2018 ANNUAL REPORT
TRANSFORMING
BUILDINGS INTO
STRATEGIC
ASSETS
ACUITY BRANDS, INC.
CRAFT
CUSTOMER JOURNEYS
Atrius Navigator delivers precise indoor positioning (IPS) and
location-based services (LBS), enabling applications that redefine
customer journeys and enhance business operations.
2018 ANNUAL REPORT
1
ACUITY BRANDS, INC.
MAKE ROOM
FOR INTELLIGENT DATA
Atrius Spaces transforms occupancy data into accurate insights into
your space utilization to efficiently allocate and plan for your spatial
requirements - optimizing facility operations, budgeting and life cycle
management - across your building or campus portfolio.
2
2
ACUITY BRANDS, INC. 2018 ANNUAL REPORT
3
3
2018 ANNUAL REPORT ACUITY BRANDS, INC.
MONITOR
EQUIPMENT & REOURCES
Atrius Assets combines asset tracking services with Bluetooth® low
energy technology tags to manage critical equipment and resources
for easy, real-time location and status monitoring.
4
4
ACUITY BRANDS, INC. 2018 ANNUAL REPORT
5
5
2018 ANNUAL REPORT ACUITY BRANDS, INC.
TRANSFORM
CUSTOMER JOURNEYS INTO
BUSINESS INTELLIGENCE
Atrius Insights enables greater understanding of how visitors interact
with retail or office space so businesses can optimize customer journeys,
analyze traffic and behavioral patterns, and improve conversions.
6
6
ACUITY BRANDS, INC. 2018 ANNUAL REPORT
7
7
2018 ANNUAL REPORT CREATE
BRILLIANT
EXPERIENCES
Wherever there are people, there are lights. And when enabled with the right
technology, lighting networks can become a powerful sensory network capable
of capturing the building-wide data needed to enhance customer experiences
and optimize business operations.
With its rich, flexible suite of software services, Atrius IoT Solutions unlocks the
power of that location-aware sensory data – allowing businesses and developers
to create a wide range of mobile and web-based applications. From indoor posi-
tioning and spatial analytics to space utilization, Atrius IoT Solutions are helping
transform IoT data into a world of infinite possibilities.
8
ACUITY BRANDS, INC. A MESSAGE FROM THE CEO
TO OUR
STAKEHOLDERS
2018 was another year of record financial performance for Acuity Brands as we
reported all-time highs for net sales, net income, and diluted earnings per share.
During the past year, we continued to successfully execute our strategy to extend our
leadership position in the North American lighting and building management solutions
market by providing our customers with differentiated value from our industry-leading
portfolio of innovative products and solutions along with superior service.
Acuity Brands 2018 financial results included:
• Return on shareholders’ equity of 21% compared
• Record net sales of $3.68 billion, an increase of 5%
with 19% in fiscal 2017.
compared with fiscal 2017;
While we achieved record financial performance on
• Record net income of $349.6 million, an increase
various measures, fiscal 2018 was a difficult operating
of 9% compared with fiscal 2017;
environment characterized by continued overall weak
• Record diluted earnings per share of $8.52, an
increase of 15% compared with fiscal 2017;
• Record net cash provided by operating activities of
$353.2 million, an increase of 5% compared with
fiscal 2017;
• Fiscal 2018 year-end cash balance of $129.1
million, while funding $163.2 million for
acquisitions, investing $43.6 million in capital
end market demand, aggressive price competition for
certain basic, lesser featured fixtures, and significant
input cost inflation. Fiscal 2018 operating profit
declined $64.2 million to $454.6 million, or 12.4% of
net sales, compared with prior year’s operating profit
of $518.8 million, or 14.8% of net sales. The increase
in diluted earnings per share was due primarily to the
benefits of lower tax expense and stock repurchases,
which more than offset the negative impact of the
expenditures, repurchasing $298.4 million of the
decline in operating profit.
Company’s common stock, and paying $21.4
million of dividends to stockholders; and
9
2018 ANNUAL REPORT
$3.68B
NET SALES
Record net sales of $3.68 billion,
an increase of 5% compared
with fiscal 2017.
