Rollins (NYSE:ROL) FY Conference September 10, 2025 10:30 AM ET Company ParticipantsKenneth Krause - EVP & CFOLyndsey Burton - VP - Investor RelationsConference Call ParticipantsPeter Keith - MD & Senior Research AnalystPeter KeithOkay. All right. Good morning, everyone. Welcome to the Piper Sandler Growth Frontiers Conference. My name is Peter Keith, Senior Research Analyst, covering consumer broad lines and hard lines. I'm very pleased to have Rollins with us today. This is, to be honest, one of the fires ...

Summary of SenesTech (SNES) Conference Call - August 19, 2025 Company Overview - **Company**: SenesTech - **Ticker Symbol**: SNES - **Industry**: Biotech and Life Sciences, specifically pest control - **Core Product**: Rodent birth control solutions disrupting the rodenticide market, focusing on sustainable pest management [3][4] Key Points and Arguments Industry Context - **Rodent Problem**: Rodents cause over $27 billion in infrastructure damage annually in the U.S. and destroy nearly 20% of the world's food supply [4][5] - **Current Solutions**: Existing rodenticides are largely poisons that are ineffective and harmful, leading to resistance and bans in various jurisdictions [6][7] Product Differentiation - **Unique Approach**: SenesTech focuses on suppressing rodent reproduction rather than increasing mortality rates, with products that are humane and do not harm non-target species [11][12] - **Evolve Product**: Launched as a solid bait, it has an 18-month shelf life and is designed for both professional and DIY use, significantly expanding market reach [16][17] Market Position and Competitive Advantage - **Regulatory Head Start**: SenesTech has a FIFRA 25B minimum risk exemption and approvals in 48 states, giving it a significant advantage over competitors [18][19] - **Intellectual Property**: The company holds patents and trade secrets that protect its unique formulations and efficacy studies [20][21] Market Opportunities - **Market Size**: The U.S. rodenticide market is approximately $1 billion, with a global market of $4.5 billion [26][63] - **Target Verticals**: Key markets include consumers, cities and governments, pest management, agribusiness, facilities management, and food production [26][27] Sales and Distribution Strategy - **E-commerce Growth**: E-commerce accounts for over 60% of revenue, with a 78% increase year-over-year, driven by the popularity of Evolve [31][32] - **Municipal Deployments**: Significant traction in cities like Chicago and New York, with successful pilot programs leading to reorders and increased consumer adoption [36][38] Financial Performance - **Revenue Growth**: Total revenue is approximately $2 million annually, with Evolve sales increasing by 94%, making up 83% of second-quarter sales [51][52] - **Gross Margins**: Improved to 65.4% in Q2, driven by the profitability of the Evolve product [55] - **Cash Position**: The company ended the quarter with $6.1 million in cash, with a pro forma cash position of about $12 million, providing a runway into 2027 [60][61] Future Outlook - **Regulatory Tailwinds**: Increasing bans on traditional rodenticides and a push for humane alternatives create a favorable environment for SenesTech's products [63][64] - **Growth Strategy**: Focus on e-commerce, international markets, and government sales, with expectations for strong revenue growth and margin expansion [66][67] Additional Important Points - **International Expansion**: Successful pilot programs in markets like Hong Kong and the Netherlands, with potential for significant orders [43][44] - **Brick and Mortar Retail**: Recent agreements with distributors to expand into physical retail, with a nearly 500% increase in brick-and-mortar sales sequentially [46][47] This summary encapsulates the key insights from the SenesTech conference call, highlighting the company's innovative approach to pest control, market opportunities, and financial performance.

