative. And then obviously, if we can generate better returns, 13%, 14%, 15%, obviously, the math gets better. The key is the link to our free cash flow generation that we're prudently deploying our capital and getting accretive returns. In this example, which is out of our results from a dollar standpoint, but it does have an implied return of 12%. I've gone back -- we'll use 18% as an example, where we've taken the annualized revenue of what we purchased that year of approximately $117 million times the 12% implied return gives us approximately $14 million of EBITDA and the return of $13.5 million is driven by the cash outflow that year that we had for those businesses of approximately $104 million. So this is, again, an illustrative example that further cements our strategy of focusing on accretive M&A. So what are the key takeaways today? How do you think about BrightView long term? I think it's very clear the model is all about free cash generation and how we deploy that. And how do we get there? Well, we have our top line revenue growth, which is very, very important. We've rebuilt the BrightView model on the organic side and we have a very significant pipeline on M&A, so you can expect low single-digit growth there. We have a pathway to get our EBITDA margins to 12% to 13%, which will generate significant cash with our cash conversion. So we have a very repeatable and stable business model. And then again, using that cash, think of 3 things; delevering the business to less than 3x leverage, driving profitable growth through organic and accretive M&A and potentially looking at share buybacks as well. So very appreciative for everybody's attention this morning. Looking forward to your questions and will now take a brief pause in action before we start our Q&A. Thank you.

Okay. Welcome back, everybody, to our Investor Day today. We're going to be going to the questions from the field, and we're all ready to field anything coming out there. First question, I think, is coming in from George. George Tong from Goldman. Can we please have the operator go in and navigate the Q&A session, please.

Your first question comes from the line of George Tong from Goldman Sachs.

You indicated that wage inflation has been approximately 7% over the past 2 quarters compared to 4% in earlier years. Approximately how much is pricing growth stepped up in response at BrightView? And to what extent does the competitive environment allow pricing increases that catch up with wage inflation?

That's a great question, George. And clearly, as we look at the pricing environment, I'll have Jamie get into a little more detail in the maintenance group on that. Initially, while we certainly didn't expect the kind of inflation that we're seeing during the pricing environment we had in the early part of 2021, it's accelerated. And so we have in the ancillary side of our business, been able to match kind of the inflationary trends and the current pricing that we have in ancillary, which happens within that 6 to -- 6-week time frame or less between bid and actually installing the ancillary business. The other side of the coin on the contract business, those tend to be contracts which were negotiated, frankly, in the fall of 2020 into the spring of 2021. Right now, that's the playbook we're putting in play as we anticipate coming then into the next phase, given the kind of inflationary pressures we see. But I'll have Jamie perhaps comment a little more detail on some of those other things that we're doing.

Thanks, Andrew. I would say if there's any positive to this is that we're prepared for it. It's not a surprise to us. And as Andrew just said, we're coming up on a renewal period where we negotiate our next year's contract pricing. So the best thing we could do now is prepare our teams, prepare our leaders for that conversation. And quite frankly, as the industry leader, we need to lead the industry and get the price increase that deserved by everybody. And it's a three-pronged approach. We have to maintain our quality that our customers deserve. We have to retain our employees and we also have to protect our margins. So we're prepared. It's not a surprise, and we're ready to take action.

Very helpful. You mentioned in the financial highlights that the longer-term organic top line revenue growth targets in the low single digits. How do you think about your targeted growth rate across -- or between maintenance and development? What are your aspirational growth targets for each of those segments?

Yes. If you look at it, and I think John went into the basic expectations of growing between 2% to 3% organically in maintenance and 1% to 2% in development. Some of that is within the kind of the scope of what we see today coming in. I will have to say, as we here in Q4, we're seeing 5% plus, in fact, trending even higher than that as we see the organic growth rates and in the maintenance side of the business. We believe longer term that we can continue to deliver at twice the industry average that we see out there. So perhaps north of that. In the development side of the business, I think Tom went into a little bit on what some of the trends we're seeing in the construction business. Maybe I'd like Tom to comment what he sees on going forward in development, some of the optimism that he sees and markets as we look out.

Well thank you Andrew... [Audio Gap]

[Operator Instructions] Your next question comes from the line of Andy Wittmann from Robert W. Baird.

