Slide 1: Preliminary Results 2023: Relentless Execution of our Plan
Preliminary Results 2023 A Global Leader in Pest Control and Hygiene & Wellbeing Services Relentless Execution of our Plan 7 March 2024 1
Slide 2: Cautionary statement
Cautionary statement In order to utilise the ‘safe harbour’ provisions of the U.S. Private Securities Litigation Reform Act of 1995 (the “PSLRA”) and the general doctrine of cautionary statements, Rentokil Initial plc (“the Company”) is providing the following cautionary statement: This communicatio
Slide 3: Agenda | Preliminary Results 2023
Agenda | Preliminary Results 2023 Introduction and Highlights Andy Ransom Group and Regional Financial Results Stuart Ingall-Tombs Operating Model and our Business Categories Andy Ransom North America: Analysis of Organic Growth in H2 2023 Andy Ransom North America: THE RIGHT WAY 2 Plan for Organic
Slide 4: 2023 | Group Highlights
2023 | Group Highlights £5.4bn +4.9% £897m 16.6% FULL YEAR REVENUE ADJUSTED OPERATING PROFIT ADJUSTED OPERATING MARGIN GROWTH OF 45.8% ORGANIC REVENUE GROWTH GROWTH OF 57.0% GROWTH OF 120bps North America margin at 18.7% £1.2bn c.£106m 89.4% 2.8x ADJUSTED EBITDA (AER) ACQUIRED BOLT-ON REVENUE ADJUST
Slide 5: 2023 | Medium-term Targets
2023 | Medium-term Targets Our plan to create a higher quality business 45.8% Revenue growth in 2023 Medium-term Revenue growth of 6% - 9% 60.6% Pest Control; 7.8% Core H&W; 13.2% FWW Medium-term Organic Revenue >5% 4.9% Organic growth in 2023 (excl Disinfection) Pest Control: 4.5% - 6.5%. H&W: 4% -
Slide 6: 2023 | North America Pest Control
2023 | North America Pest Control Increased cost synergy target and THE RIGHT WAY 2 Growth Plan North America Growth Terminix Integration • Organic Revenue Growth in NA Pest Control Services: • Phase 1 of integration (foundations for success) completed: Below our expectations at 3.5% in 2023 (H1: 5.
Slide 7: Financial & Regional Review
Preliminary Results 2023 Financial & Regional Review Stuart Ingall-Tombs 7
Slide 8: Group Financial Highlights
Group Financial Highlights Revenue +4.9% Organic Revenue (Excl. Disinfection), FY 2023 £5,414m plus 41 bolt-on acquisitions Δ Δ £ million AER CER AER CER Profit +57.0%. Continued price progression Revenue 5,375 5,414 44.7% 45.8% £897m offsetting inflation. Margin up 120bps Adjusted Operating Profit
Slide 9: North America
North America 2023 Performance: 2023 Δ Organic Revenue +3.1%* Revenue £3,314m +79.2% • Pest Control +3.1%; Pest Control services for commercial, residential Organic Revenue* +3.1% and termite customers +3.5% • H2 impacted by lower new business lead generation Adjusted Operating Profit £618m +95.9% A
Slide 10: North America Margin – Synergistic and Trading Progress
North America Margin – Synergistic and Trading Progress 2023 Performance North America margin moves forward based on trading and synergies • Trading incl. growth and density increase margin by c.100bps 1.4% • $56m/£45m of synergies in year increase margin by c.140bps 1.0% • Margin headwind from lowe
Slide 11: Europe (incl. LATAM)
Europe (incl. LATAM) 2023 Performance: Revenue +14.6%; Organic Revenue +9.2%* 2023 Δ • Pest Control Revenue +21.8%, with a strong contribution from larger markets (France, Benelux and Germany) Revenue £1,078m +14.6% • Hygiene & Wellbeing Revenue +5.8%; good momentum in Ambius; H2 improvement in Spec
Slide 12: UK & Sub-Saharan Africa
UK & Sub-Saharan Africa 2023 Performance: 2023 Δ Revenue +7.9%; Organic Revenue +3.5%* • Pest Control Revenue +8.0% Revenue £394m +7.9% • Hygiene & Wellbeing Revenue +7.7%, despite lapping COVID boosted comparators in the medical waste business Organic Revenue* +3.5% Adjusted Operating Profit -0.5%;
Slide 13: Asia & MENAT
Asia & MENAT 2023 Performance: 2023 Δ Revenue +11.2%; Organic Revenue +10.2%* Revenue £357m +11.2% • Good volume growth alongside effective pricing Organic Revenue* +10.2% • Performance led by the region’s largest markets including India, Indonesia, Malaysia and Singapore Adjusted Operating Profit £
