Rentokil Initial PLC (RTO) 2014 Q4 法說會逐字稿

Good morning, ladies and gentlemen.

Welcome to the Rentokil Initial Preliminary Results for 2014.

In February, last year, we presented the group's new strategy entitled The Right Way.

In the presentation, we outlined clear medium term targets for revenue and profit growth as well as the significant improvements in free cash flow.

We also described a set of initiatives that we plan to execute at pace to deliver those targets, including a significant reduction in restructuring cost, capital expenditure, as well as central and divisional overheads, together with an accelerated M&A program.

Despite difficult trading conditions in some of our markets, the Board is encouraged by the progress that we've made.

As a result of our strong performance in 2014 and based on the group's expectation of further progress in 2015, the Board is pleased to recommend an increase in the final dividends for 2014 to 1.82 pence resulting in a total dividend growth for the year of 12.1%.

Let me now hand over to Andy and Jeremy who will talk you through the highlights of the year and describe our plans in more detail.

Andy.

Thanks very much.

Thanks, John.

Good morning ladies and gentlemen.

Thank you all for joining us today.

In a moment, Jeremy is going to present the preliminary results for 2014.

That's going to include the performance of the overall group in the five geographic regions.

I'll then come back and provide an update, first, on our core categories -- pest control, hygiene and workwear; and secondly, on how we're executing our differentiated strategy through the use of the quadrants.

But first let me just say a few words to set the theme for this morning.

This time last year we set out our Right Way plan and our medium term targets for revenue, for profit, and for cash.

And one year on, I'm pleased to say that we've delivered largely what we've set out to deliver in 2014.

It was good to see a strong final quarter.

And while we're not going overboard about one quarter's performance, overall, I am encouraged about our performance in 2014.

Jeremy is going to take you through the revenue, the profit and cash numbers in a moment.

But for me, we've made solid progress towards those medium term targets, and in particular free cash flow of GBP129 million was the standout metric leading to our lowest net debt for 15 years.

Rentokil Initial is, once again, a highly cash generative business.

And we're using that cash to accelerate our M&A program to rebalance our portfolio into growth and into emerging markets and into the pest control category in particular.

Of the 30 acquisitions in 2014, 23 were in pest control.

It's a really outstanding category.

And I'll come back to talk about that I more detail in a few moments.

Of course, at the same time, we've used that cash to fund an increased dividend, as John has just said, and we've reduced our debt as well.

While the prospects in the majority of our markets are good, conditions in some parts of Europe do of course remain challenging.

But notwithstanding this, we are confident that by continuing to execute our strategy at pace, we'll make further progress in the coming year.

So with that, I'm going to hand over to Jeremy.

He'll take you through the numbers.

And then I'll come back and talk about categories and the quadrant performance.

Thank you, Andy, and good morning everybody.

I'll now run through the key financial highlight of 2014.

And unless I say to the contrary, all numbers are at the constant rate of exchange, and the results relates to the continuing operations of the group.

Ongoing revenue in the year grew by 3.6% with organic growth of 1.2% and growth from acquired businesses of 2.4%.

Growth in the fourth quarter increased to 5.0% compared to 3.8% in Q3 driven by both organic growth of 2% and growth from acquisitions of 3%.

Adjusted operating profit before interest for the year, on an ongoing basis, was up GBP15.2 million or 6.5%, driven by strong profit growth in North America, Asia, and Pacific.

And reduced central and divisional overheads was offset by lower profits in the Benelux.

Profits after interest at actual exchange rates grew by GBP10 million or 5.5% in the year with a GBP14.3 million reduction in interest costs offset by adverse exchange rate movements of GBP16 million.

Profit before tax at constant exchange rates grew by 58.4% reflecting a GBP38 million reduction in restructuring costs.

We committed to delivering a significant and sustainable improvement in cash flow at the beginning of the year.

And operating cash flow at GBP209 million was GBP72 million higher than 2013.

And free cash flow at GBP129 million was GBP93 million higher than the previous year.

Adjusted EPS at actual exchange rate increased by 9.4% reflecting the impact of profit growth and the lower tax rate.

Andy and I presented our strategy for the business this time last year.

A key element of the plan was to improve our financial performance quickly, looking to give ourselves with financial flexibility, (inaudible) our M&A program, pay down debt and pursue a progressive dividend policy.

In 2014, we have made encouraging progress towards our medium term objectives.

Revenue, up 3.6% versus our medium term target of mid-single digit revenue growth; underlying profit up 6.5% versus our medium term target of high single digit profit growth.

We've delivered a significant reduction in restructuring costs, which helped with the reductions in CapEx and working capital outflows delivered, as I said, a very significant improvement in free cash flow.

And this has enabled us to fund an increase in our M&A acquisitions with GBP68 million spent in the year against our original expectation of GBP50 million.

As Andy said, we've reduced net debt to its lowest level for 15 years.

And this has provided the capacity for our proposed 12.1% increase in the 2014 full year dividend.

Looking at our performance by region.

North America delivered a strong performance in 2014 supported by acquisitions and improved organic growth in the second half.

Revenue grew by 6.6% in the year, of which, 1.7% was organic growth.

The region had a strong finish with Q4 revenues up 8.4%, of which, 3.3% was organic.

Ten bolt-on acquisitions were completed in 2014, adding GBP20 million of annualized revenues.

Operating profit was up 15.6% leveraging the revenue growth as well as back office and property rationalization.

This drove an 0.9 percentage points improvement in margins.

We believe there are further opportunities to drive margins in the region through acquisitions, scale efficiency and service productivity.

Performance in Europe in 2014 was held back by the Benelux and the challenging economic environments across parts of the regions.

Ongoing revenues were at 1.7% in the year with a slightly stronger Q4 at 2.1%.

Revenue growth was driven by Germany with Latin America which is managed through the Europe region.

Revenues were broadly flat in France in difficult economic conditions but declined by 2% in the Benelux.

Ongoing profits in the year was down 3.7% largely due to a GBP9.9 million reduction in the Benelux which was impacted by the continued effect of poor service levels in 2013 and challenging economic conditions resulting in contract terminations or pricing pressure.

The outlook for our European businesses in 2015 is mixed.

Our German, Belgian, and Italian businesses are experiencing positive trading environments.

And we expect to make good progress during the year.

However, the outlook for our French and Dutch operations is more uncertain with challenging economic conditions and competitive markets expected to continue.

Overall, we would expect profitability in our Europe region in 2015 to be broadly in line with 2014.

