pest control down to a science - rollins, inc. › ~ › media › files › r › rollins ›...

30
PEST CONTROL DOWN TO A SCIENCE

Upload: others

Post on 06-Jul-2020

4 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

PEST CONTROL DOWN TO A SCIENCE

Page 2: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

Eddie Northen

Vice President, Chief Financial Officer and

Treasurer

22016

Page 3: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

Certain information provided during today's presentation will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding our expectations, beliefs, intentions, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements which are other than statements of historical facts. These statements may be identified, without limitation, by the use of forward-looking terminology such as "may", "will", "anticipates", "expects", "believes", "intends", "should" or comparable terms or the negative thereof. All forward-looking statements included in this press release are based on information available to us on the date hereof. Such statements speak only as of the date hereof and we assume no obligation to update such forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. These statements involve risks and uncertainties that could cause actual results to differ materially from those described today. Such risk factors are described in SEC reports including the Company's Form 10-K for the period ending December 31, 2015.

3

Page 4: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

Leading pest and termite

control company

Powerful “Orkin” brand

name – world renown

Over 2.0 million

residential & commercial

customers

18 consecutive years of

improved earnings

Dividend increased a

minimum of 12% for 14

consecutive years

Over 700 locations in the

U.S, and Canada with

203 franchises

worldwide

4

Page 5: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

Strong management,

excellent depth Significant insider

ownership

Recession resistent –80% of

revenues are recurring

Competitive advantage --

Brand and infrastructure create barriers

Focus on sustained

profitable growth Strong balance

sheet

Solid track record of Shareholder Value

creation

5

Page 7: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

Internet lead development

Meeting our customers’ needs from sales to service

Increased yield and retention across all brands

Pricing power

Incremental marketing investments in strategic markets

Enhanced targeting to attract higher-income customers

HomeTeam’s unique Taexx® “tubes-in-the- wall” –high penetration into new home starts; in partnership with 20 largest homebuilders

7

Page 9: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

9

• United Arab

Em irates

• Saudi Arabia

• Bahrain

• Lebanon

• Kuwait

• Iraq

• 50• Domestic

Franchises -

Right to Repurchase

• Mexico

• Panam a

• Costa Rica

• Honduras

• T he Dominican

Republic

• Guatemala

• El Salvador

• South Korea

• China

• People’s

Republic of

China• Ireland

• Cy prus

• Chile

• Uruguay

• Sao Paulo, Brazil

• Belo Horizonte, Brazil

• Quito, Ecuador

• Paraguay

• Columbia

• Jam aica

• T urks and

Caicos Islands

• T rinidad and

T obago

• US Virgin

Islands

• Guam

• Nigeria

• Egy pt

• T urkey

• T bilisi, Georgia

203Franchises

Globally

54

Domestic

50

International

153

Domestic

• India

Critter Control • 103 Domestic

Franchises

• 2 Canada Franchises

Page 10: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

Commercial41%

Residential41%

Termite 17%

Other <1%

Revenue and Retention % by Business Line

Commercial

Residential

Termite

Other

10

Retention between 88%-90%

Retention between 76%-85%

Retention approximately 85%

Page 11: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

Approximately 5% of revenues spent annually on growing and preserving the brand

National ad campaign – “Pest Control Down to a Science”

Brand value grows with importance of Internet marketing

“Orkin” man icon – 70% brand awareness

1 1

Page 12: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

COMMERCIAL

Orkin, LLC

Orkin Canada

Western Pest Services

IFC

PermaTreat

Waltham Services

Crane Pest Control

Rollins Australia

No. 1 commercial pest control provider in North

America – 20% market share

Increasing demand driven by health and safety

concerns

Worldwide service network with 103 dedicated

commercial branches

Highly recession resistant; customer’s reputation and

risk too great

High growth opportunity. CAGR 6.4% last 10 years

Highest customer retention of all service offerings and

higher average prices

Focused on five priority industries: food and beverage

processing, healthcare, food service, food retail and

hospitality

Largest 20 national accounts make up less than 3% of

business

1 2

Page 13: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

Rising concern over health, safety and protection

of property

Better informed consumers, targeting specific

segments

Internet providing accelerated growth

Recession resistant – non-discretionary purchase

Primary service offerings – varied across brands to

meet customer needs and improve profitability

HomeTeam’s unique service offering provides

recurring revenues and long-term profitability

13

RESIDENTIAL

Orkin

HomeTeam Pest Defense

Orkin Canada

PermaTreat

Waltham Service

Rollins Australia

Page 14: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

TERMITE

Orkin

HomeTeam Pest Defense

PermaTreat

Western Pest Services

Rollins Australia

Termite damage -- $5.6 billion annually, a real

threat to homeowners.

Shares many of the same characteristics of our

other businesses – strong recurring revenue and

high retention

Invigorated sales force, utilizing digital technology

HomeTeam providing pre-treat service to nation’s

leading homebuilders

1 4

Page 15: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

Wildlife – Accelerating our Growth Opportunity

North American Wildlife Category Opportunity of $500M+

Critter Control and Trutech are #1 and #2 entities in the category

Operations in over 150 of the top Markets with either or both brands

Built-in acquisition network with Critter Control

Immediate synergy created by integrating marketing and training

1 5

Page 16: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

$0.0

$20.0

$40.0

$60.0

$80.0

2010 2011 2012 2013 2014 2015

$6.2 $10.0$16.0 $20.8 $24.6 $30.0$18.5

$23.5$28.5

$33.3$39.3

$42.3

Bed Bug Revenue History(in millions)

Residential Commercial

$72.3

16

$33.5

$44.5$54.1

$63.9

Bed bug industry grew 25% to $320 million in 2010*

Rollins data shows company growing faster than industry

Recurring revenue growth through inspection and remedial services.