Slide 14: Pacific
Pacific 2023 Performance: 2023 Δ Revenue +15.0%; Organic Revenue +6.8%* • Pest Control Revenue +25.2%, driven by commercial services Revenue £261m +15.0% • Hygiene & Wellbeing Revenue +6.4%, with good demand for Ambius services Organic Revenue* +6.8% Adjusted Operating Profit +19.8% Adjusted Operati
Slide 15: Group Margin Development
Group Margin Development 120bps Group margin improvement through: Group Adjusted Operating Margin ▪ Continued execution on strategy: densification of routes 17.5% and products; M&A; optimisation of overhead; technology and innovation; active management of cost base 16.5% 1.0% ▪ +100bps to Group marg
Slide 16: Group Adjusted Cash Flow
Group Adjusted Cash Flow @AER £ million 2023 2022 Adjusted Operating Profit 898 571 Commentary Higher trading profits from organic and acquisitive Depreciation 300 276 growth resulted in Adjusted EBITDA up 43% to £1,228m Other 30 12 Non-cash one-off and adjusting items represent Terminix related one
Slide 17: Group Cash Flow cont’d
Group Cash Flow cont’d @AER £ million 2023 2022 Cash interest (166) (39) Cash tax (100) (77) Commentary Free Cash Flow 500 374 Higher interest payments at £166m reflect the timing Acquisitions (242) (1,018) of interest charge payments relating to financing of the Dividends (201) (122) Terminix trans
Slide 18: Net Debt
Net Debt @AER £ million 2023 2022* @AER Net increase/(decrease) in cash and cash equivalents (40) 726 Commentary Debt related cash flows 3 (1,566) Foreign exchange translation and IFRS 16 liability movement 3 (34) other items of £169m is primarily due Debt acquired (1) (946) to the weakening of the
Slide 19: Technical Guidance for 2024
Technical Guidance for 2024 P&L Guidance Cash Flow Guidance • Restructuring costs: £5m; and One offs and Adjusting items excl. • Overall one-off and adjusting items: c.£85m-£95m Terminix c.£10m • Working Capital: c.£50m-£60m and c.£55m-£65m of • Terminix integration costs to achieve*: c.$90m-$100m p
Slide 20: Relentless Execution of our Plan
Preliminary Results 2023 A Global Leader in Pest Control and Hygiene & Wellbeing Services Relentless Execution of our Plan Andy Ransom 20
Slide 21: Operating Model Continues to Perform Well
Operating Model Continues to Perform Well Compounding growth delivered through our model Impact on Employer Health and Society of Choice Safety Shareholder Great Service Value Leading Dividend Brands M&A Customer OPERATING Retention Cash MODEL Organic Revenue Growth New Profit Business Growth Additi
Slide 22: Employer of Choice
Employer Impact on Society Health and of Choice Safety Shareholder Value Great Service Colleague Retention Dividend Leading Brands Group improvement of 4.7ppts to 84.2%. All regions improved retention. M&A Customer Retention c.1,900 more colleagues choosing to stay. OPERATING North America +5ppts to
Slide 23: Health and Safety
Health and Safety Impact on Society Employer of Choice Shareholder Value Great Service World Class Safety Lost Time Accident rate of 0.31 per Leading Dividend Brands 100,000 hours worked and Working Days Lost 7.05 days per 100,000 hours M&A Customer Retention worked. Exceeding our targets. OPERATING
Slide 24: Great Service
Great Service Impact on Society Employer Health and of Choice Safety Shareholder Value Strong Customer Service Strong Group State of Service 97.8%. Leading Dividend Brands 1.2m post-service surveys: average score of 4.9/5. M&A Customer Retention Customer satisfaction (NPS): OPERATING remains high at
Slide 25: Impact on Society
Impact on Society Net zero emissions by 2040: Employer of Choice Health and Safety Emissions from fumigation reduced by c.16% in 2023 (target: Shareholder Value Grea 70% reduction by 2030). Low emission vehicles c.8% of fleet in UK and Europe (target: 10% by end of 2025). Dividend Strong independent
