FIN FINANC ANCIAL IAL RESU RESULTS TS 1 This presentation - - PowerPoint PPT Presentation

2019 INTE 2019 INTERIM RIM FIN FINANC ANCIAL IAL RESU RESULTS TS

31 July 2019

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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

• therwise. 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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2019 INTERIM 2019 INTERIM FIN FINANCIAL ANCIAL RESUL RESULTS TS

31 July 2019 Andy Ransom, CEO

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H1 H1 20 2019 19 Highlight Highlights

Ongoing Revenue ahead of medium-term target (5%-8%) with all Regions contributing. Strong H1 Organic Revenue growth in both Pest Control and Hygiene.

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8.8% 8.8%

H1 Ongoing Revenue Growth at CER.

4.2% 4.2%

H1 Organic Revenue Growth (H1 2018: 3.0%).

11.4% 11.4%

H1 Pest Control Ongoing Revenue Growth. 4.8% organic growth (H1 2018: 4.0%).

6.5% 6.5%

H1 Hygiene Ongoing Revenue Growth. 4.3% organic growth (H1 2018: 2.1%).

H1 H1 20 2019 19 Highlight Highlights

Strong Ongoing Profit Growth and Free Cash Flow both ahead of H1 2018. Operating margins up 0.4% pts and by +0.5% pts in North America.

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11.6% 11.6%

H1 Ongoing Profit Growth at CER.

£95.9m 95.9m

Strong Free Cash Flow +£22.9m (vs H1 2018).

1.1 1.1% % pts pts

Improvement in Customer Retention. 1.8% pts improvement in Pest Control (12-mth MAT).

All All Regions gions

Contributed to a strong First Half.

H1 H1 20 2019 19 Highlight Highlights

17 high-quality acquisitions with 12 in Pest Control and 5 in Hygiene in H1. Divestment of 17.8% stake in joint venture with Haniel for €430m.

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£55m £55m

17 deals delivered £55m revenues. c.£121m in cash spent in H1. Strong pipeline.

$59m $59m

7 deals in NA in H1 with $59m annualised revenues. FY 2018 = $53m annualised revenues.

New New Pest mar est markets ets

Jordan (Amman) and Sri Lanka (Colombo). 8 deals in Emerging markets.

€430m

Divestment of 17.8% share of Haniel JV. In addition to the €520m received in 2017. No tax to pay on sale proceeds.

H1 H1 20 2019 19

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“The business has performed very well in the first six months with strong organic growth of 4.2%. We have again exceeded our medium-term financial targets for revenue, profit and cash.”

“We are confident of delivering further progress in H2 2019.”

H1 2019 H1 2019 Financial Financial Review view

31 July 2019 Jeremy Townsend, CFO

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Fina Financ ncial ial Highlight Highlights s

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H1 2019 £ million AER CER Δ AER Δ CER Ongoing Revenue* 1,289.9 1,281.0 10.7% 8.8% Ongoing Operating Profit * 152.1 151.8 13.0% 11.6% Adjusted PBTA 141.6 141.4 13.7% 12.4% PBT 113.8 114.0 3.7% 3.2% Free Cash Flow 95.9 Adjusted EPS 5.99p 5.98p 14.0% 12.9% Dividend 1.51p 15.2%

Revenue £1,289.9m

8.8%

Cash £95.9m

93%

cash conversion**

• ver last 12 months

Profit £152.1m

11.6%

*Ongoing Revenue and Ongoing Operating Profit exclude the results of disposed businesses. Ongoing Operating Profit and Adjusted PBTA exclude certain items that could distort the underlying trading performance. **Adjusted cash flow conversion on a trailing 12-month basis

50 100 150 200

Yr to June 2013 Yr to June 2014 Yr to June 2015 Yr to June 2016 Yr to June 2017 Yr to June 2018 Yr to June 2019

130.0 180.0 230.0 280.0 330.0

Yr to June 2013 Yr to June 2014 Yr to June 2015 Yr to June 2016 Yr to June 2017 Yr to June 2018 Yr to June 2019

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 1300 1500 1700 1900 2100 2300 2500

Yr to June 2013 Yr to June 2014 Yr to June 2015 Yr to June 2016 Yr to June 2017 Yr to June 2018 Yr to June 2019

Str Stron

• ng

g Fina Financ ncial ial Pr Prog

• gres

ess

A track record of delivery

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Ongoing Revenue growth: 5%–8%, 3%-4% Organic (CER) Ongoing Operating Profit growth c.10% (CER) Strong and sustainable delivery of Free Cash Flow, c.90% conversion** (AER)

+8.8% growth in Ongoing Revenue, +4.2% Organic +11.6% in H1 2019 Free Cash Flow of £95.9m,

93% cash conversion over last 12 months

5 YR CAGR 11.5%

£m £m £m

Organic 5 YR CAGR 3.3% 5 YR CAGR 15.2%

*Ongoing Revenue and Ongoing Operating Profit exclude the results of disposed businesses. Ongoing Operating Profit and Adjusted PBTA exclude certain items that could distort the underlying trading performance. Charts calculated on a 12-month trailing basis. **Adjusted cash flow conversion on a trailing 12-month basis

Nor North th Amer America ica

Ongoing Revenue growth +9.6% Organic Revenue growth +3.7% Ongoing Operating Profit growth +14.7%

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Group Revenue: 38% Group Profit: 30%

