Financial Results
|
AER
|
CER
| |||||
£m
|
2022
£m
|
2021
£m
|
Change%
|
2022
£m
|
2021
£m
|
Change%
| |
Revenue
|
3,714
|
2,957
|
25.6%
|
3,522
|
2,957
|
19.1%
| |
Adjusted EBITDA
|
859
|
676
|
27.1%
| ||||
Adjusted Operating Profit
|
571
|
442
|
29.4%
|
542
|
442
|
22.7%
| |
Adjusted Profit before Tax
|
532
|
416
|
27.7%
|
515
|
416
|
23.5%
| |
Free Cash Flow
|
374
|
353
|
5.9%
| ||||
Diluted Adjusted EPS
|
21.22p
|
17.99p
|
18.0%
| ||||
Statutory Results
| |||||||
Revenue
|
3,714
|
2,957
|
25.6%
| ||||
Operating Profit
|
317
|
347
|
(8.4%)
| ||||
Profit before Tax
|
296
|
325
|
(9.1%)
| ||||
EPS
|
11.57p
|
14.16p
|
(18.3%)
| ||||
Dividend Per Share
|
7.55p
|
6.39p
|
18.2%
|
●
|
Revenue up 19.1%, reflecting benefit of M&A, including Terminix, and strong Organic Revenue1 growth of 6.6%, driven by resilient demand and effective price progression. Statutory Revenue up 25.6% to £3,714m at AER. As expected, COVID disinfection revenue reduced to £20m (FY 21: £117m), with £6m in H2
| |
-
|
Organic Revenue growth of 5.7% in North America, with Terminix and Rentokil North America2 delivering similar rates of growth
| |
-
|
Organic Revenue up 9.1% in Europe, the Group's second largest region
| |
-
|
Strong broad-based Organic Revenue growth across all business categories: 5.6% in Pest Control; 9.3% in Hygiene & Wellbeing; and 16.6% in France Workwear
| |
●
|
Adjusted Operating Profit increased 22.7%; 23.5% growth in Adjusted PBT. Statutory PBT down 9.1% to £296m at AER due to one-off and adjusting items, and interest related to the Terminix transaction
| |
-
|
Group Adjusted Operating Margin up 45bps to 15.4%3, the highest for 20 years
| |
-
|
Margin improvement driven by 26bps improvement in underlying trading performance and 19bps net impact from Terminix transaction
| |
●
|
Free Cash Flow of £374m leading to 91.8% Adjusted Free Cash Flow conversion
| |
●
|
Pro forma net debt to Adjusted EBITDA of less than 3.2x at 31 December 2022, as expected. Net debt at £3.3bn in line with Q3 guidance
| |
●
|
Excellent progress on Terminix integration with cost synergy guidance increased to at least $200m
| |
-
|
$13m pre-tax net P&L cost synergies achieved in FY 22, ahead of $4m guidance. On track to deliver a further $60m in FY 23, with total synergy target increased from at least $150m to at least $200m in FY 25
| |
-
|
Additional non-cash benefit of $18m in FY 22, reflecting application of IFRS accounting for termite provisions and LTIPs; a further $32m of non-cash benefits expected in FY 23
| |
●
|
Continued strong execution on M&A:
| |
-
|
52 acquisitions (excluding Terminix) completed in 2022 for an aggregate consideration of £259m.Robust pipeline of high-quality M&A in place. Guidance on targeted spend in FY 23 of c.£250m
| |
●
|
Recommended final dividend of 5.15p to bring total dividend for 2022 to 7.55p per share, an increase of 18.2%, in line with our progressive policy
| |
●
|
Successful integration of Terminix and ongoing execution of our strategy will enable the enlarged Group to deliver a highly attractive investment proposition:
| |
-
|
Medium term Organic Revenue growth target increased to at least 5.0%
| |
-
|
Group Adjusted Operating Margin for FY 23 of c.16.5%, with North America Adjusted Operating Margin of c.19.5%
| |
-
|
Group Adjusted Operating Margin greater than 19.0% and Free Cash Flow conversion of at least 90% in FY 25
| |
-
|
Net debt to EBITDA of less than 3x by the end of FY 24, falling rapidly to 2-2.5x thereafter
| |
-
|
Continued progressive dividend policy
|
Investors / Analysts:
|
Peter Russell
|
Rentokil Initial plc
|
07795 166506
|
Media:
|
Malcolm Padley
|
Rentokil Initial plc
|
07788 978199
|
Revenue
|
Adjusted Operating Profit
| ||||||
2022
£m
|
2021
£m
|
Change%
|
2022
£m
|
2021
£m
|
Change%
| ||
North America
|
1,675
|
1,291
|
29.7%
|
286
|
216
|
32.7%
| |
Pest Control
|
1,581
|
1149
|
37.7%
|
269
|
187
|
44.1%
| |
Hygiene & Wellbeing
|
94
|
142
|
(34.2%)
|
17
|
29
|
(41.5%)
| |
Europe (inc. LATAM)
|
942
|
832
|
13.2%
|
187
|
163
|
14.8%
| |
Pest Control
|
425
|
350
|
21.5%
|
103
|
92
|
12.7%
| |
Hygiene & Wellbeing
|
324
|
316
|
2.4%
|
53
|
54
|
(2.7%)
| |
France Workwear
|
193
|
166
|
16.6%
|
31
|
17
|
81.6%
| |
UK & Sub Saharan Africa
|
370
|
359
|
2.9%
|
96
|
95
|
1.7%
| |
Pest Control
|
187
|
176
|
6.2%
|
48
|
46
|
5.5%
| |
Hygiene & Wellbeing
|
183
|
183
|
(0.2%)
|
48
|
49
|
(1.8%)
| |
Asia & MENAT
|
308
|
271
|
13.4%
|
43
|
36
|
17.5%
| |
Pest Control
|
222
|
187
|
18.8%
|
32
|
25
|
26.5%
| |
Hygiene & Wellbeing
|
86
|
84
|
1.4%
|
11
|
11
|
(2.9%)
| |
Pacific
|
221
|
197
|
12.8%
|
46
|
39
|
19.7%
| |
Pest Control
|
101
|
90
|
12.9%
|
15
|
14
|
8.3%
| |
Hygiene & Wellbeing
|
120
|
107
|
12.7%
|
31
|
25
|
26.2%
| |
Central
|
6
|
7
|
(10.3%)
|
(105)
|
(97)
|
(8.9%)
| |
Restructuring costs
|
(11)
|
(10)
|
(12.7%)
| ||||
Total at CER
|
3,522
|
2,957
|
19.1%
|
542
|
442
|
22.7%
| |
Total at AER
|
3,714
|
2,957
|
25.6%
|
571
|
442
|
29.4%
|
Revenue
|
Adjusted Operating Profit
| ||||||
2022
£m
|
2021
£m
|
Change%
|
2022
£m
|
2021
£m
|
Change%
| ||
Pest Control
|
2,516
|
1,952
|
29.0%
|
467
|
364
|
28.7%
| |
Hygiene & Wellbeing
|
807
|
832
|
(3.2%)
|
160
|
168
|
(4.9%)
| |
France Workwear
|
193
|
166
|
16.6%
|
31
|
17
|
81.6%
| |
Central
|
6
|
7
|
(10.3%)
|
(105)
|
(97)
|
(8.9%)
| |
Restructuring costs
|
(11)
|
(10)
|
(12.7%)
| ||||
Total at CER
|
3,522
|
2,957
|
19.1%
|
542
|
442
|
22.7%
| |
Total at AER
|
3,714
|
2,957
|
25.6%
|
571
|
442
|
29.4%
|
Achieved
2022
|
Incremental P&L Impact by Year
|
Cumulative 2022-25
| ||
2023
|
2024-25
| |||
SG&A Expenses
|
$15m
|
$80m
|
$55m
|
$150m
|
Field Operations
|
-
|
$10m
|
$115m
|
$125m
|
Gross Synergies
|
$15m
|
$90m
|
$170m
|
$275m
|
Investments
|
$(2)m
|
$(30)m
|
$(43)m
|
$(75)m
|
Synergies Net of Investments
|
$13m
|
$60m
|
$127m
|
$200m
|
