Final Results dated 07 March 2024
|
Financial Results1
|
AER
|
CER
| |||||
£m
|
2023£m
|
2022£m
|
Change%
|
2023£m
|
2022£m
|
Change%
| |
Revenue
|
5,375
|
3,714
|
44.7%
|
5,414
|
3,714
|
45.8%
| |
Adjusted EBITDA
|
1,228
|
859
|
43.0%
| ||||
Adjusted Operating Profit
|
898
|
571
|
57.1%
|
897
|
571
|
57.0%
| |
Adjusted Profit before Tax
|
766
|
532
|
43.8%
|
801
|
532
|
50.5%
| |
Free Cash Flow
|
500
|
374
|
33.7%
| ||||
Diluted Adjusted EPS
|
23.08p
|
21.22p
|
8.8%
| ||||
Statutory Results
| |||||||
Revenue
|
5,375
|
3,714
|
44.7%
| ||||
Operating Profit
|
625
|
317
|
96.9%
| ||||
Profit before Tax
|
493
|
296
|
66.9%
| ||||
EPS
|
15.14p
|
11.57p
|
30.8%
| ||||
Dividend Per Share
|
8.68p
|
7.55p
|
15.0%
|
●
|
Group Revenue up 45.8% and Statutory Revenue up 44.7%. Organic Revenue growth of 4.9%,supported by strong performances in Europe, Asia, Pacific, UK and LATAM
| |
-
|
North America Organic Revenue growth of 3.1% with growth of 3.5% in Pest Control services owing to lower new business lead generation
| |
-
|
Good Organic Revenue growth across all business categories: 4.5% in Pest Control; 4.8% in Hygiene and Wellbeing; and 13.2% in France Workwear
| |
●
|
Adjusted Operating Profit up 57.0% and Statutory Operating Profit up 96.9%. Group Adjusted Operating Margin up 120bps to 16.6%2
| |
-
|
Full year margin expansion in Pest Control and France Workwear, with Hygiene & Wellbeing margin in H2 above 19.0%, as expected
| |
-
|
North America Adjusted Operating Margin up 160bps to 18.7%
| |
-
|
Sustained strong price progression across all regions, accompanied by good customer retention
| |
●
|
Diluted Adjusted EPS up 8.8% to 23.08p. EPS up 30.8% to 15.14p. Diluted Adjusted EPS at CER up 12.9%
| |
●
|
Free Cash Flow of £500m representing 89.4% Adjusted Free Cash Flow conversion
| |
●
|
Net debt to EBITDA reduced to 2.8x at 31 December 2023, one year ahead of target
| |
●
|
Recommended final dividend of 5.93p for total FY 23 dividend of 8.68p per share, an increase of 15.0%, in line with our progressive dividend policy
|
●
|
RIGHT WAY 2 plan launched to reinvigorate organic growth in North America
| |
-
|
Action plan devised and underway following an in-depth regional performance review. Increased Terminix synergies enables plan to be accompanied by additional c.$25m of investment in sales and marketing
| |
●
|
Terminix gross synergy target increased by $50m with integration completion revised to 2026
| |
-
|
$69m pre-tax net cost synergies achieved in FY 23, ahead of guidance ($60m). Expected to deliver a further c.$40m of net cost synergies in FY 24
| |
-
|
Total gross and net synergy targets raised to c.$325m and c.$225m respectively (previously $275m and $200m). Integration completion revised to 2026 to de-risk branch integrations and deliver the upgraded synergy targets
| |
●
|
Continued momentum in value-creating M&A programme
| |
-
|
41 acquisitions completed in 2023 with annualised revenues of c.£106m
|
Investors / Analysts:
|
Peter Russell
|
Rentokil Initial plc
|
+44 (0)7795 166506
|
Media:
|
Malcolm Padley
|
Rentokil Initial plc
|
+44 (0)7788 978199
|
Revenue
|
Adjusted Operating Profit
| ||||||
2023£m
|
2022£m
|
Change%
|
2023£m
|
2022£m
|
Change%
| ||
North America
|
3,314
|
1,849
|
79.2%
|
618
|
315
|
95.9%
| |
Pest Control
|
3,208
|
1,746
|
83.7%
|
599
|
297
|
101.8%
| |
Hygiene & Wellbeing
|
106
|
103
|
2.5%
|
19
|
18
|
0.7%
| |
Europe (incl. LATAM)
|
1078
|
941
|
14.6%
|
210
|
187
|
12.5%
| |
Pest Control
|
520
|
427
|
21.8%
|
120
|
103
|
16.6%
| |
Hygiene & Wellbeing
|
341
|
322
|
5.8%
|
52
|
53
|
(1.8%)
| |
France Workwear
|
217
|
192
|
13.2%
|
38
|
31
|
23.6%
| |
UK & Sub Saharan Africa
|
394
|
365
|
7.9%
|
95
|
95
|
(0.5%)
| |
Pest Control
|
197
|
182
|
8.0%
|
51
|
47
|
8.0%
| |
Hygiene & Wellbeing
|
197
|
183
|
7.7%
|
44
|
48
|
(8.9%)
| |
Asia & MENAT
|
357
|
321
|
11.2%
|
47
|
45
|
4.0%
| |
Pest Control
|
266
|
231
|
15.0%
|
35
|
34
|
4.5%
| |
Hygiene & Wellbeing
|
91
|
90
|
1.5%
|
12
|
11
|
2.6%
| |
Pacific
|
261
|
227
|
15.0%
|
57
|
48
|
19.8%
| |
Pest Control
|
130
|
104
|
25.2%
|
23
|
16
|
44.5%
| |
Hygiene & Wellbeing
|
131
|
123
|
6.4%
|
34
|
32
|
7.6%
| |
Central
|
10
|
11
|
(4.4%)
|
(121)
|
(107)
|
(12.7%)
| |
Restructuring costs
|
(9)
|
(12)
|
20.6%
| ||||
Total at CER
|
5,414
|
3,714
|
45.8%
|
897
|
571
|
57.0%
| |
Total at AER
|
5,375
|
3,714
|
44.7%
|
898
|
571
|
57.1%
|
Revenue
|
Adjusted Operating Profit
| ||||||
2023£m
|
2022£m
|
Change%
|
2023£m
|
2022£m
|
Change%
| ||
Pest Control
|
4,321
|
2,690
|
60.6%
|
828
|
497
|
66.7%
| |
Hygiene & Wellbeing
|
866
|
821
|
5.4%
|
161
|
162
|
(1.5%)
| |
France Workwear
|
217
|
192
|
13.2%
|
38
|
31
|
23.6%
| |
Central
|
10
|
11
|
(4.4%)
|
(121)
|
(107)
|
(12.7%)
| |
Restructuring costs
|
(9)
|
(12)
|
20.6%
| ||||
Total at CER
|
5,414
|
3,714
|
45.8%
|
897
|
571
|
57.0%
| |
Total at AER
|
5,375
|
3,714
|
44.7%
|
898
|
571
|
57.1%
|
2023AER£m
|
AERGrowth
|
2023CER£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
| |
Revenue
|
3,306
|
78.7%
|
3,314
|
79.2%
|
3.1%
|
3.0%
|
Operating Profit
|
489
|
158.4%
|
490
|
159.0%
| ||
Adjusted Operating Profit
|
617
|
95.5%
|
618
|
95.9%
| ||
Adjusted Operating Margin
|
18.7%
|
1.6%
|
18.7%
|
1.6%
|
●
|
Driving further improvement in frontline colleague retention and productivity, in particular in Sales to improve sales conversion.Our Employer of Choice programme will focus on enhanced talent acquisition and onboarding, additional investment in training, and seasonal sales incentive programmes.
|
●
|
Investing in a brand strategy to reinforce awareness.This includes additional investment in the Terminix brand to build on its industry-leading awareness (#1 best known brand in US Pest Control according to a 2023 Google Brand Arc Study) and build preference with our target segments. We'll also continue to build the equity of the Rentokil brand to support business growth in the National and Strategic accounts space.
|
●
|
Adding capabilities and resources in marketing to refine our focus and build our marketing excellence.In addition to the new regional marketing and sales leadership, the North America business will benefit from increased investment for growth of c.$25m towards people, sales leads, digital channels, and other brand and marketing activities. New marketing agency partnerships are now in place and our first multi-channel brand marketing campaign will be launched this Spring.
|
●
|
Strengthening sales effectiveness to target increased sales colleague retention, particularly in the 0-12 months service category. Over time we will introduce new data, tools and technologies in order to improve timing from sales lead to inspection and quote.
|
●
|
Enhancing our approach to pricing discipline to continue to offset inflation. Sales and marketing initiatives will be accompanied by continued strong pricing discipline for both new and existing customers. Our pricing practices will be enhanced with third-party tools and data to deliver market and segment-specific value to customers. This includes the viability testing of new AI-backed capabilities. We will also optimise bundling, promotions and discounting programmes through consistent market-level pricing tests.
|
●
|
Improving customer satisfaction and retention to take it to par with the average elsewhere in the Group over time. We are dedicated to delivering a consistently positive customer experience including through investment in our digital platforms, in technician training and in our contract renewal processes.
|
●
|
Increasing technician sales leads to expand revenue from existing customers. Through execution of the Trusted Advisor Programme, we're focused on driving up the volume, value, and conversion rate of technician leads towards the UK benchmark over time. In 2024 the Trusted Advisor programme will be rolled out to Rentokil technicians.
