Q3 2024 Rentokil Initial PLC Earnings Call (Morning Session) Transcript
Key Points
- Rentokil Initial PLC (RKLIF) reported a total revenue growth of 3.6% in the third quarter, with organic revenue growth at 2.6%.
- International regions showed strong performance, with Europe delivering 4.7% organic growth and Asia and MENAC regions achieving 6.5% organic growth.
- The company has implemented a focused action plan to address underperformance in North America, including cost-saving measures and headcount reductions.
- Progress has been made in digital inbound lead flow, particularly supporting the Terminix brand, with plans to improve leads for other master brands.
- Integration efforts are on track, with systems and data integration completed in 36 branches, and minimal disruption to operations reported.
- North America reported only 1.4% organic revenue growth, falling short of expectations.
- Elevated workforce costs and higher-than-expected material and consumable costs due to inflation have impacted the North American business.
- The company has had to remove around 250 roles to achieve cost savings, indicating operational challenges.
- Customer retention in North America remains a concern, with only slight improvements noted.
- The integration process has led to some short-term disruptions, and 2025 synergies are expected to be delayed by 2 to 3 months.
Good morning ladies and gentlemen. Welcome to our conference call for Rentokil Initial trading update for the three months to the September 30. This call is scheduled for 45 minutes and now let me hand it over to CEO, Andy Ransom. Please go ahead, Andy.
Thank you, and good morning, everyone. I'm here with Stuart. In a few minutes, we'll be pleased to take any questions. But first, let me just say a few words covering the third quarter and importantly the actions that we've been taking following the September trading update.
In the third quarter, the group delivered total revenue growth of 3.6% of which organic revenue growth was 2.6%. There was good momentum sustained in the group's international regions which in aggregate delivered organic growth of 4.4% in the third quarter with Europe delivering organic growth of 4.7% and the Asia and Menac region delivering organic growth of 6.5%. Year-to-date, our international businesses outside of North America have delivered a
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