rentokil initial plc annual report 2014
annual report 2014
protecting people
enhancing lives rentokil initial plc annual report 2014
unless otherwise stated references to ‘revenue’ are for continuing businesses and references to ‘profit’ and ‘operating profit’ are for continuing businesses before amortisation and impairment of intangible 
assets excluding computer software and restructuring costs and oneoff items ongoing revenue is revenue from continuing operations excluding revenue from disposed businesses but includes revenue 
from acquisitions ongoing profit is operating profit from continuing operations before amortisation and impairment of intangibles excluding computer software restructuring costs and oneoff items and 
excludes profit from disposed businesses but includes profit from acquisitions all references to profit are at constant exchange rates cer unless stated otherwise 
1  results at cer have been translated at the full year average exchange rates for the year ended 31 december 2013 £ average rates fy 2014 16465 fy 2013 15713  
£€ average rates fy 2014 12438 fy 2013 11820 
2  before amortisation and impairment of intangibles excluding computer software restructuring costs and oneoff items and net interest credit from pensions 
3  cash flow before interest tax acquisitions disposals foreign exchange adjustments and discontinued operations and reporting periods ongoing revenue is revenue from continuing operations excluding 
revenue from disposed businesses but includes revenue from acquisitions ongoing profit is operating profit from continuing operations before amortisation impairment of intangible assets excluding 
computer software restructuring costs and oneoff items and excludes profit from disposed businesses but includes profit from acquisitions all references to profit are at cer unless stated otherwise  
all comparisons are at constant 2013 full year average exchange rates unless otherwise stated
639 £926m
operating  
cash flow
3
 £m 
55
adjusted operating  
profit
2
 £m 
121
free cash flow
3
  
at aer £m  
dividend p 
144
adjusted profit  
before tax
2
 £m 
584
profit before tax £m
27
revenue £m
1
2013 2014
17914
18403
2013 2014
1122
1777
2013 2014
1371
2247
2013 2014
231
259
2013 2014
363
1289
2013 2014
2361
2491
2013 2014
1808
2069
revenue by region cer 
	
491  europe
	
19  9   n o r t h 
america
	
175  uk and row
	
78  pacific
	
57  asia
revenue by category cer 
pest control
hygiene
workwear
plants
facilities services
other
	
403 pest control
	
258 hygiene
	
232 workwear
	
107 other
financial highlights 2014 at cer
1
in 2014 the company announced a 
differentiated strategy to deliver profitable 
growth in order to drive shareholder value 
over the following pages we will explain 
our strategy  outline how it has been put 
into action and provide our assessment on 
progress against our mediumterm targets
protecting people 
enhancing lives
as part of the new strategy rentokil initial 
is focused on services that protect  
people and enhance lives we protect 
people from the risks of pestborne 
disease the risks of poor hygiene or  
from injury in the workplace we aim to 
enhance lives with services that protect 
the health and wellbeing of people and  
the reputation of our customers’ brands rentokil initial plc annual report 2014
1
strategic report
corporate governance
financial statements additional information
contents 
strategic report
our business 2
rentokil initial at a glance 3
statement by the chairman and the  
chief executive 4
2014 performance 8
our business model 9
differentiated strategy 10
markets – key drivers and considerations 11
strategy in action 13
business overview 18
key performance indicators 19
growth levers 21
business review – regional performance 26
business review – hygiene 29
business review – pest control 30
business review – workwear 32
corporate responsibility 33
risks and uncertainties 36
corporate governance 
board of directors 40
executive leadership team 42
chairman’s statement 43
corporate governance report 44
audit committee report 52
nomination committee report 58
directors’ remuneration report 60
independent auditor’s report to the 
members of rentokil initial plc 79
financial statements
consolidated income statement 82
consolidated statement  
of comprehensive income 83
consolidated balance sheet 84
consolidated statement  
of changes in equity 85
consolidated cash flow statement 87
notes to the accounts 88
principal operating subsidiary  
and associated undertakings 133
fiveyear summary 134
parent company balance sheet 135
notes to the parent company accounts 136
additional information
directors’ report and other statutory 
disclosures 143
additional shareholder information 146
following the introduction of our new strategy in 2014 
the company is able to provide additional transparency to 
investors embedded within our new approach is the ability 
to analyse the progress and performance of the company 
in three ways – by region category and quadrant 
this level of reporting is applied throughout this report 
find out more
this annual report will be available online at the company’s website from 
13 april 2015 in addition a full copy of the company’s corporate responsibility 
report will also be available 
relevant information
throughout the report relevant 
information is referenced using 
this device
strategic report
corporate governance
financial statements additional information
inside this report
to read more 
go to page  
a pdf copy of this report 
can be downloaded from 
the investors section at
wwwrentokilinitialcom 
a pdf copy of the corporate 
responsibility report can be 
downloaded from
wwwrentokilinitialcom 
key points to read
on the next page is 
a summary of our 
regions and a detailed 
review can be found 
on pages 26 to 28
on page 10 we articulate 
our differentiated strategy  
based upon four quadrants 
emerging growth protect 
 enhance and manage 
for v alue this is followed 
on page 18 by a review of 
each quadrant in 2014 
on page 3 is a 
summary of our 
brands and categories 
a detailed review can 
be found on pages  
29 to 32
p2 p 3 p 10
regions categories quadrants
growth
protect  
enhance
manage
for value
emerging rentokil initial plc annual report 2014
2 strategic report
our business
rentokil initial is a global leader in the provision  
of routebased services which protect people and 
enhance lives our services include pest control 
hygiene workwear and plants these are delivered 
through five strong regional businesses north 
america  europe uk  rest of world asia and pacific 
 
our business 
ours is an international services business 
operating in 63 countries and employing 
some 29000 people at the end of 2014 
but with a local focus on routebased 
efficiency delivering highquality technical 
training and outstanding service quality 
throughout the world demand for higher 
standards of public health stricter food 
safety legislation and compliance with 
workplace safety regulations are driving 
demand for our service expertise
our values 
service relationships and t eamwork 
have been identified by our colleagues 
across the group as the core values of  
the company by living our values we 
are better placed to offer outstanding 
and consistent customer service
north america
the world’ s largest pest control market we provide commercial 
and residential pest control services and sell pest control products 
we also provide plants to enhance office environments north 
america is a key focus for our acquisitive growth as we consolidate 
our national presence our countries of operation within this region 
are the us canada and mexico
europe
we provide pest control hygiene plants and exclusively to 
europe workwear and textile services our largest operations are 
in france germany and benelux the expansion of our business 
in latin america is also managed through our european business 
with support from our spanish and portuguese teams due to 
language and cultural similarities other countries managed out 
of the europe region include austria czech republic greece italy 
portugal slovakia spain switzerland and in latin america brazil 
chile and colombia
uk  rest of world 
here we provide pest control hygiene and plants services as well 
as a number of smaller specialist services including property care 
medical and specialist hygiene rest of world regions include poland 
the nordics and baltics the caribbean the middle east and 
subsaharan africa
asia 
we provide pest control and hygiene services in many countries 
across asia including brunei china india indonesia malaysia 
the philippines singapore south korea t aiwan thailand vietnam
pacific
we provide pest control hygiene services and plants in australia  
new zealand and fiji
our regions
north america
europe
uk  rest of world
asia
pacific
find out more about  
the performance of  
our regions
go to page 26   rentokil initial plc annual report 2014
3 strategic report
strategic report
corporate governance
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corporate governance
financial statements additional information
7404 4743 4278 1880
revenue £m revenue £m revenue £m revenue £m 
rentokil initial at a glance
pest control
rentokil pest control is the 
world’ s leading commercial 
pest control company
we operate in over 60 countries 
including recent entries into chile 
brazil colombia mozambique 
and the bahamas 
we have leading market 
positions in the uk continental 
europe asia and south africa 
and a rapidly expanding 
presence in north america
hygiene
initial hygiene has leading 
market positions in over 20  
of our 43 markets including 
pacific asia caribbean and 
top three positions in europe 
uk and africa
we provide highquality hygiene 
products and services that 
minimise risk of exposure to 
bacteria and other infectious 
microorganisms 
w orkwear
initial workwear is the only 
company with scale across the 
four main continental european 
markets of france germany 
belgium and the netherlands 
we specialise in the supply and 
maintenance of garments such 
as workwear and personal 
protective equipment 
throughout europe we also 
offer a specialist cleanroom 
service for the pharmaceutical 
and healthcare sectors
other
ambius is one of the world’ s 
leading interior landscaping 
companies with businesses 
in 16 countries
we install and service both 
interior and exterior plant 
displays flowers replica  
foliage christmas decorations 
and ambient scenting for 
commercial businesses ambius 
is north america’ s largest office 
interior plants business 
the ‘other’ category also 
includes a number of other 
small businesses including 
products property care and 
property insurance 
our brands and categories
revenue and profit figures above represent ongoing revenue and ongoing profit from continuing operations and exclude revenue from businesses disposed at cer 
£152m
adjusted operating profit
£659m
adjusted operating profit
£937m
adjusted operating profit
£1400m
adjusted operating profit rentokil initial plc annual report 2014
4 strategic report
2014 has been a year of tangible progress at rentokil initial in 
february we announced the divestment of the initial facilities business 
and the creation of a new differentiated strategy to drive profitable 
growth the sale of initial facilities has allowed us to focus on our core 
categories of pest control hygiene and workwear our new strategy 
which we presented in february is focused on delivering medium
term improvements in revenue and profit and a sustainable 
improvement in free cash flow which enables us to execute and 
accelerate our acquisition plans implement a progressive dividend 
policy and pay down debt in addition our strategy utilises a quadrant 
analysis to group categories and geographies into a growth potential 
and profit contribution matrix and to focus resources on delivering 
improved levels of growth and to prioritise capital allocation for 
investment and ma 
we have implemented our strategy at pace in 2014 and in the year 
achieved total revenue growth from ongoing operations of 36 
at cer a 65 increase in ongoing adjusted profit at cer and a 
significant enhancement in free cash flow which improved by £93m 
to £129m at aer restructuring costs fell by £38m year on year 
working capital outflows improved by £17m and net capex of £179m 
was £49m lower than 2013 reflecting our more focused approach to 
capital allocation and the phasing of investment at aer with a 
significant reduction in restructuring costs and with capital expenditure 
now in line with depreciation we anticipate achieving over £100m per 
annum in free cash flow on a sustainable basis and expect to make 
further progress towards our mediumterm revenue and profit targets 
in 2015 in addition we made 30 acquisitions during the year of 
which 77 are in the growth and emerging quadrants generating 
£66m of annualised revenue at aer 
we exit 2014 in a much stronger financial position than in 2013 
group net debt at aer has been reduced by £260m to £775m 
our lowest net debt in 15 years and our liquidity position is strong 
comprising over £190m of funds and £270m of available undrawn 
committed facilities interest payments including finance lease interest 
were £17m lower than last year at £495m t otal tax payments were 
£301m compared with £372m in 2013 our pension scheme is one 
of the strongest in the ftse 350 with an actuarial surplus in excess 
of £50m at the year end and an accounting surplus of around 
£190m our strategy of focusing on core growth categories with 
leading market positions has been well received by our debt credit 
rating agency standard  poor’ s resulting in a credit rating upgrade 
to bbb during the year
while much has been achieved this year there remains more to do in 
a number of areas of our business as we note below north america 
had a challenging h1 but performance improved in h2 and 
performance in the benelux was disappointing with profits down 
by £99m the outlook for europe remains mixed due to continuing 
economic weakness in certain parts please see further details below 
based on our overall performance in 2014 the board is 
recommending a final dividend of 182p per share to make a total 
of 259p – a 121 increase year on year 
regional performance 
in the north america region revenue grew 66 for the full year 
revenue growth was stronger in q4 84 supported by 
acquisitions organic revenue growth of 17 for the year was held 
back by adverse weather conditions on the east and west coasts 
during h1 but strengthened in h2 up 33 in q4 profit rose by 
156 again supported by acquisitions and by back office and 
property rationalisation delivering margin expansion of 09 further 
margin improvement opportunities exist through acquisitions scale 
efficiencies and service productivity 
statement by the chairman and the chief executive 
“  our growth in profits this year reflects 
the benefit of more efficient businesses 
and reduced overheads and has been 
achieved despite ongoing economic 
challenges in europe we have 
executed our new strategy at pace 
throughout the year in order to drive 
improved revenue profit and cash”
john mcadam  
chairman
putting our differentiated 
strategy into action
36
total revenue growth from 
ongoing operations
1
 
24
acquisitive revenue growth
£93m 
improvement in free 
cash flow
3
 at £129m at aer
12 
organic revenue
65 
ongoing adjusted 
operating profit
2
£66m 
30 acquisitions purchased in 
year with combined annualised 
revenues of £66m at aer 
2014 financial highlights at cer
aer – actual exchange rates cer – constant 2013 exchange rates 
1  ongoing revenue represents revenue with disposals removed and includes revenue from acquisitions 
2  before amortisation and impairment of intangibles excluding computer software restructuring 
costs and oneoff items and net interest credit from pensions represents profits with disposals 
removed and includes profit from acquisitions 
3  cash flow before acquisitions disposals foreign exchange adjustments and discontinued operations
andy ransom
chief executive
john mcadam 
chairman rentokil initial plc annual report 2014
5 strategic report
strategic report
corporate governance
financial statements additional information strategic report
corporate governance
financial statements additional information
despite economic weakness ongoing revenue growth in the europe 
region was 17 in 2014 21 in q4 ongoing revenue growth in 
germany up 23 france up 03 and latin america managed 
out of the europe region and up 308 was offset by a decline in 
benelux down 20 profit in europe declined by 37 due to the 
performance of our benelux hygiene and workwear business which 
was impacted by the continued effect of poor service levels in 2013 
and tough economic conditions resulting in both contract terminations 
and pricing pressure 
the outlook for our european businesses is mixed our german 
belgian and italian businesses are experiencing more positive trading 
conditions and are expected to make good progress during the year 
however the outlook for our businesses in the netherlands and 
france is more uncertain with these regions continuing to face 
challenging economic conditions and competitive markets overall 
we expect profitability in our europe region to be broadly in line with 
last year our strategy to protect margins in this region includes a 
focus on yield management service productivity customer density 
and further back office rationalisation 
in the uk  rest of world region ongoing revenue rose by 56 
in 2014 83 in q4 with organic growth for the year of 32 
the uk operations saw good revenue growth aided by increased 
pest jobbing work but margins were held back by national contract 
wins with large multipremises set ups and the cost of integrating the 
previously lossmaking green compliance acquisition in december 
2013 the rest of world operations also delivered good revenue 
growth particularly in the middle east and the caribbean but this 
was offset by lower revenues in south africa impacted by customer 
industrial action in the mining sector and pricing pressures in this 
high inflationary market margin improvement in the uk is expected  
in 2015 as new contracts and acquisitions mature
our asia region had another good year with ongoing revenue growing 
by 81 in 2014 119 in q4 both the pest control and hygiene 
categories performed well the emerging markets of china india and 
vietnam delivered combined revenue growth of 291 combined 
highsingle digit revenue growth of 85 was delivered in our more 
established businesses in indonesia and malaysia profit grew by 
182 in 2014 reflecting leverage from rising revenues and back 
office rationalisation with margins higher by 12 there are further 
opportunities to grow margins in the region through operational 
leverage from revenue growth and back office rationalisation
in the pacific region revenue increased by 09 for the full year 25 
in q4 reflecting growth in contract revenue across pest and hygiene 
offset by a decline in pest jobbing revenue and contract revenue in 
ambius profit grew by 59 in 2014 supported by business 
efficiencies cost savings and branch administration rationalisation 
further margin improvement opportunities will be sought through 
improved service productivity and targeted acquisitions 
central and divisional overheads 
central and divisional overheads decreased by £114m in the year 
beating our original target of £10m by £14m reflecting the successful 
implementation of a programme which included implementation of our 
lowcost country operating model cost reductions at head office and 
the sale of the initial facilities business in march 2014 
restructuring costs and oneoff items – operating 
a more efficient organisation exercising greater operational discipline 
resulted in a significant reduction in restructuring and oneoff operating 
items restructuring costs in the year amounted to £93m 
2013 £474m representing a reduction of over £38m on 2013 
these consisted mainly of redundancy costs consultancy and plant 
and office closure costs 
oneoff items in the current year netted out to £nil 2013 £46m 
these costs included acquisition costs disposal costs impairment 
of computer software and profits or losses on the sale of continuing 
businesses and property 
details of restructuring costs and oneoff items operating incurred 
in the period are set out in note a1 
interest at aer
net interest payable was £453m at actual exchange rates compared 
to £596m in the prior year a decrease of £143m the decrease is 
due to the refinancing of the group’ s €500m 4625 bond which 
matured in march 2014 and lower net debt levels following the sale 
of the initial facilities business the average cost of gross debt for the 
group is now less than 4 
tax at aer
the income tax expense for the year at actual exchange rates was 
£371m on the reported profit before tax of £1632m after adjusting 
profit for the amortisation of intangible assets excluding computer 
software restructuring costs and oneoff items and the net pension 
credit from pensions the effective tax rate for the year was 235 
2013 254 as restated this compares with a blended rate of tax 
for the countries in which the group operates of 26 2013 27 as 
restated the reduction is principally due to the benefit of tax losses 
brought forward being offset against uk profits and an increase in 
the deferred tax asset recognised on the uk tax losses 
net debt and cash flow at aer
operating cash inflow of £2095m at actual exchange rates for 
continuing operations was £724m higher than 2013 mainly due 
to reductions in restructuring costs working capital outflows and 
capex in 2014 
interest payments including finance lease interest were £17m lower 
than last year at £495m t otal tax payments were £301m compared 
with £372m in 2013 and the company made pension funding 
payments of £10m during the year compared to £136m in 2013 
free cash inflow of £1289m was £926m higher than in the prior year 
cash spent on acquisitions totalled £681m proceeds from disposals 
totalling £2560m including the disposal of the initial facilities 
business included in the sale were £167m of transferred restricted 
cash balances relating to private finance initiative pfi contracts 
the company made dividend payments of £432m in 2014 £46m 
119 higher than 2013
free cash flow from continuing operations of £1289m more than 
covered total investment in acquisitions £681m and dividend 
payments £432m in the year 
foreign exchange translation and other items reduced net debt 
by £440m leaving an overall reduction in net debt of £2598m 
and closing net debt of £7750m
capital expenditure 
gross capital expenditure from continuing operations of £1916m was 
£424m lower than 2013 broadly in line with depreciation the lower 
level of expenditure reflects more rigorous prioritisation towards capital 
investment including reduced levels of investment in restructuring 
activities and it  as well as phasing of spend on 2014 projects  rentokil initial plc annual report 2014
6 strategic report
pensions 
at 31 december 2014 the company’ s uk defined benefit pension 
scheme which is closed to new members was valued at an 
accounting surplus of £1922m on the company’ s balance sheet 
the trustees value the scheme on a different basis the most recent 
actuarial valuation showed that at 31 march 2013 the scheme was 
987 funded with a deficit of £178m however based on 
movements since 31 march 2013 the scheme was estimated to have 
a surplus in excess of £50m at 31 december 2014 it is anticipated 
that the scheme will remain in surplus over the period of the recovery 
plan in order to mitigate the risk that it does not however annual 
contributions of £32m per annum over the sixyear period will be paid 
into a joint escrow account by the company the first payment was 
made in october 2014 in the event that the deficit is not cleared by 
the time of the 31 march 2019 valuation it will be funded from the 
escrow account the company has recognised the pension surplus 
as an asset because the group has an unconditional right to a refund 
of the surplus at the end of the scheme’ s life
acquisitions and disposals 
in line with our strategy this year we accelerated our ma programme 
to pursue targets in higher growth markets and in areas which add 
local density to our existing operations in 2014 we acquired 30 
businesses in brazil brunei india ireland italy lithuania 
netherlands singapore south korea spain sweden the uk and 
us and entered new markets in the bahamas chile colombia 
and mozambique to exploit underserved and increasingly affluent 
markets combined annual revenues of these businesses prior to 
acquisition were approximately £66m at aer 
in pest control we acquired 23 businesses with revenues of £44m 
17 of which are in the emerging or growth quadrants of our capital 
allocation approach in hygiene we reentered the south korean 
washrooms market through the acquisition of a small business in 
seoul in plants we acquired five small boltons generating annual 
revenues of approximately £2m in december we acquired uk 
property care business peter cox limited which generated revenues 
approaching £20m in its last financial year 
building density in the north american pest market continues to be 
a priority and during the year we expanded our geographic presence 
with seven boltons in connecticut indiana mississippi oregon 
virginia washington and west virginia 
in the manage for value quadrant we completed the sale of initial 
facilities to interserve plc in march for a total consideration of £250m 
and also sold the spanish medical and austrian products businesses 
combined annual revenues from these operations in 2013 were £547m
t o date in 2015 we have completed three pest acquisitions in north 
america colombia and australia buffalo exterminating represents an 
important strategic bolton giving us a market leading position in new 
york state and building density in markets in which we are already 
active as do the acquisitions of fumighar pest control in colombia 
and the neil younger pest business in australia combined annualised 
revenues prior to acquisition of the three businesses totalled £68m
we monitor the integration and performance of acquired businesses 
closely and in aggregate profits across all acquisitions made over 
the last two years are in line with the business plans for those 
transactions the group will continue to seek further acquisitions in 
2015 particularly within the growth and emerging quadrants we 
estimate our targeted spend to be in the region of £50m but this is 
dependent on finding acquisition opportunities that meet our financial 
hurdles and resourcing abilities 
funding
at 31 december 2014 the group had net debt of £775m and a strong 
liquidity position comprising over £190m of centrally held funds and 
£270m of available undrawn committed facilities net debt to ebitda 
at the year end was 19x 
the group has since refinanced its revolving credit facility replacing 
a £270m december 2016 maturity with a £270m facility maturing in 
january 2020 the group has two options both at zero cost to 
extend the maturity date to january 2022 exercisable in january 
2016 and january 2017
the group has a £300m bond maturing in march 2016 which can be 
repaid using the group’ s cash balances and available credit facilities 
the group will review funding requirements during 2015 to provide 
additional headroom following repayment of the bond and will provide 
an update in due course 
the directors continue to adopt the going concern basis in preparing 
the accounts on the basis that the group’ s strong liquidity position and 
ability to reduce operating capital expenditure or expenditure on 
bolton acquisitions are sufficient to meet the group’ s forecast funding 
needs including those modelled in a downside case
dividend
following a strong performance in 2014 and in anticipation of further 
progress in 2015 the board is recommending a final dividend in 
respect of 2014 of 182p per share payable to shareholders on the 
register at the close of business on 17 april 2015 to be paid on 
20 may 2015 this equates to a full year dividend of 259p per share 
an increase of 121 compared to 2013 
board changes 
on 22 july 2014 the company announced the appointment of julie 
southern to the board as a nonexecutive director and chairman of 
the audit committee julie succeeds duncan t attonbrown who after 
nine years on the board also stood down as a nonexecutive director 
at the conclusion of the agm on 14 may 2014 peter long who 
joined the board in 2002 stood down as a nonexecutive director on 
31 december 2014 the board thanks peter and duncan for their 
significant contributions to the company over the years and wishes 
them the very best for the future 
strategy 
we describe our strategy as ‘differentiated’ as each of the four different 
quadrants in which we have categorised our businesses operates 
different strategies for profitable growth with a number of businesses 
well positioned in high growth territories such as brazil china and 
india but also with businesses in the low growth and highly 
competitive european markets we need to match the right strategy to 
each country’ s ability to grow or to protect profitability we now match 
differentiated financial performance expectations to market opportunity
in february 2014 as well as presenting the quadrant analysis  
we also presented targets for revenue profit and cash 
• mediumterm midsingle digit revenue growth 
• mediumterm highsingle digit profit growth and 
• immediate significant sustainable improvement in free cash flow 
in 2014 we have focused on putting our strategy into action
• our commitment to deliver an immediate improvement in free cash 
flow has been delivered with significant reductions in restructuring 
costs and capex 
statement by the chairman and the chief executive – continued rentokil initial plc annual report 2014
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core competencies 
we articulate our strategy as the right people doing the  
right things in the right way  this is in line with our core 
competencies of expertise delivered through our people  
service category leadership and highly efficient lean operations
right people  
our colleagues as experts
our people are our assets and we strive to 
build motivated and engaged teams across 
the organisation we train them to be 
‘experts in what they do’ and to have a 
relentless focus on customers and service
right things 
category leadership
we are focused on our three core 
categories of pest control hygiene and 
workwear together they comprise 89  
of group revenue have generated 97  
of total growth over the last three years  
and 95 of group profits
right way  
lean multibusiness 
operations
our move to an integrated country operating 
model enables our service lines to be 
combined within single country businesses 
run by one local management team 
operations administrative and back office 
functions are integrated enabled and 
underpinned by technology 
• we have reinvested free cash flow in our ma pipeline at  
a faster rate than the £50m per annum targeted – spending 
some £68m acquiring 30 companies – 23 in the growth  
and emerging quadrants 
• profit growth has been driven by overhead reductions and a more 
efficient organisation despite a larger reduction in benelux profits 
than anticipated and slower rate of growth in the second half in 
france 
• we have delivered an £114m reduction in central and divisional 
overheads 
• restructuring costs were reduced significantly from £474m in 
2013 to £93m at cer in 2014 and
• capex levels are now in line with 2013 depreciation a £424m 
reduction year on year
the most significant execution risk to the plan is the performance 
of the european economy and we are focusing on cost saving and 
pricing initiatives in this area to maintain profits we are also taking 
action to change the shape of the portfolio by investing in the growth 
and emerging quadrants and away from lower growth lower margin 
businesses
people 
in 2014 we have welcomed into rentokil initial new colleagues 
through the many good businesses we have acquired and through 
the ongoing process of improving the capability and efficiency of the 
business we thank all our colleagues who have put in a huge effort 
over the last year to meet the needs of our customers as well as to 
contribute to new programmes designed to improve the financial and 
operational fitness of the group colleague participation in learning 
and development programmes during 2014 has been particularly 
impressive with participation in over 66000 training courses on u 
our online learning system further details of our training initiatives can 
be found on page 33 and in our 2014 corporate responsibility report
outlook for 2015
this time last year we set out our new differentiated strategy and 
introduced mediumterm targets for midsingle digit revenue growth 
highsingle digit profit growth and a significant improvement in cash 
generation we have implemented our strategy at pace and one year 
on we have delivered ongoing revenue growth of 36 ongoing 
adjusted profit growth of 65 and a £93m improvement in free cash 
flow we are encouraged by our performance in 2014 and by the 
progress we are making towards these targets 
while prospects in the majority of our key markets are good 
conditions in parts of europe remain challenging notwithstanding this 
we are confident of making further progress in the coming year
john mcadam andy ransom 
chairman chief executive 
26 february 2015 rentokil initial plc annual report 2014
8 strategic report
2014 performance
progress against mediumterm targets
no progress
progress
good progress
achieved ambition
target and key activities progress in year one
mediumterm target midsingle digit revenue growth 
ongoing revenue growth of 36
    
organic growth of 12 
    
acquired 30 companies adding £66m of revenue mainly in growth and emerging quadrants 
    
launched new digital presence in uk australia and north america 
    
launched new product ranges in hygiene and workwear and additional services in pest control 
    
mediumterm target highsingle digit profit growth 
ongoing operating profit growth of 65 
    
