pest control down to a science

PEST CONTROL DOWN TO A SCIENCE
Eddie Northen
Vice President, Chief Financial Officer and Treasurer
2016
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Certain information provided during today's presentation will include forwardlooking 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.
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
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 207
franchises worldwide
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Recession
resistent – 80% of
revenues are
recurring
Focus on
sustained
profitable growth
Strong balance
sheet
Solid track record of
Shareholder Value
creation
Competitive
advantage -Brand and
infrastructure
create barriers
Strong
management,
excellent depth
Significant insider
ownership
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$12.3+ billion industry
Increasing health
awareness
Roughly 70% residential
and 30% commercial
Three public competitors:
Ecolab (NYSE:ECL),
ServiceMaster (NYSE:SERV)
and Rentokil (LSE:RTO)
Rollins, Terminix, and
Ecolab generate over 30%
of industry revenues
Highly fragmented with
numerous small operators
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 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
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Acquirer
of Choice
Australia
Over 30 branches
across Canada
Headquarters
Location
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50
54
157
International
Domestic
207
Franchises
Globally
Critter Control
• 106 Domestic
Franchises
• 2 Canada Franchises
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Domestic
Franchises Right to
Repurchase
Ireland
Cyprus
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Mexico
Panama
Costa Rica
Honduras
The Dominican
Republic
Guatemala
El Salvador
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Turkey
Tbilisi, Georgia
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Chile
Uruguay
Sao Paulo, Brazil
Belo Horizonte, Brazil
Quito, Ecuador
Paraguay
Columbia
South Korea
China
People’s Republic
of China
•
•
Jamaica
Turks and Caicos
Islands
Trinidad and
Tobago
US Virgin Islands
Nigeria
Egypt
•
Guam
India
•
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United Arab
Emirates
Saudi Arabia
Bahrain
Lebanon
Kuwait
Iraq
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Revenue and Retention % by Business Line
Other <1%
Retention
approximately 85%
Retention
between
88%-90%
Termite 17%
Commercial
41%
Residential
41%
Commercial
Residential
Termite
Other
Retention between
76%-85%
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Brand value grows with importance of
Internet marketing
National ad campaign – “Pest Control Down to a Science”
Approximately 5% of revenues spent annually on
growing and preserving the brand
“Orkin” man icon – 70% brand awareness
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COMMERCIAL
Orkin, LLC
 No. 1 commercial pest control provider in North
Orkin Canada
 Increasing demand driven by health and safety concerns
Western Pest
Services
 Worldwide service network with 103 dedicated
IFC
PermaTreat
Waltham Services
Crane Pest Control
Rollins Australia
America – 20% market share
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
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RESIDENTIAL
Orkin
HomeTeam Pest
Defense
Orkin Canada
 Rising concern over health, safety and protection of
property
 Better informed consumers, targeting specific
segments
 Internet providing accelerated growth
PermaTreat
 Recession resistant – non-discretionary purchase
Waltham Service
 Primary service offerings – varied across brands to
Rollins Australia
meet customer needs and improve profitability
 HomeTeam’s unique service offering provides
recurring revenues and long-term profitability
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 Termite damage -- $5.6 billion annually, a real threat
TERMITE
Orkin
HomeTeam Pest
Defense
to homeowners.
 Shares many of the same characteristics of our other
businesses – strong recurring revenue and high
retention
PermaTreat
 Invigorated sales force, utilizing digital technology
Western Pest
Services
 HomeTeam providing pre-treat service to nation’s
leading homebuilders
Rollins Australia
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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
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

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
$80.0
Bed Bug Revenue History
(in millions)
$44.5
$33.5
$40.0
$0.0
$72.3
$54.1
$60.0
$20.0
$63.9
$18.5
$6.2
2010
$23.5
$10.0
2011
$28.5
$16.0
2012
Residential
$33.3
$20.8
2013
$39.3
$24.6
2014
$42.3
$30.0
2015
Commercial
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
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Advance service and product line offerings
Expand customer base
Increase customer retention and satisfaction
Improve productivity and reduce operating costs
Achieve continuous financial improvement
Initiatives to meet these objectives
 Rollout of branch operating/CRM systems (BOSS)
 Listen 360
 Big data analytics
 Introducing new tools and advancing technology
 Focus on acquisitions
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Commitment to
Training
Cafeteria
2,400 sq. ft. home
27,000 sq. ft. Training Center
unique to pest control industry
13,000 sq. ft. commercial
training facility
Residential facility incorporates
a 2,400 sq. ft. fully constructed
home and termite treating
pavilion
Named to Training Magazine
Top 125 Training Companies
for last 14 years
Commercial Kitchen
Broadcast Studio
Hospital Room
Web-based employee training
network utilized by employees
and franchises worldwide
Attracts customers, regulators
educators, university
researchers
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PEST CONTROL DOWN TO A SCIENCE
($in millions)
$1,485
$1,500
$1,412
$1,337
$1,400
$1,271
$1,300
$1,200
$1,205
$1,137
$1,100
$1,000
2010
2011
2012
2013
2014
2015
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($in millions)
$400
$380
$360
$340
$320
$300
$280
$260
$240
$220
$200
1st Qtr
2nd Qtr
2010
2011
2012
3rd Qtr
2013
2014
4th Qtr
2015
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$0.80
$0.70
$0.70
$0.63
$0.56
$0.60
$0.50
$0.40
$0.37
$0.41
$0.46
$0.51
$0.30
$0.30
$0.20
2008 2009 2010
2011
2012
2013
2014
2015
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.
