REG - Rentokil Initial PLC - Preliminary Results
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RNS Number : 4090V Rentokil Initial PLC 05 March 2026
2025 Preliminary Results
● Evolved strategy improves performance with H2 Organic Revenue1 Growth of 3.5%
(H1: 1.6%).
● Improvement in North America Pest Control Services Organic Revenue Growth to
2.6% in Q4.
● Free Cash Flow Conversion1 of 98% ahead of guidance.
● On track to deliver North America 2027 targets of $100m cost reduction and
above 20% margin.
● Simplified approach to deliver c.800 branches and c.30 retained brands in
North America.
Financial Results Adjusted Results1 Statutory Results
Continuing Operations
$m 2025 2024 Change Change 2025 2024 Change Change
$m
$m
(reported)
(constant currency)
$m
$m
(reported)
(constant currency)
%
%
%
%
Revenue 6,908 6,617 4.4% 3.8% 6,908 6,617 4.4% 3.8%
EBITDA 1,430 1,365 4.8%
Operating Profit 1,070 1,008 6.2% 5.4% 584 644 (9.3%) (10.2%)
Operating Profit margin 15.5% 15.2% 0.3%pts 0.3%pts 8.5% 9.7% (1.2%pts) (1.3%pts)
Profit before Tax 876 842 4.0% 4.1% 390 462 (15.6%) (15.3%)
Free Cash Flow 615 494 24.5%
Basic EPS 25.91c 25.31c 2.4% 11.49c 13.72c (16.3%)
Dividend Per Share 12.39c 12.03c 3.0%
Net debt 3,650 4,017
Net debt:EBITDA 2.6x 2.9x
Andy Ransom, Chief Executive of Rentokil Initial plc ("the Company"), said:
"2025 has been a year of encouraging progress with improving performance
through the second half, after the strategic initiatives we implemented from
Q1 2025. North America delivered a quarter-on-quarter improvement in Organic
Revenue Growth and in the value of the contract portfolio. Organic Revenue
Growth in our International business accelerated to 3.4% in the second half
with solid demand in the UK, Southern Europe, India and Indonesia. This
performance, alongside continued cost discipline, delivered Group Adjusted
Operating Profit Growth of 5.4%.
"In North America, we are continuing to execute our evolved marketing and
multi-brand strategy. Informed by the strong growth in leads from our regional
brand strategy, we are planning to retain 30 national, regional and local
brands that represent over 90% of our revenue. Retaining more local brands and
their branches, and expanding our network of small, local branches following
the success of our first 150 satellite branches, will give us greater customer
proximity and a stronger local brand presence across a total branch network of
around 800 by the end of 2026. This, combined with an enhanced and streamlined
approach to systems migration, simplifies the remaining integration.
"We have made good progress in cash generation and cost discipline across the
Group. Free Cash Flow Conversion of 98% is ahead of expectations and we have
reduced leverage to 2.6x. Our efficiency programme has made a good start, and
we remain on track to deliver the c.$100m cost reduction opportunity and an
operating margin for North America above 20% in 2027.
"It is encouraging to see the strategic initiatives we put in place at the
start of this year driving an improved performance. There is still more to do,
building on this progress, to fully realise the potential of this business.
Our leading positions in the North American pest market, and other key global
markets, provide a solid foundation and mean we are well-placed to capitalise
on strong industry growth forecasts for the coming years. In the short term,
whilst recent geopolitical events create uncertainty, our plans to further
increase growth and margins give us confidence in delivering a 2026
performance in line with market expectations. As I pass the baton to Mike, I
would like to extend my sincere gratitude to all of our colleagues for their
dedication and hard work throughout my 12 years as CEO."
Organic Revenue Growth Q1 Q2 Q3 Q4 H1 H2 Full Year
Group 1.6% 1.6% 3.4% 3.5% 1.6% 3.5% 2.6%
North America 0.7% 1.4% 3.4% 3.6% 1.1% 3.5% 2.3%
North America Pest Control Services -0.2% 0.3% 1.8% 2.6% 0.1% 2.2% 1.1%
North America Business Services 5.6% 9.2% 11.9% 7.8% 7.8% 9.8% 8.9%
International 3.2% 2.0% 3.4% 3.4% 2.6% 3.4% 3.0%
2025 Financial Highlights1
● Q4 Group Organic Revenue Growth1 of 3.5% including 3.6% in North America and
3.4% in International.
● Q4 North America Pest Control Services Organic Growth of 2.6%, up from 1.8% in
Q3 and 0.1% in H1.
● FY25 Group Organic Revenue Growth of 2.6%, with improved performance in the
second half.
● Group Adjusted Operating Profit1 up 5.4%, with 16.7% growth in H2 benefiting
from the phasing of cost efficiency initiatives in North America.
● Group Adjusted Operating Margin1 of 15.5%, up 0.3%pts. North America Operating
Margin of 17.4%, up 0.4%pts.
● Additional provision for Termite Damage claims in H2 of $122m, taking the
total for FY25 to $201m. After $95m of cash-settled claims in 2025, closing
provision of $384m. Current estimate for 2026 cash outflow at similar levels
to 2025.
● Free Cash Flow1 of $615m, up 24.5% year-on-year, and Free Cash Flow Conversion
of 98%, ahead of guidance due to real-estate sales and some one-off benefits
within the overall working capital improvement.
● Net debt to Adjusted EBITDA1 ratio reduced to 2.6x (FY24: 2.9x), after a $181m
adverse foreign exchange impact on translation of year end net debt.
● Recommended final dividend of 8.24 cents, up 4.6%; total FY25 dividend of
12.39 cents, up 3%.
2025 Strategic and Operational Highlights
North America Pest Control: Quarter-on-Quarter improvement in Organic Growth
At the start of 2025, we implemented a number of strategic initiatives focused
on growth and increasing the value of our contract portfolio through winning
new customers, retaining existing customers and pricing discipline. This
evolved strategy has delivered an improved performance.
● Refocused marketing investment towards organic lead generation and more
efficient paid marketing delivered growth in residential lead flow of 7.1% in
H2 and a double-digit reduction in cost per lead.
● Investment behind additional regional brands delivered strong growth in lead
flow.
● Over 150 smaller, local branches open under the satellite programme - which
has boosted customer proximity and reviews, and lead generation.
● Moved sales accountability back into branches, driving up visits per day and
services proposed.
● Encouraging summer door-to-door pilot in 25 sales territories with planned
expansion to 40 territories in 2026.
● Focus on leadership in underperforming branches - over 90 branch manager
changes during the year.
● Sustained pricing discipline with price increases slightly above inflation.
● North America customer retention improved to 80.5%. (FY24: 80.1%).
● North America colleague retention improved to 82.2%. (FY24: 79.4%), +12%pts in
the last 3 years.
North America Pest Control: Streamlining operations - Brands, Branches and Systems
● Building on the success of our broader brand strategy and enhanced data
analysis, we are now planning to retain 30 national, regional and local brands
with strong brand equity covering over 90% of revenues to maximise demand
penetration.
● We are expanding our network of small, local branches from the satellite
programme, and retaining more local brands and their branches, which will take
our network to around 800 highly targeted locations to maximise customer
proximity and market demand penetration, yielding a strong return on
investment.
● Pausing integration and evaluating how to simplify our approach has led to an
in-development BI (Business Intelligence) tool allowing multiple systems to be
maintained, significantly reducing the operational impact of branch
integrations.
● We are encouraged by the results from the Commercial branch migrations and now
have 75% of our Commercial revenues consolidated under dedicated branch and
regional leadership.
● We have begun the roll-out of a simplified remuneration approach for
Commercial sales and designed a harmonised pay policy for new service
colleagues which offers a 'grandfathering' choice for existing colleagues.
North America: Business simplification and cost efficiencies
● Cost efficiency initiatives remain on track to deliver a cost reduction of
c.$100m in 2027 compared to an inflation-adjusted 2024 base. Initiatives
include streamlining and simplifying the business through Global Capability
Centres, outsourcing, procurement and digital enablement, with $25m savings
delivered in 2025.
● In 2027, these cost savings and an improved organic growth rate, are expected
to deliver a North America Operating Profit margin above 20%.
International: Improved second half performance
● FY25 Organic Revenue Growth of 3.0% converted into Adjusted Operating Profit
Growth of 5.7% with Adjusted Operating Profit margin of 19.8%, up 0.2%pts
year-on-year.
● H2 Organic Revenue Growth of 3.4% after 2.6% in H1.
● Good volumes and a strong demand and pricing environment across our scale
markets of the UK, the Southern European markets of Spain and Portugal and the
faster growing economies of Indonesia and India.
● We are assessing further cost efficiency opportunities across our
International businesses.
Investing in data capabilities, product innovation and AI to drive performance
and productivity
● Through 2025, we invested in capabilities to capture the opportunity of data
and to enable AI usage:
- The roll-out of Gemini to c.63,400 colleagues is expected to improve
productivity over time.
- In-house "RAT-GPT" portal launched with over 100 AI agents in development to
support growth and efficiency such as a new model which prioritises leads
based on factors such as likelihood to convert, sales value and future
customer value.
● The focus in 2026 is on advancing these AI agents to further drive
productivity and operational excellence.
● We continue to leverage the investments made in product innovation as a
competitive advantage with over 600,000 Pest Connect devices now in operation.
Ongoing investment in bolt-on M&A: 36 businesses with revenues of c.$63m
in year prior to purchase acquired for $115m
● FY25 spend of $115m was below our guidance, with a number of deals slipping
into 2026. Our pipeline of potential deals leading into 2026 is healthy, and
at this time we expect to spend around $200m on M&A in 2026.
Appointment of new Chief Executive
On 13 January 2026 we announced the appointment of Mike Duffy as Chief
Executive (CEO) and Executive Director. Mike joined as CEO Designate on 16
February and will become CEO on 16 March. Andy Ransom (CEO) and Paul
Edgecliffe-Johnson (CFO) will host the FY25 virtual results presentation to be
held today, 5 March 2026.
2026 Outlook
● Despite some weather-related disruption in North America in January, and
increased uncertainty from recent geopolitical events, we expect to deliver FY
2026 financial results in line with market expectations.
Enquiries:
Investors / Analysts: Heather Wood Rentokil Initial plc +44 7808 098793
Media: Malcolm Padley Rentokil Initial plc +44 7788 978199
A management presentation and Q&A for investors and analysts will be held
virtually today, 5 March 2026 at 8.30am (UK time). Dial-in details will be
provided on the website (https://www.rentokil-initial.com/investors.aspx). A
recording will be made available following the conclusion of the presentation.
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 US dollars. 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 in the summary and operating review relates
to the continuing operations of the Group on a constant currency basis. The
France Workwear business has been classified as a discontinued operation since
31 May 2025 following the announcement of the sale of the business which
completed on 30 September 2025, and all comparatives have been represented
accordingly.
1 Non-IFRS measures - This statement includes certain financial performance
measures which are not measures defined under International Financial
Reporting Standards (IFRS). These measures include Adjusted Operating Profit,
Adjusted Profit Before Tax, Adjusted Profit After Tax, Adjusted EBITDA,
Adjusted Interest, Adjusted Earnings Per Share, Free Cash Flow, Adjusted Free
Cash Flow, Adjusted Free Cash Flow Conversion, Adjusted Effective Tax Rate and
Organic Revenue. Management believes these measures provide valuable
additional information for users of the financial statements to aid better
understanding of the underlying trading performance. Adjusted Operating
Profit, Adjusted Profit Before/After Tax and Adjusted EBITDA exclude certain
items that could distort the underlying trading performance of the business.
An explanation of all the above non-IFRS measures used along with
reconciliation to the nearest IFRS measures is provided in Use of Non-IFRS
measures in the financial statements.
Summary of financial performance
Regional Performance
Revenue Adjusted Operating Profit
2025 2024 Change Organic Revenue Growth 2025 2024 Change
$m
$m
(constant currency)
%
$m
$m
(constant currency)
%
%
North America
Pest Control 4,148 4,026 3.1% 2.2% 720 688 4.7%
Hygiene & Wellbeing 146 138 6.0% 4.0% 29 25 17.8%
4,294 4,164 3.2% 2.3% 749 713 5.1%
International
Pest Control 1,555 1,455 5.4% 3.7% 323 299 5.2%
Hygiene & Wellbeing 1,059 998 4.0% 2.0% 195 180 6.5%
2,614 2,453 4.8% 3.0% 518 479 5.7%
Central (191) (175) (6.9)%
Restructuring costs (6) (9) 35.7%
Total 6,908 6,617 3.8% 2.6% 1,070 1,008 5.4%
Category Performance
Revenue Adjusted Operating Profit
2025 2024 Change Organic Revenue Growth 2025 2024 Change
$m
$m
(constant currency)
%
$m
$m
(constant currency)
%
%
Pest Control 5,703 5,481 3.7% 2.6% 1,043 987 4.9%
Hygiene & Wellbeing 1,205 1,136 4.3% 2.3% 224 205 7.8%
Central - - - - (191) (175) (6.9)%
Restructuring costs - - - (6) (9) 35.7%
Total 6,908 6,617 3.8% 2.6% 1,070 1,008 5.4%
Revenue
Group Revenue increased 3.8% to $6,908m (FY24: $6,617m) driven by a strong
demand and pricing environment across our scale markets. Group Organic Revenue
grew 2.6%. Revenue growth in North America was 3.2% driven primarily by
pricing. Organic Revenue Growth was 2.3%, with improvements through the year
(Q1:0.7%; Q2:1.4%; Q3:3.4%; Q4:3.6%). The International business grew Revenue
4.8% for the full year with growth across the region particularly in the UK,
Southern Europe and the faster growing economies of India and Indonesia.
Organic Revenue Growth was up 3.0%.
Our Pest Control category grew Revenue by 3.7% to $5,703m. Organic Revenue
Growth was 2.6% with 2.2% Organic Revenue Growth in North America and 3.7%
Organic Revenue Growth in International being driven primarily by pricing.
Hygiene & Wellbeing Revenue increased by 4.3% to $1,205m. Organic Revenue
Growth was up 2.3%.
Revenue ($m) H1 H2 Full Year
Group 3,364 3,544 6,908
North America 2,106 2,188 4,294
International 1,258 1,356 2,614
Organic Revenue Growth H1 H2 Full Year
Group 1.6% 3.5% 2.6%
North America 1.1% 3.5% 2.3%
International 2.6% 3.4% 3.0%
Profit
Adjusted Operating Profit increased by 5.4% during the year to $1,070m (FY24:
$1,008m) reflecting revenue growth of 3.8% and the benefit of cost efficiency
activities. Performance reflected improved results across the Group, with
growth delivered in both North America and International. Adjusted Operating
Profit for Pest Control increased by 4.9% to $1,043m (FY24: $987m). Hygiene
& Wellbeing Adjusted Operating Profit increased by 7.8% to $224m (FY24:
$205m).
Adjusted Operating Profit growth was 16.7% in the second half of the year with
the benefits from cost efficiency initiatives in North America being weighted
to later in the year.
Adjusted Operating Profit margin of 15.5% increased 0.3%pts year-on-year.
There was consistent growth across the Group with year-on-year growth in North
America of 0.4%pts and International of 0.2%pts. On a category basis, Adjusted
Operating Profit margins in Pest Control grew 0.2%pts and by 0.6%pts in
Hygiene & Wellbeing.
Adjusted Profit Before Tax, which excludes one-off and adjusting items and
amortisation costs, was $876m (FY24: $842m). Adjusted interest was $204m, $29m
higher year-on-year due to the interest cost of new bond debt issued, lower
bank interest received and a reduction in the impact from hyperinflation
accounting. One-off and adjusting operating items of $287m (FY24: $110m)
include an increase in the provision for termite claims and costs related to
North America transformation and other strategic initiatives. Statutory
Operating Profit was $584m (FY24: $644m). Statutory Profit Before Tax was
$390m (FY24: $462m).
Adjusted Operating Profit ($m) H1 H2 Full Year
Group 511 559 1,070
North America 356 393 749
International 242 276 518
Adjusted Operating Profit Margin H1 H2 Full Year
Group 15.2% 15.8% 15.5%
North America 16.9% 18.0% 17.4%
International 19.2% 20.4% 19.8%
Cash flow
Cash generation remained a key focus during the year, supported by continued
discipline in operational cash conversion and working capital management.
Free Cash Flow from continuing operations was $615m (FY24: $494m), with the
improvement driven principally by the higher profits and improved working
capital position, partly offset by higher cash interest. Free Cash Flow for
the Group including discontinued operations was $636m (FY24: $526m), $110m
higher year-on-year.