H1 2019 Growth Ongoing Revenue £482.8m +9.6% Ongoing Operating Profit £58.4m +14.7% Operating Margin 12.1% +0.5% points

Progress in H1: Ongoing Revenue growth of 9.6% in H1, 3.7% Organic Pest Control growth of 10.3%, up 3.9% Organic, despite unseasonably wet weather in certain parts of the country in Q2, particularly the North East Ongoing Operating Profit growth of 14.7%, reflecting higher revenues Net Operating Margin up 0.5% points at 12.1%, discussed further

• n following two slides

Seven Pest Control acquisitions in H1 with revenues of c. $59m (c. £44m), ahead of the c. $53m (c. £41m) revenues acquired during the whole of 2018 Focus for H2 2019: Further delivery of revenue and profit growth, continued M&A and

• ngoing implementation of Best of Breed programme to drive

margin expansion

9.6% 9.6% incr increa ease in se in reven enue ue an and 50 d 50 bp bps i s impr mproveme ement nt in in Net Net Ope Operating ting Mar Margin gin

@CER

Nor North th Amer America ica

Update on plan to deliver $1.5bn revenue, 18% Net Operating Margins

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Building scale and local density on national footprint with +300 branches, 45 distribution centres, +8,000 colleagues. Targets (FY) / Activity Progress in H1 2019

4% to 5% Organic growth 3.7% Organic growth An improving performance on H1 2018, but held back by wet weather in North Eastern areas of the country in Q2 $50m to $80m additional revenues p.a. from acquisitions

• c. $59m acquiredrevenues in H1

A very strong performance and ahead of the c. $53m of acquired revenues for the whole of 2018, positioning us well for the full year Best of Breed (BoB) back

• ffice programme

Further good progress in procurement and property, IT programme progressing to plan Net Operating Margin 50 bps improvement in H1, supported by organic revenue growth, synergies from acquisitions beginning to flow through and savings from our Best of Breed programme, partially offset by a greater mix of lower- margin product sales

Nor North th Amer America ica

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Path to $1.5bn revenue Path to 18% Net Operating Margins

Reven enue ue ta targe get on t on tr trac ack k for

• r 20

2020 20, , 18 18% % mar margins to gins to be be deliv deliver ered ed by end by end of

• f 20

2021 21

• Remain on track to deliver $1.5bn revenue by the

end of 2020

• H1 revenue growth in line with 10% CAGR required

in 2019/20 to hit target

• Our growth expectations remain at 12-15% per

annum - Organic (4-5%) and M&A (8-10%)

• M&A pipeline remains strong
• Progress on margin delivery in H1 on track for 2021

target

• Steady progress with IT transformation to replatform

the business and deploy Group IT applications effectively

• Margin improvement is back-end loaded reflects the

timing of our systems replatforming and applications deployment

Nor North th Amer America ica

IT re-platforming and applications deployment: timeline to completion

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The first step in our IT programme is to create a consistent platform across the country. We will have all the data from the business into the cloud during 2019 and the large majority

• f the business will be on a standard
• perating system by the end of this year.

Having the data in one place and a consistent infrastructure delivers cost benefits in its own right through reduced back office costs and more effective management. It also critically allows us to deploy our Group applications across the North American region in the key areas of service, sales and customer communications. Deployment of these applications enables the delivery of Best of Breed margin benefits in 2020 and 2021, meaning our journey to 18% margins by 2021 is weighted towards the end

• f the period.

2019 2020 2021

PestConnect connected devices

Infrastructure Service Sales Customer comms

RI Smartphone Service App 100% 50% RI Territory Management Tool 100% 50% RI Service Scheduling Tool 100% 50% MyRentokil Customer Portal 100% RI Sales Price, Quote, Contract 100% 50% e-Bill / e-Pay solution 100% 50% 100% 50% RI Website (v4) 100% 50% All data in Google Cloud Platform 100% RI Sales Prospect Management 100% 50% Standard operating system* 100%

*excluding any new acquisitions from Jan 2019

Eur Europ

• pe

Ongoing Revenue growth +7.7% Organic Revenue growth +4.8% Ongoing Operating Profit growth +8.6%

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Group Revenue: 27% Group Profit: 32%

H1 2019 Growth Ongoing Revenue £349.1m +7.7% Ongoing Operating Profit £63.0m +8.6% Operating Margin 18.0% 0.1% points

Progress in H1: Excellent Ongoing Revenue performance in Germany (+16.3%), strong growth in Southern Europe (+7.5%), and improved performances in Benelux and France, up 5.8% and 3.7%. Latin America (reported within Europe region) continues to perform well, with growth of 20.6%:

• 12.8% growth in Pest Control: 5.1% from acquisitions and Organic growth
• f 7.7%, aided by notably strong performance in German pest operations
• 6.3% growth in Hygiene, 2.8% Organic, benefiting from strong

performances across the region 8.6% increase in Ongoing Operating Profit, with strong growth in Southern Europe, driven by Germany and Benelux Four acquisitions in Latin America in H1 – two Hygiene, two Pest Control - with total annualised revenues of c. £4m Sale of stake in Haniel JV for cash consideration of €430m Focus for H2 2019: Further growth in Pest Control and Hygiene , ongoing progress in France Workwear, building out the M&A pipeline in Europe

