REG - Rentokil Initial PLC - Q3 Trading Update

Rentokil InitialAnnouncement

23/10/2025 07:00

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RNS Number : 4712E  Rentokil Initial PLC  23 October 2025

23 October 2025

RENTOKIL INITIAL PLC - THIRD QUARTER TRADING UPDATE

Rentokil Initial plc ("the Group"), today issues a Trading Update for the
three months of the 2025 financial year covering the period 1 July 2025 to 30
September 2025.

Andy Ransom, Chief Executive of Rentokil Initial plc, said:

"We are encouraged by our performance in the third quarter as the overall
positive trends we described at our interim results have continued into the
second half. Group Revenues grew by 4.6% with Organic Revenue growth of 3.4%,
driven by an acceleration in North America to 3.4%, including 1.8% for North
America Pest Control Services, and International Organic Revenue growth of
3.3%.

"In North America, it is pleasing to see the actions we have taken to improve
sales execution and to evolve our digital marketing strategy are driving
positive lead flow and overall sales momentum in the quarter. Our satellite
branch openings remain on track to reach 150 by the end of the year, we have
re-commenced the gradual integration of commercial branches during the quarter
and our cost efficiency programme is on track.

"Current trading is in line with expectations and our outlook for the
remainder of the year remains unchanged, as such, we expect to deliver FY 2025
financial results in line with market expectations."

 

Summary

Group Revenue for the quarter was $1,810m, representing year on year growth of
4.6%. Organic Revenue growth for the period was 3.4%.

North America

Revenue growth in North America was 4.6% and Organic Revenue growth was 3.4%.
North America Pest Control Services Organic Revenue growth was 1.8% (0.1% in
H1 2025). North America Business Services continued to see positive momentum
with Revenue growth of 14.4% (11.9% Organic).

 * Colleague Retention reached 81.8% at the end of Q3 (H1 2025: 80.7%) marking 11
consecutive quarters of growth.

 * Customer Retention of 80.9% (H1 2025: 80.5%) benefiting from the ongoing
'Drive to 85' programme including the investment in the customer saves team.

 * Positive lead flow growth in the quarter, supported by an enhanced digital
marketing strategy and improved sales execution. Through the quarter we
continued to adapt our marketing activity to drive the highest quality leads,
improving conversion and cost per lead.

 * Sustained strong pricing discipline with price increases slightly above
inflation.

 * 139 satellite branches (H1 2025: 100) are now in operation delivering improved
lead generation through a stronger local presence and enhanced customer
reviews, with 150 expected by year end.

 * Our door-to-door sales pilot continued through the summer in 25 sales
territories and will be rolled out more widely in 2026.

 * Cost efficiency initiatives are on track to deliver a $100m cost reduction and
an operating margin in North America above 20% post 2026.

The actions taken to optimise our marketing return on investment and deliver
growth in our contract portfolio have strengthened our revenue generation
through the high season.  As we enter the seasonally quieter fourth quarter
it is worth noting that Q4 2024 benefited from c.$6m of emergency Vector
Control services revenue during the hurricane season which, based on the 2025
Atlantic hurricane season, is not currently expected to repeat.

International (Group excluding North America)

International Revenue grew by 4.6% with Organic Revenue growth of 3.3%, up
from 2.7% in H1.  The improvement was primarily driven by the UK with
continued strong performance in our core UK Pest control and Plants businesses
and an improved performance from our Property Services division.  Across the
rest of our International businesses, Europe continues to be strong, driven by
the southern Europe markets of Spain, Portugal and Greece.  Growth in the
Pacific remains below the average for International with good growth in core
Pest Control and Ambius offset by the impact of adverse weather on our Rural
and Trackspray businesses.

Category Performance

Pest Control Organic Revenue growth was 3.4% driven by good momentum in North
America which was up by 3.3%. Hygiene & Wellbeing Organic Revenue grew by
3.0%, an improvement from 0.9% in H1 2025 as the UK and Sub-Saharan Africa
region returned to growth in the quarter and market conditions improved in the
Pacific.

M&A

The Group's bolt-on M&A programme continued to create value with three
deals, delivering annualised revenue in the year before acquisition of $4m.
This takes the total number of deals to 21 year-to-date with annualised
revenue in the year before acquisition of $39m.

Completion of sale of France Workwear business

The sale of our France Workwear business, which we announced in May 2025, for
an enterprise value of €410 million (c.$480 million) including an earn-out
of up to €30 million, completed on 30 September 2025, with net cash proceeds
of €370 million (c.$435 million), subject to the final earn-out outcome.

Balance Sheet

Following the completion of the sale of the France Workwear business, net debt
at the end of the quarter was $3,865m.

BBB (stable) rating reaffirmed by Fitch Ratings. The Company is also BBB
(stable) rated by S&P Global.

Outlook

Current trading is in line with expectations and our outlook for the remainder
of the year remains unchanged. We expect to deliver FY 2025 financial results
in line with market expectations.