Ongoing revenue in the UK and Rest of the World region was at 5.6%, at which, 3.2% is organic.

The region had a very strong end to the year with Q4 revenues up 8.3%, of which, 4.2% was organic.

The UK delivered strong growth in both pest and hygiene categories through key account contracts on pest jobbing sales as well as the impact of the Green Compliance acquisition.

While the jobbing work tends to be higher than the average margin, new contracts has significant setup costs.

And this combined with the integration of the Green Compliance business has subdued UK margins during the year.

Revenue growth has been generally strong in the Rest of the World region driven by the Caribbean and the Middle East.

We expect to see an improvement in margin in the region in 2015 as new contracts and acquisitions mature in the UK.

The Asia region has made excellent progress in 2014.

Ongoing revenues were up 8.1% in the year, of which, 6.7% was organic.

The region also had a very strong finish to the year with Q4 revenues up by 11.9%.

Average growth in India, China and Vietnam was just below 30%.

In our more established Asian markets such as Malaysia and Indonesia, growth was in the high single digits.

Operating profits in the region was up 18.2% reflecting leverage from the revenue growth with a 1.2 percentage points improvement in margin.

And we believe there are further opportunities for margin improvement through revenue growth, service productivity and back office rationalization.

For the first time in several years, we have made acquisitions in the region buying three small businesses in Singapore, Korea, and India.

We have a strong M&A pipeline and expect to buy more businesses in 2015.

The Pacific businesses performed well in 2014 with revenues up 0.9% and profits up 5.9%.

Revenue growth was delivered by increased contract sales in pest and hygiene but offset by disappointing performance in jobbing and product sales.

The region had a reasonably strong start with summer season with Q4 revenue growth up 2.5%.

The business managed cost well, delivering a 0.9 percentage points improvement in margins.

There are further opportunities to increase margins through improved service productivity and targeted acquisitions and we are seeking to build our M&A pipeline in 2015.

As I've said earlier, we've committed to a significant and sustainable improvement in cash flows at the beginning of the year.

The group delivered operating cash flows from continuing operations of GBP209 million, a GBP72 million increase from2013.

This was achieved through improvements across a number of areas.

EBITDA has now grown above GBP400 million for the group.

Working capital outflows of GBP4 million was GBP17 million lower than the prior year reflecting an asset-backed financing initiatives in our French business.

The net CapEx of GBP179 million was GBP49 million lower than 2013 with growth CapEx broadly in line with depreciation.

Continuing free cash flow of GBP129 million was GBP93 million higher than last year.

The improvement in operating cash flow was supported by lower cash interest, pension, and tax payments enabling the funding of GBP68 million of acquisitions on GBP43 million in cash dividend payments, a 12% increase on 2013.

Net debt was reduced in the year by the sale of the Initial Facilities business, the consideration of GBP250 million, and the GBP44 million of impact of FX movements which acted as a hedge against the adverse P&L impacts that I noted earlier.

Our closing net debt for the year of GBP775 million is GBP260 million lower than the 2013 year end, and as Andy said, the lowest level in the group for some 15 years.

We are very pleased with the progress that we've made on free cash flow in 2014.

And while I can't guarantee that the level of free cash flow will be the same in 2015, what we can say is that with restructuring costs now running at or below GBP10 million per annum and with CapEx levels now running at around depreciation levels, we expect the business to be able to deliver a sustainable level of free cash flow of at least GBP100 million per annum going forward.

The level of improved free cash flow have helped to contribute to an overall significant strengthening in the group's financial position.

As I just said, our net debt is now at its lowest level for 15 years with our net debt to EBITDA ratio comfortably below two times.

Our pension scheme is one of the strongest in the FTSE 350 with an actuarial surplus at the 2014 year-end and [accept] the GBP50 million and accounting surplus of circa GBP190 million.

Our credit rating was upgraded in the year to BBB by Standard & Poor's and we had just renewed our credit facilities.

The combined effect of our refinancings over the last three years means the average cost of our net debt has fallen from above 5% to below 4% and we would expect it to fall further to around 3.5% following our 2016 bond refinancing.

The combination of these factors means we're well-placed to continue to drive shareholder value through applying our differentiated strategy to capital allocation.

Upweighting our M&A investment in our growth and emerging quadrants, pursuing a progressive dividend policy to drive improved shareholder returns whilst maintaining the strength of our balance sheet.

Before I update you on guidance for 2015, just a couple of comments on our reporting framework.

First off, following the change to the reporting requirements announced by the [FCA] in 2014, we'll provide a full update on performance of the half-year and the full-year, but going forward we'll provide only a brief update on Q1 and Q3 focusing on topline performance.

We'll be keeping the regional and category reporting structure intact as promised and no changes will be made in 2015.

Execution of our differentiated strategy is based on a quadrant approach which factors in the strength of our businesses and the economic environment in which they operate.

And given the dynamic nature of these factors we will carry out some fine-tuning on an annual basis to replace changes in our businesses and their markets where appropriate.

Andy will talk you through some minor changes that we have made for 2015, shortly.

So finally, before I hand over to Andy, some numbers for your models in relation to 2015 following an GBP11.4 million reduction in central and divisional overhead in 2014, we'd expect 2015 cost to be in line with the prior year.

As previously indicated, we expect restructuring cost to be at or below our GBP10 million per annum going forward.

This guidance is a restructuring cost only and doesn't include one-off items which are by their nature, a bit more unpredictable.

Interest costs are expected to fall further in 2015 to around GBP43 million at constant exchange rates reflecting the impacts of our recent bond refinancings.

I expect the cash interest cost to be slightly higher than the P&L charge reflecting the phasing of interest payments.

For tax, I expect the underlying rate to be in line with 2014 at 23.5% and for cash tax to be around GBP40 million.

As you're well aware sterling continues to be strong versus the majority of global currencies and especially against the euro.

It's early in the year and exchange rate movements can be very volatile.

But as things stand, if you calculate the impact of exchange rates on our profitability, we would anticipate or we calculate a further adverse impact on the P&L in 2015 and based on today's exchange rates that impact would be around about GBP40 million or so.

We'll update with you on this as we go through the year in terms of the projected impact for the full year.

In terms of delivering 2015 free cash flow, I expect working capital outflows to be at or below GBP20 million and net CapEx to be in the region of GBP200 million.

In terms of the uses of free cash flow, at this stage of the year, we would estimate M&A spend to be in the region of GBP50 million.

