Financial Data and Key Metrics Changes - The company reported a 9% increase in net sales for Q3, with all business groups contributing to this growth [4][13] - Gross margin declined by 150 basis points year-on-year, primarily due to product mix issues in Network Infrastructure and Mobile Networks [13] - Operating margin was 9%, down 220 basis points from the previous year, largely due to a one-time benefit from a loss provision reversal in the prior year [13][14] - Free cash flow generated was EUR 429 million, with a net cash position of EUR 3 billion at the end of the quarter [14][18] Business Line Data and Key Metrics Changes - Network Infrastructure saw an 11% growth, with Optical Networks leading at 19% sales growth [15] - Cloud and Network Services experienced a 13% increase in sales, with gross margin improving by 380 basis points [16] - Mobile Networks net sales increased by 4%, driven by growth in Vietnam and the Middle East & Africa, but gross margin declined by 370 basis points due to a lower software contribution [17] - Nokia Technologies reported a 14% increase in net sales, maintaining an annual run rate of approximately EUR 1.4 billion [18] Market Data and Key Metrics Changes - In North America, strong growth was observed in Network Infrastructure and Cloud and Network Services, while Mobile Networks saw a slight decline [18] - APAC region, particularly India, showed growth in Network Infrastructure, while Mobile Networks returned to modest growth [18] - Europe remained stable, with no significant changes reported in Q3 [18] Company Strategy and Development Direction - The company is focused on operational leverage through continuous productivity improvement and digital instrumentation, rather than large restructuring programs [15][40] - The integration of the Infinera acquisition is ahead of schedule, contributing positively to net sales and order intake growth [5][11] - The company aims to unlock the full potential of its portfolio and deliver ongoing growth and operating leverage, with a strategy to be shared at the upcoming Capital Markets Day [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand environment, particularly in AI and cloud sectors, with a strong order intake and backlog coverage [4][5] - The company expects Q4 net sales to grow sequentially, slightly above historical seasonality of 22% [11] - Management highlighted the importance of focusing on innovation and technology leadership to improve returns in Mobile Networks [83] Other Important Information - The company is scaling down passive venture fund investments and will consider targeted direct minority investments to accelerate its strategy [10][11] - The AI supercycle is seen as a significant driver for demand in advanced connectivity solutions, positioning Nokia as a leader in this market [12] Q&A Session Summary Question: Progress on IP Networks and switching business - Management acknowledged positive design wins and emphasized that they are still a small player in the IP Networks space, with much work ahead [27] Question: Growth opportunities in AI and cloud - Management identified hyperscalers and sovereign clouds as significant growth opportunities, with current demand primarily driven by hyperscalers [29] Question: Insights on Scale Across for optics - Management noted that while Scale Across is not new, the increasing bandwidth demands from AI data centers create new opportunities for innovation [31][32] Question: Mobile Networks margins and future outlook - Management indicated that improving returns in Mobile Networks is a priority, focusing on customer engagement and innovation [83] Question: Demand in Europe and revenue decline - Management stated that demand in Europe is stabilizing, with potential upside if regulations address high-risk vendor status [77]

Financial Performance and Key Metrics - The group reported a statutory profit after tax of £3.3 billion for the first nine months of 2025, with a return on tangible equity (ROTE) of 11.9% [5][6] - Excluding the motor provision, ROTE was 14.6%, and the full-year ROTE is now expected to be around 12% or 14% excluding motor [6][17] - Year-to-date net income reached £13.6 billion, a 6% increase compared to the previous year, driven by growth in net interest income and a 9% rise in other operating income [6][12] - Operating costs for the year-to-date were £7.2 billion, up 3% year-on-year, in line with expectations [7][14] - The closing CET1 ratio stood at 13.8%, reflecting strong capital generation of 110 basis points year-to-date [19] Business Line Performance - Group lending balances increased to £477 billion, up £18 billion or 4% year-to-date, with retail lending growing by £5.1 billion [9][10] - Year-to-date deposits grew by £14 billion or 3%, with a quarterly increase of £2.8 billion [10] - Net interest income for the first nine months was £10.1 billion, up 6% year-on-year, with a net interest margin of 3.06% [11][12] - Other operating income (OOI) reached £4.5 billion year-to-date, up 9% year-on-year, with Q3 OOI at £1.6 billion, a 3% increase from Q2 [12][68] Market Data and Key Indicators - The retail business saw continued growth across cards, loans, and motor businesses, while commercial lending balances increased by £1.3 billion in Q3 [9][10] - The insurance, pensions, and investments segment experienced steady growth, with approximately £3.3 billion of open book net new money year-to-date [10] Company Strategy and Industry Competition - The company completed the acquisition of Schroders Personal Wealth, now rebranded as Lloyds Wealth, which will enhance its wealth management capabilities [4][33] - Significant advancements were made in the digital asset strategy, including partnerships to deliver tokenized deposits and FX derivatives trades [5][39] - The company aims to integrate Lloyds Wealth into its broader offerings, enhancing customer propositions and driving shareholder value [34][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying business performance despite the additional £800 million charge related to motor commissions [4][19] - The company anticipates continued growth in net interest income and margin expansion into 2026, driven by structural hedge contributions and lending growth [26][27] - The outlook for asset quality remains strong, with an expected asset quality ratio of around 20 basis points for the full year [16] Other Important Information - The company maintained strong cost discipline, with year-to-date operating costs in line with expectations, and plans to meet its full-year guidance [14][19] - The total provision for motor finance remediation now stands at £1.95 billion, reflecting the adverse outcomes from FCA proposals [15][44] Q&A Session Summary Question: Regarding motor finance provisions and potential top-ups - Management indicated that the current provision of £1.95 billion is a best estimate and that the FCA's proposals are heavily weighted in their scenario analysis, suggesting limited movement in overall provisioning [22][24] Question: Expectations for net interest margin (NIM) growth - Management expects NIM to continue to grow in Q4, driven by structural hedge contributions, and anticipates continued margin expansion into 2026 [26][27] Question: Insights on the wealth management strategy post-acquisition - The acquisition of Lloyds Wealth is seen as a significant step forward, with plans to integrate it into existing customer propositions and enhance advisory capabilities [33][34] Question: Thoughts on tokenized assets and their impact on banking revenues - Management views tokenized assets as an opportunity rather than a threat, with ongoing projects aimed at developing programmable currency and enhancing customer value [39][40] Question: Distribution strategy and potential for more frequent buybacks - Management remains committed to distributing excess capital and will consider the form and timing of distributions at the end of the year, with no immediate plans for more frequent buybacks [42][44] Question: Trends in non-banking net interest income and other operating income - Non-banking net interest income is running about 10% ahead of last year, primarily driven by volume growth, while other operating income is expected to continue growing, albeit with some variability across divisions [62][66][68]

Financial Performance and Key Metrics - The group reported a statutory profit after tax of £3.3 billion with a return on tangible equity (RoTE) of 11.9% for the year to date, which would be 14.6% excluding the motor provision [8][26] - Year-to-date net income reached £13.6 billion, a 6% increase compared to the previous year, driven by growth in net interest income and a 9% rise in other operating income [9][18] - Operating costs increased by 3% year-on-year to £7.2 billion, in line with expectations, while the asset quality ratio improved to approximately 20 basis points for the full year [10][25] Business Line Performance - Group lending balances increased by £18 billion or 4% year-to-date, with retail lending growing by £5.1 billion, primarily due to a rise in the mortgage book [12][13] - Deposits grew by £14 billion or 3% year-to-date, with a £2.8 billion increase in Q3, driven by retail and commercial sectors [14] - Other operating income for the year to date was £4.5 billion, up 9% year-on-year, with significant contributions from motor and LPG investments [18][19] Market Data and Key Metrics - The net interest margin (NIM) for Q3 was 3.06%, reflecting a gradual increase, and is expected to continue growing into 2026 [9][40] - The group anticipates net interest income for the full year to be around £13.6 billion, slightly above previous guidance [17][43] - The asset quality remains strong, with low levels of new arrears and a year-to-date impairment charge of £618 million [25][26] Company Strategy and Industry Competition - The full acquisition of Schroders Personal Wealth, now rebranded as Lloyds