Free Cash Flow Conversion of 98% exceeded our guidance as a result of a
particularly strong performance in debtor collection across the Group.
One-off and adjusting items (non-cash) were an outflow of $214m (FY24: $19m).
The Group had a $59m working capital outflow in the year (FY24: $126m
outflow). The movement on provisions was a $142m inflow (FY24: $76m outflow),
primarily reflecting the increase in the provision for termite damage claims
of $201m offset by the $95m of cash settled claims. Capital expenditure
additions were $196m (FY24: $190m), with disposals of property, plant and
equipment of $20m (FY24: $5m). Lease payments were $186m (FY24: $177m).
Cash interest payments were $222m, $41m higher than the prior year, reflecting
the impact of refinancing existing debt at higher prevailing rates. Cash tax
payments were lower year-on-year at $100m (FY24: $107m) mainly due to a
one-off benefit from a change to US tax legislation. Free Cash Flow from
discontinued operations was $21m (FY24: $32m).
Cash spend on current and prior year acquisitions was $121m, receipts from the
disposal of France Workwear were $391m, dividend payments were $304m and the
cash impact of one-off and adjusting items was $100m, largely related to North
America transformation costs.
Regional performance review
North America
2025 2024 Change (reported) Change (constant currency) Organic
$m
$m
%
%
Growth
Revenue 4,294 4,164 3.1% 3.2% 2.3%
Pest Control 4,148 4,026 3.0% 3.1% 2.2%
Pest Control Services 3,501 3,430 2.1% 2.1% 1.1%
Business Services 647 596 8.6% 8.7% 8.9%
Hygiene & Wellbeing 146 138 5.8% 6.0% 4.0%
Operating Profit 413 534 (22.7%) (22.6%)
Adjusted Operating Profit 749 713 5.0% 5.1%
Adjusted Operating Margin 17.4% 17.1% 0.3%pts 0.4%pts
Organic Growth Q1 Q2 Q3 Q4 Full Year
North America 0.7% 1.4% 3.4% 3.6% 2.3%
North America Pest Control Services -0.2% 0.3% 1.8% 2.6% 1.1%
North America Business Services 5.6% 9.2% 11.9% 7.8% 8.9%
2025 Performance
Full year Revenue was up 3.1% to $4,294m and by 3.2% at constant currency.
Organic Revenue was up 2.3%. Performance improved in the second half, with H2
Organic Revenue Growth of 3.5% (H1: 1.1%). A robust pricing environment
supported strong price realisation, with the measures implemented to drive up
customer retention and increase new business contributing to an easing of
volume reductions through the year.
North America Pest Control Services delivered an encouraging quarterly
sequential improvement in Organic Revenue Growth including 2.6% in Q4.
North America Business Services continued to see positive momentum through the
year with H2 revenues of $341m (H1: $306m). Organic Revenue Growth was 9.8%
(H1:7.8%). Our distribution business delivered double-digit Organic Revenue
Growth in the year, and Q4 was boosted by a good performance from our lake
management business.
Adjusted Operating Profit increased by 5.1% to $749m. Adjusted Operating
Profit margin was 17.4%, up 0.4%pts on the prior year, reflecting some early
benefit from the business simplification and cost efficiency programme.
Statutory Operating Profit was $413m (FY24: $534m).
Colleague retention increased to 82.2% (FY24: 79.4%) and customer retention
improved to 80.5% (FY24: 80.1%).
Bolt-on M&A activity continued, with 12 acquisitions completed (FY24: 13)
with combined revenues of c.$27m in the year prior to acquisition. We continue
to selectively pursue high quality M&A assets in the North America region.
Improving profitable growth in North America - 2025 progress
At the beginning of 2025, we set out our evolved strategy to improve Organic
Revenue Growth by strengthening the core performance drivers of customer
retention, colleague retention and growth in lead volumes. These 2025
activities have delivered encouraging results with improving growth in leads
through the year, with 7.1% growth in the second half, and growth in the value
of our contract portfolio.
Enhanced digital marketing and investment in brand awareness
During the year we refocused our marketing investment towards more efficient,
higher return opportunities with a stronger focus on organic lead generation
and building brand awareness for long-term brand health.
We have supported growth in leads through search engine optimisation activity
with new digital content, improved local web pages and awareness campaigns. In
total we have launched over 400 new branch, metro and state pages across our
major brands. For Terminix alone, in Q4, this drove a five-fold increase in
the number of times the brand appeared in 'exterminator near me' searches. We
have also evolved content to maximise AI optimisation driving significant
increases in our brands' appearances in AI searches.
This activity has all been supported by, and continues to evolve through, a
focus on data-driven marketing performance and efficiency, and we can measure
its success through a double-digit reduction in the cost of each lead and a
meaningful shift in the proportion of organic leads.
Elevating our local marketing execution will remain in focus in 2026, with
continued investment in data and insights to better target the highest value
leads with the strongest conversion rates.
Improved customer proximity and local lead generation
In Q4 2024, we started a successful pilot of satellite branches. These are
smaller branches that are fully branded and operational, serving as localised
hubs with active facilities, but have a low cost to operate. These branches
increase local community presence, customer proximity and lead growth in key
metro areas with high-value untapped customer demand. We continued the
roll-out through 2025, taking the total number of these smaller, local
branches to over 150. As these branches mature their performance improves and
by Q4, branches with these localised hubs connected to them recorded lead flow
more than double that of branches without. In 2026, we will expand this
network of smaller, local branches and expect to have around 220 by the end of
the year.
Strengthened sales execution
At the beginning of 2025 we integrated sales teams back into field operations
leadership at the branch level to drive local accountability with measurable
results. By the second half we had improved key metrics of sales visits per
day and services proposed. There is even more to do in 2026 to focus on
execution and conversion. We successfully piloted door-to-door sales across 25
territories to penetrate an additional fast-growing sales channel for
residential contracts in the peak US pest season. We expect to extend this to
cover around 40 territories in 2026.
Driving up customer retention through focus on customer satisfaction
We have continued to execute the 'Drive to 85' programme to improve customer
retention over time to be closer to the average outside North America. This
requires a relentless focus on improving the overall quality of end-to-end
service through getting the basics right including service adherence, speed of
sale to install, customer communications and billing and scheduling. Our State
of Service rate for 2025 was 99%, a strong indication we are delivering on
customer expectations. We have had success reducing billing friction through
initiatives such as autopay and the investment in the 'Customer Saves' team at
the start of the year has delivered good results.
Another source of improving customer satisfaction has been through investment
in the Trusted Advisor programme, training field technicians to build sticky
relationships based on delivery of high-value advice and comprehensive pest
prevention solutions in addition to recommendations for add-on services, which
also provides an additional source of leads. Participation in the Trusted
Advisor programme is up 5% year-on-year to 61.5%.
Overall, we have seen a 5.3 point year-on-year improvement in US Commercial
Pest customer Net Promoter Scores (NPS), with a 3.1 point year-on-year
increase for US Residential customers, and an improvement in customer
retention of 0.4%pts to 80.5% in North America. This is a metric which is
moving slowly, but where we see significant opportunity.
Investing in key capabilities - pricing and data
One of the key drivers of increase in the value of our contract portfolio is
pricing. There remains significant opportunity to optimise pricing (e.g.
through pricing segmentation) and in 2025 we invested in new leadership and a
new team in this area. There is also a clear opportunity to drive performance
through the increasing use of data science and analytics across the
organisation, which we have also invested behind in 2025 with new leadership
and a new team.
Leveraging data and analytics
Through 2025 we focused on improving our data and analytics, with one of the
key benefits being a more granular branch-level assessment of performance
across a full suite of metrics. We used this insight to inform targeted growth
initiatives, including replacing branch-level leadership across over 90
branches resulting in meaningful levels of acceleration in growth.
Business simplification and cost efficiencies
At the same time as driving Organic Revenue Growth we are focused on business
simplification and efficiency. We made good progress in 2025 towards our
target of a $100m cost reduction in 2027 from the inflation-adjusted 2024
spend level. A number of efficiency programmes are underway to deliver this
including a headcount reduction programme during the period, procurement
initiatives to benefit from purchasing scale and the use of outsourcing and
Global Capability Centres for back-office roles. In 2025 these initiatives
delivered in-year savings of $25m.
We continue to expect that, in 2027, the delivery of these cost savings,
together with an improved organic growth rate, will allow the North American
business to achieve Operating Profit margins of above 20%, whilst delivering
on the streamlined integration process, supported by enhanced marketing
investment and the increased branch network.
During the year we incurred one-time costs to achieve these savings (cash and
non-cash) of $77m. We currently expect further one-time costs in 2026 in the
region of $70m.
Streamlining operations in 2026
At the start of 2025, we paused integration activity and began the
implementation of an evolved strategy to optimise the combination of the
Rentokil and Terminix businesses. As we move into 2026, we will continue to
progress this strategy with a substantially streamlined approach which
simplifies further integration activity across brands, branches, systems and
pay plans.
Optimising Brand strategy
In 2025, we laid out a plan to focus on two national brands and nine
well-known regional brands. This focus has increased leads for these brands
substantially in the second half. Further data analysis confirms that growth
is optimised with multiple brand entry points to tap into highly localised
residential and SME demand across national, regional and local brands with
strong brand equity.
We now plan to retain around 30 brands which represent over 90% of our
revenues. Over time we will carefully and progressively retire the remainder,
shifting that business to the stronger and more salient retained brands.
Optimising Branch strategy
Our evolved branch strategy prioritises local customer proximity and protects
service quality and customer retention by keeping more local brands and their
branches, and by expanding our network of small, local branches from the
satellite programme. Our plan is to create a high-quality network of around
800 branches by the end of 2026, including around 220 of the small, local
branches. This evolved strategy will minimise change across branches and
technicians, which will support customer retention.
Simplified Systems approach
Following the pause in integration in 2025 we have developed an alternative
approach which uses branch data from our existing systems (Mission and
PestPac) to build an integrated Branch 360 data reporting, insight and action
system accessed through a unified branch BI (Business Intelligence) scorecard
which delivers consistent KPIs and insight into the field on how to leverage
best practice and target underperforming branches with suggested areas of
action. This dashboard enhances the user experience driving accountability for
performance, with ongoing development from initial pilot phases already
underway.
For Commercial branches, systems migration resumed in Q4 2025 with encouraging
results. This will continue in 2026, enabling all Commercial customers to
access our online portal, PestNet Online, as we consolidate on a single branch
system.
Integrating Pay Plans
The de-coupled approach on systems allows for the harmonisation of pay plans
to proceed without the need to complete branch-by-branch IT migration. We have
completed the harmonisation of pay plans for branch managers, updated
Commercial sales plans to better incentivise performance and there will be no
change to Residential sales colleagues plans in 2026. For our Technician
colleagues, future changes will involve onboarding new colleagues to the new
plans, while existing colleagues will be offered a 'grandfathering' choice
between old and new plans to ensure stability and talent retention.
We are confident this revised plan to optimise the combination of Rentokil and
Terminix in North America mitigates further risk of disruption while still
allowing us to deliver on our North America margin target of over 20% in 2027.
Our plan for more branches and fewer brand combinations bolsters our local
presence, maximises our penetration of highest value demand and minimises
fewer technician changes, protecting customer retention. Retaining our
existing systems reduces risks to growth, and incremental investment through
2025 gives us confidence we can deliver the right data and insights to support
performance and satisfy customer expectations.
During 2026, we will also remain focused on building momentum in sales and
operations through driving accountability and disciplined execution and
delivering on a renewed focus on Commercial as a key growth segment through
improved service, industry leading offerings and dedicated local and national
resources.
International
2025 2024 Change (reported) Change (constant currency) Organic
$m
$m
%
%
Growth
Revenue 2,614 2,453 6.6% 4.8% 3.0%
Operating Profit 451 377 19.6% 16.8%
Adjusted Operating Profit 518 479 8.1% 5.7%
Adjusted Operating Margin 19.8% 19.5% 0.3%pts 0.2%pts
Organic Growth Q1 Q2 Q3 Q4 Full Year
International 3.2% 2.0% 3.4% 3.4% 3.0%
2025 Performance
Revenue
Full year Revenue was up 6.6% to $2,614m and by 4.8% at constant currency.
Organic Revenue was up 3.0%. Performance improved in the second half, with H2
Organic Revenue Growth of 3.4% (H1: 2.6%).
Europe incl. LATAM saw the strongest growth in the region, driven by the
Southern European markets of Spain and Portugal which experienced good volume
growth from healthy overall demand and a solid pricing environment.
The UK & Sub-Saharan Africa region and Asia & MENAT also saw good
growth. In the UK this was driven by the core UK Pest Control and Plants
businesses and an improving performance from our Property Services division in
H2. In Asia there was strong growth in Indonesia and India benefiting from
underlying demand growth in these fast-growing economies.
Growth in the Pacific region was softer across both one-off and contract
revenue primarily due to weather related challenges which particularly
impacted rural and trackspray operations in the year.
Profit
Adjusted Operating Profit in our International region increased by 8.1% to
$518m and by 5.7% at constant currency. Adjusted Operating Margin was 19.8%,
up 0.2%pts on the prior year. Statutory Operating Profit was $451m, up 19.6%
year-on-year (FY24: $377m).
The UK and Sub-Saharan Africa region delivered double-digit growth in Adjusted
Operating Profit reflecting the strong revenue performance.
Europe and Asia & MENAT also delivered Adjusted Operating Profit growth
ahead of the regional average, with Asia & MENAT's margins demonstrating
resilience despite a backdrop of high wage inflation.
Within the Pacific region, Operating Profit grew slower than the overall
International region, consistent with the revenue growth.
Colleague retention of 90.3% was slightly below last year (FY24: 90.5%) with
small dips from exceptionally high levels in Asia and Latin America. Customer
retention improved to 85.7% (FY24: 85.1%).
The International region acquired 24 businesses with total revenues in the
year prior to acquisition of $36m.
Category performance review
Pest Control
2025 2024 Change (reported) Change (constant currency) Organic
$m
$m
%
%
Growth
Revenue 5,703 5,481 4.1% 3.7% 2.6%
Operating Profit 635 715 (11.2%) (12.1%)
Adjusted Operating Profit 1,043 987 5.7% 4.9%
Adjusted Operating Margin 18.3% 18.0% 0.3%pts 0.2%pts
Organic Growth Q1 Q2 Q3 Q4 Full Year
Pest Control 1.7% 1.9% 3.4% 3.4% 2.6%
Our Pest Control business is the largest operator in both the US, the world's
biggest pest control market, and the world overall, providing services in
around 90 markets. We are a leading global player in a resilient and
non-cyclical industry characterised by positive and strong long-term
structural growth drivers.
Market
According to latest reports, published in 2025, over the past 10 years the
global pest control market has grown from a value of $15.4bn in 2015 to
$29.0bn in 2025 at a CAGR of 6.6%. Industry forecasts for the next 10 years
deliver a CAGR of 6.2% - with the value of the global market expected to reach
around $50bn by 2034.
2025 Performance
Pest Control Revenue increased by 4.1% to $5,703m (FY24: $5,481m) and by 3.7%
at constant currency. Organic Revenue Growth was 2.6%.
Within the North America business, good revenue growth of 3.1% included 2.1%
in Pest Control Services and 8.7% in Business Services supported by a robust
pricing environment and a particularly strong performance from Target
Specialty Products in Business Services. Organic Revenue Growth was 2.2%, with
1.1% in Pest Control Services and 8.9% in Business Services.
Within the International business, good revenue growth of 5.4% was driven
principally by strong performances in Europe, the UK and Asia & MENAT,
benefiting from favourable economic trends, the roll-out of digital solutions,
resilient pricing and strong sales leadership. Organic Revenue Growth was
3.7%.
Adjusted Operating Profit increased by 5.7% to $1,043m (FY24: $987m) and by
4.9% at constant currency, with Adjusted Operating Profit Margin increasing to
18.3% (FY24: 18.0%). Statutory Operating Profit decreased by 11.2% to $635m
(FY24: $715m).
Pest Control represented 83% of Group Revenue and 82% of Group Adjusted
Operating Profit.
We acquired 31 Pest Control businesses in the period, with revenues in the
year prior to acquisition of c.$55m.