£114m reduction in central and divisional overheads 
    
branch administration rationalisation – good progress in france australia and north america
    
profit improvement initiatives including pricing yield management and service productivity 
    
significant reduction in profit in benelux business although underlying metrics improved h2 on h1 
    
 divested lowermargin noncore businesses – initial facilities spanish medical and austrian products 
    
mediumterm target significant improvement in sustainable cash flow 
£93m improvement in free cash flow of £129m 
    
£38m reduction in restructuring costs 
    
£424m reduction in capex 
    
£108m reduction in it capex 
    
£17m reduction in interest payments to £495m 2013 £512m
    
£260m reduction in net debt from £1035m to £775m 
    
 ongoing revenue and profit metrics exclude the financial performance of disposed businesses but include results from acquisitions rentokil initial plc annual report 2014
9 strategic report
strategic report
corporate governance
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our business model
how we operate to create shareholder value
the company outlined its new business model as part of its new strategy 
in early 2014 this consists of three layers – strong regional businesses 
core competencies and a differentiated strategy based upon four 
quadrants and six operational levers for growth
strong regional 
businesses
we have fixed upon a very clear 
and simple geographic model 
where we have grouped our 
businesses into five strong 
regions north america europe 
uk  rest of world asia 
and pacific
core competencies
these are focused on our 
leadership in our three core 
categories of pest control 
hygiene and workwear our 
colleagues are vitally important  
as genuine experts in their field 
as well as our lean multibusiness 
country operating model
differentiated model 
and growth levers
this is how we manage the 
business for profitable growth 
by grouping our categories 
and geographies into a growth 
potential and profit contribution 
matrix and by utilising six 
operational levers which we flex 
according to growth potential 
in the relevant markets
over the next 17 pages we 
demonstrate how our operating 
model provides focus to enable 
the company to deliver profitable 
growth
right things 
category leadership 
right way 
lean multibusiness operations 
right people 
our colleagues as experts 
targeting our offer
1 where to play
2 mastering our markets
sales effectiveness
3 building the pipeline
4 sales brilliance
retention and growth
5 delivering our promise
6 engaging our customers
emerging
manage  
for value
growth
protect 
enhance
north america
europe
uk  rest of world
asia
pacific
to read more on our  
differentiated strategies
go to page 10  
to see more on our operational  
growth levers
go to page 21  
differentiated strategies six operational growth levers rentokil initial plc annual report 2014
10 strategic report
differentiated strategy
managing the portfolio through 
profit and growth potential
by way of illustration the strategies we need to deploy to grow 
in brazil are very different to those we need to deploy to manage our 
businesses in spain and greece we review quadrant composition 
annually looking carefully at business performance and developments  
in the economic environment as a result a number of changes in 
categorisation are planned for 2015 as indicated below
achieving our aims
we aim to manage the business for profitable growth in order to drive 
shareholder value to achieve our aim we use a quadrant analysis to 
group our categories and geographies into a growth potential and 
profit contribution matrix taking account of for instance a country’s 
gdp forecasts using this approach we are able to introduce 
different growth levers see page 9 to maximise impact  
emerging
manage for value protect  enhance
growth
strategy
our strategy is to build leading 
market positions in the key 
cities across those markets 
which we identify as having 
the best opportunities for 
our pest control and hygiene 
businesses
ma strategy
pest controlled market entry 
focus on acquiring local 
management capabilities 
adding boltons for density 
internal rate of return irr 
15
strategy
our strategy is to focus on 
retaining existing customers 
aggressive cost management 
and enhancing productivity 
and efficiency
ma strategy
consolidate regional and 
local strengths acquire 
new capabilities in adjacent 
service areas above average 
irr 30
strategy
our strategy is to focus on 
retaining existing customers 
while building profit and cash 
contributions
ma strategy
acquiring boltons for density 
requires high irr 25 
divesting some subscale and 
unprofitable businesses
strategy
our strategy is to focus on 
growing market share and on 
developing existing customers 
while filling gaps in our 
geographic footprint through 
organic and acquisitive growth
ma strategy
extend geographic reach  
into new cities and build out 
subscale regions irr 15 
as platform for growth
categories
pest control
geographies
asia east africa middle east 
north africa south america 
and turkey
changes for 2015
inclusion of fiji pest control 
from protect  enhance
categories
plants
geographies
greece ireland italy portugal 
and spain
changes for 2015
ireland pest control and 
hygiene moves to protect 
 enhance
categories
pest control hygiene  
cleanroom workwear
geographies
austria caribbean germany 
north america switzerland 
and uk
changes for 2015
inclusion of seven businesses 
from protect  enhance 
including france pest control 
and cleanrooms netherlands 
cleanrooms and nordics 
south africa australian and 
new zealand pest control 
businesses
categories
h yg i e n e   w o r k we a r
geographies
australia benelux fiji france 
new zealand nordics and 
south africa
changes for 2015
inclusion of four businesses 
from manage for value 
including france technivap 
italy pest control and ireland 
pest control and hygiene 
businesses rentokil initial plc annual report 2014
11 strategic report
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corporate governance
financial statements additional information
key drivers and considerations in our market place
our strategy for managing our businesses remains unchanged we use a quadrant 
model to set differentiated strategies for our businesses and to manage capital 
allocation the four quadrants are characterised by the economic environment 
and by the performance of our respective businesses in the relevant markets 
the allocation is reviewed annually and businesses can move quadrant should 
circumstances andor their performance change positively or otherwise
markets
competitive position in the early stages 
emerging markets are generally small and 
fragmented the arrival of international players 
such as rentokil initial helps professionalise 
the industry by leveraging our global best 
practice and allows us to establish a strong 
competitive position as the markets grow
challenges markets have lower value per 
customer and sometimes a less sophisticated 
operating environment 
investment strategy irr for investment 
15 as an example our pest control 
acquisitions in 2014 included chile which 
benefits from a very high population density 
and urbanisation rate 89 compared to 
75 in eu and 52 in asia as well as a 
fastgrowing middle class and stable political 
and economic environment
market opportunity a rapidly growing 
and largely urban middle class have higher 
expectations for hygiene standards this is 
reinforced with increasing levels of regulation 
these two drivers allow pest control and 
washroom hygiene markets to be established 
and grow rapidly
market dynamics markets are 
typically characterised by high gdp 
growth and strong macroeconomic 
indicators in the early stages of 
development our focus is on major 
cities rather than entire countries and 
we only infill to other areas once there 
is sufficient customer density to support 
our routebased operations
£1354m
2014 revenue
74
share of group 2013 63
increasing across a wide set of sectors 
for pest and hygiene services the national 
or multinational customers offer growth 
opportunities to national service companies 
but require broad coverage across the 
country although this can be achieved due 
to the higher density of customers than in 
emerging markets 
competitive position significant growth 
opportunities remain however because of 
the lack of consolidation within them for 
example the us is the largest pest control 
market in the world – estimated to be 
worth over £5bn – and the most developed 
economy but has more than 16000 pest 
control companies and the market leader only 
has an estimated 16 market share 
 
challenges the competitive dynamic  
both for customers and acquisition targets  
is often more intense than in emerging but  
the fragmentation of the market and higher 
customer value offer good growth 
opportunities
investment strategy irr for investment 
15
market dynamics growth markets 
tend to have established business 
models for our core categories and are 
economically more sophisticated and 
mature growth markets have average 
or better gdp growth high regulatory 
and legislative hygiene standards and 
rigorous enforcement regimes 
market opportunity significant 
growth opportunities from the 
underlying growth rate and often 
because of the lack of consolidation 
in the market service penetration 
£7517m
2014 revenue
411
share of group 2013 403
£5bn 
us pest control market
emerging
growth rentokil initial plc annual report 2014
12 strategic report
markets – continued
challenges and strategy lower growth 
markets with higher competitive intensity 
but we are well positioned to manage this 
with good market positions and efficient 
operations
investment strategy irr for investment 
25 bolton acquisitions can also unlock 
value by increasing our customer or industry 
sector density in key areas such as our 
acquisition of a pest control business in the 
south of the netherlands in early 2014 which 
focused on the profitable food industry and 
bird control services segments 
competitive position within these markets 
the company usually has a good market 
position a strong commitment to the market 
and good levels of profitability
 
market opportunity profitability initiatives 
and branchroute optimisation tools can 
improve price and margin realisation while still 
allowing enhanced customer satisfaction and 
high levels of customer retention there is also 
scope to leverage our existing operations to 
identify targeted opportunities to grow in 
certain categories or subcategories such as 
cleanroom within the workwear category 
market dynamics these markets 
share a level of maturity and established 
business models in our core categories 
with those markets in the growth 
quadrant but typically have average or 
below average gdp growth they are 
concentrated with smaller numbers of 
strong competitors and consequentially 
high margin pressure 
£8170m
2014 revenue
446
share of group 2013 463
protect  enhance
investment strategy irr for investment 
30 businesses in this quadrant can be 
strengthened through bolton acquisitions 
that have strong synergies and increases in 
customer density for example in 2014 we 
acquired a pest control business in italy to 
improve coverage and density that delivered 
a high return on investment other options 
include exit by divestment or closure in 2014 
we sold a number of underperforming or 
lowermargin businesses such as initial 
facilities the austrian products business 
and spanish medical operation generating 
£26m we also exited our joint venture in 
libya given the deteriorating security situation 
in the country
competitive position businesses in this 
quadrant may have higher market shares 
but still suffer due to broader economic 
weaknesses in the country as a whole this 
quadrant also includes a number of subscale 
or noncore businesses that are under review
market opportunity the main focus is 
on customer service pricing and productivity 
initiatives if there is not a viable turnaround 
plan businesses may be divested
challenges defined by market dynamics  
andor competitive position
market dynamics manage for value 
markets exhibit a broader range of 
characteristics than in the other three 
quadrants they are often oversupplied 
and growth rates are flat or shrinking 
and frequently experience very strong 
pricing and margin pressure the 
macroeconomic situation is weak with 
low or negative gdp growth andor 
political instability creating a higher than 
average risk of economic shocks
1 excluding initial facilities
£1264m
2014 revenue
69
share of group 2013 7  1
1

manage for value rentokil initial plc annual report 2014
13 strategic report
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financial statements additional information
strategy in action
emerging
growth
protect  
enhance
manage 
for value
emerging
our focus in the emerging 
quadrant is on investing  
in capability and effectively 
directing sales to extend 
our footprint
asia
our priority in asia in 2014 was to strengthen sales 
leadership teams to increase productivity good 
progress has been made in recruiting and retaining 
experienced sales directors in india indonesia 
malaysia singapore and thailand our resulting  
new structured approach to sales management and 
development has delivered a 72 inyear increase 
in new contract sales
targeted sales delivery in malaysia
malaysia our largest business unit in asia delivered 
strong revenue growth of 75 in 2014 both 
categories have grown with pest control up 99 
and hygiene up 50 our strategy for 2014 was to 
drive growth through targeted sales delivery at branch 
level promoting the new signature range premium 
scenting and pestnetonline extranet reporting 
services to differentiate our offer in a mature market 
the strengthening of the sales and customer care 
functions has enabled the business to deliver good 
growth in all targeted market sectors
china
in china we have focused on building density in the 
top 15 cities and top 10 industrial zones through 
targeted sales delivery to improve gross margins which 
rose by 75 on revenue up 297 we continue to 
see strong growth in the food processing sector which 
now accounts for 24 of total china revenue 
india
the acquisition of pestconeplus marked our entry 
into gujarat a state with higher gdp and foreign 
direct investment fdi the portfolio and 
expertise strengthened our leading position in the 
pharmaceutical food processing industrial and 
manufacturing sectors rentokil is now one of the 
three leading pest control businesses in india
latin america
in latin america rentokil initial entered the chilean 
market through the acquisitions of bestway and 
chileno alemana which is particularly focused on the 
urban area of santiago in brazil rentokil is now the 
number two player in the country and is focused on 
building density in rio de janeiro and são paulo
when it has to be right…
during the 2014 fifa world cup the eyes of the world 
were on brazil our local teams managed pest control 
services for a number of team hotels training facilities 
and grounds including mosquito control to minimise 
the risk of dengue fever 
strategy 
build leading market positions 
in the key cities across those 
markets which we identify as 
having the best opportunities 
for our pest control and 
hygiene businesses
ma strategy 
pest controlled market entry 
focus on acquiring local 
management capabilities 
adding boltons for density 
irr  15
ma activity 
eight acquisitions in 2014 
contributing £169m 
annualised revenues brazil 
brunei chile colombia india 
mozambique singapore and  
south korea
changes in 2015 
inclusion of fiji pest control 
from protect  enhance
at a glance
74 
percentage of group revenue
2013 63
59 
percentage of operating profit 
2013 48
217 
ongoing revenue
226 
ongoing profit 
key facts 
to read more about our ma  
activity and the value it creates
go to page 17  
24 
proportion of revenue 
from food processing 
sector
72 
new contract
sales rentokil initial plc annual report 2014
14 strategic report
growth
strategy in action – continued
growth
protect  
enhance
manage 
for value
emerging
  
‘pestaurant’
our global multiple awardwinning pr and brand 
campaign has generated extensive media coverage 
across 11 countries raising our brand awareness and 
driving online traffic the first popup ‘pestaurant’ 
offering a menu of ‘pests’ including barbecued pigeon 
burgers mexican spiced meal worms cheese ’n 
onion crickets and chocolatedipped ants took place 
in the uk this was followed by global pestaurant day 
on 4 june 2014
‘pestaurants’ took place in australia the caribbean 
denmark france malaysia turkey and usa they 
proved to be an effective and fun way to engage with 
the public about pests generating news headlines 
across the world and driving significantly increased 
social and website traffic results included
• 1200 print and online articles 
• more than 60 tv and radio broadcasts
• 19000 visitors to rentokil and pestaurant websites
• 5000 t witter mentions 
• 6000 youtube views
• over 1m mentions on social media including 
facebook and linkedin 
 
 new products
the company launched several new products in 2014 
including a new signature hygiene colour range new 
workwear ranges and a series of new pest control 
products in the uk just over 30 of our pest control 
sales in 2014 were generated by innovations launched 
from 2011 onwards
our focus in the growth 
quadrant is on investing to 
take share develop existing 
customers and fill gaps in 
our geographic footprint
acquisitions
our ma focus in the growth quadrant has been on 
extending our geographic reach into new cities and to 
bolt on smaller acquisitions to our existing operations 
to build density particularly in north america where 
we have acquired ten companies this year and 
strengthened our national presence for ma and for 
our capex investments to support our growth plans 
we set slightly lower hurdle rates in the growth 
quadrant given the longterm importance of these 
markets to the company
 
enhancing our digital presence 
in pest control many of our new customers find us 
when they need pest control services rather than us 
finding them so our challenge is to ensure that when 
a customer has a need for pest control the first name 
that comes to mind or the first name they find when 
they search online is rentokil during 2014 our digital 
team was able to deploy new websites – enhanced 
for search engine performance – which together with 
our highly successful pr initiatives eg pestaurant 
helped to drive up our organic search performance on 
google and other search engines since their rollout 
in the second half of the year we have seen a 25 
increase in traffic to our pest control websites leading 
to a 24 increase in inbound customer contacts 
at a glance
411 
percentage of group revenue 
2013 403
402 
percentage of operating profit 
2013 382
57 
ongoing revenue 
63 
ongoing profit 
key facts 
strategy 
focus on growing market 
share and on developing 
existing customers while 
filling gaps in our geographic 
footprint through organic 
and acquisitive growth
ma strategy 
extend geographic reach 
into new cities and build out 
subscale regions irr  15 
as platform for growth
ma activity 2014 
15 acquisitions contributing 
£417m annualised revenues 
bahamas lithuania north 
america and uk
changes in 2015 
inclusion of seven businesses 
from protect  enhance 
including france pest control 
and cleanrooms netherlands 
cleanrooms and nordics 
south africa australian and 
new zealand pest control 
businesses
25 
increase in traffic 
to our pest control 
websites
for further details of our ma activities
go to page 17  
to see how digital excellence is  
improving our sales effectiveness
go to page 22  
to read more about our  
innovation programme
go to page 24   rentokil initial plc annual report 2014
15 strategic report
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corporate governance
financial statements additional information
protect  enhance
growth
protect  
enhance
manage 
for value
emerging
our focus in the protect  
 enhance quadrant is on 
service productivity  route 
density  retention new 
customer wins and product 
and service development
price discipline
in france the business is using stateoftheart 
analytical tools to provide detailed financial analysis 
of our customer base enabling its management team 
to focus on yield management and execute much 
improved pricing discipline throughout the portfolio 
by analysing customer profitability by account sector 
branch and route using this insight we are able 
to target and incentivise the sales teams on driving 
margins in relatively lowmargin accounts whilst 
recognising the particular importance of retaining 
other customers where our margins are already higher 
in the past we had very little data on individual 
customerbycustomer performance – now we are 
able to adopt a much more sophisticated approach 
to margin management the strategy used by our 
french team is being deployed in many other markets 
across the group 
ma 
three acquisitions were made in 2014 in this quadrant 
these included one pest control business in the 
netherlands a franchise buyback in zambia and a 
plants business in sweden these acquisitions further 
consolidate our regional and local strength through 
boltons and on acquiring new capabilities 
benelux
our benelux business has experienced a sustained 
period of decline and continues to operate in a 
challenging market we have recently appointed  
a new managing director and finance director with 
a very clear brief we have dramatically simplified the 
agenda the team is very focused on customer service 
account management improving our supply chain 
performance and on a much sharper focus on yield 
management the business is now operating in 
a much more customerfocused and stable 
environment its rate of profit decline improved from 
the first half to the second half of the year and the 
business returned to revenue growth in q4  
delivering a financial turnaround is a priority for 
the company in 2015 
at a glance
strategy 
focus on retaining existing 
customers while building 
profit and cash contributions
ma strategy 
consolidate regional and 
local strengths acquire new 
capabilities in adjacent service 
areas above average  
irr 25
ma activity 2014 
three acquisitions contributing 
£29m annualised revenues 
in the netherlands sweden 
and zambia
changes in 2015 
inclusion of four businesses 
from manage for value 
including france technivap 
italy pest control and ireland 
pest control and hygiene 
businesses
key facts 
446
percentage of group revenue 
2013 463
483
percentage of operating profit 
2013 510
01
ongoing revenue 
44
ongoing profit 
strategy in action – continued rentokil initial plc annual report 2014
16 strategic report
manage for value
growth
protect  
enhance
manage 
for value
emerging
our focus in the manage 
for value quadrant is on 
productivity  route density  
reducing costs and improving 
retention
changing the shape  
of the portfolio
there are two types of businesses within this quadrant 
– those which operate in challenged economic 
environments eg greece ireland portugal and 
spain and those with a challenged economic model 
where we are looking to drive improved performance 
we continue to reduce our exposure in this quadrant 
and in addition to the disposal in march of the initial 
facilities business we also divested our spanish 
medical and austrian products operations later in 
the year all three businesses operated in highly 
competitive markets and delivered lower margins 
while the divestments reduce our annual revenues by 
£547m the sale proceeds have reduced debt and we 
have also taken the opportunity to redeploy funds into 
our core businesses where we will be able to drive 
better growth and higher returns proceeds have also 
been used to accelerate ma activity and implement 
a progressive dividend policy 
investment in pest control 
in italy the pest control business continues to perform 
well and in 2014 we added four small pest businesses 
including a bolton in bergamo near milan which 
builds density in this important location and improves 
productivity any investment in this quadrant has to 
have a particularly strong business case and must 
meet a higher investment hurdle than in the emerging 
or growth quadrants 
productivity
also in italy our hygiene business initiated a 
productivity improvement programme in 2014 which 
introduced better service scheduling and rezoning 
of service technicians to better fit the density of our 
customer base at the same time a new upselling 
programme was designed to improve our coverage 
in targeted areas where it was weak 
as a result the business is now operating at a 6 
improved revenue level per stop and we have also 
seen a small increase in customer satisfaction 
the number of services per premises has increased 
by 26 
 