Slide 26: Pest Control: Market and Strategy
Pest Control Market and Strategy • Global-local footprint: Strong position in c.90 markets • People - best training, tools and career opportunities Global pest control market • High standards of service, innovation and digital leadership, product differentiation Forecasted to grow at a CAGR • Divers
Slide 27: 2023 | Pest Control
2023 | Pest Control A global leader in pest control: Operating in 90 countries 60.6% Revenue growth to £4.3bn £5,000 £900 £4,500 £800 4.5% Organic growth £4,000 £700 - NA: 3.1% £3,500 CAGR CAGR - Europe (inc LATAM): 9.2% £600 £3,000 21% 21.5% £500 £2,500 34 acquisitions, c.£76m revenues £400 £828 £4
Slide 28: 2023 | Pest Control – Scale and Growth by Region in USD
2023 | Pest Control – Scale and Growth by Region in USD #1 North America #1 Europe #1 Asia & MENAT Pest Control Revenue: $0.5bn Revenue: $0.3bn Revenue: $4.0bn Organic Growth: 8.5% Organic Growth: 7.1% Organic Growth: 3.1% Adjusted Operating Profit: $131m Adjusted Operating Profit: $44m Adjusted Ope
Slide 29: Leaders in Innovation: PestConnect, EcoCatch fly control
Leaders in Innovation PestConnect EcoCatch fly control Outdoor Fly Control • c.356,000 units, c.23% in 2023 • New proprietary EcoCatch fly control solution • 24/7 monitoring & quicker response • EcoCatch caught 60% more flies in 24 hours than the • Internet of Things. Actionable insights and big dat
Slide 30: The Future: Lumnia + Connected Camera
The Future: Lumnia + Connected Camera Leaders in Innovation Remote monitoring for faster AI identification of an infestation Product differentiation and service productivity Proprietary Lumnia LED flying insect control range • Catches +18 types of flying insects • Around 445,000 units sold since lau
Slide 31: Hygiene & Wellbeing: Market and Strategy
Hygiene & Wellbeing Market and Strategy • We estimate the global market size for • Strong category with higher awareness/appreciation post pandemic washroom services to be c.US$55bn • Strong service footprint position in over 60 markets • Forecasted to grow by a CAGR of 4% - 5% • Differentiated bran
Slide 32: Hygiene and Wellbeing
Hygiene and Wellbeing Strong performance in 2023 Revenue Growth +7.8% to £864m Including COVID Disinfection services, revenue growth of +5.4% due to the anticipated reduction in 900 180 CAGR CAGR services to £2m in 2023 (2022: £21m, 2021: £124m) 800 6.5% 160 8.1% 700 140 Organic Revenue of +4.8% 600
Slide 33: 2023 | Hygiene and Wellbeing
2023 | Hygiene and Wellbeing Growth inside and outside the washroom, strong M&A Core Washroom Expansion outside the Washroom M&A in H&W Core Washrooms (inside the washroom) Enhanced Environments (outside the 7 deals with annualised revenues in 2023: Revenue +5.9%, Organic +4.5% washroom) in 2023: Re
Slide 34: 2023 | Workwear
2023 | Workwear 4% of Group Revenue and Adjusted Operating Profit Revenue growth of 13.2%, all CAGR CAGR Organic growth 225 3.7% £40 7.4% 200 Adjusted Operating Profit growth 175 £35 £30 of 23.6% and margin of 17.5% 150 £25 125 £20 Focused pricing action and strong customer 100 181 192 217 £38 175 1
Slide 35: 2023 | M&A: Value creating acquisitions and substantial pipeline
2023 | M&A 41 deals across Growth & Emerging markets Value creating acquisitions and substantial pipeline in place Annualised acquired revenues of £106m in 2023. Consideration of £261m Pest Control: 34 deals with acquired annualised revenues of c.£76m Hygiene and Wellbeing: 7 deals with annualised r
Slide 36: THE RIGHT WAY 2 North America Organic Growth Plan
Preliminary Results 2023 THE RIGHT WAY 2 North America Organic Growth Plan Andy Ransom New US Innovation Centre, opens this Spring. 36
Slide 37: USA: World’s Largest Pest Control Market