Hygiene & Wellbeing
2025 2024 Change (reported) Change (constant currency) Organic
$m
$m
%
%
Growth
Revenue 1,205 1,136 6.1% 4.3% 2.3%
Operating Profit 230 196 17.3% 15.9%
Adjusted Operating Profit 224 205 9.3% 7.8%
Adjusted Operating Margin 18.6% 18.0% 0.6%pts 0.6%pts
Organic Growth Q1 Q2 Q3 Q4 Full Year
Hygiene & Wellbeing 1.6% 0.2% 3.2% 3.9% 2.3%
Rentokil Initial is a leader in the provision of hygiene and wellbeing
services, operating in around 70 markets around the world. Inside the washroom
we provide hand hygiene (soaps and driers), air care, in-cubicle (feminine
hygiene units), no-touch products and digital hygiene services. In addition to
core washroom hygiene, we deliver specialist services outside the washroom
such as premium scenting, plants, air quality monitoring, green walls and
specialist waste collection services.
Market
According to latest industry reports, over the next 10 years the global Core
Hygiene market is expected to grow at a CAGR of approximately 4%, driven by
macro factors including the needs of an ageing population, the rise of urban
populations and middle classes, and increasing hygiene expectations.
2025 Performance
Hygiene & Wellbeing Revenue increased by 6.1% to $1,205m (FY24: $1,136m)
and by 4.3% at constant currency. Organic Revenue Growth was 2.3%. Growth was
driven principally by key markets in Europe, UK & Sub-Saharan Africa.
Adjusted Operating Profit increased by 9.3% to $224m (FY24: $205m) and by 7.8%
at constant currency with Asia & MENAT and UK & Sub-Saharan Africa
growing profits ahead of revenue. Adjusted Operating Margin increased to 18.6%
(FY24: 18.0%). The profit performance reflected the benefit of pricing and
productivity initiatives, alongside continued cost discipline, which more than
offset inflationary pressures. Statutory Operating Profit increased by 17.3%
to $230m (FY24: $196m).
For FY25, Hygiene & Wellbeing represented 17% of Group Revenue and 18% of
Group Adjusted Operating Profit.
We acquired 5 Hygiene & Wellbeing businesses in the period with revenues
of c.$8m in the year prior to acquisition.
Disposal of France Workwear
The sale of our France Workwear business, which we announced on 28 May 2025,
completed on 30 September 2025, with net cash proceeds of €339m ($397m). The
business has been accounted for as a discontinued operation since 31 May 2025.
In FY24, France Workwear, including flat linen textile and clean room
business, generated Revenue of $324m, Adjusted Operating Profit of $57m and
had associated capital expenditure of $93m. For the nine months ended 30
September 2025, France Workwear, including flat linen textile and clean room
business, generated Revenue of $261m and Adjusted Operating Profit of $74m.
Good contributions from bolt-on M&A
In 2025, we acquired 36 businesses, comprising 31 in Pest Control and 5 in
Hygiene & Wellbeing for a total consideration of $115m. Revenues in the
year prior to purchase were c.$63m. We added 12 new businesses in North
America during the period and 24 businesses in our International region.
Revenues acquired in the year prior to purchase were c.$27m and c.$36m
respectively.
M&A remains relevant for our strategy for growth. We continue to seek
attractive bolt-on deals, both in Pest Control and Hygiene & Wellbeing, to
build density in existing and new markets. Our pipeline of prospects remains
strong.
Employer of Choice
Rentokil Initial is committed to being a world-class Employer of Choice, with
colleague safety and the attraction, recruitment and retention of the best
people from the widest possible pool of talent, being key business objectives
globally.
Group colleague retention continued to rise at 87.4% (FY24: 86.3%).
Innovation and Technology
We continue to leverage the benefits of our scale and expertise to invest in
data, innovation and technology. During 2025, we invested to capture the full
opportunity of better data and enabling AI usage including:
● Roll-out of Gemini for Google Workspace to our c.63,400 workforce to aid
productivity. There has been rapid take-up with over 1 million uses in the
first six months.
● Launch of an in-house AI Platform ('RAT-GPT') which currently has over 100 AI
agents in development to support growth and efficiency. These include a new
lead prioritisation pilot in France which prioritises leads based on factors
such as likelihood to convert, sales value and future customer value, and, a
US pilot of a hands-free AI assistant that allows our technicians to have a
two-way conversation giving them access to the customer data they need, such
as infestation history and open actions, all while on the move.
Our 2026 focus is on advancing these proven tools to further drive
productivity and operational excellence.
We also continued to leverage our investments in product innovation as a
competitive advantage with over 600,000 PestConnect devices now in operation.
Our new PestConnect Optix services now has c.4,000 environmental monitoring
cameras in use. In 2025, we processed 4.1m images from customers' premises
through our cloud-based AI tool.
Financial review
Central and regional overheads
Central and regional overheads of $191m were up $12m at CER ($16m at AER) on
the prior year predominantly as a result of inflationary increases and
increased investment in our proprietary digital applications, AI capabilities
and IT security.
Restructuring costs
With the exception of integration costs for significant acquisitions, the
Company reports restructuring costs within Adjusted Operating Profit. Costs
associated with significant acquisitions are reported as one-off and adjusting
items and excluded from Adjusted Operating Profit. Restructuring costs of $6m
were down $3m on prior year (FY24: $9m). They consisted mainly of costs in
respect of initiatives in our European business.
Legacy termite warranty obligations
The legacy termite warranty provision is based on an assessment of probable
future cash outflows arising from historical and future claims relating to the
entire pool of Termite contracts acquired on the acquisition of Terminix. It
is based on a number of assumptions including the number, and rate of claims
arising, the costs anticipated to resolve these claims, customer churn rate
for this pool of contracts, inflation and discount rate, and the actual claim
outcomes versus the assumptions which are reviewed in detail at each half year
and year end.
In the year to 31 December 2025, we have increased the termite provision by
$201m to $384m. This increase has largely been driven by:
· A continued increase in the number of litigated claims for both
Residential and Commercial customers received in 2025 compared to 2024, albeit
at a lower level than at the time of acquisition
· A continued increase in the cost per claim, as our proactive
strategy to solve customer problems and reduce litigation continues
· The settlement of some of the larger, legacy complex Commercial
cases at a higher average cost than the historical average, due to the
particular nature of the underlying facts of these claims
· An increase in the long term inflation rate in the model from 2%
to 3.2%. When the original provision was booked at the time of the acquisition
a long term inflation rate was assumed for the 20 year life of the provision.
Since then we have experienced higher levels of general inflation and,
specifically, we have seen an inflation premium over general inflation in
relation to the cost inputs for settling the claims (namely legal defence
costs, building materials and house prices).
The cost of settling claims in the year to 31 December 2025 has been $95m and
we expect a similar level of cash payments in 2026.
Interest
Adjusted interest of $204m includes $31m of lease interest charges and a $33m
offsetting reduction from the impacts of hyperinflation and net interest
received. In the year, hyperinflation of $3m was $6m lower than the prior year
(FY24: $9m) due to a drop in hyperinflation in Argentina and devaluation of
the Argentinian peso. Cash interest in FY25 was $222m (FY24: $181m), with the
year-on-year increase principally reflecting higher bond interest on new debt
issuance in the year and a reduction in bank interest received.
Tax
The income tax charge for the period at actual exchange rates was $100m on the
reported Profit Before Tax of $390m, giving an effective tax rate (ETR) of
25.6% (FY24: 25.1%). The Group's ETR before amortisation of intangible assets
(excluding computer software), one-off and adjusting items and the net
interest adjustments for FY25 was 25.3% (FY24: 24.2%). This compares with a
blended rate of tax for the countries in which the Group operates of 25.3%
(FY24: 25.3%).
Net debt and cash flow
Group Free Cash Flow including discontinued operations was $636m, $110m higher
than the prior year, predominantly due to an improved performance on trading
and working capital. After M&A spend of $121m, disposal receipts of $391m,
dividends paid of $304m, the cash impact of one-off and adjusting items of a
$100m outflow and a net adverse impact of foreign exchange and other items of
$87m, net debt reduced by $367m to $3,650m. The adverse foreign exchange
impact was caused by the translational impact on our EUR and GBP denominated
bonds carrying value as well as a positive impact on our EUR denominated
derivatives.
The debt related cash inflows of $532m resulted from the issuance of the
Group's inaugural USD bond transaction in April, raising $1.25bn across two
tranches; $750m 5 year bond at 5.0% and a $500m 10 year bond at 5.625%.
Subsequently the Group repaid its $700m term loan which was falling due in
October 2025.
Net debt and cash flow
$m at actual exchange rates Year to Date
2025 2024 Change
$m
$m $m
Adjusted Operating Profit 1,070 1,008 62
Depreciation 329 312 17
Other 31 45 (14)
Adjusted EBITDA 1,430 1,365 65
One-off and adjusting items (non-cash) (214) (19) (195)
Working capital (59) (126) 67
Movement on provisions 142 (76) 218
Capex - additions (196) (190) (6)
Disposals of Property, Plant and Equipment 20 5 15
Capital element of lease payments and initial direct costs incurred (186) (177) (9)
Cash interest (222) (181) (41)
Cash tax (100) (107) 7
Free Cash Flow - continuing operations 615 494 121
Free Cash Flow - discontinued operations 21 32 (11)
Free Cash Flow 636 526 110
Acquisitions (121) (219) 98
Disposal of companies and businesses 391 - 391
Dividends (304) (292) (12)
Cash impact of one-off and adjusting items (100) (99) (1)
Debt related cash flows
Cash inflow/(outflow) on settlement of debt related foreign exchange forward (9) (11) 2
contracts
Net investment in term deposits - (1) 1
Proceeds from issue of debt 1,232 - 1,232
Debt repayments (700) (464) (236)
Debt related cash flows 523 (476) 999
Net increase/ (decrease) in cash and cash equivalents 1,025 (560) 1,585
Cash and cash equivalents at the beginning of the year 467 1,062 (595)
Exchange gains /(losses) on cash and cash equivalents 97 (35) 132
Cash and cash equivalents at end of the financial year 1,589 467 1,122
Net increase/(decrease) in cash and cash equivalents 1,025 (560) 1,585
Debt related cash flows (523) 476 (999)
IFRS 16 asset/ (liability) movement (3) 5 (8)
Debt acquired (1) (11) 10
Debt disposed 21 - 21
Bond interest accrual (65) (3) (62)
Foreign exchange translation and other items (87) 83 (170)
Decrease/(increase) in net debt 367 (10) 377
Opening net debt (4,017) (4,007) (10)
Closing net debt (3,650) (4,017) 367
Funding
As at 31 December 2025, the Group had liquidity headroom of $2.6bn, including
$1bn of undrawn revolving credit facilities, with a maturity date of October
2029. The Net Debt to Adjusted EBITDA ratio was 2.6x at 31 December 2025 (31
December 2024: 2.9x).
Dividend
The Board is recommending a final dividend in respect of 2025 of 8.24 cents
per share. This equates to a full-year dividend of 12.39 cents per share, up
3.0% year-on-year, in line with the Company's progressive dividend policy. The
final dividend is first determined in US dollars and the sterling amount will
be announced on 23 April 2026 using the average of the market exchange rates
for the three working days commencing 20 April 2026, using the closing spot
rate. The dividend is payable to shareholders on the register at the close of
business on 10 April 2026, to be paid on 18 May 2026. The last day for DRIP
elections is 24 April 2026.
Technical guidance update for FY26
P&L
● One-off and Adjusting items excl. North America Transformation costs:
c.$10-$15m
● North America Transformation costs*: c.$70m
● P&L adjusted interest costs: c.$210m-$220m, including $5-$10m of
hyper-inflation
● Estimated Adjusted Effective Tax Rate: 25%-26%
Cash
● One-off and Adjusting items: c.$80m-$85m
● Movement on provisions: c.$85-$95m
● Capex excluding right of use (ROU) asset lease payments: $190m-$200m
● Cash interest: c.$195m-$205m
● Cash tax payments: $110m-$125m
● Anticipated spend on M&A in 2026 of c.$200m
* Reported as one-off and adjusting items and excluded from Adjusted Operating
Profit and Adjusted PBTA
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 December
Notes 2025 2024 represented1 2023 represented1
$m
$m
$m
Revenue 2 6,908 6,617 6,385
Operating expenses (6,250) (5,902) (5,609)
Net impairment losses on financial assets (74) (71) (49)
Operating profit 2 584 644 727
Finance income 4 46 59 60
Finance cost 3 (250) (250) (232)
Share of profit from associates net of tax 10 9 11
Profit before income tax 390 462 566
Income tax expense 5 (100) (116) (129)
Profit from continuing operations 290 346 437
Profit from discontinued operations 8 180 46 37
Profit for the year 470 392 474
Profit for the year attributable to:
Equity holders of the Company 470 392 474
Non-controlling interests - - -
Other comprehensive income:
Items that are not reclassified subsequently to the income statement:
Remeasurement of net defined benefit liability 1 - -
Items that are or may be reclassified subsequently to the income statement:
Net exchange adjustments offset in reserves (139) (35) (172)
Net gain/(loss) on net investment hedge 129 (22) 136
Effective portion of changes in fair value of cash flow hedge (31) 35 4
Cost of hedging - (7) 12
Tax related to items taken to other comprehensive income 18 (8) 7
Net exchange adjustments transferred to profit on disposal of business 8 38 - -
Net gain on net investment hedge transferred to profit on disposal of business 8 (11) - -
Other comprehensive income for the year 5 (37) (13)
Total comprehensive income for the year 475 355 461
Total comprehensive income for the year attributable to:
Equity holders of the Company 475 355 461
Non-controlling interests - - -
Earnings per share:
From continuing operations
Basic (cents) 6 11.49 13.72 17.37
Diluted (cents) 6 11.44 13.69 17.29
From continuing and discontinued operations
Basic (cents) 6 18.62 15.54 18.84
Diluted (cents) 6 18.54 15.51 18.75
1. Refer to foreign currency translation in material accounting policies
section.
Consolidated Balance Sheet
At 31 December
Note 2025 2024 represented1 At 1 January 2024 represented1
$m $m
$m
Assets
Non-current assets
Intangible assets 10 8,917 8,899 8,970
Property, plant and equipment 445 628 636
Right-of-use assets 576 577 576
Investments in associated undertakings 41 46 56
Other investments 25 26 27
Deferred tax assets 55 43 55
Contract costs 337 298 285
Retirement benefit assets 6 4 4
Trade and other receivables 52 71 57
Derivative financial instruments 121 8 72
10,575 10,600 10,738
Current assets
Other investments 2 1 1
Inventories 308 287 264
Trade and other receivables 1,151 1,137 1,121
Current tax assets 18 28 42
Derivative financial instruments 61 - 18
Cash and cash equivalents 2,319 1,158 1,989
3,859 2,611 3,435
Liabilities
Current liabilities
Trade and other payables (1,392) (1,400) (1,457)
Current tax liabilities (61) (53) (61)
Provisions for liabilities and charges 14 (275) (144) (119)
Bank and other short-term borrowings (1,411) (1,460) (1,444)
Lease liabilities (171) (163) (162)
Derivative financial instruments (5) (4) (41)
(3,315) (3,224) (3,284)
Net current assets/(liabilities) 544 (613) 151
Non-current liabilities
Other payables (46) (86) (90)
Bank and other long-term borrowings (4,156) (3,127) (4,016)
Lease liabilities (392) (394) (405)
Deferred tax liabilities (589) (638) (659)
Retirement benefit obligations (27) (32) (36)
Provisions for liabilities and charges 14 (397) (381) (455)
Derivative financial instruments (18) (36) (20)
(5,625) (4,694) (5,681)
Net assets 5,494 5,293 5,208
Equity
Capital and reserves attributable to the Company's equity holders
Share capital 15 41 41 41
Share premium 21 20 19
Other reserves (946) (932) (903)
Retained earnings 6,380 6,166 6,053
5,496 5,295 5,210
Non-controlling interests (2) (2) (2)
Total equity 5,494 5,293 5,208
1. Refer to foreign currency translation in material accounting policies
section.
