Rentokil Initial plc

Good morning, everyone, and thank you for joining us on today's Rent-A-Kill Q1 Trading Update. My name is Drew, and I'll be the operator on the call today. After the prepared remarks, we will have a Q&A session. If you would like to ask a question during that time, please press star followed by one on your telephone keypad. And to withdraw your question, it's star followed by two. With that, it's our pleasure to hand over to Paul Edgecliff-Johnson to begin. Please go ahead when you're ready.

Thanks Drew. Good morning everyone and welcome to our first quarter conference call. Before we begin, I'd like to draw your attention to the usual cautionary statement contained in our trading update, which also applies to this call. I'll start by making some brief remarks on trading and then I'll be happy to take your questions. As we only reported on performance and strategy last month, today's announcement is a short update on revenue performance in the first quarter. As a reminder, all commentary is on a constant currency basis unless otherwise stated. So we've made a good start for the year with group revenue of $1.7 billion, representing organic growth of 3.4%. This is driven by continued momentum in North America, which delivered 3.9% organic growth and a solid performance for international, which saw 2.8% organic growth. Looking in more detail now at North America, where revenue grew 4.5% for $995 million. Pest Control Services delivered revenue growth of 3.5%, including 6.1% from one-off job revenue and 3.0% from contract revenue, an improvement from the previous quarter's 2.4% contract revenue growth. Pest control services, organic revenue growth of 2.8%, continued the steady quarter-by-quarter improvements we've seen over the past year. As we execute our strategy to optimize the ROI from our marketing spend, invest behind our strong national and regional brands, and improve our sales execution, the pricing environment remains robust, but continues above inflationary increases. Overall, as we signed back in March, our teams across the U.S. worked hard in February, delivering excellent customer service to recover workday loss due to January's extreme weather. Business services delivered strong organic growth up 12.7%, helped by pre-spring demand in product distribution, new customer wins in brand standards, and some large contract wins in late management. Colleague retention of 82.6% increased 40 basis points compared to the position at the end of December. Customer retention was broadly flat on last year at 80.4%. Moving to our international business, revenue was $682 million for the first quarter, up 4.1%. Contract revenue grew 5.5% and one-off job revenue was broadly flat. Organic growth of 2.8% was supported by good growth in Europe, Latin America, the UK, and sub-Saharan Africa, benefiting from strong pricing and volume growth. This was offset by a 60 basis point headwind from organic revenue signs in both the Pacific, due to tough comparatives in our job-based rural and tract-based business, and Middle East-North Africa, impacted by the Middle East conflict. So, in summary. We've delivered a good start to the year during our seasonally quieter first quarter, driven by continued momentum in North America and solid progress across our international business. We remain on track to deliver a full year performance in line with market expectations. I'll also take this opportunity to welcome Therese Esprit, as we're going to build a new chair, effective from the 1st of September this year. For more details on Therese and her appointment, please see the announcement released yesterday. Finally, as you all know, last month we welcomed Mike Duffy as our new CEO. Mike will be leading the half-year results presentation in July when we will be giving you a more detailed update on the progress we're making executing against the plans we set out in March. And with that, I will now hand back through to you for Q&A.

Thank you. We'll now start today's Q&A session. If you would like to ask a question on today's call, please press star followed by one on your telephone keypad And to answer your question, it's now followed by two. Our first question today comes from Suhasini Varansi from Goldman Sachs. Your line is now open. Please go ahead.