What changed in this filing

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Item 1. Business

2024-10-28 compared with 2023-10-26 · 57 added, 56 removed, 112 unchanged (50% of the section changed)

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We achieve growth through the development of innovative new products and services, including lighting, lighting controls, building management solutions, and location-aware applications.

Our ABL strategy is to increase product vitality, improve service levels, use technology to improve and differentiate both our products and our services, and drive productivity.

Our ABL strategy is to increase product vitality, elevate service levels, use technology to improve and differentiate both our products and how we operate the business, and drive productivity.

ABL's portfolio of lighting solutions includes commercial, architectural, and specialty lighting in addition to lighting controls and components that can be combined to create integrated lighting controls systems.

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ABL's portfolio of products includes but is not limited to the following brands:

A-Light TM , Aculux TM , American Electric Lighting ® , Cyclone TM , Dark to Light ® , eldoLED ® , Eureka ® , Gotham ® , Healthcare Lighting ® , Holophane ® , Hydrel ® , Indy TM , IOTA ® , Juno ® , Lithonia Lighting ® , Luminaire LED TM , Luminis ® , Mark Architectural Lighting TM , nLight ® , OPTOTRONIC ® , Peerless ® , RELOC ® Wiring Solutions, and Sensor Switch TM .

Principal customers of ABL include electrical distributors, retail home improvement centers, electric utilities, national accounts, original equipment manufacturer (“OEM”) customers, digital retailers, lighting showrooms, and energy service companies.

A-Light TM , Aculux TM , American Electric Lighting ® , Cyclone TM , Dark to Light ® , eldoLED ® , Eureka ® , Gotham ® , Healthcare Lighting ® , Holophane ® , Hydrel ® , IOTA ® , Juno ® , Lithonia Lighting ® , Luminaire LED TM , Luminis ® , Mark Architectural Lighting TM , nLight ® , OPTOTRONIC ® , Peerless ® , RELOC ® Wiring Solutions, and SensorSwitch TM .

Principal customers of ABL include electrical distributors, retail home improvement centers, electric utilities, corporate accounts, original equipment manufacturer (“OEM”) customers, digital retailers, lighting showrooms, and energy service companies.

Our customers are located in North America and select international markets that serve new construction, renovation and retrofit, and maintenance and repair applications.

ABL's lighting and lighting controls solutions are sold primarily through a network of independent sales agencies that cover specific geographic areas and market channels, by internal sales representatives, through consumer retail channels, directly to large corporate accounts, and directly to OEM customers.

Products are delivered directly from our manufacturing facilities or through a network of distribution centers, regional warehouses, and commercial warehouses using both common carriers and an internally-managed truck fleet.

We market our product portfolio and service capabilities to customers and/or end users in multiple channels through a broad spectrum of marketing and promotional methods, including direct customer contact, trade shows, on-site training, print and digital advertising in industry publications, product brochures, and other literature, as well as through digital marketing and social media.

We operate training and education facilities in several locations throughout North America and Europe designed to enhance the lighting knowledge of customers and industry professionals.

Products are delivered primarily through a network of distribution centers as well as directly from our manufacturing facilities using both common carriers and an internally-managed truck fleet.

Our ISG strategy is to make spaces smarter, safer, and greener by connecting the edge to the cloud.

ISG offers building management solutions and building management software.

Our building management solutions include products for controlling heating, ventilation, air conditioning (“HVAC”);

refrigeration;

and building access that deliver end-to-end optimization of those building systems.

Our intelligent building software enhances the occupant experience, improves building system management, and automates labor intensive tasks while delivering operational energy efficiency and cost reductions.

Our building management solutions include products for controlling heating, ventilation, air conditioning (“HVAC”), lighting, shades, refrigeration, and building access that deliver end-to-end optimization of those building systems.

Our intelligent building management software enhances the occupant experience, improves building system management, and automates labor intensive tasks while delivering operational energy efficiency and cost reductions.

Through a connected and converged building system architecture, our software delivers different applications, allows clients to upgrade over time with natural refresh cycles, and deploys new capabilities.

Customers of ISG primarily include system integrators as well as retail stores, airports, and enterprise campuses throughout North America and select international locations.

ISG products and solutions are marketed under multiple brand names, including but not limited to, Atrius ® , Distech Controls ® , and KE2 Therm Solutions ® .

ISG products and solutions are marketed under multiple brand names, including but not limited to, Atrius ® and Distech Controls ® .

We market our product portfolio and service capabilities to customers and end users in multiple channels through a broad spectrum of marketing and promotional methods, including direct customer contact, trade shows, on-site training, print and digital advertising in industry publications, product brochures, and other literature, as well as through digital marketing and social media.

