Rentokil Initial (RTO) Trading Update summary

Revenue and Growth Performance

• Group revenue grew 3.6% at constant exchange rates in Q3 2024, with organic growth at 2.6%; international regions outperformed, with Europe at 4.7%, UK & Sub-Saharan Africa at 4.2%, and Asia/MENAT at 6.5%.

• North America delivered 1.4% organic revenue growth, below expectations, prompting focused action plans.

• Pest Control organic revenue increased 2.2%, Hygiene & Wellbeing 2.9%, and France Workwear 7.4%.

• FY 2024 revenue and margin guidance remain unchanged; Group adjusted PBTA expected at approximately £700m.

• Year-end leverage is forecast to remain at 2.8x, with BBB (stable) ratings reaffirmed by Fitch and S&P.

Cost Management and Operational Actions

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

• Implemented strict ordering controls and expect $10 million of material and consumable costs to unwind in Q4 and next year.

• Material and consumable costs remain high due to inflation and inventory.

Growth and Customer Initiatives

• Enhanced digital lead generation, especially for the Terminix brand, and piloting at least 10 new satellite branches in Q4.

• Focused on sales basics and customer retention, with customer retention improving to 79.9% and colleague retention rising to 78.5%.

• Significant increase in five-star Google reviews, with Terminix reviews rising from 14,000 to 38,000 year-to-date.

• Customer experience initiatives include analytics upgrades and expanded Customer Saves team.