Rollins, Inc. · NYSE:ROL
Rollins — FY2016 Earnings Presentation
30 slides from Rollins's earnings presentation, February 2017
Slide 1: The Leader In Pest Control
The Leader In Pest Control PEST CONTROL DOWN TO A SCIENCE PEST DEFENSE® CANADA’ ——_— ACRITTERST Walthia qe TRUTECH = ALLPEst 0 LW sf ein E Rafeguar d Crane Murray Pest Control Qi” THE PEST CONTROL PEOPLE >
Slide 2: Management Participant
Management Participant Eddie Northen Vice President, Chief Financial Officer and Treasurer 2016
Slide 3: Forward-Looking Statement
Forward-Looking Statement Certain information provided ge hag presentation will includg forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements within the meaning of the Private Securities Litigation Reform
Slide 4: Leading pest and termite control company
Leading pest and termite control company Powerful “Orkin” brand name — world renown Over 2.0 million residential & commercial customers 19 consecutive years of improved earnings Dividend increased a minimum of 12% for 15 consecutive years Over 700 locations in the U.S, and Canada with over 200 franc
Slide 5: Rollins Value Proposition
Rollins Value Proposition Recession resistent — 80% of revenues are recurring Ca. Competitive Focus on sustained advantage -- Brand profitable growth Solid track record of and infrastructure Strong balance sheet Shareholder Value | create barriers creation ~~ ~~ Strong” management, excellent depth S
Slide 6: $12.3+ billion industry
$12.3+ billion industry Increasing health awareness Three public competitors: Ecolab (NYSE:ECL), ServiceMaster (NYSE:SERV) and Rentokil (LSE:RTO) Roughly 70% residential and 30% commercial Rollins, Terminix, and Ecolab generate over 30% of industry revenues Highly fragmented with numerous small Oper
Slide 7: Growing Our Business Organically
Growing Our Business Organically > Internet lead development > Meeting our customers’ needs from sales to service > Increased yield and retention across all brands Pricing power ncremental marketing investments in strategic markets Enhanced targeting to attract higher-income customers VV VV Hometeam
Slide 8: Growth Through Strategic Acquisitions
Growth Through Strategic Acquisitions Over 30 branches ‘i across Canada Acquirer of Choice j Washington Montana basa Minnesote Dakota Oregon Idaho Wroming lowa Nebraska Alaska Utah Kansas @ Missouri f S, i Kentucky \ ay North \D ia ‘Oklahoma Arkansas Tennessee. Caroling \. Ml egavesreny Arizona Miss
Slide 9: Global Strategic Franchises
Global Strategic Franchises 220 Franchises Globally 76 International * South Korea * China * People’s Republic of China * Hong Kong Tr * Kingdom of Cambodia + Turkey * Tbilisi, Georgia MIDDLE RAST: * Critter anti North Atlantic Franchises Ocean + Mexico + Panama * Costa Rica + Nigeria * Honduras * E
Slide 10: Revenue and Retention by Business Line
Revenue and Retention by Business Line Revenue and Retention % by Business Line Retention i Retention bet approximately 85% Other <1% 3 7 aa tween f = Commercial = Residential » Termite @ Other / Retention between 76%- 85%
Slide 11: Orkin — Pest Control Down to a Science
Orkin — Pest Control Down to a Science Brand value grows with importance of Internet marketing National ad campaign — “Pest Control Down to a Science” Approximately 5% of revenues spent annually on growing and preserving the brand “Orkin” man icon — 70% brand awareness
Slide 12: Commercial
COMMERCIAL > Orkin, LLC Focused Sustained, Profitable Growth > Orkin Canada > No. 1 commercial pest control provider in North =) Western PestGenices America — 20% market share > IFC > Increasing demand driven by health and safety concerns ee . > Worldwide service network with 103 dedicated » Waltham
Slide 13: Residential
VV VV VV RESIDENTIAL Orkin HomeTeam Pest Defense Orkin Canada PermatTreat Waltham Service Rollins Australia Focused on Sustained, Profitable Growth > Rising concern over health, safety and protection of property > Better informed consumers, targeting specific segments > Internet providing accelerate
Slide 14: Termite
TERMITE > Orkin > HomeTeam Pest Defense > PermaTreat > Western Pest Services > Rollins Australia Focused on Sustained, Profitable Growth > Termite damage -- $5.6 billion annually, a real threat to homeowners. >» Shares many ofthe same characteristics of our other businesses — strong recurring revenu
Slide 15: Wildlife — Accelerating our Growth Opportunity