Accounting Adjustments
|
$18m
|
$32m
|
-
|
$50m
|
Net Synergies plus Accounting Adjustments
|
$31m
|
$92m
|
$127m
|
$250m
|
2022CER
£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
|
2022AER
£m
|
AERGrowth
| |
Revenue
|
1,675
|
29.7%
|
5.7%
|
3.2%
|
1,849
|
43.3%
|
Disinfection
|
2
|
-96.8%
|
2
|
-97.4%
| ||
Adjusted Operating Profit
|
286
|
32.7%
|
315
|
46.6%
| ||
Adjusted Operating Margin
|
17.1%
|
0.4%
|
17.1%
|
0.4%
| ||
Operating Profit
|
161
|
-2.3%
|
178
|
7.9%
|
2022CER
£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
|
2022AER
£m
|
AERGrowth
| |
Revenue
|
942
|
13.2%
|
9.1%
|
6.3%
|
941
|
13.1%
|
Disinfection
|
8
|
-73.3%
|
8
|
-71.4%
| ||
Adjusted Operating Profit
|
187
|
14.8%
|
187
|
14.5%
| ||
Adjusted Operating Margin
|
19.9%
|
0.3%
|
19.9%
|
0.3%
| ||
Operating Profit
|
154
|
6.1%
|
156
|
7.8%
|
2022CER
£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
|
2022AER
£m
|
AERGrowth
| |
Revenue
|
370
|
2.9%
|
4.7%
|
2.9%
|
370
|
3.0%
|
Disinfection
|
0
|
-100.0%
|
0
|
-98.8%
| ||
Adjusted Operating Profit
|
96
|
1.7%
|
96
|
1.8%
| ||
Adjusted Operating Margin
|
26.0%
|
-0.4%
|
26.0%
|
-0.4%
| ||
Operating Profit
|
91
|
6.4%
|
91
|
6.4%
|
2022CER
£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
|
2022AER
£m
|
AERGrowth
| |
Revenue
|
308
|
13.4%
|
11.0%
|
6.8%
|
321
|
18.3%
|
Disinfection
|
10
|
-41.2%
|
10
|
-38.9%
| ||
Adjusted Operating Profit
|
43
|
17.5%
|
45
|
24.3%
| ||
Adjusted Operating Margin
|
13.9%
|
0.5%
|
14.1%
|
0.7%
| ||
Operating Profit
|
17
|
-41.5%
|
24
|
-16.0%
|
2022CER
£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
|
2022AER
£m
|
AERGrowth
| |
Revenue
|
221
|
12.8%
|
7.9%
|
7.5%
|
227
|
15.2%
|
Disinfection
|
0
|
-100.0%
|
0
|
-98.6%
| ||
Adjusted Operating Profit
|
46
|
19.7%
|
48
|
21.9%
| ||
Adjusted Operating Margin
|
20.9%
|
1.2%
|
20.8%
|
1.1%
| ||
Operating Profit
|
39
|
13.0%
|
39
|
15.0%
|
2022CER
£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
|
2022AER
£m
|
AERGrowth
| |
Revenue
|
2,516
|
29.0%
|
5.6%
|
5.6%
|
2,695
|
38.2%
|
Disinfection
| ||||||
Adjusted Operating Profit
|
467
|
28.7%
|
498
|
37.1%
| ||
Adjusted Operating Margin
|
18.6%
|
0.0%
|
18.5%
|
-0.1%
| ||
Operating Profit
|
288
|
0.8%
|
313
|
9.8%
|
2022CER
£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
|
2022AER
£m
|
AERGrowth
| |
Revenue
|
807
|
-3.2%
|
9.3%
|
-4.0%
|
821
|
-1.5%
|
Disinfection
|
20
|
-82.9%
|
21
|
-82.4%
| ||
Adjusted Operating Profit
|
160
|
-4.9%
|
162
|
-3.2%
| ||
Adjusted Operating Margin
|
19.8%
|
-0.3%
|
19.8%
|
-0.3%
| ||
Operating Profit
|
154
|
-2.1%
|
157
|
-0.3%
|
2022CER
£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
|
2022AER
£m
|
AERGrowth
| |
Revenue
|
193
|
16.6%
|
16.6%
|
16.6%
|
192
|
15.6%
|
Disinfection
| ||||||
Adjusted Operating Profit
|
31
|
81.6%
|
31
|
80.1%
| ||
Adjusted Operating Margin
|
16.0%
|
5.7%
|
16.0%
|
5.7%
| ||
Operating Profit
|
30
|
82.7%
|
30
|
81.1%
|
●
|
Our Pest Control self-service portal is now operational in 50 countries, supporting 1.2m customer sites. The 24/7 customer portal enables scheduling of service visits, online payment of bills and viewing of documents.
|
●
|
There has been further roll-out of PestConnect, which provides a real-time, early warning digital system for monitoring and controlling rodents. We now have 290,000 units in operation (up 30,000 in the six months to Dec. 2022) across 16,000 sites.
|
●
|
Lumnia, our award-winning range of LED insect light traps, is now available in over 60 countries. Partnering with Vodafone and Google, we have been developing a partner app for Lumnia, to improve the accuracy and efficiency of counting and identifying trends using machine learning.
|
●
|
We introduced our latest intelligent bird scare device. The device recognises different bird species and identifies the best scare tool from a broad range to deter each of them.
|
●
|
We started the global delivery across 20 markets of our expanded Flexi Armour Rodent Proofing Range, which applies impenetrable barriers to reduce the risk of rodent infestations to premises, while lessening the need to use rodenticides.
|
●
|
Working with Vodafone and Google, we've conducted effective field trials of our connected cameras, which monitors premises and identifies pests with the use of AI technology. 40 individual cameras were trialled on customer sites in the UK during 2022, with 28,000 photos taken, transmitted over Vodafone's network and processed on our platform. The technology supports faster control of pest problems and the reduction of unnecessary visits.
|
●
|
A new and enhanced version of our myInitial customer portal was launched in 2022 and rolled out to c.20 countries. Total registered users have now reached more than 100,000.
|
●
|
We started the global roll-out of Luna Dry and Luna Mini Dry products, following the H1 launch in Europe. These feature the latest brushless motor technology, a hygienic HEPA 13 filter and long-life performance.
|
●
|
We continued to invest in our high-quality dispenser ranges to add differentiation and build upsell, significantly increasing usage of our Signature suite of units.
|
●
|
The Group sustained its focus on the high-growth air care market, already with a product range that features air purification, air sterilisation and air scenting products.
|
●
|
We added a new air filtration product, Aeramax Pro 3, which was introduced in Europe. This is a wall-mounted or floor-standing HEPA and carbon filter air purifier with allergy-friendly accreditation.
|
●
|
We are extending the clean air and wellbeing portfolio into air quality monitoring with data analysis and actionable insights. Pilots have taken place in Asia and Europe to assess and benchmark the quality of air in customer premises and partnership opportunities with third-party solutions were developed.
