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2015 Interim Financial Results

Welcome

30 July 2015

2015 Interim Financial Results

1

Welcome

30 July 2015

This presentation contains statements that are, or may be, forward-looking regarding the group's financial position and results, business strategy, plans and objectives. Such statements involve risk and uncertainty because they relate to future events and circumstances and there are accordingly a number of factors which might cause actual results and performance to differ materially from those expressed or implied by such

• statements. Forward-looking statements speak only as of the date they are made and no

representation or warranty, whether expressed or implied, is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Other than in accordance with the Company’s legal or regulatory obligations (including under the Listing Rules and the Disclosure and Transparency Rules), the Company does not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise. Information contained in this announcement relating to the Company or its share price, or the yield on its shares, should not be relied upon as an indicator of future performance. Nothing in this presentation should be construed as a profit forecast.

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2

Andy Ransom Chief Executive

30 July 2015

2015 Interim Financial Results

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Introduction

• Good revenue and profit performance in H1 (+5.2% ongoing revenue; 8% ongoing profit growth)
• Pest Control growing strongly (+9.6% in H1, 4.8% organic)
• Momentum in M&A – 14 bolt-ons (12 in pest) with combined revenues of £21m
• Strong cash performance (£55.4m in H1) – on track to meet £100m+ FCF target
• £129m reduction in net debt compared to 30 June 2014 – lowest net debt in 15 years
• 13% proposed increase in dividend on prior year
• On track to achieve our 2015 revenue, profit and cash expectations

Good progress in first phase of our RIGHT WAY plan: Now entering next phase.

4

Financial Overview

Jeremy Townsend CFO

30 July 2015

2015 Interim Financial Results

5

£ million

CER = constant exchange rates AER = actual exchange rates *Ongoing revenue and profit exclude the financial performance of disposed and closed businesses but include results from acquisitions

Financial Highlights (Continuing Operations)

CASH EPS/DIV PROFIT REV

H1 2015 H1 2014 Revenue at CER 886.1 848.2 4.5% Revenue at CER – ongoing* 881.5 837.6 5.2% Adjusted PBITA at CER 106.9 98.9 8.0% Adjusted PBITA at CER – ongoing* 106.5 98.6 8.0% Adjusted PBTA at CER 89.1 76.4 16.6% Adjusted PBTA at AER 82.5 77.5 6.5% PBT at CER 76.0 65.6 15.9% Operating cash flow at AER 93.6 51.5 Free cash flow at AER 55.4 4.7 Adjusted EPS at CER 3.80 3.21 18.4% Adjusted EPS at AER 3.49p 3.26p 7.1% Dividend 0.87p 0.77p 13.0%

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20.1% 12.8%

Revenue1 £176.9m 8.3%

• Adj. PBITA2

£17.8m 19.5% Margin % 10.1% 0.9% % Group Revenue % Adj. PBITA

North America

• Revenue1 +8.3%

– Organic revenue of +2.7%, pest organic revenue +2.9% – Revenue from continuing acquisition programme +5.6% – Seven bolt-on acquisitions in H1, generating annualised revenue of

• c. £14m
• Operating profit2 +19.5%

– Driven by acquisitions and leverage impact from higher revenues

• Further margin improvement: +0.9% pts in H1

– Reflecting back office and property rationalisation and lower fuel prices

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At constant exchange rates

H1 2015

excluding revenue from disposed and closed businesses but includes revenue from acquisitions

before amortisation and impairment of tangibles (excluding computer software), restructuring costs and one-off items and excludes profit from disposed and closed businesses but includes profit from acquisitions.

47.0% 50.2%

Revenue1 £414.8m 0.4%

• Adj. PBITA2

£69.7m (2.9%) Margin % 16.8% (0.6%) % Group Revenue % Adj. PBITA

Europe

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• Revenue1 +0.4% (-0.8% organic)

– Good revenue growth in Germany (+3.0%), Southern

Europe (+5.2%) and Latin America (+52.8%) (managed out

• f the Europe region)

– Offset by declines in France (-3.1%) and Benelux (-0.8%)

• Operating profit2 -2.9%

– Primarily driven by revenue and margin decline in France

• Margins -0.6% pts

– Trading conditions remain challenging in certain parts of

Europe - France and the Netherlands in particular

– Opportunities to support margins through service

productivity and further reductions in overhead

• Overall Europe trading performance in H2 expected to be

in line with H1

At constant exchange rates

excluding revenue from disposed and closed businesses but includes revenue from acquisitions

before amortisation and impairment of tangibles (excluding computer software), restructuring costs and one-off items and excludes profit from disposed and closed businesses but includes profit from acquisitions.