We operate training and education facilities in various locations in North America and Europe designed to enhance the lighting, lighting controls, and building management systems knowledge of customers and industry professionals.

Manufacturing and Distribution

We operate eighteen manufacturing facilities, including six facilities in the United States, seven facilities in Mexico, two facilities in Europe, and three in Canada.

We operate eighteen manufacturing facilities, including seven in Mexico, six in the United States, three in Canada, and two in Europe.

We utilize a blend of internal and outsourced manufacturing processes and capabilities to fulfill a variety of customer needs.

Our investment in our production facilities is focused primarily on improving capabilities, product quality, and manufacturing efficiency as well as environmental, health, and safety

Our investment in our production facilities is focused primarily on improving capabilities,

product quality, and manufacturing efficiency as well as environmental, health, and safety compliance.

We also utilize contract manufacturing from U.S., Asian, and European sources for certain products.

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Maquiladora status, which is renewed periodically, is subject to various restrictions and requirements, including compliance with the terms of the Maquiladora program and other local regulations, which have become stricter in recent years.

We operate seven distribution facilities, including five facilities in the United States and two in Canada.

During fiscal 2024, net sales initiated outside of the U.S.

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We invest in product vitality, including enhancement of existing offerings, with a focus on improving the performance-to-cost ratio and energy efficiency.

We also develop software applications and capabilities to enhance data analytics offerings for building performance, enterprise operations, and personal experiences.

We also develop software applications with a platform to enhance data analytics offerings for building performance, enterprise operations, and personal experiences.

R&D expenses consist of compensation, payroll taxes, employee benefits, materials, supplies, and other administrative costs, but the amounts do not include all new product development costs.

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HVAC controls;

refrigeration;

refrigeration controls;

and building technology controls, software, and systems.

We operate in highly competitive industries that are affected by a number of general business and economic factors, such as, but not limited to, gross domestic product growth, employment levels, credit availability, interest rates and inflation, building costs, freight, construction-related labor availability, building occupancy rates, imports and trade, energy costs, freight costs, tariffs, commodity costs, and commodity availability.

We operate in highly competitive industries that are affected by a number of general business and economic factors, such as, but not limited to, gross domestic product growth, population growth, government stimulus, employment levels, credit availability, interest rates and inflation, building costs, freight, construction-related labor availability and costs, building occupancy rates, imports and trade, energy costs, freight costs, tariffs, commodity costs, and commodity availability.

Our market is based on non-residential and residential construction, both new as well as renovation and retrofit activity, which may be impacted by these general economic factors.

Precise segmentation of the market by new construction and renovation activity is not available, though internal estimates based on third-party data estimate the size of the markets to be about the same.

Non-residential construction spending on commercial, institutional, industrial, and infrastructure projects has a material impact on the demand for our lighting and building solutions.

The volume of non-residential construction activity in commercial, institutional, industrial, and infrastructure projects has a material impact on the demand for our lighting and building management solutions.

Demand for our residential lighting products is highly dependent on economic drivers, such as consumer spending and discretionary income, along with housing construction and home improvement spending.

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and incentives by federal, state, and local municipal authorities, as well as utility companies, for using more energy-efficient lighting and building technology solutions.

We are a leading provider of integrated lighting and building technology solutions based on these technologies and utilize internally developed, licensed, or acquired intellectual property.

We are a leading provider of integrated lighting and building technology solutions that utilize internally developed, licensed, or acquired intellectual property.

We experience competition based on numerous factors, including product vitality, service capabilities, price, brand name recognition, product quality, product and system design, energy efficiency, and customer relationships.

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We do not currently believe that the costs of complying with government regulations have a material impact on our financial condition, results of operations, or cash flows.

However, we may be affected by current or future standards, laws, or regulations, including those imposed in response to energy, substances in or components in or used in the manufacturing of our products, climate change, product functionality, geopolitics, corporate social responsibility, employee health and safety, privacy, or similar concerns.

However, we may be affected by current or future standards, laws, or regulations, including those imposed in response to energy, material content, climate change, product functionality, geopolitics, corporate social responsibility, employee health and safety, privacy, or similar concerns.

These standards, laws, and regulations may impact our costs of operation, the sourcing of raw materials, and the manufacture and distribution of our products and services.

They may also place restrictions and other requirements or impediments on the products and solutions we can sell in certain geographical locations or may impact the willingness of certain investors to own our shares.

See Part I, Item 1A.

Risk Factors for additional information.