We proposed an increase in the final dividend of 12% which implies a cash spend on dividends in 2015 of a little under GBP50 million.

And consequently based on these assumptions and subject to FX movements, we would expect net debt at the end of the year, to be broadly in line with the current level.

Thank you and I would now like to hand over to Andy who'll provide more detail on our 2014 achievements by category and quadrant and how we plan to continue to execute our strategy going forward.

Thanks, Jeremy.

So, just a very quick reminder, you've seen this slide before, this summarizes how we're now managing the business.

So, we've got the five geographic regions, you just heard the financial performance from Jeremy, we got the three core categories in a moment I'll update you on their performance.

We're operating on a low cost single country operating model and of course the heart of our plan are our colleagues as genuine experts in their field.

We've got clear operational plans to drive profitable growth and we deploy these plans through our differentiated quadrant model.

And I'll come back to that at the end.

So, let me start by giving you a few examples from each of the three categories to [unblind] the progress that we're making.

I'll start with pest control, Rentokil is a very high quality business, and mind you, it is quite simply the best pest control business in the world.

In 2014 for our ongoing pest control operations, the category grew revenues by 8.5% to GBP740 million and that now represents over 40% of our group revenue.

Profit in pest control also grew by over 8% to GBP140 million and that represents 44% of group profits and these profits are delivering an operating margin of almost 19%.

As you can see there our pest control category is very well-positioned for growth, we've got over 70% of those revenues now coming from the growth in the emerging markets.

During the year, we continue to build our market positions through 23 acquisitions in pest control and seven of those acquisitions were in North America.

And as you know, North America is the world's largest pest control market.

So, clearly our plan is to grow this category aggressively.

Rentokil has got a very strong brand, we operate in over 60 countries, we're market leader in 44 of those countries.

We offer unrivaled expertise and we operate the consistent standards across the globe, that means the multinational customers we've got the ability to put in place global framework agreements for their pest control programs wherever they operate around the world.

Just as our own lives are increasingly being driven online, pest control as an industry is also moving online and Rentokil is leading the charge into digital.

With our best in class websites and our customer extranet portals.

We've got a number of other strengths listed here, but perhaps the most important are our leading technical capability and our unique proprietary products which underpin our differentiation.

Over the last 18 months or so, we've been working extremely hard in our global technical center to develop a strong pipeline of leading edge innovations in the world of pest control.

Some of these are designed to keep us ahead of new regulations affecting the industry and others to give us new products and new services to maintain our differentiation from our competitors.

Today, we've got the strongest pipeline of pest control innovations that we've had for years.

I'll give you a few quick examples.

We've got some new biocides such as a pathogenic fungi, currently that's under trial and this is using a non-chemical fungal solution which kills cockroaches incredibly effectively, I know that's not impressive to you guys, but it's really impressive to my guys.

Rentokil has indeed invented a new mouse trap, we've got a new mousetrap that uses infrared sensors but opens an internal gate that allows access to the poisons to the rodenticides only when the rodent enters the trap and that's something regulators around the world have been looking for, for a long time.

What we call [Cage Connect] uses our proprietary remote sensing technology to deal with the issues of live trapping of wildlife, say squirrels, it's an effective and a humane way of trapping without the technician having to go back to those traps every single day.

We got a new bed bug detector and that acts as a simple but effective early warning system which makes it easier for hotel staff to monitor and then they call us in before that problem becomes a crisis.

These and other examples of our pest control innovations are going to be on show at an investor relations event that we're going to be holding on the 1st of May.

We're holding the briefing on the same day as our first quarter results and the investor day will give you a much, much deeper insight into the pest control category, you can see the agenda there on the screen.

So, please do come and join us if you can.

So, we're going to move on now to hygiene, Initial is the global leader in hygiene services.

It's a strong hygiene brand, it operates in over 40 countries and we've got leading positions in over half of those markets particularly in Asia-Pacific and the Caribbean.

In 2014 for ongoing operations the hygiene category grew revenues by 1% to GBP474 million that would have been 2% if we excluded the Benelux.

Hygiene now represents 26% of our group revenues.

The category generated profits of GBP94 million in 2014 which is about 30% of the group, whilst category profitability was down during the year and that's due in the main, to Benelux of course, operating margins remained very strong at around 20%, so very similar to pest control.

This is a category which has historically lacked investment and innovation, but over the last two years we really started to turn that around.

We've now got available new award winning signature range and the high-end reflection range in stainless steel and more recently in the second half of 2014, we've launched our signature color range, with the choice of nine different colors.

The latest part of our washroom product evolution is the imminent launch of the full no touch range and that's responding to a clear consumer preference not to touch products in the washroom to avoid cross contamination.

Obviously our strategies in hygiene are not just about new products and new services, we're very focused on a range of self-help improvement measures, for example around pricing, around customer retention, around targeting postcode density and customer penetration density, that's all about selling multiple service lines to the same customer.

Within the next few months, Initial will be offering the most complete range of washroom hygiene products and services, will have options in color and stainless steel and no touch and in my view nobody will have a better product range in the market anywhere in the world.

Now, I believe comes the next existing change for hygiene, it's to move from product development and evolution to genuine innovation.

So, I want to take a few minutes to share with you an exciting -- we think it's exciting, new hygiene system and we're launching that today.

So, let me start by saying that good hand hygiene compliance is incredibly important to a lot of our customers.

Obviously it's extremely important industry is our healthcare, but it's exceptionally important in those business such as food manufacturing where compliance with regulation and food safety audits provides a fundamental license to operate.

So, I'm delighted to show you today what we're calling initial [Hygiene Connect].

Hygiene Connect is the first integrated wireless monitoring and display system and it's designed to raise hand hygiene compliance in those places where good hand hygiene is essential.

The service works through a combination of washroom sensors and these monitor how many people enter the facilities and critically how many of those people use soap to wash their hands.

The overall combined percentage of people who wash their hands is then displayed on our real-time hygiene compliance monitor for everyone to see.

Now, the percentage that's displayed, that's obviously aggregated is therefore anonymous, the display of the hand hygiene compliance though amongst the people in that area has an incredibly effective way of prompting individuals to change their hand hygiene behavior.

We've piloted this system on an industrial scale, multiple different customer sectors, over 100,000 people have been through the pilots.

On average across all of the pilots we saw baseline hand hygiene compliance at just around 50% with a bit of a different between men and women which we can come back to, but after displaying the hand hygiene data behavior changed significantly and compliance shot up into the 90s and then settled at or about 80% which is a fantastic improvement for industries to take this seriously.