H1 2015

19.2% 23.7%

Revenue1 £169.2m 13.2%

• Adj. PBITA2

£32.9m 6.8% Margin % 19.4% (1.2%)

Middle East Turkey, Africa

% Group Revenue % Adj. PBITA

UK and ROW

9

• Revenue1 +13.2%

– Organic growth +5.5%, acquisition growth of 7.7% largely from Peter Cox

acquisition completed at the end of 2014

– Continued growth from the UK pest control and hygiene categories - pest

control benefitting from increased jobbing work in particular

– Rest of World operations delivered good revenue growth driven by the

Caribbean and South Africa

• Operating profit2 +6.8% in H1
• Margins 1.2% pts lower

– Reflecting impact of Peter Cox acquisition and the phasing of costs in

ROW

At constant exchange rates

excluding revenue from disposed and closed businesses but includes revenue from acquisitions

before amortisation and impairment of tangibles (excluding computer software), restructuring costs and one-off items and excludes profit from disposed and closed businesses but includes profit from acquisitions.

H1 2015 9

6.0% 3.4%

% Group Revenue % Adj. PBITA

Asia

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• Revenue1 +13.3% (+9.0% organic)

– Both pest control and hygiene categories performing well – Operations in the emerging markets of India, China and Vietnam continue

to grow strongly - combined revenue growth of 28%.

– High single-digit revenue increase from the more mature markets of

Indonesia and Malaysia.

• Operating profit2 +51.6%

– Reflecting leverage from higher revenues, ongoing benefits from back

• ffice rationalisation and acquisitions (+11.3% contribution)
• Margins higher by +2.2% pts in H1

At constant exchange rates

Revenue1 £52.9m 13.3%

• Adj. PBITA2

£4.7m 51.6% Margin % 8.9% 2.2%

excluding revenue from disposed and closed businesses but includes revenue from acquisitions

before amortisation and impairment of tangibles (excluding computer software), restructuring costs and one-off items and excludes profit from disposed and closed businesses but includes profit from acquisitions.

H1 2015 10

7.7% 9.9%

% Group Revenue % Adj. PBITA

Pacific

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• Revenue1 +4.3% (+3.8% organic)
• Due to increased contract work in pest and hygiene categories and

greater job work in pest control

• Operating profit2 +7.9%

– Reflecting higher revenues and also supported by procurement savings

programme and ongoing branch administration rationalisation programme

• Margin improvement +0.7% pts

– Supported by business efficiencies, cost savings and branch

administration rationalisation

At constant exchange rates

Revenue1 £67.7m 4.3%

• Adj. PBITA2

£13.7m 7.9% Margin % 20.2% 0.7%

excluding revenue from disposed and closed businesses but includes revenue from acquisitions

before amortisation and impairment of tangibles (excluding computer software), restructuring costs and one-off items and excludes profit from disposed and closed businesses but includes profit from acquisitions.

H1 2015 11

Adjusted PBITA 99.7 100.2 Restructuring costs (2.3) (3.1) One-off items 0.9 0.8 Depreciation 85.4 92.1 Non-cash items1 7.9 (2.4) EBITDA 191.6 187.6 Working capital (8.0) (29.3) Movement on provisions (5.1) (8.7) Capex (88.5) (101.2) Fixed asset disposal proceeds2 3.6 3.1 Operating cash flow – continuing operations 93.6 51.5 Operating cash flow – discontinued operations (0.6) (35.5) Operating cash flow 93.0 16.0

H1 2015 H1 2014

Operating Cash Flow

At constant exchange rates

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Operating cash flow – continuing 93.6 51.5 Cash interest (23.5) (34.4) Cash tax (14.7) (12.4) Free cash flow – continuing 55.4 4.7 Free cash flow – discontinued (0.6) (35.5) Free cash flow 54.8 (30.8) Acquisitions (32.7) (41.7) Disposals

• 253.1

Restricted cash disposed (IFS)

• (16.3)

Dividends (33.1) (29.2) FX and other 56.2 40.5 Reduction in net debt 45.2 175.6 Opening net debt (775.0) (1034.8) Closing net debt (729.8) (859.2)

H1 2015 H1 2014

Free Cash Flow and Movement in Net Debt

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At actual exchange rates

13

Guidance for 2015

• Central and regional overheads anticipated to be in line with 2014
• P&L impact of restructuring costs no greater than £10m.
• Interest costs c.£42m - reflecting impact of recent refinancings - cash impact slightly

higher than P&L impact

• Based on current exchange rates the impact of currency movements would be around

£19m for the full year (£5m higher than previous guidance)

• Adjusted effective tax rate is 23.4% (in line with last year); cash tax payable no more

than c.£40m

• Working capital outflow estimated to be at or below £20m
• Net capex no more than £200m
• Full year M&A spend anticipated to be higher than £50m given cash spend in H1
• On target to achieve free cash flow target of £100m+ for the year

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Delivering profitable growth … the next phase

Andy Ransom Chief Executive

30 July 2015

1.Quick reminder of our RIGHT WAY plan for

profitable growth.

