Rentokil Initial plc (NYSE:RTO) Q4 2023 Earnings Conference Call March 7, 2024 5:15 AM ET
Company Participants
Andrew Ransom - CEO
Stuart Ingall-Tombs - CFO
Brad Paulsen - CEO, North America
Conference Call Participants
Suhasini Varanasi - Goldman Sachs
James Rose - Barclays
Andy Grobler - BNP Paribas Exane
Ian Zaffino - Oppenheimer
Nicole Manion - UBS
Dominic Edridge - Deutsche Bank
Allen Wells - Jefferies
Chris Bamberry - Peel Hunt
Andrew Ransom
Good morning, ladies and gentlemen. Thank you all for joining us today.
In a few moments, Stuart's going to provide you with details of our overall performance in 2023 and our technical guidance for 2024. I'll then come back to provide a very brief update on each of our categories before we focus today on North America. Here, I'll start by taking you through our organic growth model and our analysis of what happened in the second half. Brad Paulsen, our recently appointed CEO for North America, I'm delighted, joins us here in person. We'll then go through our RIGHT WAY 2 growth plan. I'll then wrap up with a brief update on the excellent progress that we're making towards integration. And then we'll take questions.
So to set the scene, let me just say a few words by covering the highlights for the year. In 2023, we delivered a good overall Group performance with revenue increasing by 45.8% to GBP5.4 billion, of which organic growth was 4.9%. Adjusted operating profits grew by 57% to GBP897 million, and we delivered a Group margin of 16.6%, which was an increase of 120 basis points. Adjusted EBITDA for the year was GBP1.2 billion.
Our bolt-on M&A continued to create value with 41 deals, delivering annualized revenues in the year before acquisition of around GBP106 million. Our cash conversion was at the higher end of our 80% to 90% target at 89%, and we reached a 2.8 times net debt-to-EBITDA ratio one year ahead of our plan. So a good overall Group performance.
As you can see, we continue to make very good progress against the vast majority of our targets. And even in the case of organic growth, where we experienced a more challenging second half in North America we nonetheless delivered organic growth of 4.9% against our medium-term target of 5% plus. The Group is performing very well overall, and we've got a plan in place to reinvigorate growth in North America.