|
£m at actual exchange rates
|
Year to Date
| ||
2022
£m
|
2021
£m
|
Change
£m
| |
Adjusted Operating Profit
|
571
|
442
|
129
|
Depreciation
|
276
|
224
|
52
|
Other
|
12
|
10
|
2
|
Adjusted EBITDA
|
859
|
676
|
183
|
One-off and adjusting items (non-cash)
|
(77)
|
6
|
(83)
|
Working capital
|
9
|
23
|
(14)
|
Movement on provisions
|
(12)
|
(5)
|
(7)
|
Capex - additions
|
(190)
|
(160)
|
(30)
|
Capex - disposals
|
5
|
7
|
(2)
|
Capital of lease payments and initial direct costs incurred
|
(104)
|
(88)
|
(16)
|
Adjusted Cash Flow
|
490
|
459
|
31
|
Interest
|
(39)
|
(37)
|
(2)
|
Tax
|
(77)
|
(69)
|
(8)
|
Free Cash Flow
|
374
|
353
|
21
|
Acquisitions
|
(1,018)
|
(463)
|
(555)
|
Disposal of companies and businesses
|
1
|
-
|
1
|
Dividends
|
(122)
|
(139)
|
17
|
Cost of issuing new shares
|
(16)
|
-
|
(16)
|
Cash impact of one-off and adjusting items
|
(59)
|
(27)
|
(32)
|
Debt related cash flows
| |||
Acquisition of shares from non-controlling interest
|
-
|
(9)
|
9
|
Cash outflow on settlement of debt related foreign exchange forward contracts
|
26
|
(19)
|
45
|
Net investment in term deposits
|
1
|
171
|
(170)
|
Proceeds from new debt
|
2,383
|
5
|
2,378
|
Debt repayments
|
(844)
|
(167)
|
(677)
|
Debt related cash flows
|
1,566
|
(19)
|
1,585
|
Net increase/(decrease) in cash and cash equivalents
|
726
|
(295)
|
1,021
|
Cash and cash equivalents at the beginning of the year
|
242
|
551
|
(309)
|
Exchange losses on cash and cash equivalents
|
(89)
|
(14)
|
(75)
|
Cash and cash equivalents at end of the financial year
|
879
|
242
|
637
|
Net increase/(decrease) in cash and cash equivalents
|
726
|
(295)
|
1,021
|
Debt related cash flows
|
(1,566)
|
19
|
(1,585)
|
IFRS 16 liability movement
|
(34)
|
(2)
|
(32)
|
Debt acquired
|
(964)
|
(12)
|
(952)
|
Bond interest accrual
|
(42)
|
1
|
(43)
|
Foreign exchange translation and other items
|
(131)
|
19
|
(150)
|
Increase in net debt
|
(2,011)
|
(270)
|
(1,741)
|
Opening net debt
|
(1,285)
|
(1,015)
|
(270)
|
Closing net debt
|
(3,296)
|
(1,285)
|
(2,011)
|
2022 AER
|
2023 CER
| |||||||||
Amount
|
Rate
|
Fixed/Floating
|
Cost£m
|
Swap Cost£m
|
Total Cost£m
|
Cost£m
|
Swap Cost£m
|
Total Cost£m
| ||
Legacy Bonds
| ||||||||||
EUR
|
400
|
0.95%
|
Fixed
|
3
|
(3)
|
-
|
3
|
(3)
|
-
| |
EUR
|
500
|
0.88%
|
Fixed
|
4
|
(2)
|
2
|
4
|
(4)
|
-
| |
EUR
|
600
|
0.50%
|
Fixed
|
3
|
(1)
|
2
|
3
|
(3)
|
-
| |
Amortised Cost
|
Fixed
|
1
|
-
|
1
|
1
|
-
|
1
| |||
Swaps
|
2.85% (avg)
|
Fixed
|
-
|
15
|
15
|
28
|
28
| |||
Total
|
1,500
|
11
|
9
|
20
|
11
|
18
|
29
| |||
New Bonds
| ||||||||||
EUR
|
850
|
3.88%
|
Fixed
|
14
|
(3)
|
11
|
28
|
(14)
|
14
| |
EUR
|
600
|
4.38%
|
Fixed
|
12
|
-
|
12
|
22
|
-
|
22
| |
GBP
|
400
|
5.00%
|
Fixed
|
10
|
-
|
10
|
20
|
-
|
20
| |
Amortised Cost
|
Fixed
|
1
|
-
|
1
|
3
|
-
|
3
| |||
Swaps
|
3.53% (avg)
|
Fixed
|
-
|
4
|
4
|
-
|
15
|
15
| ||
Total
|
37
|
1
|
38
|
73
|
-
|
74
| ||||
Term Loan
| ||||||||||
USD
|
700
|
4-6%
|
Float
|
5
|
-
|
5
|
27-33
|
-
|
27-33
| |
Lease Interest
|
Fixed/
Float
|
-
|
10
|
-
|
18
| |||||
Other Interest
|
Fixed/
Float
|
-
|
2
|
-
|
4
| |||||
Total Other
|
12
|
22
| ||||||||
Finance Cost
|
75
|
152-158
| ||||||||
Interest received
|
(5)
|
(3)
| ||||||||
Hyper-Inflation
|
(22)
|
(20-24)
| ||||||||
Finance Income
|
(27)
|
(23-27)
| ||||||||
Adjusted Interest
|
48
|
125-135
|
Note
|
2022
£m
|
2021
£m
|
2020
£m
| |
Revenue
|
2
|
3,714
|
2,957
|
2,803
|
Operating expenses
|
(3,373)
|
(2,610)
|
(2,509)
| |
Net impairment losses on financial assets
|
(24)
|
-
|
-
| |
Operating profit
|
317
|
347
|
294
| |
Finance income
|
4
|
49
|
4
|
6
|
Finance cost
|
3
|
(79)
|
(34)
|
(78)
|
Share of profit from associates net of tax
|
9
|
8
|
8
| |
Profit before income tax
|
296
|
325
|
230
| |
Income tax expense1
|
5
|
(64)
|
(62)
|
(44)
|
Profit for the year
|
232
|
263
|
186
| |
Profit for the year attributable to:
| ||||
Equity holders of the Company
|
232
|
263
|
186
| |
Non-controlling interests
|
-
|
-
|
-
| |
Other comprehensive income:
| ||||
Items that are not reclassified subsequently to the income statement:
| ||||
Remeasurement of net defined benefit liability
|
2
|
1
|
(13)
| |
Items that may be reclassified subsequently to the income statement:
| ||||
Net exchange adjustments offset in reserves
|
(232)
|
(18)
|
(35)
| |
Net (loss)/gain on net investment hedge
|
(68)
|
15
|
(17)
| |
Cost of hedging
|
(2)
|
(1)
|
(1)
| |
Effective portion of changes in fair value of cash flow hedge
|
(6)
|
13
|
(5)
| |
Tax related to items taken to other comprehensive income
|
11
|
2
|
4
| |
Other comprehensive income for the year
|
(295)
|
12
|
(67)
| |
Total comprehensive income for the year
|
(63)
|
275
|
119
| |
Total comprehensive income for the year attributable to:
| ||||
Equity holders of the Company
|
(63)
|
275
|
119
| |
Non-controlling interests
|
-
|
-
|
-
| |
Earnings per share attributable to the Company's equity holders:
| ||||
Basic
|
6
|
11.57p
|
14.16p
|
10.03p
|
Diluted
|
6
|
11.51p
|
14.10p
|
9.98p
|
Note
|
2022
£m
|
2021
£m
| |
Assets
| |||
Non-current assets
| |||
Intangible assets
|
9
|
7,319
|
2,164
|
Property, plant and equipment
|
10
|
495
|
398
|
Right-of-use assets
|
454
|
228
| |
Investments in associated undertakings
|
53
|
30
| |
Other investments
|
23
|
-
| |
Deferred tax assets
|
43
|
42
| |
Contract costs
|
182
|
75
| |
Retirement benefit assets
|
3
|
19
| |
Trade and other receivables
|
90
|
14
| |
Derivative financial instruments
|
21
|
10
| |
8,683
|
2,980
| ||
Current assets
| |||
Other investments
|
1
|
2
| |
Inventories
|
200
|
136
| |
Trade and other receivables
|
832
|
527
| |
Current tax assets
|
36
|
9
| |
Derivative financial instruments
|
-
|
2
| |
Cash and cash equivalents
|
11
|
2,170
|
668
|
3,239
|
1,344
| ||
Liabilities
| |||
Current liabilities
| |||
Trade and other payables
|
(1,162)
|
(764)
| |
Current tax liabilities
|
(60)
|
(61)
| |
Provisions for liabilities and charges
|
17
|
(133)
|
(27)
|
Bank and other short-term borrowings
|
(1,355)
|
(459)
| |
Lease liabilities
|
(135)
|
(78)
| |
Derivative financial instruments
|
-
|
(1)
| |
(2,845)
|
(1,390)
| ||
Net current assets/(liabilities)
|
394
|
(46)
| |
Non-current liabilities
| |||
Other payables
|
(81)
|
(72)
| |
Bank and other long-term borrowings
|
(3,574)
|
(1,256)
| |
Lease liabilities
|
(332)
|
(139)
| |
Deferred tax liabilities
|
(511)
|
(108)
| |
Retirement benefit obligations
|
16
|
(30)
|
(27)
|
Provisions for liabilities and charges
|
17
|
(359)
|
(34)
|
Derivative financial instruments
|
(92)
|
(34)
| |
(4,979)
|
(1,670)
| ||
Net assets
|
4,098
|
1,264
| |
Equity
| |||
Capital and reserves attributable to the Company's equity holders
| |||
Share capital
|
18
|
25
|
19
|
Share premium
|
9
|
7
| |
Other reserves
|
763
|
(1,927)
| |
Retained earnings
|
3,302
|
3,166
| |
4,099
|
1,265
| ||
Non-controlling interests
|
(1)
|
(1)
| |
Total equity
|
4,098
|
1,264
|
Attributable to equity holders of the Company
| ||||||
Share
capital
£m
|
Share
premium
£m
|
Other
reserves
£m
|
Retained
earnings
£m
|
Non-
controlling
interests
£m
|
Total