Company Overview - SenesTech, Inc. is a leader in fertility control for managing animal pest populations, focusing on sustainable alternatives to traditional pest control methods [3] - The company has developed ContraPest®, the first and only U.S. EPA-registered contraceptive for male and female rats, along with Evolve Rat and Evolve Mouse Birth Control, which are FIFRA 25(b) minimum-risk solutions [3] Upcoming Events - SenesTech will participate in a webcast presentation at the Lytham Partners 2025 Consumer & Technology Investor Summit on August 19, 2025, at 3:30 p.m. ET [1][2] - The webcast can be accessed through the conference home page or directly via provided links, with a replay available afterward [2] Mission and Vision - The company's mission emphasizes healthier cities, safer environments, and smarter pest management, advocating for reproductive control as the future of pest management [4]

Core Viewpoint - SenesTech, Inc. has successfully closed the exercise of outstanding warrants, raising approximately $6.3 million, and issued new short-term warrants for additional capital [1][4]. Group 1: Financial Details - The company exercised warrants to purchase 1,458,872 shares at an exercise price of $4.15 per share [1]. - New unregistered short-term warrants were issued to purchase up to 2,188,308 shares at an exercise price of $5.25 per share, with a purchase price of $0.125 per warrant [3]. - The potential gross proceeds from the new short-term warrants, if fully exercised, could amount to approximately $11.5 million [4]. Group 2: Use of Proceeds - The net proceeds from the transaction are expected to be used for working capital and general corporate purposes [4]. Group 3: Company Overview - SenesTech is focused on humane management of animal pest populations through fertility control, with products like ContraPest® and Evolve™ [8]. - ContraPest® is the only U.S. EPA-registered contraceptive for male and female rats, while Evolve™ products are designated as minimum risk contraceptives for rodents [8].

Core Investment Strategy - The wide moat strategy focuses on investing in companies with durable competitive advantages that ensure long-term profitability and market leadership, allowing them to withstand economic fluctuations [2][3]. Company Summaries Adobe Inc. (ADBE) - Adobe has integrated AI applications across its products, enhancing user efficiency and introducing tools like Adobe Firefly and Adobe Express for quick editing [7][9]. - The company is diversifying into digital marketing services through its AI-driven cloud platform, enabling personalized marketing experiences [8]. - ADBE has an expected revenue growth rate of 9.5% and earnings growth rate of 12% for the current year, with earnings estimates improving by 0.1% recently [11]. The Walt Disney Co. (DIS) - Disney is experiencing growth in Domestic Parks & Experiences, although international locations face challenges [12]. - The company anticipates double-digit operating income growth in fiscal 2025, with ESPN showing significant viewership growth [13]. - Disney's streaming business has turned profitable, with a second-quarter Direct-to-Consumer operating income of $336 million [14]. - DIS has an expected revenue growth rate of 4.1% and earnings growth rate of 16.3% for the current year, with earnings estimates improving by 0.3% recently [15]. Intuit Inc. (INTU) - Intuit is benefiting from steady revenue growth in its Online Ecosystem and Desktop segments, driven by strong performance in its services [16]. - The company’s generative AI tool, "Intuit Assist," provides personalized financial insights, enhancing user experience across its platforms [17]. - INTU has an expected revenue growth rate of 11.7% and earnings growth rate of 13.7% for the current year, with earnings estimates improving by 4.3% recently [19]. Rollins Inc. (ROL) - Rollins utilizes technology and disciplined acquisitions to enhance operations and customer service, maintaining a strong cash position with zero debt [20]. - The company has made 44 acquisitions in 2024, reflecting its growth strategy and commitment to increasing dividends [20]. - ROL has an expected revenue growth rate of 10.7% and earnings growth rate of 12.1% for the current year, with earnings estimates improving by 0.9% recently [21]. Johnson & Johnson (JNJ) - Johnson & Johnson reported strong earnings, with growth driven by its Innovative Medicine unit and key products [22][23]. - Despite challenges in the MedTech segment, the company expects sales growth to improve in the second half of the year [23]. - JNJ has an expected revenue growth rate of 5.2% and earnings growth rate of 8.8% for the current year, with earnings estimates improving by 0.1% recently [24].