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Cash From Operations
$250
$225
$200
$175
$150
$125
$100
$75
$50
$25
$0
2010
2011
Capital Expenditures
2012
2013
Dividend Payout
2014
2015
Free Cash Flow
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Cash Flow for FY 2008 – FY 2015 (in millions)
$1,400
$90
$7
$343
$1,200
$1,000
$168
$90
$800
$1,176
$600
$427
$400
$181
$200
$135
$71
$0
Beginning
Cash
Cash From
Operations
Debt Issued
Other
Net Acq.
Net Capex
Debt Repaid
Dividends
Paid
Net Rep. of
Stock
Ending Cash
Source: Company Filings
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(In million)
Year
•
•
•
•
•
•
•
2009
2010
2011
2012
2013
2014
2015
• Total
#of Shares
•
•
•
•
•
•
•
3,773,700
2,833,712
2,187,423
1,172,672
511,049
1,507,919
19,137
• 12,005,612
Cash Paid
•
•
•
•
•
•
•
27,820,860
26,410,570
27,313,664
16,399,431
8,384,761
29,394,633
429,899
• $136,153,818
5.9 Million Shares Remaining to be Repurchased at 12/31/2015
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$0.50
$0.45
$0.40
$0.35
$0.30
$0.25
$0.20
$0.15
$0.10
$0.05
$0.00
2008
2009
2010
2011
Dividends Paid excluding special dividends
2012
2013
2014
2015
Dividends Paid with special dividends
All dividend data is presented post-split for the three-for-two stock split effective March 10, 2015 for shareholders of record February 10, 2015.
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$ in millions
$45
$40
$35
$30
$25
$26.9
$20.4
$22.4
$23.4
$25.2
$25.2
$20
$15
$10
$15.2
$16.0
$15.1
$16.6
$14.4
$19.4
$5
$0
2010
2011
2012
Depreciation
2013
2014
2015
Amortization
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Rollins, Inc. 10-year stock performance (with dividends reinvested)
vs. S&P 500 Index
12/31/2005 – 12/31/2015
Rollins, Inc. (RO L-USA) [Delayed]
S&P 500 (SP50-USA) [Delayed]
500
443.49
400
300
200
163.74
100
90
80
70
60
50
40
'06
'07
'08
'09
'10
'11
10-Year Performance w/ dividends
Reinvested (12/31/2005 – 12/31/2015):
Rollins Inc.
S&P 500 Index
Source: FactSet
'12
'13
Total
419.0%
102.4%
'14
'15
'16
Annualized
17.9%
7.3%
Rollins Inc. 10-year stock performance (with dividends reinvested)
vs. Russell 2000 Index
12/31/2005 – 12/31/2015
Rollins, Inc. (RO L-USA) [Delayed]
Russell 2000 (RUT-RUX) [Delayed]
500
443.49
400
300
200
168.72
100
90
80
70
60
50
40
'06
'07
'08
'09
'10
'11
10-Year Performance w/ dividends
Reinvested (12/31/2005 – 12/31/2015):
Rollins Inc.
Russell 2000 Index
Source: FactSet
'12
'13
Total
419.0%
93.1%
'14
'15
'16
Annualized
17.9%
6.8%
Rollins buys Orkin for
$62 million
Orkin began
operations;
Otto Orkin “
The Rat Man”
sold poison
door-to-door
Rollins,
begins
trading
on the
NYSE
First Orkin
franchise
opens
Orkin celebrates 100th
Anniversary
Rollins acquires
Western Pest
Services
Rollins acquires
HomeTeam Pest
Defense and Crane Pest
Control
Rollins acquires
Australian based Allpest
WA and Statewide Pest
Management and
Virginia based
PermaTreat
1901 1941 1964 1968 1993 1994 1999 2001 2003 2004 2005 2008 2010 2014 2015
Orkin treated
military
establishments for
pest control
during WWII
Rollins acquires
Orkin named to Training
Orkin celebrates
Waltham Services
Magazine’s Top 100
the opening of the
Training Companies
Orkin Insect Zoo
Rollins acquires The
at the Smithsonian
Rollins acquires
Industrial Fumigant
Orkin
acquires
Prism,
Institute
Critter Control, Inc.
Company
Orkin Canada, and REDD
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