Str trong

• ng o
• ver

erall all per perfor

• rmance

mance fr from

• m Eur

urope

• pe region

gion

@CER

UK UK & R & Res est t of

• f W

Wor

• rld

ld

Ongoing Revenue growth +10.0% Organic Revenue growth +4.5% Ongoing Operating Profit growth +7.3%

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Group Revenue: 19% Group Profit: 23%

H1 2019 Growth Ongoing Revenue £241.0m +10.0% Ongoing Operating Profit £45.6m +7.3% Operating Margin 18.9%

• 0.5% points

Progress in H1: Excellent performance from UK Pest Control and Hygiene; UK Pest +6.5% Organic, benefiting from large contract wins, Hygiene +8.4% Organic benefiting from high levels of customer service, improving customer retention and one-off contracts 8.3% revenue growth from Rest of World operations, with contributions across all regional clusters in Nordics, Caribbean, Africa and MENAT Good overall regional performance dampened by UK Property Care, which continues to experience weak market conditions 7.3% growth in Ongoing Operating Profit reflecting higher revenues, however margin decline of -0.5% points impacted by profit decline in Property Care Two small acquisitions in H1 – one hygiene business and one pest control business with combined annualised revenues of c. £1m Focus for H2: Continued growth in Pest and Hygiene and ongoing implementation of Property Care improvement plan

Ex Excell llent pe t perf rforma mance fr from m UK UK Pest st Co Contr trol a l and Hyg Hygien iene

@CER

Asia Asia

Ongoing Revenue growth +11.6% Organic Revenue growth +5.5% Ongoing Operating Profit growth +11.9%

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Group Revenue: 9% Group Profit: 6%

H1 2019 Growth Ongoing Revenue £113.4m +11.6% Ongoing Operating Profit £11.6m +11.9% Operating Margin 10.2%

• Japanese JV*

H1 2019 Growth Ongoing Revenue £25.9m +6.8% Ongoing Operating Profit £5.8m +0.4% Operating Margin 22.5%

• 1.5% points

*Reported within Share of Profit from Associates (net of tax); Rentokil Initial has a 49% share.

@CER

Progress in H1: 11.6% increase in Ongoing Revenue, +5.5% Organic, reflecting good performances from both Pest Control and Hygiene Ongoing Operating Profit growth of 11.9%, reflecting higher revenues Net Operating Margins in line with prior year at 10.2% Four acquisitions in H1 - two small Pest Control acquisitions in Thailand and Sri Lanka and two Hygiene businesses in Indonesia and Malaysia with combined annualised revenues of £7m Focus for H2: Further delivery of revenue and profit growth, ongoing execution of Rentokil PCI joint venture, integration of recent acquisitions and further M&A to build scale

Goo Good g d growth i wth in n reven enue ue an and d pr profit

• fit

Pac acif ific ic

Ongoing Revenue growth +2.4% Organic Revenue growth +1.9% Ongoing Operating Profit growth +2.5%

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Group revenue: 7% Group Profit: 9%

H1 2019 Growth Ongoing Revenue £94.7m +2.4% Ongoing Operating Profit £18.6m +2.5% Operating Margin 19.7%

• A

A solid solid H1 H1 pe perf rfor

• rman

mance ce

@CER

Progress in H1: 2.4% growth in Ongoing Revenue (+1.9% Organic), driven by solid performances across core Pest Control and Hygiene categories Notably good performance from Australia Hygiene, reflecting the impact of new customer contracts won in 2018 and 2019, driven in part by stronger sales colleague retention. 2.5% growth in Ongoing Operating Profit reflecting higher revenues, with Net Operating Margin in line with prior year at 19.7% One small pest control acquisition in Australia with annualised revenues of

• c. £0.4m in year prior to acquisition

Focus for H2: Further improvements in performance through greater service productivity and additional acquisitions in Pest Control and Hygiene

£ million H1 2019 H1 2018 Adjusted Operating Profit 152.2 134.5 One-off items - Operating 9.8 2.6 Depreciation 105.5 72.8 Other1 3.5 0.8 EBITDA 271.0 210.7 Working capital (27.8) (14.0) Movement on provisions (4.0) (7.0) Capex (112.2) (84.4) Operating Cash Flow – continuing operations 127.0 105.3

1 Profit on sale of fixed assets, IFRS 2, dividend from associate, etc. 2 Property, plant, vehicles

Ope Operating ting Cas Cash h Flo low

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Increase in Adjusted Operating Profit largely offset by working capital outflows due to phasing Depreciation and capex both increased due to IFRS 16 but offset each other, with a broadly neutral net impact Operating cash inflow £21.7m higher than last year, driven by annual cash dividend of £16.6m received from the Haniel JV @AER

£ million H1 2019 H1 2018 Operating Cash Flow – continuing 127.0 105.3 Cash interest (11.8) (7.3) Cash tax (19.3) (25.0) Free Cash Flow – continuing 95.9 73.0 Acquisitions (120.9) (164.9) Dividends (58.1) (50.2) Underlying increase in Net Debt (83.1) (142.1) FX and other (21.3) (21.3) IFRS 16 lease obligations (184.0)

• Increase in Net Debt

(288.4) (163.4) Opening Net Debt (1,153.5) (927.3) Closing Net Debt (1,441.9) (1,090.7)

Free ee Cas Cash h Flo low & w & Mo Moveme ement nt in Net in Net De Debt bt

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@AER Interest payments £4.5m higher than H1 2018 and tax payments decreased by £5.7m, both reflecting phasing of payments versus the prior year Free Cash Flow increased by £22.9m, delivering a Free Cash Flow conversion of 93% over last 12 months Adoption of IFRS 16 has added £184.0m