Thanks for the presentation today. I guess just kind of going back to the pricing actions that you've got in place here. I guess, on one of the earlier slides, I think it said that you expect a '22 3Q, 4Q impact. So I guess, are you expecting that -- how do I phrase this, that the margin percentage is up in the back half of next year? And is the implication then that obviously, you're going to have to kind of probably eat some of the labor headwinds maybe for the first half of the fiscal year. Do you believe that the margin profile for '22 can be up year-over-year on a full year basis?

Let me let Andy talk briefly about this, and I'll hand it over to John to get into some more detail on the margins. Right now, we're seeing in Q4 and then we expect in Q1 with the Delta variant to the coronavirus, it's putting some more impact on labor than we expected that, combined with the inflationary elements. Thus, we're seeing kind of, again, over time coming in a little heavier than we anticipated even as recently as a couple of months ago during our last call. So with that, we're seeing that pressure kind of in the short term. With the pricing turnaround, we think that could help fuel margins as we get towards the back half. But I'll let John kind of talk a little bit more in detail.

Thank you Andrew. First of all, we're quite confident in being able to deliver improvement this year at 11.7% to 11.8% versus 11.6% last year. We're very -- have a lot of conviction in the chart I put up there on our path to 13% consolidated margins. All of the initiatives that I talked about, the pricing, the focus on ancillary, getting the penetration rates back up, the things we're doing on development, managing the cost, getting the pricing to offset wage inflation, so being aggressive there. All those steps are in place to look at improving margin profile going forward. We'll obviously have more to say in the fourth quarter about what our expectations are for next year.

Okay. I will stay tuned for that. Oh there was an echo, I thought that was me. I'll continue assuming that's an echo. On the CapEx that's needed for the branch of the future, I mean, that looks like a pretty substantial investment with solar panels, EV charging stations for very large fleet et cetera. John, can you talk about the kind of average CapEx per branch that you expect for something like that? And if that's baked into your guidance of 3% to 3.5% of revenue for those types of transformation costs at the branch level are in addition to that 3% to 3.5%?

Yes. I'll give some top-level comments, Andy, and then I'll let Brett add to my comments because he's been instrumental in this initiative, but that is baked into our guidance of 3% to 3.5%. We're going to have it phased in over time. So there's not going to be some huge influx of -- outflux of -- outflow of capital in fiscal 2022. And I'll let Brett give you a little bit more color on the specifics.

Thanks, John. As we look at our real estate today, we currently own approximately 40 of our 300 properties that we occupy. And we're looking at the investment into those properties. We have companies looking at today for us of how to retrofit those to support our electric energy moving forward. As John mentioned, that's included in the capital guidance, but critical step in the ability to achieve our electrification of our fleet and our equipment to build out the infrastructure to support that.

I'm going to add on a little bit to that, Andy, because what you look at, and clearly, it's going to cost capital to put some of those investments in, but we already purchased today thousands of vehicles and tens of thousands of handheld products over the course of the year. So we believe that as time goes forward, the deflationary costs of higher volume manufacturing will likely bring the cost of procurement in line with where we're at today. Any incremental CapEx that might trend us towards maybe the higher end of that 3% to 3.5% range is going to come with a really solid payback. Because one of the things on ESG investing and investing in the branch of the future is it's going to reduce our reliance on fossil fuels. We spend a significant amount of money on fossil fuels. And as we look at it, frankly, the investments we could deploy if the technology was available today to the robust levels we need for trucks that toe or things like that or lightweight handheld tools, if those investments were available today, they actually present compelling returns based on the reduction of fossil fuel consumption. And so as we get closer to when that technology actually develops into a point where it's widely available in a commercial way, we'll be very clear about that. But actually, we're actually -- we want to kind of get ahead of it as technology develops because, frankly, reduction of fuel costs in our P&L, not only on the variability we have with the movement of fuel, but also the ability just to reduce that cost is something which is going to be an exciting return on that investment for investors.

Great. I guess my final question just would be on acquisitions and the pricing surrounding those acquisitions today. I think you mentioned in the slide deck, you gave some illustrative examples, but just asset values for businesses are up across the board. And I was just wondering is that a relevant factor or first of all is that kind of what you think are acquiring?

