28 September 2021
RENTOKIL INITIAL PLC (RTO)
Notice of Capital Markets Day – 'Hygiene: The New Pest Control',
revised growth targets and changes to Category and Regional structure
Rentokil Initial plc will be holding a Capital Markets Day for investors and analysts at 12.00pm today at The Great Hall, Chartered Accountants' Hall, One Moorgate Place, London EC2R 6EA.
The event will include a series of presentations by senior executive and operational management to provide greater insight into the Group's Hygiene business. These sessions will include presentations on our core washroom business, growth opportunities outside of the washroom (including Air Care, Dental Hygiene, Medical, Specialist Hygiene, Wellbeing, Plants and Scenting) expansion of our geographic footprint, M&A and our financial model to compound growth. The event will start with a number of sessions on our Pest Control business, focusing on digital technology, PestConnect, innovation and M&A. Attendees will also be able to view displays on innovation, digital capability and ESG during the event.
The Company will not give an update on current trading today, but will be announcing revised medium-term growth targets as well as changes to its Category and Regional structure from 1 January 2022. No changes are being made to the Company's capital allocation model or dividend policy.
Medium-term growth targets
The Company will announce the following changes to its medium-term targets:
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Previous Targets |
New Targets |
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Organic Revenue growth:
Group: 3% – 4% Pest Control : 4% – 6% Hygiene: 2% – 3% Workwear : N/A
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Organic Revenue growth:
Group: 4% – 5% (ex. Disinfection) Pest Control: 4.5% – 6.5% Hygiene & Wellbeing: 4% – 6% (ex. Disinfection) Workwear: 3% – 4%
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Ongoing Revenue growth: 5% to 8%
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Ongoing Revenue growth: 6% to 9% (of which M&A 2% to 5%) |
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Ongoing Operating Profit growth: c.10% |
Ongoing Operating Profit growth: 10%+ |
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Free Cash Flow: c.90% cash conversion |
Free Cash Flow: c.90% cash conversion |
Category structure
In response to the COVID-19 pandemic and the increasing importance of hygiene and wellbeing services, we are expanding our Hygiene category with effect from 1 January 2022. The enlarged category, called Hygiene & Wellbeing, will comprise our current Hygiene operations together with our Ambius, Dental Hygiene and Cleanroom services operations, previously part of our Protect & Enhance category. In addition, the Group's UK Property Care business (also formerly in Protect & Enhance) will join the Pest Control category. France Workwear will become the Group's third business category.
Regional structure
The number of regions within the Group will remain unchanged. The Rest of World businesses, which were previously included within the UK & Rest of World region, will be transferred to other regions to better reflect their geographic locations. This includes: Poland and the Nordics, which will be transferred to Europe; our Caribbean operations, which will move to Latin America; and our businesses in MENAT, which will move to the Asia region and which will be renamed Asia & MENAT. Our Sub-Saharan Africa operations will continue to be reported within the UK. There will be no major changes to our North America region, with the exception of Puerto Rico transferring to Latin America. The Pacific region will remain unchanged, comprising Australia, New Zealand and Fiji. Consequently, the five regions will be named North America, Europe, UK & Sub-Saharan Africa, Asia & MENAT and Pacific. This new reporting structure will take effect from 1 January 2022.
Rentokil Initial will publish its Q3 Trading Statement at 7.00am on 21 October 2021.
Today's presentations will be web cast live and will be available on a replay facility for the foreseeable future at www.rentokil-initial.com . If you would like to follow our live webcast, online registration is required and will be available from 7.00am this morning on https://rentokilinitial.connectid.cloud with log in for the event from 11:30am. For access links and information please visit rentokil-initial.com .
Rentokil Initial is one of the largest business services companies in the world, operating in 87 countries. The Company offers route-based services including Pest Control, Hygiene and Wellbeing, and Workwear through over 45,000 employees around the world. For more information, visit www.rentokil-initial.com .