Wealth, aims to enhance the group's wealth management capabilities and customer propositions [6][52] - The company is advancing its digital asset strategy, including partnerships for tokenized deposits and FX derivatives, which are expected to drive customer opportunities [7][59] - The management remains confident in achieving its 2026 targets, including a RoTE exceeding 15% and capital generation above 200 basis points [88] Management Commentary on Operating Environment and Future Outlook - Management expressed disappointment regarding the additional £800 million charge related to motor commissions but remains confident in the underlying business performance [4][31] - The company expects continued growth in net interest income and margin despite headwinds from mortgage refinancing [74] - The management highlighted the importance of maintaining cost discipline while driving income growth and capital generation [21][31] Other Important Information - The total provision for potential motor commission remediation costs has reached £1.95 billion, reflecting the adverse outcomes anticipated from FCA proposals [23][68] - The company is focused on integrating the newly acquired wealth management business and enhancing customer propositions [55] Q&A Session Summary Question: Sensitivity around motor finance provision - Management indicated that the current provision of £1.95 billion is based on scenario analysis and reflects the adverse end of expected outcomes from FCA proposals [36][37] Question: Expectations for net interest margin (NIM) growth - Management confirmed expectations for NIM to increase in Q4, driven by structural hedge contributions, and anticipates continued growth into 2026 [40][41] Question: Wealth management strategy and inorganic expansion - Management expressed satisfaction with the acquisition of Lloyds Wealth and emphasized focusing on organic growth rather than inorganic expansion at this stage [51][55] Question: Nonbanking funding costs and trends in other operating income - Management reported that nonbanking net interest income is running about 10% ahead of last year, driven primarily by volume growth rather than rate increases [96][98]

Financial Data and Key Metrics Changes - Global RevPAR grew by 0.1% in Q3, consistent with Q2 performance, driven by strong trading in EMEA-A and improvement in Greater China [4] - Year-to-date global RevPAR increased by 1.4% [21] - In the Americas, RevPAR decreased by 0.9% in Q3, with the U.S. down 1.6% due to slower trading conditions [5] - EMEA-A saw RevPAR growth of 2.8% in Q3, with year-to-date growth at 3.8% [5] - The company opened 14,500 rooms across 99 hotels globally in Q3, marking a 17% year-on-year increase [8] Business Line Data and Key Metrics Changes - Rooms revenue for business days was up 4% globally, while leisure and groups were down by 2% and 4% respectively [7] - In the Americas, gross system growth was 3.6% year-on-year, with 2,700 rooms opened in Q3 [9] - EMEA-A gross system growth was 10.4% year-on-year, with 4,200 rooms opened in Q3 [10] - Greater China gross system growth reached 12.8% year-on-year, with 7,600 rooms opened in Q3 [12] Market Data and Key Metrics Changes - In EMEA-A, occupancy increased by 1.6 percentage points to 75.3%, while rate was up 0.6% [5] - Greater China experienced a 1.8% decline in RevPAR in Q3, but occupancy improved by 0.6 percentage points to 64.4% [6] - The Middle East saw a strong 9.5% growth in RevPAR, driven by the UAE [6] Company Strategy and Development Direction - The company plans to launch a new collection brand focused on the premium segment, initially targeting the EMEA-A region [18] - The new brand aims to complement existing brands like Voco and Vignette Collection, which have seen success in conversions [19] - The company is optimistic about long-term demand drivers, with a focus on expanding its portfolio of world-class brands [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth in the U.S. as economic uncertainty subsides [5] - The company remains on track to meet full-year profit and earnings expectations, with consensus for operating profits at $1.259 billion, implying a 12% growth [15] - Management highlighted strong fundamentals in the U.S. economy, including low unemployment and resilient consumer spending [31] Other Important Information - The company is 78% through its $900 million share buyback program, reducing share count by 3.9% [12] - IHG intends to change the currency of its ordinary shares traded on the London Stock Exchange from British pounds to U.S. dollars starting January 2026 [13][14] Q&A Session Summary Question: What is the outlook for net system growth in 2026? - Management feels confident about the trajectory of net system growth, with consensus for 2025 at 4.5% excluding the Venetian [24] Question: What are the expectations for RevPAR in the U.S.? - Management indicated that they are comfortable with the consensus for RevPAR, which is around 1.3% for the full year [28] Question: Can you elaborate on the increase in credit card fees? - Management confirmed an increase of about $40 million in 2025, with a gradual increase over the next three years [35] Question: Why is the new brand launching in EMEA and not the U.S.? - The EMEA market has a larger proportion of independent hotels, making it a more attractive area for conversion and collection brands [39] Question: What factors are contributing to the weakness in leisure demand in the U.S.? - Management noted several factors, including lower international inbound travel and the impact of tariffs, but remains optimistic about long-term strength [45]