Conference call details

Today, 23 October at 9:00am BST, Rentokil Initial Chief Executive, Andy Ransom
and Chief Financial Officer, Paul Edgecliffe-Johnson will host a conference
call for analysts and investors. A replay will be available on the Company
website (https://www.rentokil-initial.com/investors.aspx) following the event.

To access the live audio webcast, register via the following link:

https://www.investis-live.com/rentokil/68ef9d6433e9f50017f9b8c8/nxpwt

Alternatively, to join via teleconference, please register in advance using
the link below:

https://www.netroadshow.com/events/login/LE9zwo494Gg8GZbXj9OiVTz6GbtdSMFn5Oj

 

Enquiries:

Investors / Analysts: Heather Wood, Rentokil Initial plc, +44 7808 098793

Media: Malcolm Padley, Rentokil Initial plc, +44 7788 978199

Notes

With effect from 1 January 2025 the Group changed its presentation currency
from sterling to US dollars. All comparatives from 2024 have been represented
in USD. In addition and following the acquisition of the Terminix business
whereby the majority of the Group's revenues are now in North America, the
Group's remaining regions have been combined into an International segment and
reporting is on this basis. In order to help understand the underlying trading
performance, unless otherwise stated, all commentary and comparable analysis
relates to the continuing operations of the Group on a constant currency
basis. The France Workwear business has been classified as a discontinued
operation following the announcement of the sale of the business, and all
comparatives have been represented accordingly.

Organic Revenue growth represents the growth in Revenue excluding the effect
of businesses acquired during the year. Acquired businesses are included in
organic measures in the year following acquisition, and the comparative period
is adjusted to include an estimated full year performance for growth
calculations (pro forma revenue).

North America includes Pest Control (Pest Control Services and Business
Services) and Hygiene & Wellbeing.

North America Pest Control Services is Pest Control excluding Business
Services.

 

 

Summary of Financial Performance

                                      Revenue
                                      Q3 2025  Q3 2024  Change (reported)  Change                Organic Revenue Growth

(constant currency)
%

                  %
                                      $m       $m       %
 North America
 Pest Control                         1,105    1,058    4.4%               4.5%                  3.3%
 -       Pest Control Services        930      905      2.8%               2.8%                  1.8%
 -       Business Services            175      153      14.3%              14.4%                 11.9%
 Hygiene & Wellbeing                  32       30       6.8%               6.9%                  6.7%
                                      1,137    1,088    4.5%               4.6%                  3.4%

 International
 Pest Control                         403      376      6.8%               5.4%                  3.8%
 Hygiene & Wellbeing                  270      257      5.3%               3.5%                  2.6%
                                      673      633      6.2%               4.6%                  3.3%
 Total                                1,810    1,721    5.1%               4.6%                  3.4%

 

 

Category Performance

                          Revenue
                          Q3 2025  Q3 2024  Change (reported)  Change                Organic Revenue Growth

(constant currency)
%

                  %
                          $m       $m       %
 Pest Control             1,508    1,434    5.1%               4.7%                  3.4%
 Hygiene & Wellbeing      302      287      5.5%               3.9%                  3.0%
 Total                    1,810    1,721    5.1%               4.6%                  3.4%

 