• f lease obligations to Net Debt

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Dispo Disposa sal l of

• f 17

17.8% .8% inte interes est t in in Han Haniel iel JV JV

In July 2017 the Group’s Workwear and Hygiene assets in Germany and Benelux were transferred into a Joint Venture (JV) with Haniel for cash consideration of €520m and a retained 17.8% share in the JV Agreement on 30 July 2019 to divest of remaining 17.8% interest in the JV to Haniel for a cash consideration of €430m As at 30 June 2019 the carrying value of the Company’s investment in the JV was €290m resulting in an estimated profit on disposal of over €140m Together with initial consideration for transferring the businesses into the JV and dividends received since the formation of the JV, the transaction has realised a total cash return of €979m The proceeds from the sale will be used initially to pay down debt and support the Group’s M&A programme No tax on the gain on disposal

€ million

Cash consideration from disposal of 17.8% stake 430 Carrying value of 17.8% JV interest 1 290 Indicative profit on disposal 140 Consideration from original contribution of assets 520 Consideration from disposal of 17.8% stake 430 Dividends received 29 Total consideration 979 APBITA contributed to JV in 20172 53

€430m divestment proceeds

Notes: 1 Net of disposal provision and other costs 2 Annualised APBITA for the 12 month period ended 30 June 2017

Balan Balance ce She Sheet et

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Balance Sheet

• Net Debt at 30 June 2019 £1441.9m, an increase of £288.4m

from 31 December 2018. £184.0m of the increase relates to additional lease liabilities recognised on implementation of IFRS 16

• £918.6m of centrally held funds and available undrawn

committed facilities

• Net Debt to EBITDA ratio of 2.6x at 30 June 2019 (including the

full year impact of IFRS 16), reflecting dilutive impact of H1 acquisitions

• Adjusting for anticipated €430m proceeds from the sale of the

17.8% stake in Haniel JV, Net Debt to EBITDA ratio will fall to 1.9x

• €500m bond issue in May 2019 with a coupon of 0.875%

maturing in May 2026 will be used to refinance €500m bond maturing in September 2019

• Good progress on Pension Scheme buy-out - estimated pre-tax

cash surplus of c. £40m (vs. previously guided £20m to £40m) to be returned to the Company on completion in 2020

• Credit rating remains at BBB Stable Outlook

Guida Guidanc nce e for

• r H2

H2 / F / FY Y 20 2019 19

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IFRS 16 now expected to increase Ongoing Operating Profit by £3m and adjusted interest charge by £3m (previous guidance was between £5m and £10m) – no overall impact on Adjusted Profit before Tax Business is trading in line with our expectations and therefore our guidance for 2019 (and 2020) is unchanged apart from the items below:

• Central costs expected to be £4m above prior year in line with increase in H1, reflecting continued investment in our innovation and digital

programme and the impact of increased LTIP costs given the increase in our share price

• Underlying P&L and cash interest costs expected to be £4m lower than previously guided due to the successful refinancing of the €500m bond at

lower interest rates (before adjustments for IFRS 16) and lower levels of net debt post the sale of our stake in the Haniel JV. Full year impact in 2020 is an anticipated reduction in interest costs compared to previous guidance for 2019 of c. £14m

• Profit from Associates in H2 anticipated to be ~£7m lower than prior year post the JV disposal. Full year impact on 2020 a reduction of £17m.
• At Prelims we guided to adverse FX of c. £5m. FX has been volatile since then with sterling weakening against the Euro and US dollar. Should

current rates continue for the remainder of the year and throughout 2020, we estimate this would have a positive impact of around £5m - £10m for 2019 and £10m - £15m in 2020

Therefore, we anticipate 2019 profit expectations to remain unchanged and expectations for 2020 to increase by c. £10m

H1 H1 20 2019 19 Summa Summary

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✓ +8.8% growth in Ongoing Revenue (vs target 5% to 8%) ✓ +4.2% Organic growth (vs. target 3% to 4%) ✓ +11.6% increase in Ongoing Operating Profit (vs. target 10%) ✓ £95.9m Free Cash Flow, 93% conversion over last 12 months ✓ Sale of minority stake in Haniel JV for proceeds of €430m, to be used

initially to reduce debt and support M&A programme

✓ 17 businesses acquired in H1 with £55m annualised revenues for cash

spend of £120.9m

✓ Balance sheet remains robust ✓ Good progress towards buy-out of Pension Scheme with estimated

pre-tax cash surplus of c. £40m (vs. previously guided £20m to £40m) to be returned to the Company on completion in 2020

✓ +15.2% increase in 2019 interim dividend at 1.51p per share

We e continue to e continue to execute our Right ecute our Right Way ay plan to deliv plan to deliver er year ear-on

• n-year

ear growth in th in revenue, pr enue, prof

• fit

it and cas and cash. We e ar are conf e confident of ident of deliv delivering ering fur urther pr ther prog

• gres

ess in the in the second half econd half. .