We've launched that service today in the Netherlands.

We chose the Netherlands given the huge importance of food manufacturing to the Dutch economy and we'll be rolling it out in the coming months.

So in summary, we've got a lot of opportunity in the hygiene category.

We've got a combination of the most complete range of hygiene products.

We've got some exciting innovations.

And we've got the execution of a range of self-help improvement measures.

Let me turn now to workwear.

In workwear, we're the only provider of scale across the main European markets.

And as you can see, we've got 80% of our workwear revenues are in our Protect & Enhance quadrant.

And I'll come back to that shortly.

In 2014 for ongoing operations, our workwear category did a reasonable job of protecting revenues of GBP428 million which account for 23% of group revenues.

Profits were down by 5.5%, GBP66 million or 21% of our profits if you exclude the Benelux profits, grew by almost 5%.

And our margins in workwear remained healthy at 15.4%.

To remain competitive and to maintain our margins in this category, we're very focused on product quality, on productivity and on maintaining high levels of customer satisfaction.

In terms of product quality, I'm pleased to say that we're in the process of launching five new ranges targeted at specific customer groups.

As an example, we've just launched two personal protection ranges.

The first one, Alpha, that's designed for industrial workers, for example, machinery and equipment operators.

And Delta, the multi-protect garment, flame retardant, antistatic, protects against electric arc and chemicals, and that's targeting people who work obviously in hazardous industries.

Customer satisfaction is critical in this category, and so I'm pleased that the feedback on these new ranges has been excellent in terms of quality, design, functionality, comfort, it's been really good.

While product quality is vital, nothing frustrates customers more than receiving garments that don't fit their workers correctly and a key logistical challenge for the industry.

We've got two pilots underway.

The first is for larger customers where they probably got hundreds of workers on a particular site.

We're piloting a 3D body scanner.

This is a mobile walk-in machine and it takes perfect measurements in a matter of seconds.

That's being piloted in Belgium.

Secondly, we're looking to learn from the online fashion retail industry by providing smaller customers with a Web presence where they can themselves both order the garments but input the sizes required.

And we're piloting that in the second quarter.

So now you've heard our performance by geographic region.

You've also heard by category.

I want to talk for a few moments about the four quadrants.

As I explained 12 months ago, we're using the differentiated quadrant approach to support the execution of our strategy.

And we're using it in every single country in which we operate.

I'm not going to take you through the matrix construct in any detail.

I'm sure you've not forgotten we have four quadrants, Emerging, Growth, Manage for Value, and Protect & Enhance.

Our starting point was to profile each one of our businesses and categories into this matrix of growth potential and profit contribution.

We've used this approach to be very selective about where to focus our M&A, our CapEx, and our innovation investments, and on what financial returns we'll demand from each of the quadrants.

The large reduction in CapEx and restructuring cost that Jeremy referred to has also been delivered by taking a differential approach to investment largely in the Protect & Enhance quadrant which saw CapEx reduced by around 11% and restructuring by about 77%.

On the other hand, the Emerging quadrant benefitted from a 10% increase in CapEx.

In line with what we said last year, we've again reviewed each of our businesses against the quadrants and I'll provide you with an update for 2015 in a moment.

But let me just quickly review how the quadrants worked in 2014.

I'll start with the Emerging quadrant.

On an ongoing basis, this quadrant delivered excellent revenue growth in 2014, up 21.7%.

That was fueled by acquisitions in Latin America but also excellent organic growth rates of about 30% in India, Brazil, and China, and Vietnam.

Sales capability has been a top priority in this quadrant.

For example, in Asia, we've made really good progress this year in recruiting professional sales directors in Malaysia, in India, Indonesia, Thailand, Singapore, and that's to drive those levels of organic revenue growth.

In China, we put in a new strategy to focus on density building in the top 15 cities and the top 10 industrial zones, and that's been working well.

We're seeing good growth coming through particularly in the food processing sector.

I highlighted some good progress in Latin America at the interims so I won't do any detail on that today.

But just to remind you, we did enter both the pest and the hygiene markets in Chile and in Colombia.

We're also continuing to make very good progress in Brazil.

During the year, we made eight acquisitions across the Emerging quadrant and I'm hopeful over the next 12 months our active acquisition pipeline will continue to bear more fruit.

It's really important that we make good progress in this quadrant over the longer term because those markets of China, India and Brazil are going to be very, very important markets for us.

If I turn now to growth, the Growth quadrant, we delivered revenue up 5.7% in the year.

And as Jeremy highlighted, we had good performances in our businesses in North America and in the UK in particular.

Digital marketing is now a very important of our growth strategy and we've launched new customer websites for pest control in the UK, in North America, in Germany using a successful model that we're rolling out globally.

For example, in the fourth quarter, our new North American site delivered an increase in total website inquiries of over 50%.

One of the ways in which our UK operation has begun to build revenue is by upselling.

They're increasing the number of quotes per customer visit.

So for example, if a customer's got say a mouse infestation, obviously Rentokil can sell a service to control it.

But we can also offer proofing for doors to stop the mice reentering.

We can offer a pest infection service to hygienically clear out afterwards.

In order to support this type of sales activity, the UK has developed a pest guide for surveyors.

It's a smart phone app and it actively prompts the surveyor when in front of the customer to offer additional services and additional recommendations.

It's a sort of an Amazon type approach.

Customers who bought this service also bought this service.

Finally, it's been a very active year for M&A in this quadrant.

We built a North American position with those seven pest control acquisitions as well as delivering deals in the Caribbean and in the UK where the acquisition of the Peter Cox Property Care business was an excellent way to finish the year.

Protect & Enhance.

Our Protect & Enhance quadrant is a very important part of the overall business.

It represents just over GBP800 million in revenues.

As you can see, the strategies we deployed in this quadrant worked pretty well to protect the revenues which were flat year-on-year.

Profit was, however, down, 4.4% as result of the Benelux workwear and hygiene performance.

Market conditions in this quadrant do remain quite challenging, particularly in Holland and France.

But that said, a number of the Protect & Enhance markets -- for example, the Pacific and even Belgium now look a little bit more positive today than they did 12 months ago.

Our strategies in this quadrant are all about protecting our existing customer base and taking action to protect and enhance our margins.

So it's particularly encouraging to see improvements in customer satisfaction in South Africa, in the Nordics, and the Benelux in particular.

One of the key initiatives to support our margins is our pricing and profitability tool which we've been rolling out across our European countries.