2.Update on our progress in Phase One of the plan. 3.Our priorities - by Quadrant and Category - as we

enter the next phase.

Agenda

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• 18 months ago we articulated our new

strategy for profitable growth

–

Business model: Five regions with low cost

• perating structure.

–

Focus on our three core categories.

–

Cultural change: Local management freed up to drive local sales growth.

–

Differentiated capital allocation.

• Established medium term targets
• Execute the strategy at pace
• Phase one now largely completed

Phase one of the plan

17

Mid-single digit revenue growth High-single digit profit growth Strong and sustainable delivery of free cash flow (£100m+ pa) Medium-term targets:

The Rentokil Initial Model

• Pest Control – global leaders

–

Outstanding business – most international pest control company

–

Well positioned to capitalise on increasing demand

–

Innovation pipeline and digital expertise delivering results.

–

35 acquisitions (since 1/1/14), performing ahead of IRR thresholds.

–

c.10% revenue growth in H1.

• Hygiene – we have created the model

–

Needed re-investment has taken place – new line up of products is now in place – Signature, Colour, Reflection, No Touch.

–

Innovation starting to come through eg HygieneConnect.

–

2.3% revenue growth in H1 (2% organic).

• Workwear – work in progress

–

Strong management team and plan in place; work to be done.

Rentokil Initial Today

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• Business has been transformed – delivering

strong and sustainable free cash flow

–

Period of large-scale restructuring ended.

–

Steady improvement in revenue and profit.

–

Reduction in central and regional overheads of £12m.

–

Managing working capital tightly.

–

Capex broadly in line with depreciation.

–

Fully funded pension scheme.

–

Strong cash delivery.

–

Significant reduction in net debt (£300m+ reduction over 18 months)

–

Upgraded to BBB (stable) by S&P (reaffirmed July 2015).

• Capital allocation model working well

–

M&A and Capex allocated inline with quadrant strategies.

–

High quality acquisition pipeline established.

–

Manage for Value disposals undertaken eg IFS, Spanish Medical.

–

36 acquisitions over 18 months (£78.6m annualised revenue) in Growth and Emerging markets.

Rentokil Initial Today/2

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Rentokil Initial Today/3

2013 2015

Growth and Emerging markets now account for almost 60% of group revenue.

32% 28% 36% 4% 50% 4% 38% 8%

Emerging Growth Manage for Value Protect & Enhance

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The next phase

1.

Increasing our exposure to Growth and Emerging markets – North America and Asia in particular.

2.

Accelerate and prioritise Pest Control and upside to go for in Hygiene through “Execute Now” and Workwear’s quality-focused improvement plan.

3.

Greater exploitation of our digital expertise - to drive sales and customer engagement - “Internet of Things” approach.

4.

Further differentiation through innovation.

5.

Deliver enhanced margins through density and local share eg NA, Asia.

6.

Boost sales and service productivity.

7.

Greater sharing of best practice - further development and roll out of the Project Speed for greater sharing of operational best practices.

8.

Value creating M&A programme - continue to use our differentiated approach with clear strategies for growth and capital allocation.

Mid-single digit revenue growth High-single digit profit growth Strong and sustainable delivery of free cash flow (£100m+ pa) Medium-term targets:

21

Growth & Emerging markets

Continued progress in H1

Growth and Emerging in H1 revenue fuelled by acquisitions in Latin America and organic growth in Asia, UK, NA and Germany.

+9.2%

• 0.7%
• 1.0%

+17.5%

Growth potential Profit contribution

Note: ongoing revenue

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Next phase

 Accelerate growth in Emerging markets – a platform for long‐term sustainable growth ‐ set to grow in relative importance, growing profitability with scale and city density.  Execute country plans to drive organic growth, direct sales to brand sensitive customers and target specific areas for route density building.  Use power of the Rentokil brand to target international customers.  Complete roll out of our performance enhancing web presence and extranet platform in Asia and Latin America.  M&A – good pipeline of city‐focused targets in place; continue to extend the footprint.

