Acuity Inc.

Good morning, and welcome to Acuity Brands' fiscal 2024 fourth quarter earnings call. At this time, all participants are on a listen-only mode. After the speaker's presentation, the company will conduct a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Charlotte McLaughlin, Vice President of Investor Relations. Charlotte, please go ahead.

Thank you, Operator. Good morning and welcome to the Acuity Brands Fiscal 2024 Fourth Quarter and Full Year Earnings Call. On the call with me this morning are Neil Ash, our Chairman, President and Chief Executive Officer, and Karen Holcomb, our Senior Vice President and Chief Financial Officer. Today's call will include updates on our strategic progress and on our Fiscal 2024 Fourth Quarter and Full Year performance. There will be an opportunity for Q&A at the end of this call. As a reminder, some of our comments today may be forward-looking statements. We intend these forward-looking statements to be covered by the safe harbour provisions of the Private Securities Litigation Reform Act of 1995, as detailed on slide 2 of the accompanying presentation. Reconciliations of certain non-GAAP financial metrics with their corresponding GAAP measures are available in our 2024 fourth quarter earnings release and supplemental presentation, both of which are available on our investor relations website at www.investors.acuitybrands.com. Thank you for your interest in Acuity Brands. I will now turn the call over to Neil Ash.

Thank you, Charlotte. And thank you all for joining us this morning. Our fiscal 2024 fourth quarter performance was strong. We grew net sales in both lighting and spaces, delivered margin expansion, and increased earnings per share. Fiscal 2024 was a successful year of improved operating performance that delivered end-user satisfaction and improved financial results. In ABL, we grew net sales $11 million, increased our adjusted operating profit by $13 million, and expanded our adjusted operating profit margin to 18%. These results are being driven by our strategy to increase product vitality, elevate service levels, use technology to improve and differentiate both our products and how we operate the business, and to drive productivity. In August, we announced that we had combined our lighting and supply chain organizations under one leader to better align the end-to-end connectivity of our ABL processes. I appointed Satch Sankpal to lead the combined organization. Satch joined us about three years ago in a growth and transformation role. He is a dynamic leader who has the ability to bring the business together in order to accelerate growth and to drive productivity. This quarter, we continue to further our ongoing product vitality. One of our recent product launches was HoloBay by HoloFane, a capable and configurable round high bay for use in industrial environments, manufacturing environments, and warehouse spaces. HoloBay reinforces HoloFane's leadership position in the industrial space by leveraging both existing and new technology to deliver game-changing performance. Its innovative thermal management can withstand the most demanding environments. It has the broadest lumen output options on the market, is 5 to 10 pounds lighter than alternatives, has multiple mounting options, and is configurable with our in-light controls. This is the biggest technology improvement in over a decade in industrial highways. Our team has continued to be recognized for innovation and for the value that our products bring to our customers. In the fourth quarter, many of our lighting solutions were selected for the 2024 Illuminating Engineering Society Progress Report, which showcases the year's most significant advancements in the art and science of lighting, including Lino by Alight, the Gotham Ivo shallow recess downlight, and the Lithonia frame, all of which have been highlighted on earnings calls this year. We additionally won for our Cyclone Crosswalk, a street light that was designed to maximize pedestrian safety through innovative contrast and vertical illumination. And for the Hydrel Tierra, a compact in-grade fixture that is used in outdoor architectural and landscape lighting. Its innovative ceiling capabilities allow for maximum structural integrity that ensures long-term use with minimal maintenance. Now, I'd like to take a step back and recap our achievements this year in the lighting business. Overall, our financial performance was strong, and we made progress on our strategy and on our initiatives. We evolved our differentiated product portfolios made to order, design select, and contractor select to create the most effective way for end users and contractors to get what they need when they need it for their specific projects. And we invested for future growth, prioritizing new verticals where we have not historically competed or where we are under-penetrated. Notably, in the refueling market, where we developed a new line of tailored product solutions, and in the horticulture vertical, where we built a product portfolio to service the horticulture environment through organic and inorganic product development. Now, moving on to our intelligent spacious group, which delivered impressive growth and margin performance. Our mission in our intelligent spaces business is to make spaces smarter, safer, and greener through a strategy of connecting the edge to the cloud. In spaces, we are focused on increasing our addressable market by expanding where we compete and what we can control. France was DISTEC's original market outside of North America. We have an impressive market position as a result of having the most adaptable and capable technology on the market. And not surprisingly, our products were used in many of the facilities in Paris this summer. In the Aquatic Center, our Eclipse solutions regulated water and energy consumption. Our Eclipse controllers played a key role in managing temperature, air quality, and acoustics at the Arena Porte de la Chapelle, which hosted events like gymnastics and badminton. In the Grand Palais, our controllers enabled nighttime window automation to manage temperature and save energy. And in Maxwell Hall, we demonstrated the modularity of our Eclipse solutions. It served the needs of the athletes when the facility was being used as part of the Athletes' Village, and now it is easily adapted to the requirements of the incoming occupants as the space transforms into offices. Our intelligent spaces business had a very good year. We expanded our addressable market, continued our impressive growth, and increased margins. And now, let's look forward. In our lighting and lighting controls business, we've demonstrated performance that is clearly differentiated from the rest of the market. And we're not done. We are confident in our ability to grow this business and have a clear growth algorithm to do so. First, as the largest company in the North American lighting industry, we will grow with the market. Second, we will continue to take share. And third, we will invest for growth by entering new verticals where we have either not historically competed or where we are under-penetrated. Taken together over a long period of time, we believe that our lighting business will grow mid-single digits. We have also demonstrated that we can improve margins. In fiscal 2020, our adjusted operating profit margin was 15%, and now in fiscal 2024, it has increased to 18%. We are confident that we can continue this trend and believe that we can add around 50 to 100 basis points of adjusted operating profit margin per year in the lighting business. We have made ABL more predictable, repeatable, and scalable. It is a high-quality strategic asset and a core pillar of our company. In our intelligent spaces business, we are delivering meaningful outcomes for end users that are powered by disruptive technologies and that generate strong financial results. We are expanding our addressable market, we are growing sales, and we are increasing margins. Our open edge-to-cloud solutions currently operate buildings to maximize occupant experience and minimize energy and operational costs. And we believe we can do more in the future. We see a future where the data generated from managing a build space, from what happens in a build space, and from who is in a build space comes together in new and unique ways. Both our organic and inorganic efforts will be focused on continuing to add more disruptive technologies that bring together a new vision of data interoperability to drive end user outcomes. We have a strong pipeline of internal development and small and medium sized acquisitions to satisfy this vision. In conclusion, we are delivering better outcomes for our stakeholders and compounding wealth for our shareholders. We are continuing to drive improvements in order to make Acuity a much larger and more impactful company in fiscal 2025 and beyond. Now, I'll turn the call over to Karen, who will update you on our fourth quarter performance and provide the outlook for fiscal 2025.