|
2023AER£m
|
AERGrowth
|
2023CER£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
| |
Revenue
|
1,081
|
14.9%
|
1,078
|
14.6%
|
9.2%
|
8.3%
|
Operating Profit
|
182
|
15.6%
|
161
|
2.2%
| ||
Adjusted Operating Profit
|
215
|
14.9%
|
210
|
12.5%
| ||
Adjusted Operating Margin
|
19.9%
|
0.0%
|
19.5%
|
-0.4%
|
2023AER£m
|
AERGrowth
|
2023CER£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
| |
Revenue
|
390
|
6.6%
|
394
|
7.9%
|
3.5%
|
3.4%
|
Operating Profit
|
84
|
-6.6%
|
85
|
-5.5%
| ||
Adjusted Operating Profit
|
94
|
-1.7%
|
95
|
-0.5%
| ||
Adjusted Operating Margin
|
24.1%
|
-2.0%
|
24.1%
|
-2.0%
|
2023AER£m
|
AERGrowth
|
2023CER£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
| |
Revenue
|
339
|
5.6%
|
357
|
11.2%
|
10.2%
|
7.1%
|
Operating Profit
|
33
|
40.3%
|
34
|
44.4%
| ||
Adjusted Operating Profit
|
45
|
0.3%
|
47
|
4.0%
| ||
Adjusted Operating Margin
|
13.3%
|
-0.8%
|
13.1%
|
-1.0%
|
2023AER£m
|
AERGrowth
|
2023CER£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
| |
Revenue
|
249
|
10.0%
|
261
|
15.0%
|
6.8%
|
6.8%
|
Operating Profit
|
47
|
19.5%
|
49
|
24.9%
| ||
Adjusted Operating Profit
|
55
|
14.6%
|
57
|
19.8%
| ||
Adjusted Operating Margin
|
21.7%
|
0.9%
|
21.7%
|
0.9%
|
2023AER£m
|
AERGrowth
|
2023CER£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
| |
Revenue
|
4,286
|
59.2%
|
4,321
|
60.6%
|
4.5%
|
4.5%
|
Operating Profit
|
649
|
107.5%
|
632
|
102.1%
| ||
Adjusted Operating Profit
|
830
|
66.5%
|
828
|
66.7%
| ||
Adjusted Operating Margin
|
19.3%
|
0.8%
|
19.2%
|
0.7%
|
2023AER£m
|
AERGrowth
|
2023CER£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
| |
Revenue
|
858
|
4.6%
|
866
|
5.4%
|
4.8%
|
2.4%
|
Disinfection
|
2.44
|
-88.1%
|
2.48
|
-87.9%
| ||
Operating Profit
|
149
|
-4.9%
|
151
|
-3.8%
| ||
Adjusted Operating Profit
|
157
|
-2.6%
|
161
|
-1.5%
| ||
Adjusted Operating Margin
|
18.4%
|
-1.4%
|
18.5%
|
-1.3%
|
2023AER£m
|
AERGrowth
|
2023CER£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
| |
Revenue
|
221
|
15.3%
|
217
|
13.2%
|
13.2%
|
13.2%
|
Operating Profit
|
37
|
23.9%
|
37
|
21.6%
| ||
Adjusted Operating Profit
|
39
|
25.9%
|
38
|
23.6%
| ||
Adjusted Operating Margin
|
17.5%
|
1.5%
|
17.5%
|
1.5%
|
●
|
Migration onto the Workday HR Information System (HRIS): 10,500 colleagues from the legacy Rentokil North America business have been transitioned from UKG to the Workday platform, completed in September 2023. This change to a single HR platform for reporting is crucial to aligning numerous business processes, including time tracking, payroll and performance management, and to enabling downstream initiatives, such as pay plan harmonisation and branch integrations.
|
●
|
Benefits Harmonisation: Following an in-depth review, we adopted best practices from across the combined organisation to update company policies, procedures and offerings. All activities were completed allowing for a singular Open Enrollment experience for our colleagues in November. A harmonised benefit platform is critical to the reduction of administrative complexity and ultimately colleague engagement. It ensures consistent application of benefit access and cost to all colleagues, increases efficiencies, and provides a single platform of communication.
|
●
|
Preparation for Harmonisation of Technician, Sales and Field Management Pay Plans: Both legacy organisations have had numerous different compensation plans for front-line and field management roles. Harmonisation for approximately 11,000 front-line colleagues, 2,500 sales colleagues and 550 field management roles are set to provide market competitive base salary and performance-based commission directly aligned to our strategic objectives. New positions have been defined in each area based on skills, experience, certifications and licenses, with corresponding fixed base salary and incentive levels. Pay plan design, which entailed impact analysis to mitigate colleague retention, has been largely completed. Implementation will take place in 2024 in a staged approach across regional markets.
|
●
|
Customer Content Management (CCM) and Self-service Portal. These two transformational tools are now live in North America, delivering business benefits and improving the customer experience. The new residential portal, deployed already to 18 brands in the region, meets customer demand for a 24/7 personalised experience that includes bill payment, appointment scheduling and service recommendations. The portal also frees up valuable call agent time to handle more complex, high value interactions. Alongside this we have launched a refreshed CCM tool that better empowers our call agents with detailed customer tracking, a 360 view of the customer and guided workflows for consistency and best practice. The new CCM tool has delivered improvements in customer query resolution and new colleague training.
|
●
|
Enhanced Field Sales Tools. Valuable new features have been integrated to our 'Winning Formula' residential sales app, which is also being made available for the first time to our Terminix colleagues. The app follows the sales process end to end, from site inspection through to proposal and first appointment scheduling. Additionally, we've integrated the 'Trusted Advisor' process within our ServiceTrak app, further supporting service technicians to generate sales leads and upsell opportunities. This reflects a strategic focus on closer alignment between sales and service teams, enabled by technology.
|
●
|
Big Data Platform. The development of a data command centre brings the benefits of fast time access to big data and insights from multiple sources. It will allow for Terminix data to be integrated and increasingly provide actionable analytics from across our entire branch network. We also see exciting AI opportunities with predictive capabilities.
|
●
|
A legal entity merger, critical to enabling branch integrations and unified contracts
|
●
|
Roll out of more than 100 IT system features leading up to the commencement of system migration
|
●
|
Migration to a single Procurement platform
|
●
|
Consolidation onto a unified Finance system, including consolidation to a single expenses and travel management system, followed by purchase card harmonisation
|
●
|
Migration of Terminix National Accounts to Rentokil's single customer management and billing platform
|
●
|
Combination of all heritage customer care agents onto a single unified communications platform
|
●
|
Completion and sign off on data migration and IT system architecture configuration
|
2022
|
2023
|
2024
|
2025
|
2026
|
Cumulative
| |
Selling, General and Admin Synergies
|
$15m
|
$73m
|
$77m
|
$20m
|
-
|
$185m
|
Field Ops
|
-
|
$16m
|
$29m
|
$55m
|
$40m
|
$140m
|
Gross Synergies
|
$15m
|
$89m
|
$106m
|
$75m
|
$40m
|
$325m
|
Investments
|
$(2)m
|
$(20)m
|
$(66)m
|
$(10)m
|
$(2)m
|
$(100)m
|
Net Synergies
|
$13m
|
$69m
|
$40m
|
$65m
|
$38m
|
$225m
|
CTA Cash
|
$40m
|
$92m
|
$85m
|
$28m
|
£5m
|
$250m
|
£m at actual exchange rates
|
Year to Date
| ||
2023 FY
£m
|
2022 FY
£m
|
Change
£m
| |
Adjusted Operating Profit
|
898
|
571
|
327
|
Depreciation
|
300
|
276
|
24
|
Other
|
30
|
12
|
18
|
Adjusted EBITDA
|
1,228
|
859
|
369
|
One-off and adjusting items (non-cash)
|
(11)
|
(77)
|
66
|
Working capital**
|
(47)
|
9
|
(56)
|
Movement on provisions
|
(56)
|
(12)
|
(44)
|
Capex - additions
|
(211)
|
(190)
|
(21)
|
Capex - disposals
|
14
|
5
|
9
|
Capital of lease payments and initial direct costs incurred
|
(151)
|
(104)
|
(47)
|
Interest
|
(166)
|
(39)
|
(127)
|
Tax
|
(100)
|
(77)
|
(23)
|
Free Cash Flow
|
500
|
374
|
126
|
Acquisitions
|
(242)
|
(1,018)
|
776
|
Disposal of companies and businesses
|
19
|
1
|
18
|
Dividends
|
(201)
|
(122)
|
(79)
|
Cost of issuing new shares
|
-
|
(16)
|
16
|
Cash impact of one-off and adjusting items
|
(107)
|
(59)
|
(48)
|
Other
|
(6)
|
-
|
(6)
|
Debt related cash flows
| |||
Cash outflow on settlement of debt related foreign exchange forward contracts
|
(3)
|
26
|
(29)
|
Net investment in term deposits
|
-
|
1
|
(1)
|
Proceeds from new debt
|
-
|
2,383
|
(2,383)
|
Debt repayments
|
-
|
(844)
|
844
|
Debt related cash flows
|
(3)
|
1,566
|
(1,569)
|
Net increase/(decrease) in cash and cash equivalents
|
(40)
|
726
|
(766)
|
Cash and cash equivalents at the beginning of the year
|
879
|
242
|
637
|
Exchange losses on cash and cash equivalents
|
(7)
|
(89)
|
82
|
Cash and cash equivalents at end of the financial year
|
832
|
879
|
(47)
|
Net increase/(decrease) in cash and cash equivalents
|
(40)
|
726
|
(766)
|
Debt related cash flows
|
3
|
(1,566)
|
1,569
|
IFRS 16 liability movement
|
3
|
(34)
|
37
|
Debt acquired
|
(1)
|
(946)
|
945
|
Bond interest accrual
|
(1)
|
(42)
|
41
|
Foreign exchange translation and other items
|
169
|
(132)
|
301
|
Increase in net debt
|
133
|
(1,994)
|
2,127
|
Opening net debt
|
(3,279)
|
(1,285)
|
(1,994)
|
Closing net debt
|
(3,146)
|
(3,279)
|
133
|
●
|
Restructuring costs: £5m; and One offs and Adjusting items excl. Terminix: c.£10m
|
●
|
Terminix integration Costs to Achieve*: c.$90m-$100m
|
●
|
Central and regional overheads, including Terminix related investments. £145m-£150m
|
●
|
P&L adjusted interest costs: c.£135m-£145m**, incl. £10m-£15m of hyperinflation (at AER)
|
●
|
Estimated Adjusted Effective Tax Rate: 25%-26%
|
●
|
Share of Profits from Associates: c.£8m-£10m
|
●
|
Impact of FX within range of -£25m to -£35m***
|
●
|
Intangibles amortisation: £175m-£185m
|
●
|
Due to closure of the Paragon distribution business, North America regional Revenue and Adjusted Operating Profit in 2024 will be reduced by approximately $61m and $4m respectively.