Emerging

Phase 1

 Built presence in high growth emerging

markets to target higher levels of organic growth.

 Entered 5 new emerging markets all

performing above threshold plan.

 Identified opportunity in Latin America

and moved quickly to secure leadership position through city‐focused acquisitions.

 Refocused strategy for China and India.  Enhanced sales capability in Asia.  11 acquisitions adding £18.7m revenue

• ver 18 months

 H1 2015: Revenue +17.5%.

Asia, MENAT LatAm, Fiji

Emerging quadrant revenue growth:

17.5%

10% organic in H1 2015

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Next phase

 Country plans targeting productivity, route density, aggressive cost management and retention in line with MFV strategies.  Continued focus on managing down our position in this quadrant.

Phase 1

Manage for Value

 Exited under‐performing or low margin businesses: City Link, IFS, Austrian Products and Spanish Medical. In H1 we closed our flat linen and garments businesses in N. Ireland and Austria.  Cost, productivity and efficiency focus.  Improved businesses in Italy (pest) and Ireland (pest and hygiene) – now moved to P&E quadrant.  Managing down our revenue position:

H1 2013: £420m H1 2014: £133m H1 2015: £41m (4% of group revenue)

MFV is now just

4%

• f group revenue

Italy (H), Spain Portugal, Greece

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Next phase

 Execute Workwear Performance Improvement Plan (details to follow) focused

• n quality of service and leveraging scale.

 Country‐specific action plans for France and the Netherlands given the on‐going market and economic conditions.  Maintain focus on productivity, route density, retaining and growing existing customers, developing new offers and services in line with P&E strategies.

Phase 1

Protect & Enhance

 Pest businesses in France, Nordics, SA

and the Pacific – moved into Growth.

 Improved OCF performance  Reduction in Capex and restructuring.  Benelux Workwear & Hygiene:

• Complaints and credit notes significantly

down in line with a much stronger, more stable service performance

• Improved cash performance
• Belgium Textiles & Hygiene revenue and

profit flat on prior year

• Netherlands remains challenging

 France Workwear:

• Sales pipeline significantly stronger than

H1 2014 but margins remain under pressure

France (T&H), Benelux, Pacific (H), SA (H)

Creating a

Workwear

business with clear market differentiation:

Product and Service Quality

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Phase 1 Next phase

 Deliver enhanced margins through density and local market share.  Push hard on: − Leverage of positions in NA & UK to target national accounts. − Deployment of innovation. − Web development ‐ driving sales leads. − Utilisation of Project Speed to share best practice. − M&A programme ‐ strong pipeline of

• pportunities; NA in particular. Building

City‐focused customer density.

 Creating national pest control position in

North America, world’s largest pest

• market. NA revenue +8.3% in H1.

 UK revenue +18% in H1 and continuing

to exploit new product development and service innovations such as Speed.

 Stronger position in Pacific pest control

(revenue +6% in H1 2015).

 H1 revenue growth in Germany +3.2%;

Cleanrooms +4.8%.

 Focus for M&A – 25 acquisitions with

revenue of £60m over 18 months.

 H1 2015: Revenue +9%.

Growth

Growth quadrant

50%

• f group revenue

USA, Germany, UK, Caribbean

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Profit Contribution Growth Potential

H1 2015

• Continued to pursue targets in Growth and

Emerging markets.

• 14 acquisitions completed; 12 in pest control.
• £21m annualised revenues.
• Latin America - acquisition of Sagrip - main cities
• f Guatemala and El Salvador.
• North America - continued to expand our

presence with six pest control acquisitions.

• UK, Australia, Korea, South Africa and Poland -

acquired small businesses, driving density. Excellent pipeline in place.

Note: Quadrant analysis of M&A in Phase One (since 1/1/14) can be found in the appendix.

H1 2015 Acquisitions: 3 Revenue: £1.8m

Colombia, Korea, Guatemala, El Salvador

Capital allocation model working well

H1 2015 Acquisitions: 10 Revenue: £18.2m

NA x7, Australia, UK, Poland

H1 2015 Acquisitions: 1 Revenue: £1.0m

South Africa

H1 2015 Disposals: 2 Revenue: £10.9m

Austria and NI flat linen 27

Pest Control

H1 category revenue £367m

 Leverage this powerhouse business – the world’s most international pest control company – continue to accelerate growth.  Accelerate:  Deployment of new pest products and services from innovation pipeline.  Our leadership in the Internet-of- Things for pest control eg monitoring devices covering full range of pests and risk-based reporting through extranets/apps.  Roll out of our performance enhancing web presence to complete across pest control.  M&A programme.