Yes. On our M&A strategy, we're pretty solid in how we approach the multiples or the prices that we pay for our acquisitions. And if they start getting too expensive, we walk away. And certainly, there are deals in the space, which have gone for quite strong multiples. We've been involved with some of those discussions. But as those discussions start trending too high, fortunately, our pipeline is quite robust. And the discussions we have really are talking with those players, which kind of match with us and have the same type of financial kind of goals that we have in doing those deals. We believe we deploy capital very efficiently in the M&A area, and we're going to be sticking to our overall plan. And we believe there are abundant opportunities to execute within the guidance that we've given before that we execute that plan to.

[Operator Instructions] Your next question comes from Hamzah Mazari with Jefferies.

My first question is just when you think about landscaping being a local business. And you're one of the companies that has scale and is doing strong-on-strong M&A. Could you maybe touch on the scale benefits of being a national landscaping company? I know you touched on technology, maybe labor you can scale up as well. Maybe just give us a sense of the scale benefits you have relative to the local competitor and maybe tie into that how your retention looks like versus kind of the local player as well.

Sure, Hamzah, I'll be happy to elaborate on that. And how I'll elaborate on that is really showcasing an example of a region that we operate in. And I'll pick San Francisco as the example. In San Francisco Bay Area, the Greater Bay Area, we have over 20 branches in that location. And by having that density that we have there, it allows us to travel really no more than 10 or 20 miles in the San Francisco Bay Area to service customers as opposed to that local competitor that may have 2, 3, if they're large. And so as you see that being able to get quickly to a site, it allows us to either price more competitively than that local competitor or it allows us to be able to generate stronger margins. What we tend to use is that is maintaining a margin profile that we believe is superior to the competition that we see out there. And we validate that by just looking at the acquisitions we see in general in both those that we execute on and those that we don't. So we really believe that, that is one element. I talked about another element earlier which was the ability to take employees and move them to cover in case other employees are sick or don't come into work. We have a network in the San Francisco Bay Area of dozens of irrigators, tree specialists, and overall fertilization experts that can basically cover and execute issues that may happen in a property, whether it's a tree limb that falls down or an irrigation system that has failures. If you're working with the competition, they may have 2 or 3 branches, they may have 3 or 4 people, but the breadth that we have always allows us to tap into that resource base and the depth of that resource base to cover that area within San Francisco. And the third point I'll make is, again, using that San Francisco Bay Area. In the branches, we have employing several thousand people just in that particular geography supported by the production managers and account managers in that area allows a team work on a camaraderie amongst literally dozens, if not 100 professionals in landscaping just working for BrightView that allows best practice sharing as well as being able to think about leadership development in a way that no other landscaper -- landscaping company can do. All of those things combined together. There's not one single bullet which actually says this is the big differentiator. All of those things coupled together ultimately leads us to having better and best-in-class margins and customer service levels, which we believe lead to retention, which follows up to your last point on -- to your last question on retention. We have a benefit of looking at literally every single year dozens, if not 100 transactions and looking at the trend of retention rates those companies see, we see ourselves leading the industry in our retention rates. We see in a very strict definition of retention, which basically says, do you have dollar at the end of the year for the dollar that you started the year with. And if you look at those retention rates over the course of the last several years, we've seen an improving profile of retention as we cascade for, we believe continues to add to the overall profile of organic growth, and you're seeing that in the organic growth rates that we're seeing in the company today.

That's very helpful. And my follow-up question, and I'll turn it over, is just on the development business. Do you see the mix changing at all between private and public? It's gotten to be more public recently. And then have your conversion rates on development work, giving you more maintenance work. Has that stayed pretty consistent as well? I know the COVID downturn probably creates some noise there.

Sure. Fortunately, we have Tom here to be able to address that directly.