|
●
|
Overall one-off and adjusting items: c.£85m-£95m
|
●
|
Working Capital: c.£50m-£60m and c.£55m-£65m of provision payments
|
●
|
Capex excluding right of use (ROU) asset lease payments: £250m-£260m
|
●
|
Cash interest: c.£160m-£170m
|
●
|
Cash tax payments: £115m-£125m
|
●
|
Anticipated spend on M&A in 2024 of c.£250m
|
Amount
|
Rate
|
Fixed/Floating
|
2023AER£m
|
2024AER£m
| ||
Bonds and swaps
| ||||||
EUR
|
400
|
0.95%
|
Fixed
|
-
|
-
| |
EUR
|
500
|
0.88%
|
Fixed
|
-
|
-
| |
EUR
|
600
|
0.50%
|
Fixed
|
-
|
-
| |
EUR
|
850
|
3.88%
|
Fixed
|
15
|
15
| |
EUR
|
600
|
4.38%
|
Fixed
|
23
|
23
| |
GBP
|
400
|
5.00%
|
Fixed
|
20
|
20
| |
Amortised Cost
|
Fixed
|
4
|
3
| |||
Swaps
|
3.53% (avg)
|
Fixed
|
42
|
40
| ||
Total
|
1,850
|
104
|
101
| |||
Term Loan
| ||||||
USD
|
700
|
5%-6%
|
Float
|
31
|
23
| |
Lease Interest
|
Float
|
25
|
26
| |||
Other Interest
|
Float
|
18
|
23
| |||
Total Other
|
43
|
49
| ||||
Finance Cost2
|
178
|
173
| ||||
Interest received
|
(26)
|
(20)
| ||||
Hyperinflation
|
(11)
|
(13)
| ||||
Finance Income3
|
(37)
|
(33)
| ||||
Adjusted Interest
|
141
|
140
| ||||
Adjusting items
| ||||||
Amortisation of discount on legacy provisions2
Gain on hedge accounting recognised in finance income/cost3
|
11
(11)
|
10
-
|
North
America
£m
|
Europe
(incl. LATAM)
£m
|
UK & Sub-Saharan
Africa
£m
|
Asia &
MENAT
£m
|
Pacific£m
|
Central and regional£m
|
Total£m
| |
2022 Revenue
|
1,849
|
941
|
365
|
321
|
227
|
11
|
3,714
|
Adjustment for Terminix pre-acquisition 2022 Revenue1
|
1,311
|
23
|
-
|
-
|
-
|
-
|
1,334
|
Normalised 2022 Revenue (base for Organic Revenue Growth percentage)
|
3,160
|
964
|
365
|
321
|
227
|
11
|
5,048
|
Revenue from 2023 acquisitions(at 2022 CER)2
|
33
|
7
|
15
|
6
|
14
|
-
|
75
|
Revenue from 2022 acquisitions(at 2022 CER)3
|
24
|
27
|
1
|
7
|
4
|
-
|
63
|
Organic Revenue Growth 2023(at 2022 CER)4
|
97
|
80
|
13
|
23
|
16
|
(1)
|
228
|
Exchange differences
|
(8)
|
3
|
(4)
|
(18)
|
(12)
|
-
|
(39)
|
2023 Revenue (at AER)
|
3,306
|
1,081
|
390
|
339
|
249
|
10
|
5,375
|
Organic Revenue Growth %
|
3.0%
|
8.3%
|
3.4%
|
7.1%
|
6.8%
|
(4.4)%
|
4.5%
|
Year-over-year change in disinfection revenue
|
(1)
|
(8)
|
-
|
(9)
|
-
|
-
|
(18)
|
Organic Revenue Growth excluding disinfection %
|
3.1%
|
9.2%
|
3.5%
|
10.2%
|
6.8%
|
(4.4)%
|
4.9%
|
North
America
£m
|
Europe
(incl. LATAM)
£m
|
UK & Sub-Saharan
Africa
£m
|
Asia &
MENAT
£m
|
Pacific£m
|
Central and regional£m
|
Total£m
| |
2021 Revenue
|
1,291
|
832
|
354
|
271
|
197
|
12
|
2,957
|
Adjustment for Terminix pre-acquisition 2021 Revenue1
|
1,412
|
33
|
-
|
-
|
-
|
-
|
1,445
|
Normalised 2021 Revenue (base for Organic Revenue Growth percentage)
|
2,703
|
865
|
354
|
271
|
197
|
12
|
4,402
|
Revenue from 2022 acquisitions (excluding Terminix) (at 2021 CER)2
|
15
|
38
|
-
|
6
|
7
|
-
|
66
|
Revenue from 2021 acquisitions(at 2021 CER)3
|
48
|
11
|
-
|
12
|
4
|
-
|
75
|
Organic Revenue Growth 2022(at 2021 CER)4
|
89
|
55
|
11
|
19
|
13
|
(1)
|
186
|
Exchange differences
|
305
|
(5)
|
-
|
13
|
6
|
-
|
319
|
Remove Terminix pre-acquisition 2022 Revenue (at AER)5
|
(1,311)
|
(23)
|
-
|
-
|
-
|
-
|
(1,334)
|
2022 Revenue (at AER)
|
1,849
|
941
|
365
|
321
|
227
|
11
|
3,714
|
Organic Revenue Growth %
|
3.2%
|
6.3%
|
3.1%
|
6.8%
|
7.5%
|
(11.9)%
|
4.2%
|
Year-over-year change in disinfection revenue
|
(61)
|
(21)
|
(6)
|
(7)
|
(1)
|
-
|
(96)
|
Organic Revenue Growth excluding disinfection %
|
5.7%
|
9.1%
|
4.9%
|
11.0%
|
7.9%
|
(11.9)%
|
6.6%
|
●
|
amortisation and impairment of intangible assets (excluding computer software);
|
●
|
one-off and adjusting items; and
|
●
|
net interest adjustments.