 Our growth engine: Revenue growth

• c. 10% (organic 4.8%) in H1 2015.

 Delivered organic growth in c.50

pest businesses in H1.

 Launched performance enhancing

website template in 20 markets.

 Developed strong innovation

pipeline incl. PestConnect remote monitoring, RodentGate and myRentokil.

 Acquired 35 companies over 18

months - all performing above IRR thresholds.

Phase 1 Next Phase

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Hygiene

H1 category revenue £227m

 “Execute Now” growth strategy - leverage strengths across our 40+ markets:  Build on great hygiene brand and strong market positions.  Sell with confidence - new product ranges - Reflection, Signature, Colour and No Touch, Premium Scenting.  Lead on innovation through Internet-of- Things for Hygiene eg sensing, hand hygiene compliance - food & Health sectors.  Build city density and extend footprint through M&A.

 Revenue growth 2.3% in H1 2015,

benefits of Signature range.

UK & Ireland - hygiene returned to

growth (+3.7% in H1 2015)

France - hygiene revenue +1.3% in H1 Pacific hygiene revenue +3.9% in H1  Completed range of Hygiene products

• incl. Signature and Signature Colour;

most complete range including no-touch products.

 Launched HygieneConnect hand hygiene

monitoring service and myInitial extranet for better customer engagement.

 Premium Scenting - growing over 30% pa

although from low base.

Phase 1 Next Phase

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Workwear

H1 category revenue £193m

 Significant restructuring completed.  New products launched in main European countries.  Germany continues to perform well.  Growing Cleanroom business.  Exited lower margin flat linen in Austria.  Category held-back by France and Benelux.  Acceptable service levels but opportunity for

differentiation through best quality.

Phase 1 Our aim is to create a Workwear business that has clear market differentiation through the highest level of service quality – building customer satisfaction – to drive revenue and margin

• pportunity.

30

Workwear

• Rigorous application of KPIs to measure quality of service.
• Improved product visibility through the entire service process.
• Best in class processing – highest standards in washing and repair

quality; new higher quality detergents.

• More responsiveness to customer needs - shorter lead time

between contract and deployment (eg web-based size taking pilot).

• Smarter selling - “selling a service rather than a product”.
• Creation of product and service innovation action group.
• Leverage European scale and best practice - to create a more

effective organisation through best practice sharing in supply chain, R&D, processing, sales and marketing.

Next phase The priorities:

31

The next phase…

Momentum, Pace and Consistency

1.

Increasing our exposure to Growth and Emerging markets – North America and Asia in particular.

2.

Accelerate and prioritise Pest Control and upside to go for in Hygiene through “Execute Now” and Workwear’s quality-focused improvement plan.

3.

Greater exploitation of our digital expertise - to drive sales and customer engagement - “Internet of Things” approach.

4.

Further differentiation through innovation.

5.

Deliver enhanced margins through density and local share eg NA, Asia.

6.

Boost sales and service productivity.

7.

Greater sharing of best practice - further development and roll out of the Project Speed for greater sharing of operational best practices.

8.

Value creating M&A programme - continue to use our differentiated approach with clear strategies for growth and capital allocation.

Mid-single digit revenue growth High-single digit profit growth Strong and sustainable delivery of free cash flow (£100m+ pa) Medium-term targets:

32

Profit Contribution Growth Potential

Phase One

• Focused on targets in Growth and Emerging

markets – 36 acquisitions, £78.6m revenue.

• Entered new higher growth markets such as

Chile and Colombia.

• 17 acquisitions in NA, building density.
• Pest Control focus – 35 acquisitions.
• Deals performing in line with differentiated

IRR per quadrant.

• Managing down MfV quadrant with 5

disposals. Since 1/1/14 Acquisitions: 11 Revenue: £18.7m

Brazil, Chile, Colombia, Korea, India, Brunei, Singapore, El Salvador, Guatemala, Mozambique

Capital allocation model working well

Since 1/1/14 Acquisitions: 25 Revenue: £59.9m

NA x17, UK, Caribbean, Australia

Since 1/1/14 Acquisitions: 7 Revenue: £7.6m

Netherlands, South Africa, Sweden, Italy (pest), Ireland

Since 1/1/14 Disposals: 5 Revenue: £266.5m

Spanish Medical, NI linen, Austria Products & flat linen Acquisitions x 1 £0.5m 34