Rentokil Initial PLC (LON:RTO) has announced its 2025 Preliminary Results
| ● | Evolved strategy improves performance with H2 Organic Revenue1 Growth of 3.5% (H1: 1.6%). |
| ● | Improvement in North America Pest Control Services Organic Revenue Growth to 2.6% in Q4. |
| ● | Free Cash Flow Conversion1 of 98% ahead of guidance. |
| ● | On track to deliver North America 2027 targets of $100m cost reduction and above 20% margin. |
| ● | Simplified approach to deliver c.800 branches and c.30 retained brands in North America. |
| Financial Results Continuing Operations | Adjusted Results1 | Statutory Results | |||||||
| $m | 2025 $m | 2024 $m | Change (reported) % | Change (constant currency) % | 2025 $m | 2024 $m | Change (reported) % | Change (constant currency) % | |
| Revenue | 6,908 | 6,617 | 4.4% | 3.8% | 6,908 | 6,617 | 4.4% | 3.8% | |
| EBITDA | 1,430 | 1,365 | 4.8% | ||||||
| Operating Profit | 1,070 | 1,008 | 6.2% | 5.4% | 584 | 644 | (9.3%) | (10.2%) | |
| Operating Profit margin | 15.5% | 15.2% | 0.3%pts | 0.3%pts | 8.5% | 9.7% | (1.2%pts) | (1.3%pts) | |
| Profit before Tax | 876 | 842 | 4.0% | 4.1% | 390 | 462 | (15.6%) | (15.3%) | |
| Free Cash Flow | 615 | 494 | 24.5% | ||||||
| Basic EPS | 25.91c | 25.31c | 2.4% | 11.49c | 13.72c | (16.3%) | |||
| Dividend Per Share | 12.39c | 12.03c | 3.0% | ||||||
| Net debt | 3,650 | 4,017 | |||||||
| Net debt:EBITDA | 2.6x | 2.9x | |||||||
| Organic Revenue Growth | Q1 | Q2 | Q3 | Q4 | H1 | H2 | Full Year |
| Group | 1.6% | 1.6% | 3.4% | 3.5% | 1.6% | 3.5% | 2.6% |
| North America | 0.7% | 1.4% | 3.4% | 3.6% | 1.1% | 3.5% | 2.3% |
| North America Pest Control Services | -0.2% | 0.3% | 1.8% | 2.6% | 0.1% | 2.2% | 1.1% |
| North America Business Services | 5.6% | 9.2% | 11.9% | 7.8% | 7.8% | 9.8% | 8.9% |
| International | 3.2% | 2.0% | 3.4% | 3.4% | 2.6% | 3.4% | 3.0% |
2025 Financial Highlights1
| ● | Q4 Group Organic Revenue Growth1 of 3.5% including 3.6% in North America and 3.4% in International. |
| ● | Q4 North America Pest Control Services Organic Growth of 2.6%, up from 1.8% in Q3 and 0.1% in H1. |
| ● | FY25 Group Organic Revenue Growth of 2.6%, with improved performance in the second half. |
| ● | Group Adjusted Operating Profit1 up 5.4%, with 16.7% growth in H2 benefiting from the phasing of cost efficiency initiatives in North America. |
| ● | Group Adjusted Operating Margin1 of 15.5%, up 0.3%pts. North America Operating Margin of 17.4%, up 0.4%pts. |
| ● | Additional provision for Termite Damage claims in H2 of $122m, taking the total for FY25 to $201m. After $95m of cash-settled claims in 2025, closing provision of $384m. Current estimate for 2026 cash outflow at similar levels to 2025. |
| ● | Free Cash Flow1 of $615m, up 24.5% year-on-year, and Free Cash Flow Conversion of 98%, ahead of guidance due to real-estate sales and some one-off benefits within the overall working capital improvement. |
| ● | Net debt to Adjusted EBITDA1 ratio reduced to 2.6x (FY24: 2.9x), after a $181m adverse foreign exchange impact on translation of year end net debt. |
| ● | Recommended final dividend of 8.24 cents, up 4.6%; total FY25 dividend of 12.39 cents, up 3%. |
2025 Strategic and Operational Highlights
North America Pest Control: Quarter-on-Quarter improvement in Organic Growth
At the start of 2025, we implemented a number of strategic initiatives focused on growth and increasing the value of our contract portfolio through winning new customers, retaining existing customers and pricing discipline. This evolved strategy has delivered an improved performance.
