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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Rentokil Initial Plc | LSE:RTO | London | Ordinary Share | GB00B082RF11 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -8.20 | -1.96% | 410.10 | 410.10 | 410.20 | 417.50 | 410.00 | 417.50 | 1,548,458 | 10:18:22 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Disinfecting,pest Control Sv | 5.38B | 381M | 0.1516 | 27.14 | 10.34B |
From Apr 2019 to Apr 2024
TIDMRTO
RNS Number : 1220U
Rentokil Initial PLC
31 March 2021
Rentokil Initial plc (the "Company")
Annual Report and Annual General Meeting
In compliance with Listing Rule 9.6.1, the Company announces that the following documents have today been submitted to the UK Listing Authority, and will shortly be available for inspection via the National Storage Mechanism at morningstar.co.uk/uk/NSM :
-- Annual Report and Financial Statements for the year ended 31 December 2020 (the Annual Report 2020);
-- Notice of 2021 Annual General Meeting; and -- Proxy Form for the 2021 Annual General Meeting.
The documents will be posted today and the Annual Report 2020 and the Notice of 2021 Annual General Meeting have been published on the Company's website at rentokil-initial.com/investors .
The 2021 AGM will be held at, and be broadcast via live webcast from, the Company's offices at the Power Centre, A1 & A2, Link 10, Napier Way, Crawley, RH10 9RA at 2.00pm on Wednesday 12 May 2021. However, in light of the ongoing COVID-19 pandemic and the UK government's current guidance, which includes restrictions on public gatherings, the Board has concluded that it will unfortunately not be possible to allow shareholders to attend in person on the day. Shareholders are recommended to make use of the electronic facilities on offer to participate in the meeting remotely. In order to protect the health and well-being of our shareholders, Directors and employees, it is intended that the only people present at the physical meeting will be those required to form a quorate meeting and transact the formal business of the meeting.
The Company's preliminary results announcement on 4 March 2021 contained a condensed set of Rentokil Initial plc financial statements and information on important events that have occurred during the year ending 31 December 2020 and their impact on the financial statements. That information together with the information set out below which is extracted from the Annual Report 2020 constitute the requirements of DTR 6.3.5 which is to be communicated via an RIS in unedited full text. This announcement is not a substitute for reading the full Annual Report 2020. Page numbers and cross references in the text below refer to page numbers and cross references in the Annual Report 2020. To view the preliminary results announcement, visit the Company's website at rentokil-initial.com/investors .
Risks and uncertainties
The text in the table below, of the principal risks that the Company has identified, is extracted in full and unedited form from pages 69 to 73 of the Annual Report 2020.
Hot Features
Premium
Failure to grow our business profitably in a changing macro-economic
environment
The Company's three businesses (Pest Control, Hygiene and Protect
& Enhance) operate in a global
macro-economic environment that is subject to uncertainty and
volatility.
Impact should the risk Mitigating actions C hanges 2020 versus
materialise * Regular review of our capital allocation model which 2019
Changes in the macro-economic is differentiated by line of business to ensure that * North America business now accounts for 44% of
environment could have scarce resources are directed to countries and Ongoing Revenue at CER, up from 38%
a number of different businesses with the most attractive prospects.
impacts on the ability
of the business to * Supply chain resilience
grow profitably, * Global Employer of Choice programme to ensure focus
to sustain recruitment on the key priorities of the organisation, including
and to deliver against recruiting and retaining critical talent in all * Additional service lines in the Hygiene business
targets. markets.
Examples include:
* Recession and economic slowdown in some of our key * Biannual review of key financial controls
markets and a trend for government increases in * Working with governments and regulators on
minimum wage to exceed inflation may make it implementation of new regulations.
difficult to maintain profitability. Performance measures
to monitor risk
* Low-cost operating model, focused IT investment and * Group Ongoing Revenue growth, in total and by
* Low-growth economies with inherent cost inflation, route density incentives to deliver efficient category
where the Company has weak pricing power may make it operations for frontline and back office colleagues.
difficult to maintain profitability.
* Group Organic Revenue growth, in total and by
* International Key Accounts team developing business category
* Growing market presence of multinational competitors with multinational customers to take advantage of the
may increase the cost of acquisitions and drive down Company's unique global capabilities and new Hygiene
prices, impacting profitability. offerings. * Revenue contribution from acquisitions
* Increased market presence by facilities management * Increased review and focus on financial performance * Group Ongoing Operating Profit
companies may drive down prices and increase and controls.
compliance costs.