key facts 
69
percentage of group  
revenue 2013 7  1  
excluding initial facilities 
56
percentage of operating  
profit 2013 60 excluding 
initial facilities 
05
ongoing revenue 
45
ongoing profit 
at a glance
strategy 
focus on retaining existing 
customers cost management 
and enhancing productivity 
and efficiency
ma strategy 
acquire boltons for density 
requires high irr 30 
divesting subscale 
unprofitable businesses
ma activity 2014 
three disposals four 
acquisitions contributing 
£42m annualised revenues 
in ireland italy and spain 
changes in 2015 
ireland pest control and 
hygiene moves to protect 
 enhance
6 
improved 
revenue level 
per stop
strategy in action – continued rentokil initial plc annual report 2014
17 strategic report
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corporate governance
financial statements additional information
17
growth
protect  
enhance
manage 
for value
emerging
ma activity is core to our differentiated strategy  in 2014 
we acquired 30 companies for a consideration of £68m 
90 of which were in our growth and emerging quadrants 
mergers and acquisitions 
identify 
identify cities with good 
density and good growth 
potential identify right 
companies following
detailed analysis of 
competitive landscape
1
assessment 
ma team assess 
operational forecasts and 
integration plans plans 
submitted for approval 
from group investment 
committee and 
transactions negotiated
3
acquisition 
once offer successful 
move to detailed due 
diligence processs and 
final negotiations prior 
to purchase
4
monitoring
performance 
post deal a rigorous 
integration plan is 
implemented which 
involves monthly 
monitoring of business 
activity and performance 
to ensure growth 
opportunities are realised
upon the first anniversary 
of acquisition a detailed 
review of strategy and 
performance is completed 
with key learnings 
informing strategy
5
opportunities 
carry out structured 
contact programme 
building highquality 
database of contacts  
live targets and 
companies no longer 
meeting our requirements
2
business benefits
£66m
annualised
revenues
500
target 
companies
over 100 target cities 
and over 500 target 
companies identified 
to date 
50 live prospects by  
end of 2014 many 
of which we hope to 
convert into deals over 
next two years
30 acquisitions in 
2014 giving £66m of 
annualised revenues
50
live 
prospects
how the ma process works
strategy in action – continued rentokil initial plc annual report 2014
18 strategic report
business overview
how the portfolio has performed in 2014
on an ongoing basis the emerging quadrant 
delivered excellent revenue growth in 2014 – up 
217 and ongoing profit up 226 this was 
fuelled by acquisitions in brazil chile and colombia 
but also by organic growth rates of over 20 
in brazil china the uae and vietnam 
on an ongoing basis revenue was up 57  
in 2014 with total revenue growth in the uk 
of £117m 69 in north america revenue 
rose 66 although weather conditions  
on the east and west coasts in the first half  
held back organic growth to 17
217
ongoing revenue 
226
ongoing profit 
57
ongoing revenue 
63
ongoing profit 
our emerging 
quadrant includes our 
operations in asia and 
latin america
the growth quadrant 
includes our operations 
in north america uk 
and germany  
our operations in this quadrant delivered 
a reasonable revenue performance in 2014 
up 05 given very tough market conditions 
in southern europe 
the manage for v alue 
quadrant includes 
greece ireland italy  
portugal and spain 
our protect  enhance businesses did a respectable 
job at holding onto revenues in 2014 down just 
01 given the challenging trading conditions 
that continue to persist in most of our european 
markets pacific countries continued to maintain and 
build profit contribution in line with strategy 64 
in benelux profits of £402m declined by 188 
but overall financial performance showed signs of 
improvement in h2 on h1
our business in france delivered slower growth 
rates in the second half with full year revenue of 
£3536m 03 and profit of £643m 28
our protect  enhance 
quadrant includes 
most of europe and the 
pacific region
05
ongoing revenue 
01
ongoing revenue 
44
ongoing profit
45
ongoing profit
growth emerging
protect  enhance manage for value rentokil initial plc annual report 2014
19 strategic report
strategic report
corporate governance
financial statements additional information
key performance indicators
the board uses key performance indicators kpis to judge progress 
towards strategic objectives they are grouped within three categories 
colleagues customers and shareholders the group’s progress against 
these kpis is shown below
measuring achievement in 2014
colleagues
health and safety hs lost time through  
accidents l t a rate 
explanation
defined as workrelated injuryillness resulting in employee absenteeism for one 
dayshift or more excluding dayshift in which the accident occurred number 
of lost time accidents expressed as rate per 100000 standard working hours
customers
state of service 
explanation
t otal number of service visits performed divided by total number of visits due
sales colleague retention 
explanation
the total sales staff retained in the year as a percentage of sales headcount  
at the start of the year
service colleague retention 
explanation
the total service employees retained in the year as a percentage of service 
headcount at the start of the year
2014 results
099
2014 results
99
2014 results
73
2014 results
82
2013 results
111
2013 results
98
2013 results
71
2013 results
79
customer retention 
explanation
the reciprocal of total terminations reductions and terminations expressed  
as a percentage of opening portfolio
net gain as a percentage of opening portfolio 
explanation
movement in portfolio expressed as a percentage of opening portfolio
customer satisfaction customer v oice counts 
explanation
measured by average net promoter score rating across all branches and includes 
acquisitions in year the cvc score represents the net balance of those customers 
promoting our service compared with those neutral or not promoting
2014 results
842
2014 results
35
2014 results
262
2013 results
857
2013 results
10
2013 results
260 rentokil initial plc annual report 2014
20 strategic report
key performance indicators  – continued
shareholders
organic revenue growth 
explanation
revenue growth excluding acquisitions and disposals
ongoing revenue growth  
explanation
revenue with disposals removed and includes revenue from acquisitions at cer
apbit a margin 
explanation
adjusted profit before interest tax and amortisation apbita expressed  
as a percentage of total revenue
free cash flow at aer 
explanation
cash flow before acquisitions disposals dividends foreign exchange  
adjustments and discontinued operations
debtors days’ sales outstanding – dso 
explanation
trade debtors gross of provisions calculated on the exhaust basis ie going back 
over relevant number of preceding days’ invoicing until debt balance is zero 
number of days taken  debtor days
cash conversion as a percentage of operating profit 
explanation
adjusted operating cash flow expressed as a percentage of apbita
net capex as a percentage of depreciation 
explanation
cash capital additions net of proceeds from disposals expressed  
as percentage of depreciation
2014 results
12
2014 results
36
2014 results
135
2014 results
£129m
2014 results
52
2014 results
99
2014 results
95
2013 results
05
2013 results
73
2013 results
132
2013 results
£36m
2013 results
56
2013 results
90
2013 results
114 rentokil initial plc annual report 2014
21 strategic report
strategic report
corporate governance
financial statements additional information
growth levers
operational levers to deliver 
strategy and growth
targeting our offer sales effectiveness retention  growth
at rentokil initial the drive for growth is being delivered 
through our differentiated plan for each quadrant described 
earlier however in addition the businesses utilise six revenue 
growth levers to drive performance first we target our offer 
appropriately  ensuring we are providing the right offer to the 
right customers but also that we are masters of our markets 
adapting our thinking to local needs second we deliver sales 
effectiveness in both building the sales pipeline and through 
sales brilliance finally  we drive retention and growth through 
delivery of outstanding customer service account management 
and service differentiation
operational growth levers
find out more 
1 where to play
2 mastering our markets
3 building the pipeline
4 sales brilliance
5 delivering our promise
6 engaging our customers
to see how digital 
excellence is improving 
our sales effectiveness
go to page 22  
to find out how we are 
using google to deliver 
our service promise
go to page 23  
to read more on how  
we use innovation to 
create value
go to page 24  
over the next four 
pages we describe 
some of our growth 
initiatives including 
enhancing our digital 
presence to build our 
pipeline product 
innovation to deliver 
the right offer for the 
right customers and 
harnessing the power 
of google and apps to 
deliver our service 
promise to customers 
rentokil initial plc annual report 2014
22 strategic report
sales effectiveness building the 
pipeline through digital excellence
growth levers – continued
closer to 
customers
provide information where and 
when the customer needs it
greater
transparency
proof of service realtime  
confirmation about risk and 
visibility of recommendations 
platform for 
the future
flexible platforms shared  
across our categories that can  
be adapted for future innovations  
business benefits
sharing core 
content
the basis of our search 
engine performance  
and how we engage 
with customers online
transparency on  
service delivery 
online account 
management tool 
showing proof of service 
and linking through 
to ebilling
local adaptation 
translation and 
localisation combined 
with local brand building
sitebased 
reporting
risks and trends by 
individual trap shown 
on floorplans to help 
demonstrate quality 
of control to hygiene 
auditors
embracing 
mobile search
in 2014 44 of 
people searching for 
“pest control” used 
a mobile device
myrentokil app 
for mobile use
recommendations can 
be followed on a mobile 
or tablet as customers 
walk around their site
rentokilcom
adapted to 54 countries 
covering 23 languages
myrentokil app
customer extranet – the new 
upgrade to the highly successful 
pestnetonline
delivering insight online 
embracing digital as a 
complement to communicating 
with technicians and sales  
people
specific to local needs
adapting content to 
be relevant to the needs 
of our customers when 
they need it
accessible on 
mobile devices
available when customers 
are on the move or as they 
go around their sites
rentokil initial plc annual report 2014
23 strategic report
strategic report corporate governance financial statements additional information
growth levers – continued
harnessing the power of google and 
apps to deliver our service promise 
cloudbased 
efficiency and agility 
for a mobile workforce
social media
google has changed the way 
the company communicates 
with and recognises colleagues  
as well as sharing sales leads  
and best practice 
sales leads targetsetting and 
recognition for new customer wins 
are all shared via internal social 
media communities encouraging 
participation and input
video calling
google hangouts have 
transformed the way colleagues 
interact reducing the need for 
physical meetings and saving 
time money and energy
technicians now have onsite 
consultations via hangouts 
seeking advice on difficult issues 
that they are facing – and tapping 
into the experience of other 
colleagues
apps for productivity
one of the most visible ways 
in which working practices 
have changed is through the 
development and use of apps 
for smartphones and tablets
the company has begun to 
create its own apps dedicated 
to boosting productivity – so 
colleagues can spend more time 
with customers and less time 
travelling in their vehicles
38000 views
one colleague recognition event 
in 2014 was attended by 88 people 
but photos and posts from the 
event reached 38000 views within 
two days 
40
in australia the business estimated 
that savings on hotels and travel for 
nonservice personnel in 2014 were 
reduced by around 40  
18 apps
colleagues participate in a ‘find an 
app’ scheme to discover and share 
apps which make can make us more 
productive we have shared 18 apps 
to date  
business benefits
rentokil initial plc annual report 2014
24 strategic report
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 x 
growth levers – continued
rentokil launched pestconnect in 2013 as a pilot in the netherlands successfully 
running at 300 locations it is now being rolled out to other countries in february 
2015 initial launched hygieneconnect using the same core technology but using 
it to monitor hand washing rates and drive up standards in hand hygiene 
combining market insight with innovation 
to create new sources of value
insights innovation
pestconnect
pestconnect 
traps with builtin sensors 
communicate wireless 
data to a control panel that 
processes the information 
to be sent back to base
cageconnect
intelligent cage traps that 
communicate when they 
have been activated or if 
they need attention
trained employees
technicians with pdas and apps 
that allow them to respond quickly 
to a customer alert
global innovation centre
combining our knowledge of pest 
behaviour with novel sensing technology
hygieneconnect
footfall monitor 
anonymously tracks the 
number of visitors to each 
washroom in 15minute slots 
throughout the day 
soap usage monitor
anonymously tracks 
number of visitors washing 
their hands with soap and 
can be used to track 
consumables remaining
human behaviour research 
developed with electronic monitoring 
of over 100000 visits to washrooms
global innovation centre
leveraging insight from pestconnect 
to develop capability for hand hygiene
global insights
tested in four countries and five sectors 
to understand how behaviours vary
communication platform
linked multiple devices to our it hubs 
and integrated into our branch systems 
and the cloud rentokil initial plc annual report 2014
22 strategic report
sales effectiveness building the 
pipeline through digital excellence
growth levers – continued
closer to 
customers
provide information where and 
when the customer needs it
greater
transparency
proof of service realtime  
confirmation about risk and 
visibility of recommendations 
platform for 
the future
flexible platforms shared  
across our categories that can  
be adapted for future innovations  
business benefits
sharing core 
content
the basis of our search 
engine performance  
and how we engage 
with customers online
t ransparency on  
service delivery 
online account 
management tool 
showing proof of service 
and linking through 
to ebilling
local adaptation 
translation and 
localisation combined 
with local brand building
sitebased 
reporting
risks and trends by 
individual trap shown 
on floorplans to help 
demonstrate quality 
of control to hygiene 
auditors
embracing 
mobile search
in 2014 44 of 
people searching for 
“pest control” used 
a mobile device
myrentokil app 
for mobile use
recommendations can 
be followed on a mobile 
or tablet as customers 
walk around their site
rentokilcom
adapted to 54 countries 
covering 23 languages
myrentokil app
customer extranet – the new 
upgrade to the highly successful 
pestnetonline
delivering insight online 
embracing digital as a 
complement to communicating 
with technicians and sales  
people
specific to local needs
adapting content to 
be relevant to the needs 
of our customers when 
they need it
accessible on 
mobile devices
available when customers 
are on the move or as they 
go around their sites rentokil initial plc annual report 2014
23 strategic report
strategic report
corporate governance
financial statements additional information
growth levers – continued
harnessing the power of google and 
apps to deliver our service promise 
cloudbased 
efficiency and agility 
for a mobile workforce
social media
google has changed the way 
the company communicates 
with and recognises colleagues  
as well as sharing sales leads  
and best practice 
sales leads targetsetting and 
recognition for new customer wins 
are all shared via internal social 
media communities encouraging 
participation and input
video calling
google hangouts have 
transformed the way colleagues 
interact reducing the need for 
physical meetings and saving 
time money and energy
technicians now have onsite 
consultations via hangouts 
seeking advice on difficult issues 
that they are facing – and tapping 
into the experience of other 
colleagues
apps for productivity
one of the most visible ways 
in which working practices 
have changed is through the 
development and use of apps 
for smartphones and tablets
the company has begun to 
create its own apps dedicated 
to boosting productivity – so 
colleagues can spend more time 
with customers and less time 
travelling in their vehicles
38000 views
one colleague recognition event 
in 2014 was attended by 88 people 
but photos and posts from the 
event reached 38000 views within 
two days 
40
in australia the business estimated 
that savings on hotels and travel for 
nonservice personnel in 2014 were 
reduced by around 40  
18 apps
colleagues participate in a ‘find an 
app’ scheme to discover and share 
apps which make can make us more 
productive we have shared 18 apps 
to date  
business benefits rentokil initial plc annual report 2014
24 strategic report
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 x 
growth levers – continued
rentokil launched pestconnect in 2013 as a pilot in the netherlands successfully 
running at 300 locations it is now being rolled out to other countries in february 
2015 initial launched hygieneconnect using the same core technology but using 
it to monitor hand washing rates and drive up standards in hand hygiene 
combining market insight with innovation 
to create new sources of value
insights innovation
pestconnect
pestconnect 
traps with builtin sensors 
communicate wireless 
data to a control panel that 
processes the information 
to be sent back to base
cageconnect
intelligent cage traps that 
communicate when they 
have been activated or if 
they need attention
trained employees
technicians with pdas and apps 
that allow them to respond quickly 
to a customer alert
global innovation centre
combining our knowledge of pest 
behaviour with novel sensing technology
hygieneconnect
footfall monitor 
anonymously tracks the 
number of visitors to each 
washroom in 15minute slots 
throughout the day 
soap usage monitor
anonymously tracks 
number of visitors washing 
their hands with soap and 
can be used to track 
consumables remaining
human behaviour research 
developed with electronic monitoring 
of over 100000 visits to washrooms
global innovation centre
leveraging insight from pestconnect 
to develop capability for hand hygiene
global insights
tested in four countries and five sectors 
to understand how behaviours vary
communication platform
linked multiple devices to our it hubs 
and integrated into our branch systems 
and the cloud rentokil initial plc annual report 2014
25 strategic report
strategic report
corporate governance
financial statements additional information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 x 
247
ultimate protection with  
continuous monitoring  
between customer visits
targeted
in large sites directs  
technicians exactly to the  
location of pest activity
efficient
avoids cost of inspection  
visits to cage traps when  
no pests have been caught
50 reduction
in the number of people using  
a washroom without washing 
their hands
20–50 increase
in the usage of soap and hand 
drying products varies by sector 
hygiene audits
pilot customers credited for 
demonstrating high compliance  
in hand hygiene
business benefits
wireless signal
data sent by gprs
realtime alerts 
direct to the technician 
and to their branch so 
that a priority visit to the 
customer can be scheduled
myrentokil
realtime information 
presented to customers 
to alert them of potential 
issues and help them 
manage their risk profile   
wireless signal
data sent by gprs
hand hygiene display 
showing visitors to 
washrooms percentage 
who wash their hands 
proven to nudge hand 
hygiene compliance 
rates up significantly
myinitial
showing customers’ footfall 
and compliance rate by time 
of day for each washroom 
to help them judge where 
interventions are required rentokil initial plc annual report 2014
26 strategic report
business review
how the regions performed in 2014
this review of performance takes a close look at each of our business regions – 
north america europe uk  rest of w orld asia and pacific – in 2014 
overview of 2014 performance 
strong performance in 2014 supported by acquisitions 
revenue
1
 up 66 17 organic operating profit
2
  
up 156 
• strong end to the year with q4 revenue up 84  
33 organic
• revenue growth supported by acquisitions ten boltons  
with annualised revenues of c£20m
• strong profit growth driven by acquisitions as well as back office 
and property rationalisation
•  09 improvement in margins further improvement opportunities 
through acquisitions scale efficiencies and service productivity
1  ongoing revenue represents revenue with disposals removed and includes revenue  
from acquisitions 
2  before amortisation and impairment of intangible assets excluding computer software 
restructuring costs and oneoff items 
north america
200
group revenue  
revenue cer £m 
2013 2014
3443
3669
category mix  
countries of operation  
	
95 usa
	
4 canada
	
1 mexico
	
821 pest control
	
179 plants rentokil initial plc annual report 2014
27 strategic report
strategic report
corporate governance
financial statements additional information
business review – continued
europe
overview of 2014 performance 
2014 financial performance held back by benelux and challenging 
economic environment 
fy revenue
1
 up 17 02 organic operating profit
2
 down 37
•  more resilient q4 revenue
1
 up 21
• 2014 revenue growth driven by germany 23 and latin 
america 308 with france broadly flat 03 and benelux 
down 20
• ongoing profit down 27 largely due to benelux £99m 
impacted by the continued effect of poor service levels in 2013 
and challenging economic conditions resulting in contract 
terminations and pricing pressure 
outlook for european businesses in 2015 is mixed
• german belgian and italian businesses are experiencing positive 
trading conditions and expect to make good progress in the year
• outlook for france and the netherlands 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
we continue to see opportunities to support margins in europe 
through yield management and service productivity 
1  ongoing revenue represents revenue with disposals removed and includes revenue from 
acquisitions 
2  before amortisation and impairment of intangible assets excluding computer software 
restructuring costs and oneoff items 
175
group revenue  
revenue cer £m 
2013 2014
3054
3218
category mix  
countries of operation  
	
60 uk  ireland
	
21  nordics
	
1 1  s u b  s a h a r a n 
africa
	
5 caribbean
	
2 menat
	
1 baltics
uk  rest of world
overview of 2014 performance 
fy revenue
1
 up 56 32 organic operating profit
2
 down 10
• strong end to the year with q4 revenue up 83 42 organic
• continued growth from uk pest control and hygiene categories 
pest jobbing work in particular but margins held back by new 
large contract setup in uk and integration of previously loss 
making green compliance acquisition 
• strong revenue growth in rest of world particularly middle east 
and caribbean but offset by lower revenues in south africa 
margins held back in south africa by industrial action and 
pricing pressure
• margin improvement expected in 2015 as new contracts and 
acquisitions mature
• good execution of ma programme – six acquisitions in year 
including peter cox property care business
1  ongoing revenue represents revenue with disposals removed and includes revenue from 
acquisitions 
2  before amortisation and impairment of intangible assets excluding computer software 
restructuring costs and oneoff items 
	
441 pest control
	
412 hygiene 
	
87 plants
	
60 other 
490
group revenue  
revenue cer £m 
2013 2014
8953 9018
category mix  
countries of operation  
	
42 france
	
26 benelux
	
23 germany
	
7  s o u t h e r n  
europe
	
2 latin america
	
474 workwear
	
255 hygiene 
	
197 pest control
	
44 other  
	
30 plants  rentokil initial plc annual report 2014
28 strategic report
business review – continued  
how the regions performed in 2014 – continued
overview of 2014 performance 
excellent progress in 2014
fy revenue
1
 up 81 67 organic operating profit
2
 up 182
• strong end to the year with q4 revenue up 119
• good performances from both pest and hygiene categories
• combined revenue growth of 291 from china india and 
vietnam 
• combined high singledigit revenue growth from indonesia and 
malaysia 
• profit increase reflecting leverage from revenue growth 12 
improvement in margins 
• further margin improvement opportunities from revenue growth 
and back office rationalisation 
• three small acquisitions in india singapore and south korea 
ma pipeline strong
1  ongoing revenue represents revenue with disposals removed and includes revenue from 
acquisitions 
2  before amortisation and impairment of intangible assets excluding computer software 
restructuring costs and oneoff items 
group revenue  category mix  
asia
pacific
overview of 2014 performance 
businesses performing well in 2014
fy revenue
1
 up 09 09 organic operating profit
2
  
up 59
• strong end to the year – q4 revenue
1
 up 25
• revenue driven by growth in contract revenue in pest and hygiene 
but offset by reduced pest jobs and contract revenue in plants 
• margin improvement supported by business efficiencies 
cost savings and branch administration rationalisation
• further margin improvement opportunities from improved 
service productivity and targeted acquisitions 
• seeking to build ma pipeline in 2015
1  ongoing revenue represents revenue with disposals removed and includes revenue from 
acquisitions 
2  before amortisation and impairment of intangible assets excluding computer software 
restructuring costs and oneoff items 
group revenue  
revenue cer £m 
revenue cer £m 
category mix  
countries of operation  
countries of operation  
	