| ● | Refocused marketing investment towards organic lead generation and more efficient paid marketing delivered growth in residential lead flow of 7.1% in H2 and a double-digit reduction in cost per lead. |
| ● | Investment behind additional regional brands delivered strong growth in lead flow. |
| ● | Over 150 smaller, local branches open under the satellite programme – which has boosted customer proximity and reviews, and lead generation. |
| ● | Moved sales accountability back into branches, driving up visits per day and services proposed. |
| ● | Encouraging summer door-to-door pilot in 25 sales territories with planned expansion to 40 territories in 2026. |
| ● | Focus on leadership in underperforming branches – over 90 branch manager changes during the year. |
| ● | Sustained pricing discipline with price increases slightly above inflation. |
| ● | North America customer retention improved to 80.5%. (FY24: 80.1%). |
| ● | North America colleague retention improved to 82.2%. (FY24: 79.4%), +12%pts in the last 3 years. |
North America Pest Control: Streamlining operations – Brands, Branches and Systems
| ● | Building on the success of our broader brand strategy and enhanced data analysis, we are now planning to retain 30 national, regional and local brands with strong brand equity covering over 90% of revenues to maximise demand penetration. |
| ● | We are expanding our network of small, local branches from the satellite programme, and retaining more local brands and their branches, which will take our network to around 800 highly targeted locations to maximise customer proximity and market demand penetration, yielding a strong return on investment. |
| ● | Pausing integration and evaluating how to simplify our approach has led to an in-development BI (Business Intelligence) tool allowing multiple systems to be maintained, significantly reducing the operational impact of branch integrations. |
| ● | We are encouraged by the results from the Commercial branch migrations and now have 75% of our Commercial revenues consolidated under dedicated branch and regional leadership. |
| ● | We have begun the roll-out of a simplified remuneration approach for Commercial sales and designed a harmonised pay policy for new service colleagues which offers a ‘grandfathering’ choice for existing colleagues. |
North America: Business simplification and cost efficiencies
| ● | Cost efficiency initiatives remain on track to deliver a cost reduction of c.$100m in 2027 compared to an inflation-adjusted 2024 base. Initiatives include streamlining and simplifying the business through Global Capability Centres, outsourcing, procurement and digital enablement, with $25m savings delivered in 2025. |
| ● | In 2027, these cost savings and an improved organic growth rate, are expected to deliver a North America Operating Profit margin above 20%. |
International: Improved second half performance
| ● | FY25 Organic Revenue Growth of 3.0% converted into Adjusted Operating Profit Growth of 5.7% with Adjusted Operating Profit margin of 19.8%, up 0.2%pts year-on-year. |
| ● | H2 Organic Revenue Growth of 3.4% after 2.6% in H1. |
| ● | Good volumes and a strong demand and pricing environment across our scale markets of the UK, the Southern European markets of Spain and Portugal and the faster growing economies of Indonesia and India. |
| ● | We are assessing further cost efficiency opportunities across our International businesses. |
Investing in data capabilities, product innovation and AI to drive performance and productivity
| ● | Through 2025, we invested in capabilities to capture the opportunity of data and to enable AI usage: | |
| – | The roll-out of Gemini to c.63,400 colleagues is expected to improve productivity over time. | |
| – | In-house “RAT-GPT” portal launched with over 100 AI agents in development to support growth and efficiency such as a new model which prioritises leads based on factors such as likelihood to convert, sales value and future customer value. | |
| ● | The focus in 2026 is on advancing these AI agents to further drive productivity and operational excellence. | |
| ● | We continue to leverage the investments made in product innovation as a competitive advantage with over 600,000 Pest Connect devices now in operation. | |
Ongoing investment in bolt-on M&A: 36 businesses with revenues of c.$63m in year prior to purchase acquired for $115m
| ● | FY25 spend of $115m was below our guidance, with a number of deals slipping into 2026. Our pipeline of potential deals leading into 2026 is healthy, and at this time we expect to spend around $200m on M&A in 2026. |
Appointment of new Chief Executive
On 13 January 2026 we announced the appointment of Mike Duffy as Chief Executive (CEO) and Executive Director. Mike joined as CEO Designate on 16 February and will become CEO on 16 March. Andy Ransom (CEO) and Paul Edgecliffe-Johnson (CFO) will host the FY25 virtual results presentation to be held today, 5 March 2026.
2026 Outlook
| ● | Despite some weather-related disruption in North America in January, and increased uncertainty from recent geopolitical events, we expect to deliver FY 2026 financial results in line with market expectations. |
Andy Ransom, Chief Executive of Rentokil Initial plc, said:
“2025 has been a year of encouraging progress with improving performance through the second half, after the strategic initiatives we implemented from Q1 2025. North America delivered a quarter-on-quarter improvement in Organic Revenue Growth and in the value of the contract portfolio. Organic Revenue Growth in our International business accelerated to 3.4% in the second half with solid demand in the UK, Southern Europe, India and Indonesia. This performance, alongside continued cost discipline, delivered Group Adjusted Operating Profit Growth of 5.4%.
“In North America, we are continuing to execute our evolved marketing and multi-brand strategy. Informed by the strong growth in leads from our regional brand strategy, we are planning to retain 30 national, regional and local brands that represent over 90% of our revenue. Retaining more local brands and their branches, and expanding our network of small, local branches following the success of our first 150 satellite branches, will give us greater customer proximity and a stronger local brand presence across a total branch network of around 800 by the end of 2026. This, combined with an enhanced and streamlined approach to systems migration, simplifies the remaining integration.
“We have made good progress in cash generation and cost discipline across the Group. Free Cash Flow Conversion of 98% is ahead of expectations and we have reduced leverage to 2.6x. Our efficiency programme has made a good start, and we remain on track to deliver the c.$100m cost reduction opportunity and an operating margin for North America above 20% in 2027.
“It is encouraging to see the strategic initiatives we put in place at the start of this year driving an improved performance. There is still more to do, building on this progress, to fully realise the potential of this business. Our leading positions in the North American pest market, and other key global markets, provide a solid foundation and mean we are well-placed to capitalise on strong industry growth forecasts for the coming years. In the short term, whilst recent geopolitical events create uncertainty, our plans to further increase growth and margins give us confidence in delivering a 2026 performance in line with market expectations. As I pass the baton to Mike, I would like to extend my sincere gratitude to all of our colleagues for their dedication and hard work throughout my 12 years as CEO.”