Financial Results Announcement - SenesTech, Inc. will report its second quarter 2025 financial results for the period ended June 30, 2025, after market close on August 7, 2025 [1] - A conference call is scheduled for the same day at 5:00 p.m. Eastern time to review the results [1][2] Company Overview - SenesTech is focused on humane management of animal pest populations through fertility control, with products like ContraPest®, the only U.S. EPA-registered contraceptive for rats, and Evolve™ products for rodents [4] - The company's mission emphasizes proactive, safe, and sustainable pest management solutions, aiming for clean cities and efficient businesses [4] Webcast and Replay Information - Interested parties can access the live conference call via a webcast available on the company's Investor Relations website [2] - A replay of the webcast will be available for 90 days following the event [3]

Financial Data and Key Metrics Changes - Group revenues increased by 3.1% to $3,360,000,000 with organic growth of 1.6% [2][8] - Group adjusted profit before tax (PBT) was $418,000,000, and the operating margin was 15.2%, down 120 basis points year-on-year [2][9] - Cash flow conversion was strong at 93%, exceeding the guidance of 80% [9][19] - Net debt to adjusted EBITDA ratio stood at 2.8 times, slightly up from the year-end [9][21] Business Line Data and Key Metrics Changes - North America revenue increased by 2% to $2,106,000,000, with organic growth of 1.1% [10][12] - International revenue rose by 5.1% to $1,251,000,000, with organic growth of 2.7% [13][14] - Pest Control organic growth was strong at 3.8%, while Hygiene and Well-being grew at 1.1% [14][15] - Adjusted operating profit for North America decreased by 7.3% to $356,000,000, reflecting cost inflation and lower volumes [10][11] Market Data and Key Metrics Changes - North America accounted for 63% of group revenues, with pest control making up 81% of that segment [31][32] - The international region represented 37% of group revenues, with strong performance in Europe and Asia [30][31] - The pest control market is projected to grow at a CAGR of around 6.2% over the next ten years, reaching approximately $50,000,000,000 by 2034 [28][29] Company Strategy and Development Direction - The company is focusing on improving customer retention, pricing, and new customer contracts to drive contract portfolio growth [27][36] - Plans to optimize satellite branches and increase their number to around 150 by year-end [5][43] - The divestment of the French workwear operations is expected to enhance cash generation and focus on core pest control and hygiene sectors [17][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth of the pest control market, driven by factors such as urbanization and increased hygiene standards [28][29] - The company is optimistic about improving lead flow and sales performance in the second half of the year, following positive trends in June [25][72] - Management acknowledged the challenges in contract revenue growth but emphasized ongoing efforts to enhance customer retention and pricing strategies [36][37] Other Important Information - The company acquired eight businesses with combined revenues of approximately $18,000,000 in the year prior to purchase [11][16] - The sale of the French workwear business is expected to complete by late Q3 or early Q4, with net cash proceeds of approximately €370,000,000 [17][18] - The predictive churn model is being developed to identify at-risk customers and improve retention efforts [73][74] Q&A Session Summary Question: Discussion on termite provision claims and future changes - Management indicated that the increase in termite provision is based on recent experiences, with costs for settling claims up by 9% [54][55] - Future provisions may vary based on the cost per claim, which remains volatile [55] Question: Insights on quarterly growth rates and lead flow - Management noted improvements in lead flow in June but did not provide specific insights on July performance [56] Question: Clarification on digital and organic lead generation - Management confirmed a shift in marketing spend from paid to organic channels, resulting in improved lead performance [60][61] Question: One-off jobs growth slowdown - Management acknowledged variability in one-off job revenues and emphasized the focus on improving contract sales [64] Question: Confidence in brand investments and funding - Management expressed confidence in reallocating marketing spend to support brand investments without needing additional funding [82][88] Question: Clarification on cost savings and integration timelines - Management clarified that while the path to $100,000,000 in cost savings remains, not all branches may be fully integrated by 2026 [91][92]