26 malaysia
	
24 other
	
18 singapore
	
16 indonesia
	
9 hong kong
	
7 thailand
	
79 australia
	
19 new zealand
	
2 fiji
	
535 pest control
	
440 hygiene 
	
22 other
	
03 plants
	
458 hygiene
	
443 pest control 
	
99 plants
57
2013 2014
1037
1058
78
2013 2014
1427 1440 rentokil initial plc annual report 2014
29 strategic report
strategic report
corporate governance
financial statements additional information
business review – continued
for more than 100 years initial hygiene 
has helped organisations provide 
pleasant and hygienic environments 
for staff clients and visitors
strategic focus
• leveraging awardwinning signature range of hygiene products 
to sell more services per customer targeting highermargin 
customers and increasing retention rates
• improving pricing and margin management particularly for 
singleservice customers
• seeking to build market share through acquisitions at local 
and national level in europe
• launch of ‘hygieneconnect’ hand washing compliance system 
establishing good hygiene practices throughout organisations reduces 
the risk of infection being passed from person to person as a result 
fewer days are lost to sickness which translates directly into real cost 
savings and improved productivity
performance
in 2014 the category generated ongoing revenue of £474m up  
10 at cer it has a 198 operating margin and delivered £94m 
of ongoing operating profit a decline of 54 at cer state of service 
has risen consistently over the past five years and as a result customer 
satisfaction rates continue to improve rising by 17 across the group 
in 2014 
market 
initial hygiene operates in a competitive market with good growth 
opportunities we are well placed to increase market share through 
market segmentation and the introduction of value propositions to 
customers significant investment has been made in updating and 
delivering bestinclass product solutions 
customers
we achieve high customer satisfaction levels and believe this is a key 
competitive advantage the businesses have account management 
processes in place with tiered strategies for contacting customers at 
least annually to confirm that their service requirements are being met 
in addition we continue to use the insight gained from our customer 
voice counts cvc feedback to improve service levels and every 
detractor score on cvc is followed up by a call from an account 
manager or a branch manager within two working days of the survey 
more recently the launch of the new ‘myinitial’ extranet tool gives 
complete transparency about individual customer service including 
proof of service and proof of delivery with einvoicing being rolled out 
from the start of 2015 
outlook
our hygiene business is complementary to our worldleading pest 
control business – a linked offer in environmental health requiring 
similar skills sets from our employees and with both categories 
having compatible operational models the category is well placed to 
demonstrate its expertise as demand for improved hand and feminine 
hygiene solutions are sought around the world while organic growth 
has been squeezed through difficult trading conditions in europe the 
strong contribution to profits from our hygiene category underscores 
its importance to the group building market share in the growth and 
emerging quadrants remains a priority for our hygiene category
experts in hygiene
our awardwinning signature range  
heritage of over 100 years 
percentage of group revenue  percentage of group operating profit  
revenue £m 
£475m
operating margin
198
operating profit £m
£94m
initial began trading 
in 1903 when 
american 
businessman 
mr ap  bigelow 
started a towel 
rental service for london businesses 
each customer had their initials 
embroidered on their towels – and so the 
initial towel supply company was born 
in march 2014 we 
announced that our 
signature range of hygiene 
products received its 
second international award 
for product design excellence previous 
winners of the internationally recognised 
product accolade red dot design award 
include mercedes benz bosch and apple   
26 30 rentokil initial plc annual report 2014
30 strategic report
business review – continued
experts in pest control
search performance
percentage of group revenue  percentage of group operating profit  revenue £m 
£741m
operating margin
189
operating profit £m
£140m
during 2014 our digital team deployed new websites 
– and enhanced for search engine performance – 
which have helped drive up our organic search 
performance on google and other search engines
we are the world’s leading 
commercial pest company 
our usps include our global 
reach service quality brand 
strength expertise of people 
innovation management 
information systems and 
digital capability
why choose rentokil
41 44 rentokil initial plc annual report 2014
31 strategic report
strategic report
corporate governance
financial statements additional information
rentokil is the world’s 
leading commercial pest 
control business providing 
the highest levels of risk 
management reassurance 
and responsiveness to 
customers
strategic focus
over recent years we have broadened our 
geographic presence through acquisitions in north 
central and south america and the middle east
we compete on the basis of
• building our brand strength in each of our 
markets
• being the most international of pest control 
companies to deliver consistently to multinational 
customers
• sharing best practice in sales and service across 
our international network
• delivering technical expertise through our 
technicians and supporting organisation
• investing in innovation to develop proprietary 
products service models and digital reporting
• winning customers online through search 
performance and conversion rate optimisation
pest control is our principal category for 
growth with a focus on
• establishing national and local leadership in 
each of our markets
• broader and deeper coverage in the north 
american market
• using pest control as a vehicle for entering new 
markets eg emerging economies of latin 
america
• developing the opportunity for international 
accounts
• ongoing service productivity improvements
performance
in 2014 the pest control business achieved 
ongoing revenue of £740m 85 at cer and 
ongoing operating profit of £140m 84 at  
cer the business is highly profitable and 
generates an 189 operating margin north 
america and the uk are among our largest 
geographies in this category 
market
we have an 8 share of the estimated £95bn 
market for pest control services and we are 
continuing to increase this share through a 
combination of organic growth and targeted 
acquisitions rising standards of hygiene are driving 
greater demand for pest control across our markets 
but particularly in emerging economies in mature 
markets the sector is consolidating presenting 
good opportunities for growth and enhanced 
profitability through acquisitions our key points 
of differentiation include our brand strength 
international reach innovative products and an 
operating model that allows us to deliver our 
collective expertise through our frontline service 
colleagues this is being helped further with our 
investment in information technology enabling us to 
serve customers better faster and more efficiently
customers
in over 60 countries businesses and homeowners 
trust rentokil to solve their pest problems and 
prevent them from reoccurring 
we are the world’ s leading provider of pest control 
services to commercial customers and this 
accounts for 78 of the category’ s revenue  
we deliver services to all commercial sectors  
and while customers in the food processing  
food service and food retail sectors are the most 
prominent given their legislative requirements  
for pest control services the majority of our 
revenue comes from nonfood sectors where  
we continue to see increasing market penetration 
and growth opportunities 
residential pest control represents 22 of category 
revenue with over 75 of this coming from the us 
and australia on a per capita basis these two 
countries have much larger residential markets for 
pest control than in europe catalysed primarily 
because of the importance of termites in these 
markets in europe residential pest control tends 
to be typically 4 to 8 of category revenue
outlook
in the coming year we will be looking to broaden 
further our global footprint in the growth and 
emerging quadrants in particular our pest control 
operations work together across regions to share 
best practice and build capabilities in strategic 
marketing and innovation we have an excellent 
pipeline of innovations which we expect to launch 
over the coming 12 to 24 months rentokil initial plc annual report 2014
32 strategic report
business review – continued
initial workwear specialises primarily 
in the rental and maintenance of 
garments such as workwear and 
personal protective equipment ppe 
throughout europe it also offers 
specialist cleanroom services 
strategic focus
• repositioning business to focus on workwear garments and on 
increasing sharing of best practice and product ranges across 
countries of operation
• seeking acquisitions in cleanroom market 
• ongoing investment in product and service innovation to deliver 
the best products and more efficient services 
• focus on service quality 
performance
performance in 2014 was held back by the turnaround of benelux 
and the impact of challenging economic conditions in europe 
ongoing revenue decreased by 03 at cer to £428m and  
ongoing operating profit declined by 32 at cer at £66m  
the category has an operating margin of 154 
market 
initial workwear operates across three main european areas – france 
germany and benelux the west european workwear market which 
includes general workwear cleanroom linen and personal protective 
equipment is valued at €9bn with a compound annual growth rate of 
33 it is expected to reach €10bn in 2017 
customers
based on our researchled understanding of people at work we can 
help our customers perform better by providing them with the highest 
quality workwear solutions 
there is an increasing trend by customers to outsource their 
workwear requirements which is fuelling further sales opportunities 
customers are seeking both functional and fashionable workwear 
maintained to the highest standard and with greater transparency on 
costs and performance workplace safety regulation also supports 
the market for protective as well as functional workwear
outlook
the business remains highly profitable and cash generative despite 
the challenging market conditions which we expect to continue in 
2015 and enjoys a strong position in the european workwear market 
it is a good complementary fit with our hygiene business – both 
businesses are routebased and have a shared brand with linked 
services for customers 
international scale
percentage of group revenue  percentage of group operating profit 
revenue £m 
£428m
operating margin
154
operating profit £m
£66m
our workwear business is the only 
organisation with international scale  
in the four main continental european 
markets of belgium france germany 
and the netherlands 
23 21
experts in workwear rentokil initial plc annual report 2014
33 strategic report
corporate responsibility
our service categories – 
delivered responsibly
as a major employer supplier of services 
which protect people and enhance lives 
and customer rentokil initial is thoroughly 
committed to acting responsibly  it is a 
member of the dow jones sustainability 
and britain’s top employers indices
governance
the chief executive has responsibility for corporate responsibility 
cr the company has a robust policy framework for cr 
monitored by internal audit and supported by a broad range of 
training resources and a speakup confidential reporting system
a skilled and engaged workforce
rentokil initial is committed to workplace practices that are based 
on equal opportunities for all colleagues irrespective of age gender 
race colour sexual orientation disability or marital status the 
company’s policy is to recruit appoint and promote on merit as at 
the end of 2014 the company employed 28731 colleagues across 
the company approximately 36 of employees were female 24 
of our senior managers and 25 of our board are female
performance on skills development continued to improve in 2014 
learning and development is delivered primarily through u the 
company’s inhouse university as well as through on the job training 
by the end of 2014 colleagues undertook 66000 u online courses 
these included programmes on our code of conduct health and 
safety legal compliance and leadership development together with 
sales technical and operational topics specific to our business 
engagement and collaboration is supported by sophisticated use 
of google apps including google and hangouts video calls which 
accelerate collaboration networks and lead sharing internally as 
well as reducing travel time energy use and cost for example 
one recognition event in 2014 was attended by 88 people but 
photographs and posts from the event reached 38000 views 
within two days
high standards of health and safety
there is nothing more important in rentokil initial than ensuring that 
‘everyone goes home safe’ at the end of their working day health 
and safety is our first priority and therefore is the first agenda item 
in meetings of senior management including the elt and board 
in addition the board reviews the health and safety policy annually
2014 was a year of further improvement in health and safety 
performance across the group with improvements in lta and wdl 
rates in the majority of our regions but with remaining challenges 
in france and on wdl in north america despite the progress 
across the group regrettably there were two road traffic fatalities 
linked to our operations in 2014 in thailand a motorcyclist died 
after performing a uturn in front of one of our vehicles and in 
south africa there was a second fatality involving a company 
vehicle and a pedestrian
see also harnessing the power of google  
and apps to deliver our service promise
go to page 23
key information
099
2014 target
2193
2014 target
099
2014 outcome
2708
2014 outcome
11
change vs 2013
65
change vs 2013
lost time accident 
lta rate
working days 
lost wdl rate
note for ongoing operations adjusted following the disposal of initial facilities
further details can be found in the  
corporate responsibility report 2014 
available at wwwrentokilinitialcom  
strategic report
corporate governance
financial statements additional information
to read more on board responsibilities
go to page 45
key information
66k
66000 u 
development 
courses undertaken
2
sales colleague 
retention up 2 
points year on year
3
service colleague 
retention up 3 
points year on year rentokil initial plc annual report 2014
34 strategic report
innovation and responsible product stewardship 
rentokil initial invests in an active innovation programme to 
support the responsible delivery of its categories this includes 
full research and development of new products to enhance the 
quality and safety of the company’s services also minimising 
their environmental impact
in hygiene the company has introduced new products with anti
microbial coverings to reduce cross contamination new designs 
which enable more efficient delivery and reduced fuel consumption 
and products to reduce energy consumption in the industrial 
washing process in the uk the hygiene business has introduced 
modular airfresh units which are more environmentally friendly with 
46 waste reduction and safer disposal with 25 less chemicals 
other initiatives which combine innovation with improved health 
safety and environmental outcomes include hygiene sensing to 
improve hand washing compliance use of products approved 
under the eu’s biocidal products directive such as alphachlorolose 
for mice energyefficient fly control units more secure bait box 
designs soda blasting replacing chemicals for graffiti removal and 
wall cleaning safety sheets are provided for all its products and the 
company actively supports organisations such as the campaign 
for responsible rodenticide use crru to improve knowledge 
and understanding of safe pest control 
corporate responsibility – continued
the inaugural winners of the chief 
executive’s safety health and environment 
awards in recognition of their excellent 
performance in 2014 were
15 
benelux workwear and 
hygiene – lta rate 15 
to 073 2013 086
19 
uk pest control lta rate 
19 to 071 2013 088
zero 
uk supply chain 
manufacturing –
zero lost time accidents 
in 2014 one lta since 201 1
59 
australia
lta rate 59 to 155 
2013 380
large business small business
most improved
environmentally responsible service delivery
the company’s environmental plan includes a target of an emissions 
reduction of 10 by the end of 2016 derived from property energy 
and vehicle fuel since 2011 emissions have reduced by 13 
we are pleased to have met our 2016 target more than a year 
in advance
rentokil initial’s principal environmental kpis are water consumption 
in the workwear processing plants where large volumes of water 
are used in the laundry process and energy derived emissions 
our workwear processing plants use water recovery systems and 
boiler water treatment systems to ensure maximum boiler efficiency 
also steamless laundries are being introduced currently in use in 
six plants with energy and water use benefits 
with vehicle emissions representing 65 of energy derived 
emissions companywide initiatives include
•  branch optimisation new scheduling tool launched in 45 
branches in europe south africa and pacific in 2014 further 
roll out in 2015
•  route optimisation new optimisation tool – rolling out to 50 
of 1000 service routes in major europe businesses in 2015
•  driver telemetry north america and france have deployed 
‘trimble’ telemetry across thousands of vehicles leading to 
improved driver behaviours and more efficient vehicle use
•  vehicle selection and engine control unit mapping fuel reduction 
was achieved by remapping engines to local road conditions
key information
20
total company emissions – 
reduced by 20 since 2009 
and by 4 in 2014
17
energy consumption 
workwear laundries –  
reduced by 17 since 2009
26
water consumption 
workwear laundries – 
reduced by 26 since 2009
20
co
2
 emissions  
workwear laundries – 
reduced by 20 since 2009 
co
2
to read more about our innovation programme
go to page 24   rentokil initial plc annual report 2014
35 strategic report
greenhouse gas ghg emissions reporting 
rentokil initial reports on all direct and indirect greenhouse gas 
ghg emissions emissions have been calculated in line with the 
2014 defra reporting standards and calculated using the uk 
government conversion factors for company reporting produced 
for defra and decc 
data methodology
•  emissions calculated using defradecc ‘uk government 
conversion factors for company reporting’ may 2014
•  energy emissions include all emissions derived from property 
energy and vehicle fuel consumption
•  fumigation emissions relate to emissions derived from the use 
of sulfuryl fluoride in large building fumigation contracts 
in 2014 the company continued to measure and report on its use 
of sulfuryl fluoride used in pest fumigation in ten of our country 
operations a significant contributor to emissions in 2014 absolute 
emissions derived from sulfuryl fluoride were 850883 tonnes 
2013 – 380979 tonnes following its use in a number of businesses 
acquired in north america where it remains in widespread use 
there is yearly variability in fumigation gas emissions as the use of 
these gases is typically related to large building fumigation contracts 
which relate to ad hoc customer requirements
data methodology
• index of co
2
 emissions – calculated as an index of kilograms 
per £m turnover on a constant exchange rate basis providing 
an accurate likeforlike performance comparison removing the 
variables of currency and divestments and acquisitions emissions 
resulting from initial facilities and city link have been excluded 
from this table
supply chain
the rentokil initial supplier standard covers product environmental 
social and governance esg issues and ensures bestpractice 
procurement all contracts include antibribery and corruption 
clauses there are just over 1700 direct suppliers with 30 deemed 
critical and managed by group procurement with regular audits 
sustainability risks for critical suppliers are identified and managed 
by group procurement fabric suppliers meet key esg standards 
including fairtrademax havelaar certification fibre citoyenne 
and oekotex chemicals used in pesticides and fragrances 
are validated by the global science centre to ensure regulatory 
compliance in hygiene most hand washing liquids and foams 
and paper supplies carry nordic swan and eco flower labelling
positive community action
in 2014 the company’s community orientated health and 
education programme undertook education training of over 3000 
children exceeding its target by 200 about the importance of 
hand hygiene in india and parts of africa and asia colleagues 
also undertook community activities with funds matched by the 
company’s helping hands scheme these included bike rides and 
ice bucket challenges for the charity malaria no more in the uk 
the company undertook a school education programme on hand 
hygiene and pest control linked to the awardwinning ‘pestaurant’ 
initiative see page 14 charitable cash donations amounted to 
£77000 in 2014 2013 £101000 
total emissions 
tonnes co
2
e
energy derived fumigation derived
2013 2014 2013 2014
direct ghg emissions
relating to the combustion 
of fuel and the operation 
of any facility 219333 218069 380979 850883
indirect ghg emissions
through the purchase 
of electricity heat steam 
or cooling 26864 24876 0 0
environmental 
impacts – 
intensity values 2009 2010 2011 2012 2013 2014
index of energy derived 
co
2
 emissions cer 1000 922 919 852 836 800
strategic report
corporate governance
financial statements additional information rentokil initial plc annual report 2014
36 strategic report
risks and uncertainties
principal risks
the group’s overall risk management approach is designed to 
provide reasonable but not absolute assurance at all levels of the 
group that risks are properly identified and are being effectively 
managed this includes the provision of appropriate mechanisms 
to ensure that issues and concerns relating to risk can be escalated 
up through the organisation confidentially 
the principal risks most relevant to the group are described in the 
table below together with mitigating actions ‘assurance risks’ which 
relate to activities that the group must undertake in order to meet 
legal fiscal and governance obligations are also shown the exact 
financial impact of one or more of our principal risks materialising will 
depend on the precise operational impact of the risk its interaction 
with other risks and whether mitigating actions are successful in 
reducing the overall financial impact however as a rule of thumb 
a 1 decrease in revenue if not mitigated at all would have an 
impact on operating profit in the range of £80m to £120m and 
on operating cash flow in the range of £60m to £100m 
review of risks – risks and mitigating activities are regularly 
reviewed by the board and the senior leadership team but it should 
be noted that remedial actions taken may not be sufficient on their 
own to fully mitigate the risks should they materialise 
other risks – the group is exposed to other risks and uncertainties 
related to environmental political social economic and employment 
factors in the territories in which we operate additional risks and 
uncertainties not presently known to management or deemed to be 
of lower materiality may if they materialise have an adverse impact 
on the group’s growth profitability cash flow andor net assets
managing our principal risks
principal risk risk description mitigating actions
growing our 
business profitably 
in an increasingly 
competitive 
environment
the company’s three primary categories 
pest control hygiene and workwear  
operate in competitive environments 
acquiring new customers and retaining 
existing customers in such competitive 
environments remains challenging failure 
to do so may have a negative impact on 
growth profitability and cash flow
• tracking customer satisfaction and the perception of both customers 
and noncustomers of rentokil initial benchmarked against competitors
• significant investment in innovation to support our market leadership 
positions and support a brand premium through differentiation
• investing in new digital platforms to provide improved channels of 
communication and marketing
• investment in improving sales capabilities including the appointment  
of a sales excellence director
• international accounts team formed in 2014 to develop business with 
multinational customers to take advantage of the company as the most 
international player in our categories
• careful selection of potential acquisition targets to ensure strong cultural 
fit with the brand and our service model whilst supporting growth
principal risk risk description mitigating actions
maintaining 
margins during 
periods of weak 
economic growth
the global economic environment is volatile 
with many western economies experiencing 
historically low gdp growth there is a high 
level of volatility in global commodity prices 
and exchange rates and wide variations in 
local market price and cost inflation across 
the globe in the face of these economic 
pressures our customers may choose not to 
renew contracts or may look for reductions 
in prices or delay payments which may have 
a negative impact on our ability to develop 
margins and cash flow 
• regular monitoring of market pricing trends and individual customer 
profitability to ensure that margin erosion is minimised continuing 
focus on cost with regular reviews of cost base and productivity 
programmes
• group functions with executive authority to deliver economies of 
scale in procurement especially it  fleet and energy and logistics
• reduction in central and regional overheads of £10m in 2014
• investment in tools to monitor customer profitability
• regular monitoring of debtor days outstanding with action taken 
against customers with overdue debts
principal risk risk description mitigating actions
delivering 
consistently high 
levels of service to 
the satisfaction of 
our customers
our business model depends on servicing 
the needs of our customers in line with 
internal high standards and to levels agreed 
in contracts if our operatives are not 
sufficiently qualified or do not have the right 
technical and interpersonal skills or we fail 
to deliver successful innovations this may 
negatively impact our ability to acquire new 
customers andor retain existing customers 
with the consequent impact on growth 
profitability and cash flow 
• creation of an operational excellence team to drive superior 
customer service
• t argets for frontline staff and management based on delivering and 
improving customer service levels
• ‘customer voice counts’ – feedback sought from a range of 
customers used to track customer service quality with improvement 
in cvc scores year on year targeted at all locations
• state of service key performance indicators used to monitor service 
delivery
• hr development processes including leadership  development 
training performance management reward and incentives
full details of the company’s financial risks can be found in 
note c1 on pages 120 to 122 rentokil initial plc annual report 2014
37 strategic report
managing our principal risks – continued
principal risk risk description mitigating actions
business  
continuity
the ability to continuously service customers 
without interruption is essential in a service 
industry in our workwear category where 
clothing is often tailored to individual needs 
business could be adversely affected if 
access to the laundries is not possible due  
to issues such as fire flood it failure or 
industrial action failure to service our 
customers may adversely affect our ability 
to retain those customers and may badly 
damage the company’s reputation this 
may have a negative impact on growth 
profitability and cash flow
• all countries and units required to maintain business continuity plans
• detailed it backup procedures including mirroring of information held 
at regional data centres
• regular feedback sessions with workforce
• procedures in place to ensure that potential industrial disputes are 
escalated quickly to group hr director
• local plans to service customers from adjacent laundriesbranches 
where supply has been interrupted
principal risk risk description mitigating actions
financial  
market risks
we operate in international markets and are 
therefore exposed to foreign exchange risk 
interest rate risk liquidity risk counterparty 
risk and settlement risk if any of these risks 
materialise this may have a negative impact 
on profitability cash flow and financial 
statements and may have a negative impact 
on financial ratios credit ratings andor the 
ability to raise funds for acquisitions further 
details of the impact of financial market risks 
are given in the notes to the financial 
statements on pages 120 to 122
• forward looking financing policy to ensure that the company has 
sufficient financial headroom to finance all but the very largest 
acquisitions t arget credit rating of bbb achieved in 2014
• treasury policies that limit key financial transactions such as use 
of derivatives hedging raising bank finance and opening bank 
accounts
• monthly reporting of financial and liquidity ratios
• cash pooling and debt financing arrangement to match as closely  
as possible currency availabilitydemand across borders
principal risk risk description mitigating actions
fraud financial 
crime or material 
financial 
misstatement
theft of property andor deliberate 
misstating of financial records may result 
in fraud and financial loss to the business 
and damage the company’s reputation
• code of conduct regularly circulated and reviewed locally including 
annual letter of assurance for all senior management
• 26 key financial controls defined centrally and independently 
assessed at country level every year
• mandatory training on code of conduct including competition laws 
antibribery and corruption information security
• international confidential ‘speak up’ hotline and email address 
monitored by internal audit
• significant frauds investigated by internal audit and lessons learned 
widely shared
principal risk risk description mitigating actions
health safety   
the environment
the company operates in a number of 
hazardous environments and situations 
for example
• use of poisons and fumigation materials 
in pest control
• driving to customers across all our 
categories
• working at height
• biohazards from laundering of medical 
and hospital workwear and linen
noncompliance with internal policies andor 
industry regulations could lead to personal 
injury substantial fines andor penalties 
including withdrawal of licences to operate 
damage to the company’s reputation 
• robust and uptodate health and safety hs policies
• hs officers appointed in all jurisdictions
• regular training of all relevant employees in safe working practices 
including mandatory driving training
• hs kpis discussed at all country and regional board meetings
• formal review of accidents and lessons learned widely circulated
strategic report
corporate governance
financial statements additional information rentokil initial plc annual report 2014
38 strategic report
risks and uncertainties – continued
managing our principal risks – continued
principal risk risk description mitigating actions
breach of laws 
andor regulations 
including 
competition and 
antitrust laws
the company is a multinational business 
that operates in many jurisdictions and is 
increasing its business in emerging markets 
including by acquisition and new country 
entry failure to comply with local laws such 
as antibribery and corruption laws 
employment legislation andor financial 
reporting requirements may result in fines 
andor withdrawal of licence to operate 
which could have an adverse impact of 
growth profitability and cash flow
• group legal involvement in all acquisitions including advising  
on risk and regulatory issues
• regular compliance exercises for example on anticorruption and 
antibribery legislation competition law labour law and data 
protection
• authority schedule in place and regularly reviewed
• group and local policies in place and regularly reviewed
• requirement to report breaches in controls andor laws to group 
general counsel and head of internal audit
• mandatory training on code of conduct
principal risk risk description mitigating actions
integration of 
acquisitions
the company has a strategy which includes 
growth by acquiring existing companies 
to extend its geographic footprint andor 
to improve its market share in existing 
geographies if the company fails to 
successfully integrate these acquisitions 
into its existing organisation structures 
the business may not achieve the expected 
financial and operational benefits which 
may have an adverse impact on growth 
profitability and cash flow 
• integration process considered by investment committee as part 
of acquisition approval process
• detailed induction programme for first 100 days
• continuity of managementleadership in acquired companies  
where possible 
• group departments eg health and safety group legal group 
insurance group it  involved early with new acquisitions to drive 
compliance with group standards especially when entering new 
geographies
• review of acquisition benefits against original plan within two years rentokil initial plc annual report 2014
39 corporate governance
strategic report
corporate governance
financial statements additional information
corporate governance
strategic report
our business 2
rentokil initial at a glance 3
statement by the chairman and the  
chief executive 4
2014 performance 8
our business model 9
differentiated strategy 10
markets – key drivers and considerations 11
strategy in action 13
business overview 18
key performance indicators 19
growth levers 21
business review – regional performance 26
business review – hygiene 29
business review – pest control 30
business review – workwear 32
corporate responsibility 33
risks and uncertainties 36
corporate governance
board of directors 40
executive leadership team 42
chairman’s statement 43
corporate governance report 44
audit committee report 52
nomination committee report 58
directors’ remuneration report 60
independent auditor’s report to the 
members of rentokil initial plc 79
 
financial statements
consolidated income statement 82
consolidated statement  
of comprehensive income 83
consolidated balance sheet 84
consolidated statement  
of changes in equity 85
consolidated cash flow statement 87
notes to the accounts 88
principal operating subsidiary  
and associated undertakings 133
fiveyear summary 134
parent company balance sheet 135
notes to the parent company accounts 136
additional information
directors’ report and other statutory  
disclosures 143
additional shareholder information 146
directors’ report
this corporate governance report for the year on pages 39 to 78 forms part 
of the directors’ report disclosures elsewhere in the 2014 annual report are 
crossreferenced where appropriate and taken together fulfil the 
requirements of the companies act the dtrs and the lrs the directors’ 
report and other statutory disclosures can be found on pages 143 to 145 
other information
information relevant to the directors’ report can be found  
elsewhere in this annual report on the following pages 
statutory information location in this annual report
accountability and audit page 144 
acquisitions and disposals  page 44 and notes b1 and b2  
financial statements
appointment of directors page 6
board of directors and  
committee membership page 49
directors’ conflicts of interest pages 40 and 41
directors’ interests in shares page 77
directors’ liabilities  
and protections page 49
employees and gender diversity page 33
going concern page 144
greenhouse gas emissions pages 34 and 35
key performance indicators pages 19 and 20
operating model page 9
pension schemes note a9 financial statements
post balance sheet events note d3  financial statements
risks and uncertainties pages 36 to 38
share capital  note c11 financial statements and 
note 2 parent company accounts
substantial interests in shares page 50 rentokil initial plc annual report 2014
40 corporate governance
board of directors
1 john mcadam 
chairman 66
chairman of the nomination committee
skills and experience 
john joined rentokil initial as chairman in 
may 2008 prior to this he had a successful 
executive career with imperial chemical 
industries plc ici becoming chief executive 
from 2003 until ici’s takeover by akzo nobel 
in 2008 before joining ici he held a number 
of senior executive positions at unilever from 
1974 with birds eye walls quest international 
and unichema international formerly a 
director of severn trent plc and sara lee 
corporation usa
qualifications
graduated from manchester university with a 
first class honours degree in chemical physics 
and after completing his doctorate was 
awarded a research fellowship
other appointments 
chairman of united utilities group plc senior 
independent director of j sainsbury plc and 
nonexecutive director of rollsroyce plc 
advisor to tpg capital llp 
2 andy ransom 
chief executive 51
skills and experience
andy joined rentokil initial as an executive 
director in may 2008 and became chief 
executive in october 2013 before becoming 
chief executive he was responsible for the 
west region business and the group legal 
and ma functions rentokil initial’s 
asiapacific businesses were added to his 
remit in 200809 formerly a senior executive 
at ici 1987–2008 where he was responsible 
for a number of group functions and 
international businesses including ici’s 
regional and industrial divisions he also 
served as the executive vice president of 
mergers and acquisitions general counsel 
and company secretary
qualifications
llb hons law from the university of 
southampton a solicitor 
other appointments 
director and trustee of street league charity
3 jeremy townsend 
chief financial officer and  
chief information officer 51
skills and experience 
jeremy joined rentokil initial as chief financial 
officer in august 2010 and in addition 
became chief information officer in november 
2013 formerly finance director of mitchells 
 butlers plc and previously an executive at 
j sainsbury plc where he held various finance 
roles including group financial controller 
corporate finance director and strategy 
director prior to sainsbury’s jeremy was 
employed by ernst  young working in audit 
and corporate finance
qualifications
graduated from manchester university with 
a first class honours degree in management 
science a chartered accountant
other appointments 
member of the accounting council of the 
financial reporting council
1
4
7
2
5
8
3
6
9 rentokil initial plc annual report 2014
41
strategic report
corporate governance
financial statements additional information
corporate governance
4 peter bamford  
nonexecutive director 60
member of the audit committee
skills and experience 
peter joined rentokil initial as a nonexecutive 
director in july 2006 he brings extensive 
experience to the board over developing the 
marketing agenda for rentokil initial’s brands 
he was one of the key architects of developing 
the global vodafone brand as chief marketing 
officer and director of vodafone group plc 
from 1998 to 2006 prior to this he held senior 
positions at kingfisher plc and tesco plc and 
was a director of whsmith plc he was 
formerly chairman of prs for music limited 
and brandtone holdings limited ireland
other appointments 
chairman of supergroup plc and six degrees 
technology group ltd
5 angela seymourjackson 
nonexecutive director 48
member of the remuneration committee
skills and experience
angela joined rentokil initial as a 
nonexecutive director in march 2012 angela 
was previously chief executive of rac 
motoring services prior to joining rac she 
held roles as distribution director of aviva uk 
life and norwich union insurance
qualifications
a member of the chartered institute of 
marketing and the chartered insurance 
institute with a master’s degree in marketing 
other appointments 
managing director corporate solutions 
at aegon uk plc a nonexecutive director 
of henderson group plc
6 julie southern
nonexecutive director 55
chairman of the audit committee
skills and experience
julie joined rentokil initial as a nonexecutive 
director in july 2014 she has had a long 
successful career in a number of 
commerciallyoriented finance and related 
roles working for some of the world’s best 
known consumer brands most recently she 
was chief financial officer from 2000 to 2010 
and then chief commercial officer from 2010 
to 2013 of virgin atlantic limited prior to this 
julie held a number of financial and 
operational roles in porsche cars great 
britain and wh smith plc
qualifications 
graduated from cambridge university 
with ma hons economics a chartered 
accountant
other appointments
nonexecutive director of nxp 
semiconductors nv nasdaq 
nonexecutive director of dfs furniture plc
7 richard burrows
nonexecutive director 69
member of the remuneration committee 
skills and experience
richard joined rentokil initial as a 
nonexecutive director in january 2008 
he has significant international business 
experience ranging from leading successful 
manufacturing and service businesses in the 
drinks industry to banking and financial 
services roles formerly governor of the bank 
of ireland joint chief executive and latterly a 
nonexecutive director of pernod ricard sa 
france chairman and chief executive of irish 
distillers and a director of cityjet ltd ireland 
mey ìçki turkey and eurasian natural 
resources corporation plc
qualifications
a graduate of wesley college dublin ireland 
a chartered accountant 
other appointments 
chairman of british american tobacco plc 
and voicesage global holdings ltd 
nonexecutive director of carlsberg as 
denmark
8 alan giles 
nonexecutive director 60
chairman of the remuneration committee 
member of the nomination committee and 
audit committee
senior independent director – with effect 
from 1 january 2015
skills and experience 
alan joined rentokil initial as a 
nonexecutive director in may 2006 
he has extensive commercial and strategic 
service industry experience having led two 
major retail brand businesses through 
significant periods of change formerly 
chairman of fat face group limited chief 
executive of hmv group plc managing 
director of waterstones a director at 
whsmith plc and book tokens limited 
and held nonexecutive directorships at 
somerfield plc and wilson bowden plc
other appointments
a nonexecutive director of the 
competition and markets authority 
chairman of the advisory board at the 
oxford institute of retail management and 
associate fellow at oxford university’s 
saïd business school honorary visiting 
professor at cass business school
9 daragh fagan
general counsel  company 
secretary 45
skills and experience
daragh joined rentokil initial in september 
2013 as group general counsel and 
added the role of company secretary on 
30 july 2014 he has extensive inhouse 
legal and company secretarial experience 
in major listed multinational corporations in 
the energy and mediafinancial services 
sectors including significant businesses in 
rapidly developing economies he joined 
the company from thomson reuters 
where he was general counsel europe  
asia and previously general counsel 
emea for reuters group plc before 
reuters he spent ten years in the oil and gas 
exploration industry with eni spa ultimately 
as associate general counsel north 
america north sea  middle east
qualifications 
graduated from cambridge university with 
ma hons in history a solicitor
other appointments
none
note duncan tattonbrown stood down as a director on 
14 may 2014 at the conclusion of the annual general meeting and 
peter long stood down as a director on 31 december 2014  42
rentokil initial plc annual report 2014
executive leadership team
1 andy ransom 
chief executive 51
please see page 40
the chief executive chairs the 
executive leadership team 
comprising the key regional 
business and functional leaders 
they meet regularly to review 
operational performance 
execution against strategy 
governance and risk 
management
2 jeremy townsend 
chief financial officer and 
chief information officer 51
please see page 40
3 jürgen höfling
managing director europe 51
skills and experience
jürgen joined the company in 
october 2014 his previous career 
was in sales and marketing in the 
logistics sector principally 14 
years at deutsche post and dhl 
international he held the position 
of chief executive officer dhl 
global mail responsible for the 
worldwide mail business of  
dhldeutsche post outside 
germany from 2009 he was 
founding partner of theron 
management advisors an 
international management 
consultancy he is a german 
national and fluent in english 
french and german
qualifications
degree in integration  marketing 
wharton school of the university 
of pennsylvania 
other appointments
none 
4 martin sawkins 
group hr director 59
skills and experience 
martin joined the company in 
november 2008 he previously 
held positions as group hr 
director at homeserve plc 
group hr director at the aa ltd 
and hr director at centrica 
home and road services prior 
to this he held a number of senior 
positions in hr and operations 
at british aerospace and united 
biscuits
qualifications 
bsc hons in physics from 
southampton university
other appointments
nonexecutive director 
of wincanton plc and scapa 
group plc
5 stewart power
chief marketing officer 44
skills and experience
stewart was appointed to the 
above position in march 2014 
having covered it on an interim 
basis since december 2013 he 
joined rentokil initial in 2006 as 
director of marketing and 
strategy for the rentokil division 
and became group marketing 
director in 2010 prior to this he 
held roles as marketing and 
strategy director at rac 
business solutions director of 
business solutions at capita 
group and was a management 
consultant with the boston 
consulting group he started his 
career at the boc group plc 
spending seven years in strategy 
marketing and sales roles 
qualifications
mba from london business 
school bsc in physics from 
imperial college university of 
london and a member of the 
chartered institute of marketing 
6 phill wood
managing director  
uk  rest of world 49
skills and experience
phill was appointed to the above 
position in october 2013 he 
joined the company in 2006 as 
managing director europe pest 
control and was appointed 
managing director of the pest 
control division uk and ireland in 
2009 previously at lex service 
rac plc for 15 years holding 
managing director positions of 
commercial fleet and outsourced 
vehicle solution divisions prior to 
that he held commercial business 
development and senior 
operational roles within the lex 
service group
qualifications
first class bsc hons in 
management science from 
loughborough university 
a chartered management 
accountant 
other appointments
none 
7 john myers
managing director  
north america 57
skills and experience 
john was appointed to the above 
position in october 2013 he 
joined the company in 2008 as 
president and chief executive of 
north america pest control 
division his previous career was 
as senior vice president of sales 
at cintas corporation he 
previously held a number of 
operations and business 
development roles within the 
cintas group prior to that he was 
president and chief executive at 
bio quest llc and began his 
career with american national 
can company where he held a 
variety of sales operations and 
marketing roles including one 
international assignment
qualifications
degree in business 
administration from the university 
of vermont and mba from mercer 
university 
other appointments
member of the united way board 
in berks county 
8 daragh fagan
general counsel  company 
secretary 45
please see page 41
1
3
5
7
2
4
6
8
corporate governance john mcadam 
chairman
dear fellow shareholder 
strong corporate governance underpins the successful execution 
of our strategy and helps drive growth in our business and the 
creation of shareholder value by insisting on high standards 
of governance across the company we help create a stronger 
performance culture and ensure throughout the business better 
quicker decision making 
we have continued to streamline our portfolio of businesses in 
2014 under our chief executive with the sale of initial facilities 
in march to interserve plc and have made substantial progress in 
executing against our new corporate strategy put in place at the 
end of 2013 and outlined in last year’s annual report
as described in the strategic report we believe that the clarity 
of our plan supported by an appropriate governance framework 
will deliver a tangible improvement in the return to shareholders
sale of initial facilities 
after the sale of city link in 2013 the sale of initial facilities 
removed a nonstrategic business in our manage for value 
quadrant from the group and allowed the board to focus on 
the core categories of pest control hygiene and workwear 
board composition
the composition of the board has continued to evolve in 2014 
at the agm in may duncan tattonbrown stepped down after 
nine years on the board latterly as audit committee chairman in 
july we were delighted to appoint julie southern to the board as 
our new audit committee chair as mentioned in last year’s report 
peter long our senior independent director who joined the board 
in 2002 stepped down at the end of 2014 peter has made an 
enormous contribution to the work of the board in his 12 years as 
a nonexecutive director and my colleagues and i on the board 
have benefited greatly from his wise counsel during that time alan 
giles has taken over the role of senior independent director from 
1 january 2015 combining it with his role as our remuneration 
committee chairman
it is my responsibility to ensure that board members have a diverse 
range of backgrounds and skills and that they all contribute to our 
decisionmaking each board member brings his or her viewpoint 
to board discussions and collectively as well as individually 
i am confident the board demonstrates the highest standards of 
governance and integrity which is essential to ensuring that these 
standards are reflected across the group
with the appointment of julie southern in july 2014 i am pleased 
to report that we now have a 25 level of female representation  
john mcadam 
chairman 
26 february 2015
at board level which makes us consistent with the recommendations 
of the davies review we will continue to look to enhance the 
composition and diversity of the board over time with a view 
to equipping the board with the optimum range of skills for the 
business’ future development and this will remain an important 
topic for the board in 2015
the board evaluation for 2014 reconfirmed the positive outcome 
of the previous year the ongoing improvement in ratings versus 
2013 and previous years and confirms that the board functions 
effectively some suggestions for improvements were identified 
which are set out on page 46
challenge
a major responsibility of the board is to challenge the executive team 
constructively over its execution of strategy and hold it to account 
over actions taken during the year the board has held meetings in 
oslo with the team leading the business across the nordics with the 
leaders of the business in north america and benelux and with the 
digital marketing and innovation teams one of our nonexecutive 
directors visited our pacific business’ head office in australia and 
spent time with its management while in the region on business 
these engagements not only help directors to develop a better 
understanding of the issues faced in implementing strategy but also 
provide reference points for the assessment of the management 
cadre in the organisation we continue to ensure that the induction 
process for directors includes time with frontline staff and detailed 
briefings on the operational businesses as well as information on 
their responsibilities and the governance framework of the group
reporting and engagement
i hope that you have found the strategic report to shareholders 
on pages 1 to 38 a helpful explanation of our strategy and of how 
the strategy is executed through our business model this year 
we have taken into account the guidance of the financial reporting 
council frc on strategic report preparation issued in june 2014 
the changes in the uk corporate governance code following its 
reissue in september 2014 and ongoing developments in 
remuneration reporting under the new regulations our remuneration 
policy appended to the directors’ remuneration report on pages 
61 to 68 was approved by shareholders at the agm in may 2014 
and will not be put to the vote again until 2017
i hope that the remainder of this report gives you a clear 
understanding of the governance process as well as how the board 
complies with its obligations under the uk corporate governance 
code 2012 the listing rules and the disclosure and transparency 
rules we will continue to keep these obligations under review 
during 2015 
if you are able to attend the agm i look forward to seeing you 
in may in the meantime we are keen to engage with shareholders 
and other stakeholders and would welcome your feedback on this 
annual report please email investorrentokilinitialcom and let 
us know what you think
yours faithfully
 
