Slide 1: Fourth Quarter and Full Year 2023 Earnings Webcast Presentation
Fourth Quarter and Full Year 2023 Earnings Webcast Presentation Rollins, Inc. February 15, 2024
Slide 2: Safe Harbor
Safe Harbor Statements made in this earnings presentation may contain forward-looking statements that involve risks and uncertainties concerning the Company’s business and financial results. We have based these forward-looking statements largely on our current opinions, expectations, beliefs, plans,
Slide 3: Reconciliation Of GAAP And Non-GAAP Financial Measures
Reconciliation Of GAAP And NON- GAAP Financial Measures The Company has used the non-GAAP financial measures of organic revenues, organic revenues by type, adjusted net income, adjusted earnings per share (“EPS”), earnings before interest, taxes, depreciation and amortization (“EBITDA”), EBITDA marg
Slide 4: Full Year 2023 Results and Highlights
Full Year Other 2023 Results 2023 Highlights • Double-digit growth across all major service lines. $3.1B 14% Revenue of up • Organic growth of over 8%, acquisitions drove remaining growth. $0.90 20% Adjusted • Executed balanced capital allocation program, up deploying nearly $1 BILLION of capital. E
Slide 5: Q4 2023 Results and Highlights
Q4 Other 2023 Results Q4 Highlights • Double-digit growth across all major service lines $754M 14% Revenue of up • Organic growth of over 7%, acquisitions drove remaining growth $0.21 24% Adjusted • Divested non-core lawn care asset, recorded $15 up million gain on sale EPS1 of • Free cash flow conv
Slide 6: Balanced 2024 Outlook
Balanced 2024 Outlook WHAT WE ARE SEEING WHAT WE EXPECT Organic Growth Continued Growth Healthy market growth and solid execution Focused on delivering solid growth and healthy driving strong organic growth with good incremental margins in 2024, further performance across all major service areas com
Slide 7: Revenue Growth Trends
Revenue Growth Trends ROLLINS COMPETITIVE ADVANTAGES YOY REVENUE GROWTH COVID Pandemic Resilient business that has grown Great Financial Crisis Industrial Slowdown through economic cycles Growth acceleration began pre-COVID and has continued • Consistently delivered HSD organic growth over the last
Slide 8: Q4 Revenue Growth
Q4 Revenue Growth +13.4% +14.0% +10.6% $754 +17.7% $14M organic1 $3M acquisition1 $21M organic1 $4M acquisition1 ($0.5M) impact of $14M organic1 divestiture1 $38M acquisition1 ($1M) impact of divestiture1 Double-Digit Revenue Growth Across All Three Service Lines Note: Figures may not foot due to ro
Slide 9: FY 2023 Revenue Growth
FY 2023 Revenue Growth +14.0% +13.1% +11.2% +16.8% $3,073 $55M organic1 $89M organic1 $15M acquisition1 $15M acquisition1 $74M organic1 ($0.5M) impact of divestiture1 $130M acquisition1 ($1M) impact of divestiture1 Double-Digit Revenue Growth Across All Three Service Lines Note: Figures may not foot
Slide 10: Q4 Adjusted EBITDA Margin
Q4 Adjusted EBITDA Margin1 HIGHLIGHTS Gross Profit • Gross margin 50.9% • Fox accretive by ~30 bps, 10 bps of organic improvement • Leverage from people and fleet 0 bps costs offset pressure from materials & supplies and higher 22.1% insurance-related costs Adj. SG&A* • Benefits from leverage on peo
Slide 11: FY 2023 Adjusted EBITDA Margin
FY 2023 Adjusted EBITDA Margin1 HIGHLIGHTS Gross Profit • Gross margin 52.2% • Pricing continues to outpace +70 bps inflation • Improvement across several key 22.7% cost categories Adj. SG&A* • Improvement across several key cost categories more than offset headwinds from increased advertising and s
Slide 12: Cash Flow and Use Of Liquidity
Cash Flow and Use Of Liquidity HIGHLIGHTS Cash Generation Q4 & FY 2023 Free Cash Flow FY 2023 Uses of Cash Flow • FY Free Cash Flow Conversion & Liquidity was ~114% • Strong balance sheet with CAPEX ($32M) modest levels of debt +22% +14% DIVIDENDS $496M Acquisitions $142M ($264M) • Closed 5 acquisit
Slide 13: Key Takeaways
Key Takeaways Focus on Modernization Exceptional Performance Broadened banking relationships and expanded Healthy pipeline of acquisitions, Fox acquisition revolver from $200 million to $1 billion in early 2023 leading to robust growth from M&A Executed restructuring program in home office to improv
Slide 14: Appendix
APPENDIX 14
Slide 15: Reconciliation Of GAAP And Non-GAAP Financial Measures
Reconciliation Of GAAP And Non-GAAP Financial Measures Set below are reconciliations of non-GAAP financial measures used in this investor presentation and conference call with their most directly comparable GAAP measures. Three Months Ended December 31, Twelve Months Ended December 31, Variance Vari
Slide 16: Reconciliation Of GAAP And Non-GAAP Financial Measures
Reconciliation Of GAAP And Non-GAAP Financial Measures Set below are reconciliations of non-GAAP financial measures used in this investor presentation and conference call with their most directly comparable GAAP measures. Three Months Ended December 31, Twelve Months Ended December 31, Variance Vari
Slide 17: Reconciliation Of GAAP And Non-GAAP Financial Measures
Reconciliation Of GAAP And Non-GAAP Financial Measures Set below are reconciliations of non-GAAP financial measures used in this investor presentation and conference call with their most directly comparable GAAP measures. Three Months Ended December 31, Twelve Months Ended December 31, Variance Vari
Slide 18: Reconciliation Of GAAP And Non-GAAP Financial Measures
Reconciliation Of GAAP And Non-GAAP Financial Measures Set below are reconciliations of non-GAAP financial measures used in this investor presentation and conference call with their most directly comparable GAAP measures. Three Months Ended December 31, Twelve Months Ended December 31, Variance Vari
Slide 19: Reconciliation Of GAAP And Non-GAAP Financial Measures
Reconciliation Of GAAP And Non-GAAP Financial Measures Set below are reconciliations of non-GAAP financial measures used in this investor presentation and conference call with their most directly comparable GAAP measures. Period Ended (unaudited, in thousands) December 31, 2023 Reconciliation of Lon
Slide 20: Reconciliation Of GAAP And Non-GAAP Financial Measures
Reconciliation Of GAAP And Non-GAAP Financial Measures Set below are reconciliations of non-GAAP financial measures used in this investor presentation and conference call with their most directly comparable GAAP measures. Three Months Ended December 31, Variance Twelve Months Ended December 31, Vari
Slide 21: Reconciliation Of GAAP And Non-GAAP Financial Measures
Reconciliation Of GAAP And Non-GAAP Financial Measures Set below are reconciliations of non-GAAP financial measures used in this investor presentation and conference call with their most directly comparable GAAP measures. Three Months Ended December 31, Variance Twelve Months Ended December 31, Vari
Slide 22: Slide 22