|
One-off and adjusting items
cost/(income)
£m
|
One-off and adjusting items
tax impact
£m
|
One-off and adjusting items
cash inflow/(outflow)£m
| |
2021
| |||
Acquisition and integration costs
|
13
|
(1)
|
(12)
|
Terminix acquisition costs
|
6
|
-
|
(6)
|
Other
|
2
|
(1)
|
(9)
|
Total
|
21
|
(2)
|
(27)
|
2022
| |||
Acquisition and integration costs
|
5
|
(2)
|
(13)
|
Fees relating to Terminix acquisition
|
68
|
(4)
|
(38)
|
Terminix integration costs
|
62
|
(14)
|
(32)
|
UK pension scheme - return of surplus
|
-
|
-
|
22
|
Other
|
1
|
-
|
2
|
Total
|
136
|
(20)
|
(59)
|
2023
| |||
Acquisition and integration costs
|
13
|
(2)
|
(13)
|
Fees relating to Terminix acquisition
|
1
|
-
|
(25)
|
Terminix integration costs
|
81
|
(21)
|
(74)
|
Other
|
3
|
(1)
|
5
|
Total
|
98
|
(24)
|
(107)
|
2023AER£m
|
2022AER£m
| |
Finance cost
|
189
|
79
|
Finance income
|
(48)
|
(49)
|
Add back:
| ||
Amortisation of discount on legacy provisions
|
(11)
|
(3)
|
Foreign exchange and hedge accounting ineffectiveness
|
11
|
21
|
Adjusted Interest
|
141
|
48
|
2023£m
|
2022£m
| |
Operating profit
|
625
|
317
|
Add back:
| ||
One-off and adjusting items
|
98
|
136
|
Amortisation and impairment of intangible assets1
|
175
|
118
|
Adjusted Operating Profit (at AER)
|
898
|
571
|
Effect of foreign exchange
|
(1)
|
-
|
Adjusted Operating Profit (at CER)
|
897
|
571
|
2023
| ||||||
IFRS measures
£m
|
Net interest adjustments £m
|
One-off and adjusting items
£m
|
Amortisation and impairment of intangibles1
£m
|
Non-IFRS measures
£m
| ||
Profit before income tax
|
493
|
-
|
98
|
175
|
766
|
Adjusted Profit Before Tax
|
Income tax expense
|
(112)
|
(2)
|
(24)
|
(44)
|
(182)
|
Tax on Adjusted Profit
|
Profit for the year
|
381
|
(2)
|
74
|
131
|
584
|
Adjusted ProfitAfter Tax
|
2022
| ||||||
IFRS measures
£m
|
Net interest adjustments £m
|
One-off and adjusting items
£m
|
Amortisation and impairment ofintangibles1
£m
|
Non-IFRS measures
£m
| ||
Profit beforeincome tax
|
296
|
(18)
|
136
|
118
|
532
|
Adjusted ProfitBefore Tax
|
Income tax expense
|
(64)
|
3
|
(20)
|
(24)
|
(105)
|
Tax on Adjusted Profit
|
Profit for the year
|
232
|
(15)
|
116
|
94
|
427
|
Adjusted ProfitAfter Tax
|
2023£m
|
2022£m
| |
Profit for the year
|
381
|
232
|
Add back:
| ||
Finance income
|
(48)
|
(49)
|
Finance cost
|
189
|
79
|
Share of profit from associates net of tax
|
(9)
|
(9)
|
Income tax expense
|
112
|
64
|
Depreciation
|
300
|
276
|
Other non-cash expenses
|
30
|
12
|
One-off and adjusting items
|
98
|
136
|
Amortisation and impairment of intangible assets1
|
175
|
118
|
Adjusted EBITDA
|
1,228
|
859
|
2023£m
|
2022£m
| |
Profit attributable to equity holders of the Company
|
381
|
232
|
Add back:
| ||
Net interest adjustments
|
-
|
(18)
|
One-off and adjusting items
|
98
|
136
|
Amortisation and impairment of intangibles1
|
175
|
118
|
Tax on above items2
|
(70)
|
(41)
|
Adjusted profit attributable to equity holders of the Company
|
584
|
427
|
Weighted average number of ordinary shares in issue (million)
|
2,516
|
2,002
|
Adjustment for potentially dilutive shares (million)
|
11
|
12
|
Weighted average number of ordinary shares for diluted earnings per share (million)
|
2,527
|
2,014
|
Basic Adjusted Earnings Per Share
|
23.19p
|
21.34p
|
Diluted Adjusted Earnings Per Share
|
23.08p
|
21.22p
|
2023£m
|
2022£m
| |
Net cash flows from operating activities
|
737
|
600
|
Purchase of property, plant, and equipment
|
(167)
|
(153)
|
Purchase of intangible assets
|
(44)
|
(37)
|
Capital element of lease payments and initial direct costs incurred
|
(151)
|
(104)
|
Proceeds from sale of property, plant and equipment, and software
|
14
|
5
|
Cash impact of one-off and adjusting items
|
107
|
59
|
Dividends received from associates
|
4
|
4
|
Free Cash Flow
|
500
|
374
|
2023£m
|
2022£m
| |
Free Cash Flow
|
500
|
374
|
Product development additions
|
10
|
10
|
Net investment hedge cash interest through Other Comprehensive Income
|
12
|
8
|
Adjusted Free Cash Flow (a)
|
522
|
392
|
Adjusted Profit After Tax (b)
|
584
|
427
|
Adjusted Free Cash Flow Conversion (a/b)
|
89.4%
|
91.8%
|
2023£m
|
2022£m
| |
Net cash flows from operating activities (a)
|
737
|
600
|
Profit attributable to equity holders of the Company (b)
|
381
|
232
|
Cash Conversion (a/b)
|
193.4%
|
258.6%
|
2023£m
|
2022£m
| |
Income tax expense
|
112
|
64
|
Tax adjustments on:
| ||
Amortisation and impairment of intangible assets1
|
44
|
24
|
Net interest adjustments
|
2
|
(3)
|
One-off and adjusting items
|
24
|
20
|
Adjusted Income Tax Expense (a)
|
182
|
105
|
Adjusted Profit Before Tax (b)
|
766
|
532
|
Adjusted Effective Tax Rate (a/b)
|
23.8%
|
19.7%
|
Note
|
2023
£m
|
2022
£m
|
2021
£m
| |
Revenue
|
2
|
5,375
|
3,714
|
2,957
|
Operating expenses
|
(4,711)
|
(3,373)
|
(2,610)
| |
Net impairment losses on financial assets
|
(39)
|
(24)
|
-
| |
Operating profit
|
625
|
317
|
347
| |
Finance income
|
4
|
48
|
49
|
4
|
Finance cost
|
3
|
(189)
|
(79)
|
(34)
|
Share of profit from associates net of tax
|
9
|
9
|
8
| |
Profit before income tax
|
493
|
296
|
325
| |
Income tax expense1
|
5
|
(112)
|
(64)
|
(62)
|
Profit for the year
|
381
|
232
|
263
| |
Profit for the year attributable to:
| ||||
Equity holders of the Company
|
381
|
232
|
263
| |
Non-controlling interests
|
-
|
-
|
-
| |
Other comprehensive income:
| ||||
Items that are not reclassified subsequently to the income statement:
| ||||
Remeasurement of net defined benefit liability
|
-
|
2
|
1
| |
Items that may be reclassified subsequently to the income statement:
| ||||
Net exchange adjustments offset in reserves
|
(352)
|
(232)
|
(18)
| |
Net gain/(loss) on net investment hedge
|
109
|
(68)
|
15
| |
Cost of hedging
|
9
|
(2)
|
(1)
| |
Effective portion of changes in fair value of cash flow hedge
|
3
|
(6)
|
13
| |
Tax related to items taken to other comprehensive income
|
6
|
11
|
2
| |
Other comprehensive income for the year
|
(225)
|
(295)
|
12
| |
Total comprehensive income for the year
|
156
|
(63)
|
275
| |
Total comprehensive income for the year attributable to:
| ||||
Equity holders of the Company
|
156
|
(63)
|
275
| |
Non-controlling interests
|
-
|
-
|
-
| |
Earnings per share attributable to the Company's equity holders:
| ||||
Basic
|
6
|
15.14p
|
11.57p
|
14.16p
|
Diluted
|
6
|
15.07p
|
11.51p
|
14.10p
|
Note
|
2023
£m
|
Retrospectively
adjusted
20221
£m
| |
Assets
| |||
Non-current assets
| |||
Intangible assets1
|
9
|
7,042
|
7,303
|
Property, plant and equipment
|
10
|
499
|
495
|
Right-of-use assets1
|
452
|
449
| |
Investments in associated undertakings1
|
44
|
63
| |
Other investments
|
21
|
23
| |
Deferred tax assets
|
43
|
43
| |
Contract costs1
|
224
|
215
| |
Retirement benefit assets
|
3
|
3
| |
Trade and other receivables
|
45
|
90
| |
Derivative financial instruments
|
57
|
21
| |
8,430
|
8,705
| ||
Current assets
| |||
Other investments
|
1
|
1
| |
Inventories
|
207
|
200
| |
Trade and other receivables1
|
880
|
830
| |
Current tax assets
|
33
|
36
| |
Derivative financial instruments
|
14
|
-
| |
Cash and cash equivalents
|
11
|
1,562
|
2,170
|
2,697
|
3,237
| ||
Liabilities
| |||
Current liabilities
| |||
Trade and other payables1
|
(1,144)
|
(1,166)
| |
Current tax liabilities
|
(48)
|
(60)
| |
Provisions for liabilities and charges
|
17
|
(94)
|
(133)
|
Bank and other short-term borrowings1
|
(1,134)
|
(1,345)
| |
Lease liabilities
|
(127)
|
(135)
| |
Derivative financial instruments
|
(32)
|
-
| |
(2,579)
|
(2,839)
| ||
Net current assets
|
118
|
398
| |
Non-current liabilities
| |||
Other payables1
|
(71)
|
(90)
| |
Bank and other long-term borrowings
|
(3,153)
|
(3,574)
| |
Lease liabilities1
|
(318)
|
(325)
| |
Deferred tax liabilities1
|
(517)
|
(513)
| |
Retirement benefit obligations
|
16
|
(28)
|
(30)
|
Provisions for liabilities and charges1
|
17
|
(357)
|
(381)
|
Derivative financial instruments
|
(16)
|
(92)
| |
(4,460)
|
(5,005)
| ||
Net assets
|
4,088
|
4,098
| |
Equity
| |||
Capital and reserves attributable to the Company's equity holders
| |||
Share capital
|
18
|
25
|
25
|
Share premium
|
14
|
9
| |
Other reserves
|
532
|
763
| |
Retained earnings
|
3,518
|
3,302
| |
4,089