Financial Data and Key Metrics Changes - Group revenues increased by 3.1% to $3,360 million, with organic growth of 1.6% [2][10] - Group adjusted profit before tax (PBT) was $418 million, with an operating margin of 15.2%, down 120 basis points year-on-year [2][10] - Cash flow conversion was strong at 93%, exceeding the guidance of 80% [10][20] - Net debt to adjusted EBITDA ratio stands at 2.8 times, slightly up from the year-end [10][20] Business Line Data and Key Metrics Changes - North America revenue grew by 2% to $2,106 million, with organic growth of 1.1% [11][12] - Adjusted operating profit in North America decreased by 7.3% to $356 million, with an adjusted operating margin of 16.9% [11][12] - International revenue increased by 5.1% to $1,251 million, with organic growth of 2.7% [14][15] - Pest Control organic growth was strong at 3.8%, while Hygiene and Well-being grew at 1.1% [15][16] Market Data and Key Metrics Changes - The international region accounted for 37% of group revenues, with strong performance in Europe and Asia [31] - North America contributed 63% of group revenues, with pest control making up 81% of that [32] - The pest control market is projected to grow at a CAGR of around 6.2% over the next ten years [29] Company Strategy and Development Direction - The company is focusing on improving customer retention, pricing, and winning new customer contracts to grow its contract portfolio [28][39] - Plans to optimize satellite branches and increase their number to around 150 by year-end [5][44] - The sale of the French workwear business is expected to enhance cash generation and focus on core pest control and hygiene sectors [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth of the pest control industry, driven by urbanization and increased hygiene standards [29][30] - The company is optimistic about improving lead flow and sales performance in the second half of the year [25][49] - Management acknowledged the challenges in contract revenue growth but emphasized ongoing efforts to address these issues [38][39] Other Important Information - The company acquired eight businesses with combined revenues of approximately $18 million in the year prior to purchase [12][17] - The predictive churn model is being developed to identify at-risk customers and improve retention strategies [75][76] - The door-to-door sales pilot generated approximately $12 million in annualized sales, with plans for full-scale deployment next year [46][78] Q&A Session Summary Question: Discussion on termite provision claims and future changes - Management indicated that the increase in termite provision is based on a mechanistic calculation and future changes will depend on the cost per claim [56][57] Question: Insights on quarterly growth rates and changes in July - Management noted improvements in lead flow but did not provide specific insights on July performance [58] Question: Split between digital and organic leads - Management stated that they are shifting focus from paid search to organic channels, with overall lead performance improving [61][62] Question: Clarification on one-off jobs slowdown - Management acknowledged variability in one-off job revenues and emphasized the focus on improving contract sales [65] Question: Confidence in brand investments and funding - Management expressed confidence in reallocating marketing spend to support brand investments without needing additional funding [84][90] Question: Clarification on cost savings and integration timelines - Management confirmed the path to achieving cost savings and a 20% margin but noted that not all branches may be fully integrated by 2026 [92][93]

Financial Performance - Group revenue increased by 3.1% to $3,364 million[12, 19, 131] - Organic growth was 1.6%, with International at 2.7% and North America Q2 at 1.4% (vs Q1 0.7%)[12] - Group Adjusted PBT (Profit Before Tax) reached $418 million[12, 130] - Strong Free Cash Flow conversion rate of 93.0%[12, 41, 130] North America Performance - North America revenue was $2,106 million, a 2.0% increase[21, 76] - Organic revenue growth in North America was +1.1%[21, 22, 76] - Adjusted Operating Profit in North America was $356 million, with a margin of 16.9%[21, 22] - Colleague retention in North America improved by 1.4 percentage points to 80.7%[22, 76] International Region Performance - International revenue was $1,251 million, up 5.1%[30, 70] - Organic revenue growth in the International region was +2.7%[12, 27, 30, 70] - Adjusted Operating Profit in the International region increased by 4.6% to $242 million, with a margin of 19.3%[28, 30] Strategic Initiatives - The company expects approximately $100 million in cost savings and an operating margin above 20% in North America post-2026[15, 24, 46, 128] - The company is rolling out satellite branches, aiming for approximately 150 locations by year-end[16, 26, 107, 111, 131] - The company divested France Workwear for an enterprise value of €410 million (approximately $465 million), expecting net cash proceeds of €370 million (approximately $420 million)[37]