Consolidated Statement of Changes in Equity
For the year ended 31 December
Attributable to equity holders of the Company
Notes Share Share Other Retained Non- Total
capital
premium
reserves
earnings
controlling
equity
$m
$m
$m
$m
interests
$m
$m
At 1 January 2023 represented2 41 14 (883) 5,787 (2) 4,957
Profit for the year - - - 474 - 474
Other comprehensive income:
Net exchange adjustments offset in reserves - - (172) - - (172)
Net gain on net investment hedge - - 136 - - 136
Net gain on cash flow hedge1 - - 4 - - 4
Cost of hedging - - 12 - - 12
Tax related to items taken directly to other comprehensive income - - - 7 - 7
Total other comprehensive income for the year - - (20) 481 - 461
Transactions with owners:
Gain on stock options - 5 - - - 5
Dividends paid to equity shareholders 7 - - - (252) - (252)
Cost of equity-settled share-based payment plans - - - 32 - 32
Movement in the carrying value of put options - - - 5 - 5
At 31 December 2023 represented2 41 19 (903) 6,053 (2) 5,208
Profit for the year - - - 392 - 392
Other comprehensive income:
Net exchange adjustments offset in reserves - - (35) - - (35)
Net loss on net investment hedge - - (22) - - (22)
Net gain on cash flow hedge1 - - 35 - - 35
Cost of hedging - - (7) - - (7)
Tax related to items taken directly to other comprehensive income - - - (8) - (8)
Total other comprehensive income for the year - - (29) 384 - 355
Transactions with owners:
Gain on stock options - 1 - - - 1
Dividends paid to equity shareholders 7 - - - (292) - (292)
Cost of equity-settled share-based payment plans - - - 25 - 25
Tax related to items taken directly to equity - - - (3) - (3)
Movement in the carrying value of put options - - - (1) - (1)
At 31 December 2024 represented2 41 20 (932) 6,166 (2) 5,293
Profit for the year - - - 470 - 470
Other comprehensive income:
Remeasurement of net defined benefit liability 1 1
Net exchange adjustments offset in reserves - - (139) - - (139)
Net gain on net investment hedge - - 129 - - 129
Net loss on cash flow hedge1 - - (31) - - (31)
Cost of hedging - - - - - -
Tax related to items taken directly to other comprehensive income - - - 18 - 18
Cumulative reserves recycled to income statement on disposal of foreign - - 27 - - 27
operations
Total other comprehensive income for the year - - (14) 489 - 475
Transactions with owners:
Gain on stock options - 1 - - - 1
Dividends paid to equity shareholders 7 - - - (304) - (304)
Cost of equity-settled share-based payment plans - - - 28 - 28
Tax related to items taken directly to equity - - - 1 - 1
At 31 December 2025 41 21 (946) 6,380 (2) 5,494
1. $31m net loss (2024: $35m net gain; 2023: $4m net gain) on cash flow hedge
includes a $64m gain (2024: $65m loss; 2023: $36m loss) from the effective
portion of changes in fair value, and a $95m loss (2024: $100m gain; 2023:
$40m gain) reclassification to the income statement due to changes in foreign
exchange rates.
2. Refer to foreign currency translation in material accounting policies
section.
Shares of $nil (2024: $nil; 2023: $nil) have been netted against retained
earnings. This represents 9.8m (2024: 11.4m; 2023: 13.0m) shares held by the
Rentokil Initial Employee Share Trust, which is not consolidated. The market
value of these shares at 31 December 2025 was $59m(2024: $56m; 2023: $71m).
Dividend income from, and voting rights on, the shares held by the Trust have
been waived.
Consolidated Statement of Changes in Equity (continued)
Analysis of other reserves
Capital Merger Cash flow Translation Cost of Total
reduction
relief
hedge
reserve
hedging
$m
reserve
reserve
reserve
$m
$m
$m
$m
$m
At 1 January 2023 represented2 (3,146) 3,326 4 (1,062) (5) (883)
Net exchange adjustments offset in reserves - - - (172) - (172)
Net gain on net investment hedge - - - 136 - 136
Net gain on cash flow hedge1 - - 4 - - 4
Cost of hedging - - - - 12 12
Total comprehensive income for the year - - 4 (36) 12 (20)
At 31 December 2023 represented2 (3,146) 3,326 8 (1,098) 7 (903)
Net exchange adjustments offset in reserves - - - (35) - (35)
Net loss on net investment hedge - - - (22) - (22)
Net gain on cash flow hedge1 - - 35 - - 35
Cost of hedging - - - - (7) (7)
Total comprehensive income for the year - - 35 (57) (7) (29)
At 31 December 2024 represented2 (3,146) 3,326 43 (1,155) - (932)
Net exchange adjustments offset in reserves - - - (139) - (139)
Net gain on net investment hedge - - - 129 - 129
Net loss on cash flow hedge1 - - (31) - - (31)
Cumulative reserves recycled to income statement on disposal of foreign - - - 27 - 27
operations
Total comprehensive income for the year - - (31) 17 - (14)
At 31 December 2025 (3,146) 3,326 12 (1,138) - (946)
1. $31m net loss (2024: $35m net gain; 2023: $4m net gain) on cash flow hedge
includes a $64m gain (2024: $65m loss; 2023: $36m loss) from the effective
portion of changes in fair value, offset by reclassification to the cost of
acquisition of $nil (2024: $nil; 2023: $nil) and a $95m loss (2024: $100m
gain; 2023: $40m gain) reclassification to the income statement due to changes
in foreign exchange rates.
2. Refer to foreign currency translation in material accounting policies
section.
The capital reduction reserve arose in 2005 as a result of the scheme of
arrangement of Rentokil Initial 1927 plc, under section 425 of the Companies
Act 1985, to introduce a new holding company, Rentokil Initial plc, and the
subsequent reduction in capital approved by the High Court whereby the
nominal value of each ordinary share was reduced from 100p to 1p.
The excess of the fair value of shares issued to fund the acquisition of
Terminix over their par value gave rise to a new reserve called a Merger
Relief Reserve. Under section 612 of the Companies Act 2006, merger relief is
available if certain circumstances are met when a business is acquired by
issuing shares to replace already issued shares. This reserve is unrealised
(and therefore not distributable), but it may become realised at a later date;
for example, on disposal of the investment to which it relates or on
impairment of that investment (which may occur after payment of a dividend by
the investment).
Consolidated Cash Flow Statement
For the year ended 31 December
Note 2025 2024 represented2 2023 represented2
$m $m
$m
Cash flows from operating activities
Operating profit from:
- Continuing operations 584 644 727
- Discontinued operations 8 74 57 50
Operating profit including discontinued operations 658 701 777
Adjustments for:
- Depreciation and impairment of property, plant and equipment 167 204 191
- Depreciation and impairment of leased assets 160 157 150
- Amortisation and impairment of intangible assets (excluding computer 10 199 254 218
software)
- Amortisation and impairment of computer software 10 37 33 32
- Other non-cash items 15 23 32
Changes in working capital (excluding the effects of acquisitions and exchange
differences on consolidation):
- Inventories (27) (15) (18)
- Contract costs (51) (18) (24)
- Trade and other receivables (20) (48) (36)
- Trade and other payables and provisions 162 (129) (76)
Interest received 31 46 31
Interest paid1 (255) (229) (237)
Income tax paid (104) (111) (124)
Net cash flows from operating activities 972 868 916
Cash flows from investing activities
Purchase of property, plant and equipment (208) (219) (207)
Purchase of intangible fixed assets (61) (56) (55)
Proceeds from sale of property, plant and equipment 20 5 17
Acquisition of companies and businesses, net of cash acquired 9 (121) (219) (298)
Disposal of investment in associate - - 24
Proceeds from disposal of businesses, net of tax paid 8 391 - -
Dividends received from associates 5 14 5
Net change to cash flow from investment in term deposits - (1) -
Net cash flows from investing activities 26 (476) (514)
Cash flows from financing activities
Dividends paid to equity shareholders 7 (304) (292) (252)
Capital element of lease payments (192) (185) (195)
Cash outflow on settlement of debt-related foreign exchange forward contracts (9) (11) (4)
Proceeds from new debt 1,232 - -
Debt repayments 11 (700) (464) -
Net cash flows from financing activities 11 27 (952) (451)
Net increase/(decrease) in cash and cash equivalents 1,025 (560) (49)
Cash and cash equivalents at beginning of period 467 1,062 1,064
Exchange gain/(loss) on cash and cash equivalents 97 (35) 47
Cash and cash equivalents at end of the financial period 11 1,589 467 1,062
1. Interest paid includes the interest element of lease payments of $31m
(2024: $31m; 2023: $31m).
2. Refer to foreign currency translation in material accounting policies
section.
Notes to the Consolidated Financial Statements
1. Basis of preparation and accounting policies
a) Basis of preparation
The Consolidated Financial Statements have been prepared in accordance with
UK-adopted International Accounting Standards (IAS) and with the requirements
of the Companies Act 2006 as applicable to companies reporting under those
standards. The Consolidated Financial Statements also comply fully with
International Financial Reporting Standards (IFRSs) as issued by the
International Accounting Standards Board (IASB). The Consolidated Financial
Statements have been prepared under the historical cost convention, as
modified by the revaluation of certain financial assets and liabilities
(including derivative instruments). Certain financial and equity instruments
have been measured at fair value.
b) Going concern
The Directors have prepared Board-approved cash flow forecasts for a period of
18 months to 30 June 2027 to demonstrate that the Group has sufficient
liquidity to meet its obligations as they fall due for the period of at least
12 months from the date of approval of these Consolidated Financial
Statements, with a longer assessment period to 30 June 2027 being considered
as appropriate.
Additionally, the Directors have assessed severe but plausible downside
scenarios. The downside scenarios include: (i) a revenue decline of 20%
against base budget for six months; and (ii) a 20% revenue decline for 12
months. Both of these scenarios are considerably worse than the actual impact
of the COVID-19 pandemic in 2020. These assessments were prepared on the
conservative assumption that the Group has no access to the debt capital
markets. As part of their analysis, the Board considered mitigating actions at
their discretion to improve the position identified by the analysis if
the debt capital markets are not accessible, such as cost savings, adjusting
the level of M&A activity, and/or dividends paid. In addition to the
above, the Directors also considered that the Group has the ability to extend
existing or raise new financing, although this was not included in the
modelling undertaken for going concern assessment.
The Going Concern analysis demonstrates that under the base case, the Group
has c.$0.8bn of headroom at 30 June 2027 and c.$0.5bn under the severe but
plausible downside scenario. This is before potential mitigations available,
estimated to be c.$1.2bn.
Based on the above, the Directors have concluded that the Group is well placed
to manage its financing and other business risks and have a reasonable
expectation that the Group will have adequate resources to continue in
operation for at least 12 months from the signing date of these Consolidated
Financial Statements. They therefore consider it appropriate to adopt the
going concern basis in preparing these Consolidated Financial Statements.
c) Foreign currency translation
Items included in the Financial Statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the functional currency). The Consolidated Financial
Statements are presented in US dollars, which differs from the functional
currency of Rentokil Initial plc which remains in sterling.
On 25 July 2024, the Group announced that with effect from 1 January 2025 it
would be changing its presentation currency from sterling to US dollar. Within
the Group's current portfolio of businesses, sterling denominated earnings,
while sizeable, are a relatively small proportion of overall earnings. To
reduce the potential for foreign exchange volatility in our future reported
earnings, the Board determined that, with effect from 1 January 2025, the
Group will present its results in US dollar.
Accordingly, to satisfy the requirements of IAS 21 The Effects of Changes in
Foreign Exchange Rates, the reported results for the years ended 31 December
2024 and 31 December 2023 have been translated from sterling to US dollar
using the following procedures:
(i) assets and liabilities denominated in non-US dollar currencies were
translated into US dollar at the relevant closing rates of exchange;
(ii) the trading results of subsidiaries whose functional currency was other
than US dollar were translated into US dollar at the average rates of exchange
for the relevant period, with material items translated at the rate on the
dates of transaction;
(iii) share capital, share premium, capital reduction reserve, and merger
relief reserve were translated at the historic rates prevailing on the date of
each transaction; and
(iv) the cumulative translation reserve balance was set to nil on 1 January
2004, the date of transition to IFRS, and has been represented on the basis
that the Group has reported in US dollar since that date.
A change in presentation currency represents a change in accounting policy
under IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
which is accounted for retrospectively. The £/$ rates used for this exercise
are: average 2024 1.2773, 2023 1.2441; and closing 2024 1.2519, 2023 1.2737.
d) Standards, amendments, and interpretations to published standards that are mandatorily effective for the current year
Except as described below, the accounting policies applied in these
Consolidated Financial Statements are the same as those applied in the Group's
Consolidated Financial Statements for the year ended 31 December 2024.
The Group has adopted the following new standards and amendments to standards,
including any consequential amendments to other standards, with effect from 1
January 2025:
● amendments to IAS 21 - Lack of exchangeability
The application of this amendment had no material impact on the disclosures
of the amounts recognised in the Group's Consolidated Financial Statements.
Consequently, no adjustment has been made to the comparative financial
information at 31 December 2024.
e) New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that
are not mandatory for 31 December 2025 reporting periods, and have not been
adopted early by the Group.
● IFRS 18 - Presentation and disclosure in financial statements
IFRS 18 is effective for annual periods beginning on or after 1 January 2027
and will replace IAS 1 - Presentation of financial statements. It will
introduce new requirements that are intended to help to achieve comparability
of the financial performance of similar entities, and provide more relevant
information and transparency to users. Even though IFRS 18 will not impact the
recognition or measurement of items in the financial statements, its impacts
on presentation and disclosure are expected to be pervasive; in particular
those related to the statement of comprehensive income or loss, and providing
management-defined performance measures within the financial statements.
IFRS 7 & IFRS 9 is effective for annual periods beginning on or after 1
January 2026. Restatement is required under IAS 8 otherwise the cumulative
effect is recognised in the opening balance of retained earnings and other
equity components at the date of application. The amendments clarify IFRS 9
rules for derecognition, SPPI assessment (including ESG‑linked features),
and the treatment of renewable PPAs, while IFRS 7 introduces stronger
disclosure requirements for contingent and ESG‑linked terms to improve
transparency.
Management is currently assessing the detailed implications of applying the
new standard on the Group's consolidated financial statements.
2. Revenue recognition and operating segments
Segment reporting
Segmental information has been presented in accordance with IFRS 8 Operating
Segments on the next page. The Group's operating segments are regions and this
reflects the internal management reporting structures and the way information
is reviewed by the chief operating decision maker (the Chief Executive). The
businesses within each operating segment operate in a number of different
countries and sell services across two business segments with the workwear
segment disposed of in the year.
Following the acquisition of Terminix, the majority of the Group's activity is
in North America. With effect from 1 January 2025, the Group's reporting
structure has been changed to combine Europe incl. LATAM, UK & SSA,
Pacific and Asia & MENAT regions into a single operating and reporting
segment, International. The Chief Executive remains as CODM and reviews the
results on a monthly basis for North America and International segments. All
reporting to the Board is also done on this basis. Comparative segmental
financial information for 2024 and 2023 have been represented.
Disaggregated revenue under IFRS 15 is the same as the segmental analysis
below. Restructuring costs, one-off and adjusting items, amortisation and
impairment of intangible assets (excluding computer software), and central and
regional costs are presented at a Group level as they are not targeted or
managed at reportable segment level. The basis of presentation is consistent
with the information reviewed by internal management.
The segment profit or loss measure that is regularly provided to the CODM is
Adjusted Operating Profit.
Revenue and Profit
Revenue Revenue Revenue Operating Operating Operating
2025
2024
2023
profit
profit
profit
$m
$m
$m
2025
2024
2023
$m
$m
$m
North America
Pest Control 4,148 4,026 3,981 720 688 745
Hygiene & Wellbeing 146 138 131 29 25 23
Sub-total North America 4,294 4,164 4,112 749 713 768
International
Pest Control 1,555 1,455 1,355 323 299 286
Hygiene & Wellbeing 1,059 998 918 195 180 169
Sub-total International 2,614 2,453 2,273 518 479 455
Total 6,908 6,617 6,385 1,267 1,192 1,223
Central and regional overheads - - - (191) (175) (150)
Restructuring costs - - - (6) (9) (9)
Revenue and Adjusted Operating Profit 6,908 6,617 6,385 1,070 1,008 1,064
One-off and adjusting items (287) (110) (119)
Amortisation and impairment of intangible assets1 (199) (254) (218)
Operating profit 584 644 727
Finance income 46 59 60
Finance cost (250) (250) (232)
Share of profit from associates net of tax 10 9 11
Profit before income tax 390 462 566
1. Excluding computer software, which is included in our segment operating
profit measure.