Well, I'll take the markets. We have been in the public markets for decades, literally. And we've been purposefully migrating more into the public market over the last 3 years. We showed that data earlier in the slide presentation. As far as conversions go, as I said in my presentation, we're trying to -- thank you. I apologize -- I'll look at the camera. We've been focused on introducing our landscape services teams to our clients that are converting our installs to maintenance every chance we get. We have a very collegial and collaborative way of sharing leads and bringing our landscape services team members in to do those conversions. And there's examples all across the country of some great conversions. Matter of fact, the SoFi Stadium project, which I showed you is a conversion from install to landscape maintenance. One of the more famous projects that we've done recently, the Apple headquarters up in Cupertino, California is another one, a great example where we can bring the 2 teams together and create a great install and a conversion to landscape services that's going to last over time.

We will now take questions submitted by webcast participants.

[Indiscernible] can you talk a little more about the priorities in that category and what you see as the key takeaway for the investors?

The question I just heard was from the webcast again about the priorities for our cash and how we want to use it for investors. And I think I'll have John jump on that one.

Thank you, Andrew. We have been very disciplined in the use of our cash. In no specific quarter, we plan to delever the balance sheet and get to a leverage ratio of less than 3x. And then the other bulk of the cash utilization is going to be on the accretive M&A. We have a very robust pipeline. Over the last 3 years, we've averaged about $100 million of cash utilization on the M&A front. And then the third thing, which is something that's recently come up as we're also thinking about share buybacks because of where our shares trade now. So those, I would say, are the 3 specific areas of cash utilization.

Andrew, we have another question from a webcast participants. We appreciate you sharing details around your organic growth strategies and we're good to see the long-term growth range of 2% to 3%. Can you please expand upon the near-term trends related to organic growth in fiscal 2022?

The question on the webcast was about what we think about near-term trends on organic growth and especially as we look into 2022. I can talk briefly about kind of what our near-term trends are, and I'll have Jamie follow up on that. We're super encouraged by what we're seeing in the marketplace. The business, the investment we've made in our sales team, combined with the improved retention rates we're seeing are leading to levels of organic growth in the contract base that we really haven't seen as a company. We posted over 11%, almost 12% growth in Q3. Again, we're seeing above 5% growth here in Q4. And I think as we look into Q1 and Q2, the net new sales that we're seeing come into the business, and those rates continue to support a higher-than-average growth rates that we would expect in the contract side to absolutely underpin the growth. And the rest of it is going to be the continued return of ancillary. But maybe I'll have Jamie comment a little more on that.

Thank you, Andrew. And not to be too repetitive, but obviously, our net new momentum right now is strong. Not only from a recovery of the pandemic, but also our business models. As Andrew said, we've invested a lot in our sales team. We have over 200 leaders and business developers that are very successful in building a very robust pipeline. And our strategy is to improve our close ratio to improve those sales. And in addition to that, we're investing in our customer retention and lastly, accelerating our price increases to drive that organic growth. And last but not least, our snow through our bundle up strategy or bundling up our snow services with our land services creates the momentum we need to drive us to organic growth in the future.

I will add one other thing is that the investments we've made in our marketing and omnichannel development and in our sales force and on the street, on the ground, boots on the ground identifying and specifically quantifying those new opportunities and putting them into our new CRM technology investment has allowed us to have visibility into literally billions of dollars of landscaping opportunities and allows us to look at that reservoir of opportunity in a way we never have before. We believe that continued investment in that is going to drive continued expansion of that opportunity pipeline that is going to be something that no other company in the world has visibility to in the detail level that we will to be able to drive and continue to drive that organic growth.

And Andrew, we have a few more questions from the webcast. The next is related to labor. Clearly, it's a challenge for most service companies right now, and we're happy to hear the acceleration of price increases is helping. But outside of price, can you talk a little bit more about other actions you're helping to mitigate and why you see labor challenges as more short term in nature?

Absolutely. The question is about labor and the challenges outside of -- well, I should say, the responses outside of pricing that we're doing to handle with the labor challenges, I'll have Mandy jump on that one for us.

Thank you. A good question. I think we all know labor is a challenge no matter what industry or service you provide and you are offering right now. But what I would say is while it's been a challenge, we've also put a lot of extra resources, extra programs and ensure we're keeping up with the pace that the branches need and then most importantly, holding on to that talent once we get it. So the extra resources and work we're putting behind it has been imperative to our success this year.