|
4,099
| ||
Non-controlling interests
|
(1)
|
(1)
| |
Total equity
|
4,088
|
4,098
|
Attributable to equity holders of the Company
| ||||||
Share
capital
£m
|
Share
premium
£m
|
Other
reserves
£m
|
Retained
earnings
£m
|
Non-
controlling
interests
£m
|
Total
equity
£m
| |
At 1 January 2021
|
18
|
7
|
(1,926)
|
3,031
|
1
|
1,131
|
Profit for the year
|
-
|
-
|
-
|
263
|
-
|
263
|
Other comprehensive income:
| ||||||
Net exchange adjustments offset in reserves
|
-
|
-
|
(18)
|
-
|
-
|
(18)
|
Net gain on net investment hedge
|
-
|
-
|
15
|
-
|
-
|
15
|
Net gain on cash flow hedge1
|
-
|
-
|
13
|
-
|
-
|
13
|
Cost of hedging
|
-
|
-
|
(1)
|
-
|
-
|
(1)
|
Remeasurement of net defined benefit liability
|
-
|
-
|
-
|
1
|
-
|
1
|
Transfer between reserves
|
-
|
-
|
(10)
|
10
|
-
|
-
|
Tax related to items taken directly to other comprehensive income
|
-
|
-
|
-
|
2
|
-
|
2
|
Total comprehensive income for the year
|
-
|
-
|
(1)
|
276
|
-
|
275
|
Transactions with owners:
| ||||||
Shares issued in the year
|
1
|
-
|
-
|
(1)
|
-
|
-
|
Acquisition of non-controlling interests
|
-
|
-
|
-
|
(8)
|
(2)
|
(10)
|
Dividends paid to equity shareholders
|
-
|
-
|
-
|
(139)
|
-
|
(139)
|
Cost of equity-settled share-based payment plans
|
-
|
-
|
-
|
10
|
-
|
10
|
Tax related to items taken directly to equity
|
-
|
-
|
-
|
5
|
-
|
5
|
Movement in the carrying value of put options
|
-
|
-
|
-
|
(8)
|
-
|
(8)
|
At 31 December 2021
|
19
|
7
|
(1,927)
|
3,166
|
(1)
|
1,264
|
Profit for the year
|
-
|
-
|
-
|
232
|
-
|
232
|
Other comprehensive income:
| ||||||
Net exchange adjustments offset in reserves
|
-
|
-
|
(232)
|
-
|
-
|
(232)
|
Net loss on net investment hedge
|
-
|
-
|
(68)
|
-
|
-
|
(68)
|
Net loss on cash flow hedge1
|
-
|
-
|
(6)
|
-
|
-
|
(6)
|
Cost of hedging
|
-
|
-
|
(2)
|
-
|
-
|
(2)
|
Remeasurement of net defined benefit liability
|
-
|
-
|
-
|
2
|
-
|
2
|
Tax related to items taken directly to other comprehensive income
|
-
|
-
|
-
|
11
|
-
|
11
|
Total comprehensive income for the year
|
-
|
-
|
(308)
|
245
|
-
|
(63)
|
Transactions with owners:
| ||||||
Shares issued in the year
|
6
|
-
|
-
|
-
|
-
|
6
|
Merger relief on acquisition of Terminix Global Holdings, Inc.
|
-
|
-
|
3,014
|
-
|
-
|
3,014
|
Gain on stock options
|
-
|
2
|
-
|
-
|
-
|
2
|
Cost of issuing new shares
|
-
|
-
|
(16)
|
-
|
-
|
(16)
|
Dividends paid to equity shareholders
|
-
|
-
|
-
|
(122)
|
-
|
(122)
|
Cost of equity-settled share-based payment plans
|
-
|
-
|
-
|
18
|
-
|
18
|
Tax related to items taken directly to equity
|
-
|
-
|
-
|
(2)
|
-
|
(2)
|
Movement in the carrying value of put options
|
-
|
-
|
-
|
(3)
|
-
|
(3)
|
At 31 December 2022
|
25
|
9
|
763
|
3,302
|
(1)
|
4,098
|
Adjustment on initial application of IFRS17
|
-
|
-
|
-
|
(1)
|
-
|
(1)
|
Adjusted balance as at 1 January 2023
|
25
|
9
|
763
|
3,301
|
(1)
|
4,097
|
Profit for the year
|
-
|
-
|
-
|
381
|
-
|
381
|
Other comprehensive income:
| ||||||
Net exchange adjustments offset in reserves
|
-
|
-
|
(352)
|
-
|
-
|
(352)
|
Net gain on net investment hedge
|
-
|
-
|
109
|
-
|
-
|
109
|
Net gain on cash flow hedge1
|
-
|
-
|
3
|
-
|
-
|
3
|
Cost of hedging
|
-
|
-
|
9
|
-
|
-
|
9
|
Tax related to items taken directly to other comprehensive income
|
-
|
-
|
-
|
6
|
-
|
6
|
Total comprehensive income for the year
|
-
|
-
|
(231)
|
387
|
-
|
156
|
Transactions with owners:
| ||||||
Gain on stock options
|
-
|
5
|
-
|
-
|
-
|
5
|
Dividends paid to equity shareholders
|
-
|
-
|
-
|
(201)
|
-
|
(201)
|
Cost of equity-settled share-based payment plans
|
-
|
-
|
-
|
27
|
-
|
27
|
Movement in the carrying value of put options
|
-
|
-
|
-
|
4
|
-
|
4
|
At 31 December 2023
|
25
|
14
|
532
|
3,518
|
(1)
|
4,088
|
Capital reduction reserve£m
|
Merger
relief
reserve
£m
|
Legal reserve£m
|
Cash flow hedge reserve£m
|
Translation reserve£m
|
Cost of hedging£m
|
Total£m
| |
At 1 January 2021
|
(1,723)
|
-
|
10
|
(4)
|
(208)
|
(1)
|
(1,926)
|
Net exchange adjustments offset in reserves
|
-
|
-
|
-
|
-
|
(18)
|
-
|
(18)
|
Net gain on net investment hedge
|
-
|
-
|
-
|
-
|
15
|
-
|
15
|
Net gain on cash flow hedge1
|
-
|
-
|
-
|
13
|
-
|
-
|
13
|
Transfer between reserves
|
-
|
-
|
(10)
|
-
|
-
|
-
|
(10)
|
Cost of hedging
|
-
|
-
|
-
|
-
|
-
|
(1)
|
(1)
|
Total other comprehensive income for the year
|
-
|
-
|
(10)
|
13
|
(3)
|
(1)
|
(1)
|
At 31 December 2021
|
(1,723)
|
-
|
-
|
9
|
(211)
|
(2)
|
(1,927)
|
Net exchange adjustments offset in reserves
|
-
|
-
|
-
|
-
|
(232)
|
-
|
(232)
|
Net loss on net investment hedge
|
-
|
-
|
-
|
-
|
(68)
|
-
|
(68)
|
Net loss on cash flow hedge1
|
-
|
-
|
-
|
(6)
|
-
|
-
|
(6)
|
Cost of hedging
|
-
|
-
|
-
|
-
|
-
|
(2)
|
(2)
|
Total other comprehensive income for the year
|
-
|
-
|
-
|
(6)
|
(300)
|
(2)
|
(308)
|
Transactions with owners:
| |||||||
Merger relief on acquisition of Terminix Global Holdings, Inc.
|
-
|
3,014
|
-
|
-
|
-
|
-
|
3,014
|
Cost of issuing new shares
|
-
|
(16)
|
-
|
-
|
-
|
-
|
(16)
|
At 31 December 2022
|
(1,723)
|
2,998
|
-
|
3
|
(511)
|
(4)
|
763
|
Net exchange adjustments offset in reserves
|
-
|
-
|
-
|
-
|
(352)
|
-
|
(352)
|
Net loss on net investment hedge
|
-
|
-
|
-
|
-
|
109
|
-
|
109
|
Net gain on cash flow hedge1
|
-
|
-
|
-
|
3
|
-
|
-
|
3
|
Cost of hedging
|
-
|
-
|
-
|
-
|
-
|
9
|
9
|
Total other comprehensive income for the year
|
-
|
-
|
-
|
3
|
(243)
|
9
|
(231)
|
At 31 December 2023
|
(1,723)
|
2,998
|
-
|
6
|
(754)
|
5
|
532
|
Note
|
2023£m
|
2022£m
|
2021£m
| |
Cash flows from operating activities1
| ||||
Operating profit
|
625
|
317
|
347
| |
Adjustments for:
| ||||
- Depreciation and impairment of property, plant and equipment
|
154
|
148
|
128
| |
- Depreciation and impairment of leased assets
|
120
|
106
|
78
| |
- Amortisation and impairment of intangible assets (excluding computer software
|
175
|
118
|
74
| |
- Amortisation and impairment of computer software
|
26
|
22
|
17
| |
- Other non-cash items
|
26
|
8
|
6
| |
Changes in working capital (excluding the effects of acquisitions and exchange differences on consolidation):
| ||||
- Inventories
|
(15)
|
(4)
|
(3)
| |
- Contract costs
|
(19)
|
(10)
|
(5)
| |
- Trade and other receivables
|
(29)
|
5
|
59
| |
- Trade and other payables and provisions
|
(60)
|
6
|
(32)
| |
Interest received
|
25
|
13
|
5
| |
Interest paid2
|
(191)
|
(52)
|
(42)
| |
Income tax paid
|
(100)
|
(77)
|
(69)
| |
Net cash flows from operating activities
|
737
|
600
|
563
| |
Cash flows from investing activities
| ||||
Purchase of property, plant and equipment
|
(167)
|
(153)
|
(128)
| |
Purchase of intangible assets
|
(44)
|
(37)
|
(32)
| |
Proceeds from sale of property, plant and equipment
|
14
|
5
|
7
| |
Acquisition of companies and businesses, net of cash acquired
|
8
|
(242)
|
(1,018)
|
(463)
|
Disposal of companies and businesses
|
-
|
1
|
-
| |
Disposal of investment in associate
|
19
|
-
|
-
| |
Dividends received from associates
|
4
|
4
|
4
| |
Net change to cash flow from investment in term deposits
|
-
|
1
|
171
| |
Net cash flows from investing activities
|
(416)
|
(1,197)
|
(441)
| |
Cash flows from financing activities
| ||||
Dividends paid to equity shareholders
|
7
|
(201)
|
(122)
|
(139)
|
Acquisition of shares from non-controlling interest
|
-
|
-
|
(9)
| |
Capital element of lease payments
|
(157)
|
(104)
|
(88)
| |
Cost of issuing new shares
|
-
|
(16)
|
-
| |
Cash (outflow)/inflow on settlement of debt-related foreign exchange forward contracts
|
(3)
|
26
|
(19)
| |
Proceeds from new debt
|
-
|
2,383
|
5
| |
Debt repayments
|
-
|
(844)
|
(167)
| |
Net cash flows from financing activities
|
(361)
|
1,323
|
(417)
| |
Net (decrease)/increase in cash and cash equivalents
|
(40)
|
726
|
(295)
| |
Cash and cash equivalents at beginning of year
|
879
|
242
|
551
| |
Exchange losses on cash and cash equivalents
|
(7)
|
(89)
|
(14)
| |
Cash and cash equivalents at end of the financial year
|
11
|
832
|
879
|
242
|
●
|
introduction of IFRS 17 Insurance contracts (for non-issuers);
|
●
|
amendments to IAS 8 Definition of accounting estimates;
|
●
|
amendments to IAS 1 Disclosure of accounting policies; and
|
●
|
amendments to IAS 12 Deferred tax.