chairman’s statement
43
strategic report
corporate governance
financial statements additional information
rentokil initial plc annual report 2014
corporate governance corporate governance report
rentokil initial plc annual report 2014
44
good corporate governance from the board down through the business units 
ensures the right decisionmaking processes controls and information to drive 
strategy and deliver longterm shareholder value
compliance statement
as noted in the chairman’s introduction the principal governance 
framework applying to the company is the uk corporate governance 
code ‘the code’ the company has complied throughout 2014 
with the relevant main principles and detailed provisions set out in 
the code published in 2012 this corporate governance report also 
addresses the requirements of the code published in september 
2014 which will apply to future reporting periods from 1 october 2014 
and will seek to comply with the 2014 code from 2015 onwards the 
code is published by the financial reporting council and the full text 
is available on its website at wwwfrcorguk
role and effectiveness of the board
the role of the board
the board is collectively responsible for the longterm success of the 
company by creating value for shareholders and always acting in 
their interests it assesses whether the necessary financial and human 
resources are in place to enable the company to meet its objectives 
as well as ensuring that it takes into account safety environmental 
and social factors when reviewing operations and taking decisions
specifically the board must
•  provide entrepreneurial leadership
•  understand and monitor risk
• develop the business model consider and approve strategy 
approve annual operating plans and major transactions
• ensure the adequacy of management resources and make 
executive appointments including that of the chief executive
• challenge and support executive management oversee the 
governance process and the control framework
• report to shareholders and be accountable to them
a schedule of the matters reserved for the board’s attention is 
reviewed annually and was most recently reviewed in december 
2014 the schedule sets out the board’s ultimate responsibility for 
the group’s strategy operations and risks and reserves to the board 
power to approve a range of decisions of a significant nature the 
schedule is available on the company’s website
without seeking to single out one responsibility above others the 
board is mindful of its responsibility for the group’s risk management 
approach including evaluating and reviewing the overall level of risk 
that is inherent in its strategy and for the execution of that strategy 
the board has carried out a robust assessment of the principal risks 
facing the company including those that would impact its business 
model and future performance and more detail of the key risks 
identified and considered is set out at page 36
an overview of the matters considered by the board in 2014 is shown 
in the table on page 50
key board roles
the division of responsibilities between the chairman and  
chief executive is set out in writing and is summarised on page 45 
together with the primary responsibilities of the senior independent 
director and those of the company secretary nonexecutive directors 
have regular opportunities to meet with members of executive 
management and also hold discussions under the leadership of the 
chairman without executive members present at least once a year 
nonexecutive directors meet under the leadership of the senior 
independent director without the chairman being present
appointments to the board and composition
the company’s articles of association empower the board to 
appoint new directors to ensure a formal rigorous and transparent 
procedure for appointing directors a nomination committee 
comprising independent nonexecutive directors and chaired by the 
company chairman has responsibility for managing the appointment 
process and its work is described on page 58
in order for the board to discharge its duties and responsibilities 
effectively it must comprise the right blend of individuals whose skills 
and experience are gained in a diverse range of backgrounds most 
importantly directors must exhibit independence of mind integrity 
and have the ability to challenge constructively when appropriate all 
appointments are made on merit and against objective criteria in the 
case of candidates for nonexecutive directorships time commitment 
and potential conflicting interests are considered carefully by the 
nomination committee proforma letters of appointment and 
employment contracts are available for public inspection on the 
company’s website
at the date of this report the board has eight members the 
chairman five nonexecutive directors and two executive directors 
the names of the directors serving throughout and at the end of 
2014 and their biographical details are set out on pages 40 to 41 
duncan tattonbrown stepped down as a director on 14 may 2014 
and peter long stepped down from the board as a director and 
senior independent director on 31 december 2014
as mentioned in the introduction diversity considerations are among 
the important factors considered by the nomination committee 
and the board when considering the composition of the board 
the nomination committee and the board will continue to seek to 
identify the bestqualified candidates to enhance the effectiveness 
of the board regardless of gender ethnicity or other personal 
characteristics
corporate governance
corporate governance rentokil initial plc annual report 2014
45
strategic report
corporate governance
financial statements additional information
balance and independence of board members
the board believes that it and its committees have an appropriate 
composition to discharge their duties effectively and to manage 
succession issues the board keeps its membership and that of 
its committees under review to ensure that an acceptable balance 
is maintained and that the collective skills and experience of its 
members continue to be refreshed it is satisfied that all directors 
have sufficient time to devote to their roles and that undue reliance 
is not placed on any individual
all directors may serve on a number of other boards provided that 
they can demonstrate that any such appointment will not interfere 
with their time commitment to the company and that they obtain 
the agreement of the chairman before proceeding this ensures that 
any potential conflicts of interest are considered and addressed the 
major commitments of the directors are shown in their biographical 
information on pages 40 and 41 currently nonexecutive directors 
are obliged to commit at least 20 days a year and the chairman is 
obliged to commit at least two days a week to the company 
the continuing independence of nonexecutive directors is critical to 
their ongoing effectiveness over challenging executive management 
the independence of directors is reviewed as part of the individual 
director performance evaluation process the performance evaluation 
process provides assurance that all nonexecutive members of 
the board retain the independence of judgement which underpins 
the culture of constructive challenge in the boardroom the non
executive directors bring their wide experience to the boardroom for 
the benefit of the execution of business strategy and as a group and 
individually constructively challenge the executive team both at board 
and committee meetings as well as during the many exchanges 
which occur between formal meetings 
all nonexecutive directors other than the chairman have been 
determined by the board to be independent having retained 
their independence of character and judgement in making this 
determination the board has taken into account indicators of potential 
nonindependence as set out in the code no director took part in 
the board’s consideration of their own independence
the board considers that an individual’s independence cannot be 
determined arbitrarily on the basis of a particular period of service 
in the case of peter long who stepped down at the end of 
december 2014 and had served as a director for 12 years the board 
continued to benefit from his considerable experience and knowledge 
resulting from the length of his service as well as from his wider 
business experience 
board responsibilities
  the group’s corporate responsibility performance is in the group’s webbased 2014 corporate responsibility report which is available online at wwwrentokilinitialcom
for more information
go to pages 4749  
chief executive 
andy ransom
duties include
• recommending strategy and 
 strategic priorities
• managing agreed strategies 
 and strategic priorities
• operational and financial 
 performance including 
 identifying and managing risks 
 to delivery of strategy
• with the chief financial 
 officer explaining performance 
 to shareholders
• executive management 
 capability and development
• overall development of group 
 policies
• responsibility for all corporate 
 responsibility matters which are 
 reviewed at least annually by 
 the board and by the executive 
 leadership team
company secretary
paul griffiths
to 29 july 2014 
daragh fagan 
from 30 july 2014
duties include
• secretary to the board and each 
 of its committees reporting 
 directly to their chairmen
• secretary to the executive 
 leadership team reporting directly 
 to the chief executive
• assisting the chairman and 
 senior independent director in 
 their evaluation of the board’s 
 effectiveness
• keeping the board and its 
 committees informed on 
 governance matters and advising 
 on these through their chairmen
• assisting in the overall development 
 of group policies
senior independent
director peter long
to 31 december 2014
duties include
• leading the nonexecutive 
 directors’ appraisal of the 
 chairman
• work with the chairman on 
 board effectiveness
• providing an alternative channel 
 of communication for investors 
 primarily on corporate governance 
 matters
• being a sounding board for the 
 chairman
chairman 
john mcadam
duties include
• leading and managing 
 the board
• providing timely information 
 to directors
• setting the agenda and 
 managing the board’s time
• communication with 
 shareholders
• director induction training 
 and development
• board succession and chair 
 of the nomination committee
• performance evaluation of the 
 board and chief executive
principal governance responsibilities
corporate governance rentokil initial plc annual report 2014
46
corporate governance – continued
directors’ length of service 
board performance training and succession
the board ensures that the directors continue to provide suitable 
leadership for the company through a regular performance evaluation 
process training processes board succession planning and annual 
reelection by shareholders
performance evaluation
this involved an external independent facilitator lintstock engaging 
with the chairman and company secretary to set the context for the 
evaluation lintstock is a specialist corporate governance consultancy 
and has no commercial dealings with the group other than over the 
provision of corporate governance services to the board
actions taken following the 2013 evaluation were as follows
• competitor landscape presentations to the board included 
detailed analyses of the competitive position of the group in its 
key markets and positioning in relation to key competitors and 
generally enhancing the board’s understanding of the competitor 
landscape was a regular feature of briefings by management and 
the chief executive
• differentiated strategy use of the four quadrants emerging 
growth protect  enhance and manage for value became an 
established means of analysing and articulating the performance 
of the business from operational management to growth and 
investment metrics including ma activity
• greater focus on strategic risk issues at the board’s strategy 
review session in november 2014 and periodically during the 
remainder of the year strategic risks and efforts to understand 
and mitigate their impact were discussed by the board
• greater exposure to leadership and talent pool the range 
of executives who engaged with the board during the year was 
broadened and plans for scheduled indepth reviews by the board and 
audit committee of key regions and functions are in place for 2015
the external evaluation in 2014 covered the balance of skills and 
experience independence and knowledge diversity including gender 
of board members how the board works together all of which are 
important factors relevant to an assessment of the board’s effectiveness 
this year there was particular emphasis on the way in which the 
committees the board and the chairman exercised their strategic 
and operational oversight role this included a review of our organic 
and ma growth plans oversight of category and regional strategy 
and the nature of and competitive dynamic in the markets where the 
group operates the review also covered board time management 
strategic and operational risk oversight key talent and succession 
and the quality of information flow and board support the anonymity 
of all respondents was ensured in order to promote an open and frank 
exchange of views
the board considered the output from the 2014 review at its meeting 
on 18 february 2015 the review reported further progress in the 
effectiveness of the board and against the actions identified in the 
2013 review following some suggestions for further improvements 
the board agreed a number of actions summarised below
• operational business reviews allowing more time for formal 
deep dive reviews of all five regional businesses the core categories 
and key functions these have been scheduled into the board 
calendar for 2015 to allow thoughtful detailed preparation
• risk oversight greater time for the audit committee to review the 
schedule of key risks and gaining greater clarity on the effectiveness 
of mitigation measures in addition regional finance directors 
would attend audit committee meetings ahead of regional deep 
dives at the board
• digital marketing building on the greater focus in the second half 
of 2014 this will continue to receive regular updates on progress at 
each board meeting and be reviewed in depth at least once in 2015
• succession planning focus on refreshing the board’s range of 
skills as new appointments are made and succession planning for 
executive and nonexecutive directors
we will report on progress in implementing the actions in the 
2015 report
succession planning
the board is ultimately responsible for succession planning for 
executive and nonexecutive directors the nomination committee 
has conducted a performance evaluation of each nonexecutive 
director seeking reelection and concluded that their performance 
continues to be effective and that each demonstrates commitment to 
the role the committee is also satisfied that the backgrounds skills 
experience and knowledge of the continuing directors collectively 
enables the board and the committees to discharge their duties 
and responsibilities effectively further information on the succession 
planning process is included in the nomination committee report 
on page 58
training
where appropriate directors participate in peer group discussion 
forums and seminars related to the commercial environment 
and targeted at specific needs for example relating to executive 
remuneration financial reporting or risk management training also 
covers the group its business sectors and governance matters more 
generally including individual experiences with frontline staff 
further information on the induction process for new directors is 
included in the nomination committee report 
	
25 03 years
	
12 45 years
	
38 67 years
	
25 89 years
directors’ tenure
corporate governance rentokil initial plc annual report 2014
47
strategic report
corporate governance
financial statements additional information
annual reelection
in accordance with the code the directors are subject to annual 
reelection by shareholders to enable shareholders to make an 
informed decision the 2015 notice of the agm includes biographical 
information and a statement as to why the company believes the 
directors should be reelected the results of the individual director 
performance review undertaken by the chairman indicate that each 
director continues to be effective and demonstrates commitment to 
the role
the board recommends to shareholders the reappointment of all 
directors retiring at the meeting on the basis that they are all effective 
directors of the company and demonstrate the appropriate level of 
commitment to the role the terms of the directors’ service contracts 
are disclosed in the directors’ remuneration report starting on 
page 60 directors’ interests in shares are disclosed on page 77 
directors’ service contracts and the letters of appointment of the 
nonexecutive directors are available for inspection at the company’s 
registered office and will be available at the agm which will take place 
on 13 may 2015 a proforma of the nonexecutive directors’ letters 
of appointment is available at wwwrentokilinitialcom
board committees and board support
in addition to a clear statement of the matters reserved to the board 
each board committee has written terms of reference approved 
by the board summarising its objectives remit and powers these 
are available on the company’s website at wwwrentokilinitialcom 
membership of the principal board committees is shown in the 
directors’ attendance and membership table on page 49
agendas papers and minutes of committee meetings are provided 
to all board members save for the private sessions of committee 
members chairmen of committees update the board following each 
committee meeting the nomination committee is chaired by john 
mcadam the company chairman the chairmen of committees 
attend the agm to answer any questions on the committees’ activities
reports by the principal board committees audit remuneration 
and nomination including a full discussion of their terms of reference 
role structure and composition are set out between pages 52 and 69
for more details see 
audit committee – page 52 
nomination committee – page 58 
remuneration committee – page 68
governance overview
board
investment committee 
it investment 
committee
risk committee
executive
leadership team
disclosure 
committee
finance
committee
audit
committee
remuneration
committee
nomination
committee
functional and regional 
governance
chief executive
corporate governance
senior leadership 
forum
pesthygiene 
category board
workwear 
category board rentokil initial plc annual report 2014
corporate governance – continued
48
in addition to the principal board committees the board operates 
a number of ad hoc committees the main one being the finance 
committee which comprises the chairman the chief executive 
the chief financial officer and nonexecutive directors with 
relevant financial experience this committee reviews matters 
concerning company financing and group treasury policy and makes 
recommendations to the board on financing matters
the chairman supported by the company secretary ensures 
that the board is kept properly informed and that matters are given 
appropriate attention board papers and other information and 
resources are provided in sufficient time to allow directors to be 
properly briefed in advance of meetings all directors are able to 
make further enquiries of the executive directors or management 
whenever necessary and have full access to the company secretary 
who is responsible for advising the board through the chairman on 
corporate governance matters there is also a procedure in place 
for directors to take independent legal advice if they judge this to 
be necessary at the company’s expense
managing conflicts of interest
the directors have a statutory duty to avoid a situation where they 
have or could have a direct or indirect interest that conflicts or might 
possibly conflict with the interests of the company the board is 
permitted under powers from shareholders contained in the articles 
of association to authorise actual or potential conflicts of interest
the company has a procedure in place to deal with the situation 
where a director has a conflict of interest and as part of the process 
the board considers each potential conflict situation on its particular 
merits the board maintains a register of authorisations granted and 
the scope of any approvals given these potential conflicts are not 
material either to the company or the directors believe to the other 
companies that are the subject of the potential conflict the register 
of authorised conflicts is reviewed by the board regularly all of the 
approvals given have been situational and no transactional conflicts 
have occurred 
details of directors’ interests are shown on pages 40 to 41 no 
director has had a material interest in any contract of significance 
in relation to the company’s business at any time during the year 
or to the date of this report
executive governance 
the board’s governance procedures delegate the daytoday 
management of the group’s businesses to the chief executive who in 
turn cascades authority to the wider management population through 
a documented schedule of authorities setting out responsibilities 
decisionmaking and approval powers of managers at different levels 
in the organisation
executive leadership team 
to support the chief executive in managing the business at group 
level the executive leadership team has been established under 
the chief executive’s chairmanship and comprises the group’s 
operational heads for europe north america and uk  rest of 
world and the heads of the finance and it human resources and 
marketing  innovation functions as well as the company secretary 
they meet regularly to review performance operational actions 
governance and risk management biographical information on the 
executive directors andy ransom and jeremy townsend and on 
the company secretary daragh fagan is provided on pages 40 
to 41 and information on other current members of the executive 
leadership team is shown on page 42
senior leadership forum 
the chief executive has also established the senior leadership forum 
comprising approximately 25 of the most senior operational and 
functional colleagues globally who meet on a monthly basis by 
conference call and twice a year in person to share progress and 
discuss a range of issues that are critical to the operational 
performance of the group as a whole
clear roles and responsibilities 
disclosure committee 
the company’s disclosure committee chaired by the chief financial 
officer supports the board’s responsibility for the accuracy and 
timeliness of the disclosures made by the company whether in 
connection with its financial reporting obligations or on other matters 
group risk committee 
the company’s group risk committee chaired by the chief financial 
officer has oversight of the group’s risk and control functions and 
reviews the risks the group is facing and the effectiveness of the internal 
controls it includes the company secretary and representatives from 
the hr operational it finance and internal audit functions risk 
management and internal control is an intrinsic part of the governance 
process as is the identification management and control of risk 
copies of the minutes of the group risk committee are provided to 
the audit committee information on the risk management and control 
framework is provided in the risks and uncertainties section on pages 
36 to 38 and in the audit committee report on pages 52 to 57
investment committee
the company’s investment committee chaired by the chief 
executive and including the chief financial officer group financial 
controller and the company secretary reviews and approves 
investments below the threshold requiring approval by the board 
including ma transactions property sales and investments and 
environmental remediation expenditures 
performance reviews 
the chief executive and chief financial officer lead monthly 
and quarterly business performance reviews with business unit 
management teams 
category boards
there are category boards for pest control hygiene and workwear 
these are forums where the senior operational and functional leaders 
of the relevant category meet to coordinate the development agenda 
for growth and productivity initiatives and to oversee the sharing of 
best practice they meet at least quarterly with the pest and hygiene 
category boards being chaired by the chief executive while the 
workwear board is chaired by the managing director europe
corporate responsibility 
the chief executive is responsible for corporate responsibility and the 
executive leadership team has authority for reviewing all aspects of 
corporate responsibility the board reviews specific corporate 
responsibility matters on a regular basis and on a broader basis at least 
once a year a safety health and environment she report including 
a review of she kpis is the first item on the agenda at each meeting 
of the board executive leadership team and senior leadership 
forum she performance outcomes are published annually further 
information can be found in the corporate responsibility section 
on pages 33 to 35 and at wwwrentokilinitialcom
corporate governance rentokil initial plc annual report 2014
49
strategic report
corporate governance
financial statements additional information
business units 
the governance process in business units comprises the application 
of group and local policies and procedures management oversight 
and the analysis and management of risk all underpinned by the 
group’s values and behaviours the group operates through locally 
constituted and governed legal entities in 63 countries all staff are 
required to act in accordance with principles set out in the group’s 
code of conduct which is communicated internally in full in 14 
languages and in summary format in 32 languages and is available 
to shareholders at wwwrentokilinitialcom
directors’ liabilities and protections
directors are ultimately responsible for most aspects of the 
company’s business dealings they face significant personal liability 
under criminal or civil law or the uk listing prospectus disclosure 
and transparency rules and face a range of penalties including 
censure fines and imprisonment the company considers that it is 
in its best interests to protect individuals who serve as directors from 
the consequences of innocent error or omission since this enables 
the company to continue to attract prudent appropriately qualified 
individuals to act as directors
the company maintains at its expense a directors’ and 
officers’ liability insurance policy to afford an indemnity in certain 
circumstances for the benefit of group personnel including as 
recommended by the code the directors the policy does not 
provide cover where the director or officer has acted fraudulently 
or dishonestly
in addition the company has granted indemnities in favour of 
directors as permitted by s232 to s235 of the companies act 
2006 in general terms the indemnities protect directors to the 
extent permissible by law from all costs and expenses incurred in 
the defence of any civil or criminal proceedings in which judgement 
is given in their favour or the proceedings or otherwise disposed 
of without finding fault or where there is a successful application to 
court for relief from liability the indemnity operates to the extent that 
the director is not able to recover the relevant amounts under the 
company’s directors’ and officers’ liability insurance
board meetings
the board met 11 times during the year all scheduled meetings and 
a committee of the board met six times in relation to the release of 
quarterly results the disposal of initial facilities and the allotment of 
shares under the 2008 oneoff incentive arrangement as in previous 
years the board has this year visited one of its overseas operations 
on this occasion the nordics business the board had the opportunity 
to meet the extended management team of the business and 
conduct a detailed review of the businesses in each of the key nordic 
markets the differences between those markets and the competitive 
dynamic within them and their ability to leverage the resources and 
exchange best practices and innovation with the wider group
a summary of the activities carried out by the board during the year 
is shown on page 50 and directors’ membership and attendance 
at board and committee meetings is shown below
nonattendance at meetings by directors was either as a result 
of unavoidable changes in commitments illness or from ad hoc 
meetings called by the company which conflicted with existing 
arrangements the chairman or committee chairman seeks the 
views of any director unable to attend a meeting and provides 
a briefing on outcomes directors are provided with material for 
all meetings whether or not they are able to attend
directors’ attendance and committee membership
 
 
 
board
audit  
committee
remuneration  
committee
nomination 
committee
john mcadam 11 – – 3 chairman
andy ransom 11 – – –
jeremy townsend 11 – – –
peter bamford 9 6 acting chairman – –
richard burrows 11 – 9 –
alan giles 11 6 9 chairman 3
peter long

9 – 8 2
angela seymourjackson 11 – 9 –
duncan tattonbrown 4 1 chairman – 1
julie southern
†
5 4 chairman
†
– –
total number of meetings 11 6 9 3
 peter bamford acted as chairman at the audit committee meeting on 28 april 2014  
 duncan tattonbrown resigned on 14 may peter bamford acted as chairman of the audit committee in april 2014 in the absence of the chair of the committee 
 peter long resigned on 31 december 2014  
† julie southern was appointed to the board on 21 july 2014 and is the chairman of the audit committee
corporate governance rentokil initial plc annual report 2014
corporate governance – continued
50
key items discussed by the board 
in 2014 the board considered 
• safety health  environment performance and governance
• operational and financial performance including review of the 
annual operating plan
• preparation of the annual report and accounts and quarterly 
and half year financial results
• investor relations activity
• ma activity including the disposal of initial facilities
• reviews of key risks to the business including material disputes
• governance arrangements and processes including conflicts 
of interest board evaluation and board governance structures 
and processes
• strategy for the group and its businesses
• marketing and innovation
• visit to oslo to review the nordics business
• colleague engagement and succession planning
• corporate responsibility
accountability to shareholders
accountability to shareholders is a key consideration and the board 
is extremely conscious that it is a steward of the business and 
that ultimately it manages the group on their behalf accountability 
represents both clear and open reporting on current performance 
and plans for the future and taking into account the views expressed 
by shareholders 
the company has a premium listing on the london stock exchange 
and an adr listing on the new york stock exchange to facilitate 
shareholding by retail investors in the united states all ordinary 
shares carry the same rights and no shareholder enjoys any 
preferential rights regardless of the size of their holding further 
information on the rights attaching to shares can be found in the 
directors’ report on page 144
the company has been notified pursuant to dtr 5 of the following 
substantial interests in the company’s share capital
substantial interests in shares at 26 february 2015
   

no of 
ordinary shares
nature of 
holding
schroders plc 1493 272214223 indirect
ameriprise financial inc 1006 183351215 indirect
invesco ltd 988 179549886 direct
aviva plc and subsidiaries 564 102915768 direct
majedie asset 
management ltd
 