equity
£m
| |
At 1 January 2020
|
18
|
7
|
(1,868)
|
2,844
|
1
|
1,002
|
Profit for the year
|
-
|
-
|
-
|
186
|
-
|
186
|
Other comprehensive income:
| ||||||
Net exchange adjustments offset in reserves
|
-
|
-
|
(35)
|
-
|
-
|
(35)
|
Net loss on net investment hedge
|
-
|
-
|
(17)
|
-
|
-
|
(17)
|
Net loss on cash flow hedge1
|
-
|
-
|
(5)
|
-
|
-
|
(5)
|
Cost of hedging
|
-
|
-
|
(1)
|
-
|
-
|
(1)
|
Remeasurement of net defined benefit liability
|
-
|
-
|
-
|
(13)
|
-
|
(13)
|
Tax related to items taken directly to other comprehensive income
|
-
|
-
|
-
|
4
|
-
|
4
|
Total comprehensive income for the year
|
-
|
-
|
(58)
|
177
|
-
|
119
|
Transactions with owners:
| ||||||
Cost of equity-settled share-based payment plans
|
-
|
-
|
-
|
6
|
-
|
6
|
Tax related to items taken directly to equity
|
-
|
-
|
-
|
3
|
-
|
3
|
Movement in the carrying value of put options
|
-
|
-
|
-
|
1
|
-
|
1
|
At 31 December 2020
|
18
|
7
|
(1,926)
|
3,031
|
1
|
1,131
|
Profit for the year
|
-
|
-
|
-
|
263
|
-
|
263
|
Other comprehensive income:
| ||||||
Net exchange adjustments offset in reserves
|
-
|
-
|
(18)
|
-
|
-
|
(18)
|
Net gain on net investment hedge
|
-
|
-
|
15
|
-
|
-
|
15
|
Net gain on cash flow hedge1
|
-
|
-
|
13
|
-
|
-
|
13
|
Cost of hedging
|
-
|
-
|
(1)
|
-
|
-
|
(1)
|
Remeasurement of net defined benefit liability
|
-
|
-
|
-
|
1
|
-
|
1
|
Transfer between reserves
|
-
|
-
|
(10)
|
10
|
-
|
-
|
Tax related to items taken directly to other comprehensive income
|
-
|
-
|
-
|
2
|
-
|
2
|
Total comprehensive income for the year
|
-
|
-
|
(1)
|
276
|
-
|
275
|
Transactions with owners:
| ||||||
Shares issued in the year
|
1
|
-
|
-
|
(1)
|
-
|
-
|
Acquisition of non-controlling interests
|
-
|
-
|
-
|
(8)
|
(2)
|
(10)
|
Dividends paid to equity shareholders
|
-
|
-
|
-
|
(139)
|
-
|
(139)
|
Cost of equity-settled share-based payment plans
|
-
|
-
|
-
|
10
|
-
|
10
|
Tax related to items taken directly to equity
|
-
|
-
|
-
|
5
|
-
|
5
|
Movement in the carrying value of put options
|
-
|
-
|
-
|
(8)
|
-
|
(8)
|
At 31 December 2021
|
19
|
7
|
(1,927)
|
3,166
|
(1)
|
1,264
|
Profit for the year
|
-
|
-
|
-
|
232
|
-
|
232
|
Other comprehensive income:
| ||||||
Net exchange adjustments offset in reserves
|
-
|
-
|
(232)
|
-
|
-
|
(232)
|
Net loss on net investment hedge
|
-
|
-
|
(68)
|
-
|
-
|
(68)
|
Net loss on cash flow hedge1
|
-
|
-
|
(6)
|
-
|
-
|
(6)
|
Cost of hedging
|
-
|
-
|
(2)
|
-
|
-
|
(2)
|
Remeasurement of net defined benefit liability
|
-
|
-
|
-
|
2
|
-
|
2
|
Tax related to items taken directly to other comprehensive income
|
-
|
-
|
-
|
11
|
-
|
11
|
Total comprehensive income for the year
|
-
|
-
|
(308)
|
245
|
-
|
(63)
|
Transactions with owners:
| ||||||
Shares issued in the year
|
6
|
-
|
-
|
-
|
-
|
6
|
Merger relief on acquisition of Terminix Global Holdings, Inc.
|
-
|
-
|
3,014
|
-
|
-
|
3,014
|
Gain on stock options
|
-
|
2
|
-
|
-
|
-
|
2
|
Cost of issuing new shares
|
-
|
-
|
(16)
|
-
|
-
|
(16)
|
Dividends paid to equity shareholders
|
-
|
-
|
-
|
(122)
|
-
|
(122)
|
Cost of equity-settled share-based payment plans
|
-
|
-
|
-
|
18
|
-
|
18
|
Tax related to items taken directly to equity
|
-
|
-
|
-
|
(2)
|
-
|
(2)
|
Movement in the carrying value of put options
|
-
|
-
|
-
|
(3)
|
-
|
(3)
|
At 31 December 2022
|
25
|
9
|
763
|
3,302
|
(1)
|
4,098
|
Capital reduction reserve
£m
|
Merger
relief
reserve
£m
|
Legal reserve
£m
|
Cash flow hedge reserve
£m
|
Translation reserve
£m
|
Cost of hedging
£m
|
Total
£m
| |
At 1 January 2020
|
(1,723)
|
-
|
10
|
1
|
(156)
|
-
|
(1,868)
|
Net exchange adjustments offset in reserves
|
-
|
-
|
-
|
-
|
(35)
|
-
|
(35)
|
Net loss on net investment hedge
|
-
|
-
|
-
|
-
|
(17)
|
-
|
(17)
|
Net loss on cash flow hedge1
|
-
|
-
|
-
|
(5)
|
-
|
-
|
(5)
|
Cost of hedging
|
-
|
-
|
-
|
-
|
-
|
(1)
|
(1)
|
Total comprehensive income for the year
|
-
|
-
|
-
|
(5)
|
(52)
|
(1)
|
(58)
|
At 31 December 2020
|
(1,723)
|
-
|
10
|
(4)
|
(208)
|
(1)
|
(1,926)
|
Net exchange adjustments offset in reserves
|
-
|
-
|
-
|
-
|
(18)
|
-
|
(18)
|
Net gain on net investment hedge
|
-
|
-
|
-
|
-
|
15
|
-
|
15
|
Net gain on cash flow hedge1
|
-
|
-
|
-
|
13
|
-
|
-
|
13
|
Transfer between reserves
|
-
|
-
|
(10)
|
-
|
-
|
-
|
(10)
|
Cost of hedging
|
-
|
-
|
-
|
-
|
-
|
(1)
|
(1)
|
Total comprehensive income for the year
|
-
|
-
|
(10)
|
13
|
(3)
|
(1)
|
(1)
|
At 31 December 2021
|
(1,723)
|
-
|
-
|
9
|
(211)
|
(2)
|
(1,927)
|
Net exchange adjustments offset in reserves
|
-
|
-
|
-
|
-
|
(232)
|
-
|
(232)
|
Net loss on net investment hedge
|
-
|
-
|
-
|
-
|
(68)
|
-
|
(68)
|
Net loss on cash flow hedge1
|
-
|
-
|
-
|
(6)
|
-
|
-
|
(6)
|
Cost of hedging
|
-
|
-
|
-
|
-
|
-
|
(2)
|
(2)
|
Total comprehensive income for the year
|
-
|
-
|
(6)
|
(300)
|
(2)
|
(308)
| |
Transactions with owners:
| |||||||
Merger relief on acquisition of Terminix Global Holdings, Inc.
|
-
|
3,014
|
-
|
-
|
-
|
-
|
3,014
|
Cost of issuing new shares
|
-
|
(16)
|
-
|
-
|
-
|
-
|
(16)
|
At 31 December 2022
|
(1,723)
|
2,998
|
-
|
3
|
(511)
|
(4)
|
763
|
Note
|
2022
£m
|
2021
£m
|
2020
£m
| |
Cash flows from operating activities
| ||||
Cash generated from operating activities
|
15
|
716
|
669
|
653
|
Interest received
|
13
|
5
|
8
| |
Interest paid1
|
(52)
|
(42)
|
(49)
| |
Income tax paid
|
(77)
|
(69)
|
(64)
| |
Net cash flows from operating activities
|
600
|
563
|
548
| |
Cash flows from investing activities
| ||||
Purchase of property, plant and equipment
|
(153)
|
(128)
|
(130)
| |
Purchase of intangible fixed assets
|
(37)
|
(32)
|
(23)
| |
Proceeds from sale of property, plant and equipment
|
5
|
7
|
6
| |
Acquisition of companies and businesses, net of cash acquired
|
8
|
(1,018)
|
(463)
|
(194)
|
Disposal of companies and businesses
|
1
|
-
|
2
| |
Dividends received from associates
|
4
|
4
|
12
| |
Net change to cash flow from investment in term deposits
|
1
|
171
|
(170)
| |
Net cash flows from investing activities
|
(1,197)
|
(441)
|
(497)
| |
Cash flows from financing activities
| ||||
Dividends paid to equity shareholders
|
7
|
(122)
|
(139)
|
-
|
Acquisition of shares from non-controlling interest
|
-
|
(9)
|
-
| |
Capital element of lease payments
|
(104)
|
(88)
|
(85)
| |
Cost of issuing new shares
|
(16)
|
-
|
-
| |
Cash inflow/(outflow) on settlement of debt-related foreign exchange forward contracts
|
26
|
(19)
|
(24)
| |
Proceeds from new debt
|
2,383
|
5
|
1,690
| |
Debt repayments
|
(844)
|
(167)
|
(1,352)
| |
Net cash flows from financing activities
|
1,323
|
(417)
|
229
| |
Net increase/(decrease) in cash and cash equivalents
|
726
|
(295)
|
280
| |
Cash and cash equivalents at beginning of year
|
242
|
551
|
274
| |
Exchange losses on cash and cash equivalents
|
(89)
|
(14)
|
(3)
| |
Cash and cash equivalents at end of the financial year
|
11
|
879
|
242
|
551
|
●
|
amendments to IAS 16 Property, Plant and Equipment;
|
●
|
amendments to IFRS 3 Reference to the Conceptual Framework;
|
●
|
amendments to IAS 37 Onerous Contracts; and
|
●
|
annual improvements to IFRS Standards 2018-2020.
