Rollins Inc at Barclays Americas Select Franchise Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Manav Patnaik - Barclays - Analyst : And just to the point on the macro, I guess, just talk there. I think on the call -- you aren't seeing any impacts really at the moment. Is that correct?

Question: Manav Patnaik - Barclays - Analyst : Got it. And just for some historical context, for most companies, this is not a softball question, but for you it is. Like, how has Rollins performed in prior recessions?

Question: Manav Patnaik - Barclays - Analyst : And that chart obviously showed the residency over the years, but also Rollins has been around for a long time. But there have been some changes over the last three to four years. So maybe we can start with the CEO change and perhaps what -- some of the changes from that level that have happened, so far.

Question: Manav Patnaik - Barclays - Analyst : And maybe just from our perspective, through all the things that you've done, you mentioned, maybe just elaborate a little bit on that more, but for background, what was it that the company finally realized that needed to change from the CFO and IR perspective?

Question: Manav Patnaik - Barclays - Analyst : So just to follow up on a couple of the things. So the secondary that you talked about: How much does the family still own? And what should we think about that ownership plan going forward?

Question: Manav Patnaik - Barclays - Analyst : And another big milestone was, I think, for you at least, was in February, the IG ratings from S&P and Fitch. Can you just help us appreciate why that was so important?

Question: Manav Patnaik - Barclays - Analyst : So you were clearly not having any issues with doing acquisitions already, so the comment on IG rating acquisitive, does that mean we should anticipate bigger deals down the road? Or not necessarily?

Question: Manav Patnaik - Barclays - Analyst : Got it. Shifting to another topic, pricing. I think that's also an area, I think, where you and Jerry have really focused in on. So again just for some perspective, what was historical pricing like? What's current pricing?What are some of the changes around there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2025 / 5:30AM, ROL.N - Rollins Inc at Barclays Americas Select Franchise Conference

Question: Manav Patnaik - Barclays - Analyst : And so of your 7% to 8% organic growth, 3%, 4% is pricing. How do you break out the other 3% to 4%?

Question: Manav Patnaik - Barclays - Analyst : And so maybe on that market growth. Maybe the first question would be, at Investor Day, you guys attempted to size the TAM.

Question: Manav Patnaik - Barclays - Analyst : So maybe, just for the audience, if you can help with that TAM size and what that market should grow foreseeably. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2025 / 5:30AM, ROL.N - Rollins Inc at Barclays Americas Select Franchise Conference

Question: Manav Patnaik - Barclays - Analyst : And you mentioned share gains as part of your growth vertical. Can you just talk about how fragmented or -- the market is and perhaps maybe where some concentrations are?

Question: Manav Patnaik - Barclays - Analyst : Got it. And the concentration question where I was heading to is obviously, out here in the UK in particular, we get a lot of questions around Rentokil and the Terminix acquisition. Does a particular player like that not doing well directly show up in better numbers of yours? Or not necessarily.

Question: Manav Patnaik - Barclays - Analyst : Got it. You briefly referred to your multi-brand strategy, so if you could just elaborate on that. Because quite often, you're like, oh, that looks like a Rollins competitor. And the next you know, it's under your umbrella.

Question: Manav Patnaik - Barclays - Analyst : So like, how did that develop? And it seems a little bit unique to some of the other larger-scale industrial services companies we cover.

Question: Manav Patnaik - Barclays - Analyst : So when you look at your acquisition pipeline -- let's put the returns and stuff to the side for a second, but strategically, are you going after geographies? Is that the primary target that you're looking for? Or is there something more with some of these deals?

Question: Manav Patnaik - Barclays - Analyst : Got it. And maybe looking at your most recent acquisition, the Saela acquisition, can you just remind us of the size, contribution metrics? And maybe use that as an example of like the financial criteria you use, like the returns you need on investment. How many years does it need to be accretive? Those things.

Question: Manav Patnaik - Barclays - Analyst : Got it. The Fox acquisition, can you remind me? Just a quick follow-up on pricing. The 3% to 4% is the company average, correct? Like, depending on the brand or the demographic, it's higher in different places.

Question: Manav Patnaik - Barclays - Analyst : Got it. Since you mentioned commercial, let's jump there. I mean, for the most part, I think we think residential when we think Rollins, but obviously it's been a greater focus for you guys. So maybe if you can just give us a sense of what mix commercial is today of the business and then the change in strategy, I guess.

Question: Manav Patnaik - Barclays - Analyst : How about the growth and margin profile commercial versus residential?

Question: Manav Patnaik - Barclays - Analyst : Got it. And then in terms of the competitive dynamics, fragmentation, TAM, anything to call out there versus the residential?

Question: Manav Patnaik - Barclays - Analyst : Got it. And so residential; commercial; and the other, ancillary. Can you just help us with what fits into the other stuff there?

Question: Manav Patnaik - Barclays - Analyst : Got it. I wanted to shift to margins. Obviously, with the top line growing 8%-plus, that helps give you a lot of leverage to show margins, but what is the new kind of incremental margin target or margin targets? And how did that compare to before?

Question: Manav Patnaik - Barclays - Analyst : And what are some of those opportunities to improve that going forward? I mean obviously you have the scale. You have the route density. Is it technology? What is the extra juice there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2025 / 5:30AM, ROL.N - Rollins Inc at Barclays Americas Select Franchise Conference

Question: Manav Patnaik - Barclays - Analyst : Got it. Maybe let's just end with a broader capital allocation question. We've talked a lot about M&A, but help us with how you guys see your priorities with organic buybacks, dividends, those kinds of things.

Question: Manav Patnaik - Barclays - Analyst : Got it. All right, Ken, well, let's leave it there. Thank you so much for your time, appreciate it. Thank you, everybody.