$349.6M
NET INCOME
Record net income of $349.6 million,
an increase of 9% compared
with fiscal 2017.
$8.52
EARNINGS PER SHARE
Record diluted earnings per share
of $8.52, an increase of 15% compared
with fiscal 2017.
$353.2M
NET CASH PROVIDED BY
OPERATING ACTIVITIES
Record net cash provided by operating
activities of $353.2 million, an increase of
5% compared with fiscal 2017.
On the strategic front, we had many significant
accomplishments, including the following key items
during fiscal 2018:
• Extended our industry leading portfolio of
innovative and energy-efficient lighting and
building management solutions with the
introduction of almost 100 new product families,
including the expansion of the Contractor Select
portfolio to more profitably compete in the market
segment for basic, lesser featured luminaires;
• Increased the sales of our Atrius-based IoT-
enabled solutions, providing customers with
the opportunity to transform their spaces from
expense items to strategic assets;
• Outpaced the growth rate of our overall market
and gained market share in many important
product categories and sales channels;
• Expanded our portfolio and access to market with
the acquisitions of Lucid Design Group and IOTA
Engineering; and
• Initiated actions to further streamline our
operations to reduce costs, accelerate investments
in areas with higher growth opportunities,
and improve our productivity and financial
performance.
At August 31, 2018, the 1 and 3-year total returns
on the Company’s common stock were below that of
the respective benchmark indexes, which include the
S&P Midcap 400 Index, the Dow Jones U.S. Electrical
Components & Equipment Index, and the Dow Jones
U.S. Building Materials & Fixtures Index. However,
the Company’s 5-year annualized return was in line
with the respective benchmark indexes as noted in the
table on page 12.
10
ACUITY BRANDS, INC. 1111
2018 ANNUAL REPORT ANNUALIZED TOTAL RETURNS
1-YEAR
3-YEARS
5-YEARS
Acuity Brands, Inc.
Dow Jones U.S. Electrical Components & Equipment Index
Dow Jones U.S. Building Materials & Fixtures Index
Standard & Poor’s Midcap 400 Index
(13%)
17%
6%
20%
(8%)
19%
11%
15%
13%
13%
15%
13%
Our Future: Growth, Innovation, Excellence
a promise best captured in our tag line: “Expanding the
This is an extraordinary time to be in the lighting
Boundaries of Lighting™.”
and building management industries, particularly
As the world entered the 21st century, digital
for a company of the caliber of Acuity Brands. Rapid
technology was evolving in a way where many
advancements in technology, along with the need for
discussed the possibility of creating connected
greater energy efficiency, changes in public policy,
solutions where vast amounts of data could be
and demand for environmental sustainability, continue
collected and utilized to enhance the interface between
to drive profound changes in our industry creating
humans and infrastructure of all kinds ushering in the
exciting opportunities. Acuity Brands is capitalizing
world of “Smart Cities” through “connected, intelligent
on these profound changes to provide lighting and
buildings.” At Acuity Brands, we are turning this dream
building management solutions that are efficient,
into reality where our many solutions are creating
elegant, and sophisticated, while at the same time
“connected, intelligent buildings” for customers
simple to install, maintain, and use. We are at the
transforming their buildings into strategic assets for
forefront of transforming the lighting and building
owners and users alike. Our company is uniquely
management industries. Our experience, knowledge,
positioned to accelerate the adoption of connected,
and skill as lighting experts allow us to deliver superior
intelligent buildings because of our unique collection
lighting solutions for virtually any application,
of hardware and software assets along with our multiple
21%
RETURN ON
SHAREHOLDERS’ EQUITY
Return on shareholders’ equity of 21%
compared with 19% in fiscal 2017.
channels to market that are unmatched in the industry
today. Our solutions, which contain embedded sensors
and software, are ubiquitous, dense, and powered,
affording the opportunity to collect vast amounts
of actionable data to optimize the efficiency and
utilization of the space, position people, and track
assets, among other activities. The value creating
potential of these capabilities are endless as customers
are finding out.
12
ACUITY BRANDS, INC.