|
●
|
North America: Puerto Rico joined the Latin America (LATAM) region
|
●
|
Europe: Includes Nordics (Norway, Sweden, Finland, Denmark and Poland), previously in UK & Rest of World region. Also continues to include LATAM¹ which has been expanded to include Caribbean (formerly in UK & Rest of World) and Puerto Rico (formerly in North America)
|
●
|
UK & Sub-Saharan Africa: No change to UK, Ireland & Baltics. Sub-Saharan Africa remained in this region. Other Rest of World countries (MENAT and Caribbean) moved to other regions
|
●
|
Asia & MENAT: Enlarged region includes Asia and MENAT countries
|
●
|
Pacific: No change
|
●
|
amortisation and impairment of intangible assets (excluding computer software);
|
●
|
one-off and adjusting items; and
|
●
|
net interest adjustments.
|
Revenue
2022
£m
|
Revenue1
2021
£m
|
Revenue1
2020
£m
|
Operating
profit
2022
£m
|
Operating
profit1
2021
£m
|
Operating
profit1
2020
£m
| |
North America2
| ||||||
Pest Control
|
1,746
|
1,149
|
979
|
297
|
187
|
131
|
Hygiene & Wellbeing
|
103
|
142
|
218
|
18
|
29
|
78
|
1,849
|
1,291
|
1,197
|
315
|
216
|
209
| |
Europe (incl LATAM)
| ||||||
Pest Control
|
427
|
350
|
324
|
103
|
92
|
75
|
Hygiene & Wellbeing
|
322
|
316
|
330
|
53
|
54
|
59
|
France Workwear
|
192
|
166
|
173
|
31
|
17
|
19
|
941
|
832
|
827
|
187
|
163
|
153
| |
UK & Sub-Saharan Africa
| ||||||
Pest Control
|
187
|
176
|
163
|
48
|
46
|
37
|
Hygiene & Wellbeing
|
183
|
183
|
164
|
48
|
49
|
22
|
370
|
359
|
327
|
96
|
95
|
59
| |
Asia & MENAT
| ||||||
Pest Control
|
231
|
187
|
171
|
34
|
25
|
20
|
Hygiene & Wellbeing
|
90
|
84
|
92
|
11
|
11
|
16
|
321
|
271
|
263
|
45
|
36
|
36
| |
Pacific
| ||||||
Pest Control
|
104
|
90
|
81
|
16
|
14
|
15
|
Hygiene & Wellbeing
|
123
|
107
|
97
|
32
|
25
|
20
|
227
|
197
|
178
|
48
|
39
|
35
| |
Central and regional overheads
|
6
|
7
|
11
|
(108)
|
(97)
|
(95)
|
Restructuring costs
|
-
|
-
|
-
|
(12)
|
(10)
|
(13)
|
Revenue and Adjusted Operating Profit
|
3,714
|
2,957
|
2,803
|
571
|
442
|
384
|
Adjusted Operating Profit Margin
|
15.4%
|
14.9%
|
13.7%
| |||
One-off and adjusting items
|
(136)
|
(21)
|
(8)
| |||
Amortisation and impairment of intangible assets3
|
(118)
|
(74)
|
(82)
| |||
Operating Profit
|
317
|
347
|
294
| |||
Operating Profit Margin
|
8.5%
|
11.7%
|
10.5%
| |||
Share of profit from associates (net of tax)
|
9
|
8
|
8
| |||
Net adjusted interest payable
|
(48)
|
(34)
|
(37)
| |||
Net interest adjustments
|
18
|
4
|
(35)
| |||
Profit Before Tax
|
296
|
325
|
230
| |||
Net interest adjustments
|
(18)
|
(4)
|
35
| |||
One-off and adjusting items
|
136
|
21
|
8
| |||
Amortisation and impairment of intangible assets3
|
118
|
74
|
82
| |||
Adjusted Profit Before Tax
|
532
|
416
|
355
|
Organic Revenue growth
excluding disinfection
|
Organic Revenue growth
including disinfection
| |||
2022
%
|
2021
%
|
2022
%
|
2021
%
| |
North America
|
5.7%
|
8.7%
|
3.2%
|
1.5%
|
Europe (incl LATAM)
|
9.1%
|
4.7%
|
6.3%
|
1.9%
|
UK & Sub-Saharan Africa
|
4.7%
|
12.3%
|
2.9%
|
9.9%
|
Asia & MENAT
|
11.0%
|
5.8%
|
6.8%
|
4.9%
|
Pacific
|
7.9%
|
6.4%
|
7.5%
|
6.3%
|
Group
|
6.6%
|
7.0%
|
4.2%
|
2.9%
|
Pest Control
|
5.6%
|
8.2%
|
5.6%
|
8.2%
|
Hygiene & Wellbeing
|
9.3%
|
7.2%
|
(4.0)%
|
(5.7)%
|
France Workwear
|
16.6%
|
1.5%
|
16.6%
|
1.5%
|
Group
|
6.6%
|
7.0%
|
4.2%
|
2.9%
|
One-off and adjusting items
cost/(income)
£m
|
One-off and adjusting items
tax impact
£m
|
One-off and adjusting items
cash inflow/(outflow)
£m
| |
2020
| |||
Acquisition and integration costs
|
15
|
(3)
|
(15)
|
Pension scheme closure in North America
|
(7)
|
2
|
-
|
UK pension scheme - return of surplus¹
|
-
|
-
|
9
|
Other
|
-
|
(1)
|
4
|
Total
|
8
|
(2)
|
(2)
|
2021
| |||
Acquisition and integration costs
|
13
|
(1)
|
(12)
|
Terminix acquisition costs
|
6
|
-
|
(6)
|
Other
|
2
|
(1)
|
(9)
|
Total
|
21
|
(2)
|
(27)
|
2022
| |||
Acquisition and integration costs
|
5
|
(2)
|
(13)
|
Fees relating to Terminix acquisition
|
68
|
(4)
|
(38)
|
Terminix integration costs
|
62
|
(14)
|
(32)
|
UK pension scheme - return of surplus1
|
-
|
-
|
22
|
Other
|
1
|
-
|
2
|
Total
|
136
|
(20)
|
(59)
|
Amortisation and
impairment of
intangibles1
2022
£m
|
Amortisation and
impairment of
intangibles1
2021
£m
|
Amortisation and
impairment of
intangibles1
2020
£m
| |
North America
|
59
|
34
|
30
|
Europe (incl. LATAM)
|
29
|
14
|
15
|
UK & Sub-Saharan Africa
|
-
|
9
|
9
|
Asia & MENAT
|
20
|
7
|
17
|
Pacific
|
4
|
4
|
4
|
Central and regional
|
6
|
6
|
7
|
Disposed businesses
|
-
|
-
|
-
|
Total
|
118
|
74
|
82
|
Tax effect
|
(25)
|
(18)
|
(18)
|
Total after tax effect
|
93
|
56
|
64
|
2022
£m
|
2021
£m
|
2020
£m
| |
Hedged interest payable on medium-term notes issued1
|
39
|
10
|
16
|
Interest payable on bank loans and overdrafts1
|
5
|
3
|
3
|
Interest payable on RCF1
|
1
|
1
|
5
|
Interest payable on foreign exchange swaps2
|
19
|
14
|
9
|
Interest payable on leases
|
10
|
6
|
7
|
Amortisation of discount on provisions
|
3
|
-
|
-
|
Fair value loss on hedge ineffectiveness
|
2
|
-
|
8
|
Fair value adjustment on debt repayment
|
-
|
-
|
4
|
Fair value loss on other derivatives3
|
-
|
-
|
26
|
Total finance cost
|
79
|
34
|
78
|
2022
£m
|
2021
£m
|
2020
£m
| |
Bank interest received
|
5
|
1
|
2
|
Interest receivable on foreign exchange swaps
|
-
|
-
|
3
|
Fair value gain on hedge ineffectiveness
|
22
|
-
|
-
|
Hyperinflation accounting adjustment
|
22
|
3
|
-
|
Interest on net defined benefit asset
|
-
|
-
|
1
|
Total finance income
|
49
|
4
|
6
|
2022
AER
£m
|
2021
AER
£m
| |
Finance cost
|
79
|
34
|
Finance income
|
(49)
|
(4)
|
Add back:
| ||
Amortisation of discount on legacy provisions
|
(3)
|
-
|
Gain on hedge accounting recognised in finance income/cost
|
21
|
4
|
Adjusted interest
|
48
|
34
|
2022
£m
|
2021
£m
|
2020
£m
| |
UK corporation tax at 19.0% (2021: 19.0%; 2020: 19.0%)
|
17
|
9
|
9
|
Overseas taxation
|
59
|
48
|
61
|
Adjustment in respect of previous periods
|
2
|
(3)
|
(3)
|
Total current tax
|
78
|
54
|
67
|