I think one of the things that you saw on Mandy's presentation is that the retention rates we're seeing as a company are actually industry-leading when it comes to overall retention rates in a high labor force type environment. We believe a lot of that is the engagement that we have with our -- with the folks in the business. And frankly, the leadership we have at the branch level, down to our account managers and our production managers and really the creation of family type atmosphere that we have in a local environment. That continued emphasis and basically giving tools of how to manage has allowed us to have a higher level of retention than we believe that we see other places. And that's going to continue to allow us to fuel and staff the growth that we see coming.

And the next question, Andrew, relates to pricing. And the webcast participant would like to know what are the top initiatives that we're implementing there to drive success in getting higher pricing?

Question is on what initiatives are we doing specifically are taking to get higher pricing and discussing with our clients on why that's important. Jamie, I think we'll have you.

Absolutely. It's a multipronged approach. Number 1 is obviously education. We have to educate our leaders what the current market is and understand the inflationary factors that are in place. And we created a playbook that not only helps them during the conversation, but I think pre-conversation to help them prepare for this. But the biggest thing we can do is training, education and protecting what we have today and making sure that our folks are aware that we are the leaders, and we will lead this initiative for the industry.

And we have 2 more questions that have come from the webcast. The next is regarding technology. We understand that technology is a significant competitive advantage. Can you get a little more granular on some of the larger customer-facing opportunities over the next couple of years?

Yes, question is on technology and customer-facing opportunities we have in investments in technology, and I'll have Brian Bruce handle that for us.

Thank you, Andrew. As part of our customer technology advisory panel, we've actually created a road map of features and capabilities based upon what they told us they prefer and would really value. And so while I highlighted the first couple of new features and capabilities that are coming into FY '22, we have 3 or 4 more right behind that, and we'll continue to follow up with what our customers value, particularly give them more online and mobile capabilities, supporting our teams in the field at the same time.

And we have 1 more question from the webcast audience. We know development has historically showed solid consistent growth year-to-year pre-pandemic. As we start to move past the pandemic, when will development return to the growth profile it has demonstrated previously?

Question is on development and the facts are that development has been a consistent and stable organic grower for us for years. So clearly, the pandemic has affected us and when do we see that emerge out. Tom?

Well, Andrew, I think I'll start by saying that this too shall end, we are anxiously waiting for the pandemic to get behind us. We are positioned right now. Year-over-year, our backlogs look great compared to 2021 when we entered that fiscal year. All indications are that based on the KPIs I shared with you earlier that we're at the leading edge of a boom for the architectural billing index. So the designers are getting very busy. They obviously develop a great pipeline of things for us, and we're really encouraged about the platform that we've built, the organic locations and the branch locations we're in. And we see a lot of blue sky late '22 into '23, '24.

Great. I think that's all the questions we have from the field right now from either the webcast or live. First and foremost, I thank everyone for your time today, taking time to learn more about BrightView and really to listen to the outstanding leadership we have as an organization. And hopefully, you're taking away some of the optimism we all have about where growth is coming into the industry and where growth is coming more specifically into BrightView in the industry, and how we're going to be able to execute on a strategy that delivers strong returns for our shareholders while also providing great opportunities for our employees and most importantly, putting intense customer focus on landscapes throughout the country in both the maintenance, the design and the development parts of our business. If you think about it, again, we're a significant player. We're the #1 player by a long shot in a significant market, $70 billion and growing. Our leadership team and an environmentally focused company has been around for decades and has an industry-leading approach to creating a differentiated experience in our customer base and creating a warm and yet focused approach within our customer -- within our employees that really creates the absolute best landscapes on earth. The model we have in our business model is underpinned by cash generation, and that cash will be consistent and will be delivered to the business in a reliable manner kind of regardless of the variations you may see in the overall business profile we have due to some of the short-term pressures we have in labor or the variability of weather. Our model is a cash model that will consistently deliver. And also the cash we deliver off of is going to continue to allow us to invest in our M&A platform. 27 deals done year-to-date, and we expect as we go into 2022, that number will go and cascade easily above the 30 and continue to be a funnel of key growth into the overall business. Again, I thank you for your time today. I look forward to seeing you as we continue to talk about the business and believe that the investments you make continue to fuel the best landscapes on earth.