$129.1M
CASH BALANCE
Fiscal 2018 year-end cash balance of $129.1
million, while funding $163.2 million for
acquisitions, investing $43.6 million in capital
expenditures, repurchasing $298.4 million of
the Company’s common stock, and paying
$21.4 million of dividends to stockholders.
As the market leader in North America, we believe
our deep expertise in technology, optics and thermal
management, our understanding of the art and science
of lighting, and our ability to provide tailored lighting
and building management solutions for numerous
applications have positioned the company to excel.
Our key strategies and tactical focus have remained
consistent over the last few years. We expect to
continue to execute our profitable growth strategy by
focusing on three mission-critical areas of operational
excellence that we refer to as the 3 Cs:
• Providing unparalleled customer service;
As we enter 2019, our mission is to continue to build on
• Pursuing world-class cost efficiency by
our rich legacy of excellence, growth, and innovation
eliminating non-value added activities and
to provide great returns for our shareholders, superior
transaction costs; and
value for our customers, and growth opportunities
for our associates. Our passion and intense focus
continue to be centered on creating lighting and
building management solutions that deliver superior
quality, energy efficiency and performance. We know
that superior quality of light enhances how we live
and interact, whether it is increasing students’ learning
ability in schools, improving worker productivity and
comfort in offices and industrial facilities, enhancing
the shopping experience in retail establishments,
or accelerating patient healing in hospitals. The
• Creating a culture that demands excellence
in everything we do through continuous
improvement.
On behalf of Acuity’s management team and its Board
of Directors, I would like to thank our 13,000 associates
for their continued contributions and dedication to
our vision. I would also like to thank our customers
for their business, our suppliers for their support, and
our stockholders for the partnership we share in our
enterprise.
possibilities of what can be achieved using intelligent
Sincerely,
lighting solutions are still being explored. Our
associates are rapidly exploiting new technologies
and aggressively expanding our industry-leading
portfolio by developing intelligent lighting and building
management solutions that represent significant
advancements over traditional technologies and
easily network with other systems, improving energy
efficiency, health & safety, and productivity.
Vernon J. Nagel
Chairman, President, and
Chief Executive Officer
November 19, 2018
13
2018 ANNUAL REPORT ATRIUS NAVIGATOR
ENHANCE CUSTOMER
JOURNEYS AND BUSINESS
OPERATIONS
14
ACUITY BRANDS, INC. To help deliver a wider range of location-based services to both customers and employees,
the Atrius Navigator software service unlocks the power of indoor positioning data within
mobile applications to improve business operations. A web-based administration tool simplifies
development of applications, including setting action zones, maintaining venue layouts, and
managing multi-site requirements and user roles.
The Benefits
Transform indoor positioning and location-based data,
Enable real-time location-based interactions within
acquired from Atrius Navigator into spatial analytics
customer loyalty or associate services mobile
with Atrius Insights, a web-based dashboard.
applications, including:
- point of interest search
How It Works
Atrius Navigator acquires data from the Atrius − Ready
- wayfinding (blue-dot navigation), including point-to-
Sensory Network, leveraging embedded Bluetooth
point and multi-stop routing
- proximity marketing and promotional offers
- point of interest notifications
- assistance requests and proactive customer service
applications
Low Energy and/or visible light communication
technologies, as well as readily-available sensor fusion
technologies on users’ mobile devices.
15
2018 ANNUAL REPORT
ATRIUS SPACES
MAKE ROOM FOR
INTELLIGENT DATA
16
ACUITY BRANDS, INC. Atrius Spaces software service (APIs) and web application make it easy for an enterprise to gain
accurate insights into their space utilization.
The Benefits
How It Works
Efficiently allocate and plan for spatial requirements,
Atrius Spaces leverages occupancy data from the
optimizing facility operations, budgeting and life cycle
nLight® lighting control platform to help building
management, across your building or campus portfolio.
tenants, owners, and managers achieve the optimal
Access room, floor, and building plans anytime and
anywhere through a browser.
Leverage real-time and historical data to identify
occupancy status, peak and average space utilization, and
types of spaces used within one or multiple buildings.
space utilization of common areas, meeting rooms,
and offices.