Analysis of revenue by type
Revenue Revenue Revenue
2025
2024
2023
$m
$m
$m
Contract service revenue 4,803 4,643 4,489
Job work 1,549 1,472 1,365
Sales of goods 556 502 531
Total 6,908 6,617 6,385
Other segment items included in the consolidated income statement are as
follows:
Depreciation, amortisation and impairment Net impairment losses on financial assets Depreciation, amortisation and impairment Net impairment losses on financial assets Depreciation, amortisation and impairment Net impairment losses on financial assets
2025
2025
2024
2024
2023
2023
$m
$m
$m
$m
$m
$m
North America 256 66 269 62 270 43
International 238 8 263 9 218 6
Central and regional 34 - 33 - 28 -
Total 528 74 565 71 516 49
3. Finance cost
2025 2024 2023
$m
$m
$m
Hedged interest payable on medium-term notes issued1 127 77 76
Interest payable on bank loans and overdrafts1 27 64 50
Interest payable on RCF1 2 1 4
Interest payable on foreign exchange swaps2 50 56 54
Interest payable on leases 31 31 30
Amortisation of discount on provisions 13 14 18
Foreign exchange loss on translation of foreign assets/liabilities - 7 -
Total finance cost 250 250 232
1. Interest expense on financial liabilities held at amortised cost.
2. Interest payable on foreign exchange swaps including coupon interest
payable for the year was $56m (2024: $69m). $6m has been reported in other
comprehensive income due to hedge accounting (2024: $13m).
4. Finance income
2025 2024 2023
$m
$m
$m
Bank interest received 31 46 31
Fair value gain on hedge ineffectiveness 2 4 3
Foreign exchange gain on translation of foreign assets/liabilities 10 - 12
Hyperinflation accounting adjustment 3 9 14
Total finance income 46 59 60
5. Income tax
Analysis of charge in the year:
2025 2024 2023
$m
$m
$m
Current tax charge 119 110 114
Adjustment in respect of previous periods (5) 6 (11)
Total current tax 114 116 103
Deferred tax (credit)/charge (14) 9 31
Deferred tax adjustment in respect of previous periods - (9) (5)
Total deferred tax (14) - 26
Continuing tax charge 100 116 129
Discontinued income tax charge 16 9 11
Total tax charge 116 125 140
The income tax charge for the period at actual exchange rates was $100m on the
reported profit before tax of $390m, giving an effective tax rate (ETR) of
25.6% (2024: 25.1%; 2023: 22.8%). The Group's ETR before amortisation of
intangible assets (excluding computer software), one-off and adjusting items
and the net interest adjustments for 2025 was 25.3% (2024: 24.2%; 2023:
23.8%). Adjusted ETR is higher this year compared to last year due to a larger
deferred tax asset recognised on losses in 2024. This compares with a blended
rate of tax for the countries in which the Group operates of 25.3% (2024:
25.3%; 2023: 25.1%).
The cash tax paid for the year was $104m (2024: $111m). The decrease was
attributable mainly to one-off US tax deductions resulting from the One Big
Beautiful Bill Act enacted on 4 July 2025.
2025 2024
$m
$m
Deferred Tax at 1 January (595) (604)
Exchange differences (7) 1
Impact of business combinations & disposals 43 25
Credited/(Charged) to the income statement 6 (5)
Credited/(Charged) to other comprehensive income 18 (8)
Credited/(Charged) to equity 1 (4)
Deferred Tax at 31 December (534) (595)
A deferred tax asset of $56m has been recognised in respect of losses which
are expected to be utilised within 10 years (2024: $51m), of which $41m (2024:
$38m) relates to UK losses (excluding capital losses) carried forward at 31
December 2025 (both amounts having increased due to foreign exchange
translation by $3m during the year). These amounts have been calculated by
estimating the future taxable profits, against which the tax losses will be
utilised, progressively risk-weighted, and applying the tax rates
(substantively enacted as at the balance sheet date) applicable for each year.
The UK continues to apply a global minimum effective tax rate of 15% for 2025.
The legislation implements a domestic top-up tax and a multinational top-up
tax, however, the group does not expect a material top up tax each year (less
than $1m).
6. Earnings per share
Basic earnings per share is calculated by dividing the profit after tax
attributable to equity holders of the Company by the weighted average number
of shares in issue during the year, excluding those held in the Rentokil
Initial Employee Share Trust (see note at the bottom of the Consolidated
Statement of Changes in Equity) which are treated as cancelled, and including
share options for which all conditions have been met.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to include all potential dilutive ordinary shares. The
Group's potentially dilutive ordinary shares relate to the contingent issuable
shares under the Group's long-term incentive plans (LTIPs) to the extent that
the performance conditions have been met at the end of the period. These share
options are issued for nil consideration to employees if performance
conditions are met.
For the calculation of diluted earnings per share, 477,325 share options were
anti-dilutive and not included in the calculation of the dilutive effect as at
31 December 2025 (2024: 435,578; 2023: 18,422).
Details of the calculation of earnings per share are set out below:
2025 2024 2023
$m
$m
$m
Profit attributable to equity holders of the Company from continuing 290 346 437
operations
Profit attributable to equity holders of the Company from discontinued 180 46 37
operations
Total profit attributable to equity holders of the Company 470 392 474
Weighted average number of ordinary shares in issue (million) 2,524 2,521 2,516
Adjustment for potentially dilutive shares (million) 11 7 11
Weighted average number of ordinary shares for diluted earnings per share 2,535 2,528 2,527
(million)
Earnings per share for continuing operations
Basic earnings per share (cents) 11.49 13.72 17.37
Diluted earnings per share (cents) 11.44 13.69 17.29
Earnings per share for discontinued operations
Basic earnings per share (cents) 7.13 1.82 1.47
Diluted earnings per share (cents) 7.10 1.82 1.46
Total earnings per share
Basic earnings per share (cents) 18.62 15.54 18.84
Diluted earnings per share (cents) 18.54 15.51 18.75
7. Dividends
Dividend distribution to the Company's shareholders is recognised as a
liability in the Consolidated Financial Statements in the period in which the
dividends are approved by the Company's shareholders. Interim dividends are
recognised when paid.
2025 2024 2023
$m
$m
$m
2022 final dividend paid - 6.50 cents per share 1 - - 165
2023 interim dividend paid - 3.44 cents per share 2 - - 87
2023 final dividend paid - 7.41 cents per share 1 - 186 -
2024 interim dividend paid - 4.15 cents per share 2 - 106 -
2024 final dividend paid - 7.91 cents per share 1 198 - -
2025 interim dividend paid - 4.15 cents per share 106 - -
304 292 252
1. Represented at exchange rate prevailing at AGM's date (2024: 5.93 pence per
share; 2023: 5.93 pence per share)
2. Represented at exchange rate prevailing at date of announcement (2024: 3.16
pence per share; 2023: 2.75 pence per share)
An interim dividend of 4.15 cents per share was paid on 22 September 2025,
amounting to $106m. A final dividend in respect of 2025 of 8.24 cents per
share is to be proposed at the Annual General Meeting on 7 May 2026.
The aggregate amount of the proposed dividend to be paid out of retained
earnings at 31 December 2025, but not recognised as a liability at year end,
is $208m (2024: $198m; 2023: $186m).
8. Discontinued operations
Rentokil Initial plc announced that it entered into an agreement for the
intended sale of its Workwear business in France with H.I.G. Capital (the
Proposed Transaction) on 28 May 2025 which was subsequently completed on 30
September 2025. Financial information relating to the discontinued operation
to the date of disposal is set out below.
The financial performance and cash flow information presented below are for
the nine months ended 30 September 2025, the year ended 31 December 2024, and
the year ended 31 December 2023.
2025 2024 2023
$m
$m
$m
Revenue 261 324 302
Operating expenses (186) (266) (252)
Net impairment losses on financial assets (1) (1) -
Operating profit 74 57 50
Finance cost (2) (2) (2)
Profit before income tax 72 55 48
Income tax expense (16) (9) (11)
Profit after income tax of discontinued operations 56 46 37
Profit on sale of the subsidiary after income tax 124 - -
Profit from discontinued operations 180 46 37
Profit for the period attributable to:
Equity holders of the Company 180 46 37
Other comprehensive income:
Items that may be reclassified subsequently to the income statement:
Net exchange adjustments offset in reserves 38 (12) 7
Net (loss)/gain on net investment hedge (11) 8 (5)
Other comprehensive income for the period 27 (4) 2
Total comprehensive income for the period 207 42 39
Total comprehensive income for the period attributable to:
Equity holders of the Company 207 42 39
Net cash generated from operating activities 100 125 114
Net cash flows from investing activities 318 (85) (85)
Net cash flows from financing activities (6) (8) (7)
Net increase in cash generated by discontinued operations 412 32 22
The carrying amounts of assets and liabilities as at the date of sale were:
At 30 September 2025
$m
Assets
Intangible assets 8
Property, plant and equipment 287
Right-of-use assets 22
Contract costs 20
Inventories 12
Trade and other receivables 82
Cash and cash equivalents 6
437
Liabilities
Trade and other payables (112)
Lease liabilities (20)
Deferred and current tax (56)
Retirement benefit obligations (8)
Provisions (9)
(205)
Net assets and liabilities disposed 232
Cash consideration received 397
Carrying amount of net assets sold (232)
Gain on sale before income tax and reclassification of foreign currency 165
translation reserve
Cumulative exchange recycled from translation reserve (38)
Cumulative reserve recycled from net investment hedge reserve 11
Costs related to disposal (14)
Net profit on disposal 124
9. Business combinations
All business combinations are accounted for using the purchase method
(acquisition accounting) in accordance with IFRS 3 Business Combinations. The
cost of a business combination is the aggregate of the fair values at the date
of exchange of assets given, liabilities incurred or assumed, and equity
instruments issued by the Group. The cost of a business combination is
allocated at the acquisition date by recognising the acquiree's identifiable
assets, liabilities, and contingent liabilities that satisfy the recognition
criteria at their fair values. Any excess of the purchase price over the fair
value of the identifiable assets and liabilities is recognised as goodwill.
The acquisition date is the date on which the acquirer effectively obtains
control of the acquiree.
An intangible asset is recognised if it meets the definition under IAS 38
Intangible Assets. The intangible assets arising on acquisition are goodwill,
customer lists, and brands. Goodwill represents the synergies, workforce, and
other benefits expected as a result of combining the respective businesses.
Customer lists and brands are recognised at their fair value at the date of
acquisition using an income-based approach, which involves the use of
assumptions including customer termination rates, profit margins, contributory
asset charges, and discount rates.
At the date of acquisition, deferred and contingent consideration represents
its fair value, with subsequent changes after the measurement period being
recognised in the income statement. Costs directly attributable to business
combinations are charged to the income statement as incurred and presented as
one-off and adjusting items.
Disclosures required by IFRS 3 Business Combinations are provided separately
for those individual acquisitions that are considered to be material, and in
aggregate for individually immaterial acquisitions. An acquisition would
generally be considered individually material if the impact on the Group's
revenue and Adjusted Operating Profit measures (on an annualised basis) is
greater than 5%, or the impact on goodwill is greater than 10% of the closing
balance for the period. There were no individually material acquisitions in
the year (2024: none).
During the year, the Group purchased 100% of the share capital or trade and
assets of 36 companies and businesses (2024: 36). The total consideration in
respect of these acquisitions was $115m (2024: $232m), and the cash outflow
from current and past period acquisitions net of cash acquired was $121m
(2024: $219m).
Goodwill on all acquisitions represents the synergies and other benefits
expected to be realised from integrating acquired businesses into the Group,
such as improved route density, expansion in use of best-in-class digital
tools, and back office synergies. Details of goodwill and the fair value of
net assets acquired in the year are as follows:
2025 2024
$m
$m
Purchase consideration
- Cash paid 90 147
- Deferred and contingent consideration 25 85
Total purchase consideration 115 232
Provisional fair value of net assets acquired (44) (65)
Goodwill from current-year acquisitions 71 167
Goodwill expected to be deductible for tax purposes 48 105
Deferred consideration of $12m and contingent consideration of $13m are
payable in respect of the above acquisitions (2024: $44m and $41m
respectively). Contingent consideration is payable based on a variety of
conditions, including revenue and profit targets being met. Amounts for both
deferred and contingent consideration are payable over the next five years.
The Group has recognised contingent and deferred consideration based on fair
value at the acquisition date. A range of outcomes for contingent
consideration payments cannot be estimated due to the variety of performance
conditions and the volume of businesses the Group acquires. During the year,
there were releases of contingent consideration liabilities not paid of $25m
(2024: $9m).
The fair values6 of assets and liabilities arising from acquisitions in the
year are as follows:
2025 2024
$m
$m
Non-current assets
- Intangible assets1 47 72
- Property, plant and equipment2 4 14
Current assets3 9 35
Current liabilities4 (4) (30)
Non-current liabilities5 (12) (26)
Net assets acquired 44 65
1. Includes $46m (2024: $59m) of customer lists and $1m (2024: $13m) of other
intangibles.
2. Includes $1m (2024: $5m) of ROU assets.
3. Includes cash acquired of $2m (2024: $3m), inventory of $2m (2024: $14m),
and trade and other receivables of $5m (2024: $18m).
4. Includes trade and other payables of $4m (2024: $30m).
5. Includes $8m of deferred tax liabilities relating to acquired intangibles
(2024: $11m), lease liabilities of $1m (2024: $5m), and other liabilities of
$3m (2024: $10m).
6. The fair values of assets and liabilities from acquisitions in the current
year will be finalised in the 2025 Financial Statements. These fair values are
provisional as the acquisition accounting has not yet been finalised,
primarily due to the proximity of many acquisitions to the year end.
The cash outflow from current and past acquisitions is as follows:
2025 2024
$m
$m
Total purchase consideration 115 232
Consideration payable in future periods (25) (85)
Purchase consideration paid in cash 90 147
Cash and cash equivalents in acquired companies and businesses (2) (3)
Cash outflow on current period acquisitions 88 144
Deferred and contingent consideration paid 33 75
Cash outflow on current and past acquisitions 121 219
From the dates of acquisition to 31 December 2025, new acquisitions
contributed $29m to revenue and $3m to operating profit (2024: $86m and $2m
respectively).
If the acquisitions had occurred on 1 January 2025, the revenue and operating
profit of the combined Group would have amounted to $6,943m and $584m
respectively (2024: $6,689m and $646m respectively).
10. Intangible assets
Intangible assets are stated at cost less accumulated amortisation and
accumulated impairment losses, where applicable.
A breakdown of intangible assets is as shown below:
Goodwill Customer Indefinite-lived brands Other Product development Computer Total
$m
lists
$m
intangibles
$m
software
$m
$m
$m
$m
Cost
At 1 January 2024 6,471 1,860 1,436 97 83 291 10,238
Exchange differences (51) (48) (2) (1) (1) (7) (110)
Additions - - - - 11 59 70
Disposals/retirements - (29) - (3) - (28) (60)
Acquisition of companies and businesses 144 47 - 13 - - 204
Hyperinflationary adjustment 12 5 - 1 - - 18
At 31 December 2024 6,576 1,835 1,434 107 93 315 10,360
At 1 January 2025 6,576 1,835 1,434 107 93 315 10,360
Exchange differences 64 61 1 4 7 19 156
Additions - - - - 14 47 61
Disposals/retirements (5) (109) - (7) - (29) (150)
Acquisition of companies and businesses 71 46 - 1 - - 118
Hyperinflationary adjustment - 2 - - - - 2
At 31 December 2025 6,706 1,835 1,435 105 114 352 10,547
Accumulated amortisation and impairment
At 1 January 2024 (81) (878) - (50) (56) (203) (1,268)
Exchange differences 6 35 - 1 2 5 49
Disposals/retirements - 29 - 3 - 26 58
Hyperinflationary adjustment (10) (2) - (1) - - (13)
Impairment charge (36) - - - (3) - (39)
Amortisation charge - (194) - (11) (10) (33) (248)
At 31 December 2024 (121) (1,010) - (58) (67) (205) (1,461)
At 1 January 2025 (121) (1,010) - (58) (67) (205) (1,461)
Exchange differences (1) (49) - (2) (6) (14) (72)
Disposals/retirements - 109 - 7 - 25 141
Hyperinflationary adjustment - (2) - - - - (2)
Amortisation charge - (182) - (7) (10) (37) (236)
At 31 December 2025 (122) (1,134) - (60) (83) (231) (1,630)
Net book value
At 1 January 2024 6,390 982 1,436 47 27 88 8,970
At 31 December 2024 6,455 825 1,434 49 26 110 8,899
At 31 December 2025 6,584 701 1,435 45 31 121 8,917
The main categories of intangible assets are as follows:
Intangible assets - finite useful lives
Intangible assets with finite useful lives are initially measured at either
cost or fair value and amortised on a straight-line basis over their useful
economic lives, which are reviewed on an annual basis. These assets are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of the asset may exceed its recoverable amount. The
fair value attributable to intangible assets acquired through a business
combination is determined by discounting the expected future cash flows to be
generated from that asset at the risk-adjusted weighted average cost of
capital for the Group. The residual values of intangible assets are assumed to
be $nil.