Financial Data and Key Metrics Changes - The company reported a 9% increase in net sales for Q3, with all business groups contributing to growth [3][11] - Gross margin for the group declined by 150 basis points year-on-year, primarily due to product mix [11] - Operating margin was 9%, down 220 basis points from the previous year, mainly due to a one-time benefit from a loss provision reversal in the prior year [11][12] - Free cash flow generated was $429 million, with a net cash position of $3 billion at the end of the quarter [11][16] Business Line Data and Key Metrics Changes - Network Infrastructure saw an 11% growth, with Optical Networks leading at 19% sales growth [12] - Cloud and Network Services experienced a 13% increase in sales, with gross margin improving by 380 basis points [13] - Mobile Networks net sales increased by 4%, driven by growth in Vietnam and the Middle East & Africa, but gross margin declined by 370 basis points [15] - Nokia Technologies reported a 14% increase in net sales, maintaining an annual run rate of approximately €1.4 billion [16] Market Data and Key Metrics Changes - In North America, strong growth was noted in Network Infrastructure and Cloud and Network Services, while Mobile Networks saw a slight decline [16] - In APAC, India experienced growth in Network Infrastructure, driven by demand for fixed wireless, while Mobile Networks returned to modest growth [16] - Europe remained stable, with no significant changes reported in the quarter [16] Company Strategy and Development Direction - The company is focused on operational leverage through continuous productivity improvement and digital instrumentation rather than large restructuring programs [12][37] - Strategic partnerships, such as with N-Scale and Supermicro, are aimed at enhancing networking technologies and expanding the footprint of Nokia's network operating system [5] - The company is optimistic about growth opportunities in AI and cloud, particularly with hyperscalers and sovereign clouds [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year outlooks, expecting Q4 net sales to grow sequentially above historical seasonality [4][9] - The demand environment remains healthy, with strong order intake in AI and cloud sectors [3][4] - Management acknowledged the need for continued innovation and collaboration with customers to improve returns in Mobile Networks [78] Other Important Information - The company is ahead of schedule with the integration of the Infinera acquisition, contributing positively to net sales and order intake growth [4] - A strategic review of venture fund investments led to a decision to scale down passive investments, focusing instead on targeted direct minority investments [8] Q&A Session Summary Question: Progress on IP Networks and switching business - Management noted positive metrics and wins in IP Networks but acknowledged that they are still a small player in the market [23] Question: Growth opportunities in AI and cloud - The biggest opportunities are seen in hyperscalers and sovereign clouds, with significant demand driving growth [25] Question: Impact of Scale Across for optics - Management indicated that while the technology is not new, the demand for innovation is increasing due to bandwidth demands driven by AI data centers [27][28] Question: 6G mobility investments - Investment in 6G standardization has already started, with ongoing work in pre-standard 6G radio technology [32] Question: Factors driving positive surprise in Q3 - Improved gross margins in Cloud and Network Services and successful traction in 5G standalone core implementations contributed to the positive surprise [40] Question: Demand in Europe - Management indicated that demand is stabilizing, with potential upside if regulations address high-risk vendor status [73]

InterContinental Hotels Group (NYSE:IHG) Q3 2025 Earnings Call October 23, 2025 04:30 AM ET Speaker0Hello, everyone, and welcome to today's IHG Third Quarter Trading Update Call. My name is Seb, and I'll be the operator for your call today. I will now hand the call over to Stuart Ford to begin the call. Please go ahead.Speaker1Thanks, Seb. Good morning, everyone, and welcome to IHG's hotel and results conference call covering the twenty twenty five third quarter trading update. I'm Stuart Ford, Senior Vice ...