17
2018 ANNUAL REPORT ATRIUS ASSETS
TAKE ACTION
ON MOVEMENT
18
ACUITY BRANDS, INC. Designed to enhance business performance, Atrius Assets is a cloud-based software service
that provides accurate monitoring of assets and personnel directly from a web browser or via
integration with other business applications. With a thorough understanding of assets’ real-time
location and movement trends, customers can optimize workflows, enhance on-demand and
dispatch services, redesign space layouts, implement safety or theft prevention initiatives, and
improve equipment utilization and maintenance.
The Benefits
Gain thorough understanding of asset utilization and
Overlay 60-minutes of live data onto your venue layout
trends, and view analysis of aggregated data over
to locate assets, analyze movement paths and monitor
customizable date ranges with Atrius Insights’ web-
asset telemetry information.
based spatial analytics dashboard.
Create real-time alerts based on dwell time,
How It Works
count, health metrics, etc. and facilitate actionable
Atrius Assets provides real-time indoor tracking data
management of alerts through web-based visualization,
of tagged assets, equipment and personnel with
text and email notifications.
2-meter or better accuracy, by leveraging the Atrius™-
Integrate and use asset location, movement and
telemetry data within enterprise software or third-
party applications, leveraging Atrius Assets software
service APIs.
Ready Sensory Network and Bluetooth® Low Energy
technology communication.
19
2018 ANNUAL REPORT ATRIUS INSIGHTS
TRANSFORM LOCATION-BASED
SERVICES INTO BUSINESS
INTELLIGENCE
20
ACUITY BRANDS, INC. The Atrius Insights web application and APIs transform indoor positioning and asset tracking
data, acquired from Atrius Navigator and Atrius Assets, into rich contextual spatial analytics.
Providing thorough analysis of indoor contextual data with reports, trends and graphical
representations, Atrius Insights makes complex relationships actionable for a business.
The Benefits
Gain understanding of how:
Aggregate and compare metrics across multi-site
organizations.
- visitors interact with a space to optimize customer
APIs provide for integration into enterprise and
journeys, analyze and predict traffic and behavioral
third-party software.
patterns, and improve conversions
- asset utilization and trends, for space-contextual
optimization of processes, layouts and equipment
utilization
How It Works
Using indoor positioning and asset tracking data
acquired from Atrius Navigator and Atrius Assets,
Atrius Insights displays location-based metrics via
Analyze data with map-based visualizations and
web-based dashboard or integrates data within
heatmaps that illustrate changes over time and exactly
enterprise systems, business intelligence, point of
where those changes are taking places.
sale, and marketing applications.
21
2018 ANNUAL REPORT
OUR BRANDS
INNOVATIVE SOLUTIONS
22
ACUITY BRANDS, INC.
2018 ANNUAL REPORT
$3.7
Billion
FISCAL 2018 NET SALES
$1.7
Billion
STOCKHOLDERS’ EQUITY
97%NORTH AMERICAN
NET SALES
25BRANDS
2 Million
SKUs
19MANUFACTURING
FACILITIES
~13,000
EMPLOYEES
23
23
2018 ANNUAL REPORT ACUITY BRANDS, INC.
PERFORMANCE
FINANCIAL HIGHLIGHTS
(dollars in millions except for diluted earnings per share)
$3,680.1
NET SALES
$349.6
NET INCOME
$8.52
DILUTED EARNINGS
PER SHARE
$129
TOTAL CASH
$2,989
TOTAL ASSETS
$357
TOTAL DEBT
24
24
ACUITY BRANDS, INC.