* Group Net Operating Margin
* Group Procurement team tasked to deliver economies of
* Shift to greater proportion of key accounts in some scale and increasingly source materials and
markets may drive down prices and make it difficult operational equipment on a global basis. * Free Cash Flow conversion
to maintain profitability.
* Environmental action plan. * Net capital expenditure
* Political instability and civil unrest in some
markets may cause localised revenue reductions.
* Legislation, regulation or society expectation limits
our 'licence to operate'.
------------------------------------------------------------- -----------------------------------------------------------------------
Failure to deliver consistently high levels of service to the
satisfaction of our customers
Our business model depends on servicing the needs of our customers
in line with internal high standards
and to levels agreed in contracts.
Impact should the risk Mitigating actions Changes 2020 versus
materialise * HR development processes, including Employer of 2019
If our operatives are Choice programme. * 77% increased in U+ learning
not sufficiently qualified,
or do not have the
right skills, or we * Regular tracking of customer satisfaction and the * Refreshed and relaunched Technical Hub (Safe Working
fail to perception by both customers and non-customers of Practices)
innovate successfully, Rentokil Initial, benchmarked against competitors.
this may negatively
impact our ability * Continued deployment of IT programmes to frontline
to acquire or retain * Dedicated Operational Excellence team to drive colleagues
customers, adversely superior customer service and safe working practices,
impacting growth, and to establish key metrics, combined with a strong
profitability and cash focus on safety by supervisors and frontline staff. * Quarterly IT Risk meeting
flow.
Industrial action in * Incentives for sales and service staff aligned
key operations could closely with strategic priorities, based on Performance measures
result in diminished delivering improved customer service levels. to monitor risk
customer service levels; * Sales and Service colleague retention
if prolonged, it could
damage the Company's * Oversight of key industrial relations matters by
reputation and ability Group HR Director and regular review by the Chief * The number of online training courses being developed
to secure or renew Executive for countries where industrial relations
contracts. risk is elevated.
* U+ learning views
In markets where overall
employment rates are * Regular review of major IT programmes by the Chief
high, and/or our business Information Officer and the introduction of a * State of Service
is growing fast organically quarterly IT risk meeting.
or via acquisition,
we may have difficulty * Customer satisfaction (Customer Voice Counts)
attracting and retaining
key management of the
right capability and * Customer retention
the right calibre of
operational personnel.
Major digital change
programmes could disrupt
our ability to deliver
high levels of service
to our customers.
Extreme weather could
cause disruption to
local operations and
may impact colleague
health and safety.
------------------------------------------------------------- -----------------------------------------------------------------------
Failure to develop products and services that are tailored and
relevant to local markets
and market conditions
We operate across markets that are at different stages in the
economic cycle, at varying stages of market
development and have different levels of market attractiveness.
We must be sufficiently agile to develop and deliver products
and services that meet local market needs.
Impact should the risk Mitigating actions Changes 2020 versus
materialise * Acquisition of targets with specific capabilities 2019
If we are not able that address future changes in our markets. * Increased profile and importance of Hygiene category
to adapt to local business
and consumer needs,
our existing customers * Targeted investment in innovation to meet market and * Increased penetration of digital technologies on
may choose not to renew regulatory needs and defend against commoditisation. customer sites
contracts, or seek
reductions in prices.
This negatively impacts * Category Boards for Pest Control and Hygiene oversee * Growth in use of digital platforms by customers
our ability to maintain the roll-out of innovations at pace across our
or increase margins regional businesses.
and cash flow. * Demonstration of business model resilience in the
face of COVID-19
Examples include: * Continued investment in digital platforms to support
* We must adapt to changes to the regulatory Sales and Service colleagues
environment that may ban certain products or service Performance measures
models from being used, such as permanent rodent to monitor risk
baiting. * Sales growth for key innovations
* We need to respond to the expectations from customers * Percentage of job sales revenue from innovation
and the wider populace for us to reduce our own
environmental impact and support our customers in
reducing their environmental impact. * Number of patents raised
* We need to develop products that are networked and * Number of sites with digital solutions
capable of being monitored in real time, or react to
competitor technology developments that are
disruptive to the market. * Percentage of commercial customers registered for
digital platforms
* Percentage of colleagues utilising digital
applications
------------------------------------------------------------- -----------------------------------------------------------------------
Failure to ensure business continuity in case of a material
incident
The business needs to have resilience to ensure business can
continue if impacted by externally induced incidents, e.g. cyber
attack, hurricane or terrorism.
