Rentokil Initial (RTO) Trading Update summary

Financial performance and growth

• Achieved total revenue growth of 3.6% in Q3 2024, with organic growth at 2.6% and international regions delivering 4.4% organic growth, led by Europe (4.7%), Asia/MENA (6.5%), and France Workwear (7.4%).

• North America organic revenue growth was 1.4%, with pest control at 2.2% and hygiene & wellbeing at 2.9%.

• International businesses outside North America delivered a combined organic growth rate of 5% year-to-date.

• FY 2024 revenue and margin guidance remain unchanged; Group Adjusted PBTA expected at c.£700m, leverage at 2.8x, and BBB (stable) rating reaffirmed.

• M&A activity added £39m in annualised revenue from 5 deals; full-year M&A spend expected at c.£200m.

Cost management and operational actions

• Reduced sales and service headcount by 250 roles, targeting $22 million in annualized cost savings.

• Implemented strict ordering controls to address elevated material and consumable costs, with $10 million expected to unwind in Q4 and 2025.

• Identified $33 million of a £50 million cost overrun to be recovered, with $10 million of material costs expected to flow back in Q4 and 2025.

• Pricing actions in North America offset inflationary pressures.

• Year-end leverage expected to remain at 2.8x.

Integration and strategic initiatives

• Integrated systems and data in 36 branches (revenue $172 million), with minimal operational disruption and strong retention.

• Q4 to see further integration in 23 branches ($130 million revenue) and piloting of new pay plans across 8 branches.

• At least 10 new satellite branches to be piloted in Q4 to boost brand presence and digital leads in prime metro areas.

• Right Way 2 plan focuses on sales/marketing, customer retention, and high-performance culture.

• Integration review in Q1 2025 will delay synergy delivery by 2–3 months.