Financial Data and Key Metrics Changes - The company reported a 9% increase in net sales for Q3 2025, with all business groups contributing to this growth [4][17] - Gross margin for the group declined by 150 basis points year-on-year, primarily due to product mix issues within Network Infrastructure and Mobile Networks [17] - Operating margin was reported at 9%, which is 220 basis points lower than the previous year, largely due to a one-time benefit from the prior year [17][18] - Free cash flow generated was $429 million, with a net cash position of $3 billion at the end of the quarter [18][23] Business Line Data and Key Metrics Changes - Network Infrastructure saw an 11% growth, with Optical Networks leading at 19% sales growth [19] - Cloud and Network Services experienced a 13% increase in sales, with gross margin improving by 380 basis points [20] - Mobile Networks net sales increased by 4%, driven by growth in Vietnam and the Middle East and Africa, although gross margin declined by 370 basis points [21][22] - Nokia Technologies reported a 14% increase in net sales, maintaining an annual run rate of approximately $400 million [22] Market Data and Key Metrics Changes - In North America, strong growth was observed in Network Infrastructure and Cloud and Network Services, while Mobile Networks saw a slight decline [23] - In APAC, India experienced growth in Network Infrastructure, driven by demand for fixed wireless, while Mobile Networks returned to modest growth [23] - Europe remained stable, with no significant changes reported in Q3 [23] Company Strategy and Development Direction - The company is focused on leveraging AI and cloud technologies, with a strategic emphasis on partnerships, such as with EnScale and Super Micro [8][15] - Nokia is transitioning to a continuous improvement culture, emphasizing operational leverage and cost discipline rather than large restructuring programs [18][68] - The company is optimistic about the potential of AI and data center business, particularly in the EU and US markets [101] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the full-year outlook, with expectations for sequential net sales growth in Q4 slightly above historical seasonality [7][15] - The demand environment is described as healthy, with strong order intake particularly in AI and cloud sectors [5][6] - Management acknowledged the need for ongoing innovation and technology leadership to improve returns in Mobile Networks [108] Other Important Information - The integration of the Infinera acquisition is ahead of schedule, contributing positively to net sales and order intake growth [6][71] - A strategic review of venture fund investments led to a decision to scale down passive investments, focusing instead on targeted direct minority investments [14] Q&A Session Summary Question: Progress on IP networks and switching business - Management acknowledged positive metrics and wins in IP networks but noted that they are still a small player in the market, indicating more work is needed [34][35] Question: Growth opportunities in AI and cloud - The biggest opportunities are seen in hyperscalers and sovereign clouds, with significant demand currently coming from these segments [38] Question: Scale across for optics and its implications - Management indicated that while the technology is not new, the demand for innovation is increasing due to bandwidth demands driven by AI data centers [41] Question: Six G mobility investments - Investments in six G technology standardization have already begun, with ongoing R&D efforts [45][46] Question: Factors driving positive surprise in Q3 - Improved gross margins in Cloud and Network Services and successful market share gains in five G standalone core implementations were highlighted [58] Question: Demand in Europe and its implications - Management noted that while demand is stabilizing, the majority of investment is currently happening in the US, with potential upside in Europe if regulations change [101]

Financial Data and Key Metrics Changes - For the three months ending September 30, group revenue was $1.8 billion, reflecting a year-on-year growth of 4.6% [2] - Organic revenue growth was 3.4%, with North America showing an improvement to 3.4% and international businesses achieving organic growth of 3.3% [2][9] - Net debt at the end of the quarter was $3.9 billion, supported by ongoing cash generation and proceeds from disposals [9] Business Line Data and Key Metrics Changes - In North America, pest control services organic growth was 1.8%, an improvement from 0.3% in the second quarter, while business services organic revenue growth surged by 11.9% [3][4] - International revenue grew by 4.6%, with organic growth of 3.3%, particularly strong in southern European markets [8] - Pest control organic revenue growth for the group was 3.4%, driven by momentum in North America, while hygiene and well-being grew by 3% organically [8][9] Market Data and Key