A people A people business, business, ena enabled bled by w by wor

• rld

ld-class lass tec techno hnologies logies and and inno innova vations tions

31 July 2019 Andy Ransom, CEO

25

Con Consist sisten ent t Mod Model el for

• r Pr

Profita

• fitable

ble Gr Growth wth

Transparent medium-term targets

• North America
• Europe
• UK & Rest of World
• Asia
• Pacific

Hygiene Focus: Operational excellence Protect & Enhance Focus: Retention and enhancing profitability Pest Control Focus: Growth and Emerging Markets Differentiated IRR Growth 13%+ Emerging 15%+ Differentiated IRR 15% - 20%+ Differentiated IRR 20%+

Medium-Term Targets:

Ongoing Revenue Growth: 5% - 8%

Organic 3%- 4%

Ongoing Operating Profit Growth: c.10% Free Cash Flow Conversion: c.90%

Multi-local Operations Leadership in Digital and Innovation Market-Leading Businesses

+1800local service teams. 80 countriescovering 90% global GDP. 90/100 largest cities c.90%of revenues outside the UK

Expertise of our People Low Cost Operating Model Financial Model to Compound Growth 26

Lo Low Cost w Cost Ope Operating ting Mod Model el

“The machine”

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Becoming an Employer of Choice. Colleague safety, expertise, engagement and retention. Delivering customer service and customer engagement (CVC) Sales Excellence driving gross sales (Contract and Jobs)

Service efficiency Customer retention Contract portfolio growth Price management Jobbing and product sales Revenue Growth Profit and Cash

RIGHT PEOPLE RIGHT THINGS RIGHT WAY

Productivity and effective cost management.

Density building incl. M&A. Sharing best practices, common IT and digital solutions.

Digital expertise and leadership in innovation

Lo Low Cost w Cost Ope Operating ting Mod Model el

Highly motivated people, enabled by world-class technologies and innovations

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Becoming an Employer of Choice. Colleague safety, expertise, engagement and retention. Delivering customer service and customer engagement (CVC) Sales Excellence driving gross sales (Contract and Jobs)

Service efficiency Customer retention Contract portfolio growth Price management Jobbing and product sales Revenue Growth Profit and Cash

RIGHT PEOPLE RIGHT THINGS RIGHT WAY

Productivity and effective cost management.

Density building incl. M&A. Sharing best practices, common IT and digital solutions.

Digital expertise and leadership in innovation

Ho How w we r e run un ou

• ur Bu

r Busine siness ss

Safety, Health and Environment (SHE): Agenda item number one

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The Royal Society for the Prevention of Accidents Gold Award International Institute for Risk and Safety Management International Risk Initiative of the Year

Emissions: 20% reduction since 2014. New target: 20% reduction by end

• f 2020 (16% achieved to date).

18% improvement in Lost Time Accident (LTA) rate to 0.57 (year on year). NA: LTA rate 0.42 (YTD) – 32% improvement on 2018. 7% improvement in Working Days Lost rate to 12.67 (year on year). Monthly KPIs reporting Consistent measurement - branch-country-region. Training eg ‘Safety Moments’ (100+ short videos produced and shared by colleagues). Global awareness campaigns eg Electrical Safety. Ex Exce cell llen ent H1 t H1 Saf Safety P ety Perf erfor

• rman

mance ce

World Class: Lost Time Accidents

2014: 1.00 2018: 0.63

37% 37%

World Class: Working Days Lost

2014: 28.99 2018: 14.77

Net Zero Emissions 100% annual carbon footprint mitigated through rainforest protection via Cool Earth / RI Cares initiative.

49% 49%

improvement improvement

Ho How w we r e run un ou

• ur Bu

r Busine siness ss

Employer of Choice

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Group LTA Rate

Our goal is to increase colleague retention, boost line manager capability and build expertise - and thereby improving productivity and the service we offer. Good progress in H1.

High quality colleague experience

World-class colleague engagement and enablement. Glassdoor: Excellent overall rating of 4.4 out of 5 and strong scores for Culture and Values, Career Opportunities and Senior Management.

Building expertise

• c. 800,000 training content/courses undertaken in H1

(+10% increase YoY).

• c. 350 new training content developed in H1 including

training videos to support innovation launches.

Coll

• llea

eague gue Retention etention

2.8% pts increase to 87.0%

Custome ustomer r Rete etention ntion

1.1% pts increase to 87.1%

12 month MAT

Custom ustomer er Sa Sati tisf sfaction (NPS) action (NPS)

Pest Control + 1.6 points / Hygiene + 2.0 points

Ren ento tokil kil Pes est t Con Contr trol

• l

31

Consistent strong performance

@CER

300 400 500 600 700 800 900 H1 2014 H1 2015 H1 2016 H1 2017 H1 2018 H1 2019

£414m £518m £650m £734m £818m

Ongoing Revenue: H1 2014 to H1 2019

£377m Str Stron

• ng P

g Perf erfor

• rman

mance ce in in H1 H1 20 2019 19 H1 Ongoing Revenue: £817.8m +11.4% H1 Profit: £135.3m +11.5% Organic growth: 4.8% (4.0% in H1 2018). Acquisitions: 6.6%. Ongoing revenue breakdown: Growth markets: +11.1%. Emerging markets: +13.0%. Pest Control: 64% of Group Revenues. Non-cyclical, sustainable growth market. c.$20bn by end of 2019 and growing at c.5% p.a. Rising consumer expectations, growing middle classes, urbanisation, increasing workplace / food regulations, climate change and increasing pest pressures. Highly fragmented industry 40,000 companies, 50% in North America. 2014 2014-2019 2019 REV EVENUE ENUE CAGR GR