561
 
101963126
 
indirect
artemis investment 
management llp
 
537
 
97646833
 
direct
 ameriprise financial inc includes threadneedle asset management holdings ltd
formal reporting 
the company publishes a half yearly unaudited interim statement 
at the end of julyearly august as well as audited financial statements 
which are announced in february and circulated to shareholders 
in early april from the start of 2015 in accordance with the 
changes implemented by the financial conduct authority with effect 
from 7 november 2014 we will cease formal provision of interim 
management statements on a quarterly basis we will however 
continue to provide simplified quarterly trading updates in may 
and november and make regulatory news announcements when 
required to ensure that all required information is made available 
to shareholders on a timely basis
the code requires that the board provides a fair balanced and 
understandable assessment of the company’s position and prospects 
in its external reporting the board considers that the annual report 
and accounts for 2014 taken as a whole is compliant with the code 
requirement and provides the information necessary for shareholders 
to assess the company’s performance business model and strategy
over 75 of shareholders obtained their primary information on the 
company through electronic communications and the company’s 
website the company strongly encourages shareholders to use 
electronic means for accessing shareholder communications 
saving resources and cost that would be involved in distributing 
printed material shareholders who elect to receive electronic 
communications can revert to paper communications at a future time 
if they so wish the company periodically canvasses shareholders on 
how they wish to receive their shareholder communications and did 
so in february 2014 and february 2015
the company’s website wwwrentokilinitialcom contains information 
on the company’s operations and the website investor section 
contains information on past results and publications press releases 
and analyst presentation material it also contains information to 
help shareholders manage their holdings such as change of address 
or change of name notifications transfer of shares lost share 
certificates online and telephone share dealing facilities and how 
to receive shareholder communications electronically
corporate governance rentokil initial plc annual report 2014
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corporate governance
financial statements additional information
shareholder communications 
the board places great importance on communications with 
shareholders and also recognises the contribution made by other 
providers of capital and is open to hearing the views of such providers 
in so far as they are relevant to the company’s overall approach to 
governance 
the following summarises the activities carried out by the company 
to ensure that investors and other interested parties have a transparent 
and effective dialogue with the company
• the chairman chief executive and chief financial officer make 
themselves available to shareholders at all appropriate times
• regular dialogue with institutional shareholders through onetoone 
and group meetings formal investor and analyst conference calls 
as well as adhoc communications where appropriate
• formal presentations are held after fullyear and halfyear results 
to which investors and sell and buyside analysts are invited these 
presentations are webcast and any investor is able to hear the 
presentation and related questions and answers via the company’s 
website slide presentations of results are hosted on the company’s 
website as are recordings of meetings
• conference calls for investors and analysts are hosted after the first 
and third quarter trading updates with typical levels of participation 
in excess of 80 shareholders and analysts
• investor roadshows are conducted after fullyear and interim results 
involving extensive investor meetings on each occasion 
• the chief financial officer supported by the group financial 
controller and treasurer regularly meets with and hears the views 
of representatives of the debt capital markets
• the chairman the senior independent director and committee 
chairmen are available to attend meetings with investors as 
required and will typically do so on a number of occasions annually
• the company provides opportunities for private client investor 
presentations across the uk
• the board receives material issued by shareholder representative 
groups to ensure that the views and preferences of investors are 
taken into account
• the company sees the agm as an important opportunity for all 
shareholders to engage with the board over performance and other 
matters on the agenda for the meeting and encourages both private 
and institutional shareholders to attend 
• the board is briefed on the company’s investor relations 
programme through a regular report from the head of investor 
relations as well as by periodic updates from the chief executive 
and the chief financial officer
additional information for investors can be found on pages 146 to 148
annual general meeting 
the agm will be held at 12 noon on 13 may 2015 in the ascot suite 
at the london gatwick hilton hotel south terminal crawley 
west sussex rh6 0ll a separate notice of meeting containing 
explanation of the items of special business has been sent to 
all shareholders and is available at wwwrentokilinitialcom the 
company encourages all shareholders to attend the agm and to 
participate in discussion of the matters at the meeting the chief 
executive will present to shareholders on the company’s strategy and 
performance and all directors will be available to answer questions 
both formally at the meeting and informally over lunch voting at the 
agm will be conducted by a poll and the results announced to the 
market and displayed on the company’s website the day following 
the agm
john mcadam 
chairman 
26 february 2015
corporate governance audit committee report
dear shareholder 
the audit committee has a clear set of responsibilities which are 
laid down in its terms of reference and agreed by the board these 
terms of reference were reviewed and updated during the year and 
conform with the requirements of the uk corporate governance 
code 2012 the code and to the best practice standard laid down 
by the institute of chartered secretaries and administrators icsa
the committee comprises only independent directors and its 
overriding purpose is to provide assurance to the board that the 
interests of shareholders are appropriately protected principally 
in the areas of financial reporting both internal and external and 
over the effectiveness of the internal control environment and of the 
internal and external audit processes the role of the committee is 
set out in this report and the terms of reference are available at  
wwwrentokilinitialcom
the code requires that the committee report on significant matters 
considered during the year the committee has therefore set out 
its position formally on the issues relating to the financial statements 
where key judgements were taken these are
• restructuring costs
• the annual impairment assessment of goodwill and acquired 
intangible assets and
• provisions for tax contingencies and uk deferred tax asset 
recognition
in the audit report on pages 79 to 80 the auditor also provides 
a commentary on what they consider to be the significant matters 
of judgement taken in respect of the financial statements i am 
comfortable that all material issues of accounting judgement have 
been fully discussed by the committee and that there were no 
divergent views between management and the auditor that were 
not resolved 
in addition to consideration of areas of accounting judgement we 
have set out on pages 53 to 54 a summary of all the activities of 
the committee during the year divided between the committee’s 
primary areas of focus internal controls and risk external audit 
and financial reporting 
i took on the role of chair of the audit committee in july 2014 from 
duncan tattonbrown who had stepped down after chairing the 
committee since july 2003 i am grateful to duncan for leaving me 
with such a sound platform to build on and have been delighted 
to take on the chairmanship of such a wellfunctioning committee 
julie southern 
chairman
audit committee
whose members are very engaged with the work required of them 
in his report last year duncan commented on the organisation’s 
improved control framework and it has been encouraging in my first 
five months to see this trend continue with evidence of positive and 
transparent engagement between different parts of the business 
and the internal audit team in 2015 we will continue to focus on 
improving financial controls in particular taking the lessons learned 
from divisional audits during the disposal of initial facilities and 
from the issues on a significant commercial contract in belgium 
and strengthening the review of business processes to support 
the delivery of the business strategy
although the business has a mature risk management process we 
will strengthen it further for 2015 by the addition where possible 
of explicit targets to allow the business to better demonstrate 
progress on the mitigation of the risks identified the committee 
also plans to have regular attendance from regional financial 
directors which will allow us to access a good local view and give 
us a deeper insight into the financial talent in the wider business
as described in this report we will continue to monitor the 
effectiveness of the internal audit assurance process but the 
committee has seen clear benefit from the more thematic and 
targeted approach to internal audit assurance over the last two 
years which has helped to ensure that internal audit’s forward
looking programme is fully aligned with the group’s risk profile 
and its strategy
the committee has considered the recommendations of the code 
and related guidance in relation to tendering the external audit at 
least every ten years as shareholders will be aware kpmg llp 
were appointed auditor to the group in 2009 following a competitive 
tender as reported last year the lead audit partner appointed in 
2009 retired from the firm early in 2013 and the company had a 
new lead audit partner with effect from the beginning of the 2013 
financial year given that the committee is comfortable with the 
effectiveness of the audit process and the committee’s relationship 
with kpmg llp is good the committee does not see audit re
tendering as relevant to the company at the present time 
i continue to be satisfied that the committee has been provided 
with good quality and timely material to allow proper consideration 
to be given to the committee’s responsibilities the committee has 
met with the internal and external auditors without management 
present on a number of occasions and i have a regular dialogue 
with the external audit partner the chief financial officer and the 
director of risk and internal audit
yours faithfully
julie southern 
chairman  
audit committee 
26 february 2015
rentokil initial plc annual report 2014
52
audit committee
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strategic report
corporate governance
financial statements additional information
role of the committee 
the audit committee assists the board in its oversight and monitoring 
of financial reporting risk management and internal controls the 
committee’s focus is to review and challenge in these areas both with 
management and with internal and external auditors the committee’s 
terms of reference include a responsibility on the committee to advise 
the board on whether the content of the annual report taken as a 
whole represent a fair balanced and understandable representation 
of the company’s performance financial position and prospects
the committee
• monitors the integrity of the annual and halfyear results and interim 
management statements including a review of the significant 
financial reporting judgements contained therein
• keeps under review the company’s internal financial controls and 
internal control and risk management systems
• provides the board with an independent assessment of the group’s 
accounting affairs and financial position
• monitors and reviews the effectiveness of the company’s internal 
audit function
• establishes and oversees the company’s relationship with the 
auditor including setting their fees monitoring their independence 
and effectiveness and ensuring that the company’s policy relating to 
their engagement on nonaudit matters is appropriate and observed
• monitors matters raised pursuant to the company’s whistleblowing 
arrangements
the committee reports to the board on its activities and minutes of 
meetings and material considered by the committee is shared with 
the board
the board is required by the code to present a fair balanced and 
understandable assessment of the company’s position and 
prospects in relation to this requirement reference is made to the 
statement of directors’ responsibilities for preparing the annual 
report and the financial statements set out on page 145
terms of reference
the terms of reference of the committee are available at  
wwwrentokilinitialcom the committee’s terms of reference were 
reviewed by the committee during 2014 and the board approved 
a number of amendments to the text to ensure that the terms of 
reference are fully aligned to current best practice they take full 
account of the frc guidance on audit committees
composition of the committee
the members of the committee are set out on page 49 in the corporate 
governance report julie southern is a chartered accountant with 
extensive financial and accounting experience duncan tattonbrown 
who chaired the committee until he stepped down in may 2014 is a 
chartered management accountant with extensive financial and 
accounting experience both peter bamford and alan giles have 
extensive commercial and operational experience in overseeing the 
financial affairs of substantial business undertakings biographical 
information on all committee members is set out on pages 40 to 41 
committee members are all independent nonexecutive directors 
and both duncan tattonbrown and julie southern are considered 
by the board to have recent and relevant financial experience 
the committee did not find it necessary to seek external advice 
during the year other than through its usual dialogue with the auditor
meetings of the committee are attended by the chairman the chief 
executive the chief financial officer the auditor the director of risk 
and internal audit and the company secretary other company 
executives attend meetings periodically such as the group financial 
controller and treasurer the group tax director and the regional 
finance heads who periodically update the committee on control 
and reporting within their areas of responsibility
activities of the committee in 2014
the committee met six times during the year and attendance 
at those meetings is shown on page 49
key items discussed by the audit committee
in 2014 the committee considered
internal controls and risk 
• the status of the control environment
• the outcome of internal audit investigations and status 
of resolution of issues raised
• group risks and actions to enhance their measurement 
monitoring and mitigation actions 
• review and enhancement of relevant policies and procedures 
including the group authority schedule
• review of issues including controls weaknesses arising from 
divisional audits and on a significant commercial contract 
in belgium 
• review of issues arising from divisional audits relating to the 
disposal of initial facilities
• group reporting processes and the central control environment 
including review of group risk committee minutes
• the conclusions and themes emerging from the internal audit 
investigations conducted during the year and approved the 
plans for 2015 in parallel with the board’s strategic review 
and operating plan for the year
external audit
• the terms and scope of the audit engagement for the annual 
halfyear and quarterly financial statements together with fees 
charged
• the effectiveness of the external audit process
• a review of the annual financial statements consideration of 
principal areas of accounting judgement or materiality further 
details of which are provided in this report including discussions 
with the auditor without executives present
• compliance with the company’s policy on the provision of non
audit services by the auditor
• the audit strategy for the 2014 audit including the key areas 
of focus materiality levels scope and coverage
• an analysis setting out the basis on which kpmg llp continued 
to meet the appropriate professional standards of independence 
as auditor to the company
corporate governance rentokil initial plc annual report 2014
54
audit committee – continued
accounting financial reporting
• the effectiveness of the internal control and risk management 
framework and consideration of the statement to shareholders 
on the control environment
• the annual halfyear and quarterly financial statements together 
with the significant financial reporting judgements relating to 
each statement
• a review of material litigation and claims
• a review of and recommendation to the board in relation to the 
going concern analysis
significant issues considered by the audit committee
after discussion with both management and the auditor the 
committee determined the key issues of accounting judgement 
affecting the financial statements and therefore providing the potential 
for material misstatement in the group’s financial statements related 
to be
• restructuring costs
• the annual impairment assessment of goodwill and acquired 
intangible assets and
• provisions for tax contingencies and uk deferred tax asset 
recognition
these issues have been discussed and reviewed by the committee 
during the year but notably at the review of the interim results and 
at the review and agreement of the audit plan for 2014
restructuring costs
there has been a material reduction in the level of restructuring 
costs in 2014 approval of any restructuring costs requires a specific 
business case and authorisation from the chief financial officer and 
chief executive as a result of the reduced level of restructuring costs 
in 2014 and the anticipation that they will be at or below this level 
in 2015 the committee does not consider this to be a key issue 
going forward
annual impairment assessment of goodwill and acquired 
intangible assets
the group has £3913m of acquired intangible assets at 
31 december 2014 management is required to perform annual 
tests for potential impairment of goodwill and other intangible assets 
the group’s principal nonfinancial assets are grouped into cash
generating units cgus for the purpose of assessing the recoverable 
amount – usually a country business unit where a cgu carries 
goodwill above the local equivalent of £1m sterling this must be 
tested for potential impairment using a centrally provided model for 
goodwill balances below the local equivalent of £1m sterling cgus 
are only required to satisfy themselves that nothing has happened 
since the previous review or since the goodwill balance was 
established that would indicate any impairment 
cash flows are based on recent strategic plans as amended for any 
significant changes since preparation discount rates used for cash 
flows must be the applicable rate from the internally published group 
discount rates which are adjusted for local country risk cgus are 
required to provide positive confirmation that they have performed 
impairment tests and where applicable that they are satisfied that 
no impairment of goodwill is necessary
the auditor reviews the centrally provided model and a sample 
of individual cgus impairment testing as well as evaluating the 
procedures undertaken to identify indicators of impairment in the year 
although the total values of intangible assets are significant 
management has been able to demonstrate to the committee that 
there is material headroom in the major balances based on the 
assumptions made
provision for tax contingencies and uk deferred tax 
asset recognition
the group holds a number of provisions for outstanding tax 
exposures which arise in the normal course of business the group 
operates across a wide range of tax jurisdictions representing many 
different approaches to the charging and collection of corporation tax 
due to the complexity of the group’s tax position there are a number 
of areas where significant judgement is exercised the group employs 
local tax experts to support judgements where there is significant 
uncertainty and the amounts involved are material in respect of 
transfer pricing across tax jurisdictions the group has benchmarked 
its approach using international tax experts to ensure the risk of 
breaching local tax authority requirements is mitigated in addition 
the group has deferred tax assets that have been recognised in 
respect of tax losses in the uk there is inherent uncertainty involved 
in both evaluating the accessibility of the tax losses and in estimating 
the quantum of future uk taxable profits to utilise the assets where 
the judgements are material to the group the auditor uses its own 
specialists to assist in the review of the approaches taken and 
assumptions made by management and ensure these result in 
adequate provisions the committee is satisfied that the assumptions 
supporting the valuations are appropriate and that the assets are 
reasonably stated in the financial statements
internal audit 
the group has an internal audit team led by the director of risk 
and internal audit where justified by the need for local language or 
technical expertise in particular markets the team draws additional 
resources from external practices principally deloitte llp in 2014 
this was for the audits of turkey and brazil only the committee also 
has the benefit of the output from the controls testing carried out by 
the company’s auditor kpmg llp  the director of risk and internal 
audit reports to the chief financial officer and has direct lines of 
communication with the chairman of the audit committee the chief 
executive and the company chairman as well as to all operational 
and functional leaders in the business 
the company has completed the changes to the structure of the 
internal audit function started in 2011 and the committee remains 
comfortable that the assurance process has been enhanced by the 
changes made the effectiveness of the internal audit function will 
be kept under review 
corporate governance rentokil initial plc annual report 2014
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corporate governance
financial statements additional information
during the year internal audit continued with the approach first 
adopted in 2012 to review a broad range of business processes 
in depth at a relatively limited number of business locations the 
audit plan approved by the committee in december 2013 has been 
completed with a number of additional investigations carried out at 
the company’s request during the year the common themes and 
related recommendations arising from the 20 audits and investigations 
completed or in progress considered by the committee covered 
key financial controls entertainment and expenses state of service 
performance monitoring it general controls and entity level controls 
pricing strategy sales and customer account management customer 
contract management stock and warehousing business continuity 
management and compliance with treasury policy health and safety 
policy and code of conduct compliance
in each area of focus recommendations for implementation of 
additional controls or improvements to the existing controls were 
agreed with management and realistic time frames set for actions to be 
completed progress on the completion of agreed recommendations 
is reviewed by the committee and it noted that the number of 
overdue audit recommendations is at a historically low level
none of the failures identified by internal audit in the control 
environment or any of the recommendations resulting from individual 
audits represented a systemic underlying issue and overall the work 
of the internal audit function is supportive of the committee’s and 
the board’s view set out in ‘risks and uncertainties’ on page 36 
that the financial controls environment is working adequately
external audit
audit services 
the auditor is appointed by shareholders to provide an opinion 
on the financial statements and certain other disclosures prepared 
by the directors kpmg llp has acted as the auditor to the group 
throughout the year the committee is responsible for oversight of 
the auditor agreeing the audit strategy and related work plan as well 
as approving their fees
the auditor attends all meetings of the committee and meets 
with the committee without executive management present the 
main engagement with the committee in 2014 has been over the 
review and publication of annual and periodic financial statements 
and consideration of the changes required this year in reporting to 
shareholders on the committee’s activities in relation to its review of 
the financial statements as provided in the code the committee 
considers that it has an effective working relationship with the external 
audit team as reported below the committee has formally reviewed 
the effectiveness of the auditor and is satisfied with their performance 
audit related and nonaudit services
to safeguard the objectivity and independence of the auditor the 
company has a policy on the engagement of the auditor’s services 
on audit related and nonaudit services the committee accepts that 
certain work of a nonaudit nature is best undertaken by the auditor 
the policy sets out the nature of services that are permitted and 
those that are specifically prohibited in general permitted services 
would be limited to matters that are closely related to the annual audit 
process or where a detailed knowledge of the group is advantageous 
the auditor is permitted to be engaged on transaction services but 
not to undertake any work which would itself be subject to audit the 
committee reviews regularly the amount and nature of nonaudit work 
performed by the auditor to ensure that the auditor’s independence 
is not compromised any engagement on permitted services in 
excess of £50000 requires the approval of the chairman of the audit 
committee and any engagement in excess of £250000 requires the 
approval of the committee a copy of the policy is available at  
wwwrentokilinitialcom
fees for audit related and nonaudit services incurred during the year 
amounted to £06m 2013 £05m representing 27 of the audit 
fees details of the fees paid for audit services audit related services 
and nonaudit services can be found in note a11 to the financial 
statements 
disclosure of information to the auditor
the committee monitors the process leading up to the preparation 
of financial statements including the arrangements the company 
has in place for disclosing all relevant audit information to the auditor 
a formal confirmation on disclosure of information to the auditor is 
provided in the directors’ report on page 145
effectiveness 
under the code the committee is required to review and monitor 
the auditor’s independence and objectivity and the effectiveness of 
the audit process taking into consideration relevant uk professional 
and regulatory requirements the 2013 audit was completed and all 
milestones reached including dealing with the additional complexity 
caused by the disposal of initial facilities there were no significant 
unexpected events relating to the publication of the yearend results 
the committee conducted a review of the auditor’s effectiveness 
during the year drawing input from the chief financial officer the 
director of risk and internal audit and other members of the senior 
finance management team as well as from the majority of the finance 
directors of the group’s subsidiaries the process made use of a 
formal evaluation using a questionnaire which was completed by 39 
business units as well as by the central accounts tax and treasury 
functions the questionnaire covered
• resources and expertise of the external audit team 
• effectiveness of the audit process 
• effectiveness of the financial controls testing process 
the committee considered the detailed findings of the review  
which included a number of detailed recommendations none of 
which was material in the overall context of the group audit but 
was helpful in relation to improvements in the company’s processes 
and those of the auditor taking all responses into account the 
scoring mechanism which was the same as in the previous year 
demonstrated that the audit performance was effective and at a 
similar level to the previous year 
corporate governance rentokil initial plc annual report 2014
56
audit committee – continued
auditor independence and objectivity 
in concluding that kpmg llp should be proposed for reappointment 
as auditor at the 2015 agm the board and the audit committee 
took into account the need to ensure that auditor independence was 
safeguarded the audit committee also took into account the review 
undertaken of the effectiveness of the audit process as well as input 
from executive management
the company considers that there are sufficient controls and 
processes in place to ensure that the required level of independence 
is maintained the board does not consider that there is any material 
risk of the company’s auditor withdrawing from the market 
auditor retendering 
following a tender process in 2009 kpmg llp replaced 
pricewaterhousecoopers llp as the group’s auditor the code 
states that ftse 350 companies should tender the provision of audit 
services at least every ten years or explain their approach if different 
a resolution concerning kpmg llp’s proposed reappointment as 
auditor and setting of its fees will be proposed at the agm of the 
company to be held on 13 may 2015
group’s approach to risk management and 
internal control
the group’s approach to managing risk and ensuring that an effective 
internal control environment is maintained is described below and the 
board’s statement on internal control and risk is set out in the section 
immediately following
the identification and management of risk is fully integrated into 
the development of the group’s strategy and into the daytoday 
operational execution of the strategy by the regions and business 
units ensuring that risks are identified and managed effectively is 
a part of every manager’s and supervisor’s job through leadership 
of the teams for which they are responsible
the board has overall responsibility for the group’s risk management 
approach which includes
• review and approval of the group’s overall strategy including overall 
risk appetite this includes reviewing the risks that may prevent the 
group from achieving its objectives and ensuring that these risks are 
mitigated or managed to an acceptable level
• regular reviews of business performance including updates of the 
risks that the business is facing and challenging management to 
obtain assurance that these risks are being effectively managed
• review of management’s approach to identifying and managing 
risk including approval of the group key risks schedule and 
recommending enhancements
• evaluation of the effectiveness of internal controls including 
financial operational and compliance controls
• evaluation of the effectiveness of internal and external audit 
• delegation of authority to the chief executive and chief financial 
officer to make commitments on behalf of the company
some of the above responsibilities are delegated to the audit 
committee the full remit of which is described above 
the audit committee receives regular reports from the chief financial 
officer and the director of risk and internal audit on financial controls 
and process improvement programmes these include
• an annual report on the overall status of the control environment in 
the group including the results of testing and reports on identified 
areas of weakness in controls
• action plans on control environment improvements and updates 
on their implementation 
• updates on control breakdowns and planned actions to prevent 
a recurrence
• periodic reports from divisional and functional finance executives 
and internal audit
the group risk committee chaired by the chief financial officer 
includes senior functional executives with daytoday responsibility 
for the internal control environment covering financial hr and it 
systems legal and regulatory compliance as well as the director 
of risk and internal audit and a representative of operational 
management the group risk committee supports the audit 
committee and executive management by
• providing oversight of the framework for managing risk throughout 
the group
• providing oversight of the processes for reviewing the effectiveness 
of the group risk management framework and internal control 
systems
• assisting the committee and the board assess the risks the group 
is prepared to take
• monitoring emerging risks
• determining internal responsibility for appropriate mitigating 
strategies
specific programmes are used to support implementation of 
the code of conduct and underlying policies national laws and 
regulations in some cases dedicated specialists ensure that 
standards are set and complied with for example in health and 
safety it security pensions and tax more broadly elearning training 
including on the u learning management platform is used to ensure 
that expected standards of behaviour are widely disseminated and 
adopted across the group for example to ensure understanding of 
the code of conduct and compliance with competition law and anti
corruptionantibribery legislation 
independent reassurance of the effectiveness of risk management 
and internal controls across the group is provided to the chief 
executive and the board by group internal audit
the board delegates daytoday management of the company to the 
chief executive who together with his executive leadership team 
is responsible for daytoday identification and management of risk 
which includes
• setting targets and objectives for their respective teams in line with 
the agreed group strategic direction 
• monitoring of business performance through monthly and quarterly 
meetings with regional and functional leadership 
• compilation and regular review of the group risk register and the 
status of mitigation actions
• ensuring that operating units maintain sound systems of internal 
control and appropriate assurance mechanisms including controls 
relating to the preparation of financial statements health and safety 
and employment matters
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strategic report
corporate governance
financial statements additional information
• delegating authorities to ensure that decisions are made at the most 
appropriate level in the organisation taking into account the level of 
risk involved financial and nonfinancial
• demonstrating behaviours in line with and promulgating the code 
of conduct a copy of which is available at wwwrentokilinitialcom 
board statement on the effectiveness of risk 
management and internal control 
the board has overall responsibility for maintaining sound systems 
of risk management and internal control and for reviewing their 
effectiveness the systems of internal control and risk management 
have been developed to ensure compliance with the code on internal 
control and risk management
the system of risk management and internal control described in the 
preceding section is designed to manage and mitigate risk rather than 
eliminate the risk of failure to achieve business objectives in pursuing 
business objectives internal controls and risk management can only 
provide reasonable and not absolute assurance against material 
misstatement or loss
risks are considered in the context of longterm strategic and 
emerging threats mediumterm challenges associated with business 
change programmes shortterm risks triggered by changes in the 
external and regulatory environment shortterm risks in relation to 
internal operations and control
the board gains confidence over the effectiveness of control 
processes through regular and transparent management reporting 
the governance processes and from the external and internal 
assurance processes the board reviews the strategic risks facing 
the group and mitigating actions as part of its annual review of 
strategy and operational risks
the audit committee assists the board in meeting its obligations 
for maintaining sound systems of risk management and internal 
control and a summary of the committee’s activities in 2014 is 
provided earlier in this report the board has conducted a review of 
the effectiveness of the system of internal control for the year ended 
31 december 2014 and confirms that
• the group has an ongoing process for identifying evaluating 
and managing the significant risks faced by the group
• this process has been in place for the year under review and up 
to the date of approval of the annual report and accounts
• the process is regularly reviewed by the board
• the process accords with the code
code of conduct 
updated mandatory online training was issued on the group’s code 
of conduct and on other compliance areas including competition law 
antibribery and corruption and securing information and protecting 
privacy enhanced monitoring and recording of training completions is 
achievable using the u platform over 58 of colleagues invited to 
partake have participated in these online training modules 
the code of conduct is distributed in full in 14 languages and in 
summary format in 32 languages covering all of the group’s material 
operations and a communications programme and material for 
workplace briefing to support reinforcement of code of conduct 
compliance is embedded in the business units the effectiveness of 
the communications programme is reviewed by group internal audit 
the code communications for frontline colleagues includes specific 
material tailored to each business category flagging the key ‘do’s 
and don’ts’ of responsible business conduct that are embedded 
in the group’s code of conduct the board will continue to keep 
policies supporting code of conduct compliance under regular 
review to ensure that they are appropriate and effective
whistleblowing ‘speakup’
there are policies and procedures in place for the reporting by 
colleagues of suspected wrongdoing for these suspicions to be 
formally investigated and for the results of the investigation to be 
reported to the whistleblower the committee receives a report on 
control incidents arising from whistleblowing as well as from other 
sources the committee also reviews periodically processes which 
the company has in place to ensure that in all territories there is 
an effective communication process through which colleagues are 
kept informed about the whistleblowing process global freephone 
