ABM Industries Incorporated (NYSE:ABM) Q4 2022 Earnings Call Transcript

Andy Wittmann: Got it. Okay. Last question, Scott. You didn’t mention it in the script, but it was in the press release here that you’re targeting the 30% to 35% payout of adjusted EPS as the dividend over time. Now, maybe I missed it or maybe just haven’t focused on it enough, but you paid out about 21% this year. So, I guess what’s the realistic time period, for specific guidance, but to get to that level, obviously, the dividend bump that you had here was a little bit bigger. Seems like you’re starting to strive for that, but is this like something we can expect to happen by like to get to that payout ratio or how should we be thinking about that?

Scott Salmirs: Yes, I’ll take that question Andy. So, if you look at the increase that we’ve just announced, it really is what I will call a jump start to our longer-term strategy of getting back to that 30% to 35%, which again is where we were pre-pandemic. I would say from a time perspective, again, we’re not rushing into this, so I’d say, it’s not going to be linear, but probably about a 3-year to 5-year period.

Andy Wittmann: Got it. Thank you for your time.

Earl Ellis: Thanks, Andy.

Operator: Thank you. Our next question is from Faiza Alwy with Deutsche Bank. Please proceed with your question.

Faiza Alwy: Yes. Hi. Thank you. So, first, I guess, Scott, I was wondering if you could reflect back on maybe the acquisition of Able and how you would characterize some of the cross-selling efforts or where are you in that cycle? Has the acquisition so far been in-line with your expectations, ahead of your expectations? Just some perspective on that would be helpful.

Scott Salmirs: Sure. Well, I could start by saying, we are just super excited that we consummated that transaction. And what this does for us Faiza, in like the, kind of that engineering space, right, and sustainability and all the headwinds in that area or I should say tailwinds in that area. Just phenomenal. So, we’re super pleased with the acquisitions. It’s on our expectation everything we thought we would get from Able. So, really, really excited, the cross-selling efforts just beginning now. I think that’s something €“ and I think we’ve said from the start that’s something that takes time because you put business development teams together, they got to get educated on the platform. So, that’s a longer journey, but I would just say today we’re as optimistic as ever, probably a little bit more optimistic now that we got a chance to look under the covers and we’re just really happy with the acquisition.

Faiza Alwy: Great. And then on the e-mobility part of the business, could you help size it for us in terms of what it was in the year? I know, it’s been growing very strongly. And maybe if there is a number that you can put in terms of how you’re thinking about that for 2023? And are you thinking of RavenVolt as, I mean, I don’t think it’s part of e-mobility specifically, but would you put it in a similar box maybe like what’s the growth trajectory that we should be thinking about for those two businesses?

Scott Salmirs: Sure, sure. So, like e-mobility, you know I can only tell you like, you saw the numbers, it went from 30 million plus to 130 million plus year-over-year. And it’s like we have such . It’s really hard to talk about the addressable market because it’s so big. The numbers are crazy, right? Because €“ and you know this just intuitively, the demand for electric vehicles, the lack of charging stations out into the public, it’s a huge addressable market. We love the fact that we are number one, number one installer. And that we’re building a business around that because there’s so many components of e-mobility that we’re still not in yet. So, we’re super excited about e-mobility, but it’s really hard for me to tell you what the ultimate size will be other than we’re putting a lot of effort into it and we’re going to be growing.