16 16.8% .8%

Ren ento tokil: kil: Globa Global l Le Lead ader ers s in P in Pes est t Con Contr trol

• l

32

Strong performance in long-term growth markets

@CER

North America +10% Chile +25% UK +26% Vietnam +24% South Africa +13% Germany +21% Nordics +14% China +15% Indonesia +61% Brazil +9%

Gr Growth wth ac across ou

• ss our g

r globa lobal P l Pest est Con Contr trol

• l foo
• otp

tprint. rint. Number one in over 50 of our 80 markets

UAE +20%

H1 2019 Ongoing revenue growth

Caribbean +13% Thailand +19% Sub-Saharan +11% France +10%

Ren ento tokil kil Pes est t Con Contr trol

• l

33

The world’s leading pest control company

@CER

✓ Global leader - number one in over 50 markets. ✓ Strong Employer of Choice programme – outstanding technical training building expertise. ✓ Powerful brand. One of the top 50 most valuable Commercial Services brands (Brand Finance). ✓ Core strength in attractive Commercial sector. ✓ Leaders in digital and innovation. ✓ Strong digital marketing – record H1 with 9m sessions. Online enquiries up 33%. ✓ Disciplined M&A – highly fragmented market.

A high-quality business, operating in a resilient and growing market. Pest Control market offers sustainable, long-term growth prospects.

H1 Organic growth

H1 2014 H1 2015 H1 2016 H1 2017 H1 2018 H1 2019

4.8% 1.9%

Ren ento tokil kil Pes est t Con Contr trol

• l

34

The world’s leading pest control company

Str Stron

• ng P

g Perf erfor

• rman

mance ce in in H1 H1 20 2019 19 Revenue: £819m +11.5% Profit: £XXXm +X.X% Organic growth: 5.1% (4.0% in H1 2018). Acquisitions, particularly in North America: 6.4%. Ongoing revenue breakdown: Growth markets: +X.X%. Emerging markets: +X.X%. Service? CVC? Customer retention? Rentokil web traffic +47% YOY with organic growth +60%. Total traffic of 9m sessions (6m in H1 2018). Enquiry growth YTD +33%.

@CER

People, Technology & Innovation = Profitable Growth. Leading ing in in digita igital l and inn innova vation tion

✓ Improve our productivity - reduce our costs. ✓ More sophisticated pest control needs – higher barriers to excellence. ✓ Protect our core markets – retention & price. ✓ Responding to customer needs eg sustainability, new regulations. ✓ Enhance customer service and customer satisfaction. ✓ Sharing capability with Hygiene and other businesses. ✓ New and enhanced services to differentiate us – drive sales.

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• ugh

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35

Lumnia has revolutionised the insect light trap market – continued strong growth in H1 First to develop LED range for commercial pest control

Energy savings of 61% compared to previous range. Global leader in the use of LED technology in pest control. Second generation LEDs now in use.

Full range to meet the needs of all customer segments

Launch: Standard and Ultimate (high dependency customers). H1 2019: launched Compact for smaller customers and Compact Colour offering customers a choice of colour, matching decor. H2 / 2020: Further new enhancements in development.

44% increase in Lumnia sales in H1 2019 (year on year).

42 markets - strong performance in UK, NA and Australia.

Dr Driving iving Pr Prod

• duc

uctivity tivity an and d Cos Cost t Red educ uction tion

36

Series of pilots using Artificial Intelligence (AI) underway

Str Stron

• ng P

g Perf erfor

• rman

mance ce in in H1 H1 20 2019 19 Revenue: £819m +11.5% Profit: £XXXm +X.X% Organic growth: 5.1% (4.0% in H1 2018). Acquisitions, particularly in North America: 6.4%. Ongoing revenue breakdown: Growth markets: +X.X%. Emerging markets: +X.X%. Service? CVC? Customer retention? Rentokil web traffic +47% YOY with organic growth +60%. Total traffic of 9m sessions (6m in H1 2018). Enquiry growth YTD +33%.

@CER

AI Appointments in place:

Director for Digital Products and Operational AI. Group Director for Digital Innovation and Customer AI.

AI route optimisation productivity tool:

Artificial Intelligence programme with global technology leader underway - potential to deliver a new route optimisation tool with traffic updates by the millisecond.

AI tool to enhance our effectiveness:

PestID is an image-based smartphone App which identifies a pest from a photo taken by the technician. Once identified, PestID will recommend the best tools to control the pest plus other important information such as operational safety reminders. System ‘learns’ over time using Google Auto Machine Learning. Successful first pilot.

Pr Prot

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ecting ting Cor Core e Mar Market ets

Innovative rodent control

Str Stron

• ng P

g Perf erfor

• rman

mance ce in in H1 H1 20 2019 19 Revenue: £819m +11.5% Profit: £XXXm +X.X% Organic growth: 5.1% (4.0% in H1 2018). Acquisitions, particularly in North America: 6.4%. Ongoing revenue breakdown: Growth markets: +X.X%. Emerging markets: +X.X%. Service? CVC? Customer retention? Rentokil web traffic +47% YOY with organic growth +60%. Total traffic of 9m sessions (6m in H1 2018). Enquiry growth YTD +33%.

@CER

Rodent control accounts for c. $2bn of the global pest control market and continues to grow at c. 4% p.a.