|
Revenue
2023
£m
|
Revenue1
2022
£m
|
Revenue1
2021
£m
|
Operating
profit
2022
£m
|
Operating
profit1
2022
£m
|
Operating
profit1
2021
£m
| |
North America2
| ||||||
Pest Control
|
3,201
|
1,746
|
1,149
|
599
|
297
|
187
|
Hygiene & Wellbeing
|
105
|
103
|
142
|
18
|
18
|
29
|
3,306
|
1,849
|
1,291
|
617
|
315
|
216
| |
Europe (incl LATAM)
| ||||||
Pest Control
|
516
|
427
|
350
|
124
|
103
|
92
|
Hygiene & Wellbeing
|
344
|
322
|
316
|
52
|
53
|
54
|
France Workwear
|
221
|
192
|
166
|
39
|
31
|
17
|
1,081
|
941
|
832
|
215
|
187
|
163
| |
UK & Sub-Saharan Africa
| ||||||
Pest Control1
|
195
|
182
|
171
|
51
|
47
|
45
|
Hygiene & Wellbeing
|
195
|
183
|
183
|
43
|
48
|
49
|
390
|
365
|
354
|
94
|
95
|
94
| |
Asia & MENAT
| ||||||
Pest Control
|
250
|
231
|
187
|
34
|
34
|
25
|
Hygiene & Wellbeing
|
89
|
90
|
84
|
11
|
11
|
11
|
339
|
321
|
271
|
45
|
45
|
36
| |
Pacific
| ||||||
Pest Control
|
124
|
104
|
90
|
22
|
16
|
14
|
Hygiene & Wellbeing
|
125
|
123
|
107
|
33
|
32
|
25
|
249
|
227
|
197
|
55
|
48
|
39
| |
Central and regional overheads
|
10
|
11
|
12
|
(121)
|
(107)
|
(96)
|
Restructuring costs
|
-
|
-
|
-
|
(7)
|
(12)
|
(10)
|
Revenue and Adjusted Operating Profit
|
5,375
|
3,714
|
2,957
|
898
|
571
|
442
|
One-off and adjusting items
|
(98)
|
(136)
|
(21)
| |||
Amortisation and impairment of intangible assets3
|
(175)
|
(118)
|
(74)
| |||
Operating Profit
|
625
|
317
|
347
|
Amortisation and
impairment of
intangibles1
2023
£m
|
Amortisation and
impairment of
intangibles1
2022
£m
|
Amortisation and
impairment of
intangibles1
2021
£m
| |
North America
|
118
|
59
|
34
|
Europe (incl. LATAM)
|
24
|
29
|
14
|
UK & Sub-Saharan Africa
|
8
|
-
|
9
|
Asia & MENAT
|
11
|
20
|
7
|
Pacific
|
6
|
4
|
4
|
Central and regional
|
8
|
6
|
6
|
Total
|
175
|
118
|
74
|
Tax effect
|
(44)
|
(25)
|
(18)
|
Total after tax effect
|
131
|
93
|
56
|
2023
£m
|
2022
£m
|
2021
£m
| |
Hedged interest payable on medium-term notes issued1
|
61
|
39
|
10
|
Interest payable on bank loans and overdrafts1
|
42
|
5
|
3
|
Interest payable on RCF1
|
3
|
1
|
1
|
Interest payable on foreign exchange swaps2
|
44
|
19
|
14
|
Interest payable on leases
|
25
|
10
|
6
|
Amortisation of discount on provisions
|
14
|
3
|
-
|
Fair value loss on hedge ineffectiveness
|
-
|
2
|
-
|
Total finance cost
|
189
|
79
|
34
|
2023
£m
|
2022
£m
|
2021
£m
| |
Bank interest received
|
25
|
5
|
1
|
Fair value gain on hedge ineffectiveness
|
1
|
22
|
-
|
Foreign exchange gain on translation of foreign assets/liabilities
|
11
|
-
|
-
|
Hyperinflation accounting adjustment
|
11
|
22
|
3
|
Total finance income
|
48
|
49
|
4
|
2023
£m
|
2022
£m
|
2021
£m
| |
Current tax expense
|
94
|
76
|
57
|
Adjustment in respect of previous periods
|
(8)
|
2
|
(3)
|
Total current tax
|
86
|
78
|
54
|
Deferred tax expense/(credit)
|
30
|
(3)
|
21
|
Deferred tax adjustment in respect of previous periods
|
(4)
|
(11)
|
(13)
|
Total deferred tax
|
26
|
(14)
|
8
|
Total income tax expense
|
112
|
64
|
62
|
2023
£m
|
2022
£m
|
2021
£m
| |
Profit attributable to equity holders of the Company
|
381
|
232
|
263
|
Weighted average number of ordinary shares in issue (million)
|
2,516
|
2,002
|
1,858
|
Adjustment for potentially dilutive shares (million)
|
11
|
12
|
8
|
Weighted average number of ordinary shares for diluted earnings per share (million)
|
2,527
|
2,014
|
1,866
|
Basic earnings per share
|
15.14p
|
11.57p
|
14.16p
|
Diluted earnings per share
|
15.07p
|
11.51p
|
14.10p
|
2023
£m
|
2022
£m
|
2021
£m
| |
2020 final dividend paid - 5.41p per share
|
-
|
-
|
100
|
2021 interim dividend paid - 2.09p per share
|
-
|
-
|
39
|
2021 final dividend paid - 4.30p per share
|
-
|
80
|
-
|
2022 interim dividend paid - 2.40p per share
|
-
|
42
|
-
|
2022 final dividend paid - 5.15p per share
|
131
|
-
|
-
|
2023 interim dividend paid - 2.75p per share
|
70
|
-
|
-
|
Total
|
201
|
122
|
139
|
As
reported
£m
|
Measurement
period
adjustment
£m
|
Retrospectively
adjusted
£m
| |
Non-current assets
| |||
- Intangible assets
|
2,027
|
-
|
2,027
|
- Property, plant and equipment1
|
249
|
(5)
|
244
|
- Other non-current assets
|
143
|
47
|
190
|
Current assets
|
701
|
(3)
|
698
|
Current liabilities
|
(311)
|
(5)
|
(316)
|
Non-current liabilities
|
(1,875)
|
(18)
|
(1,893)
|
Net assets acquired
|
934
|
16
|
950
|
Goodwill
|
3,176
|
(16)
|
3,160
|
Total
2023
£m
|
Terminix Global Holdings, Inc.1
2022
£m
|
Individually immaterial acquisitions
2022
£m
|
Retrospectively
adjusted
Total1
2022
£m
| |
Purchase consideration
| ||||
- Cash paid
|
203
|
1,087
|
214
|
1,301
|
- Deferred and contingent consideration
|
58
|
-
|
45
|
45
|
- Equity interests
|
-
|
3,023
|
-
|
3,023
|
Total purchase consideration
|
261
|
4,110
|
259
|
4,369
|
Fair value of net assets acquired1
|
(88)
|
(950)
|
(87)
|
(1,037)
|
Goodwill from current-year acquisitions1
|
173
|
3,160
|
172
|
3,332
|
Goodwill expected to be deductible for tax purposes
|
76
|
-
|
60
|
60
|
Total
2023
£m
|
Terminix Global Holdings, Inc.1
2022
£m
|
Individually immaterial acquisitions
2022
£m
|
Retrospectively
adjusted
Total1
2022
£m
| |
Non-current assets
| ||||
- Intangible assets2
|
80
|
2,027
|
74
|
2,101
|
- Property, plant and equipment3
|
12
|
244
|
14
|
258
|
- Other non-current assets
|
-
|
190
|
-
|
190
|
Current assets4
|
22
|
698
|
28
|
726
|
Current liabilities5
|
(12)
|
(316)
|
(11)
|
(327)
|
Non-current liabilities6
|
(14)
|
(1,893)
|
(18)
|
(1,911)
|
Net assets acquired
|
88
|
950
|
87
|
1,037
|
Total
2023
£m
|
Terminix Global Holdings, Inc.