USA: World’s Largest Pest Control Market The GLOBAL pest control market is Estimated US Market Growth Residential Served/Unserved ($bn) forecasted to grow at a CAGR of c.5% - 6% (2023-28) to c.US$33bn Dual (Served+DIY) $0.2 DIY In the US, Commercial accounts for $1.7 Served approximately c.33%, Resi
Slide 38: Organic Growth Model – Multiple Growth Levers
Organic Growth Model – Multiple Growth Levers Analysis: US Pest Control Services in H2 2023 EMPLOYER OF CHOICE Organic Growth is generated from both existing (left hand side Retention: Brand of the model) and new customers (right hand side of the Service SERVICE Sales Quality model). Performance fro
Slide 39: Organic Growth Model Scorecard: Retention and Service
Organic Growth Model Scorecard: US Pest Control Services in H2 2023 EMPLOYER Growth Lever OF CHOICE Retention SERVICE Service Quality Customer Service, SALES Employer of Choice Satisfaction and Retention Customer Retention Significant Improvement in Colleague Retention: Customer Service Remained Str
Slide 40: Organic Growth Model Scorecard: Pricing and Tech Leads
Organic Growth Model Scorecard: US Pest Control Services in H2 2023 Growth Lever Annual Increasing Revenue Pricing Pricing Increasing Revenue from Existing Customers from Existing Customers Consistent, Tightly Managed Approach to Pricing Tech Leads – a Core Channel to Organic Growth Pricing in 2023
Slide 41: Organic Growth Model Scorecard: Marketing
Organic Growth Model Scorecard: US Pest Control Services in H2 2023 Growth Lever Marketing SEO Brand Sales Proposition Brand Position Paid Campaigns New Customer Inbound sales leads flow Acquisition Terminix is the #1 Best Known Brand in US Pest Generating Sales Leads from New Potential Control, acc
Slide 42: Organic Growth Model Scorecard: Sales and Installation
Organic Growth Model Scorecard: US Pest Control Services in H2 2023 Growth Lever Sales Conversion Technician Install Sales Sales increasing customer new customer Performance Productivity penetration contracts Technician Installation Challenged lead generation put pressure on Deployed Rentokil Termin
Slide 43: Talented Sales & Marketing Leadership Team in Place
Talented Sales & Marketing Leadership Team in Place Brad Paulsen* John Myers Eric Rimiller Dave Hall^ Owen Schiano* Kira Lindquist Mark Reader^ Johanna Metz* Will Lin* Chris Raabe* CEO - North CEO - US Pest COO - US Pest Dir, Operations Chief Sales Officer VP, Sales Chief Mktg VP, Residential VP, Di
Slide 44: THE RIGHT WAY 2 North America Organic Growth Plan
Preliminary Results 2023 THE RIGHT WAY 2 North America Organic Growth Plan Brad Paulsen Chief Executive Officer North America 44
Slide 45: Organic Growth Opportunities in North America
Organic Growth Opportunities in North America RIGHT WAY 2 Plan for Organic Growth 1. Continue to drive up frontline colleague retention - particularly in Sales through Employer of Choice and investment in pay plans. 2. By focusing on the end-to-end customer service and experience, improve customer r
Slide 46: US Pest Control Organic Growth Plan: Retention and Service
Organic Growth Model US Pest Control Organic Growth Plan 2024 EMPLOYER Growth Lever Growth Lever OF CHOICE Retention SERVICE Service Quality Customer Service, SALES Employer of Choice Satisfaction and Retention Customer Retention Attracting and Retaining Talent Increase Customer Retention & Satisfac
Slide 47: US Pest Control Organic Growth Plan: Marketing
Organic Growth Model US Pest Control Organic Growth Plan 2024 Growth Lever Marketing Brand Sales SEO Proposition Brand Position Paid Campaigns New Customer Inbound sales Acquisition leads flow Leverage #1 Terminix brand Establish Marketing Excellence ▪ Invest in the Terminix brand - maintain ▪ Fully
Slide 48: Cockroaches advertisement
Cockroaches ) We Can Get Lay 40 Eggs in Rid of Them in 4 “ One Treatment ae A: OUR ONLINE / : | CHAT CANHELP I ' IN 2 SECONDS 1 | ’ 4 J
Slide 49: US Pest Control Organic Growth Plan: Sales and Pricing