Cautionary Statement

In order to utilise the 'safe harbour' provisions of the U.S. Private
Securities Litigation Reform Act of 1995 (the "PSLRA") and the general
doctrine of cautionary statements, Rentokil Initial plc ("the Company") is
providing the following cautionary statement: This communication contains
forward-looking statements within the meaning of the PSLRA. Forward-looking
statements can sometimes, but not always, be identified by the use of forward-
looking terms such as "believes," "expects," "may," "will," "shall," "should,"
"would," "could," "potential," "seeks," "aims," "projects," "predicts," "is
optimistic," "intends," "plans," "estimates," "targets," "anticipates,"
"continues" or other comparable terms or negatives of these terms and include
statements regarding Rentokil Initial's intentions, beliefs or current
expectations concerning, amongst other things, the results of operations of
the Company and its consolidated entities ("Rentokil Initial" or "the Group"),
financial condition, liquidity, prospects, growth, strategies and the economic
and business circumstances occurring from time to time in the countries and
markets in which Rentokil Initial operates. Forward- looking statements are
based upon current plans, estimates and expectations that are subject to
risks, uncertainties and assumptions. Should one or more of these risks or
uncertainties materialise, or should underlying assumptions prove incorrect,
actual results may vary materially from those indicated or anticipated by such
forward-looking statements. The Company can give no assurance that such plans,
estimates or expectations will be achieved and therefore, actual results may
differ materially from any plans, estimates or expectations in such
forward-looking statements. Important factors that could cause actual results
to differ materially from such plans, estimates or expectations include: the
Group's ability to integrate acquisitions successfully, or any unexpected
costs or liabilities from the Group's disposals; difficulties in integrating,
streamlining and optimising the Group's IT systems, processes and
technologies, including artificial intelligence technologies; the Group's
ability to attract, retain and develop key personnel to lead the Group's
business; the availability of a suitably skilled and qualified labour force to
maintain the Group's business; cyber security breaches, attacks and other
similar incidents, as well as disruptions or failures in the Group's IT
systems or data security procedures and those of the Group's third-party
service providers; weakening general economic conditions, including changes in
the global job market or decreased consumer confidence or spending levels,
especially as they may affect demand from the Group's customers; inflationary
pressures, such as increases in wages, fuel prices and other operating costs;
the Group's ability to implement its business strategies successfully,
including achieving its growth objectives; the Group's ability to retain
existing customers and attract new customers; the highly competitive nature of
the Group's industries; extraordinary events that impact the Group's ability
to service customers without interruption, including a loss of its third-party
distributors; the impact of environmental, social and governance ("ESG")
matters, including those related to climate change and sustainability, on the
Group's business, reputation, results of operations, financial condition
and/or prospects; supply chain issues, which may result in product shortages
or other disruptions to the Group's business; the Group's ability to protect
its intellectual property and other proprietary rights that are material to
the Group's business; the Group's reliance on third parties, including
third-party vendors for business process outsourcing initiatives, investment
counterparties, and franchisees, and the risk of any termination or disruption
of such relationships or counterparty default or litigation; the Group's
ability to prevent or detect fraud by third-party service providers,
contractors, employees, franchisees or any other third parties or
counterparties; any future impairment charges, asset revaluations or
downgrades; failure to comply with the many laws and governmental regulations
to which the Group is  subject or the implementation of any new or revised
laws or regulations that alter the environment in which the Group does
business, as well as the costs to the Group  of complying with any such
changes and the risk of related litigation; termite damage claims and lawsuits
related thereto and any associated impacts on the termite provision; the
Group's ability to comply with safety, health and environmental policies, laws
and regulations, including laws pertaining to the use of pesticides; any
actual or perceived failure to comply with stringent, complex and evolving
laws, rules, regulations and standards in many jurisdictions, as well as
contractual obligations, including data privacy and security, and any
litigation (including class action claims and lawsuits) related to such actual
or perceived failures; the identification of material weaknesses in the
Group's internal control over financial reporting within the meaning of
Section 404 of the Sarbanes-Oxley Act; changes in tax laws and any
unanticipated tax liabilities; adverse credit and financial market events and
conditions, which could, among other things, impede access to or increase the
cost of financing; the restrictions and limitations within the agreements and
instruments governing the Group's indebtedness; a lowering or withdrawal of
the ratings, outlook or watch assigned to the Group's debt securities by
rating agencies; an increase in interest rates and the resulting increase in
the cost of servicing the Group's debt; and exchange rate fluctuations and the
impact on the Group's results or the foreign currency value of the Company's
ADSs and any dividends. The list of factors presented here is representative
and should not be considered to be a complete statement of all potential risks
and uncertainties. Unlisted factors may present significant additional
obstacles to the realisation of forward-looking statements. The Company
cautions you not to place undue reliance on any of these forward-looking
statements as they are not guarantees of future performance or outcomes and
that actual performance and outcomes, including, without limitation, the
Group's actual results of operations, financial condition and liquidity, and
the development of new markets or market segments in which the Group operates,
may differ materially from those made in or suggested by the forward-looking
statements contained in this communication. Except as required by law,
Rentokil Initial assumes no obligation to update or revise the information
contained herein, which speaks only as of the date hereof.

The Company makes no guarantee that trends in the management of termite damage
claims will continue. Additionally, the Company makes no guarantee that its
operational improvement plans will mitigate against or reduce the number of
termite damage claims (litigated and non-litigated) against the Company nor
that these plans will reduce the ongoing cost to resolve such claims.

Additional information concerning these and other factors can be found in
Rentokil Initial's filings with the U.S. Securities and Exchange Commission
("SEC"), which may be obtained free of charge at the SEC's website, http://
www.sec.gov, and Rentokil Initial's Annual Reports, which may be obtained free
of charge from the Rentokil Initial website, https://www.rentokil-initial.com

No statement in this communication is intended to be a profit forecast and no
statement in this communication should be interpreted to mean that earnings
per share of Rentokil Initial for the current or future financial years would
necessarily match or exceed the historical published earnings per share of
Rentokil Initial.

This communication presents certain non-IFRS measures, which  should not be
viewed in isolation as alternatives to the equivalent IFRS measure, rather
they should be viewed as  complements to, and read in conjunction with, the
equivalent IFRS measure. These include revenue and  measures presented at
actual exchange rates ("AER" - IFRS) and constant currency ("CER"  -
Non-IFRS). Non-IFRS measures presented also include Organic Revenue Growth.
The Group's internal strategic planning process is also based on  these
measures, and they are used for incentive purposes. These measures may not be
calculated in the same  way as similarly named measures reported by other
companies.

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