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Rentokil Initial plc (RTOKY) CEO Andrew Ransom on Q4 2020 Results - Earnings Call Transcript

Mar. 04, 2021 5:40 PM ETRentokil Initial plc (RTO) Stock, RKLIF Stock
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Rentokil Initial plc (RTOKY) Q4 2020 Earnings Conference Call March 26, 2021 4:00 AM ET

Company Participants

Stuart Ingall-Tombs - CFO

Andrew Ransom - CEO

Conference Call Participants

Sylvia Barker - JPMorgan

Andy Grobler - Crédit Suisse

Edward Stanley - Morgan Stanley

Simona Sarli - Bank of America

James Winckler - Jefferies

Matthew Lloyd - HSBC

Jane Sparrow - Barclays

Dominic Edridge - Deutsche Bank

Allen Wells - Exane

Sam Dindol - Stifel

Andrew Ransom

Good morning, ladies and gentlemen, and thank you all for joining us today. In a few moments, Stuart will provide you with details of our financial results for 2020 and the performance of each of our regions. I'll then come back and provide an update on our operational model and the performance of our categories of Pest Control, Hygiene and Protect and Enhance. There will then be a Q&A session at 10 o'clock, and the details of which are in the RNS and on the website.

So just to set the scene, let me just say a few words by covering the highlights of 2020. Revenue from ongoing operations increased by 6.3% at constant exchange rates, a very credible performance in the face of a global pandemic, with our North America region exceeding its target of $1.5 billion in revenues and also making good progress towards margins of 18%. Ongoing operating profit grew by 5.4%, reflecting the significant actions taken to mitigate COVID-related revenue reductions, and despite an increase of GBP 34 million in bad debt provisions and the additional costs associated with personal protective equipment.

Free cash flow of GBP 336.8 million represented an excellent cash conversion rate of 123%. Stuart will, of course, cover these numbers in more detail, but clearly, we once again showed both the strength and the resilience of our operating model.

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