Wildlife — Accelerating our Growth Opportunity North American Wildlife Category Opportunity of $500M+ Critter Control and Trutech are #1 and #2 entities in the (nad TRUTECH Gwe, WILDLIFE SERVICE Operations in over 150 of the top Markets with either or both brands Built-in acquisition network with Cr
Slide 16: Bed Bugs: Strategic Growth Opportunity
Bed Bugs: Strategic Growth Opportunity > Bed bug industry grew 25% to $320 million in 2010* > Rollins data shows company growing faster than industry > Recurring revenue growth through inspection and remedial services. > New opportunity to introduce residential and commercial pest control services t
Slide 17: Focus on Continuous Improvement
Focus on Continuous Improvement to: > Advance service and product line offerings > Expand customer base > Increase customer retention and satisfaction > Improve productivity and reduce operating costs > Achieve continuous financial improvement Initiatives to meet these objectives > Rollout of branch
Slide 18: Commitment to Training
Cafeteria Commitment to Training 27,000 sq. ft. Training Center unique to pest control industry 13,000 sq. ft. commercial training facility Residential facility incorporates a 2,400 sq. ft. fully constructed home and Commercial Kitchen termite treating pavilion Named to Training Magazine E . _ Top 1
Slide 19: The Leader In Pest Control
The Leader In Pest Control PEST CONTROL DOWN TO A SCIENCE A WESTERN <> HomeTeam Rei ——. AERITTER SS TRUTEC A Waltham Perma TRear Can WILDLIFE SERVICE H LLPEST = re] Ly] STATEWIDE Rafeguar d Py Crane Murray Past Control Qa Tilt PEST CONTROL PLOPLE SS Lenries og
Slide 20: Revenue Growth
Revenue Growth ($in millions) 2012 $1,573 2013 2014 2015 2016
Slide 21: Revenue Growth by Quarter
Revenue Growth by Quarter ($in millions) $450 $400 $350 $300 $250 ist Qtr ond Qtr 3rd Qtr 4th Qtr M2012 2013 "2014 ©2015 2016
Slide 22: Diluted Earnings Per Share Growth
Diluted Earnings Per Share Growth $0.80 $0.75 $0.70 $0.65 $0.60 $0.55 $0.50 $0.45 $0.40 2012 2013 2014 2015 2016 All diluted earnings per share data is presented post-split for the three-for-two stock split effective March 10, 2015 for shareholders of record February 10, 2015. <>
Slide 23: Strong Free Cash Flows
Strong Free Cash Flows Cash From Operations R -_ No a1 ee | Fa | é 2012 2013 2014 2015 2016 OCapital Expenditures & Dividend Payout @ Free Cash Flow <>
Slide 24: Rollins' Sources and Uses of Cash
Rollins’ Sources and Uses of Cash Cash Flow for FY 2011 — FY 2016 (in millions) Beginning Cash = Cash From Other Net Acq. NetCapex Dividends Paid ~—_— Net Rep. of Operations Stock Source: Company Filings Ending Cash <>
Slide 25: Share Repurchase Program: 2009 - 2016
Share Repurchase Program: 2009 - 2016 (In million) #of Shares Cash Paid ° 2009 © 3,773,700 « 27,820,860 * 2010 © 2,833,712 * 26,410,570 * 2011 * 2,187,423 |* 27,313,664 * 2012 ° 1,172,672 | * 16,399,431 | * 2013 ° 511,049 + 8,384,761 ° 2014 * 1,507,919 * 29,394,633 | © 2015 temp * 19,137 map 429,899
Slide 26: Dividend Record
Dividend Record $0.55 $0.50 $0.50 $0.42 | $0.40 | $0.35 | $0.32 $0.29 O20 | $0.28 | $0.24 | $0.21 | 2012 2013 2014 2015 2016 @ Dividends Paid excluding special dividends @ Dividends Paid with special dividends All dividend data is presented post-split for the three-for-two stock split effective Marc
Slide 27: Depreciation and Amortization of Intangibles
Depreciation and Amortization of Intangibles $ in millions $60 $50 2012 2013 2014 2015 2016 ~ Depreciation ™ Amortization
Slide 28: Rollins Inc. 10-year stock performance vs. Russell 2000
Rollins Inc. 10-year stock performance (with dividends reinvested) vs. Russell 2000 Index 12/31/2006 — 12/31/2016 — Rollins, Inc. (ROL-USA) [Delayed] —— Russell 2000 (RUT-RUX) [Delayed] 07 08 09 10 "1 rH) "3 "4 45 16 10-Year Performance w/ dividends Reinvested (12/31/2006 — 12/31/2016): Total Annual
Slide 29: Rollins, Inc. 10-year stock performance vs. S&P 500
Rollins, Inc. 10-year stock performance (with dividends reinvested) vs. S&P 500 Index 12/31/2006 — 12/31/2016 — Rollins, Inc. (ROL-USA) [Delayed] —— S&P 500 (SP50-USA) [Delayed] 78 ‘09 10 4M "2 3 14 6S 6 10-Year Performance w/ dividends Reinvested (12/31/2006 — 12/31/2016): Total Annualized Rollins
Slide 30: Company History
Orkin began operations: Otto Orkin “ The Rat Man’ sold poison Rollins buys Orkin tor $62 million First Orkin franchise opens door-to-door Rollins, begins trading on the NYSE a and REOD Orkin acquires Prism, Orkin Canada, Company History Orkin named to Training Magazine's Top 100 Training Companies R