The estimated useful economic lives of intangible assets are as follows:
Customer lists: 3 to 15 years
Other intangibles: 2 to 15 years
Product development: 2 to 5 years
Computer software: 3 to 5 years
The following are the main categories of intangible assets with finite useful
lives:
(a) Customer lists
Customer lists are acquired as part of business combinations. No value is
attributed to internally generated customer lists.
(b) Other intangibles
Other intangibles consists of brands with finite useful lives and intellectual
property. Brands are acquired as part of business combinations. No value is
attributed to internally generated brands as expenditure incurred to develop,
maintain, and renew brands internally is recognised as an expense in the
period incurred. Intellectual property costs are incurred in acquiring and
maintaining patents and licences. These are recognised only if the cost can be
measured reliably, and they are expected to generate economic benefits beyond
one year, in excess of their cost.
(c) Product development
Costs incurred in the design and testing of new or improved products are
recognised as intangible assets only if the cost can be measured reliably, and
it is probable that the project will be a success considering its commercial
and technological feasibility. Capitalised product development expenditure is
measured at cost less accumulated amortisation.
Other development expenditure and all research expenditure are recognised as
an expense as incurred and amount to $4m in the year (2024: $5m).
Development costs recognised as an expense are never reclassified as an asset
in a subsequent period. Development costs that have been capitalised are
amortised from the date the product is made available.
(d) Computer software
Costs that are directly associated with the production of identifiable and
unique software products that are controlled by the Group (including employee
costs and external software development costs) are recognised as intangible
assets, if they are expected to generate economic benefits beyond one year in
excess of their cost. Purchased computer software is initially recognised
based on the costs incurred to acquire and bring it into use.
Costs associated with maintaining computer software are recognised as an
expense in the period in which they are incurred.
Intangible assets - indefinite useful lives
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair
value of the Group's share of the net identifiable assets of the acquired
business at the date of acquisition. It is recognised as an intangible asset.
Goodwill arising on the acquisition of an associate is included in investments
in associates.
(b) Brands with indefinite useful lives
Brands with indefinite useful lives are acquired as part of business
combinations. No value is attributed to internally generated brands as
expenditure incurred to develop, maintain, and renew brands internally is
recognised as an expense in the period incurred.
The Terminix US and Terminix International brands are considered to have
indefinite useful lives due to their long history in the US (being founded in
1927) and having a strong brand equity in the US for much of their history and
now internationally. The Group plans to continue to support and invest in the
Terminix brand; it controls all the associated assets that support the
underlying business, and therefore it is considered that there is no
foreseeable limit on the period over which these brands will continue to
generate net cash inflows.
Goodwill and brands with indefinite useful lives are tested annually for
impairment and carried at cost less accumulated impairment losses. For the
purpose of impairment testing, goodwill is allocated to cash-generating unit
groups (CGU groups) identified according to region of operation and reportable
business unit. Gains and losses on the disposal of an entity include the
carrying amount of goodwill relating to the entity sold.
At the start of 2025, management reviewed its grouping of CGUs and its
allocation of goodwill for the purposes of assessing impairment based on the
lowest level at which the goodwill is monitored. Based on this review,
management has determined that the Group now has six CGU groups. These are
North America, UK & SSA, Europe, LATAM, Asia & MENAT and Pacific. The
key factors considered in management's conclusion included the change in
reporting segments to North America and International, to reflect the high
proportion of business in the US, and the subsequent allocation of resources
based on the results for each operating segment.
Before initiating the change in CGU grouping, in accordance with IAS 36,
management performed a value-in-use impairment test on the pre-existing CGU
groups and determined there to be no impairment of goodwill within any of the
groups.
The recoverable amount of a CGU group is determined based on the higher of
value-in-use calculations using cash flow projections, and fair value less
costs to sell. The cash flow projections in year one are based on financial
budgets approved by management, which are prepared as part of the Group's
normal planning process. Cash flows for years two to five use management's
expectation of revenue growth and operating profit margin, based on past
experience and expectations regarding future performance and profitability for
each CGU group. Cash flows beyond the five-year period are extrapolated using
estimated long-term growth rates (LTGR).
Cash flow projections included in the impairment review models include
management's view of the impact of climate change, including costs related to
the effects of climate change, as well as the future costs of the Group's
commitment to reach net zero by 2040 and costs of compliance with current
legal requirements. The potential increased costs, to meet these commitments
less any benefits that may occur, are not expected to be material and
therefore have not resulted in any impairments during 2025.
A breakdown of goodwill by region is shown below:
2025 2024
$m
$m
North America 5,718 5,668
International
Europe 250 218
UK & Sub-Saharan Africa 149 138
Asia & MENAT 232 229
LATAM 77 61
Pacific 158 141
Sub-total International 866 787
Total 6,584 6,455
Impairment tests for goodwill and brands with indefinite useful lives
All CGU groups were supported through the value-in-use approach. During the
year, the Group recognised no goodwill impairments (2024: $36m). For all
goodwill and indefinite-lived brands balances, it can be demonstrated that
there is sufficient headroom in the recoverable amount of the CGU goodwill
balances based on the assumptions made, and there is no reasonably likely
scenario under which material impairment could be expected to occur in the
next 12 months based on the testing performed.
The key assumptions used by CGU groups for value-in-use calculations were:
2025 long-term 2025 pre-tax 2024 long-term 2024 pre-tax
growth rate1 discount rate growth rate¹ discount rate
North America 2.2% 10.3% 2.0-2.1% 8.5-8.7%
International
Europe 1.9% 9.9% 1.7-2.5% 8.0-10.8%
UK & Sub-Saharan Africa 2.3% 10.9% 2.0% 9.3-11.1%
Asia & MENAT 2.7% 13.1% 2.0-4.0% 7.7-14.1%
LATAM 2.4% 12.9% 2.3-3.0% 11.2-17.11%
Pacific 2.4% 10.0% 2.0-2.5% 10.3-10.9%
1. Source: imf.org.
The growth rates used by CGU groups are based on the LTGR predicted for the
relevant sector and countries in which a business operates. They do not exceed
the long-term average growth rate for that industry or countries. The pre-tax
discount rates are internally calculated weighted average cost of capital for
each category and region weighted based on the profit contribution to the
region. The pre-tax discount rates are based on current prices, therefore
future cash flow projections include inflation-linked measures.
11. Net debt
Net debt is used to assess the Group's financial capacity. Net debt is not a
measure defined by IFRS. Management defines net debt as the total of bank and
other borrowings, lease liabilities, other investments, fair value of
debt-related derivatives, and cash and cash equivalents (as presented in the
Consolidated Balance Sheet).
Closing net debt comprises:
2025 2024
$m
$m
Current
Cash and cash equivalents in the Consolidated Balance Sheet 2,319 1,158
Other investments1 2 1
Fair value of debt-related derivatives 56 (3)
Bank and other short-term borrowings2 (1,411) (1,460)
Lease liabilities (171) (163)
Non-current
Fair value of debt-related derivatives 103 (29)
Bank and other long-term borrowings3 (4,156) (3,127)
Lease liabilities (392) (394)
Total net debt (3,650) (4,017)
1. Net debt excludes other investments which are non-cash, such as the
investment in unlisted shares.
2. Bank and other short-term borrowings consists of $586m bond debt (2024:
$nil), $730m overdraft (2024: $692m), $30m loans (2024: $720m), and $65m bond
accruals (2024: $48m).
3. Bank and other long-term borrowings consists of $4,155m bond debt (2024:
$3,122m) and $1m loans (2024: $5m).
The currency split and cash flows of bank, other borrowings, and debt-related
derivatives are as follows:
2025 2024
$m
$m
Pound sterling 1,265 1,153
Euro 1,243 1,093
US dollar 2,860 2,362
Other currencies 40 11
Carrying value 5,408 4,619
Effect of discounting 844 484
Undiscounted value 6,252 5,103
Analysis of undiscounted cash flows of bank and other borrowings:
Less than one year 1,461 1,565
Between one and five years 3,573 2,314
More than five years 1,218 1,224
Future minimum payments 6,252 5,103
Reconciliation of net change in cash and cash equivalents to net debt:
Opening Cash Non-cash Non-cash Closing
2025
flows
(fair value changes,
(foreign exchange,
2025
$m
$m
accruals and
additions
$m
acquisitions)
and other)
$m
$m
Bank and other short-term borrowings (1,460) 700 (65) (586) (1,411)
Bank and other long-term borrowings (3,127) (1,232) - 203 (4,156)
Lease liabilities (557) 223 (176) (53) (563)
Other investments 1 1 - - 2
Fair value of debt-related derivatives (32) 39 (58) 210 159
Gross debt (5,175) (269) (299) (226) (5,969)
Cash and cash equivalents in the Consolidated Balance Sheet 1,158 1,161 - - 2,319
Net debt (4,017) 892 (299) (226) (3,650)
Opening Cash Non-cash Non-cash Closing
2024
flows
(fair value changes,
(foreign exchange,
2024
$m
$m
accruals and
additions
$m
acquisitions)
and other)
$m $m
Bank and other short-term borrowings (1,444) 769 (126) (659) (1,460)
Bank and other long-term borrowings (4,016) - - 889 (3,127)
Lease liabilities (567) 216 (186) (20) (557)
Other investments 1 - - (0) 1
Fair value of debt-related derivatives 29 87 (9) (139) (32)
Gross debt (5,997) 1,072 (321) 71 (5,175)
Cash and cash equivalents in the Consolidated Balance Sheet 1,989 (814) - (17) 1,158
Net debt (4,008) 258 (321) 54 (4,017)
Included within the net decrease in cash and cash equivalents is $9m (2024:
$11m) cash paid on debt-related foreign exchange forward contracts (which is
included within financing activities in the Consolidated Cash Flow Statement).
The total cash inflow in borrowings of $532m (2024: $464m outflow) includes
$1,232m proceeds from new debt (included in financing activities) (2024:$nil)
and $700m debt repayment (included in financing activities) (2024: $464m).
The derivatives cash outflow of $39m (2024: $85m outflow) includes $9m (2024:
$49m outflow) of cash paid on debt-related foreign exchange swaps (included in
financing activities) and $30m (2024: $36m) interest paid (included in
operating activities).
The cash outflow of $223m from lease liabilities (2024: $216m) includes $192m
(2024: $185m) capital paid (included within financing activities) and $31m
(2024: $31m) interest paid (included in operating activities).
Fair value is equal to carrying value for all elements of net debt with the
exception of bond debt which has a carrying value of $4,748m (2024: $3,122m)
and a fair value of $4,814m (2024: $3,105m).
The Group operates notional pooling arrangements whereby cash balances and
overdrafts held within the same bank have a legal right of offset. Derivative
financial instruments held with the same bank and having a legal right to
offset are shown net. The following table shows the effect of offsetting in
the balance sheet due to financial instruments subject to enforceable netting
arrangements:
Gross amount Gross amounts Net amounts Amount subject Net amount
2025
set off in the
presented in the
to master netting
2025
$m
balance sheet
balance sheet
arrangement
$m
2025
2025
2025
$m
$m
$m
Financial assets
Cash and cash equivalents 2,319 - 2,319 (730) 1,589
Trade and other receivables1 1,119 - 1,119 - 1,119
Other financial assets 2 - 2 - 2
Derivative financial instruments 182 - 182 (21) 161
Total 3,622 - 3,622 (751) 2,871
Financial liabilities
Trade and other payables2 (1,037) - (1,037) - (1,037)
Borrowings (5,567) - (5,567) 730 (4,837)
Lease liabilities (563) - (563) - (563)
Derivative financial instruments (23) - (23) 21 (2)
Total (7,190) - (7,190) 751 (6,439)
Gross amount Gross amounts Net amounts Amount subject Net amount
2024
set off in the
presented in the
to master netting
2024
$m
balance sheet
balance sheet
arrangement
$m
2024
2024
2024
$m
$m
$m
Financial assets
Cash and cash equivalents 1,158 - 1,158 (691) 467
Trade and other receivables1 1,112 - 1,112 - 1,112
Other financial assets 1 - 1 - 1
Derivative financial instruments 8 - 8 (2) 6
Total 2,278 - 2,278 (693) 1,585
Financial liabilities
Trade and other payables2 (1,060) - (1,060) - (1,060)
Borrowings (4,587) - (4,587) 691 (3,896)
Lease liabilities (557) - (557) - (557)
Derivative financial instruments (40) - (40) 2 (38)
Total (6,244) - (6,244) 693 (5,551)
1. Trade and other receivables exclude prepayments of $84m (2024: $96m)
2. Trade and other payables exclude social security & other taxes of $109m
(2024: $114m) and contract liabilities of $292m (2024: $312m)
12. Analysis of bank and bond debt
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are classified as current liabilities unless the Group
has a continuing right to defer settlement of the liability for at least 12
months after the balance sheet date.
The Group's bank debt facilities comprise:
Facility Drawn at Headroom Interest rate Facility Drawn at Headroom Interest rate
amount
year end
2025
at year end
amount
year end
2024
at year end
2025
2025
$m
2025
2024
2024
$m
2024
$m
$m
%
$m
$m
%
Current
$700m term Loan due October 2025 (repaid April 2025) - - - - 700 700 - 5.18
$50m term loan due May 2025 (ended April 2025) - - - - 50 - 50 0.21
Non-current
$1.0bn RCF due October 2029 1,000 - 1,000 0.14 1,000 - 1,000 0.14
During April 2025, the Group fully repaid the $700m term loan with proceeds
from new bonds (totalling $1.25bn) issued and terminated the $50m term loan.
The Revolving Credit Facility (RCF) remained undrawn throughout 2024 and 2025.
There are no financial covenants associated with the RCF or any other debt
facility.
Medium-term notes and bond debt comprises:
Bond interest coupon Effective hedged interest rate Bond interest coupon Effective hedged interest rate
2025
2025
2024
2024
Current
€500m bond due May 2026 Fixed 0.875% Fixed 2.73% Fixed 0.875% Fixed 2.72%
Non-current
€850m bond due June 2027 Fixed 3.875% Fixed 4.81% Fixed 3.875% Fixed 5.05%
€600m bond due October 2028 Fixed 0.500% Fixed 2.17% Fixed 0.500% Fixed 2.17%
€600m bond due June 20301 Fixed 4.375% Fixed 4.55% Fixed 4.375% Fixed 4.67%
£400m bond due June 20321 Fixed 5.000% Fixed 5.35% Fixed 5.000% Fixed 5.30%
$750m bond due April 20302 Fixed 5.000% Fixed 5.20% - -
$500m bond due April 20352 Fixed 5.625% Fixed 5.73% - -
Average cost of bond debt at year-end rates 4.38% 4.16%
1. Bonds not in hedging relationship in 2024.
2. Bonds not in hedging relationship in 2025.
During April 2025, the Group issued two new bonds totalling $1.25bn,
consisting of $750m due 2030 and $500m due 2035. Part of the proceeds was used
to settle the $700m term loan.
On 2 March 2026, Rentokil Initial plc redeemed in full the €500m 0.8750%
Senior Unsecured Notes due 30 May 2026, at their principal amount together
with accrued interest. The redemption was carried out in accordance with the
terms and conditions of the notes.
The effective hedged interest rate reflects the interest rate payable after
the impact of interest due from cross-currency swaps. The Group's hedging
strategy is to hold foreign currency debt in proportion to foreign currency
profit and cash flows, which are mainly in Euro and US dollar. As a result,
the Group has swapped a portion of the bonds it has issued into US dollars,
thus increasing the effective hedged interest rate.
The Group considers the fair value of other current liabilities to be equal to
the carrying value.