Impact should the risk Mitigating actions Changes 2020 versus
materialise * All countries and units maintain business continuity 2019
Failure to service plans, with local plans to service from alternative * Acceleration of multi-factor authentication for
our customers may affect locations if required, and IT disaster recovery remote access
our ability to retain plans.
those customers and
damage the Company's * Deployment of anti-ransomware software to the data
reputation. This may * The majority of key data and applications are located centres
negatively impact growth, in regional data centres with enhanced backup
profitability and cash capability, and resilience and tools deployed to
flow. detect malicious behaviour and help prevent malicious * Additional colleague training and awareness
Examples of incidents files from spreading.
that could impact our
ability to service
customers include: * Data encryption and implementation of AirWatch on Performance measures
* A significant cyber attack or IT failure which laptops, tablets and mobile phones. to monitor risk
impacts our ability to plan efficient routing, or * Number of serious IT incidents and time taken to
ability to invoice, and is not recovered quickly. respond
* Strong anti-phishing programme using phishing
simulation tool to highlight risks to users.
* Fire or flood impacting our laundries (in Workwear) * Major Incident Review actions
or warehouses (in Hygiene and Pest Control),
preventing goods from being available to enable our * Annual penetration testing on all systems to test
technicians to service our customers. external firewalls and address any identified * Actions arising from IT security
weaknesses.
* Industrial action by employees self-assessments
* Annual inspections of key sites by insurers, on a * External testing and benchmarking of our IT security
rotating basis, to identify potential risks. environment
------------------------------------------------------------- -----------------------------------------------------------------------
Failure to mitigate against financial market risks
Our business is exposed to foreign exchange risk, interest rate
risk, liquidity risk, counterparty risk
and settlement risk.
Impact should the risk Mitigating actions Changes 2020 versus
materialise * Financing policy in place to ensure that the Company 2019
If any of the above has sufficient financial headroom to finance * Refinancing completed in 2020
risks materialise, operations and bolt-on acquisitions. Commitment to
this may have a negative target credit rating of BBB.
impact on profitability, * Rolling 13-week cash forecasting
cash flow and financial
statements, and may * Treasury policies that limit the use of foreign
negatively impact financial exchange and interest rate derivatives, set limits
ratios and credit ratings, for financial counterparty exposure, govern how Performance measures
impacting our ability financing is raised in bank and other debt capital to monitor risk
to raise funds markets and provide rules around treasury-related * Liquidity headroom at the year end of GBP1,089m
for acquisitions. matters at operating company level.
* Counterparty ratings above A-
* Monthly reporting and monitoring of financial
covenants and rating agency metrics and compliance
with treasury policies. * Monthly reporting against ratings metrics and
financial covenants
* Monitoring of the impact of exchange rate movements
on non-GBP profits and net debt. * No unhedged foreign exchange positions above GBP0.5m;
fixed interest >50%; and matching currency of net
debt to underlying profitability
* Cash pooling and debt financing arrangement to match,
as far as possible, currency availability/demand
across borders. * Monitoring of amounts outstanding against
counterparty credit limits
* Revolving credit facility (RCF) increased to GBP550m.
* Refinancing completed in 2020.
------------------------------------------------------------- -----------------------------------------------------------------------
Fraud, financial crime and loss or unintended release of personal
data
Collusion between individuals, both internal and external, could
result in fraud if internal controls are not in place and working
effectively. The business holds personal data on employees,
some customers and suppliers:
unintended loss or release of such data may result in criminal
sanctions.
