Rollins : 1st Quarter 2024 Earnings Webcast

FirstQuarter 2024 Earnings

Webcast Presentation

Rollins, Inc.

April 25, 2024

Cautionary Statement Regarding

Forward-Looking Statements

This presentation as well as other written or oral statements by the Company may contain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current opinions, expectations, intentions, beliefs, plans, objectives, assumptions and projections about future events and financial trends affecting the operating results and financial condition of our business. Although we believe that these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions, or expectations. Generally, statements that do not relate to historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. The words "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "should," "will," "would," and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.Forward-looking statements in this presentation include, but are not limited to, statements regarding: expectations with respect to our financial and business performance; demand for our services; our pipeline of acquisitions and potential targets; expected growth; continuous improvement initiatives enhancing profitability; and a balanced capital allocation program.

These forward-looking statements are based on information available as of the date of this presentation, and current expectations, forecasts, and assumptions, and involve a number of judgments, risks and uncertainties. Important factors could cause actual results to differ materially from those indicated or implied by forward-looking statements including, but not limited to, those set forth in the sections entitled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and may also be described from time to time in our future reports filed with the SEC.

Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required by law.

© 2024 Rollins, Inc. All rights reserved.	2

Reconciliation Of GAAP And Non-GAAP Financial Measures

The Company has used the non-GAAP financial measures of organic revenues, organic revenues by type, adjusted operating income, adjusted operating margin, adjusted net income, adjusted earnings per share ("EPS"), earnings before interest, taxes, depreciation and amortization ("EBITDA"), EBITDA margin, Adjusted EBITDA, adjusted EBITDA margin, incremental EBITDA margin, adjusted incremental EBITDA margin, free cash flow, free cash flow conversion, net debt, net leverage ratio, and adjusted sales, general and administrative expenses ("Adjusted SG&A") in this earnings presentation. Organic revenue is calculated as revenue less the revenue from acquisitions completed within the prior 12 months and excluding the revenue from divested businesses. Acquisition revenue is based on the trailing 12-month revenue of our acquired entities. Adjusted operating income and adjusted operating income margin are calculated by adding back to the GAAP measures those expenses resulting from the amortization of certain intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisition of Fox. Adjusted net income and adjusted EPS are calculated by adding back to the GAAP measure amortization of certain intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisition of Fox and excluding gains and losses on the sale of non-operational assets and by further subtracting the tax impact of those expenses, gains, or losses. Adjusted EBITDA and adjusted EBITDA margin are calculated by adding back to the GAAP measures those expenses resulting from the adjustments to the fair value of contingent consideration resulting from the acquisition of Fox and excluding gains and losses on the sale of non-operational assets. Incremental margin is calculated as the change in EBITDA divided by the change in revenue. Adjusted incremental margin is calculated as the change in adjusted EBITDA divided by the change in revenue. Free cash flow is calculated by subtracting capital expenditures from cash provided by operating activities. Free cash flow conversion is calculated as free cash flow divided by net income. Net debt is calculated as total long-term debt less cash and cash equivalents. Net leverage ratio is calculated by dividing net debt by trailing twelve-month EBITDA. Adjusted SG&A is calculated by removing the adjustments to the fair value of contingent consideration resulting from the acquisition of Fox. These measures should not be considered in isolation or as a substitute for revenues, net income, earnings per share or other performance measures prepared in accordance with GAAP.

Management uses adjusted operating income, adjusted operating income margin, adjusted net income, adjusted EPS, EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, incremental EBITDA margin, adjusted incremental EBITDA margin, and adjusted SG&A as measures of operating performance because these measures allow the Company to compare performance consistently over various periods. Management also uses organic revenues, and organic revenues by type to compare revenues over various periods excluding the impact of acquisitions and divestitures. Management uses free cash flow to demonstrate the Company's ability to maintain its asset base and generate future cash flows from operations. Management uses free cash flow conversion to demonstrate how much net income is converted into cash. Management uses net debt as an assessment of overall liquidity, financial flexibility, and leverage. Net leverage ratio is useful to investors because it is an indicator of our ability to meet our future financial obligations. Management believes all of these non-GAAP financial measures are useful to provide investors with information about current trends in, and period- over-period comparisons of, the Company's results of operations. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.

A non-GAAP financial measure is a numerical measure of financial performance, financial position, or cash flows that either 1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of operations, balance sheet or statement of cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.

See the appendix for a reconciliation of non-GAAP financial measures used in this presentation with their most directly comparable GAAP measures.

© 2024 Rollins, Inc. All rights reserved.