Deferred tax (credit)/expense
|
(3)
|
21
|
(17)
|
Deferred tax adjustment in respect of previous periods
|
(11)
|
(13)
|
(6)
|
Total deferred tax
|
(14)
|
8
|
(23)
|
Total income tax expense
|
64
|
62
|
44
|
2022
AER
£m
|
2022
CER
£m
|
2021
AER/CER
£m
| ||
Unadjusted income tax expense
|
64
|
63
|
62
| |
Tax adjustments on:
| ||||
Amortisation and impairment of intangible assets (excluding computer software)
|
24
|
22
|
18
| |
One-off and adjusting items - operating
|
20
|
19
|
1
| |
Net interest adjustments
|
(3)
|
(3)
|
(1)
| |
Adjusted income tax expense (a)
|
105
|
101
|
80
| |
Adjusted profit before tax (b)
|
532
|
515
|
416
| |
Effective Tax Rate (a/b)
|
19.7%
|
19.7%
|
19.4%
|
2022
£m
|
2021
£m
|
2020
£m
| |
Profit from continuing operations attributable to equity holders of the Company
|
232
|
263
|
186
|
One-off and adjusting items
|
136
|
21
|
8
|
Amortisation and impairment of intangibles1
|
118
|
74
|
82
|
Net interest adjustments2
|
(18)
|
(4)
|
35
|
Tax on above items3
|
(41)
|
(18)
|
(26)
|
Adjusted profit from continuing operations attributable to equity holders of the Company
|
427
|
335
|
285
|
Weighted average number of ordinary shares in issue (million)
|
2,002
|
1,858
|
1,853
|
Adjustment for potentially dilutive shares (million)
|
12
|
8
|
10
|
Weighted average number of ordinary shares for diluted earnings per share (million)
|
2,014
|
1,866
|
1,863
|
Basic earnings per share
|
11.57p
|
14.16p
|
10.03p
|
Diluted earnings per share
|
11.51p
|
14.10p
|
9.98p
|
Basic adjusted earnings per share
|
21.34p
|
18.07p
|
15.37p
|
Diluted adjusted earnings per share
|
21.22p
|
17.99p
|
15.29p
|
2022
£m
|
2021
£m
|
2020
£m
| |
2020 final dividend paid - 5.41p per share
|
-
|
100
|
-
|
2021 interim dividend paid - 2.09p per share
|
-
|
39
|
-
|
2021 final dividend paid - 4.30p per share
|
80
|
-
|
-
|
2022 interim dividend paid - 2.40p per share
|
42
|
-
|
-
|
Total
|
122
|
139
|
-
|
Terminix Global Holdings, Inc.
2022
£m
|
Individually immaterial acquisitions
2022
£m
|
Total
2022
£m
|
2021
£m
| |
Purchase consideration
| ||||
- Cash paid
|
1,087
|
214
|
1,301
|
273
|
- Deferred and contingent consideration
|
-
|
45
|
45
|
41
|
- Equity interests1
|
3,023
|
-
|
3,023
|
-
|
Total purchase consideration
|
4,110
|
259
|
4,369
|
314
|
Fair value of net assets acquired
|
(934)
|
(87)
|
(1,021)
|
(83)
|
Goodwill from current-year acquisitions
|
3,176
|
172
|
3,348
|
231
|
Goodwill expected to be deductible for tax purposes
|
-
|
60
|
60
|
146
|
Terminix Global Holdings, Inc.
2022
£m
|
Individually immaterial acquisitions
2022
£m
|
Total
2022
£m
|
2021
£m
| |
Non-current assets
| ||||
- Intangible assets2
|
2,027
|
74
|
2,101
|
71
|
- Property, plant and equipment3
|
249
|
14
|
263
|
13
|
- Other non-current assets
|
143
|
-
|
143
|
2
|
Current assets4
|
701
|
28
|
729
|
37
|
Current liabilities5
|
(311)
|
(11)
|
(322)
|
(26)
|
Non-current liabilities6
|
(1,875)
|
(18)
|
(1,893)
|
(14)
|
Net assets acquired
|
934
|
87
|
1,021
|
83
|
Terminix Global Holdings, Inc.
2022
£m
|
Individually immaterial acquisitions
2022
£m
|
Total
2022
£m
|
2021
£m
| |
Total purchase consideration
|
4,110
|
259
|
4,369
|
314
|
Equity interests
|
(3,023)
|
-
|
(3,023)
|
-
|
Consideration payable in future periods
|
-
|
(45)
|
(45)
|
(41)
|
Purchase consideration paid in cash
|
1,087
|
214
|
1,301
|
273
|
Cash and cash equivalents in acquired companies and businesses
|
(313)
|
(9)
|
(322)
|
(6)
|
Cash outflow on current period acquisitions
|
774
|
205
|
979
|
267
|
Deferred consideration paid
|
-
|
39
|
39
|
196
|
Cash outflow on current and past acquisitions
|
774
|
244
|
1,018
|
463
|
Goodwill
£m
|
Customer
lists
£m
|
Indefinite-lived brands
£m
|
Other
intangibles
£m
|
Product development
£m
|
Computer
software
£m
|
Total
£m
| |
Cost
| |||||||
At 1 January 2021
|
1,653
|
824
|
-
|
66
|
40
|
145
|
2,728
|
Exchange differences
|
4
|
(13)
|
-
|
-
|
-
|
(2)
|
(11)
|
Additions
|
-
|
-
|
-
|
4
|
6
|
21
|
31
|
Disposals/retirements
|
-
|
(4)
|
-
|
(3)
|
-
|
(1)
|
(8)
|
Acquisition of companies and businesses¹
|
228
|
69
|
-
|
-
|
-
|
-
|
297
|
Hyperinflationary adjustment
|
3
|
-
|
-
|
-
|
-
|
-
|
3
|
At 31 December 2021
|
1,888
|
876
|
-
|
67
|
46
|
163
|
3,040
|
Exchange differences
|
(72)
|
(5)
|
(107)
|
2
|
(1)
|
6
|
(177)
|
Additions
|
-
|
-
|
-
|
-
|
10
|
27
|
37
|
Disposals/retirements
|
-
|
(180)
|
-
|
(12)
|
-
|
(1)
|
(193)
|
Acquisition of companies and businesses¹
|
3,352
|
779
|
1,292
|
23
|
-
|
11
|
5,457
|
Hyperinflationary adjustment
|
14
|
3
|
-
|
1
|
-
|
-
|
18
|
Disposal of companies and businesses
|
(1)
|
-
|
-
|
-
|
-
|
-
|
(1)
|
At 31 December 2022
|
5,181
|
1,473
|
1,185
|
81
|
55
|
206
|
8,181
|
Accumulated amortisation and impairment
| |||||||
At 1 January 2021
|
(45)
|
(585)
|
-
|
(47)
|
(27)
|
(102)
|
(806)
|
Exchange differences
|
1
|
10
|
-
|
-
|
-
|
1
|
12
|
Disposals/retirements
|
-
|
4
|
-
|
4
|
-
|
1
|
9
|
Impairment charge
|
-
|
-
|
-
|
-
|
-
|
(2)
|
(2)
|
Amortisation charge
|
-
|
(64)
|
-
|
(5)
|
(5)
|
(15)
|
(89)
|
At 31 December 2021
|
(44)
|
(635)
|
-
|
(48)
|
(32)
|
(117)
|
(876)
|
Exchange differences
|
1
|
(31)
|
-
|
(2)
|
-
|
(5)
|
(37)
|
Disposals/retirements
|
-
|
179
|
-
|
12
|
-
|
1
|
192
|
Hyperinflationary adjustment
|
-
|
(1)
|
-
|
-
|
-
|
-
|
(1)
|
Impairment charge
|
(22)
|
-
|
-
|
-
|
-
|
-
|
(22)
|
Amortisation charge
|
-
|
(85)
|
-
|
(6)
|
(5)
|
(22)
|
(118)
|
At 31 December 2022
|
(65)
|
(573)
|
-
|
(44)
|
(37)
|
(143)
|
(862)
|
Net book value
| |||||||
At 1 January 2021
|
1,608
|
239
|
-
|
19
|
13
|
43
|
1,922
|
At 31 December 2021
|
1,844
|
241
|
-
|
19
|
14
|
46
|
2,164
|
At 31 December 2022
|
5,116
|
900
|
1,185
|
37
|
18
|
63
|
7,319
|
Land and
buildings
£m
|
Service contract equipment
£m
|
Other plant and
equipment
£m
|
Vehicles
and office
equipment
£m
|
Total
£m
| |
Cost
| |||||
At 1 January 2021
|
87
|
524
|
186
|
200
|
997
|
Exchange differences
|
(4)
|
(27)
|
(9)
|
(5)
|
(45)
|
Additions
|
3
|
94
|
13
|
19
|
129
|
Disposals
|
(2)
|
(73)
|
(3)
|