Impact should the risk Mitigating actions Changes 2020 versus
materialise * Ongoing programme to ensure all businesses are 2019
Loss of personal data compliant with data privacy requirements (GDPR in * Biannual review of key financial controls
of customers, suppliers Europe and data protection legislation in other
or employees could, markets).
if significant, result * Inclusion of Corporate Criminal Offence policy in
in annual Letter of Assurance
regulatory intervention * Mandatory online training by all senior employees for
which may result in the Code of Conduct, preventing anti-competitive
substantial fines and practice, preventing bribery and corruption, securing Performance measures
damage to the Company's information and protecting privacy, avoiding to monitor risk
reputation. conflicts of interest and preventing insider trading. * Completion rate for mandatory U+ training modules
Theft of Company assets
including property, * Roll-out of Corporate Criminal Offence policy and * Data privacy programme roll-out and implementation
customer or employee training.
information, or misstatement
of financial or other * Speak Up investigations and remediation
records via deliberate * Compliance with Code of Conduct and other key
action by employees policies affirmed by the annual Letter of Assurance
or third parties may by all senior management. * Key financial controls pass rates
constitute fraud and
result in financial
loss to the business, * Standardised financial control framework operating in
damage to the Company's all locations.
reputation and/or fines
by regulators.
* Confidential Speak Up hotline and email address,
monitored and followed up by Internal Audit.
* Significant frauds investigated by Internal Audit and
lessons learned widely shared.
* User security awareness guidance and policies
refreshed and reissued.
* Updated policies on devices and the provision of
Citrix-only access combined with global patching
programmes, multi-factor authentication and
deployment of anti-ransomware to our data centres.
------------------------------------------------------------- -----------------------------------------------------------------------
Safety, health and the environment (SHE)
The Company has an obligation to ensure that colleagues, customers
and other stakeholders remain safe, that the working environment
is not detrimental to health and that we are aware of and minimise
any adverse impact on the environment.
Impact should the risk Mitigating actions Changes 2020 versus
materialise * Robust health and safety (H&S) policies supplemented 2019
The Company operates by the SHE Golden Rules and technical policies * New mandatory U+ module for Pink Notes
in hazardous address higher risk and regulated activities.
environments and situations,
for example: * Extension of Pink Notes to cover all business
* use of poisons and fumigants in Pest Control; * H&S officers appointed in all jurisdictions, categories
supported by a dedicated central team.
* driving to and working at customers' premises; * Refreshed and relaunched Technical Hub (Safe Working
* Mandatory training of all relevant employees in safe Practices)
working practices.
* working at height; and
* Updated Internal Audit work plan for SHE
* Focus on implementation of Group fumigation standards
* exposure to needlestick injury/ bio-hazards from in all new acquisitions.
medical waste.
Performance measures
* H&S considered as the first item at all Board and to monitor risk
Non-compliance with senior management meetings; review of standardised * Lost Time Accident rate
internal policies or H&S KPIs.
industry regulations
could lead to personal * Working Days Lost rate
injury, substantial * Formal review of accidents and circulation of lessons
fines or penalties learned.
including withdrawal * Total emissions
of licences to operate,
and reputational damage. * Strategy to further develop environmentally friendly
approaches, e.g. lower pest control chemical use, * Energy usage
Environmental risks recycling of hygiene units, piloting use of electric
may arise from former vehicles.
activities at sites * Compliance rates for mandatory U+ training
currently operated
by the Company or acquired
by the Company.
------------------------------------------------------------- -----------------------------------------------------------------------
Breaches of laws or regulations (including tax, competition
and anti-trust laws)
As a responsible company we aim to comply with all laws and
regulations that apply to our businesses across the globe.
Impact should the risk Mitigating actions Changes 2020 versus
materialise * Group Legal involvement in all acquisitions. 2019
Failure to comply with * Internal Audit of UK Coronavirus Job Retention Scheme
local laws covering
bribery and corruption, * Tax strategy re-issued and approved by the Board
anti-competitive practice, annually. * Review and presentation of all Internal Audit issues
employment law, data for 2019 and 2020 to senior leadership
privacy, health and
safety, or financial * All significant tax planning opportunities have to be
and tax reporting requirements pre-agreed with the Group Tax Director and Chief
may result in fines Financial Officer with independent tax advice taken
or withdrawal of licence where necessary. Regular review of tax exposures. Performance measures
to operate, which could to monitor risk
adversely impact growth, * Central monitoring of material litigation
profitability and cash * Authority schedule in place and regularly reviewed.
flow.
