First-Quarter 2021 Earnings Webcast
May 6, 2021
Cautionary Statements
Safe Harbor Statement
This presentation contains forward-looking statements and cautionary statements, including cash flow outlook and projections, that are based on management's beliefs and assumptions and on information currently available to management. Most forward-looking statements contain words that identify
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"projects," "should," "will," "would" or similar expressions and the negatives of those terms that relate to future events. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Terminix's actual results, performance or achievements to be materially different from any projected results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent the beliefs and assumptions of Terminix only as of the date of this presentation and Terminix undertakes no obligation to update or revise publicly any such forward-looking statements, whether as a result of new information, future events or otherwise. As such, Terminix's future results may vary from any expectations or goals expressed in, or implied by, the forward-looking statements included in this presentation, possibly to a material degree. Terminix cannot assure you that the assumptions made in preparing any of the forward-looking statements will prove accurate or that any long-term financial or operational goals and targets will be realized. For a discussion of some of the important factors that could cause Terminix's results to differ materially from those expressed in, or implied by, the
forward-looking statements included in this presentation, investors should refer to the disclosure contained under the heading "Risk Factors" in our Annual Report on Form 10-K, and our other filings with the SEC.
Note to Non-GAAP Financial Measures
This presentation contains certain non-GAAP financial measures. Non-GAAP measures should not be considered as an alternative to GAAP financial measures. Non-GAAP measures may not be calculated like or comparable to similarly titled measures of other companies. See non-GAAP reconciliations below in this presentation for a reconciliation of these measures to the most directly comparable GAAP financial measures. Organic revenue growth, Adjusted EBITDA, adjusted net income, adjusted earnings per share, free cash flow, free cash flow conversion and net debt leverage ratio are not measurements of the
Company's financial performance under GAAP and should not be considered as an alternative to net income, net cash provided by operating activities from
continuing operations, or any other performance or liquidity measures derived in accordance with GAAP. Management uses these non-GAAP financial measures to facilitate operating performance and liquidity comparisons, as applicable, from period to period. We believe these non-GAAP financial measures are useful for investors, analysts and other interested parties as they facilitate company-to-company operating performance and liquidity comparisons, as applicable, by excluding potential differences caused by variations in capital structures, acquisition activity, taxation, the age and book depreciation of facilities and equipment, restructuring initiatives and equity-based,long-term incentive plans.
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Agenda
Q1 2021 Performance Highlights
Brett Ponton
Strategic Priorities Update
Brett Ponton
Q1 2021 Financial Summary
Bob Riesbeck
Q1 2021 Cash Flow
Bob Riesbeck
FY 2021 Guidance
Bob Riesbeck
Closing Remarks and Q&A
Brett Ponton
Brett Ponton
Chief Executive Officer
Bob Riesbeck | Jesse Jenkins |
VP Investor Relations, FP&A | |
Executive Vice President & | |
and Treasurer | |
Chief Financial Officer | |
Q1 Performance and Recent Operating Highlights
First-quarter organic revenue growth1,2 of 3%
- 4% organic growth1 in termite and home services
- 4% organic growth1 in residential pest
- 3% organic growth1 in commercial pest, continued sequential improvement
First-quarter Adjusted EBITDA1 margins of 19.0% for year-over-year expansion of 590bps
- Continued strong direct cost productivity
- Realized benefits from simplified back-office structure to be used to fund operational investments
Increased 2021 Adjusted EBITDA1 outlook
Returned capital to shareholders through purchase of 3.5m shares for $169m ($48.12 per share)
Launched the Terminix Way initiative
- Enhancing standard operating procedures, improving training curriculum and aligning career paths
Launched Customer Experience Platform (CXP) to commercial selling teams
Strong Q1 Revenue Growth and Adjusted EBITDA1 Conversion
1See Appendix for non-GAAP reconciliations and non-GAAP reconciliation definitions. 2Approximately 0.5% of total organic growth was related to favorable currency translation.
Strategic Priorities
Teammate Experience
- Launched the Terminix Way initiative
- Enhancing SOPs across the business
- Improving training curriculums
- Aligning career paths
- Technician turnover flat YoY but up in March due to tight labor markets
Customer Retention
- Trailing-twelve-monthretention improvement in all revenue lines
- 5% residential pest cancel rate improvement
- 10% termite cancel rate improvement
- Retention improvement in commercial pest for the first time since pandemic began
Customer Acquisition
- Optimize digital marketing capabilities
- Strengthening commercial sales capabilities with CXP
- Website and ecommerce platform on track for 2H launch
- Closed 4 tuck-in deals in Q1 and Citron Pest Control in Canada on April 30
Expand Profit Margin
- $12m direct cost productivity
- $3m reduction in back-office cost to be reinvested in the back-half of the year
- Progress on termite damage claims
- Strong contributions from European pest operations
Progress on Strategic Priorities Driving Growth and Profitability
CONFIDENTIAL &
PROPRIETARY
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Terminix Global Holdings Inc. published this content on 06 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 May 2021 12:07:05 UTC.