3

Q1

2024 Results

Revenue of

$748M up 14%

Adjusted $0.20 18%

EPS1 ofup

Free

Flow1

Cash $120M up29%

Other

Q1 Highlights

• Double-digitgrowth across all major service lines
• Organic growth1 of 7.5% despite unfavorable weather in January; acquisitions drove remaining growth
• Growth accelerated through the quarter with organic growth1 of 10%+ for February and March
• Solid Q1 gross margin and further leverage in SG&A drove 130 basis points of improvement in adjusted operating margins1
• Free cash flow conversion1 of ~127%

Double-Digit Revenue & Adj. Earnings Growth Despite Slower Start In January

© 2024 Rollins, Inc. All rights reserved.

Comparisons are against Q1 2023 unless otherwise noted.	4
1 These amounts are non-GAAP measures (see Appendix).

Balanced 2024 Outlook

WHAT WE ARE SEEING

Organic Growth

Healthy market growth and solid execution driving strong organic growth with good performance across all major service areas; Demand strong to start Q2

Inorganic Growth

Robust M&A pipeline; attractive multiples in potential targets. Expect 2-3% Revenue Growth Contribution from M&A in 2024

Healthy Margin Performance

Good leverage across the income statement

Staffing Remains Strong

Beginning peak season with staffing levels needed to respond to favorable demand trends

WHAT WE EXPECT

Continued Growth

Focused on delivering solid growth and healthy incremental margins in 2024, further complemented by a strategic and disciplined approach to M&A

Margin Expansion Opportunities

Continued focus on pricing, as well as ongoing execution of modernization program in 2024

Compounding Cash Flow

Strong cash position will enable a balanced capital allocation strategy focused on investing in growth opportunities in our core market

Focused on Delivering Continued Growth and Improving Profitability in 2024

© 2024 Rollins, Inc. All rights reserved.

5

Q1 Revenue Growth

+16.5%

$12M organic1

$38M acquisition1

($3M) impact of

divestiture1

+11.4%

$23M organic1

$5M acquisition1

($2M) impact of

divestiture1

+11.7%

$13M organic1

$3M acquisition1

+13.7%

$748

Double-Digit Revenue Growth Across All Three Service Lines

© 2024 Rollins, Inc. All rights reserved.	Note: Figures may not foot due to rounding.	6
1These amounts are non-GAAP measures (see Appendix)

Q1 Adjusted EBITDA Margin1

Adj. SG&A(1) +20 bps

+100 bps

21.5%

HIGHLIGHTS

Gross Profit

• Gross margin 51.2%
• Fox accretive by ~40 bps, 50 bps of organic improvement
• Leverage from people costs, fleet, and materials & supplies

Adj. SG&A(1)

• Benefits from leverage on people costs offset headwinds from increased advertising and selling expenses associated with growth initiatives

Solid Q1 Gross Margin & SG&A Leverage Drove 100 BPS of Adj

EBITDA Margin1 Improvement

© 2024 Rollins, Inc. All rights reserved. 1These amounts are non-GAAP measures (see Appendix)

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Cash Flow and Use Of Liquidity

Q1 2024 Free Cash Flow1	Q1 2024 Uses of Cash Flow
							& Liquidity
		+29%					CAPEX ($7M)
					DIVIDENDS
								($73M)
			$120M
	$93M			ACQUISITIONS
								($47M)

1	2	0.6x
~106%	~127%
CONVERSION OF NET INCOME	NET DEBT TO EBITDA

Solid Cash Flow Performance Enabling Balanced Capital Allocation Strategy

© 2024 Rollins, Inc. All rights reserved. 1These amounts are non-GAAP measures (see Appendix)

HIGHLIGHTS

Cash Generation

• Q1 Free Cash Flow Conversion1 was ~127%
• Strong balance sheet with modest levels of debt

Acquisitions

• Closed 12 acquisitions in Q1

Dividends

• Healthy dividend +15% YoY

Net Leverage1

• Well below 1x of EBITDA
• Expect to maintain a balanced capital allocation approach

8

Key Takeaways

Focus on Modernization

Hiring key talent across the organization to accelerate modernization efforts

Focused on upgrading technology and executing continuous improvement across key processes

Margins Remain a Focus

Focus on pricing and productivity has resulted in increased margins across several key income statement categories

Strong improvement in margins with and without acquisitions

© 2024 Rollins, Inc. All rights reserved.

Exceptional Performance

Healthy pipeline of acquisitions

Robust organic growth across all service areas

Essential nature of services provides consistency in business growth across all cycles

Balance Sheet Provides Flexibility

Strong balance sheet with modest levels of debt post Fox acquisition and recent share repurchase

Cash flow conversion well above 100%

Balanced approach to capital allocation

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APPENDIX

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