2022
£m
|
Individually immaterial acquisitions
2022
£m
|
Retrospectively
adjusted
Total
2022
£m
| |
Total purchase consideration
|
261
|
4,110
|
259
|
4,369
|
Equity interests
|
-
|
(3,023)
|
-
|
(3,023)
|
Consideration payable in future periods
|
(58)
|
-
|
(45)
|
(45)
|
Purchase consideration paid in cash
|
203
|
1,087
|
214
|
1,301
|
Cash and cash equivalents in acquired companies and businesses
|
(8)
|
(313)
|
(9)
|
(322)
|
Cash outflow on current period acquisitions
|
195
|
774
|
205
|
979
|
Deferred and contingent consideration paid
|
47
|
-
|
39
|
39
|
Cash outflow on current and past acquisitions
|
242
|
774
|
244
|
1,018
|
Goodwill1
£m
|
Customer
lists
£m
|
Indefinite-lived brands
£m
|
Other
intangibles
£m
|
Product development
£m
|
Computer
software
£m
|
Total1
£m
| |
Cost
| |||||||
At 1 January 2022
|
1,888
|
876
|
-
|
67
|
46
|
163
|
3,040
|
Exchange differences
|
(72)
|
(5)
|
(107)
|
2
|
(1)
|
6
|
(177)
|
Additions
|
-
|
-
|
-
|
-
|
10
|
27
|
37
|
Disposals/retirements
|
-
|
(180)
|
-
|
(12)
|
-
|
(1)
|
(193)
|
Acquisition of companies and businesses¹
|
3,336
|
779
|
1,292
|
23
|
-
|
11
|
5,441
|
Hyperinflationary adjustment
|
14
|
3
|
-
|
1
|
-
|
-
|
18
|
Disposal of companies and businesses
|
(1)
|
-
|
-
|
-
|
-
|
-
|
(1)
|
At 31 December 2022 (retrospectively adjusted)
|
5,165
|
1,473
|
1,185
|
81
|
55
|
206
|
8,165
|
Exchange differences
|
(269)
|
(70)
|
(58)
|
(5)
|
-
|
(3)
|
(405)
|
Additions
|
-
|
-
|
-
|
-
|
10
|
34
|
44
|
Disposals/retirements
|
(2)
|
(15)
|
-
|
(12)
|
-
|
(8)
|
(37)
|
Acquisition of companies and businesses
|
172
|
69
|
-
|
11
|
-
|
-
|
252
|
Hyperinflationary adjustment
|
14
|
3
|
-
|
1
|
-
|
-
|
18
|
At 31 December 2023
|
5,080
|
1,460
|
1,127
|
76
|
65
|
229
|
8,037
|
Accumulated amortisation and impairment
| |||||||
At 1 January 2022
|
(44)
|
(635)
|
-
|
(48)
|
(32)
|
(117)
|
(876)
|
Exchange differences
|
1
|
(31)
|
-
|
(2)
|
-
|
(5)
|
(37)
|
Disposals/retirements
|
-
|
179
|
-
|
12
|
-
|
1
|
192
|
Hyperinflationary adjustment
|
-
|
(1)
|
-
|
-
|
-
|
-
|
(1)
|
Impairment charge
|
(22)
|
-
|
-
|
-
|
-
|
-
|
(22)
|
Amortisation charge
|
-
|
(85)
|
-
|
(6)
|
(5)
|
(22)
|
(118)
|
At 31 December 2022
|
(65)
|
(573)
|
-
|
(44)
|
(37)
|
(143)
|
(862)
|
Exchange differences
|
12
|
26
|
-
|
2
|
-
|
3
|
43
|
Disposals/retirements
|
2
|
15
|
-
|
12
|
-
|
7
|
36
|
Hyperinflationary adjustment
|
(10)
|
(1)
|
-
|
-
|
-
|
-
|
(11)
|
Impairment charge
|
(3)
|
(1)
|
-
|
-
|
-
|
-
|
(4)
|
Amortisation charge
|
-
|
(155)
|
-
|
(9)
|
(7)
|
(26)
|
(197)
|
At 31 December 2023
|
(64)
|
(689)
|
-
|
(39)
|
(44)
|
(159)
|
(995)
|
Net book value
| |||||||
At 1 January 2022
|
1,844
|
241
|
-
|
19
|
14
|
46
|
2,164
|
At 31 December 20221
|
5,100
|
900
|
1,185
|
37
|
18
|
63
|
7,303
|
At 31 December 2023
|
5,016
|
771
|
1,127
|
37
|
21
|
70
|
7,042
|
Land and
buildings
£m
|
Service contract equipment
£m
|
Other plant and
equipment
£m
|
Vehicles
and office
equipment
£m
|
Total
£m
| |
Cost
| |||||
At 1 January 2022
|
87
|
518
|
188
|
210
|
1,003
|
Exchange differences
|
5
|
27
|
11
|
15
|
58
|
Additions
|
7
|
112
|
19
|
19
|
157
|
Disposals
|
(1)
|
(72)
|
(7)
|
(27)
|
(107)
|
Acquisition of companies and businesses
|
29
|
2
|
4
|
30
|
65
|
Reclassification from IFRS 16 ROU assets1
|
-
|
-
|
-
|
8
|
8
|
At 31 December 2022
|
127
|
587
|
215
|
255
|
1,184
|
Exchange differences
|
(7)
|
(20)
|
(5)
|
(15)
|
(47)
|
Additions
|
7
|
123
|
14
|
23
|
167
|
Disposals
|
(9)
|
(77)
|
(9)
|
(25)
|
(120)
|
Acquisition of companies and businesses
|
-
|
1
|
1
|
8
|
10
|
Hyperinflationary adjustment
|
4
|
-
|
-
|
1
|
5
|
Reclassification from IFRS 16 ROU assets1
|
-
|
-
|
-
|
8
|
8
|
At 31 December 2023
|
122
|
614
|
216
|
255
|
1,207
|
Accumulated depreciation and impairment
| |||||
At 1 January 2022
|
(31)
|
(314)
|
(135)
|
(125)
|
(605)
|
Exchange differences
|
(3)
|
(18)
|
(8)
|
(11)
|
(40)
|
Disposals
|
1
|
72
|
6
|
25
|
104
|
Impairment charge
|
(8)
|
-
|
-
|
-
|
(8)
|
Depreciation charge
|
(3)
|
(96)
|
(14)
|
(27)
|
(140)
|
At 31 December 2022
|
(44)
|
(356)
|
(151)
|
(138)
|
(689)
|
Exchange differences
|
2
|
14
|
5
|
7
|
28
|
Disposals
|
4
|
75
|
8
|
22
|
109
|
Hyperinflationary adjustment
|
(1)
|
-
|
-
|
(1)
|
(2)
|
Depreciation charge
|
(5)
|
(102)
|
(15)
|
(32)
|
(154)
|
At 31 December 2023
|
(44)
|
(369)
|
(153)
|
(142)
|
(708)
|
Net book value
| |||||
At 1 January 2022
|
56
|
204
|
53
|
85
|
398
|
At 31 December 2022
|
83
|
231
|
64
|
117
|
495
|
At 31 December 2023
|
78
|
245
|
63
|
113
|
499
|
Gross
amounts
2023
£m
|
Gross
amounts
2022
£m
| |
Cash at bank and in hand
|
1,080
|
1,713
|
Money market funds
|
153
|
236
|
Short-term bank deposits
|
329
|
221
|
Cash and cash equivalents in the Consolidated Balance Sheet
|
1,562
|
2,170
|
Bank overdraft
|
(730)
|
(1,291)
|
Cash and cash equivalents in the Consolidated Cash Flow Statement
|
832
|
879
|
Opening
2023
£m
|
Cash
flows
£m
|
Non-cash
(fair value changes, accruals and acquisitions)
£m
|
Non-cash (foreign exchange
and other)
£m
|
Closing
2023
£m
| |
Bank and other short-term borrowings
|
(1,345)
|
664
|
(106)
|
(347)
|
(1,134)
|
Bank and other long-term borrowings
|
(3,574)
|
-
|
-
|
421
|
(3,153)
|
Lease liabilities
|
(460)
|
182
|
(162)
|
(5)
|
(445)
|
Other investments
|
1
|
-
|
-
|
-
|
1
|
Fair value of debt-related derivatives
|
(71)
|
39
|
(1)
|
56
|
23
|
Gross debt
|
(5,449)
|
885
|
(269)
|
125
|
(4,708)
|
Cash and cash equivalents in the Consolidated Balance Sheet
|
2,170
|
(601)
|
-
|
(7)
|
1,562
|
Net debt
|
(3,279)
|
284
|
(269)
|
118
|
(3,146)
|
Opening
2022
£m
|
Cash
flows
£m
|
Non-cash
(fair value changes, accruals and acquisitions)1
£m
|
Non-cash (foreign exchange
and other) 1
£m
|
Closing
2022 1
£m
| |
Bank and other short-term borrowings1
|
(459)
|
(121)
|
(762)
|
(3)
|
(1,345)
|
Bank and other long-term borrowings
|
(1,256)
|
(2,257)
|
-
|
(61)
|
(3,574)
|
Lease liabilities1
|
(217)
|
114
|
(217)
|
(140)
|
(460)
|
Other investments
|
1
|
-
|
-
|
-
|
1
|
Fair value of debt-related derivatives
|
(22)
|
(7)
|
19
|
(61)
|
(71)
|
Gross debt1 (retrospectively adjusted)
|
(1,953)
|
(2,271)
|
(960)
|
(265)
|
(5,449)
|
Cash and cash equivalents in the Consolidated Balance Sheet
|
668
|
1,591
|
-
|
(89)
|
2,170
|
Net debt1 (retrospectively adjusted)
|
(1,285)
|
(680)
|
(960)
|
(354)
|
(3,279)
|
Level 1
|
- unadjusted quoted prices in active markets for identical assets or liabilities;
|
Level 2
|
- inputs other than quoted prices that are observable for the asset or liability either directly as prices or indirectly through modelling based on prices; and
|
Level 3
|
- inputs for the asset or liability that are not based on observable market data.