Financial Data and Key Metrics Changes - Ecolab achieved double-digit earnings growth of 13% in the second quarter, with organic sales growth of 3% driven by strong value pricing and solid core business momentum [4][12]. - The operating income margin increased by 170 basis points, reaching a solid 18% for the full year 2025 target, with aspirations to reach 20% by 2027 [12][78]. Business Line Data and Key Metrics Changes - The remaining 85% of Ecolab's business grew organic sales by 4% and operating income by 18%, showcasing the strength of its diversified portfolio [5][12]. - The Pest Elimination segment saw organic sales growth accelerate to 6%, benefiting from the shift to a digital Pest Intelligence model [10][39]. - Life Sciences experienced mid-single-digit growth, with strong double-digit growth in biopharma and core Pharma, while Water Purification faced production limitations [10][104]. Market Data and Key Metrics Changes - Global Water sales growth accelerated to 4%, with operating income growing double digits, driven by strong performance in Food and Beverage [9][10]. - The Paper and Basic Industries segments, which represent 15% of total sales, faced uneven demand, impacting overall growth [4][5]. Company Strategy and Development Direction - Ecolab's strategy focuses on value pricing, innovation, and enhancing operational performance, with a commitment to delivering superior customer value [6][12]. - The company is investing in growth engines such as Life Sciences, Global Hi-Tech, and Ecolab Digital, which collectively represent nearly €3 billion in annual sales and are growing double digits [9][10]. - Ecolab aims to leverage its strong balance sheet and low leverage ratio of 1.7 to capitalize on both organic and inorganic growth opportunities [13][85]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering 12% to 15% adjusted EPS growth for the upcoming quarters, supported by strong business fundamentals and a diversified portfolio [12][25]. - The company acknowledges the complexities of the global operating environment but remains optimistic about future growth driven by macro trends in water, AI infrastructure, and productivity [23][25]. Other Important Information - Ecolab will host an Investor Day on September 4 in Minnesota to provide an in-depth review of its strategy and showcase breakthrough innovations [15]. - The company is focused on maintaining a disciplined approach to capital allocation, prioritizing dividends, business investments, and potential buybacks [81][85]. Q&A Session Summary Question: Expectations for Guidance Adjustments - Management indicated a combination of conservatism and ongoing investments in growth businesses, maintaining a commitment to deliver on promised growth targets [21][22]. Question: Pricing Trends and Expectations - Management expects pricing to strengthen closer to 3% in the third and fourth quarters, supported by value delivery to customers [28][31]. Question: Pest Elimination Business Transition - The transition to Pest Intelligence is significant and requires investment, but management is optimistic about long-term growth and customer satisfaction [34][39]. Question: Delivered Product Costs and Inflation - Management noted that commodity costs are expected to rise low to mid-single digits, but efficiencies from the supply chain are helping to maintain favorable margins [42][45]. Question: Water Business Capacity Constraints - Management confirmed capacity limitations in the Water business, particularly in Water Purification, but expressed confidence in the overall growth trajectory [61][66]. Question: Free Cash Flow Expectations - Management expects free cash flow conversion to be around 90% for the year, with strong earnings growth driving improvements in the second half [95][99]. Question: Life Sciences Margin Expectations - Management indicated that while margins may drop back towards mid-teens, strong growth in biopharma will continue to drive overall performance [102][104].