IES (IESC) 16th Annual Midwest Ideas Conference summary

Business overview and market exposure

• Provides electrical and technology infrastructure services across North America, serving data centers, e-commerce, high-tech manufacturing, healthcare, education, and residential markets.

• Fiscal 2024 revenue reached $2.9 billion with $301 million in operating income and adjusted EPS of $9.62.

• Revenue mix is diversified, with strong exposure to high-growth end markets.

Growth strategy and capital allocation

• Growth driven by a mix of organic expansion and acquisitions, with organic growth as the primary driver since 2021.

• Acquisitions are funded by operational cash flow, with prudent borrowing used when needed.

• Revenue grew at a 22% CAGR and operating income at 48% over five years; margins rose from under 4% to 10.4%.

• Capital is allocated to both organic and inorganic opportunities, with a focus on diversification to reduce cyclicality.

Segment performance and market trends

• Communications segment benefits from data center and high-tech manufacturing investments, with repeat business from major customers.

• Residential segment focuses on electrical, HVAC, and plumbing for single and multifamily builds, mainly in the southern U.S.; expansion of HVAC and plumbing services is ongoing.

• Infrastructure Solutions segment sees growth from custom enclosures for data centers and other markets, supported by facility expansions.

• Commercial & Industrial segment is expanding data center capabilities and training, with improved margins due to market constraints.