Rollins, Inc. · NYSE:ROL
Rollins — Q4 2020 Earnings Presentation
30 slides from Rollins's earnings presentation, 2021
Slide 1: The Leader in Pest Control
O N D ITI A TR I NG NN WI A The Leader in Pest Control Investor Relations Presentation Q4 2020
Slide 2: The Rollins' Brands
The Rollins’ Brands Continued Growth • 23 consecutive years of improved • Over 2.8 million global residential and revenues commercial customers • Dividend growth average greater than • Over 900 locations and franchises 18% over 17 consecutive years* worldwide • 20% Average annual earnings growth • R
Slide 3: Rollins brand logos
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Slide 4: Rollins: Then & Now
Rollins: Then & Now “We were in a lot of really poor businesses before We found a good business” - O. Wayne Rollins Our History 4
Slide 5: Key Events in Our History
Key 1893 Waltham Pest Control was founded Events 1901 Orkin began operations; Otto Orkin “the rat man” sold poison door to door in 1964 Rollins buys Orkin for $62 million Our 1968 Rollins begins trading on the NYSE History 1995 First Orkin domestic franchise opens Rollins enters the Canadian market
Slide 6: Rollins Value Proposition
Solid track record of shareholder value creation Rollins Value Proposition Competitive Advantage Brand and best in class customer experience Recession Resistant Over 80% of revenues are contractual recurring Significant Insider Ownership Strong management and excellent depth Strong Balance Sheet Foc
Slide 7: Industry
Industry Growth Customers $18 billion industry globally with an expected growth US, roughly 70% rate of 4-5% annually; residential and 30% $12+ billion US commercial Awareness Increasing health, social, and environmental awareness Market US market is 20,000+ companies; Remaining Competitors Global m
Slide 8: General Pests
General Pests Roaches Since every home is different, the technician will design a unique program for each structure. Techs can provide the right solution to keep cockroaches in their place Termites To prevent termites in your structure, eliminate moisture problems, and remove food sources. This will
Slide 9: Wildlife
Wildlife Rats Rats often are attracted to homes for the 3 essentials: food, water, & shelter. Homeowners should reduce or eliminate as many of these sources as possible Snakes A step that can help prevent snakes is removing as much of their habitat as possible. Without a comfortable habitat, snakes
Slide 10: Residential Business
Focused on sustained & profitable growth Residential Business • #1 in Residential Pest Control globally • Rising concern over health, safety and protection of property • Better informed consumers, targeting specific segments • Internet providing accelerated growth • Recession resistant – non-discret
Slide 11: HomeTeam Pest Defense
Focused on sustained & profitable growth HomeTeam Pest Defense VISION To deliver a delightful experience every time for a lifetime PURPOSE Protecting homes and improving communities • Of the Top 25 Builders in 2020, HomeTeam provided service to 22 of 25 • As of 2018, HomeTeam has installed TAEXX in
Slide 12: Commercial Business
Focused on sustained & profitable growth Commercial Business • No. 1 commercial pest control provider in Companies o ering North America – over 20% market share commercial seffrvices • Increasing demand driven by health and safety concerns • Worldwide service network with dedicated • Orkin commercia
Slide 13: Termite Business
Focused on sustained & profitable growth Termite Business • Termites cost Americans more than $5 billion in damage each year and most home insurance plans don’t cover the cost of damage repairs • Strong recurring revenue and high retention • Invigorated sales force, utilizing digital technology • Ho
Slide 14: Ancillary & Disinfectant Business
Ancillary & Disinfectant Business Focused on sustained & profitable growth Before • Home insulation solutions to protect against heating and cooling loss while giving protection against unwanted pests • Moisture control treatments to reduce excess moisture in home’s crawlspaces, basements, and other
Slide 15: Wildlife Control
Wildlife Control Wildlife – Accelerating Our Growth Opportunity • North America Wildlife category opportunity of $500M+ • Critter Control and Trutech are #1 and #2 companies in the category • Immediate synergy created by integrating marketing and training • Built-in acquisition network with Critter
Slide 16: People - Our Greatest Asset