* Tax provisions
The Company operates * Group and local policies in place and regularly
across many different reviewed.
tax jurisdictions and * Completion rate for mandatory U+ training modules,
is subject to periodic e.g. Code of Conduct and competition law
tax * Requirement to report breaches in controls and/or
audits which sometimes laws to Group General Counsel and Head of Internal
challenge the basis Audit. Follow-up by Group General Counsel of any
on which local tax significant regulatory breach in any country.
has been calculated
and/or withheld. Successful
challenges by local * Mandatory training on Code of Conduct and other core
tax compliance topics, to instil a highly principled
authorities may have culture of ethical behaviour, completion rates
an adverse impact on reported to senior management monthly.
profitability and cash
flow.
* All major business transactions or internal
reorganisations are subject to a rigorous internal
and external review.
------------------------------------------------------------- -----------------------------------------------------------------------
Failure to integrate acquisitions and execute disposals from
continuing business
The Company has a strategy that includes growth by acquisition,
and has acquired 23 businesses in 2020. These companies need
to be integrated quickly and efficiently to minimise potential
impact on the acquired business and the existing business.
Impact should the risk Mitigating actions Changes 2020 versus
materialise * Integration plans considered by the Investment 2019
If the Company fails Committee as part of the acquisition approval * Additional resources provided to the US to support
to successfully integrate process. Integration activities and progress integration and replatforming
acquisitions into its discussed during monthly performance reviews.
existing organisation
structures, fails to
deliver the revenue * Dedicated project teams established for largest Performance measures
and profit targets, acquisitions and demergers with clear deliverables to monitor risk
or fails to deliver over three months, six months and one year. * Integration plans (30 days, 100 days, 1 year)
expected synergy savings,
the business may not
achieve the expected * Tried and tested induction programme for the first * Reviews of integration plans for specific large
financial and operational 100 days for all acquisitions. acquisitions
benefits which may
adversely impact growth,
profitability and cash * Continuity of management/leadership in acquired * Post-acquisition review completions
flow. companies, where possible.
Business disposals * Post-investment review by the Board of aggregate
also have to be managed * Use of transaction structures including deferred performance of investment in M&A
efficiently to minimise consideration to mitigate deal risk.
risk to the businesses
being disposed and
the residual business. * Group departments, e.g. health and safety, legal,
insurance and IT, involved with acquisitions to drive
integration plans and compliance with Group standards,
especially when entering new geographies.
* Post-completion governance: formal post-acquisition
review of every acquisition by Investment Committee
against original business plan within 18-24 months;
Board post-investment review of acquisitions in
aggregate every six months; Internal Audit review of
acquisitions in new geographies within 12-18 months.
* Board oversight of all acquisitions involving new
country entries or new business lines.
------------------------------------------------------------- -----------------------------------------------------------------------
Statement of Directors' responsibilities
The Annual Report 2020, on pages 203 to 204, contains the following statement regarding responsibility for the financial statements and is repeated here solely for the purpose of complying with DTR 6.3.5. Responsibility is for the full Annual Report 2020 and not the extracted information presented in this announcement or the preliminary results announcement.
The Directors are responsible for preparing the Annual Report and the Group and Parent Company Financial Statements in accordance with applicable law and regulations. Company law requires the Directors to prepare Group and Parent Company Financial Statements for each financial year. Under that law they are required to prepare the Group Financial Statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and applicable law and have elected to prepare the Parent Company Financial Statements in accordance with UK Accounting Standards, including FRS 101 Reduced Disclosure Framework. In addition, the Group Financial Statements are required under the UK Disclosure and Transparency Rules to be prepared in accordance with International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union (IFRSs as adopted by the EU).
Under company law, the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Parent Company and of their profit or loss for that period. In preparing each of the Group and Parent Company Financial Statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgements and estimates that are reasonable, relevant and reliable;
-- for the Group Financial Statements, state whether they have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union (IFRSs as adopted by the EU);
-- for the Parent Company Financial Statements, state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Parent Company Financial Statements;
-- assess the Group and Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
-- use the going concern basis of accounting unless they either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and enable them to ensure that its Financial Statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that comply with that law and those regulations. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.
Each of the Directors, whose names and functions are set out on pages 78 and 79, confirms that, to the best of their knowledge:
-- the Financial Statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
-- the Strategic Report and Directors' Report include a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
Each Director considers the Annual Report and Financial Statements, taken as a whole, to be fair, balanced and understandable and to provide the information necessary for shareholders to assess the Group's position and performance, business model and strategy.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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END
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