That tool not only provides profitability analysis by customer but also by sector, by tier, by service line, by sales manager, and by sales rep.

So it's a really, really powerful tool that we're using to help us execute our yield management strategies.

Service productivity remains an important part of the strategy with new tools being developed to deliver better scheduling and route planning.

In 2015, we plan to optimize over 50% of the thousand or so service routes that we have across Europe.

As for the Benelux, operationally, we're certainly entering 2015 in a much better place than we started 2014.

Belgium in particular has responded well to the Protect & Enhance strategies.

And in particular, having its sales force become much more specialized on either targeting workwear or hygiene customers that's worked well in Belgium is now being implemented in Holland.

Holland is taking a bit longer in the turnaround process but we are making progress in Holland as well.

As Jeremy has just said, economic conditions do remain more challenging within parts of this quadrant.

But that said, as I'll explain in a moment, it's also pleasing to see that the business performance of seven of our businesses in this quadrant has been so encouraging in 2014 that we'll be moving them into the Growth quadrant for 2015.

Finally, Manage for Value, that's now a relatively small quadrant for us with only GBP126 million of revenue and less than GBP20 million of profit, delivered a reasonable revenue performance up half a percent in the year.

Profits declined by 4.5% reflecting the economic challenges in parts of Southern Europe.

That said, our Italian pest control business and our businesses in Ireland performed much more strongly than expected and they've taken up the challenge to prove that they can move in this quadrant over into Protect & Enhance.

And they've done that by managing strong customer relations, some excellent productivity and indeed some very growth initiatives.

Clearly, the sale of initial facilities was a major step in the refocusing of Rentokil Initial.

But we also disposed of our Austrian products business, our Spanish medical business, and we'll continue to analyze closely the businesses in this quadrant and I expect there'll be a few small exits from this quadrant in 2015.

As I've mentioned earlier, we've undertaken now what will be an annual review of the businesses in the quadrants for 2015.

The encouraging performance of several businesses over 2014 period means that we can now move seven businesses from Protect & Enhance into Growth and four from Manage for Value into Protect & Enhance.

The details are there on the slide.

Now, I'm really encouraged to see these movements within the matrix, could clearly demonstrate that the model is working as we've intended.

We'll review the quadrants again in 12 months time.

So to wrap up, the quadrant inside this chart, I hope, demonstrates very clearly how we're executing the strategy over time.

We're migrating more of our businesses into Growth than into emerging markets and we're reducing our exposure to Manage for Value businesses.

You can see growth in the Emerging markets now account for over 50% of group revenues and we've got less than 5% of our revenues in Manage for Value.

Much of that reshaping, of course, is being delivered through M&A.

In 2014, we completed 30 acquisitions with annualized revenues of GBP66 million.

Twenty-three of the acquisitions, as I've said, were in Growth and Emerging markets.

We've got really strong M&A capabilities across the organization in all of the five regions and we've got our management teams actively looking for city-focused opportunities to build both scale and density.

So M&A really now is a core part of ROI's DNA.

We've recently undertaken our annual review of acquisitions, looking back at the deals we've completed over the last two years.

Pleased to say that the M&A program is on track to deliver or exceed the levels of returns expected from those deals.

So far to date in 2015, we've completed three pest control acquisitions in North America, in Colombia and Australia with combined revenues of about GBP7 million.

Obviously, M&A is going to go up and down by quarter but the current pipeline of opportunity that we have, really does look very good.

Finally then, in summary, and this is where I feel the company is, 12 months on, into The Right Way plan.

We're leaders in our chosen markets.

We're generating high returns and we've got good long-term growth prospects.

We've got a clear differentiated strategy to drive improved performance.

We're executing that plan at pace and it is beginning to deliver.

As part of that strategy, we've also aligned our capital allocation to this differentiated approach and that too is delivering results.

As Jeremy's highlighted, Rentokil Initial is now financially strong with excellent sustainable free cash flows.

Very importantly, we've got a high-caliber management team around us.

And together, we're driving a common one Rentokil Initial agenda across the group.

Finally, we've got a clear plan to deliver our medium term targets for revenue profit and cash and I'm encouraged by the performance in 2014 and the progress that we're making towards these targets.

So thank you very much.

Jeremy and I will obviously now be happy to take any questions.

Good morning.

John Mullane here from Investec.

Just three quick ones from me.

Obviously, we saw somewhat of an acceleration in ongoing revenue growth in Q4, particularly in the UK and US.

Can you provide more color in terms of the drivers behind that?

Then in terms of operating profit performance in pest seems to be stronger, how much of that was driven by margin improvements in the US pest segment?

And then thirdly, the Benelux -- the non-financial metrics, KPIs are moving in the right direction.

When do you sort of see that region stabilizing for you?

Thanks, John.

I'll take the first and the third.

You can do the margin part as usual.

Organic revenues, it's always very difficult to give them forward-looking news on organics.

You correctly called out that the Q4 performance benefitted from really good performances in the UK and the stronger performance in America.

If I look at America first, we highlighted that in the first half of 2014, we had been impacted by severe weather conditions up the eastern sea border, the polar vortex that affected everyone.

So we were expecting -- and I said six months ago, we were expecting a better performance in North America in the second half.

So I would hope and expect that improved organic performance out of our American business should continue -- I can't put a number on it for you, John, by I certainly wouldn't expect to see the weather impact.

That said, honestly, there's a lot of snow up in Boston at the moment.

But, yes, the weather last year went on for months, months, months.

So I think North America, good second half organics.

UK, yes, had a really strong finish.

What they've done on the web has been particularly helpful, launching new innovations.

It's the most aggressive of our businesses to take on new products and services, and that's come through.

And they've got a very, very strong sales model in the UK.

So I think those are the two standout performance in terms of the bigger markets.

But our Asian markets are also consistently delivering good levels of organic growth.

So I don't want to put a figure or a prediction.

All I want to say is that the strategies that we've deployed to drive better levels of growth have been taking effect.

And I think they're working quite well.

And the margin story then follows on from that.

So both the US and the Asia, and Pacific all benefited from margin growth in the year and helped by that -- the past elements of those businesses, both the revenue leverage and discontinue to take cost down to the back end.

The UK was the exception to that, we had really good Q4 and really good sales in the year, but tend to be more on the key accounts space and the were setup cost around that.

As we said in the presentation, we expect that margin to then flow through into 2015.