In H1 2019 we launched a range of new products to enhance our proposition in this core market with remote monitoring to allow for a quick response to prevent an infestation. Dual AutoGate Connect - a rat and mice remote monitoring and control solution - opens its ‘gate’ to provide access to bait. Rat Riddance Connect - innovative trap that is able to send immediate notification of a rat capture. Rodent Ceiling Trap - ceiling solution for rodent control in gaps above ceilings. Indicator alert to a capture. Multi-Mouse Trap - a monitoring sensor that can be attached to several live catch products for real-time reporting, allowing for early technician support.

37

Responding to Customers’ Needs

38

Customers risk increased fines without effective pest management and reporting The world’s leading digital pest control platform providing an unmatched level of monitoring, reporting and insight for customers. Strong progress. Internet-of-Things 24/7 monitoring with alerts

Protecting customers’ facilities with maximum effect. Instant alerts for rapid resolution.

17% increase in connected devices vs H1 2018.

PestConnect

Online tool for real-time insight, report and record

Total transparency on pest management and history of issues for customers – high quality reporting for audits.

29% increase in usage vs H1 2018.

myRentokil

Tracks pest trends and identifies emerging risks

Mitigate risk with root cause analysis and targeted intervention. New level of pest control insight.

14m messages across our network in H1.

CommandCentre

CommandCentre now includes data from c.40 countries.

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40

Over 3,500 species of mosquitoes

Aedes aegypti Can spread Dengue fever, Chikungunya, Zika, Mayaro and Yellow fever. Anopheles gambiae considered to be one of the most efficient vectors of Malaria in the world. Aedes albopictus (also known as Asian tiger mosquito). Can spread Dengue fever, Zika and West Nile viruses. Culex pipiens Most effective vector for Japanese encephalitis and West Nile virus.

Significant Significant th threa eats ts to to pub publi lic c he health alth

41

YELLOW FEVER 207 THOUSAND CASES PER YEAR HOT SPOT FOR ALL THE DISEASES MALARIA 200 MILLION CASES PER YEAR DENGUE FEVER 390 MILLION CASES PER YEAR WEST NILE VIRUS 30 THOUSAND CASES PER YEAR

Unfortunately it’s getting worse…

For illustration only, based on data from the World Health Organization.

Urbanisation will make break-bone (Dengue) fever one of the most common diseases of the century. Will extend into Southern Europe.

Daily Telegraph - June 2019

In Brazil, almost 1.2m dengue cases in H1 2019. Increase of almost 600% from last year. Higher temperatures and volume of rainfall.

Brazilian Ministry of Health - July 2019

Six human West Nile virus infections have been reported in Greece and Romania.

European Centre for Disease Prevention and Control July 2019

Dengue Fever Is Massively Spreading Across Thailand. More than 28,000 cases and 53 death cases from the mosquito- borne Dengue virus. Last year, there were only 33 death cases. One

• f the most severe Dengue outbreaks in recent years.

Thai Bureau of Epidemiology at the Department of Disease Control - July 2019

Drug-resistant malaria parasites 'spreading aggressively' across south-east Asia Up to 80% of the most common carriers of the disease are immune to the most common treatments

Guardian – July 2019

Philippines government sounds national alert after steep rise in deaths from dengue Health authorities in the Philippines have declared a “national dengue alert” after an alarming upsurge in cases

July 2019

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42

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Mo Mosquito ito & V & Vector Con Control l ma market: Total market is worth c. $4.4bn and growing at c.7% p.a. Rentokil il I Initial: itial: People & expertise, footprint in key countries, experience (public authority contracts to commercial & residential contracts and jobs). Technology and innovation agendas. 2018 revenues c. US$50m (mainly NA and Asia). Bu Buil ilding ing our sc scale le and ca capabil ilities ities:

• Centre of Excellence established.
• New Mosquito lab established at The Power Centre.
• Acquisitions of VDCI, the US’s leading provider of

municipal and commercial mosquito control, Mosquito Control Services in Louisiana and Multicontrole in Brazil.

• Acquisition of Ecovec in Brazil in July 2019 – high quality

business with infrastructure & organization to monitor the presence of mosquitoes – supporting ongoing discussions with municipalities.

43

Initial Initial Hyg Hygiene iene

Strong increase in organic growth

44

1.4% 3.0% 3.8% 3.0% 2.1% 4.3%

H1 2014 H1 2015 H1 2016 H1 2017 H1 2018 H1 2019

H1 organic growth

140 160 180 200 220 240 260 280 300 H1 2014 H1 2015 H1 2016 H1 2017 H1 2018 H1 2019

£193m £200m £182m £277m £260m Ongoing Revenue: H1 2014 to H1 2019 £176m

Organic growth: 4.3% (H1 2018: 2.1%). Strong progress, particularly France (+4.0%), Australia (+4.0%) & UK (+8.4%). Acquisitions: 2.2%. Str Stron

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mance ce in in H1 H1 20 2019 19

@CER

H1 Ongoing Revenue: £277.2m +6.5% H1 Profit: £45.4m +8.6% Hygiene: 22% of Group Revenues. Market growing around GDP levels. 2014-2019 REVENUE CAGR 9.5%

Initial Initial Hyg Hygiene iene

Broad-based improvements for organic growth and productivity

45

Ser Servi vice ce qua quali lity ty & & Pr Prod

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5-star Trustpilot service rating. On-site servicing – ‘liner’ service rather than traditional bin transfer. UK fully rolled out - van is 50% less full / reducing return times to branch. myInitial portal - increasing self-service – service details, billing, contract terms, etc

M&A M&A

5 Hygiene deals in H1 2019 4 deals in FY2018 Cannon Hygiene – fully integrated in 8 countries – performing well. Building a strong position in emerging markets eg H1 acquisitions in Indonesia, Malaysia, Chile and Colombia.