New opportunity to introduce residential and commercial pest control services to new bed bug customers

*Specialty Products Consultants

Page 17: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

Advance service and product line offerings

Expand customer base

Increase customer retention and satisfaction

Improve productivity and reduce operating costs

Achieve continuous financial improvement

Initiatives to meet these objectives

Rollout of branch operating/CRM systems (BOSS)

Listen 360

Big data analytics

Introducing new tools and advancing technology

Focus on acquisitions

17

Page 18: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

Commitment

to Training

27,000 sq. ft. Training Center unique to pest control industry

13,000 sq. ft. commercial training facility

Residential facility incorporates a 2,400 sq. ft. fully constructed home and termite treating pavilion

Named to Training Magazine Top 125 Training Companies for last 14 years

Web-based employee training network utilized by employees and franchises worldwide

Attracts customers, regulators educators, university researchers

Cafeteria

Commercial Kitchen

Hospital Room

1 8

2,400 sq. ft. home

Broadcast Studio

Page 19: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

PEST CONTROL DOWN TO A SCIENCE

Page 20: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

$1,000

$1,100

$1,200

$1,300

$1,400

$1,500

2010 2011 2012 2013 2014 2015

$1,137

$1,205

$1,271

$1,337

$1,412

$1,485

($in millions)

20

Page 21: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

$200

$220

$240

$260

$280

$300

$320

$340

$360

$380

$400

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

($in millions)

2010 2011 2012 2013 2014 2015 2016

21

Page 22: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

2008 2009 2010 2011 2012 2013 2014 2015

$0.30

$0.37 $0.41

$0.46 $0.51

$0.56

$0.63

$0.70

22

All diluted earnings per share data is presented post-split for the three-for-two stock split effective March 10, 2015 for shareholders of

record February 10, 2015.

Page 23: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

23

$0

$25

$50

$75

$100

$125

$150

$175

$200

$225

$250

2010 2011 2012 2013 2014 2015

Capital Expenditures Dividend Payout Free Cash Flow

Ca

sh

Fro

m O

pe

ra

tio

ns

Page 24: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

BeginningCash

Cash FromOperations

Debt Issued Other Net Acq. Net Capex Debt Repaid DividendsPaid

Net Rep. ofStock

Ending Cash

$71

$1,176

$90$7

$343

$168

$90

$427

$181

$135

24

Source: Company Filings

Cash Flow for FY 2008 – FY 2015 (in millions)

Page 25: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

Year

• 2009

• 2010• 2011• 2012

• 2013• 2014

• 2015• 2016

• Total

#of Shares

• 3,773,700• 2,833,712• 2,187,423• 1,172,672• 511,049• 1,507,919• 19,137• 54,208

• 12,059,820

Cash Paid

• 27,820,860

• 26,410,570• 27,313,664• 16,399,431

• 8,384,761• 29,394,633

• 429,899• 1,344,883

• $137,498,701

(In million)

5.9 Million Shares Remaining to be Repurchased at 03/31/2016

25

Page 26: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

$0.40

$0.45

$0.50

2008 2009 2010 2011 2012 2013 2014 2015

Dividends Paid excluding special dividends Dividends Paid with special dividends

26

All dividend data is presented post-split for the three-for-two stock split effective March 10, 2015 for shareholders of record February 10, 2015.

Page 27: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

2010 2011 2012 2013 2014 2015

$16.0$15.1

$15.2

$14.4

$16.6 $19.4

$20.4 $22.4 $23.4 $25.2$26.9

$25.2

Depreciation Amortization

$ in millions

27

Page 28: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

Rollins, Inc. 10-year stock performance (with dividends reinvested)vs. S&P 500 Index

12/31/2005 – 12/31/2015

Source: FactSet

10-Year Performance w/ dividends

Reinvested (12/31/2005 – 12/31/2015): Total Annualized

Rollins Inc. 419.0% 17.9%

S&P 500 Index 102.4% 7.3%

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '1640

50

60

70

8090100

200

300

400

500

163.74

443.49

Rollins, Inc. (RO L-USA) [Delayed] S&P 500 (SP50-USA) [Delayed]

Page 29: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand

Rollins Inc. 10-year stock performance (with dividends reinvested)vs. Russell 2000 Index

12/31/2005 – 12/31/2015

Source: FactSet

10-Year Performance w/ dividends

Reinvested (12/31/2005 – 12/31/2015): Total Annualized

Rollins Inc. 419.0% 17.9%

Russell 2000 Index 93.1% 6.8%

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '1640

50

60

70

8090100

200

300

400

500

168.72

443.49

Rollins, Inc. (RO L-USA) [Delayed] Russe ll 2000 (RUT-RUX) [Delayed]

Page 30: PEST CONTROL DOWN TO A SCIENCE - Rollins, Inc. › ~ › media › Files › R › Rollins › reports-and... · National ad campaign –“Pest Control Down to a Science ” Brand