Rollins (ROL) investor relations material

Labor and workforce trends

• Labor conditions have improved significantly since the COVID era, making it easier to attract and retain talent, especially younger employees.

• Investments in leadership development and onboarding are aimed at reducing early turnover and fostering long-term employee relationships.

• The average age of new hires has shifted from the mid-thirties to the twenties, requiring new approaches to training and engagement.

• Modernization efforts include leadership training for all people managers and a focus on building emotional connections with new hires.

• Long-term employee relationships are seen as key to strong customer relationships and business results.

Growth strategy and financial performance

• Organic growth remains strong at 7%-8%, with M&A contributing an additional 2%-4% due to recent acquisitions.

• Margins have expanded by 700-800 basis points over the past 25 years, with incremental margins targeted at 25%-30%.

• Ancillary services are growing at a double-digit pace, driven by cross-selling and team-based sales approaches.

• Recent acquisitions like Fox and Saela have been accretive to margins and organic growth, with Saela showing double-digit organic growth in its first quarter.

• The company remains acquisitive, focusing on culture and brand fit rather than price, and is expanding in Canada and the Midwest.

Commercial and residential market dynamics

• Commercial business is ramping up, with fewer but stronger competitors compared to the highly fragmented residential market.

• Investments in commercial sales force and leadership, including a new COO for Orkin commercial, have driven high single-digit growth.

• The Orkin brand's national scale and triple guarantee are key differentiators in winning commercial accounts.

• Residential business faces more competition from smaller regional players, but brand equity and service breadth provide an advantage.

• Housing market softness has had limited impact, as most business is not tied to real estate transactions; ancillary services benefit from homeowners investing in their properties.