(18)
|
(96)
|
Acquisition of companies and businesses1
|
3
|
-
|
1
|
8
|
12
|
Reclassification from IFRS 16 ROU assets2
|
-
|
-
|
-
|
6
|
6
|
At 31 December 2021
|
87
|
518
|
188
|
210
|
1,003
|
Exchange differences
|
5
|
27
|
11
|
15
|
58
|
Additions
|
7
|
112
|
19
|
19
|
157
|
Disposals
|
(1)
|
(72)
|
(7)
|
(27)
|
(107)
|
Acquisition of companies and businesses1
|
29
|
2
|
4
|
30
|
65
|
Reclassification from IFRS 16 ROU assets2
|
-
|
-
|
-
|
8
|
8
|
At 31 December 2022
|
127
|
587
|
215
|
255
|
1,184
|
Accumulated depreciation and impairment
| |||||
At 1 January 2021
|
(30)
|
(310)
|
(132)
|
(122)
|
(594)
|
Exchange differences
|
1
|
16
|
7
|
3
|
27
|
Disposals
|
1
|
72
|
2
|
15
|
90
|
Depreciation charge
|
(3)
|
(92)
|
(12)
|
(21)
|
(128)
|
At 31 December 2021
|
(31)
|
(314)
|
(135)
|
(125)
|
(605)
|
Exchange differences
|
(3)
|
(18)
|
(8)
|
(11)
|
(40)
|
Disposals
|
1
|
72
|
6
|
25
|
104
|
Impairment charge
|
(8)
|
-
|
-
|
-
|
(8)
|
Depreciation charge
|
(3)
|
(96)
|
(14)
|
(27)
|
(140)
|
At 31 December 2022
|
(44)
|
(356)
|
(151)
|
(138)
|
(689)
|
Net book value
| |||||
At 1 January 2021
|
57
|
214
|
54
|
78
|
403
|
At 31 December 2021
|
56
|
204
|
53
|
85
|
398
|
At 31 December 2022
|
83
|
231
|
64
|
117
|
495
|
2022
£m
|
2021
£m
| |
Cash at bank and in hand
|
1,713
|
554
|
Money market funds
|
236
|
52
|
Short-term bank deposits
|
221
|
62
|
Cash and cash equivalents in the Consolidated Balance Sheet
|
2,170
|
668
|
Bank overdraft
|
(1,291)
|
(426)
|
Cash and cash equivalents in the Consolidated Cash Flow Statement
|
879
|
242
|
Opening
2022
£m
|
Cash
flows
£m
|
Non-cash
(fair value changes, accruals and acquisitions)
£m
|
Non-cash (foreign exchange
and other)
£m
|
Closing
2022
£m
| |
Bank and other short-term borrowings
|
(459)
|
(121)
|
(771)
|
(4)
|
(1,355)
|
Bank and other long-term borrowings
|
(1,256)
|
(2,257)
|
-
|
(61)
|
(3,574)
|
Lease liabilities
|
(217)
|
114
|
(225)
|
(139)
|
(467)
|
Other investments
|
1
|
-
|
-
|
-
|
1
|
Fair value of debt-related derivatives
|
(22)
|
(7)
|
19
|
(61)
|
(71)
|
Gross debt
|
(1,953)
|
(2,271)
|
(977)
|
(265)
|
(5,466)
|
Cash and cash equivalents in the Consolidated Balance Sheet
|
668
|
1,591
|
-
|
(89)
|
2,170
|
Net debt
|
(1,285)
|
(680)
|
(977)
|
(354)
|
(3,296)
|
Opening
2021
£m
|
Cash
flows
£m
|
Non-cash
(fair value changes, accruals and acquisitions)
£m
|
Non-cash (foreign exchange
and other)
£m
|
Closing
2021
£m
| |
Bank and other short-term borrowings
|
(1,591)
|
1,135
|
(12)
|
9
|
(459)
|
Bank and other long-term borrowings
|
(1,338)
|
15
|
(12)
|
79
|
(1,256)
|
Lease liabilities
|
(215)
|
94
|
(5)
|
(91)
|
(217)
|
Other investments
|
172
|
(171)
|
-
|
-
|
1
|
Fair value of debt-related derivatives
|
7
|
31
|
(3)
|
(57)
|
(22)
|
Gross debt
|
(2,965)
|
1,104
|
(32)
|
(60)
|
(1,953)
|
Cash and cash equivalents in the Consolidated Balance Sheet
|
1,950
|
(1,267)
|
-
|
(15)
|
668
|
Net debt
|
(1,015)
|
(163)
|
(32)
|
(75)
|
(1,285)
|
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 facilities)
|
2
|
Nominal value
|
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 WACC
|
Facility
amount
2022
£m
|
Drawn at
year end
2022
£m
|
Headroom
2022
£m
|
Interest rate
at year end
2022
%
| |
Non-current
| ||||
$700m term loan due October 2025
|
579
|
579
|
-
|
4.9
|
$1.0bn RCF due October 2027
|
827
|
-
|
827
|
0.14
|
Facility
amount
2021
£m
|
Drawn at
year end
2021
£m
|
Headroom
2021
£m
|
Interest rate
at year
end
2021
%
| |
Non-current
| ||||
£550m RCF due August 2025
|
550
|
-
|
550
|
0.14
|
Bond interest coupon
2022
|
Effective hedged interest rate
2022
|
Bond interest coupon
2021
|
Effective hedged interest rate
2021
| |
Non-current
| ||||
€400m bond due November 2024
|
Fixed 0.95%
|
Fixed 3.21%
|
Fixed 0.95%
|
Fixed 3.08%
|
€500m bond due May 2026
|
Fixed 0.875%
|
Fixed 1.78%
|
Fixed 0.875%
|
Fixed 1.54%
|
€850m bond due June 2027
|
Fixed 3.875%
|
Fixed 3.98%
|
-
|
-
|
€600m bond due October 2028
|
Fixed 0.5%
|
Fixed 1.3%
|
Fixed 0.50%
|
Fixed 1.08%
|
€600m bond due June 2030
|
Fixed 4.375%
|
Fixed 4.38%
|
-
|
-
|
£400m bond due June 2032
|
Fixed 5.0%
|
Fixed 5.11%
|
-
|
-
|
Average cost of bond debt at year-end rates
|
3.28%
|
1.78%
|
2022
£m
|
2021
£m
|
2020
£m
| |
Operating Profit
|
317
|
347
|
294
|
Adjustments for:
| |||
- Depreciation and impairment of property, plant and equipment
|
148
|
128
|
132
|
- Depreciation and impairment of leased assets
|
106
|
78
|
78
|
- Amortisation and impairment of intangible assets (excluding computer software)
|
118
|
74
|
82
|
- Amortisation and impairment of computer software
|
22
|
17
|
19
|
- Other non-cash items
|
8
|
6
|
(1)
|
Changes in working capital (excluding the effects of acquisitions and exchange differences on consolidation):
| |||
- Inventories
|
(4)
|
(3)
|
(23)
|
- Contract costs
|
(10)
|
(5)
|
(2)
|
- Trade and other receivables
|
37
|
59
|
(19)
|
- Accrued income
|
(32)
|
-
|
2
|
- Trade and other payables and provisions
|
(75)
|
(43)
|
78
|
- Contract liabilities
|
81
|
11
|
13
|
Cash generated from operating activities
|
716
|
669
|
653
|
Purchase of property, plant and equipment
|
(153)
|
(128)
|
(130)
|
Purchase of intangible fixed assets
|
(37)
|
(32)
|
(23)
|
Capital element of lease payments and initial direct costs incurred
|
(104)
|
(88)
|
(83)
|
Proceeds from sale of property, plant and equipment
|
5
|
7
|
6
|
Cash impact of one-off and adjusting items
|
59
|
27
|
7
|
Dividends received from associates
|
4
|
4
|
12
|
Adjusted Cash Flow
|
490
|
459
|
442
|
Interest received
|
13
|
5
|
8
|
Interest paid
|
(52)
|
(42)
|
(49)
|
Income tax paid
|
(77)
|
(69)
|
(64)
|
Free Cash Flow
|
374
|
353
|
337
|
2022
AER
£m
|
2021
AER
£m
| |
Net cash from operating activities
|
600
|
563
|
Purchase of property, plant, equipment and intangible fixed assets
|
(190)
|
(160)
|
Capital element of lease payments and initial direct costs incurred
|
(104)
|
(88)
|
Proceeds from sale of property, plant, equipment and software
|
5
|
7
|
Cash impact of one-off and adjusting items
