2200221 1AAnnnuuaal lRReeppoortrt
About Terminix
Terminix Global Holdings is a leading provider of residential and commercial pest control. The company provides pest management services and protection against termites, mosquitoes, bedbugs, rodents and other pests.
REACH
2.9M
U.S. Customers
50,000+
Daily Visits to Homes and Businesses
11,700
Teammates
380+
Company-Owned Locations
*Customers who enter into a contract with the option to renew periodically
STRONG 2021 PERFORMANCE
2 percentage points
Organic Growth Acceleration
130 basis points
Adjusted EBITDA Margin Expansion
6 percentage points
Free Cash Flow Conversion Acceleration
2021 Financial Summary
Year ended December 31,(In millions, except per share data) 2021 Operating Results
2020
2019
Revenue
Net Income (Loss) Adjusted EBITDA Adjusted EBITDA Margin Adjusted Net Income Net Income Per Share Adjusted Earnings Per Share
$ 2,045
$ 1,961
$ 1,819
125
551 128
387
345 313
18.9
17.6% 17.2%
180
126 108
0.99
4.14 0.94
1.43
0.95 0.79
Financial Position (as of period end)
Total Assets
Total Long-Term Debt Total Stockholders' Equity
$ 4,410 899 2,375
$4,837 920 2,741
$5,322 1,735 2,322
Cash Flows
Net Cash Provided from
Operating Activities from
Continuing Operations Free Cash Flow
$ 239 217
Free Cash Flow Conversion 56%
$ 198 172 50%
$ 164 139 45%
See Non-GAAP Reconciliations on Pg. 10 for definitions of accounting terms.
Revenue
(in $ millions)
Adjusted EBITDA/Margin
(in $ millions / %)
2018
2017
$ 1,655
$ 1,541
(41) 510
298 277
18.0% 18.0%
$5,023 $5,646
1,774 2,776
2,204 1,167
$ 155 115 39%
$ 139 76 27%
387
2,045
1,541
2017
1,655
2018
2019
1,819
2020
1,961
2021
2018
2017
Adjusted EBITDA
2021 v 2020
Change
4% (77%) 12%
43% (76%) 51%
21% 26%
2019
2020
2021
Margin
1
LETTER FROM THE CEO, BRETT PONTON
Dear Fellow Stockholders
2021 was a great year for Terminix, filled with progress and per-formance based on our strategy. Our professional technicians continued to deliver expert service, solving some of the most import-ant problems of our customers and creating new opportunities for our business to grow and our teammates to succeed.
I am proud of the team for growing revenue by four percent to $2.045 billion and improving Adjusted EBITDA by 12 percent to $387 million in 2021. Our strong revenue performance benefited from meaningful increases in our residential service lines, with both ter-mite and residential pest growing three percent organically. Our commercial business grew two percent organically and continued to benefit from solid demand in our international business.
Margin improvements and Adjusted EBITDA growth were driven mainly by direct cost improvements due to favorable fleet man-agement, including from our fuel purchasing strategies and lower chemical costs. We also made substantial progress managing our termite damage claims expense, ending the year with the lowest quarterly number of new non-litigated claims since 2018.
We continued to see meaningful gains in customer retention. Retention improved by 30 basis points in both of our residential and commercial pest service lines, and we ended the year above indus-try retention rates in our termite business. We owe this success to the incredible efforts of our teammates as they took care of cus-tomers and delivered strong results.
We also made great strides in building the foundation for our future profitable growth: The Terminix Way and our Customer Experience Platform. The Terminix Way is a sustainable, repeatable operating model to standardize our work. Our Customer Experience Platform, or CxP, helps simplify how our frontline interacts with customers. Even with these major investments and focus on the future, we deliv-ered strong results to our stockholders by accelerating our organic growth rates by two percentage points and expanding our Adjusted EBITDA margins by more than 130 basis points in 2021 versus 2020.
In addition, as we solidified our transition to a pure play pest com-pany, we streamlined our organization and reimagined corporate functions with an intensive focus on the frontline - creating a true branch support center.
Brett T. Ponton
We also addressed pandemic-related challenges in the labor mar-ket and made headway toward our staffing and workforce goals by improving the teammate experience. This included a new focus on the onboarding experience-that crucial first day and those initial weeks after a teammate joins. Additionally, we reworked certain pay plans to help ensure we continue retaining the best employees and attracting the best pest management professionals.
We ended the year with considerable momentum. Key changes to our digital footprint and e-commerce platform helped us enhance our marketing presence and close the year strong. Combined with consistent improvements in staffing levels in the back-half of the year, we were able to drive considerable growth in our residential business in the fourth quarter. Organic revenue in termite and home services grew nine percent and residential pest control revenue was up four percent.
I'm excited about 2022 as we gain further momentum on our key strategies in teammate retention, marketing excellence, household penetration, and commercial pest management. We continue to invest in tools, training, and technology to make our people and our teams successful, underpinned by our ability to create an industry-leading teammate experience and build on our scalable enabling capabilities. We continue to tap into the knowledge and expertise of individuals and teams who understand how our busi-ness really works, especially in our extensive branch network around the country.
Finally, as we look to our previously announced merger with Rentokil Initial anticipated to close in the second half of 2022, we are enthu-siastic about unlocking value for the Terminix brand, our teammates, and our shareholders, including an enhanced ability to use the scale and platforms of the combined companies to better serve our cus-tomers and deliver for our shareholders.
I am excited about the path in front of us and opportunities to unlock value and drive continued growth.
Chief Executive Officer
April 8, 2022
2021 CUSTOMER RETENTION GROWTH
30
basis points
Residential Pest
30
basis points
Commercial Pest
Our Customer Experience Platform, or CxP, helps simplify how our frontline interacts with customers.
The Terminix Way is a sustain-able, repeatable operating model to standardize our work.
Terminix Academy is how we train our teammates to deliver best-in-class service and support their individualized career paths.
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Disclaimer
Terminix Global Holdings Inc. published this content on 03 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 April 2022 07:58:06 UTC.