|
Financial instrument
|
Hierarchy level
|
Valuation method
|
Financial assets traded in active markets
|
1
|
Current bid price
|
Financial liabilities traded in active markets
|
1
|
Current ask price
|
Listed bonds
|
1
|
Quoted market prices
|
Money market funds
|
1
|
Quoted market prices
|
Interest rate/currency swaps
|
2
|
Discounted cash flow based on market swap rates
|
Forward foreign exchange contracts
|
2
|
Forward exchange market rates
|
Borrowings not traded in active markets (term loans and uncommitted facilities)
|
2
|
Nominal value
|
Money market deposits
|
2
|
Nominal value
|
Trade payables and receivables
|
2
|
Nominal value less estimated credit adjustments
|
Contingent consideration (including put option liability)
|
3
|
Discounted cash flow using WACC
|
Facility
amount
2023
£m
|
Drawn at
year end
2023
£m
|
Headroom
2023
£m
|
Interest rate
at year end
2023
%
| |
Non-current
| ||||
$700m term loan due October 2025
|
550
|
550
|
-
|
5.94
|
$1.0bn RCF due October 2028
|
785
|
-
|
785
|
0.14
|
Facility
amount
2022
£m
|
Drawn at
year end
2022
£m
|
Headroom
2022
£m
|
Interest rate
at year end
2022
%
| |
Non-current
| ||||
$700m term loan due October 2025
|
579
|
579
|
-
|
4.9
|
$1.0bn RCF due October 2028
|
827
|
-
|
827
|
0.14
|
Bond interest coupon
2023
|
Effective hedged interest rate
2023
|
Bond interest coupon
2022
|
Effective hedged interest rate
2022
| |
Current
| ||||
€400m bond due November 2024
|
Fixed 0.950%
|
Fixed 3.60%
|
Fixed 0.950%
|
Fixed 3.08%
|
Non-current
| ||||
€500m bond due May 2026
|
Fixed 0.875%
|
Fixed 2.80%
|
Fixed 0.875%
|
Fixed 1.78%
|
€850m bond due June 2027
|
Fixed 3.875%
|
Fixed 5.01%
|
Fixed 3.875%
|
Fixed 3.98%
|
€600m bond due October 2028
|
Fixed 0.500%
|
Fixed 2.23%
|
Fixed 0.500%
|
Fixed 1.30%
|
€600m bond due June 2030
|
Fixed 4.375%
|
Fixed 4.48%
|
Fixed 4.375%
|
Fixed 4.38%
|
£400m bond due June 2032
|
Fixed 5.000%
|
Fixed 5.20%
|
Fixed 5.000%
|
Fixed 5.11%
|
Average cost of bond debt at year-end rates
|
3.97%
|
3.28%
|
Termite damage claims1
£m
|
Self-
insurance
£m
|
Environmental1
£m
|
Other
£m
|
Total1
£m
| |
At 1 January 2022
|
-
|
37
|
11
|
13
|
61
|
Exchange differences1
|
(29)
|
(7)
|
-
|
-
|
(36)
|
Additional provisions
|
3
|
30
|
-
|
8
|
41
|
Used during the year
|
(10)
|
(26)
|
(2)
|
(8)
|
(46)
|
Unused amounts reversed
|
-
|
(6)
|
-
|
(2)
|
(8)
|
Acquisition of companies and businesses1
|
354
|
136
|
7
|
1
|
498
|
Unwinding of discount on provisions
|
3
|
1
|
-
|
-
|
4
|
At 31 December 20221(retrospectively adjusted)
|
321
|
165
|
16
|
12
|
514
|
At 1 January 2023
|
321
|
165
|
16
|
12
|
514
|
Exchange differences
|
(14)
|
(8)
|
(1)
|
1
|
(22)
|
Additional provisions
|
15
|
56
|
3
|
7
|
81
|
Used during the year
|
(73)
|
(44)
|
(2)
|
(7)
|
(126)
|
Unused amounts reversed
|
-
|
(8)
|
-
|
(3)
|
(11)
|
Acquisition of companies and businesses
|
-
|
-
|
-
|
1
|
1
|
Unwinding of discount on provisions
|
11
|
3
|
-
|
-
|
14
|
At 31 December 2023
|
260
|
164
|
16
|
11
|
451
|
2023Total£m
|
Retrospectively
adjusted
2022Total1£m
| |
Analysed as follows:
| ||
Non-current1
|
357
|
381
|
Current
|
94
|
133
|
Total
|
451
|
514
|
●
|
Discount rate - The exposure to termite damage claims is largely based within the United States, therefore measurement is based on a seven-year US bond risk-free rate. During 2023, interest rates (and therefore discount rates) have moved up and are at their highest level in over a decade. Rates could move in either direction and management has modelled that an increase/decrease of 5% in yields (would decrease/increase the provision by £3m (2022: £3m). Over the 12 months to 31 December 2023, seven-year risk-free rate yields have decreased c.4% from 4.03% to 3.88%.
|
●
|
Claim value - Claim value forecasts have been based on the latest available historical settled Terminix claims. Claims values are dependent on a range of inputs including labour cost, materials costs (e.g. timber), whether a claim becomes litigated or not, and specific circumstances including contributory factors at the premises. Management has determined the historical time period for each material category of claim, between three months and one year, to determine an estimate for costs per claim. Recent fluctuations in input prices (e.g. timber prices) means that there is potential for volatility in claim values and therefore future material changes in provisions. Management has modelled that an increase/decrease of 5% in claim values would increase/decrease the provision by c.£15m (2022: £14m). Over the 12 months to 31 December 2023, as a result of accelerating the clear down of legacy longstanding claims and other macroeconomic factors, in-year costs per claim rose by c.32% (2022: 17%).
|
●
|
Claim rate - Management has estimated claim rates based on statistical historical incurred claims. Data has been captured and analysed by a third-party agency, to establish incidence curves that can be used to estimate likely future cash outflows. Changes in rates of claim are largely outside the Group's control and may depend on litigation trends within the US, and other external factors such as how often customers move property and how well they maintain those properties. This causes estimation uncertainty that could lead to material changes in provision measurement. Management has modelled that an increase/decrease of 5% in overall claim rates would increase/decrease the provision by c.£15m (2022: £14m), accordingly. Over the 12 months to 31 December 2023 claim rates fell by c.7% (2022: 16%).
|
●
|
Customer churn rate - If customers choose not to renew their contracts each year, then the assurance warranty falls away. As such there is sensitivity to the assumption on how many customers will churn out of the portfolio of customers each year. Data has been captured and analysed by a third-party agency, to establish incidence curves for customer churn, and forward looking assumptions have been made based on these curves. Changes in churn rates are subject to macroeconomic factors and to the performance of the Group. A 1% movement in customer churn rates, up or down, would change the provision by c.£11m up or down (2022: £10m), accordingly. On average over the last 10 years churn rates have moved by +/- c.1.8% per annum (2022: +/-1.2%).
|
2023£m
|
2022£m
| |
Issued and fully paid
| ||
At 31 December - 2,522,539,885 shares (2022: 2,520,039,885)
|
25
|
25
|
●
|
the Group Financial Statements, which have been prepared in accordance with UK-adopted International Accounting Standards and International Reporting Financial Standards as issued by the International Accounting Standards Board, give a true and fair view of the assets, liabilities, financial position and profit of the Group;
|
●
|
the Company's Financial Statements, which have been prepared in accordance with United Kingdom Accounting Standards, comprising FRS 101 'Reduced Disclosure Framework', give a true and fair view of the assets, liabilities, financial position and profit of the Company; and
|
●
|
the Annual Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.
|
Date: 07 March 2024
|
RENTOKIL INITIAL PLC
|
/s/Stuart Ingall-Tombs
| |
Name: Stuart Ingall-Tombs
| |
Title: Chief Financial Officer
| |
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Rentokil Initial plc published this content on 07 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 March 2024 11:27:54 UTC.