Organic Growth Model US Pest Control Organic Growth Plan 2024 Growth Lever Sales Conversion Annual Sales Sales Pricing Pricing increasing customer new customer Performance penetration contracts Sales Colleague Retention & Effectiveness Ensure Strategic Pricing Approach ▪ Increase retention of Sales
Slide 50: US Pest Control Organic Growth Plan: Technician Productivity
Organic Growth Model US Pest Control Organic Growth Plan 2024 Growth Lever Increasing Increasing Revenue Technician Install Revenue from Existing from Existing Customers Productivity Customers Technician Installation Accelerate Trusted Advisor Program Standardize Service Training & Execution RIGHT W
Slide 51: THE RIGHT WAY 2 Growth Plan
THE RIGHT WAY 2 Growth Plan Reinvigorating growth in North America • World-class team passionate about our colleague and customer success • Proven leaders and strategy in place to re-establish expected marketing and customer acquisition leadership position • Strategic approach and execution rigor in
Slide 52: Terminix Integration: Combination of Strong Industrial Logic
Terminix Integration Combination of Strong Industrial Logic Scale and Density Fundamental understanding of Largest in Commercial, density enabling margin expansion. Residential and Economies of scale and Termite efficiency. Outstanding network coverage across the entire USA Combining our strengths:
Slide 53: Integration: Synergy Delivery Ahead of 2023 Target
Integration: Synergy Delivery Ahead of 2023 Target Net synergy target for 2023 exceeded by $9m Cumulative 2022 2023 by YE 2023 Gross synergies $15m $89m $104m Investments $(2)m $(20)m $(22)m Net Synergies $13m $69m $82m 2023 target $60m Costs to Achieve - Cash $40m $92m • $104m gross cost synergies
Slide 54: Our Journey to Success: Phase One Complete
Our Journey to Success Phase One: Complete ✓ ✓ Streamlined and unified organisational Co-location: Successfully reduced branch properties by structures to create a single RTX team 97, comprising 108 exits and 11 new sites ✓ ✓ Single payroll and benefits system launched for IT systems: 100% of collea
Slide 55: Our Journey to Success: Phase Two
Our Journey to Success Phase Two (to H1 2024): Preparation for Branch Integrations 1. Each market integration - runs over a 10-month 5. Consolidate RNA and TMX onto a unified Finance period. Implement best practice playbook system. Consolidate to a single expenses and travel (people, IT, branding, e
Slide 56: Our Journey to Success: Phases Three and Four
Our Journey to Success Phase Three Phase Four Undertake first integrations in 2024 Complete the branch integrations - achieving synergy plan in 2026 Colleagues initially move onto standard systems, tools and processes Lead and grow: Innovation. Digital. AI. M&A. Market share First market: Reducing f
Slide 57: A New Era of Innovation
ww. . + ~® @ ANEW ERA OOF INNOVATION * _ a
Slide 58: Terminix Termite Control
Terminix Termite Control Further good progress on legacy termite warranties 3500 ✓ Significantly fewer filed warranty claims: Total 3000 filed warranty claims reduced: 14% reduction in 2500 2023 vs prior year and by 44% since 2019 2000 ✓ Open warranty claims further reduced: 29% reduction in 2023 vs
Slide 59: Integration: Synergy Delivery
Integration: Synergy Delivery Gross synergy target increased by $50m to c.$325m Cumulative Cumulative 2024 2025 2026 by YE 2023 by YE 2026 Selling, General and Admin Synergies $88m $77m $20m $-m $185m Field Operations $16m $29m $55m $40m $140m Gross Synergies $104m $106m $75m $40m c.$325m Investment
Slide 60: Summary: Strong Group Performance in 2023
Summary: Strong Group Performance in 2023 Good overall group performance • 45.8% Revenue growth to £5.4bn of which 4.9% was Organic • 57.0% growth in Adjusted Operating Profit • 120 basis points increase in Adjusted Operating Margin to 16.6% 2024 Outlook • Strong Free Cash Flow of £500m; 89.4% cash