Q3 2024 Rentokil Initial PLC Earnings Call (Afternoon Session) Transcript
Key Points
- Rentokil Initial PLC (RKLIF) reported a total revenue growth of 3.6% in the third quarter, with organic revenue growth of 2.6%.
- The company's international regions showed strong performance, with Europe achieving 4.7% organic growth and Asia and MENAT regions delivering 6.5% organic growth.
- Cost-saving measures in North America are expected to result in an annualized saving of around $22 million.
- The company is implementing new strategies to increase organic growth, including the Right Way 2 growth plan and piloting new satellite branches.
- Customer retention in North America improved slightly to 79.9%, and colleague retention also showed improvement.
- North America's organic revenue growth was only 1.4%, which was below expectations.
- The company faced higher-than-expected material and consumable costs in North America, partly due to inflation.
- There was a weaker termite season in North America, leading to elevated inventory levels.
- The integration process has led to a delay in synergy realization, pushing out 2025 synergies by approximately two to three months.
- The company is facing challenges in optimizing its branch network, which may impact future growth strategies.
Good morning, ladies and gentlemen. Welcome to our conference call for Rentokil's Initial's trading update for the first 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 very much. Good morning, good afternoon, everyone. I'm here with Stuarts and 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're taking following September's 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 MENAT region delivering organic growth of 6.5%. Year to date, our international businesses
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