And we took the opportunities in those areas for margin growth in 2015 as well as we get leverage off that continued revenue growth.

Yes, let me pick up the Benelux.

Look, there's some good pointers about improved performance in the Benelux, as I said a moment ago.

Belgium, in particular, has had a stronger performance.

Revenue was up in the fourth quarter.

It grew.

We had a better second half and the first half.

And those we have good memories for.

Remember six months ago, I said it is my hope, but not promise, that we would deliver a better second half.

We did have a second half which was better than the first.

And CVC or customer voice count scores, that's customers satisfaction, are improved in the Benelux.

The management team that we put in a year ago has had a year to bed in, and it's a really good management team.

We're seeing at some of the innovations that we've been talking about here are being piloted in the Benelux, and that's because they're asking for them, they want these innovations.

So I think there's a lot of pointers where you can be optimistic about the Benelux.

But pretty much like I said a few months ago, I'm highly confident that the Benelux will return to form.

But I don't really want to put a timeframe on it.

We've still got more work to do, we've still got some heavy lifting to do, particularly in the Dutch business.

But as I said, operationally, it's stable, the service levels are good.

But we are still dealing with the tail of that poor service that was delivered in 2013, that Jeremy mentioned.

So over the medium term, I've got no worries, the Benelux will come through.

Over the short term, I don't want to give predictions or forecasts, but as I said, operationally, we're in a much, much tighter position than we were 12 months ago.

Hi.

It's Joel Spungen from Merrill Lynch.

I just got two questions, actually.

First one I guess for Jeremy's.

I just wondered if you could give us the organics by category.

I just want to get a sense of how much is the growth in the pest business was organic as opposed through acquisitions.

And my second question -- sorry, to harp on about the Benelux issues.

But I hear what you're saying about the sort of initiatives you're putting in place to improve performance and that obviously all sounds positive.

I guess what I'm trying to get a sense of is, to what extent are the problems of the Benelux market to do with structural overcapacity because of the amount of competition in that market?

It kind of doesn't matter what you do.

You're just going to face problems out of this.

There's too much capacity in the industry.

Is that the right way to see it, and if so, how long do you think that would take to clear?

That's on the organics -- we just talked about it a bit in the previous question in terms of where the organic growth came from -- by pest category in the region of 3% to 4% and obviously had a strong Q4.

The hygiene and workwear are basically flat and clearly with a higher proportion in the Protect & Enhance market that is perhaps not surprising (inaudible).

On the Benelux, what can I tell you?

I think they are competitive marketplaces.

They've been competitive market places for a long time.

I'm sure they'll continue to be competitive market places.

It's difficult to talk about structural overcapacity because I come from the chemicals industry.

You can always create capacity if you need it.

You can double shift, you can 24/7, you can seven-days-a-week.

So capacity can flex according to demand.

So I don't think it's a capacity issue so much.

I just think the nature of the market in the Benelux is such that there are quite a number of players.

Nobody's a strong number one player.

And it's -- for a small country or countries, it's quite a congested space.

So for me, it's competitive forces at work.

I've got no doubt that the right strategy for our business is to be the best quality provider.

There is absolutely a gap in the market for someone who delivers outstanding service consistently every time.

It's a very difficult business, logistically, to deliver outstanding service every single time.

If you think about thousands of pieces of work where you got to get them out, they got to be [clean], they got to be on time, they got to be the right -- lined up in the right order.

There's a lot of challenges there.

So we're working on strategies to try and address that gap in the market to be the outstanding service provider.

If we're successful in that, that's how I think we'll win over the long-term.

So I don't think it's a capacity issue, but they are competitive markets.

(Inaudible) JPMorgan.

Just a quick question on M&A.

How do you look at the returns you're trying to get from an acquisition, and over what timeframe?

First of all, we look at differentiated returns by quadrant.

But when the emerging markets, for example, we're going to expect low returns at about 15%.

In the growth quadrant, it's somewhere between 15% and 20%.

And as then we move down into the Protect & Enhance and the Manage for Value, we're looking for much higher returns given the risk around those categories and where the markets are.

And as Andy said, we do some exhaustive post-investment reviews looking at the returns on our investments.

And what we tend to find is the returns in the emerging, and the growth quadrant tend to be higher than the hurdle rates we're setting more around the profit delivery and the synergies with the bolt-on type of acquisitions we're doing with 30 deals last year with the spend (inaudible).

So that on average, they're relatively small deals.

And what we tend to find is the profit returns tend to be at or stronger than expectations.

Where the revenue doesn't come through, and that's because sometimes, these small deals that [is a] bit of the portfolio, we tend to have a lock-in arrangement with the vendor which actually reduces the amount of investment cost.

So the IRR tends to get protected on those.

But as Andy said, when we did our latest review, all of the deals we've done in the last 18 months are delivering against their target IRRs.

And there comes a point with smaller deals where it's no longer possible to look at them -- the acquisitions because they've been fully integrated, and these are small businesses locking in at the branch level.

So we can really track them very closely for the first 12 months.

But after that, and it's quite difficult to say that the revenue came from organic versus acquired revenues.

So yes (multiple speakers) --

So (inaudible) done from the US.

We look at our returns on investment in the US overtime.

And that's another way to look at it.

So look at your cash return and cash employed.

And again, the track record over the last five years is very strong on an overall basis.

Okay.

This is Lisa Chang from Merrill Lynch.

I was wondering -- could you explain to what extend your European business is correlated with general economic indicators?

And in markets like the UK and Europe, if you're seeing that these businesses are willing to spend for the new technology because they have larger budgets for that?

Yes.

It's a question we've debated many times in the company.

When GDP is good -- when GDP growth is good, there is little doubt that we benefit from that.

So the UK -- we had quite a few questions last year saying why have you put the UK into your growth quadrant?

Is that really what you expect to see?

So where there is good GDP growth, we do see our categories performing in a similar fashion.

In pest control, we would typically -- kind of bank this, but we would typically expect to be growing at above GDP, 1 1/2 to 2 times GDP as a sort of a rule of thumb we sometimes use.

In the workwear category, we see that more aligned to levels of employment.

So if a certain market is closing factories and laying people off, that's going to depress the demand for workwear.

Now, that may be correlated then directly to GDP, it may not.

What we tend to see is in a weak GDP market, our businesses will struggle and they'll do perhaps less well in GDP.

In a rising GDP market, we tend to do better.

These are all rules of thumb for what we've seen.

So Asia certainly, or the emerging markets, if they're growing at 5%, we would expect to do much, much better than that.