13. Fair value estimation
All financial instruments held at fair value are classified by reference to
the source of inputs used to derive the fair value. The following hierarchy is
used:
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 2 Nominal value
facilities)
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 weighted average cost of capital
Fair value Fair value liabilities Fair value Fair value liabilities
assets
2025
assets
2024
2025
$m
2024
$m
$m
$m
Cross currency interest rate swaps and interest rate swaps (level 2):
- non-hedge - - - -
- net investment hedge 144 (10) 29 (23)
- cash flow hedge 29 (7) 1 (35)
- fair value hedge 4 (6) - -
Foreign exchange swaps (level 2):
- non-hedge 5 - - (4)
182 (23) 30 (62)
Analysed as follows:
Current portion 61 (5) - (4)
Non-current portion 121 (18) 30 (58)
Derivative financial instruments 182 (23) 30 (62)
Contingent consideration (including put option liability) (level 3) - (70) - (94)
Analysed as follows:
Current portion - (49) - (47)
Non-current portion - (21) - (47)
Other payables - (70) - (94)
Certain interest rate swaps have been bifurcated to manage different foreign
exchange risks. The interest rate swaps are shown on the balance sheet as net
derivative assets of $182m (2024: $8m) and net derivative liabilities of $22m
(2024: $40m).
Given the volume of acquisitions and the variety of inputs to the valuation of
contingent consideration (depending on each transaction), there are not
considered to be any changes in input that would have a material impact on the
contingent consideration liability.
Contingent consideration 2025 Contingent consideration 2024
$m
$m
At 1 January 94 97
Exchange differences 7 (3)
Acquisitions 13 39
Payments (17) (32)
Unused amount reversed (25) (9)
Revaluation of put option (2) 2
At 31 December 70 94
Fair value is equal to carrying value for all other trade and other payables.
The table below analyses the Group's undiscounted cash flows on borrowings and
derivative financial instruments that will be settled on a gross basis, into
relevant maturity groupings based on the remaining period to the contractual
maturity date at the balance sheet date.
Less than Between More than Total
1 year
1 and 5 years
5 years
$m
$m
$m
$m
At 31 December 2025
Non-derivative financial instruments
Borrowings (1,518) (3,676) (1,217) (6,411)
(1,518) (3,676) (1,217) (6,411)
Derivative financial instruments
Cross-currency interest rate swaps:
- outflow (802) (1,349) - (2,151)
- inflow 836 1,444 - 2,280
Interest rate swaps:
- outflow (3) (7) - (10)
- inflow - - 8 8
Foreign exchange swaps:
- outflow (284) - - (284)
- inflow 289 - - 289
Foreign exchange forwards:
- outflow (48) - - (48)
- inflow 48 - - 48
35 88 8 131
Net outflow (1,483) (3,588) (1,209) (6,280)
At 31 December 2024
Non-derivative financial instruments
Borrowings (1,534) (2,314) (1,224) (5,072)
(1,534) (2,314) (1,224) (5,072)
Derivative financial instruments
Cross-currency interest rate swaps:
- outflow (59) (2,122) - (2,181)
- inflow 31 2,032 - 2,063
Interest rate swaps:
- outflow - - - -
- inflow - - - -
Foreign exchange swaps:
- outflow (455) - - (455)
- inflow 451 - - 451
Foreign exchange forwards:
- outflow (13) - - (13)
- inflow 13 - - 13
(32) (90) - (122)
Net outflow (1,566) (2,404) (1,224) (5,194)
14. Provisions for liabilities and charges
The Group has provisions for termite damage claims, self-insurance,
environmental, and other. Provisions are recognised when the Group has
a present obligation as a result of past events, it is probable that an
outflow of resources will be required to settle the obligation, and the amount
is capable of being reliably estimated. If such an obligation is not capable
of being reliably estimated it is classified as a contingent liability.
Future cash flows relating to these obligations are discounted when the effect
is material. The effect of discounting environmental provisions and other
provisions is not considered to be material due to the low level of expected
future cash flows. Termite damage claim provisions and self-insurance
provisions are discounted, and the majority of these provisions are held in
the US. discount rate used is based on US government bond rates, and was
3.94%-5.16% (2024: 4.48%-5.25%).
Termite damage claims Self- Environmental Other Total
$m
insurance $m
$m $m
$m
At 1 January 2024 330 209 21 14 574
Exchange differences - - (1) (1) (2)
Additional provisions 25 126 1 10 162
Used during the year (86) (105) (3) (12) (206)
Unused amounts reversed (16) - (1) (2) (19)
Acquisition of companies and businesses - - - 2 2
Unwinding of discount on provisions 13 1 - - 14
At 31 December 2024 266 231 17 11 525
At 1 January 2025 266 231 17 11 525
Exchange differences - - - 2 2
Additional provisions 201 126 6 10 343
Used during the year (95) (89) (3) (12) (199)
Unused amounts reversed - (2) - (3) (5)
Acquisition of companies and businesses - - - 2 2
Disposal of companies and businesses - - (9) - (9)
Unwinding of discount on provisions 12 1 - - 13
At 31 December 2025 384 267 11 10 672
2025 2024
Total
Total
$m
$m
Analysed as follows:
Non-current 397 381
Current 275 144
Total 672 525
Termite damage claims
The Group holds provisions for termite damage claims covered by contractual
warranties. Termite damage claim provisions are subject to significant
assumptions and estimation uncertainty. The assumptions included in valuing
termite provisions are based on an estimate of the volume and value of future
claims (based on historical), customer churn rates, discount rates and
inflation. Additional amendments may be necessary based on specific underlying
facts of the particular legal claim as and when they develop. These provisions
are expected to be substantially utilised within the next 15 years at a
declining rate. The trend of volume and value of claims is monitored and
reviewed over time (with the support of external advisors). It is reasonably
possible, based on experience to date, that outcomes within the next financial
year that are different from the assumption could require an adjustment to the
carrying amount of the provision.
The Group's provision relates to legacy customer claims (contracts from the
period prior to the acquisition of Terminix), estimated at $358m (2024:
$246m); and new customer claims, estimated at $26m (2024: $20m). The
sensitivity of the legacy claims liability balance to changes in the inputs is
illustrated as follows:
• Discount rate - The exposure to termite damage claims is largely based within
the US, therefore measurement is based on a seven-year US bond risk-free rate.
During 2025, interest rates (and therefore discount rates) have decreased.
Rates could move in either direction and management has modelled that an
increase/decrease of 50 bps in yields would decrease/increase the provision by
$7m (2024: $6m). Over the 12 months to 31 December 2025, seven-year risk-free
rate yields have decreased 54 bps from 4.48% to 3.94% (2024: increased 60
bps).
• Claim value - Claim value forecasts have been based on the latest available
historical settled Termite claims. Claims values are dependent on a range of
inputs including, housing costs, materials costs (e.g. timber), whether a
claim becomes litigated or not, and specific circumstances including
contributory factors at the premises. Management has used an average of claim
costs for the last 12 months for non-litigated claims and 24 months for
litigated claims, adjusted where necessary to account for ageing of claims, to
determine an estimate for costs per claim. Fluctuations in input prices (e.g.
timber prices), as have been experienced over recent years, 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 litigated claim values would increase/decrease the provision by c.$5m
(2024: $4m) and an increase/decrease of 5% in non-litigated claim values would
increase/decrease the provision by c.$9m (2024: $8m). Over the 12 months to 31
December 2025, costs per litigated claim rose by c.48% (2024: rose 8%) and
non-litigated costs rose by 8% (2024: 45%). Actual value of claims settled in
the year to December 2025 has been at a combined cost per claim 14% higher
than that seen throughout 2024. This is not representative of management's
expectation of future costs as ageing of claims, which drives an increased
cost per claim, has reduced in recent months along with a flattening of global
inflation, and cost per claim is expected to continue to improve.
• Claim rate - Management has estimated claim rates based on historical incurred
claims. Data has been captured, 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 litigated claim rates would
increase/decrease the provision by c.$5m (2024: $4m) and an increase/decrease
of 5% in non-litigated claim rates would increase/decrease the provision by
c.$9m (2024: $8m) accordingly. Over the 12 months to 31 December 2025,
litigated claim rates rose by 75% (2024: fell 52%) and non-litigated claim
rates fell by 6% (2024: rose 7%).
• 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 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 the performance of the Group. A 1% increase or
decrease in customer churn rates, would decrease or increase the provision by
$13m (2024: $9m), accordingly. On average over the last 10 years churn rates
have moved by +/- c.2% per annum (2024: +/-2%).
• Inflation rate - The exposure to termite damage claims is largely based within
the United States and therefore measurement is based on expected long term
inflation trends. Settlement costs are driven by a number of factors as
discussed in the claim cost section. Management has seen a trend that these
costs have tracked above baseline US inflation rates and therefore a premium
is taken to expected future inflation rates of 1% per annum. Rates could move
in either direction and management has modelled that an increase/decrease of
50 bps would increase/decrease the provision by $6m (2024: $5m).
Self-insurance
The Group's self-insurance provisions provide coverage for exposures related
to the self-insured retention (SIR), or excesses/deductibles, mainly on
General (Public) Liability, Third-Party Automobile Liability and Workers'
Compensation policies. In order to help mitigate the cost of external
insurance, the Group self-insures a level of cover on its major insurance
policies. At 31 December 2025, the Group recognised provisions of $267m (2024:
$231m) in relation to these risks, and the Group retains the primary
obligation for these matters. External actuaries are used to help management
estimate the provisions held. Due to the nature of the claims, the timing of
utilisation of these provisions is uncertain.
Based on confirmed insurance coverage, and management's assessment that
reimbursement is virtually certain, a separate reimbursement asset of $43m
(2024: $30m) is recognised within Other Receivables. The reimbursement asset
is not offset against the related provision in accordance with IAS 37.53.
Environmental
The Group owns, or formerly owned, a number of properties in Europe and the US
where environmental contamination is being managed. These issues tend to
be complex to determine and resolve and may be material, although it is often
not possible to accurately predict future costs of management or remediation
reliably. Provisions are held where liability is probable and costs can be
reliably estimated. Contingent liabilities exist where the conditions for
recognising a provision under IAS 37 have not been met. The Group monitors
such properties to determine whether further provisions are necessary. The
provisions that have been recognised are expected to be substantially utilised
within the next five years.
Other
Other provisions principally comprise amounts required to cover obligations
arising and costs relating to disposed businesses and restructuring costs.
Other provisions also includes costs relating to onerous contracts and
property dilapidations settlements. Existing provisions are expected to be
substantially utilised within the next five years.
15. Share capital
The Company's share capital is made up of the shares that have been issued to
its members, whether on, or subsequent to, its incorporation. At the year
end, the Company's issued share capital consisted of ordinary shares of 1p
each, with one voting right per share, as detailed below.
The Company does not have a limited amount of authorised capital and does not
hold any shares in treasury.
During the year, 1,500,000 new shares were issued in relation to employee
share schemes.
2025 2024
$m
$m
Issued and fully paid
At 31 December 2025 - 2,526,039,885 shares (2024: 2,524,539,885) 41 41
16. Post balance sheet events
On 2 March 2026, Rentokil Initial plc redeemed in full the €500m 0.8750%
Senior Unsecured Notes due 30 May 2026, at their principal amount together
with accrued interest. The redemption was carried out in accordance with the
terms and conditions of the notes. There were no other significant events
between 31 December 2025 and the date of approval of these accounts that would
require amendments to or additional disclosures in the financial statements.
Use of Non-IFRS Measures
Reconciliation of non-IFRS measures to the nearest IFRS measure
The Group uses a number of non-IFRS measures to present the financial
performance of the business. These are not measures as defined under IFRS, but
management believes that these measures provide valuable additional
information for users of the Financial Statements, in order to better
understand the underlying trading performance in the year from activities that
will contribute to future performance. The Group's internal strategic planning
process is also based on these measures and they are used for management
incentive purposes. They should be viewed as complements to, and not
replacements for, the comparable IFRS measures. Other companies may use
similarly labelled measures which are calculated differently from the way the
Group calculates them, which limits their usefulness as comparative measures.
Accordingly, investors should not place undue reliance on these non-IFRS
measures.
The following sets out an explanation and the reconciliation to the nearest
IFRS measure for each non-IFRS measure. All non-IFRS measures exclude
discontinued operations unless explicitly stated otherwise.
Constant exchange rates (CER)
Given the international nature of the Group's operations, foreign exchange
movements can have a significant impact on the reported results of the Group
when they are translated into US dollar (the presentation currency of the
Group).
In order to help understand the underlying trading performance of the
business, revenue and profit measures are often presented at constant exchange
rates. CER is calculated by translating prior year reported numbers at the
average exchange rates for the current year. This represents a change from
prior periods in which CER was calculated by a translation of current year
reported numbers at the average exchange rates for the prior year. It is used
to give management and other users of the accounts clearer comparability of
underlying trading performance against the prior period by removing
the effects of changes in foreign exchange rates. The major exchange rates
used to calculate CER in 2025 are $/€0.8917 and $/£0.7613.
Comparisons are with the year ended 31 December 2024 unless otherwise stated.
Organic Revenue Growth
Acquisitions are a core part of the Group's growth strategy. The Organic
Revenue Growth measures (absolute and percentage) are used to help investors
and management understand the underlying performance, of the business, by
identifying Organic Revenue Growth excluding the impact of Acquired Revenue.
This approach isolates changes in performance of the Group that take place
under the Company's stewardship, and thereby reflects the potential benefits
and risks associated with owning and managing a professional services
business.
Organic Revenue Growth is calculated based on year-over-year revenue growth at
CER to eliminate the effects of movements in foreign exchange rates.
Acquired Revenue represents a 12-month estimate of the increase in Group
revenue from each business acquired. Acquired Revenue is calculated as: (a)
the revenue from the acquisition date to the year end in the year of
acquisition in line with IFRS 3; and (b) the pre-acquisition revenues from
1 January up to the acquisition date in the year of acquisition. The
pre-acquisition revenue is based on the previously reported revenues of the
acquired entity and is considered to be an estimate.
In the year a business is acquired, all of its revenue reported under (a)
above is classified as non-organic growth. In the subsequent first full
financial year after acquisition, Organic Revenue Growth is calculated for
each acquisition as the reported revenue less Acquired Revenue.
At a Group level, calculating Organic Revenue Growth therefore involves
isolating and excluding from the total year-over-year revenue change: (i) the
impacts from foreign exchange rate changes; (ii) the growth in revenues that
have resulted from completed acquisitions in the current period; and (iii) the
estimate of pre-acquisition revenues from each business acquired. The sum of
(ii) and (iii) is equal to the total Acquired Revenues for all acquisitions.
The calculated Organic Revenue is expressed as a percentage of prior year
revenue. Prior year revenue is not 'pro-forma' adjusted in the calculation, as
any such estimated adjustments would have an immaterial impact.
If an acquisition is considered to be a material transaction, such as the
Terminix acquisition in October 2022, the above calculation is amended in
order to give a 'pro-forma' view of any Organic Revenue Growth for the full
financial year in the year of acquisition, as if the acquisition had been part
of the Group from the beginning of the prior year. The pro-forma calculation
is completed using pre-acquisition revenues to normalise current and prior
periods as shown in the table below. These revenue normalisations are
considered estimates, and ensure that the potentially larger Organic Revenue
Growth is measured over a denominator that includes the material acquisition.
While management believes that the methodology used in the calculation of
Organic Revenue is representative of the performance of the Group,
the calculations may not be comparable with similarly labelled measures
presented by other publicly traded companies in similar or other industries.
North International Total
America
$m
$m
$m
2024 Revenue 4,164 2,453 6,617
2024 Exchange differences (3) 40 37
2024 Revenue (at 2025 CER) 4,161 2,493 6,654
2024 Revenue from closed businesses1 (18) (18)
Normalised 2024 Revenue (at 2025 CER) - base for Organic Revenue Growth 4,143 2,493 6,636
percentage
Revenue from 2025 acquisitions (at 2025 CER)² 15 15 30
Revenue from 2024 acquisitions (at 2025 CER)³ 41 31 72
Organic Revenue Growth 2025 (at 2025 CER) 95 75 170
2025 Revenue (at AER) 4,294 2,614 6,908
Organic Revenue Growth % 2.3% 3.0% 2.6%
1. The adjustment removes revenue from 1 January 2024 to 31 March 2024 from
the Paragon distribution business, closed with effect from 1 April 2024.
2. Revenue from completed acquisitions in the current period.
3. Estimate of revenue from each business acquired by the Group in the
previous financial year through to the 12-month anniversary of the Group's
ownership.
4. Organic Revenue Growth includes Organic Revenue Growth for all entities in
the Group's continuing operations as at 31 December 2024.