PERFORMANCE
FINANCIAL HIGHLIGHTS
(in millions of dollars, except earnings per share)
for the year ended August 31
OPERATIONS
Net sales
Gross profit %
Operating profit
Operating profit %
Net Income
Diluted earnings per share
2018 (1)
2017 (2)
% Change
$ 3,680.1 $ $3,505.1
5%
40.4%
42.3%
454.6
$
$518.8
(12%)
$
$
12.4%
14.8%
349.6
$
$321.7
$8.52
$7.43
9%
15%
9%
5%
8%
(35%)
Diluted weighted average number of shares outstanding (in millions)
41.0
43.3
Return on average shareholders' equity
20.9%
19.2%
Cash provided by operating activities
$
353.2
$
$336.6
Depreciation and amortization
Capital expenditures
$80.3
$43.6
$74.6
$67.3
FINANCIAL POSITION:
2018
2017
% Change
Total assets
Total cash
Total debt
Total stockholders' equity
Ratio of total debt to capital
Operating working capital as a percentage of net sales (3)
$
$
$
$
2,989
129
357
$1,717
$
$
$
$
17.2%
16.3%
$2,900
3%
$311
(59%)
(0%)
3%
$357
$1,666
17.6%
14.5%
(1) 2018 results include pre-tax special charges associated with streamlining initiatives of $5.6 million, pre-tax amortization of acquired intangible
assets of $28.5 million, pre-tax share-based payment expense of $32.3 million, pre-tax acquisition-related items of $3.8 million, excess inventory
related to the closure of a facility of $3.1 million, gain on sale of a business of $5.4 million, and discrete income tax benefits of the U.S. Tax Cuts and
Jobs Act of $34.6 million, totaling $0.32 per share.
(2) 2017 results include pre-tax special charges associated with streamlining initiatives of $11.3 million, pre-tax amortization of acquired intangible
assets of $28.0 million, pre-tax share-based payment expense of $32.0 million, and pre-tax costs associated with manufacturing inefficiencies
associated with the closing of a facility of $1.6 million, and gain on sale of investment in an unconsolidated affiliate of $7.2 million, totaling $1.02
per share.
(3) Operating working capital is defined as net receivables plus inventories minus accounts payable.
25
2018 ANNUAL REPORT
4000
3500
3000
2500
2000
1500
1000
500
0
10
8
6
4
2
0
$3,680
$3,505
$3,291
$2,707
$2,394
$518.8
$475.2
$454.6
14.4%
14.8%
12.4%
$376.3
$299.1
13.9%
12.5%
‘14
‘15
‘16
‘17
‘18
‘14
‘15
‘16
‘17
‘18
REVENUES
($ in millions)
OPERATING PROFIT
($ in millions)
Margin
$8.52
$7.43
$6.63
$304.2
$309.6
$261.7
$269.3
$218.8
$5.09
$4.05
‘14
‘15
‘16
‘17
‘18
‘14
‘15
‘16
‘17
‘18
DILUTED EPS
FREE CASH FLOW
($ in millions)
Free Cash Flow is defined as cash provided by operating activities minus purchases of property, plant, and equipment. Prior year amounts reflect
adoption of Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting.
26
600
500
400
300
200
100
0
350
300
250
200
150
100
50
0
ACUITY BRANDS, INC. FINANCIAL HIGHLIGHTS
5-YEAR CUMULATIVE
TOTAL RETURN*
Among Acuity Brands, Inc., the Dow Jones U.S. Electrical Components & Equipment
Index, the Dow Jones U.S. Building Materials & Fixtures Index, the S&P Midcap 400
Index, and the S&P 500 Index.
$350
300
250
200
150
100
50
0
8/13
8/14
8/15
8/16
8/17
8/18
8/13
8/14
8/15
8/16
8/17
8/18
Acuity Brands Inc.
$100
$146
$230
$325
$209
$182
Dow Jones U.S. Electrical Components & Equipment
$100
$125
$113
$129
$160
$188
Dow Jones U.S. Building Materials & Fixtures
$100
$125
$144
$179
$188
$199
S&P Midcap 400 Index
S&P 500 Index
$100
$123
$123
$138
$156
$187
$100
$125
$126
$142
$165
$197
* For fiscal year ending August 31. Assumes $100 invested on 8/31/13 in stock or index, including reinvestment of dividends.
During fiscal 2018, the Company was removed from the S&P 500 Index and added to the S&P Midcap 400 Index.
Copyright © 2018 Standard & Poor’s, a division of S&P Global. All rights reserved.
Copyright © 2018 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved.
27
2018 ANNUAL REPORT
STOCKHOLDER
INFORMATION
BOARD OF DIRECTORS
Vernon J. Nagel(1)
Chairman, President, and
Chief Executive Officer
Acuity Brands, Inc.