Metrics Changes - The UK saw improved growth in core pest control and plants businesses, while the Pacific region's growth remained below average due to adverse weather impacts [8] - The southern European markets of Spain, Portugal, and Greece sustained strong growth from the first half into the third quarter [8] Company Strategy and Development Direction - The company is focused on enhancing lead generation and customer retention in North America, with a revised strategy that includes improving digital marketing and sales operating models [4][6] - The rollout of satellite branches is on track, with 139 in operation and a target of 150 by year-end, aimed at improving local presence and lead generation [5][9] - Cost efficiency initiatives are expected to deliver $100 million in cost reductions by the end of 2026, with a goal of achieving an operating margin above 20% post-2026 [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the continued positive trends and performance in the third quarter, with expectations to deliver financial results in line with market expectations for the full year [2][9] - The company noted that Q4 is seasonally quieter and anticipates a drag on organic growth due to the non-repeat of one-off emergency mosquito control work from the previous year [7][32] Other Important Information - The company completed three acquisitions in the quarter, bringing the total for the year to 21, with annualized revenue of approximately $39 million from these deals [9] - The company is also focusing on improving free cash flow through working capital management and capital expenditure optimization [25] Q&A Session All Questions and Answers Question: Could you talk about contract portfolio net gain improvement performance in Q3? - Management noted that the improvement in net gain was essential for achieving healthy organic growth, with both jobbing and contract portfolio showing positive trends [14][15] Question: What is the balance between lowering prices to take share and pushing through price increases? - Management indicated that pricing strategies are more sophisticated, focusing on identifying opportunities rather than a blanket approach to price increases [24] Question: Can you discuss expectations for growth in the next quarter? - Management refrained from making precise forecasts but expressed confidence in the positive momentum observed in lead flow and customer retention [31][32] Question: How is the integration of commercial branches progressing? - Management reported steady progress in the integration of commercial branches, focusing on easier conversions and ensuring cost savings and margin improvements [40][41] Question: When would it make sense to increase spend in marketing and sales? - Management emphasized the importance of demonstrable returns on marketing investments and indicated that they are getting better at measuring the effectiveness of their spending [47][49]

Financial Data and Key Metrics Changes - For Q3 2025, group revenue was $1.8 billion, representing a year-on-year growth of 4.6% [3] - Organic revenue grew by 3.4%, with North America showing an improvement to 3.4% and international businesses at 3.3% [3] - Net debt at the end of the quarter was $3.9 billion, following the completion of the France Workwear sale, which generated $397 million in cash proceeds [9] Business Line Data and Key Metrics Changes - In North America, Pest Control Services organic growth was 1.8%, an improvement from 0.3% in Q2, while Business Services organic revenue growth was strong at 11.9% [3][6] - International revenue grew by 4.6% with organic growth of 3.3%, particularly strong in Southern European markets [8] - Pest Control organic revenue growth for the group was 3.4%, driven by good momentum in North America, while Hygiene and Well-being grew by 3% [9] Market Data and Key Metrics Changes - The UK saw improved growth in core pest control and plants businesses, while the Pacific region's growth remained below the average for international [8] - The Southern European markets of Spain, Portugal, and Greece sustained strong growth from the first half into the third quarter [8] Company Strategy and Development Direction - The company is focusing on enhancing lead generation and customer retention in North America, with a revised strategy that includes improving digital marketing and local search visibility [4][6] - The rollout of satellite branches is on track, with 139 operational and a target of 150 by year-end, aimed at improving lead generation [5] - Cost efficiency initiatives are expected to deliver $100 million in cost reductions by 2026, with a target operating margin in North America above 20% post-2026 [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the continued positive trends and performance in Q3, expecting to deliver full-year results in line with market expectations [2][10] - The company noted that Q4 is typically a quieter quarter and anticipates a 60 