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Intellectual Property

We own or have licenses to use various domestic and foreign patents, trademarks, and other intellectual property related to our products, processes, and businesses.

These intellectual property rights are important factors for our businesses.

We rely on copyright, patent, trade secret, and trademark laws as well as agreements, restrictive covenants, and internal processes and controls to protect these proprietary rights.

Despite these protections, unauthorized parties may attempt to infringe on our intellectual property.

As of August 31, 2023, we had approximately 1,600 total patent assets including issued United States and foreign patents as well as pending United States and foreign patent applications.

We own various domestic and foreign patents, copyrights, trade secrets, trademarks, and other intellectual property, which are important factors for our businesses.

We rely on patent, copyright, trade secret, and trademark laws as well as agreements, restrictive covenants, and internal processes and controls to protect these proprietary rights.

Despite these protections, unauthorized parties may take actions that infringe on our intellectual property.

We also have licenses to certain patents and trademarks which, if not renewed, could adversely impact our business.

As of August 31, 2024, we had approximately 1,600 total patent assets including issued U.S.

and foreign patents as well as pending U.S.

and foreign patent applications.

While patents and patent applications in the aggregate are important to our competitive position, no single patent or patent application is individually material to us.

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Our business exhibits some seasonality, with net sales being affected by weather and seasonal demand on construction and installation programs, particularly during the winter months, as well as the annual budget cycles of major customers.

Historically, with certain exceptions, we have experienced our highest sales in the last two quarters of each fiscal year due to these factors.

Historically, with certain exceptions, we have experienced our highest sales in the last two quarters of our fiscal year due to these factors.

Our lighting and building technology solutions are sold to customers in both the new construction as well as renovation and retrofit markets for residential and non-residential applications.

The construction market is cyclical in nature and subject to changes in general economic conditions and fiscal policies.

Sales volume has a major impact on our profitability.

Sales volume may have an impact on our profitability.

Economic downturns and the potential decline in key construction markets may have a material adverse effect on our net sales, operating income, financial position, and cash flows.

Human Capital

We employed approximately 12,200 associates at August 31, 2023 of which approximately 3,600 were employed in the United States and approximately 7,700 were employed in Mexico.

Our remaining associates were employed in other international locations including Europe, Canada, and the Asia/Pacific region.

Union recognition and collective bargaining arrangements in place or in process cover approximately 1,300 and 6,500 associates in the United States and Mexico, respectively.

Arrangements related to approximately 400 associates in the United States will expire within the next fiscal year.

Arrangements for approximately 6,500 associates in Mexico will expire within the next fiscal year, primarily due to annual negotiations of union contracts.

We believe that we have strong relationships with both our unionized and non-unionized associates.

Growth and Development

A key pillar to attract, develop, and retain top talent is our focus on the growth and development of our associates.

In fiscal 2023, we remained focused on development through development plans for associates, training opportunities, and other activities.

Our performance management and other processes are intended to align associate aspirations, interests, performance, and experiences with the talent needs that enable the business.

Managers and associates conduct periodic check-in discussions to encourage continuous performance feedback and improvement.

These discussions also act to hold leaders accountable for creating an associate development culture.

Investing in the development of our associates is part of our operating system and correlates to our preparedness to meet current and future strategic priorities of the business.

In fiscal 2023, we continued a management effectiveness series focused on coaching to performance, which we offered through in-person events.

We also provide a digital platform with learning content and resources to help associates expand their knowledge, skills, and abilities through self-directed learning initiatives.

We provide self-learning resources to help associates expand their lighting, controls, and building management technical knowledge through Acuity Academy and other resources.

Compensation and Benefits

We review our compensation and benefit plans annually to ensure that we are providing competitive, contemporary, and inclusive programs so we can attract and retain the best people and support the health and well-being of our associates and their families.

Based on this review, we offer a competitive total rewards package to our associates that includes base compensation, bonuses, profit-sharing plans, stock grants, health benefits, and/or retirement benefits commensurate with an employee's position, skill set, and experience.

Diversity, Equity, and Inclusion

We believe that diversity, equity, and inclusion are important factors in our ongoing success.

Our goal is to ensure that all associates feel valued, respected, and accepted for their contributions regardless of their race, sex, religion, ethnicity, age, gender identity, disabilities, national origin, sexual orientation, or other unique characteristics.

To promote diversity in the workplace, we sponsor a diversity, equity, and inclusion council that is responsible for setting our diversity strategy and initiatives, many resulting from associate feedback.

Our diversity, equity, and inclusion council consists of members of management as well as key human resource process leaders and leaders from our various employee resource groups.