That's because there's new demand for what we're selling as regulation improves, as legislation tightens, those are the things that drive those growth rates more than GDP.

So I think it's a complex mix, but there is an indirect correlation.

Hello.

Hector Forsythe from Oriel Securities.

A couple of questions on guidance.

Could you just run through the basis of the working capital and the CapEx guidance?

Really of CapEx, what are you spending money on this, is popping up this year?

So part of the reason for the 2014 strong capital is sort of the CapEx that was lower than we'd expected and that's around phasing of projects, Hector, so there's an element of 2015 guidance.

It's just the re-phasing of 2014 projects.

Broadly, I think we stick to our original guidance from last year that we're looking to spend in line with depreciation the increased investment of the previous three or four years through that restructuring program.

So this is around maintaining plants, reinvesting in our mode of vehicle fleet.

We spend about GBP20 million a year in IT and a large part of the CapEx is actually the garments that go into the workwear business which is an ongoing investment in cost of sales.

So there's nothing particularly new or different that we're spending.

This is a maintenance level of CapEx, but there is a phasing element on that which means that this will be slightly higher in 2015 than it was in 2014.

And the working capital --

So working capital (inaudible) guidance to GBP20 million last year and we're going to do the same again.

We did benefit in 2014 from an asset backed financing in France and that delivered GBP50 million of cash flow.

And assuming we don't do a similar thing in 2015, then regarding the working capital for outflows of 20 million or less.

On the businesses themselves, is it possible to work to capital return type measures that you could share with us across the categories and the various other quadrants?

The [plan] with capital returns is, trying to work out what the capital base is.

There isn't really an asset.

That some of the businesses are being acquired in the past, some of the businesses are being acquired more recently.

And in the workwear business, you've got the garments, are they capital or are they of [Rev-Ex] nature.

And I've done some cash returns on cash capital employed adding back all the cash capital and we can look at sharing those with you.

I can certainly look at that in terms of their ultimately US business for example.

But it's not -- it's quite a tricky measure.

We've looked at it as one of our performance measures.

And because there isn't really a cash asset that we're dealing with, looking at cash returns and cash capital employed is quite challenging for our sector because these are mainly services, and people oriented.

And finally, in terms of the US pest business, I think you're number three but you're number three by some gap to this one and two.

Are you looking to find the acquisition to some scale but there probably aren't that many.

But an acquisition of some scale in that market to close the gap that will really probably give you a national coverage and you can get some proper leverage out of that.

We've got national coverage now so I think from a coverage point of view we're good.

Look, we are always hunting for acquisitions and always talking to people in the market.

So the US is probably the most advanced M&A program that we've got and have had.

So that 19,000 pest control companies in America but we're not trying to have 19,000 conversations here.

We're trying to have 100 or 200.

So all of the people inside the top 200 are on our lists, we will have contacted most if not all and we keep in touch with them.

They're all family-owned these companies.

So there comes a time typically when the owner of the business either decides to hand business down the line to son or daughter or to sell.

So the art of these things is to be there at the right time when that decision is taken.

There are quite a number of pest control companies in the $100 million and $50 million space.

We bought one a couple of years ago of course, [Westin].

So what I can't tell you, Hector is, when the next one will drop and whether we'll catch it.

But what I can tell you is, we're having all the right conversations with all the right people.

And yes, you make a really good point.

One of the neat things about these businesses is they do give you operational leverage.

If you can put more revenue on this network you don't have to add overhead.

You add obviously service cost into the cost base to deliver the service.

But you don't need more marketeers or more finance people or HR people.

It's a great operational leverage model.

So clearly, part of the plan and what Jeremy says we can get our margins up in North America is we plan to put more revenue through that network.

That'll come through organic.

It'll come through small bolt-ons.

And if we're able to or come through medium size as well.

But I can't really predict when the next one would drop.

Okay.

Thank you very much.

Hello, good morning.

Sylvia Foteva from Deutsche Bank.

Two of my questions actually are quite directly or relate to your just discussing.

But I was just wondering can you give us the North America pest margin?

You can pick it out from the regional numbers.

It's in the low-teens.

It was subdued by the deal we did in California a couple of years back which was a relatively low margin deal as those synergies are coming through and as we're delivering on that deal the margins have improved.

And as Andy said, we would see that further scope (inaudible) margins to improve North America if we benchmark North America for example again, [we saw] our UK business there's clearly some scope for growth there.

And when we look at various margins across our US business where we got more density, those margins can be in the mid 20s where we got less density.

In the Southern states for example, it can be in the high single digit.

So we'd see margin opportunity just building out the density in some of those where we got less current coverage.

Just to supplement that.

You're questions, Sylvia, I think was in a context of pest margins in North America.

The overall margin in North America as Jeremy has described also includes our products business and our Ambius businesses.

Products is the products distribution business like anywhere in the world and they operated the lower margin point.

And Ambius office plants and services, typically also operated the lower margin points.

So actually within the low-teens margin that Jeremy just gave you, that's a blended margin.

So the pest margin would be higher and would be closer to the benchmarks you might be looking at in North America.

Okay.

I've got one on France growth.

So what kind of trends are you seeing, obviously you are a bit more cautious on France.

You were seeing profit grow last time you updated us.

So what kind of trends are you seeing end of last year, beginning of this year organically and then on profitability please?

I don't know that I'm calling friends in France, so we all think what we see in France is a reasonably challenged economic environment and it's been that quite -- for some time.

And the strategies for France is, as I've touched on earlier, it's been very much to protect the margins of our good French business.

And I think the guys and girls have been very effective at doing that in 2014.

So in terms of what we do with that business that's going to be a core strategy to keep -- to protect those margins which means you have to try and hold on to your customers, up sell to your customers, take every opportunity for efficiency, for productivity, for rerouting, for rescheduling.

Those are the drivers in the business.

And we know how to execute those.

So I would say on margins, we ought to continue the good work that we've done in '14.

On the top line, we're in February -- we're in February, so I don't make a call on what do I think the outlook for the region is going to be.

I'd simply the repeat.

The reason we've highlighted it is, we do think France is a tough market overall.

Interesting thing is, six months ago, we were saying that Germany was looking quite weak as a market.

I think it had gone into negative GDP for the first time in a long time back to the GDP comment.

And six months on, we're all feeling a lot more confident about Germany.

And the Germans that we talked to are feeling a lot more confident.

So these things do move and I've been around long enough.