basis point impact on organic growth due to the absence of one-off emergency mosquito control work from the previous year [7] Other Important Information - The company completed three acquisitions in the quarter, bringing the total for the year to 21, with an annualized revenue of approximately $39 million from these acquisitions [9] - The company has reported 11 consecutive quarters of improving colleague retention, with customer retention nudging up to 80.9% [5] Q&A Session Summary Question: Improvement in contracting portfolio performance - Management noted that both jobbing and contracting saw growth, with net gain being the best in a while, but emphasized the need for continued improvement in the portfolio [13][17] Question: Pricing strategy and free cash flow - Management discussed a sophisticated pricing strategy that identifies opportunities for price increases while also managing customer retention [24][27] Question: Expectations for Q4 growth - Management refrained from making precise forecasts but indicated that the fundamentals remain strong despite the seasonal challenges [33][36] Question: Update on Termika integration and technician pay plans - Management reported steady progress in integration and indicated that discussions on pay plans for technicians are ongoing, with potential changes to be decided soon [50][56] Question: Marketing and sales reinvestment - Management acknowledged the challenge of determining effective marketing spend but indicated a willingness to invest more if demonstrable returns can be shown [60][66] Question: Clarification on net gain and contracted growth - Management clarified that net gain refers to the overall performance of the contracted portfolio, emphasizing the importance of customer retention and pricing strategies [103][109]

Financial Data and Key Metrics Changes - For Q3, the group revenue was $1.8 billion, reflecting a year-on-year growth of 4.6% and organic revenue growth of 3.4% [2][8] - North America showed organic growth of 3.4%, with pest control services growing by 1.8%, an improvement from 0.3% in Q2 [3][6] - The customer retention rate increased to 80.9%, up from the half-year stage [5] Business Line Data and Key Metrics Changes - Pest control organic revenue growth for the group was 3.4%, driven by strong performance in North America [7] - Hygiene and well-being grew by 3% organically, an improvement from 0.9% in the first half [8] - North America business services organic revenue growth was particularly strong at 11.9% in Q3 [3] Market Data and Key Metrics Changes - International revenue grew by 4.6%, with organic growth of 3.3%, particularly strong in southern European markets [7] - The Pacific region's growth remained below average due to adverse weather impacts [7] Company Strategy and Development Direction - The company is focused on enhancing lead generation and customer retention through a revised North America strategy [4] - Plans to open 150 satellite branches this year are on track, with 139 already operational [5] - Cost efficiency initiatives are expected to deliver $100 million in cost reductions by the end of 2026 [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the continued positive trends and expects to deliver financial results for the full year in line with market expectations [2][8] - The company noted that Q4 is seasonally quieter and anticipates a 60 basis point impact on organic growth due to the non-repeat of one-off emergency mosquito control work [6][9] Other Important Information - The company completed three M&A deals in the quarter, bringing the total for the year to 21, with annualized revenue of around $39 million from these acquisitions [8] - Net debt at the end of the quarter was reported at $3.9 billion [8] Q&A Session Summary Question: Can you discuss the contract portfolio net gain improvement performance in Q3? - Management noted that both jobbing and contract portfolio growth improved, with net gain being the best seen in a while [13][14] Question: How did residential, commercial, and permit performance compare? - Improvements were seen across all areas, with termite performance particularly better in Q3 compared to H1 [15][16] Question: What is the balance between lowering prices to gain market share and pushing through price increases? - The pricing strategy is sophisticated, focusing on identifying opportunities rather than a blanket increase [22] Question: Can you discuss progress on levers to improve free cash flow? - There are opportunities in working capital and capital expenditure to drive free cash flow [24] Question: What are the expectations for growth in the next quarter? - Management refrained from making precise forecasts but expressed satisfaction with lead flow improvements [30] Question: Can you clarify the net gain calculation? - Net gain reflects customer retention, price increases, and new business, with a focus on maintaining momentum in the contract portfolio [80][82]