People - Our Greatest Asset Rollins has been awarded a 2020 Top Workplaces Award by The Atlanta Journal-Constitution. This is the fourth consecutive year Rollins has received the illustrious award Safety Strategy Integrate Safety with the “PEOPLE” Value of our company to positively engage our employ
Slide 17: Safety and Health 2021 Initiatives
Safety and Health 2021 Initiatives Worksite/Hazard Analysis • Evaluation • Incident Reviews • Vendor Qualifications Hazard Prevention and Controls • Policies • Driver Coach Technology • Communications Leadership and Employee Involvement • Executive Safety Comittee • Safety Council • Safety and Risk
Slide 18: Commitment to Training
Commitment to Training Custom home for training simulates a variety of possible customer environments for our technicians 27,000 Sq. Ft. state of the art learning & training center unique to pest control industry, including termite & commercial training facility Attracts regulators, educators & univ
Slide 19: Global Training Communication
Global Training Communication Web-based employee training network utilized by employees and franchises worldwide Broadcasting studio used for global communication 19
Slide 20: Total Revenue Growth / Quarterly Revenue Growth
Total Revenue Growth 2011-2020 $2,200,000,000 $2,000,000,000 $1,800,000,000 $1,600,000,000 $1,400,000,000 $1,200,000,000 $1,000,000,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Quarterly Revenue Growth $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 $0 Q1 Q2 Q3
Slide 21: Revenue & Retention by Business Line
Revenue & Retention by Business Line Termite & Ancillary 19% Retention range 86% -88% Commercial Pest Control 36% Retention range 86% -90% Residential Pest Control 45% Retention range 74% -85% Mosquito Revenue & Growth % $45,000,000 40% $40,000,000 35% $35,000,000 30% $30,000,000 25% $25,000,000 20%
Slide 22: Net Income 2011-2020
Net Income 2011-2020 $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $0 2011 2012 2013 2014 2015 2016 2017* 2018 2019* 2020 *2017 adjusted for TCJA enactment, 2019 adjusted for non-cash pension settlement Quarterly Net Income Growth $90,000,000 $80,000,000 $70,000,000 $6
Slide 23: Free Cash Flow (FCF) and Primary Uses for Cash
Free Cash Flow (FCF) (FCF = Net Cash provided by Operating Activities - Capital Expenditures) $450,000,000 $400,000,000 $350,000,000 $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $0 2015 2016 2017 2018 2019 2020 Primary Uses for Cash Acquisitions • 31 acquisitions comp
Slide 24: Global Strategic Operations
Global Strategic Operations Countries with Company owned operations 93% Domestic U.S. Revenues 7% International Revenues North America • United States • Canada Central America • Mexico • Guatemala • El Salvador • Honduras • Nicaragua • Costa Rica • Panama Caribbean & Bahamas • Jamaica • Turks & Caic
Slide 25: Franchises and Countries
20 North America 49 Orkin Domestic U.S. Franchises 11 South America 94 Orkin International Franchises 8 Europe 9 Murray Australia Franchises 24 Asia 79 Critter Control Franchises 1 Australia 231 Total Franchises 7 Africa 71 Total Countries Europe • Netherlands • Ireland • Portugal • Romania • Russia
Slide 26: Growth & Future at Rollins
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Slide 27: Investing In New Technology
Investing In New Technology Phase 1 – BOSS 9 Completed/Achieved • Business Operations Support z In Progress System (BOSS) Branch operating system • Virtual Route Manager (VRM) Technician route optimization • Orkin 2.0 Realignment of customer service activities Phase 3 & Phase 4 • Customer notificati
Slide 28: Sustainability Mission
Sustainability Mission At Rollins, we are committed to sustaining our people and communities, our environment, and our business. Sampling of our ESG Initiatives • Through improved efficiency, Orkin saved an additional 3.8 million miles during 2020 lapping 2019’s previous savings • Decreased water us
Slide 29: Environmentally Friendly Services
Environmentally Friendly Services Falconry Services In the U.K., our Van Vynk Environmental brand offers Falconry services to control nuisance bird activity, such as feral pigeons and gulls. Exposing the nuisance bird to trained birds of prey over an extended period of time persuades them to relocat
Slide 30: Thank You!
Thank You! For questions, please reach out to Julie Bimmerman: Julie Bimmerman VP, Finance and Investor Relations (404) 888-2000 investorrelations@rollins.com Telephone Location Website 404-888-2000 2170 Piedmont Rd, NE www.rollins.com Atlanta, GA 30324