numbers and a dedicated email address have been established 
in addition to workplace material for colleagues multiple language 
information on the ‘speakup’ programme is prominently displayed 
on the group and individual business unit intranet sites
committee effectiveness
the committee conducted a review of its effectiveness using the 
services of lintstock an independent external corporate governance 
consultancy the review concluded that the committee was 
performing effectively and had received sufficient reliable and timely 
information from management to enable it to fulfil its responsibilities
julie southern 
chairman  
audit committee 
26 february 2015
corporate governance nomination committee report
rentokil initial plc annual report 2014
58
nomination committee
dear fellow shareholder 
the nomination committee provides a focus for the key task 
of ensuring that the board continues to comprise a group of 
individuals who work effectively together as a team and who 
possess the right mix of experience and talent to provide effective 
oversight and challenge to management 
after the selection of a new chief executive in 2013 the 
committee’s principal task in 2014 was to appoint a new 
chairman of the audit committee to succeed duncan tatton
brown after a thorough review of external candidates with the 
assistance of korn ferry julie southern was appointed to the 
board and to the position of chairman of the audit committee 
in july julie has brought a wealth of experience and expertise 
to the board and the operations of the audit committee and we 
look forward to benefiting from her contribution over the years 
to come
the committee continued to review the development of the 
senior cadre of executives in the company and we were pleased 
to note that a significantly higher proportion of appointments in 
the senior management team were being made from internal 
candidates demonstrating improved strength in depth in the 
management and improving the likelihood of future executive 
director roles being appointed from within the organisation
the committee’s report on the year follows
yours faithfully
john mcadam 
chairman
john mcadam 
chairman  
nomination committee 
26 february 2015
role of the committee 
the committee has delegated authority from the board as set out 
in its terms of reference the primary purpose of the committee 
is to ensure that a regular rigorous and objective evaluation of 
the structure size composition balance of skills knowledge 
and experience of the board is undertaken and to recommend 
any changes to the composition of the board and its committees 
and to instigate and manage recruitment processes
material findings and recommendations are reported at the next 
board meeting and copies of the minutes of meetings are circulated 
to all directors where appropriate
the terms of reference of the committee were reviewed by the 
committee during 2014 and are available at wwwrentokilinitialcom 
composition of the committee
the composition of the committee and attendance at meetings in 
2014 is shown in the chart on page 49 the committee met three 
times during the year all nonexecutive directors are invited to 
participate in meetings of the committee
appointment process and diversity
our policy on appointments to the board is set out in the corporate 
governance report on page 44 in brief all appointments are 
made on merit against objective criteria and the process is usually 
supported through the use of an external recruitment consultant 
this process was followed over the appointment of julie southern 
in 2014 the process typically commences with the selection of a 
suitable recruitment consultant who will be briefed on the skill sets 
and candidate experience we were seeking to attract the recruitment 
consultant korn ferry in the case of julie southern then prepares 
a candidate specification for approval by the committee thereafter 
potential candidates are identified interviews take place with 
members of the committee with other nonexecutive directors and 
with executive directors following which the nomination committee 
forms a recommendation for consideration by the board 
a similar process is undertaken when external candidates are under 
consideration for executive roles
the board remains of the firm view that in order to secure the best 
talent either for the board or for within the business it is essential 
to draw on the widest possible talent pool and our diversity policy 
requires selection from diverse objective and purely meritbased 
shortlists diversity enriches debate and problem solving at board 
level and enhances operational performance as well as governance 
processes the board meets the davies report’s targets for more 
balanced gender representation
the board is mindful that as director rotation occurs candidates 
will be sought who fit the skills criteria and gender balance that is in 
line with the board aspiration and the needs of the global business 
we continue to focus on encouraging diversity and business skills 
and experience throughout the group recognising that directors 
and leaders in our businesses with diverse skill sets capabilities 
and experience gained from different geographic and cultural 
backgrounds enhance the effectiveness of the organisation 
the gender breakdown for the group as a whole some 28731 
colleagues at the end of 2014 and for the senior management 
population some 1388 colleagues is provided in the corporate 
responsibility report on page 33 
corporate governance rentokil initial plc annual report 2014
59
strategic report
corporate governance
financial statements additional information
director induction process
following the appointment of any new director the chairman in 
conjunction with the company secretary and group hr director 
ensures that a full formal and tailored induction to the company 
is made available the induction process is summarised below
on appointment the company secretary provides information on 
the group’s businesses including
• board and relevant committee minutes from the prior year
• key board papers from the prior year
• key policies and procedures
• governance information about the company including the role of 
the board board and executive committees chairman and chief 
executive
• guidance for directors on their legal and regulatory responsibilities 
in a uk publicly listed company including briefings on request 
from the company’s external legal advisors
before and after the first board meeting the new director will attend
• business briefings with the chief executive and the chief financial 
officer
• meetings with other members of the senior management team
• meetings with country managers
• visits to sites within the uk andor overseas including opportunities 
to spend time with frontline staff in the course of their duties
• meeting with the auditor and financial advisors
activities of the committee in 2014
audit committee chairman succession
as mentioned above the main task of the committee in 2014 
was the appointment of a successor to duncan tattonbrown as 
chairman of the audit committee following the process outlined 
above the committee was supported in this work by korn ferry 
and by the group hr director
other matters considered by the committee in 2014 
included
• a review of the committee’s report within the 2013 annual report 
and recommended approval to the board
• a review of the committee’s effectiveness which was externally 
facilitated by lintstock an independent corporate governance 
consultancy 
• a review of the potential conflicts of interest authorised by the 
board and a review of the processes in place to ensure that 
potential conflicts are properly considered
• a review of the performance of individual directors utilising 
the output from the board evaluation process and making 
recommendations to the board over the reelection of directors 
at the agm
committee effectiveness
the committee conducted a review of how it operates which 
concluded that the committee had operated effectively in 2014 
the committee noted that in 2015 its attention would be focused 
on nonexecutive director rotation as well as broader executive 
and board succession planning
john mcadam 
chairman  
nomination committee  
26 february 2015
corporate governance alan giles 
chairman
remuneration  
committee
rentokil initial plc annual report 2014
60 corporate governance
directors’ remuneration report
dear fellow shareholder
this year’s directors’ remuneration report is split into four parts
• part 1 contains details of the current remuneration policy that 
was approved by a binding shareholder vote at the 2014 agm 
and which remains effective for the forthcoming year
• part 2 contains details of the activities of the remuneration 
committee during 2014
• part 3 contains details of the intended implementation of our 
remuneration policy in 2015
• part 4 contains details of pay received by directors in 2014
parts 2 3 and 4 together the directors’ annual remuneration 
report will be subject to an advisory vote at the 2015 agm as 
no changes are planned to our existing remuneration policy in 
2015 part 1 will not be subject to a vote at the 2015 agm
the key remuneration challenge in 2014 was to complete the 
review of the effectiveness of our longterm incentive arrangements 
for 2014 and beyond in the context of portfolio rationalisation and 
the evolution of the company’s strategy as the new executive 
team reshapes the business and sets out a new growth strategy
link to strategy
as articulated in the strategic report our strategy is focused on 
delivering significant mediumterm improvements in revenue and 
profit and an immediate improvement in free cash flow it calls an 
end to the restructuring era of the business and uses a quadrant
based approach to focus resources on delivering improved levels 
of growth and to prioritise capital allocation for restructuring capex 
and ma  
as a consequence annual bonus plans incentivise management 
to deliver shortterm profit growth and revenue growth which using 
the quadrantbased approach will set the foundations for longer
term profitable growth in 2014 coefficients were introduced to 
adjust revenue targets in line with the quadrants this approach 
has worked well and will be continued in 2015 executive directors’ 
bonuses are only payable once demanding cash generation targets 
have been met
the addition of earnings per share eps as a second measure 
in our longterm incentive plan ltip more directly aligns the plan 
with our strategy of mediumterm improvements in profit given the 
business focus on improving efficiency and reducing costs around 
restructuring such costs are included in the eps calculation in order 
to incentivise management to achieve this
the links between the strategy and the elements of remuneration for 
directors remain unchanged and are described in the remuneration 
policy report for the wider management and colleague population 
sales effectiveness and customer retention and growth remain two 
key levers where remuneration issues are critical incentivisation of 
colleagues throughout the business is now looked at in the context 
of both the business units’ strategic positioning in the quadrants and 
the operational levers to drive growth
following the sale of the initial facilities business the remuneration 
committee approved adjustments to existing incentives to ensure 
that arrangements for the core business remained effective these 
adjustments included the removal of initial facilities’ revenue and 
profit contribution from the group targets and a reduction in the cash 
gateway of £100m cash flow to £81m for the 2014 bonus plan 
longterm incentive arrangements
in 2013 we conducted a thorough review of the company’s long 
term incentive arrangements in 2014 following consultation with 
major shareholders we introduced eps as a second performance 
measure alongside relative total shareholder return tsr for  
approximately 100 participants including the executive directors 
to further strengthen the link between performance and reward 
we also decided to retain the individual performance modifier for 
longterm incentive awards for the executive directors 
corporate governance code 2014
the current shareholder approved policy provides for malus provisions 
in the ltip and annual bonus arrangements the committee is 
considering the practical implications of the insertion of a clawback 
provision into future incentive schemes and will in principle introduce 
such a provision for executive directors’ shortterm and longterm 
incentive awards from 2016 onwards 
review of advisors to the committee
during the year the committee conducted a review of the provision 
of professional advice to the committee and looked in detail at three 
potential sources of such advice as a result of the review deloitte 
llp has been reappointed as advisors to the committee
directors’ remuneration report rentokil initial plc annual report 2014
61
strategic report
corporate governance
financial statements additional information
corporate governance
remuneration outcomes for 2014
the 2014 annual bonus had two performance gateways based 
on profit and cash generation both of which were satisfied the 
level of bonus was then determined by group profit and revenue 
performance and an individual performance modifier as outlined 
elsewhere in the annual report financial performance during 2014 
in the form of revenue profit and cash performance has shown 
strong progress 
the committee reviewed performance in 2014 and determined 
that the chief executive andy ransom should receive a bonus 
of 6162 of base salary jeremy townsend the chief financial 
officer will receive a bonus of 5574 of base salary
the increased weighting of the revenue component in the executive 
directors’ annual bonus in 2014 and the introduction of a gateway 
based on cash generation was to ensure alignment with strategy
relative tsr performance for the performance share plan awards 
granted in 2011 was below median and therefore these awards 
lapsed in june 2014
andy ransom’s salary was set at £700000 with effect from 
his appointment as chief executive on 1 october 2013 and no 
increase was made in respect of 2014 he received a 2 increase 
in salary with effect from 1 january 2015 jeremy townsend 
received a 2 increase in salary with effect from 1 january 2015 
in line with inflationary increases across the broader uk workforce 
engagement with shareholders
during early 2014 i engaged with a number of major shareholders 
in relation to the introduction of the eps measure as an additional 
measure of performance in the ltip  i am extremely grateful for 
the input and support we have received particularly as we have 
been reflecting on how best to incentivise executive directors and 
the broader team to deliver on the strategy and create value for 
shareholders
yours faithfully
alan giles 
chairman  
remuneration committee 
26 february 2015
part 1 – directors’ remuneration  
policy report
at the agm in may 2014 shareholders approved with a 96 majority 
vote the remuneration policy which sets out the company’s policy 
on the remuneration of executive and nonexecutive directors the 
remuneration policy became effective from the conclusion of the agm 
on 14 may 2014 and can apply until 31 december 2017 unless a 
revised policy is approved by shareholders and comes into force 
before this date
for the benefit of shareholders in this part 1 policy section of the 
directors’ remuneration report we have reprinted the approved 
remuneration policy report to ensure that the report is relevant 
within the context of this directors’ remuneration report we have 
made minor textual changes to reflect 2015 information in the following 
sections base salary annual bonus longterm incentive plan 
measures and targets all colleague remuneration policy performance 
scenario charts chairman and nonexecutive directors and 
stakeholder views the original remuneration policy report as 
approved by shareholders can be found in last year’s director’s 
remuneration report a copy of which can be found in the investors 
section of our website
the company’s remuneration policy for executive directors which 
is described in the policy tables on pages 62 to 67 is designed to 
• attract and retain the leadership talent needed to drive and deliver 
business growth financial performance and other key strategic 
priorities without paying more than is necessary
• recognise and reward individual contribution to delivering longterm 
sustainable business performance
• ensure alignment of executives with the overall shareholder 
objective of longterm value creation through linking a substantial 
part of the remuneration package to longterm performance targets
• deliver a total reward package that is marketaligned affordable 
and reflective of business performance
• encourage executive behaviours consistent with rentokil initial’s 
business values and risk appetite
the same principles apply for the remuneration policy for other 
senior executives
as noted in the introductory letter to shareholders the committee 
is open to an ongoing dialogue with shareholders on remuneration 
matters in early 2014 the company communicated with larger 
investors regarding the adoption of an eps measure alongside relative 
tsr for the ltip  rentokil initial plc annual report 2014
62 corporate governance
part 1 – directors’ remuneration report – continued
key elements of remuneration policy – executive directors
base salary
purpose and link to strategy operation levels of payout performance measures and periods
to attract and retain 
executives of the 
calibre required 
to implement our 
strategy
cash salaries are normally reviewed annually with 
effect from 1 january salaries are set taking into 
account
• market data from both towers watson and 
deloitte or other appropriate data providers  
for a crosssection of companies of a similar 
size and complexity at the time of review
• scope and responsibilities of the role
• external economic environment
• individual skills and experience
• contribution to overall business performance
• pay conditions for other colleagues based in the 
uk or other regions which are considered by 
the committee to be relevant for that executive
salary policy is to set base salary 
at an appropriate level taking into 
account the factors described under 
‘operation’ and salary increases are 
considered in this context 
while there is no maximum salary 
level the committee would normally 
expect percentage pay increases 
for the executive directors to be 
broadly in line with other colleagues 
in relevant regions
however higher increases may be 
awarded in certain circumstances 
where the committee considers this 
appropriate such as
• where a new executive director 
has been appointed to the board 
at a lower than typical market 
salary to allow for growth in the 
role then larger increases may 
be awarded in following years to 
move salary positioning closer 
to typical market level as the 
executive grows in experience
• where the executive director 
has been promoted or has had a 
change in responsibilities salary 
increases in excess of the above 
level may be awarded
• where the positioning of an 
executive director’s salary has 
fallen significantly behind market 
practice
• in exceptional circumstances 
where a nonexecutive director 
temporarily takes up an executive 
position
the 2014 salary for the chief 
executive andy ransom was 
£700000 and for the chief financial 
officer jeremy townsend was 
£450000 the 2015 salary for the 
chief executive andy ransom is 
£714000 and for the chief financial 
officer jeremy townsend is 
£459000
the payment of salary is not 
dependent on achieving performance 
targets although individual 
performance is taken into account 
when setting salary levels and 
determining any salary increases rentokil initial plc annual report 2014
63
strategic report
corporate governance
financial statements additional information
corporate governance
key elements of remuneration policy – executive directors
annual bonus
purpose and link to strategy operation levels of payout performance measures and periods
recognises and 
rewards the delivery 
of exceptional 
business 
performance 
against annual 
financial strategic 
and operational 
goals and individual 
contribution 
to company 
performance
the annual bonus is paid in cash each year after 
the committee has reviewed performance against 
targets which are set at around the beginning 
of each year for each executive director taking 
into consideration the underlying performance of 
the business
the committee may reduce bonus payments 
in respect of the current year or future years 
potentially to nil in the event of a material 
misstatement of the company’s audited results for 
the current year or prior years serious reputational 
damage to a member of the company’s group or 
in any other circumstances where the committee 
considers that this treatment is appropriate
bonus payouts start to accrue at 
10 of base salary for meeting 
threshold levels of performance 
with an ontarget bonus opportunity 
of 50 of base salary and a 
maximum bonus opportunity of 
100 of base salary before the 
individual performance modifier
an individual performance modifier 
based on individual performance 
as measured by the company’s 
performance and development 
review process may also increase 
or decrease the opportunity 
stated above to further recognise 
individual contribution to business 
performance the maximum 
opportunity will not exceed 120 
of base salary
the annual bonus is normally linked 
to a mix of financial elements and 
other key strategic performance 
targets including achievement 
of personal objectives where 
appropriate financial elements 
will include profit and may include 
one or more of the following annual 
measures
• cash
• revenue 
at least 50 of the bonus will 
be based on financial measures 
financial measures may be linked to 
group performance or the executive’s 
specific area of responsibility if 
appropriate
the annual remuneration report on 
pages 72 to 74 sets out the measures 
and weightings for 2014 and pages 
70 to 71 for 2015 
the committee reserves the right to 
change the measures in future years 
to reflect alignment with business 
strategy and shareholder interests 
subject to at least 50 of measures 
being financial in nature
longterm incentive plan ‘ltip’ – continued
longterm incentive plan ltip – continued
longterm incentive plan ltip
purpose and link to strategy operation levels of payout performance measures and periods
to motivate and 
incentivise delivery 
of exceptional 
business 
performance over 
the longterm and 
to create alignment 
with growth in value 
for shareholders
to act as a retention 
tool for the 
senior executive 
leadership team
awards are made over shares normally in the 
form of nilcost options or conditional shares 
with a face value set by reference to a multiple 
of base salary awards normally vest after three 
years subject to the committee’s assessment 
of the achievement of the relevant performance 
conditions and underlying performance awards 
may be settled in cash
award levels and performance conditions are set 
to support the business’s longterm goals and 
seek to reflect market practice and shareholder 
guidance 
award levels are generally set at a market 
competitive level relative to companies of 
comparable size and complexity
a ‘malus’ provision exists to allow the committee 
the discretion to scale back awards granted 
on or after 1 may 2012 potentially to nil that 
have not yet vested in the event of a material 
misstatement of the company’s audited results 
serious reputational damage to a member of the 
company’s group or in other circumstances where 
the committee considers that this treatment is 
appropriate 
vested ltip awards include dividend equivalents 
linked to the performance period
the core award is 120 of base 
salary for the chief executive and 
100 of base salary for other 
executive directors 25 of the 
award shall vest for meeting 
threshold levels of performance
awards are subject to an individual 
performance modifier which is 
based on annual bonus outcomes 
over the three years of the plan 
this individual performance 
modifier can increase the ltip 
award to 200 of base salary if 
exceptional business and individual 
performance is delivered over the 
performance period if bonus targets 
are not met in each of the three 
years of the performance period 
the ltip award will normally reduce 
to 0
the maximum award is therefore 
200 of base salary in line with the 
plan rule approved by shareholders 
this may be increased to 250 
in exceptional circumstances as 
determined by the committee
awards are subject to 
• relative total shareholder return 
tsr performance and 
• the achievement of earnings per 
share eps targets 
performance measures will typically 
be weighted two thirds relative 
tsr and onethird eps but the 
committee shall retain discretion to 
determine that a different weighting 
shall apply for future awards
performance conditions are normally 
measured over a threeyear period 
awards granted under the ltip 
prior to 2014 were subject to total 
shareholder return performance only
if events happen which cause 
the committee to consider that 
a performance condition would 
not without alteration achieve its 
original purpose it may amend that 
performance condition provided that 
the amended performance condition 
is materially no less challenging than 
it would have been had the event not 
occurred
longterm incentive plan ltip
purpose and link to strategy operation levels of payout performance measures and periods
to motivate and 
incentivise delivery 
of exceptional 
business 
performance over 
the longterm and 
to create alignment 
with growth in value 
for shareholders
to act as a retention 
tool for the 
senior executive 
leadership team
awards are made over shares normally in the 
form of nilcost options or conditional shares 
with a face value set by reference to a multiple 
of base salary awards normally vest after three 
years subject to the committee’s assessment 
of the achievement of the relevant performance 
conditions and underlying performance awards 
may be settled in cash
award levels and performance conditions are set 
to support the business’s longterm goals and 
seek to reflect market practice and shareholder 
guidance 
award levels are generally set at a market 
competitive level relative to companies of 
comparable size and complexity
a ‘malus’ provision exists to allow the committee 
the discretion to scale back awards granted 
on or after 1 may 2012 potentially to nil that 
have not yet vested in the event of a material 
misstatement of the company’s audited results 
serious reputational damage to a member of the 
company’s group or in other circumstances where 
the committee considers that this treatment is 
appropriate 
vested ltip awards include dividend equivalents 
linked to the performance period
the core award is 120 of base 
salary for the chief executive and 
100 of base salary for other 
executive directors 25 of the 
award shall vest for meeting 
threshold levels of performance
awards are subject to an individual 
performance modifier which is 
based on annual bonus outcomes 
over the three years of the plan 
this individual performance 
modifier can increase the ltip 
award to 200 of base salary if 
exceptional business and individual 
performance is delivered over the 
performance period if bonus targets 
are not met in each of the three 
years of the performance period 
the ltip award will normally reduce 
to 0
the maximum award is therefore 
200 of base salary in line with the 
plan rule approved by shareholders 
this may be increased to 250 
in exceptional circumstances as 
determined by the committee
awards are subject to 
• relative total shareholder return 
tsr performance and 
• the achievement of earnings per 
share eps targets 
performance measures will typically 
be weighted two thirds relative 
tsr and onethird eps but the 
committee shall retain discretion to 
determine that a different weighting 
shall apply for future awards
performance conditions are normally 
measured over a threeyear period 
awards granted under the ltip 
prior to 2014 were subject to total 
shareholder return performance only
if events happen which cause 
the committee to consider that 
a performance condition would 
not without alteration achieve its 
original purpose it may amend that 
performance condition provided that 
the amended performance condition 
is materially no less challenging than 
it would have been had the event not 
occurred
longterm incentive plan ltip
purpose and link to strategy operation levels of payout performance measures and periods
to motivate and 
incentivise delivery 
of exceptional 
business 
performance over 
the longterm and 
to create alignment 
with growth in value 
for shareholders
to act as a retention 
tool for the 
senior executive 
leadership team
awards are made over shares normally in the 
form of nilcost options or conditional shares 
with a face value set by reference to a multiple 
of base salary awards normally vest after three 
years subject to the committee’s assessment 
of the achievement of the relevant performance 
conditions and underlying performance awards 
may be settled in cash
award levels and performance conditions are 
set to support the business’ longterm goals and 
seek to reflect market practice and shareholder 
guidance 
award levels are generally set at a market 
competitive level relative to companies of 
comparable size and complexity
a ‘malus’ provision exists to allow the committee 
the discretion to scale back awards granted 
on or after 1 may 2012 potentially to nil that 
have not yet vested in the event of a material 
misstatement of the company’s audited results 
serious reputational damage to a member of the 
company’s group or in other circumstances where 
the committee considers that this treatment is 
appropriate 
vested ltip awards include dividend equivalents 
linked to the performance period
the core award is 120 of base 
salary for the chief executive and 
100 of base salary for other 
executive directors 25 of the 
award shall vest for meeting 
threshold levels of performance
awards are subject to an individual 
performance modifier which is 
based on annual bonus outcomes 
over the three years of the plan 
this individual performance 
modifier can increase the ltip 
award to 200 of base salary if 
exceptional business and individual 
performance is delivered over the 
performance period if bonus targets 
are not met in each of the three 
years of the performance period 
the ltip award will normally reduce 
to 0
the maximum award is therefore 
200 of base salary in line with the 
plan rule approved by shareholders 
this may be increased to 250 
in exceptional circumstances as 
determined by the committee
awards are subject to 
• relative total shareholder return 
tsr performance and 
• the achievement of earnings per 
share eps targets 
performance measures will typically 
be weighted twothirds relative 
tsr and onethird eps but the 
committee shall retain discretion to 
determine that a different weighting 
shall apply for future awards
performance conditions are normally 
measured over a threeyear period 
awards granted under the ltip 
prior to 2014 were subject to total 
shareholder return performance only
if events happen which cause 
the committee to consider that 
a performance condition would 
not without alteration achieve its 
original purpose it may amend that 
performance condition provided that 
the amended performance condition 
is materially no less challenging than 
it would have been had the event not 
occurred rentokil initial plc annual report 2014
64 corporate governance
part 1 – directors’ remuneration report – continued
key elements of remuneration policy – executive directors
longterm incentive plan ltip – continued
purpose and link to strategy operation levels of payout performance measures and periods
executive directors are normally expected to retain 
at least half of their vested shares after sufficient 
shares have been sold to settle any tax liability 
until their shareholding guideline is met unless 
agreed otherwise with the committee under 
the shareholding guidelines executive directors 
are expected to build up a shareholding in the 
company of 100 of salary over a five year period
the exercise period for awards in the form of nil 
cost options extends from the date of vesting to 
the tenth anniversary of the award being made
the ltip was approved by shareholders in 2006 
awards may be a adjusted in accordance with the 
rules in the event of a variation of the company’s 
share capital demerger special dividend or similar 
event that materially affects the price of shares and 
b amended in accordance with the plan rules
the annual remuneration report 
sets out the performance conditions 
for 2014 and 2015
pensions
purpose and link to strategy operation levels of payout performance measures and periods
to attract and retain 
executives of the 
calibre required 
to implement our 
strategy
to facilitate 
executives’ planning 
for retirement
executive director pension arrangements are 
by way of a defined contribution arrangement 
or through a cash alternative of a similar value
the committee retains the discretion to operate 
different pension arrangements where new 
executive directors are appointed to reflect 
individual circumstances market practice and 
company strategy
contribution of up to 25  
of base salary 
none
benefits 
purpose and link to strategy operation levels of payout performance measures and periods
to attract and retain 
executives of the 
calibre required 
to implement our 
strategy
benefits are determined taking into account 
market practice the level of benefits provided 
throughout the group and individual 
circumstances 
the main benefits for executive directors are
• life assurance
• car or allowance
• family healthcare
• permanent health insurance
• relocation benefits – in the event that an 
executive were required to relocate to undertake 
their role the committee may provide an 
additional appropriate level of benefits to reflect 
the relevant circumstances such benefits may 
be oneoff or ongoing in nature
should an executive director be appointed in  
a country other than the uk benefits appropriate 
to that market would be considered
the committee retains the discretion to change 
the benefits provided including offering additional 
benefits in line with market practice this may 
include offering participation in any future 
allemployee share plan offered and the provision 
of a car and a driver for the chief executive
levels of benefits are set in line 
with market practice the level of 
benefits provided varies year on year 
depending on the cost of provision 
of benefits to the company and 
therefore it is not meaningful to 
identify a maximum level of benefits 
none rentokil initial plc annual report 2014
65
strategic report
corporate governance
financial statements additional information
corporate governance
notes
measures and targets
all the measures selected support the delivery of short and longterm 
financial performance of the business and shareholder value creation 
targets are set each year based on stretching internal budgets 
and achieving or exceeding these targets will both return value to 
shareholders and reward the executive team for delivery
the committee has chosen revenue and profit measures for the 2014 
and 2015 bonus these measures have been chosen as revenue 
is a key focus for the business to increase and broaden our scale 
while ensuring that we also improve overall profitability the individual 
performance modifier allows the committee to incentivise executives 
to achieve specific strategicoperational objectives
over the longterm performance measures are focused on 
generating returns to shareholders through the relative tsr measure 
and through a focus on improving earnings 
all colleague remuneration policy
at the end of 2014 the company had 28731 colleagues based in 
63 countries 2013 52000 colleagues based in 60 countries our 
broad remuneration policy reflects the diversity of cultures legislative 
environments employment markets and the types and seniority 
of roles that this geographic spread provides we structure our 
colleague reward to enable us to recruit and retain the right people 
doing the right job for our customers 
a broad population of management colleagues are invited to join the 
annual bonus plan the group management bonus scheme – the 
gmbs the measures for the gmbs are broadly aligned with those 
set out in the policy table above
the senior management population are eligible to participate in the 
ltip wherever practicable and possible subject to local legislation 
and annually around 250 are invited to join the plan the measures 
for the 100 most senior colleagues will remain aligned with those of 
the executive directors with the exception of the use of the individual 
performance modifier to support focus on key strategic targets 
however the plan structure below this may be varied to support the 
retention of this population
performance scenario charts 
our remuneration arrangements are designed so that a significant 
proportion of pay is dependent on the delivery of short and longterm 
goals that are aligned with our strategic objectives and the creation 
of shareholder value
in developing the scenarios below the following assumptions have 
been made
minimum 
no bonus payout
no vesting under the ltip
ontarget 
performance
50 of maximum annual bonus payout assuming 
target individual performance under the individual 
performance modifier 50 of salary
25 of target awards vesting under the ltip 30 of 
salary for the chief executive and 25 of salary for the 
chief financial officer with no change resulting from 
the individual performance modifier
maximum 
performance
maximum annual bonus payout 120 of salary
maximum ltip vesting 200 of salary ie maximum 
individual performance modifier
illustration of remuneration policy for 2015 and 2014 
for the purposes of these illustrations no share price growth 
or receipt of dividends is assumed the top illustration shows 
remuneration policy for 2015 which is updated for reference from 
the 2014 policy which was approved at the agm in may 2014 
the bottom illustration shows remuneration policy for 2014 as 
disclosed in the 2013 directors’ remuneration report
illustration of remuneration policy for 2015
chief executive 
chief financial ocer
fixed pay           annual cash incentive           longterm incentive
minimum
ontarget
performance
maximum
performance
£0m £05m £1m £15m £2m £25m £3m £35m
100 £912200
£1483400
£3197000 28 27 45
62 24 14
minimum
ontarget
performance
maximum
performance
£0m £05m £1m £15m £2m £25m
100 £544400
£888700
£2013200 27 27 46
61 26 13
illustration of remuneration policy for 2014
chief executive 
chief financial ocer
fixed pay           annual cash incentive           longterm incentive
minimum
ontarget
performance
maximum
performance
00
05
10
15
20
25
30
35
100 £895000
£1455000
£3135000 28 27 45
62 24 14
minimum
ontarget
performance
maximum
performance
£0m £05m £1m £15m £2m £25m
100 £533500
£871000
£1973500 27 27 46
61 26 13
 
