RTO

Andrew Ransom focused on North America's performance in 2025 and plans for 2026. North America's organic growth in fourth quarter reached 2.6% underpinned by strong execution, new marketing plan, investing in regional brands, opening 150 small local branches and $25 million cost savings. International business saw improving organic revenue growth of 3.4% in second half. 2026 plans include expanding multi-brand strategy with around 30 regional and local brands, increasing local presence to around 220 small local branches, simplifying systems and pay plans in North America.

Looking to 2026, North America plans to build on progress with expanding multi-brand strategy, increasing local branches, simplifying systems and pay plans. Target to deliver 20% net operating margins in North America next year. International business continues with cost efficiencies and growth plans.

Revenue was up 3.8% to $6.9 billion with organic revenue growth of 2.6%. Adjusted operating profit increased by 5.4% to just over $1 billion. North America: Revenue grew 3.2% to $4.3 billion with organic growth of 2.3%. Pest Control Services was up 1.1%, while Business Services grew 8.9%. Adjusted operating profit for the region was $749 million, up 5.1%, bringing our adjusted operating profit margin to 17.4%. International business: Revenue grew 4.8% to $2.6 billion with organic revenue up 3%. Organic revenue growth improved in the second half, up 3.4% compared to 2.6% in the first half. Adjusted operating profit increased 5.7% to $518 million, with margins increasing 20 basis points to 19.8%.

Termite provision costs increased, with cash cost of settling claims in 2025 being $95 million and expecting similar in 2026. Extreme weather in Jan 2026 disrupted North America business temporarily. Market share competition in pest control industry.

Q: Andy Grobler on balancing cost of North America operations and central visibility, and termite costs.

A: Andrew Ransom and Paul Edgecliffe-Johnson answered on visibility with Branch 360, termite cost expectations.

Q: Suhasini Varanasi on door-to-door pilot and Business Services growth.

A: Andrew Ransom responded on door-to-door pilot and Business Services drivers.

Q: Annelies Vermeulen on rebranding and pay plans.

A: Andrew Ransom answered on rebranding criteria and pay plan grandfathering.

Q: William Kirkness on market share and weather impact.

A: Andrew Ransom replied on market share difficulty and weather impact on North America.

Q: Nicole Manion on price and volume split and branch base.

A: Paul Edgecliffe-Johnson answered on price and volume and branch base numbers.

Q: Jane Sparrow on Terminix brand and pay plan KPIs.

A: Andrew Ransom responded on Terminix brand and early pay plan KPI divergence.

Q: Allen Wells on $100 million cost saving plan and pay plan change.

A: Paul Edgecliffe-Johnson answered on cost saving plan and pay plan change reasons.

Q: James Beard on residential leads conversion and pay plan change.

A: Andrew Ransom replied on residential leads conversion and pay plan change timing.

Q: James Rosenthal on commercial growth, systems and innovation.

A: Andrew Ransom answered on commercial growth plans, systems and innovation in commercial business