North International Total
America
$m
$m
$m
2023 Revenue 4,112 2,273 6,385
2023 Exchange differences (3) 31 28
2023 Revenue (at 2025 CER) 4,109 2,304 6,413
2023 Revenue from closed businesses1 (56) (56)
Normalised 2023 Revenue (at 2025 CER) - base for Organic Revenue Growth 4,053 2,304 6,357
percentage
Revenue from 2024 acquisitions (at 2025 CER)² 28 59 87
Revenue from 2023 acquisitions (at 2025 CER)³ 18 30 48
Organic Revenue Growth 2024 (at 2025 CER) 62 100 162
Exchange differences 3 (40) (37)
2024 Revenue (at AER) 4,164 2,453 6,617
Organic Revenue Growth % 1.5% 4.4% 2.6%
1. The adjustment removes revenue from 1 April 2023 to 31 December 2023 from
the Paragon distribution business, closed with effect from 1 April 2024.
2. Revenue from completed acquisitions in the current period.
3. Estimate of revenue from each business acquired by the Group in the
previous financial year through to the 12-month anniversary of the Group's
ownership.
4. Organic Revenue Growth includes Organic Revenue Growth for all entities in
the Group as at 31 December 2023.
Adjusted expenses and profit measures
Adjusted expenses and profit measures are used to give investors and
management a further understanding of the underlying profitability of the
business over time by stripping out income and expenses that can distort
results due to their size and nature. Adjusted profit measures are calculated
by adding the following items back to the equivalent IFRS profit measure:
• amortisation and impairment of intangible assets (excluding computer
software);
• one-off and adjusting items; and
• net interest adjustments.
Intangible assets (such as customer lists and brands) are recognised on
acquisition of businesses which, by their nature, can vary by size and amount
each year. Capitalisation of innovation-related development costs will also
vary from year to year. As a result, amortisation of intangibles is added back
to assist with understanding the underlying trading performance of the
business and to allow comparability across regions and categories.
One-off and adjusting items are significant expenses or income that will have
a distortive impact on the underlying profitability of the Group. Typical
examples are costs related to the acquisition of businesses, gain or loss on
disposal or closure of a business, material gains or losses on disposal of
fixed assets, adjustments to legacy environmental and legacy termite
liabilities, and payments or receipts as a result of legal disputes. An
analysis of one-off and adjusting items is set out below.
Net interest adjustments are other non-cash, or one-off and adjusting
accounting gains and losses, that can cause material fluctuations and distort
understanding of the performance of the business, such as amortisation of
discount on legacy provisions and gains and losses on hedge accounting.
Adjusted expenses are one-off and adjusting items, and Adjusted Interest.
Adjusted profit measures used are Adjusted Operating Profit, Adjusted Profit
Before and After Tax, and Adjusted EBITDA. Adjusted Earnings Per Share is also
reported, derived from Adjusted Profit After Tax.
One-off and adjusting items
An analysis of one-off and adjusting items is set out below.
One-off and adjusting items One-off and adjusting items One-off and adjusting items
cost/(income)
tax impact
cash (outflow)/inflow
$m
$m
$m
2023
Acquisition and integration costs 15 (2) (16)
Fees relating to Terminix acquisition 1 - (31)
Terminix integration costs 99 (26) (92)
Other 4 (1) 6
Total 119 (29) (133)
2024
Acquisition and integration costs 11 (4) (19)
Terminix integration costs 75 (19) (77)
Other 24 (6) (3)
Total 110 (29) (99)
2025
Acquisition and integration costs (5) 1 (18)
Termite provision movement 195 (50) -
North America transformation costs 77 (20) (76)
Other 20 (3) (6)
Total 287 (72) (100)
Adjusted Interest
Adjusted Interest is calculated by adjusting the reported finance income and
costs by net interest adjustments (amortisation of discount on legacy
provisions and foreign exchange and hedge accounting ineffectiveness).
2025 2024 2023
$m
$m
$m
Finance cost 250 250 232
Finance income (46) (59) (60)
Add back:
Amortisation of discount on legacy provisions (12) (13) (14)
Foreign exchange and hedge accounting ineffectiveness 12 (3) 15
Adjusted Interest 204 175 173
Adjusted Operating Profit
Adjusted Operating Profit is calculated by adding back one-off and adjusting
items, and amortisation and impairment of intangible assets to operating
profit.
2025 2024 2023
$m
$m
$m
Operating profit 584 644 727
Add back:
One-off and adjusting items 287 110 119
Amortisation and impairment of intangible assets1 199 254 218
Adjusted Operating Profit 1,070 1,008 1,064
1. Excluding computer software.
Adjusted Profit Before and After Tax
Adjusted Profit Before Tax is calculated by adding back net interest
adjustments, one-off and adjusting items, and amortisation and impairment of
intangible assets to profit before tax. Adjusted Profit After Tax is
calculated by adding back net interest adjustments, one-off and adjusting
items, amortisation and impairment of intangible assets, and the tax effect on
these adjustments to profit after tax.
2025
IFRS Net interest One-off Amortisation Non-IFRS
measures
adjustments
and
and
measures
$m
$m
adjusting
impairment of
$m
items
intangibles
$m $m
Profit before income tax 390 - 287 199 876 Adjusted Profit Before Tax
Income tax expense (100) 1 (72) (51) (222) Tax on Adjusted Profit
Profit for the period 290 1 215 148 654 Adjusted Profit After Tax
2024
IFRS Net interest One-off Amortisation Non-IFRS
measures
adjustments
and
and
measures
$m
$m
adjusting
impairment of
$m
items
intangibles
$m $m
Profit before income tax 462 16 110 254 842 Adjusted Profit Before Tax
Income tax expense (116) (4) (29) (55) (204) Tax on Adjusted Profit
Profit for the period 346 12 81 199 638 Adjusted Profit After Tax
2023
IFRS Net interest One-off Amortisation Non-IFRS
measures
adjustments
and
and
measures
$m
$m
adjusting
impairment of
$m
items
intangibles
$m $m
Profit before income tax 566 (1) 119 218 902 Adjusted Profit Before Tax
Income tax expense (129) (2) (29) (55) (215) Tax on Adjusted Profit
Profit for the period 437 (3) 90 163 687 Adjusted Profit After Tax
1. Excluding computer software.
EBITDA and Adjusted EBITDA
EBITDA is calculated by adding back finance income, finance cost, share of
profit from associates net of tax, income tax expense, depreciation,
amortisation and impairment of intangible assets, and other non-cash expenses
to profit for the year. Adjusted EBITDA is calculated by adding back one-off
and adjusting items to EBITDA.
2025 2024 2023
$m
$m
$m
Profit for the period 290 346 437
Add back:
Finance income (46) (59) (60)
Finance cost 250 250 232
Share of profit from associates net of tax (10) (9) (11)
Income tax expense 100 116 129
Depreciation 329 312 300
Other non-cash expenses 31 45 37
Amortisation and impairment of intangible assets1 199 254 218
EBITDA 1,143 1,255 1,282
One-off and adjusting items 287 110 119
Adjusted EBITDA 1,430 1,365 1,401
EBITDA attributable to discontinued operations 109 139 122
EBITDA for the Group 1,252 1,394 1,404
Adjusted EBITDA attributable to discontinued operations 109 139 122
Adjusted EBITDA for the Group including discontinued operations 1,539 1,504 1,523
1. Excluding computer software.
Adjusted Earnings Per Share
Basic earnings per share is calculated by dividing the profit attributable to
equity holders of the Company by the weighted average number of shares in
issue during the year, and is explained in Note 6. Adjusted Earnings Per Share
is calculated by dividing adjusted profit from continuing operations
attributable to equity holders of the Company by the weighted average number
of ordinary shares in issue and is shown below.
For Adjusted Diluted Earnings Per Share, the weighted average number of
ordinary shares in issue is adjusted to include all potential dilutive
ordinary shares. The Group's potentially dilutive ordinary shares are
explained in Note 6.
2025 2024 2023
$m
$m
$m
Profit attributable to equity holders of the Company 290 346 437
Add back:
Net interest adjustments - 16 (1)
One-off and adjusting items 287 110 119
Amortisation and impairment of intangibles1 199 254 218
Tax on above items2 (122) (88) (86)
Adjusted profit attributable to equity holders of the Company 654 638 687
Weighted average number of ordinary shares in issue (million) 2,524 2,521 2,516
Adjustment for potentially dilutive shares (million) 11 7 11
Weighted average number of ordinary shares for diluted earnings per share 2,535 2,528 2,527
(million)
Basic Adjusted Earnings Per Share (cents) 25.91 25.31 27.31
Diluted Adjusted Earnings Per Share (cents) 25.80 25.24 27.19
1. Excluding computer software.
2. The tax effect on add-backs is as follows: one-off and adjusting items $72m
(2024: $29m; 2023: $29m); amortisation and impairment of intangibles $51m
(2024: $55m; 2023: $55m); and, net interest adjustments $(1)m (2024: $4m;
2023: $2m).
Adjusted cash measures
The Group aims to generate sustainable cash flow in order to support its
acquisition programme and to fund dividend payments to shareholders.
Management considers that this is useful information for investors. Adjusted
cash measures in use are Free Cash Flow, Adjusted Free Cash Flow,
and Adjusted Free Cash Flow Conversion.
Free Cash Flow
Free Cash Flow is measured as net cash flows from operating activities,
adjusted for cash flows related to the purchase and sale of property, plant,
equipment and intangible assets, cash flows related to leased assets, cash
flows related to one-off and adjusting items, and dividends received from
associates. These items are considered by management to be non-discretionary,
as continued investment in these assets is required to support the day-to-day
operations of the business. Free Cash Flow is used by management for incentive
purposes and is a measure shared with and used by investors.
A reconciliation of net cash flows from operating activities in the
Consolidated Cash Flow Statement to Free Cash Flow is provided in the
table below.
2025 2024 2023
$m
$m
$m
Net cash flows from operating activities 872 743 802
Purchase of property, plant, equipment (136) (134) (122)
Purchase of intangible assets (60) (56) (55)
Capital element of lease payments and initial direct costs incurred (186) (177) (181)
Proceeds from sale of property, plant, equipment and software 20 5 17
Cash impact of one-off and adjusting items 100 99 132
Dividends received from associates 5 14 5
Free Cash Flow 615 494 598
Free Cash flow attributable to discontinued operations 21 32 22
Free Cash Flow for the Group including discontinued operations 636 526 620
Adjusted Free Cash Flow and Adjusted Free Cash Flow Conversion
Adjusted Free Cash Flow Conversion is provided to demonstrate to investors the
proportion of Adjusted Profit After Tax that is converted to cash.
It is calculated by dividing Adjusted Free Cash Flow by Adjusted Profit
After Tax, expressed as a percentage. Adjusted Free Cash Flow is measured as
Free Cash Flow adjusted for product development additions and net investment
hedge cash interest through other comprehensive income. Product development
additions are adjusted due to their variable size and non-underlying nature.
Net investment hedge cash interest through other comprehensive income is
adjusted because the cash relates to an item that is not recognised in
Adjusted Profit After Tax.
2025 2024 2023
$m
$m
$m
Free Cash Flow 615 494 598
Product development additions 13 11 13
Net investment hedge cash interest through Other Comprehensive Income 10 13 15
Adjusted Free Cash Flow (a) 638 518 626
Adjusted Profit After Tax (b) 654 638 687
Free Cash Flow conversion (a/b) 97.6% 81.2% 91.1%
Free Cash Flow conversion attributable to discontinued operations 69.4% 82.1% 62.6%
Free Cash Flow conversion for the Group including discontinued operations 96.3% 81.2% 89.7%
The nearest IFRS-based equivalent measure to Adjusted Free Cash Flow
Conversion would be Cash Conversion, which is shown in the table below to
provide a comparison in the calculation. Cash Conversion is calculated as net
cash flows from operating activities divided by profit attributable to equity
holders of the Company, expressed as a percentage. Management considers that
this is useful information for investors as it gives an indication of the
quality of profits, and ability of the Group to turn profits into cash flows.
2025 2024 2023
$m
$m
$m
Net cash flows from operating activities (a) 872 743 802
Profit attributable to equity holders of the Company (b) 290 346 437
Cash Conversion (a/b) 300.7% 214.7% 183.5%
Cash Conversion attributable to discontinued operations 55.6% 271.7% 308.1%
Cash Conversion for the Group including discontinued operations 206.8% 221.4% 193.2%
Adjusted Effective Tax Rate (Adjusted ETR)
Adjusted Effective Tax Rate is used to show investors and management the rate
of tax applied to the Group's Adjusted Profit Before Tax. The measure
is calculated by dividing Adjusted Income Tax Expense by Adjusted Profit
Before Tax, expressed as a percentage.
2025 2024 2023
$m
$m
$m
Income tax charge 100 116 129
Tax adjustments on:
Amortisation and impairment of intangible assets1 51 55 55
Net interest adjustments (1) 4 2
One-off and adjusting items 72 29 29
Adjusted Income Tax Charge (a) 222 204 215
Adjusted Profit Before Tax (b) 876 842 902
Adjusted Effective Tax Rate (a/b) 25.3% 24.2% 23.8%
1. Excluding computer software.
The Group's effective tax rate (ETR) for 2025 on reported profit before tax
was 25.6% (2024: 25.1%; 2023: 22.8%). The Group's Adjusted ETR before
amortisation of intangible assets (excluding computer software), one-off and
adjusting items, and the net interest adjustments for 2025 was 25.3% (2024:
24.2%; 2023: 23.8%). This compares with a blended rate of tax for the
countries in which the Group operates of 25.3% (2024: 25.3%; 2023: 25.1%).
The Group's tax charge and Adjusted ETR will be influenced by the global mix
and level of profits, changes in future tax rates and other tax legislation,
foreign exchange rates, the utilisation of brought-forward tax losses on which
no deferred tax asset has been recognised, the resolution of open issues with
various tax authorities, acquisitions and disposals.
17. Legal statements
The financial information for the year ended 31 December 2025 contained in
this preliminary announcement has been approved by the Board and authorised
for release on 5 March 2026.
The financial information in this statement does not constitute the Company's
statutory accounts for the years ended 31 December 2025 or 2024. The financial
information for 2024 and 2025 is derived from the statutory accounts for 2024
(which have been delivered to the registrar of companies) and 2025 (which will
be delivered to the registrar of companies following the AGM in May 2026). The
auditors have reported on the 2024 and 2025 accounts; their report was (i)
unqualified, (ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
The statutory accounts for 2025 are prepared in accordance with UK-adopted
International Accounting Standards and International Financial Reporting
Standards (IFRSs) as issued by the International Accounting Standards Board
(IASB). The accounting policies (that comply with IFRS) used by Rentokil
Initial plc ("the Group") are consistent with those set out in the 2024 Annual
Report. A full list of accounting policies will be presented in the 2025
Annual Report. For details of new accounting policies applicable to the Group
in 2025 and their impact please refer to Note 1.
18. 2025 Annual Report
Copies of the 2025 Annual Report will be sent to shareholders who have elected
to receive hard copies on or around 25 March 2026 and will also be available
from the Company's registered office by contacting the Company Secretariat
(secretariat@rentokil-initial.com) and at www.rentokil-initial.com in PDF
format.
19. Financial calendar
The Company's Annual General Meeting will be held at, and be broadcast from,
the Company's offices at Compass House, Manor Royal, Crawley, West Sussex,
RH10 9PY at 2.00pm on 7 May 2026 (UK time). Shareholders should refer to the
Notice of Meeting and the Company's website at www.rentokil-initial.com/agm
for further information on the AGM.
20. Responsibility statements
The Directors consider that the Annual Report, which includes the Financial
Statements, complies with the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority in respect of the requirement
to produce an annual financial report.
Each of the Directors, whose names and functions are set out in the 2025
Annual Report, confirms that, to the best of their knowledge:
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.
By Order of the Board
Andy Ransom
Chief Executive
5 March 2026
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; inflationary pressures, such as increases in wages, fuel
prices and other operating costs; 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; 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 due to a material incident,
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, cost increases 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, fraudulent activity or litigation; 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. Non-IFRS measures presented also include Organic
Revenue Growth, One-off and adjusting items, Adjusted Interest, Adjusted
Operating Profit, Adjusted Profit Before and After Tax, Adjusted EBITDA,
Adjusted Earnings Per Share, Free Cash Flow, Adjusted Free Cash Flow, Adjusted
Free Cash Flow Conversion and Adjusted Effective Tax Rate. Definitions for
these measures can be found under the Use of Non-IFRS measures section of the
financial statements. 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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
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.
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