Den ensi sity: ty: sales sales fu funn nnel el

Initial web traffic increased by 9% YTD. Targeting more people with upsell to drive density email campaigns (84k emails sent in UK to targets in 10 months). 30% increase in target list in Q1. GoogleMyBusiness and Pay Per Click campaigns – highly effective.

Digital igital In Inno nova vation tion

ServiceTrak Hygiene - now in 23 countries 50% decrease – in the number of ‘proof

• f service’ emails requested to be sent to

customers. 11% increase - total number of sales leads submitted by technicians*.

*Oct 2018 to May 2019

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Product differentiation focus eg Signature Colour & H1 launches with new soaps and new aerosol fragrances. 2-point improvement in customer satisfaction (NPS) Incentives continue to drive range selling.

Initial Initial Hyg Hygiene iene

Extending our range of services

46

Revenue: £279m +6.6% Profit: £XXXm +X.X% Digital Hygiene Route Based Extensions Exploit opportunities as the market for air enhancement and purification grows. Total air care est. $17bn market. CAGR 10% over next 7 years. Preferred suppliers in place. Maximise shared expertise with Pest in Digital / IOT. Digital Hygiene products for the washroom – eg connected soap dispensers. First digital washroom products in late stage development. Target potential growth options in new areas eg: First Aid: New service solution targeting key sectors. Pilots underway (first aid kits, defibrillator, eye wash etc). Air Care

Targeting new growth opportunities Building product density and adding premium ranges

Pr Prot

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47

14% of group Ongoing Revenues

120 140 160 180 200 H1 2014 H1 2015 H1 2016 H1 2017 H1 2018 H1 2019

£188m £182m £183m £183m £186m Ongoing Revenue: H1 2014 to H1 2019 £183m @CER

H1 Ongoing Revenue: £186.0m +1.4% H1 Profit: £16.5m

• 2.0%

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Quali lity ty an and d Ser Servi vice ce

France Workwear H1 Ongoing Revenue: £96.9m +2.9% (year on year). H1 Profit: In line with prior year. Ambius H1 Ongoing Revenue: £66.8m +1.2% (year on year). H1 Profit: In line with prior year. 39 awards at the International Plantscape awards 2019. UK Property Care H1 Ongoing Revenue: £10.5m -7.3% (year on year). Small loss in H1. Best brands and strong service. UK property market remains challenging. Balancing risk mitigation / revenue growth. New Pest proofing work coming through in H2.

2014-2019 REVENUE CAGR 0.4%

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48

France Workwear

France Workwear - continued progress with focus on product & service quality

H1 2019: Ongoing Revenues +2.9% to £97m, profits in line with PY. Employer of Choice: Significant safety improvements (Lost Time Accident rate from 1.59 to 0.69). RFID: Tracking and garment use optimization process underway with 190,000 garments RFID tagged. All laundries now RFID compliant. Customer terminations: Improved by 9% by volume. Logistics: First electric vehicles – targeting 30% CO2 emission reduction / 3 years. Fabric recycling (first in the industry): From August, 95% of our used garments and flat linen (c. 450 tonnes pa) - transformed into thermal insulation. Overall, good progress in the areas of products & service quality, innovation and people – but too early to claim victory.

Value alue Cr Crea eating ting M&A M&A

49

Disciplined execution of our strategy in H1 2019

49

2013

22%

Pest Control Hygiene Disposed Protect & Enhance

18% 29% 39% 14% 64%

H1 2019

Transforming the shape of the Group through M&A. Focus on higher growth businesses.

14%

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£55.1m. 5.1m. £12 £121m 1m cash spend cash spend in in H1. H1.

M&A focus: Building density through highly-targeted city acquisitions and entering new city markets. 12 deals in Pest Control and 5 Hygiene deals completed. £44m ($59m) annualised revenues through 7 deals in North America including Active, one of the top 40 pest control companies. New city entries in Jordan (Amman) and Sri Lanka (Colombo). 9 deals in Growth markets and 8 in Emerging markets. Financially disciplined approach to M&A: Our recent acquisitions continue to perform at or above our required hurdle rates. Excellent pipeline maintained. Full year spend expected to exceed £250m.

Ongoing revenues

Deliv Deliver ered ed a Str a Stron

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g Per erfor

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mance ce in H1 in H1

Interim Dividend of 1.51p per share – an increase of 15.2%

50

Ongoing Operating profit

11.6% 11.6%

Operating margins +0.4% pts (Group) +0.5% pts (NA). Free Cash Flow conversion

93% 93%

increased by £22.9m year on year. Value-creating M&A

17 17 de deals als

c.£55m annualised

• revenues. JV divestment.

Strong pipeline. Colleague & Customer

Ret eten entio tion

Increasingly by 2.8% pts and 1.1% pts respectively. Strong progress

Inn Innova vatio tion

+44% Lumnia sales. +29% myRentokil usage. Organic Revenue Growth

4.2% 4.2%

in H1 2019.

Confident of delivering further progress in H2 2019.