W. Patrick Battle
Managing Partner
Stillwater Family Holdings
Peter C. Browning(2)
Managing Director
Peter Browning Partners Board
Advisory Services
G. Douglas Dillard, Jr.
Founder and Managing Director
Slewgrass Capital, LLC
James H. Hance, Jr.
Operating Executive
The Carlyle Group;
Former Vice Chairman
Bank of America Corporation
Ray M. Robinson(4)
Non-Executive Chairman
Citizens Trust Bank;
President Emeritus
East Lake Golf Club
Robert F. McCullough
Former Chief Financial Officer
AMVESCAP PLC
(now known as Invesco Ltd.)
Norman H. Wesley
Former Chairman and
Chief Executive Officer
Fortune Brands, Inc.
Mary A. Winston
President
Winsco Enterprises, Inc.;
Former Executive Vice President
and Chief Financial Officer
Family Dollar Stores, Inc.
Julia B. North
Former President and
Chief Executive Officer
VSI Enterprises, Inc.;
Former President of Consumer
Services BellSouth Corporation
Dominic J. Pileggi(3)
Former Chairman and
Chief Executive Officer
Thomas & Betts Corporation
EXECUTIVE OFFICERS
Vernon J. Nagel
Chairman, President, and
Chief Executive Officer
Richard K. Reece
Executive Vice President
and Chief Financial Officer
Laurent J. Vernerey
Executive Vice President
and President of Acuity
Technology Group
(1) Chairman of Executive Committee
(2) Chairman of Governance Committee, Lead Director
(3) Chairman of Audit Committee
(4) Chairman of Compensation Committee
28
ACUITY BRANDS, INC.
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
EY
Suite 1000
55 Ivan Allen Jr. Boulevard
Atlanta, Georgia 30308-3051
404-874-8300
DIRECT STOCK PURCHASE PLAN
Computershare Shareowner
Services offers a direct stock
purchase and sale plan for investors
wishing to purchase Acuity
Brands stock. Dividends can be
automatically reinvested. The Plan
is not sponsored or administered
by Acuity Brands. Inquiries should
be directed to: Computershare
Shareowner Services.
CORPORATE
INFORMATION
CORPORATE HEADQUARTERS
STOCK LISTING
Acuity Brands, Inc.
1170 Peachtree Street, NE
Suite 2300
Atlanta, Georgia 30309-7676
404-853-1400
www.acuitybrands.com
Acuity Brands Lighting
One Lithonia Way
Conyers, Georgia 30012-3957
770-922-9000
New York Stock Exchange
Ticker Symbol: AYI
ANNUAL MEETING
11:00 a.m. Eastern Time
January 4, 2019
Four Seasons Hotel
75 Fourteenth Street, NE
Atlanta, Georgia 30309
REPORTS AVAILABLE TO
STOCKHOLDERS
Copies of the following Company
reports may be obtained, without
charge:
- 2018 Annual Report to the
Securities and Exchange
Commission, filed on Form 10-K
- Quarterly Reports to the
Securities and Exchange
Commission, filed on Form 10-Q
Requests should be directed to:
Acuity Brands, Inc.
Attention: Investor Relations
1170 Peachtree Street, NE
Suite 2300
Atlanta, Georgia 30309-7676
404-853-1400
www.acuitybrands.com
TRANSFER AGENT AND
REGISTRAR
Computershare Shareowner
Services is the transfer agent,
registrar, dividend disbursing agent
and dividend reinvestment agent
for the Company. Stockholders of
record with questions about lost
certificates, lost or missing dividend
checks, direct deposit of dividends,
or notification of change of address
should contact:
Acuity Brands, Inc.
c/o Computershare
By Regular Mail
PO BOX 505000
Louisville, Kentucky 40233-5000
By Overnight Delivery
462 South 4th Street, Suite 1600
Louisville, Kentucky 40202
www.computershare.com/investor
Toll Free: 866-234-1921
(Inside the United States and Canada)
201-680-6578
(Outside the United States and Canada)
1170 Peachtree Street, NE
Suite 2300
Atlanta, GA 30309-7676
404-853-1400
acuitybrands.com