2015 Preliminary Results Welcome This presentation contains - PowerPoint PPT Presentation

2015 Preliminary Results Welcome

This presentation contains statements that are, or may be, forward-looking regarding the group's financial position and results, business strategy, plans and objectives. Such statements involve risk and uncertainty because they relate to future events and circumstances and there are accordingly a number of factors which might cause actual results and performance to differ materially from those expressed or implied by such statements. Forward-looking statements speak only as of the date they are made and no representation or warranty, whether expressed or implied, is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Other than in accordance with the Company’s legal or regulatory obligations (including under the Listing Rules and the Disclosure and Transparency Rules), the Company does not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise. Information contained in this announcement relating to the Company or its share price, or the yield on its 2 2 shares, should not be relied upon as an indicator of future performance. Nothing in this presentation should be construed as a profit forecast .

2015 Pr 2015 Preliminar eliminary y Results: esults: Ope Opening R ning Remar emarks ks John McAdam Chairman

2015 Pr 2015 Preliminar eliminary y Results: esults: Intr Introduc oduction tion Andy Ransom Chief Executive Officer

2015 Highlights Executing our strategy in 2015 +6.5% Ongoing revenue +6.5% (CER) in 2015 (organic +1.8 % vs 1.2% PY). Good growth in NA, Germany, Asia, Pacific and UK. H2 revenue growth +7.7% (H1: 5.3%) reflecting Steritech acquisition in Q4. Customer retention +0.9%. 5

2015 Highlights Executing our strategy in 2015 +8.5% Ongoing adjusted operating profit +8.5% (CER). Focus on density building. Group margins up 20bps. NA & Asia seeing margin uplift (+1.2% pts). France remains challenging. 6

2015 Highlights Executing our strategy in 2015 +13.1% Pest Control: +13.1% revenue and +14.2% profit in 2015 (CER). 4.6% organic growth. Leadership in digital and innovation. World class business performing well. 7

2015 Highlights Executing our strategy in 2015 Hygiene Growth Hygiene revenue +2.6% and profit +1.2% growth in 2015 (CER). Good progress in Pacific, Asia and UK & Ireland, in particular. Benefits of product investment coming through. 8

2015 Highlights Executing our strategy in 2015 23 acquisitions 23 acquisitions in 2015, 21 in Pest Control. Annualised revenues of £158m. Steritech integration progressing well. 9

2015 Highlights Executing our strategy in 2015 Growth & Emerging Capital allocation model working well. Revenue growth: +14.0% Emerging, +12.0% Growth (CER). All 2015 acquisitions in Growth & Emerging quadrants. Growth & Emerging: 60% of portfolio. 10

Encouraging overall performance in 2015 Clear strategy in place. Good opportunities to maintain the progress in 2016 11

2015 Pr 2015 Preliminar eliminary y Results: esults: Finan Financial cial Review view Jeremy Townsend Chief Financial Officer

Financial Highlights (Continuing Operations) H2 Full Year 2015 2014 Δ 2015 2014 Δ Revenue at CER 951.1 892.6 6.6% 1,837.2 1,740.8 5.5% Revenue at CER – ongoing* 941.3 874.4 7.7% 1,813.9 1,702.9 6.5% Adjusted PBITA at CER 144.3 133.3 8.3% 251.2 232.2 8.2% Adjusted PBITA at CER – ongoing* 145.4 134.0 8.5% 252.8 233.0 8.5% Adjusted PBTA at CER 126.0 114.4 10.1% 215.1 190.8 12.7% Adjusted PBTA at AER 115.5 113.3 1.9% 198.0 190.8 3.8% PBT at CER 98.7 97.6 1.1% 174.7 163.2 7.0% Operating cash flow at AER 220.7 209.5 Free cash flow at AER 147.7 128.9 Adjusted EPS at CER 8.99p 8.05p 11.7% Dividend 2.93p 2.59p 13.1% CER = constant exchange rates AER = actual exchange rates 13 *Ongoing revenue and profit exclude the financial performance of disposed and closed businesses but include results from acquisitions