We employed approximately 13,200 employees at August 31, 2024, of which approximately 3,600 were employed in the United States and approximately 8,700 were employed in Mexico.

Our remaining employees were employed in other international locations including Europe, Canada, and the Asia/Pacific region.

Union recognition and collective bargaining arrangements in place or in process cover approximately 1,300 and 7,400 employees in the United States and Mexico, respectively.

Arrangements related to approximately 700 employees in the United States will expire within the next fiscal year.

Arrangements for approximately 7,400 employees in Mexico will expire within the next fiscal year, primarily due to statutory requirements of annual negotiations of union contracts.

We believe that we have strong relationships with both our unionized and non-unionized employees.

Growth, Development, and Inclusion

A key pillar to attract, develop, and retain top talent is our focus on the growth and development of our employees.

In fiscal 2024, we remained focused on development through development plans for employees, special projects, training opportunities, and other activities.

Our performance management and other processes are intended to align employee aspirations, interests, performance, and experiences with the talent needs that enable the business.

Managers and employees conduct periodic check-in discussions to encourage continuous performance feedback and improvement.

These discussions also act to hold leaders accountable for creating an employee development culture.

Investing in the development of our employees is part of our operating system and correlates to our preparedness to meet current and future strategic priorities of the business.

In fiscal 2024, we continued a management effectiveness series focused on coaching to performance, which we offered through in-person events and ongoing sustainment activities.

We also provide a digital platform with learning content and resources to help employees expand their knowledge, skills, and abilities through self-directed learning initiatives.

We provide on demand, virtual, and in-person instructor led classes to help employees and customers expand their lighting, controls, and building management technical knowledge through Acuity Academy and other resources.

Our goal is to ensure that all employees feel valued, respected, and accepted for their contributions regardless of their race, sex, religion, ethnicity, age, gender identity, disabilities, national origin, sexual orientation, or other unique characteristics.

To promote diversity in the workplace, we sponsor an Inclusion and Belonging Council that is responsible for setting our diversity strategy and initiatives, many resulting from employee feedback.

Our Inclusion and Belonging Council consists of members of management as well as key human resource process leaders and leaders from our various employee resource groups.

We currently have five employee resource groups:

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These groups are designed to embrace, celebrate, and recognize the power of diversity.

Compensation and Benefits

Based on this review, we offer a competitive total rewards package to our employees that includes base compensation, annual cash incentive programs, stock grants with service and/ or performance requirements, health benefits, and/or retirement benefits commensurate with an employee's position, skill set, and experience.

Health and Safety

We strive to ensure our associates have a safe and collaborative work environment.

We strive to ensure our employees have a safe and collaborative work environment.

Our management practices promote Environmental, Health & Safety (“EHS”) excellence.

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We review each facility’s qualitative and quantitative results, with an emphasis on leading indicators that help avoid violations, accidents, and injuries.

A variety of different metrics are averaged to determine a facility’s performance, which is used to find continuous improvement opportunities.

A variety of different metrics is averaged to determine a facility’s performance, which is used to find continuous improvement opportunities.

Environmental Sustainability

We save energy and help reduce carbon emissions through our lighting, lighting controls, and building management solutions by replacing older technologies, and we drive innovation and performance across our business to minimize our impact on the environment.

We save energy and help reduce carbon emissions through our lighting, lighting controls, and building management solutions by replacing older technologies, and we drive innovation and productivity across our business to minimize our impact on the environment.

We have extended the capabilities of our energy data management software to help enable users to track and report their carbon footprint.

We also seek to use raw materials more efficiently and to operate our own facilities in a more intelligent, environmentally-friendly manner.

We have extended the capabilities of our energy data management software to help enable users to track and report their full carbon footprint.

We regularly communicate progress on our environmental commitments as part of our EarthLIGHT sustainability program.

Information Concerning Acuity Brands

Available Information

Acuity Brands, Inc.

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Any amendments to, or waivers of, the Code of Ethics and Business Conduct for our principal executive officer and senior financial officers will be disclosed on our website promptly following the date of such amendment or waiver.

Additionally, the charters for our Audit Committee, Compensation and Management Development Committee, and Governance Committee are available free of charge through the “Committee Charters and Governance Documents” link under the “Governance” heading within the "For Investors" section on our website.

Additionally, the charters for our Audit Committee, Compensation and Management Development Committee, and Governance Committee are available free of charge through the “Committee Charters & Governance Documents” link under the “Governance” heading within the "For Investors" section on our website.

The Code of Ethics and Business Conduct, the Corporate Governance Guidelines, and the committee charters are available in print to any of our stockholders that request such document by contacting our Investor Relations department.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business