|
59
|
27
|
Dividends received from associates
|
4
|
4
|
Free Cash Flow
|
374
|
353
|
2022
AER
£m
|
2021
AER
£m
| |
Adjusted Profit After Tax
|
427
|
336
|
Free Cash Flow
|
374
|
353
|
Product development additions
|
10
|
7
|
Net investment hedge cash interest through Other Comprehensive Income
|
8
|
4
|
Adjusted Free Cash Flow
|
392
|
364
|
Free Cash Flow conversion
|
91.8%
|
108.3%
|
24 February 2022
|
31 December 2021
| |
Weighted average %
| ||
Discount rate
|
2.6%
|
2.0%
|
Future salary increases
|
n/a
|
n/a
|
Future pension increases
|
3.6%
|
3.3%
|
RPI inflation
|
3.7%
|
3.4%
|
CPI inflation
|
3.0%
|
2.7%
|
Present value
of obligation
2022
£m
|
Fair value of
plan assets
2022
£m
|
Total
2022
£m
|
Present value
of obligation
2021
£m
|
Fair value of
plan assets
2021
£m
|
Total
2021
£m
| |
At 1 January
|
(1,313)
|
1,305
|
(8)
|
(1,481)
|
1,461
|
(20)
|
Current service costs1
|
(2)
|
-
|
(2)
|
(1)
|
-
|
(1)
|
Past service costs1
|
(1)
|
-
|
(1)
|
1
|
-
|
1
|
Settlement gain
|
4
|
-
|
4
|
22
|
(21)
|
1
|
Transfer of RIPS annuity policies (buy-out)
|
1,159
|
(1,159)
|
-
|
-
|
-
|
-
|
Administration expenses1
|
4
|
(4)
|
-
|
-
|
-
|
-
|
Interest on defined benefit obligation/asset1
|
(5)
|
5
|
-
|
(21)
|
21
|
-
|
Exchange difference
|
(3)
|
2
|
(1)
|
2
|
(1)
|
1
|
Total pension income/(expense)
|
1,156
|
(1,156)
|
-
|
3
|
(1)
|
2
|
Remeasurements:
| ||||||
- Remeasurement gain/(loss) on scheme assets
|
-
|
(79)
|
(79)
|
-
|
(78)
|
(78)
|
- Remeasurement gain/(loss) on obligation²
|
81
|
-
|
81
|
79
|
-
|
79
|
Contributions:
| ||||||
- Employers
|
(1)
|
-
|
(1)
|
(1)
|
8
|
7
|
- Benefit payments
|
12
|
(10)
|
2
|
87
|
(85)
|
2
|
- Refund of surplus
|
-
|
(22)
|
(22)
|
-
|
-
|
-
|
At 31 December
|
(65)
|
38
|
(27)
|
(1,313)
|
1,305
|
(8)
|
Retirement benefit obligation schemes3
|
(49)
|
19
|
(30)
|
(63)
|
36
|
(27)
|
Retirement benefit asset schemes4
|
(16)
|
19
|
3
|
(1,250)
|
1,269
|
19
|
2022
£m
|
2021
£m
| |
Equity instruments
|
2
|
3
|
Debt instruments - unquoted
|
15
|
16
|
Insurance policies
|
-
|
1,239
|
Other
|
21
|
47
|
Total plan assets
|
38
|
1,305
|
Termite damage claims
£m
|
Self-
insurance
£m
|
Environmental
£m
|
Other
£m
|
Total
£m
| |
At 1 January 2021
|
-
|
32
|
14
|
18
|
64
|
Exchange differences
|
-
|
-
|
(1)
|
-
|
(1)
|
Additional provisions
|
-
|
18
|
-
|
6
|
24
|
Used during the year
|
-
|
(14)
|
(2)
|
(9)
|
(25)
|
Unused amounts reversed
|
-
|
(1)
|
-
|
(2)
|
(3)
|
Acquisition of companies and businesses
|
-
|
2
|
-
|
-
|
2
|
At 31 December 2021
|
-
|
37
|
11
|
13
|
61
|
At 1 January 2022
|
-
|
37
|
11
|
13
|
61
|
Exchange differences
|
(28)
|
(7)
|
-
|
-
|
(35)
|
Additional provisions
|
3
|
30
|
-
|
8
|
41
|
Used during the year
|
(10)
|
(26)
|
(2)
|
(8)
|
(46)
|
Unused amounts reversed
|
-
|
(6)
|
-
|
(2)
|
(8)
|
Acquisition of companies and businesses
|
335
|
136
|
3
|
1
|
475
|
Unwinding of discount on provisions
|
3
|
1
|
-
|
-
|
4
|
At 31 December 2022
|
303
|
165
|
12
|
12
|
492
|
2022
Total
£m
|
2021
Total
£m
| |
Analysed as follows:
| ||
Non-current
|
359
|
34
|
Current
|
133
|
27
|
Total
|
492
|
61
|
●
|
Discount rate - this exposure is largely based within the United States, therefore measurement is based on a US risk-free rate. As we have seen during 2022, interest rates (and therefore discount rates) have moved up and are at their highest in over a decade. Rates could move in either direction and management has modelled that an increase/decrease of 5% in yields (from 4.31% to 4.53%) would reduce/increase the provisions by £3m. Over the 12 months to 31 December 2022, as a result, inter alia, of the conflict in Ukraine, risk-free rate yields have risen from c.0.9% to 4.31%.
|
●
|
Claim cost - claim cost forecasts have been based on the latest available historical settled Terminix claims. Claims costs are dependent on a range of inputs including labour cost, materials costs (e.g. timber), whether a claim becomes litigated or not, and specific circumstances including contributory factors at the premises. Management has determined the historical time period for each material category of claim, between 6 months and 5 years, to determine an estimate for costs per claim. Recent fluctuations in input prices (e.g. timber prices) means that there is potential for volatility in claim costs and therefore future material changes in provisions. Management has modelled that a structural increase/decrease of 5% in total claim costs would increase/decrease the provision by c.£14m. Over the 12 months to 31 December 2022, as a result of supply chain issues caused by the COVID pandemic and other macro-economic factors, in year costs per claim rose by c.17%.
|
●
|
Claim rate - management has estimated claim rates based on statistical historical incurred claims. Data has been captured and analysed by a third party agency, used by Terminix over many years, 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 overall claim rates would increase/decrease the provisions by c.£14m, accordingly. Over the 12 months to 31 December 2022 claim rates fell by c.16%.
|
●
|
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 by a third party agency, used by Terminix over many years, 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 macro-economic factors and to the performance of the Group. A 1% movement in customer churn rates, up or down, would change the provisions by c.£10m up or down, accordingly. On average over the last 10 years churn rates move by +/- c.1.2% per annum.
|
2022
£m
|
2021
£m
| |
Issued and fully paid
| ||
At 31 December - 2,520,039,885 shares (2021: 1,859,332,965)
|
25
|
19
|
●
|
the Group Financial Statements, which have been prepared in accordance with UK-adopted International Accounting Standards, 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.
|
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Rentokil Initial plc published this content on 16 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 March 2023 13:24:04 UTC.