Rentokil(US:RTO)2023-04-04 10:23Revenue Growth - Revenue increased by £154 million, or 5.5%, to £2,957 million for the year ended 31 December 2021 from £2,803 million in 2020, driven by organic growth of £80 million and acquisitions of £184 million[107]. - North America revenue increased by £94 million, or 7.8%, to £1,291 million in 2021, aided by M&A impacts and organic growth[124]. - Europe revenue increased by £5 million, or 0.6%, to £832 million in 2021, driven by growth in Southern Europe and Latin America despite challenges from lockdowns[128]. - Revenue in Pest Control increased by £234 million, or 13.6%, to £1,952 million for the year ended 31 December 2021, driven by strong performance in North America[146]. - UK & Sub-Saharan Africa revenue rose by £32 million, or 9.7%, to £359 million, with UK operations increasing by £30 million, or 10.3%[133]. - Asia & MENAT revenue increased by £8 million, or 3.0%, to £271 million, with MENAT growing by £8 million, or 35.3%[138]. - Pacific region revenue grew by £19 million, or 10.7%, to £197 million, with Australia contributing £18 million, or 13.3%[142]. - Contract revenue across all segments increased by £130 million to £1,249 million, reflecting recovery from the pandemic[148]. Profitability - Operating profit rose by £53 million, or 17.9%, to £347 million in 2021, reflecting revenue growth across all major regions and improved net operating margins of 11.7%[118]. - Profit before income tax increased by £95 million, or 41.5%, to £325 million in 2021, supported by lower net finance costs of £30 million, a decrease of 59.2% from £72 million in 2020[119]. - Profit for the year increased by £77 million, or 41.3%, to £263 million in 2021, primarily due to the increase in profit before income tax[121]. Operating Expenses - Employee costs rose by £100 million, or 7.7%, to £1,405 million in 2021, due to an increase in the number of employees from acquisitions[110]. - Operating expenses in North America increased by £102 million, or 10.0%, to £1,125 million, driven by higher employee costs and direct materials[151]. - Operating expenses in Europe decreased by £11 million, or 1.6%, to £693 million for the year ended 31 December 2021 from £704 million in 2020, primarily due to a £8 million reduction in one-off and adjusting items[152]. - In the UK & Sub-Saharan Africa, operating expenses decreased by £6 million, or 1.8%, to £276 million for the year ended 31 December 2021 from £282 million in 2020, driven by a £11 million decrease in other operating expenses[153]. - Asia & MENAT saw operating expenses decrease by £2 million, or 0.5%, to £249 million for the year ended 31 December 2021 from £251 million in 2020, mainly due to a £10 million reduction in amortisation of intangibles[154]. - Operating expenses in the Pacific region increased by £15 million, or 10.3%, to £162 million for the year ended 31 December 2021 from £147 million in 2020, largely due to a £11 million rise in employee costs[155]. - Pest Control segment's operating expenses increased by £141 million, or 9.2%, to £1,676 million for the year ended 31 December 2021 from £1,535 million in 2020, with employee costs rising by £90 million[156]. - Hygiene & Wellbeing segment's operating expenses decreased by £38 million, or 5.5%, to £658 million for the year ended 31 December 2021 from £696 million in 2020, primarily due to a £15 million decrease in direct materials and services[157]. Cash Flow - Net cash inflows from operating activities increased by £15 million, or 2.7%, to £563 million for the year ended 31 December 2021 from £548 million in 2020, driven by a £53 million increase in operating profit[161]. - Net cash outflows from investing activities decreased by £56 million, or 11.3%, to £441 million for the year ended 31 December 2021 from £497 million in 2020, mainly due to a £341 million change in net investment in term deposits[163]. - Net cash flows from financing activities decreased by £646 million to a £417 million outflow for the year ended 31 December 2021 from a £229 million inflow in 2020, primarily due to a £1,685 million decrease in proceeds from new debt[164]. Other Financial Information - The company experienced a release of £20 million in revenue provisions and £12 million in bad debt provisions during 2021, reflecting recovery from the COVID-19 pandemic[118]. - Temporary customer suspensions peaked at 7.9% in August 2021 but fell to 2.8% by December 2021, indicating improving market conditions[141]. - One-off and adjusting items increased by £13 million, or 168.8%, to £21 million in 2021, primarily due to fees related to the Terminix transaction[116]. - The company experienced a £1 million adverse effect from foreign exchange movements, but organic revenue growth was strong across multiple regions[134]. ADR Program and Fees - The Company received approximately $950,000 in the year ended December 31, 2022, from fees related to dividends paid and contributions to the ADR program costs[279]. - The Depositary charges up to $5.00 per 100 ADSs for issuing upon deposits of shares[278]. - The fee for distributing cash dividends or other cash distributions is up to $0.05 per ADS[278]. - The exercise of rights to purchase additional ADSs incurs a fee of up to $5.00 per 100 ADSs[278]. - The fee for surrendering ADSs for cancellation and withdrawal is also up to $5.00 per 100 ADSs[278]. - General depositary services fee is up to $0.05 per ADS per calendar year[278]. - The Depositary reimburses the Company for certain expenses related to the ADR program, including mailing financial reports and distributing dividend checks[279]. - The Company has limits on the amount of expenses for which the Depositary will reimburse, but this is not tied to the fees collected from investors[279]. - The Depositary's fees and expenses include taxes, registration of shares, and currency conversion costs[278]. - The Company’s ADR program is administered by The Bank of New York Mellon[276].