North America At constant exchange rates Strong perfor mance in 2015 Group revenue Gr Group operating ing profit it suppor ted by acquisitions Revenue up 16.8% (+2.7% organic), operating profit up 28.6% 22% 17% +3.0% organic growth from Pest Control Operating profit performance and +1.2% margin improvement reflecting leverage from higher revenues, back office & property rationalisation and fuel cost savings FY 20 Y 2015 Gr Growt wth Integration of Steritech proceeding well – annualised exit profit run rate of $20m +16.8% £407.9m Revenue 1 13 acquisitions in 2015 with annualised revenues of c.£149m +28.6% £52.6m Operating profit 2 Strategic focus for 2016: Integration of Steritech - delivering improved margins through density, +1.2% 12.9% Operating margin % National Accounts capability and maximising new line in Brand Standards Ongoing focus on driving organic growth 1 ongoing revenue represents revenue with disposals removed and includes revenue from acquisitions Continued M&A to build city density 2 before amortisation and impairment of intangible assets, Further margin improvement opportunities from M&A, scale efficiencies reorganisation costs and one-off items and service productivity 14

Europe At constant exchange rates Revenue flat, good growth in central Group revenue Gr Group operating ing profit it and souther n Europe Overall perfor mance held back by France and Benelux 45% 48% Good revenue growth in Germany (+3.2%), southern Europe (+5.3%) and Latin America - managed out of Europe region (+33.5%) - offset by declines in Benelux (-1.1%) and France (-3.4%) Profit decline driven by revenue reductions and pricing pressure in France FY 20 Y 2015 Gr Growt wth Outlook for 2016: +0.1% £819.4m Revenue 1 German and southern Europe businesses experiencing positive trading conditions, further progress expected -4.6% £152.4m Operating profit 2 Challenging economic and competitive conditions in France and Benelux anticipated to continue -0.9% 18.6% Operating margin % As a result of actions being undertaken to improve performance, level of profit decline anticipated to be considerably lower in 2016 than in 2015 1 ongoing revenue represents revenue with disposals Strategic focus for 2016: removed and includes revenue from acquisitions 2 before amortisation and impairment of intangible assets, Support margins through Quality Initiative in Workwear, service and reorganisation costs and one-off items distribution productivity and branch & back office rationalisation 15

UK & ROW At constant exchange rates Revenue +11.5% (+4.2% organic) in 2015 Group revenue Gr Group operating ing profit it Operating profit +12.5% reflecting revenue perfor mance and impact of Peter Cox proper ty care business 19% 23% acquired end 2014 Strong growth from UK Pest Control and Hygiene businesses, pest jobbing work in particular FY 20 Y 2015 Growt Gr wth Continued revenue growth in RoW, driven by the Caribbean and South Africa +11.5% £342.3m Revenue 1 Increase in operating margins reflecting leverage from revenue growth and continued strong cost control +12.5% £72.1m Operating profit 2 Strategic focus for 2016: +0.2% 21.1% Operating margin % Further improvements in performance through application of successful UK operating model across the region 1 ongoing revenue represents revenue with disposals removed and includes revenue from acquisitions 2 before amortisation and impairment of intangible assets, reorganisation costs and one-off items 16

Asia At constant exchange rates Revenue +11.3% (+8.6% organic Group revenue Gr Group operating ing profit it growth) in 2015 Operating profit +27.5% reflecting leverage from revenue 6% 3% Good performances from both Pest Control and Hygiene businesses Combined revenue growth of 26.0% from India, China and Vietnam Combined high single-digit revenue growth from Indonesia and Malaysia FY 20 Y 2015 Growt Gr wth Profit increase reflecting leverage from revenue growth and ongoing benefit from back office rationalisation +11.3% £108.1m Revenue 1 +1.2% improvement in margins – further opportunities from revenue growth, service productivity and back office rationalisation +27.5% £10.2m Operating profit 2 Pest control acquisition in South Korea Strategic focus for 2016: +1.2% 9.4% Operating margin % Further M&A opportunities sought across region to build scale in this key strategic market 1 ongoing revenue represents revenue with disposals removed and includes revenue from acquisitions 2 before amortisation and impairment of intangible assets, reorganisation costs and one-off items 17