One of these days, we will wake up and we'll see the front page of the financial times talking about Euro zone recovery.

And we won't know until it starts.

But if it comes, when it comes, we're really, really well-positioned to benefit from that.

But we are not calling a French macro recovery, we think it'll be a tough -- if we could do it, that would be good.

We think it'll be a tougher year as it's been now for a couple of years in France.

Do you have anything to add?

No, I think that's -- you're right.

I think it's pursuing the Protect & Enhance strategy and making sure we protect the profits.

Sure.

Thank you.

And last question just on acquisitions just maybe a bit from the shape of the pipeline and of size and where it is.

And I just want to check with you.

So obviously you have -- you seem to have entered quite a few different regions, and I don't know how many countries you are in, currently.

But it does seem like you're spreading yourselves a bit thin.

Obviously, density helps margins, so do you think that you are in enough countries already?

And you kind of, you're just going to bulk up from now on, is that what you're aiming for?

My wife asked me that question because I say I have to go and visit every one of our countries.

And she keeps saying, "Are you sure you haven't got enough countries already?" Seriously, I don't think about this as countries I think about it as cities.

You make money in our business through building density.

I talked earlier about postcode density and customer penetration density.

Where you've got postcode density that means and I'll say you own a city.

Where you've got good density around a city that's how you make great gross margins.

So that's why the strategy we were deploying in China, a couple of years ago wasn't the right one.

We were spread through too many cities.

Now we're focusing on a much smaller numbers of cities.

So it's an important building block or piece of the understanding about Rentokil Initial that the whole gross margin story is down to, can you build that postcode density.

So my question is not, "Are we in too many countries or whatever?" When we look at a city, can we realistically build a good level of density quickly in those cities?

If the answer is no, then we shouldn't be there, doesn't matter whether it's in North America or in China.

If the answer is yes, then we should do.

We've got really good processes now particularly in pest control.

We now have five businesses and we now have to run them.

So for me, I don't see a major risk or a major distraction from going into additional markets.

In fact, I find the opposite.

I read the McKinsey report a little while ago on the top 100 cities for 2050.

That's a really interesting read because it tells you in their view -- they're not always right, of course, which are going to be the big cities in the next 20, 30 years.

And there's a lot of cities on that list which are not big major cities today.

So there's a real -- if you get that right, build city density, run the operations well.

Also there are certain markets we're just not interested in because we don't like the governance standards and all that.

We walk away if we see any of that.

So now I'm not someone that is put off by the fact that we're in now over 60 markets provided we can build city density, then it's a good thing to do.

Thank you.

Hi, it's Karl Green from Credit Suisse.

So I've got three questions up on the margin [are pretty] disconnected.

But just a number of things you pointed out, the Green Compliance M&A in the UK.

Can you say what loss has that contributed in 2014 and how you see that swinging around in 2015 for UK and Rest of World?

Also, the Benelux you pointed out the variance there about GDP10 million, I mean, it's a stupid question, but how close to breakeven does that make the businesses and which side of breakeven is that at that moment?

And where do you think that goes in 2015?

And then the last one probably a little bit more long-term in terms of the hygiene business on the signature Reflections products which do look pretty attractive come with presumably attractive margins, I mean how big are they at the moment?

What sort of margin deferential would you see on those higher-end products versus the more plain vanilla stuff?

[Answer] the first two?

Yes.

So in terms of Green Compliance, this is a deal we did at the end of 2013.

It was a marginally loss making business.

We've completely integrated it in with the rest of our businesses.

So what I can't tell you is what the losses of those individual contracts where in 2014.

All I can tell you is as we took those contracts onboard and I think we were just making sure the service levels for the customers we were taking on were at appropriate level.

One of the reasons why Green Compliance have been losing money and losing business was it wasn't servicing its customers appropriately.

So we put a lot of efforts in during 2014 to getting those service levels back.

These are pretty big blue chip businesses, who really were demanding higher level and high quality levels of service.

As we've invested that in, we'd expect that -- once you've made that investments and got the service up and running, you don't have to repeat that in 2015.

So I can't call you a number.

All I can do is say; we would expect those margins to improve as we head into 2015.

It's clear that's going to come through.

The second question was --

Benelux.

Benelux.

So the -- I'm not sure whether your breakeven means year-on-year movement or the absolute profitability of the business.

The business actually is quite a high margin business.

It remains high margins.

So although the profits were reduced by GBP9.9 million, the business is still generating a good level of margin, a good level of returns.

And I think year-on-year how the business moves, as Andy said, it had a better H2 than H1.

We're not looking at this stage to be able to give specific guidance by country.

We have guided year up overall.

And we think overall year, it will be -- we'll make as much profit in 2015 to 2014.

But what we are reassured by is the improvement in the revenue and profit statuses as the years continue.

You can see those from the Q4 numbers, the level of revenue performance and profit performance has improved significantly as we track through 2014.

On the hygiene product range, it is really difficult and probably impossible to give you a financial or a mathematical answer to your question.

The first point is, we are selling the new ranges at a higher price point.

We can't guarantee that.

And if you think about how many markets we operate in, and these are local operations, I couldn't tell you hand on heart, exactly what we're selling at across the entire businesses because it's a distributed set of branches across 40 markets.

But they're designed to be sold into the higher price points, so that's the first piece.

The second piece is, if you go into a UK washroom, it never fails to surprise me how many different vendors you can see on the wall.

You might see a hair care from somebody, soaps from someone else.

The real -- back to this density and margin point, there's two ways to make gross margin in this business, one is, the post guide story which I gave you earlier, the other is customer penetration.

So these products are designed to be sold as bundles or hygiene concept.

So we're trying to move away from selling one product or the service line of one product.

And say, why wouldn't you take these bundles.

So we package them together, you get quite a good discount if you -- the more lines you take, the bigger the discount gross because we get great gross margin.

If we're servicing six lines in a washroom you got a much, much higher gross margin.

And if you're going in for one -- because you've spent all the money to get to the property in first place.

The cost to serve is to get there; once you're there, it's a low cost to do the incremental services.

So that's the second answer.

The third answer is the service we've launched this morning very difficult to say because we're really in this pilot and testing mode.

And we are actually testing with customers what would you be willing to pay for this, because it's giving them information that they can't otherwise get.

It's giving them an impact that they can't otherwise achieve.

So we would hope to get really good pricing on the service we've launched today.

But I can't really give you any numbers to be fair.

Anymore?

Excellent.

All right.

Thank you very much indeed.

Thanks for coming.