Rollins Inc at Wells Fargo Industrials Conference Transcript

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

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : Great. Maybe to start, can you talk about some of the changes that you've made since joining the company? What have been the biggest areas of focus for you?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : Thanks. Can you explain the thought process behind your decision to break out a new commercial division for Orkin?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : Great. During the Investor Day, you also mentioned plans to create a second commercial division. Can you talk about what that would look like? I think that may be a year or so out.

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : Can we double click on that? Can you talk about your general strategy of splitting branches once they reach a certain size? And why not go the other way like some are doing the market and create more -- consolidate and create more mega branches?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : What inning are you in, in terms of leveraging and investing in the technology across the organization? When you look at technology, what areas in particular you get most excited about?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : Can you talk about what data you collect on your customers and if there's an opportunity there to leverage that data more efficiently?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : One thing I've noticed from covering pest control is that people don't appreciate how much of a relationship-driven business it is and how important the people are. Can you talk about how you run the company to ensure you're hiring the right people, you're incentivizing them appropriately, keeping the routes consistent where possible?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : How has the hiring environment been recently for technicians?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : At your recent Investor Day, you issued guidance, I believe, for the first time. Can you just talk about the thought process behind introducing that guidance, if that's something we should expect going forward?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : Can you talk about what gives you confidence in that organic growth profile, both in terms of the industry drivers, and then also, what you're doing internally?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : There's been some headlines about the consumer recently that may be starting to crack a little bit. Have you seen any signs of that in your business?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : What was the consumer reception like to the 3% to 4% price increase that you put in this year? And is that a sustainable level?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : So switching over to margins. Your guidance for this year calls for a 30% incremental EBITDA margins. But longer term, you're hoping to be more in the 30% to 35% range. Can you just talk about either what's pressuring margins this year relative to that long-term target or what you're doing to get up to that 30% to 35% range?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : The long-term framework that you put out includes 2% to 3% of growth from M&A. As the business gets larger, it implies that you'll need to do -- you have to get more dollars from M&A. Can you just talk about the strategy there? Are you expecting to do more large deals? Is it going to be more -- larger volume of smaller deals?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : There was a slide at your recent Investor Day that showed the multiple when you acquired Fox. I think it was 13, 14 times, and how within one year, dropped down to, I believe, below 10 times. Is that typical for the deals? Can you just talk about what you do to drive that expansion in EBITDA? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 11, 2024 / 8:45PM, ROL.N - Rollins Inc at Wells Fargo Industrials Conference

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : Does the success of that acquisition leads you to focus more on doing door-to-door or acquiring door-to-door sales business or doing more

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : After you acquire a business, what do you do to ensure that the integration goes smoothly? And how do you get the target company's operations up to the Rollins standards?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : How do you determine, after making an acquisition, whether you keep that brand intact or whether you'll roll it into one of your existing brands? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 11, 2024 / 8:45PM, ROL.N - Rollins Inc at Wells Fargo Industrials Conference

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : Has there been any change in the level of PE interest in some of these acquisition targets? Are multiples going up, multiples going down in there?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : To what extent do you control pricing and other decisions at the corporate level versus how much do you let (inaudible) brands and local branches to determine things like prices or what services they'll offer? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 11, 2024 / 8:45PM, ROL.N - Rollins Inc at Wells Fargo Industrials Conference

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : Can you talk about what the key margin drivers are for the businesses in terms of what could create some volatility to margins and where the potential opportunity is longer term to expand those margins?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : Great. So we're nearing the end of time, so maybe one last question just to wrap this up. Curious where you're spending the most amount of your time right now? What areas are you most focused on?

Question: Jason Haas - Wells Fargo Securities LLC - Analyst : Great. So we're out of time. Thank you very much for joining us.