Rentokil Initial (RTO) H2 2024 earnings summary

Executive summary

• Revenue grew 3.9% to £5.6bn in 2024, with organic growth of 2.8%, in line with revised guidance.

• International operations outperformed North America, with international revenue up 8.2% and strong pest control growth.

• North America faced margin compression and underperformance in organic growth, but showed progress in integration and retention.

• Terminix integration advanced, with over 250 branches on unified systems and improved colleague and customer retention.

• Group-wide focus on innovation, digital transformation, and sustainability, including 500,000 PestConnect units installed.

Financial highlights

• Adjusted operating profit fell 7.1% to £860m; margin declined by 130bps to 15.4%.

• Free cash flow was £410m with 80% conversion.

• Net debt/EBITDA at year-end was 2.9x.

• Full-year dividend per share was 9.09p, up 5% YoY.

• Diluted adjusted EPS was 21.19p, down 8.2%.

Outlook and guidance

• 2025 performance expected in line with market expectations despite soft Q1 lead generation.

• North America margins targeted to exceed 20% by 2027 post-integration.

• 2025 guidance: restructuring costs ~$10m, one-offs (excl. Terminix) ~$15m, Terminix integration costs $55–65m.

• No additional investment required in 2025 beyond 2024 levels; focus on repurposing spend.

• Moving to dollar reporting from Q1 2025.