 
 
 
 
base from 
1 january 
2015 
£000
 
 
benefits  
for 2014 
£000
pension  
based on  
salary from  
1 january 2015 
£000
 
 
total  
fixed  
£000
andy ransom  
– chief executive
 
714
 
197
 
1785
 
9122
 
jeremy townsend – 
chief financial officer
 
 
459
 
 
165
 
 
689
 
 
5444
 
 
 
 
 
base from 
1 january 
2014 
£000
 
 
benefits  
for 2013 
£000
pension  
based on  
salary from  
1 january 2014 
£000
 
 
total  
fixed  
£000
andy ransom  
– chief executive
 
700
 
200
 
1750
 
8950
 
jeremy townsend – 
chief financial officer
 
 
450
 
 
160
 
 
675
 
 
5335
in 2015 fixed pay for this illustration derived as follows
in 2014 fixed pay for this illustration was derived as follows rentokil initial plc annual report 2014
66 corporate governance
part 1 – directors’ remuneration report – continued
key elements of remuneration policy – chairman and nonexecutive directors
fees
approach details other items
nonexecutive directors’ remuneration is 
determined by the board on the recommendation 
of the nonexecutive directors’ terms committee 
of the board comprising the chairman the chief 
executive and the chief financial officer within 
the limits set by the articles of association non
executive directors’ fees are set at a level which is 
considered appropriate for the calibre of individual 
required to support the delivery of business 
strategy and taking into account skills experience 
time commitment and independent surveys of 
fees paid to nonexecutive directors of similar 
companies
fees for the company chairman are determined by 
the board based on external remuneration advice 
and considered by the remuneration committee 
taking into account typical fee arrangements at 
other companies of a similar size and complexity 
the time commitment required to fulfil the role and 
the calibre of the individual required
fees are reviewed at appropriate intervals
nonexecutive directors’ fees are payable in 
cash and consist of a basic fee plus additional 
fees payable to 
• senior independent director
• board committee chairmen
additional fees may be paid to nonexecutive 
directors on an ongoing or temporary basis 
if there is a change in their responsibilities or 
a significant increase in the time commitment 
required from them to fulfil their role
the chairman receives annual fees agreed 
periodically by the board and based upon 
external remuneration advice considered by 
the committee 
the fees for directors were approved by 
shareholders in 2005 and shall not exceed in 
aggregate £1000000 per annum or such higher 
amount as the company may from time to time 
by ordinary resolution determine
no element of nonexecutive director 
remuneration is performance related
nonexecutive directors do not participate in 
any of the company’s incentive schemes nor 
are they eligible to join the company’s pension 
scheme 
the chairman is not eligible to participate in 
the company’s annual bonus plan or in the 
company’s longterm incentive plan the 
chairman has access to a company car and 
driver
nonexecutive directors who are based outside 
the uk may be provided with support in relation 
to their tax reporting
the chairman and nonexecutive directors 
do not currently receive any other benefits 
however benefits may be provided in the future 
if in the view of the nonexecutive directors’ 
fees committee for nonexecutive directors 
or the committee for the chairman this was 
considered appropriate 
recruitment
the committee’s key principle when determining appropriate 
remuneration arrangements for a new executive director appointed 
from within the organisation or externally is to ensure that 
arrangements are in the best interests of both the company and 
its shareholders without paying more than is considered necessary 
by the committee to recruit an executive of the required calibre 
to develop and deliver the business strategy when determining 
appropriate remuneration arrangements the committee will 
take into account all relevant factors these factors may include 
among others
• the level and type of remuneration opportunity being forfeited
• the jurisdiction the candidate was recruited from
• the skills experience and calibre of the individual
• the circumstances of the individual
the committee would generally seek to align the remuneration 
package offered with our remuneration policy outlined in the table 
above however the committee may offer additional variable 
remuneration arrangements in respect of an executive director’s 
appointment that it considers appropriate and necessary to recruit 
and retain the individual any variable remuneration awarded in 
respect of the executive director’s appointment shall be limited to 
370 of base salary this reflects bonus policy and the level of award 
under the ltip in exceptional circumstances this limit excludes any 
awards made to compensate the executive director for remuneration 
forfeited from their previous employer
the committee may make awards on appointing an executive 
director to ‘buy out’ remuneration terms forfeited on leaving a 
previous employer in doing so the committee will take account 
of relevant factors including any performance conditions attached 
to these awards the form in which they were granted eg cash 
or shares and the time over which they would have vested 
generally buyout awards will be made on a comparable basis 
to those forfeited
to facilitate awards outlined above in the event of recruitment the 
committee may grant awards to a new executive director under 
listing rule 942 which allows for the granting of awards to facilitate 
in unusual circumstances the recruitment of an executive director 
without seeking prior shareholder approval or under other appropriate 
company share plans the use of listing rule 942 will be limited 
to granting buyout awards only
where an executive director is required to relocate to take up 
their role the committee may provide appropriate assistance 
with relocation either on an ongoing or oneoff basis
in the event that an internal candidate was promoted to the board 
legacy terms and conditions may be honoured including pension 
entitlements and any outstanding incentive awards
in the event of the appointment of a new chairman or nonexecutive 
director remuneration arrangements will normally reflect the policy 
outlined above for chairman and nonexecutive directors
the committee’s intention is that timely disclosure of the remuneration 
structure of any new executive director or chairman will be made by 
the company unless not practical rentokil initial plc annual report 2014
67
strategic report
corporate governance
financial statements additional information
corporate governance
directors’ service agreements and nonexecutive 
directors’ letters of appointment
executive directors
the company’s policy is for executive directors to have rolling 
contracts subject to one year’s notice from the company the 
company’s policy in respect of the notice periods for the termination 
of executive directors’ contracts conforms to the code the 
remuneration and contractual arrangements for the executive 
directors and senior management do not contain any matters that are 
required to be disclosed under the takeovers directive the contracts 
of service for executive directors are as set out below 
current policy is for executive directors to be required to give 
six months’ notice to the company andy ransom has a legacy 
agreement requiring that he give the company one year’s notice 
which was a term of his previous service agreement as an executive 
director prior to his appointment as chief executive under the terms 
of their contracts executive directors are entitled to participate in 
the annual bonus scheme and performance share plan they are 
also entitled to receive a car allowance life assurance cover family 
healthcare and permanent health insurance
executive  
directors
date of service 
agreement
type of 
agreement
notice by  
the company
notice by  
the director
andy ransom
31 december 
2013
rolling 
contract
12 months 12 months
jeremy townsend 4 march 2010
rolling 
contract
12 months 6 months
loss of office payments
the policy on termination is as follows 
element policy – disability retirement redundancy death sale of an individual employing business out of the group
base pay and benefits on termination without notice executive directors are entitled to a payment in lieu of notice equal to base pay and the 
value of benefits only for the duration of the remaining notice period subject to mitigation the company has the ability 
to terminate executive directors’ employment without notice in the event of a prolonged mental or physical incapacity to 
carry out hisher company duties or in the event of gross misconduct or being disqualified to act as a director appropriate 
medical benefits may still be provided in the case of prolonged mental or physical incapacity
other executive directors may be entitled to appropriate repatriationrelocation outplacement legal andor tax and other 
relevant professional costs the committee would look to ensure that the level of these costsbenefits was reasonable 
and in the best interests of shareholders
policy – disability retirement redundancy death  
sale of an individual employing business out of the group policy – other leavers
bonus executive directors may receive a bonus payment for the year in 
which they cease employment this payment will normally be pro
rated for time and performance however the committee retains the 
discretion to review overall business and individual performance and 
determine that a different level of bonus payment is appropriate
generally executive directors must be employed 
at the date of payment to receive a bonus
in certain circumstances the committee may 
determine that a bonus payment may be due to 
reflect performance and contribution to the point 
of cessation
the longterm 
incentive plan ltip
awards may vest following a review by the committee of the extent 
to which the performance conditions are met on a time prorated 
basis on a monthly basis in the case of redundancy retirement or 
the sale of the individual employing company or business in the 
case of disability or death the level of vesting will be determined 
by the committee the committee may have regard in these 
circumstances to the performance conditions and time prorating 
formulae referred to above
vested awards may be exercised for six months 
following cessations unvested awards will lapse
nonexecutive directors
nonexecutive directors have letters of appointment but not service 
contracts subject to annual reelection at the agm nonexecutive 
directors will be appointed for an initial period of three years which 
may be extended for a further period of three years by mutual  
consent and thereafter reviewed annually subject to acceptable 
tests of performance and independence 
 julie southern joined the board as a director in july 2014
 duncan tatton brown stepped down as a director on 14 may 2014
 peter long stepped down as a director on 31 december 2014
chairman
the chairman john mcadam has a letter of appointment 
dated 13 december 2012 setting out his responsibilities for the 
management of the board since may 2014 the chairman’s contract 
may be terminated by either party without notice
copies of executive directors’ service contracts and the chairman 
and nonexecutive directors’ letters of appointment are available for 
inspection by shareholders at the company’s registered office and 
on its website at wwwrentokilinitialcom 
director letter of appointment appointment period

 
peter bamford 15 december 2011 annual
richard burrows 15 december 2011 annual
alan giles 15 december 2011 annual
angela seymourjackson 5 march 2012 3 years
julie southern 21 july 2014 3 years
duncan t attonbrown

15 december 2011 annual
peter long 15 december 2011 annual rentokil initial plc annual report 2014
68 corporate governance
part 1 – directors’ remuneration report – continued
when an executive director leaves the business on the basis of 
mutual agreement the committee will determine an appropriate 
payment taking into account the circumstances of leaving but any 
payment will be no more generous than that for leavers by reason 
of disability retirement redundancy death or sale of an individual 
employing business
there are no provisions for notice periods or compensation in 
the event of termination of the appointment of the chairman  
or a nonexecutive director
change of control
if the company is taken over or wound up ltip awards may vest 
by reference to the extent to which the performance conditions 
are met and on a time prorated basis calculated on a monthly 
basis typically salaries and bonuses will be paid to date of change 
of control 
comparison of remuneration policy to that of the 
wider employee group
whilst our colleagues are not currently formally consulted on 
executive director pay our employee opinion survey ‘your voice 
counts’ and other surveys provides an opportunity for them to 
provide the company with feedback on their own remuneration 
arrangements and also to comment on broader matters across the 
company the committee recognises that it needs an understanding 
of the broader remuneration of colleagues when making decisions 
on executive director pay the committee annually reviews pay and 
conditions for all colleagues based in the uk and has sight of the high 
level outcomes of annual bonuses and is responsible for approving 
all ltip awards across the group 
stakeholder views
the views of shareholders are important to the committee and 
provide the context for setting the remuneration arrangements for 
executive directors the chairman of the remuneration committee 
the company chairman and the chief executive have met with 
a number of major shareholders and their views were taken into 
account when formulating this policy report in early 2014 
general
the committee reserves the right to make any remuneration 
payments and payments for loss of office including exercising 
any discretions available to it in connection with such payments 
notwithstanding that they are not in line with the policy set out in this 
report where the terms of the payment were agreed i before the 
policy came into effect or ii at a time when the relevant individual was 
not a director of the company and in the opinion of the committee 
the payment was not in consideration for the individual becoming a 
director of the company for these purposes ‘payments’ includes the 
committee satisfying awards of variable remuneration and an award 
over shares is ‘agreed’ at the time the award is granted 
the committee may make minor changes to this policy for regulatory 
exchange control tax or administrative purposes or to take account 
of a change in legislation without seeking shareholder approval for 
that amendment
part 2 – directors’ annual  
remuneration report
the remuneration committee
the committee’s main responsibilities are
• to determine and agree with the board the executive remuneration 
strategy and policy
• to settle individual remuneration arrangements for the chairman 
executive directors and members of the executive leadership 
team including arrangements relating to those leaving the business 
• ensuring that contractual terms on termination affecting executive 
directors and senior executives and any payments made are fair 
to the individual and to the company that failure is not rewarded 
and that the duty to mitigate loss is fully recognised
• to oversee the company’s incentive schemes including the 
operation and effectiveness of performance measures and targets 
in both annual bonus plans and in longterm incentive schemes
• to consider major changes in employee remuneration in the group 
• to report to shareholders on remuneration matters 
• to select and appoint advisors to the committee
the committee gives full regard to the matters set out in the uk 
corporate governance code 2012 and 2014 ‘the code’ when 
determining policy the committee considers the pay and conditions 
across the rest of the company
the committee comprised four independent nonexecutive directors 
during the year and at the date of this report comprised alan giles 
chairman richard burrows and angela seymourjackson peter 
long stepped down from the committee in december 2014 each 
of the committee members has significant senior level experience 
of setting and monitoring remuneration matters in large complex 
international businesses with similar characteristics to those of the 
company giving them the collective experience to offer a balanced 
independent and informed view on remuneration matters no member 
of the committee has any personal financial interest other than 
as a shareholder in the matters to be decided by the committee 
no member of the committee has any conflict of interest arising 
from other directorships nor does any member participate in any 
of the company’s incentive or pension arrangements or have any 
involvement in the daytoday running of the company
the committee’s terms of reference are available on the company’s 
website at wwwrentokilinitialcom or from the company secretary 
they were reviewed during the year and a number of amendments 
were approved by the board to ensure that they remain in line with 
best practice as well as reflecting revisions to the code 
the committee met nine times in 2014 and in addition was consulted 
on various remuneration issues between formal meetings 
details of committee attendance can be found in the corporate 
governance report on page 49 key items considered by the 
committee during the year are shown below rentokil initial plc annual report 2014
69
strategic report
corporate governance
financial statements additional information
corporate governance
part 2 – directors’ remuneration report
activities of the committee
in 2014
•  approval of the following for executive directors and senior 
executives
 – base salaries for 2014
 – bonus outcomes for 2013
 – bonus structure for 2014
 – proposed 2014 longterm incentive awards
 – approval of remuneration policy including the policy report 
 – approval of the directors’ annual remuneration report
• consideration of reward arrangements for key executives below 
executive level and appointment terms for executive leadership 
team appointments
• review of broad colleague reward arrangements across 
the group
• review of group targets in light of the sale of the initial facilities 
business
• finalise changes to the structure of the ltip following 
engagement with shareholders
• review of assessments of performance against objectives and 
approval of 2014 awards under the ltip
• approval of the nonvesting of the 2011 performance share plan 
award as a result of performance targets not being met
• review of the provision of professional advice to the committee
• annual performance review of the committee
during 2015
• approval of the following for executive directors and other senior 
executives
 – base salaries for 2015
 – bonus outcomes for 2014
 – bonus structure for 2015
 – proposed longterm share awards and preliminary review 
of ltip structure for 2015
• review of proposed malus and clawback policy to be 
implemented in 2016
• review with remuneration advisors of market practice 
on remuneration and governance issues
• approval of the 2014 directors’ remuneration report
• review of results of the annual committee performance review
the committee chairman presents a summary of material matters 
discussed at each meeting to the following board meeting and 
minutes of the committee meetings are circulated to all directors 
the committee reports to shareholders annually in this report 
and the committee chairman attends the agm to address any 
questions arising
the committee conducted a review of its performance during the 
year with the assistance of lintstock an external independent 
specialist consultancy the review concluded that the committee 
continued to operate effectively and that individual directors serving 
on the committee continued to have access to appropriate advice 
and information
advisors to the committee 
material advice andor services were provided to the committee 
during the year by
• deloitte llp deloitte
• towers watson ltd towers watson
• martin sawkins – group hr director
• paul griffiths – company secretary to 29 july 2014
• daragh fagan – company secretary from 30 july 2014
• louise baker – group reward director to 28 february 2014
• john richardson – group reward director from 1 march 2014
the committee initiated a review of sources of professional advice in 
the first half of 2014 following which deloitte has been retained by the 
committee to provide independent advice on executive remuneration 
matters and on the company’s longterm incentive arrangements 
deloitte is a founding member of the remuneration consultants 
group and adheres to its code in relation to executive remuneration 
consulting in the uk fees charged during the year for advice to  
the committee were £19910 deloitte also provided services  
to the hr and company secretary teams in their roles of supporting 
the committee these services included support in preparing the 
directors’ remuneration report provision of market data and 
support in relation to the taxation of and accounting for share plans 
the committee is satisfied that the deloitte engagement partner and 
team who provide remuneration advice to the committee do not 
have connections with the group that may impair their independence 
during the year separate teams within deloitte provided the company 
with a limited level of advice over nonremuneration matters such as 
taxation and due diligence on acquisitions although they are one of a 
number of advisors to the company in such areas deloitte also acted 
as a cosource partner providing support to the internal audit function 
the committee is satisfied that neither the quantum nor the nature 
of services provided by deloitte to the company which are unrelated 
to remuneration matters represent a conflict of interest over the firm’s 
role as advisors to the committee 
towers watson’s involvement with the committee is limited to the 
provision of market data on competitiveness and current trends for 
use in connection with remuneration matters fees charged during 
the year for market data were £3500 towers watson also advises 
the company on uk pension scheme matters
the group hr director has direct access to the chairman of the 
committee and together with the group reward director advises the 
committee on remuneration matters relating to executive directors 
and members of the executive leadership team 
the company chairman attends meetings and makes 
recommendations in relation to the remuneration and incentive 
arrangements for the chief executive the chief executive 
attends and makes recommendations in respect of remuneration 
arrangements for his direct reports no director or executive is 
present when their own remuneration is under consideration rentokil initial plc annual report 2014
70 corporate governance
part 3 – directors’ remuneration report
part 3 – directors’ annual remuneration 
report – looking forward 2015
executive director base salaries from 1 january 2015
executive directors’ and senior executives’ salaries are reviewed with 
effect from 1 january each year in accordance with the remuneration 
policy base salaries reflect the role individual experience skills and 
contribution to overall business performance as well as external 
market conditions following a review of the performance of the 
business the economic and market considerations in the uk where 
average pay increases in the company will be in the order of 2 
the committee agreed that the salaries of executive directors for 
2015 should be as set out below the committee also took into 
account the wider pay position across the group 
andy ransom’s base salary was reviewed on appointment as chief 
executive in october 2013 in line with the policy set out on page 62 
and was set at £700000therefore his salary was not reviewed in 
january 2014 andy ransom’s salary was reviewed again in january 
2015 and with effect from 1 january 2015 the base salary for andy 
ransom was increased by 2 to £714000 also with effect from 
1 january 2015 the salary for jeremy townsend was increased by 
2 to £459000 
pension contribution
in 2015 andy ransom will receive a pension contribution worth 
25 of base salary and jeremy townsend will receive a pension 
contribution worth 15 of base salary
2015 bonus structure 
executive directors can earn a maximum opportunity of 120 of their 
base salary as an annual cash bonus 
the focus of the bonus is on rewarding profitable growth in order to 
align executive directors’ incentives with the group’s strategy the 
committee has approved the following structure of bonuses for 2015 
for the executive directors 
both 95 of the profit target and a free cash flow gateway of £100m 
have to be reached at group level before a bonus is paid to the 
executive directors if both these profit and cash flow gateways are 
achieved then executive directors can earn up to 100 of base 
salary based on a combination of revenue and profit targets this is 
split 5050 for the chief executive and 70 profit30 revenue 
for the chief financial officer
revenue targets for executive directors will continue to be weighted 
to focus on the segments that will set the foundations for longer term 
profitable growth to provide this focus the following coefficients will 
be applied to revenue generated from businesses in the following 
quadrants as described in the strategic report on page 9
the above represent the 2015 coefficients which are broadly the 
same as the previous years
in 2014 the coefficients were applied to the growth quadrant which 
worked as there were material differences within and between each 
of the quadrants for 2015 we will apply the coefficients to the total 
as the absolute growth numbers in three of the four quadrants are 
relatively small making it difficult to achieve a meaningful split that 
balances back to zero the 2015 scheme will be slightly less sensitive 
to differences in quadrant performance than the 2014 scheme but 
will still reward differential performance
an individual performance modifier may also increase or decrease 
the opportunity stated above arising from performance against the 
revenue and profit targets to further recognise individual contribution 
to business performance this individual performance modifier applies 
to all colleagues who partake in the group management bonus 
scheme gmbs measured by the company’s performance and by the 
individual development review process to further recognise individual 
contribution to business performance for executive directors the 
maximum opportunity will not exceed 120 of base salary
1 the total bonus payment is capped at 120 of base salary for executive 
directors senior management who partake in the group management bonus 
scheme gmbs have the opportunity to obtain 125 of base salary
bonus targets have not been disclosed looking forward for 2015 
as the board believes that this information is commercially sensitive 
disclosing bonus targets could provide information about our 
business plans to our competitors which could be damaging to 
our business interests and therefore to shareholders however 
retrospective bonus outcomes for 2014 have been disclosed in the 
tables on page 72 and the 2015 targets will be disclosed in next 
year’s report 
salary from 1 january 2015
executive director salary effective date 
andy ransom £714000 1 january 2015
jeremy townsend £459000 1 january 2015
quadrant
 coefficient 2015 coefficient 2014
emerging 151 14
growth 12 12
protect  enhance 07 07
manage for value 04 04
rating
 1 2 3 4 5
modifier 0 75 100 110 125
1 rentokil initial plc annual report 2014
71
strategic report
corporate governance
financial statements additional information
corporate governance
part of this eps growth is anticipated to be driven by a reduction 
of annual restructuring costs although a substantial amount will be 
driven by underlying improvements in the business in this context 
the committee has reduced eps targets for awards to be made 
in 2015 given the expected reduced scope for restructuring costs 
reduction the committee is satisfied that these targets represent a 
stretching challenge for the business over the next three years this 
is consistent with last year’s directors’ remuneration report where 
the committee noted that the 2014 targets were higher than typical 
market practice and that it anticipated lower targets would be set 
for awards going forward 
in addition when determining the level of vesting the committee will 
also consider the underlying financial performance of the business 
as well as the value added to shareholders during the performance 
periods and may adjust the vesting outcome if it considers this to 
be appropriate 
individual performance modifier 
for executive directors the initial level of vesting of their core psp 
awards is determined by the tsr and eps conditions outlined 
above that level of vesting is then adjusted to reflect the effect 
of the individual performance modifier as set out in the table 
below the individual performance modifier reduces the level of the 
core award that would otherwise vest if an individual fails to reach 
threshold performance under the annual bonus in each of the three 
years of the performance period to zero and increases vesting of the 
core award to a maximum of 200 if maximum bonus performance 
is achieved in each of the three years of the performance period
awards will vest on a straightline basis between each point above
accordingly there is the possibility that awards could vest at 200 
of salary if the business achieves upper quartile tsr performance 
and maximum eps achievement over the performance period and 
financial performance that results in maximum bonus outcomes 
in each of the three consecutive financial years for the relevant 
business unit
2015 nonexecutive directors’ fees 
2015 psp award 
the performance share plan award for 2015 is 120 of base 
salary for the chief executive and 100 of base salary for the 
chief financial officer this is based on epstsr performance as 
explained below and a potential performance modifier of between 0 
and 200 based on bonus performance over the threeyear period 
the maximum number of shares that can vest is capped at shares 
worth 200 of base salary at date of grant
for the executive directors and the most senior colleagues 
approximately 100 individuals the relative tsr and eps 
performance measures will continue to apply to twothirds and to 
onethird of the total award respectively the structure of the eps 
and relative tsr measures also remain unchanged from 2014 
relative tsr performance twothirds of the awards 
• a relative tsr measure is used to ensure participants are 
incentivised to outperform key peers and to ensure that the interests 
of management are aligned with shareholders tsr was also 
selected to reflect market practice and shareholder preferences  
the structure remains unchanged
• it is measured relative to the constituents of the ftse 350 index 
excluding financial services property and primary resources 
sectors the ftse 350 is recognised as a broad index and 
is considered to be an appropriate benchmark for measuring 
performance given the company’s membership of the ftse 250 
the scope and scale of the company’s international operations 
and the diverse nature of companies in the business services sector
• 25 of the award will vest if rentokil initial’s performance is 
positioned at median against the comparator group with the full 
award vesting for upper quartile tsr performance vesting is on 
a straightline basis between these two points no award vests 
for below median performance
eps measure onethird of the awards  
• an eps measure is used to more directly link reward to longterm 
profit performance
• eps is measured on a point to point basis over the threeyear 
period of the award in order to measure underlying earnings 
improvement eps will be measured after adjusting for impairments 
amortisation pension interest and material oneoff items as the 
committee considers that these items do not reflect the underlying 
performance of the business 
• given the business’ focus on improving efficiency and reducing 
costs around restructuring the committee felt that it was 
appropriate that restructuring costs are included in the eps 
calculation in order to incentivise management to achieve this 
given the international nature of our business eps will be 
measured on an exchange neutral basis to reflect management 
performance by removing the impact of windfalls and losses as 
a result of exchange rate movements 
the targets in 2015 are as follows with a straightline vesting 
between these figures 
nonexecutive director fees from 1 january 2015
 
position
fee policy for year beginning  
1 january 2015
chairman £350000 per annum
nonexecutive director £55000 per annum
senior independent director additional £5000 per annum
chairman of audit committee additional £15000 per annum
chairman of remuneration committee additional £15000 per annum
achievement against annual bonus 
targets in respect of each financial year 
average over performance period
 
below 
threshold
 
 
threshold
 
 
target
 
 
maximum
individual performance modifier 0 20 100 200
  
vesting level
compound eps growth 
per annum
threshold 25 of maximum 7 per annum
maximum 100 of maximum 13 per annum rentokil initial plc annual report 2014
72 corporate governance
part 4 – directors’ remuneration report
single total figure for the remuneration of executive directors
the table below has been audited
purpose fixed pay variable pay total
executive directors
base  
salary 
2014
base  
salary 
2013
benefits
1
 
2014
benefits
1
 
2013
pension
4
 
2014
pension
4
 
2013
annual  
bonus 
2014
annual  
bonus 
2013
longterm 
incentives
2 
2014
longterm 
incentives
 
2013
total single 
figure 
2014
total single 
figure 
2013
andy ransom
3
  
chief executive
700 513 20 20 175 128 431 177 0 0 1326 838
jeremy townsend  
chief financial 
officer
450 442 17 16 68 65 251 172 0 0 786 695
alan brown
5
   
ceo to 300913
– 581 – 16 – 145 – 251 – 0 – 993
1 executive directors are provided with life insurance private health cover and a company car or a car allowance the value of the benefits is included under ‘benefits’ in the 
above table there were no other taxable benefits paid to executive directors in 2014
2 no ltip vested in 2014 hence disclosure of nil
3 andy ransom was promoted to chief executive on 1 october 2013 his 2013 pay therefore reflects three months as chief executive and nine months as an executive 
director andy ransom’s salary was unchanged throughout the period from 1 october 2013 to 31 december 2014
4 andy ransom receives a pension contribution in the form of a cash supplement worth 25 of base salary jeremy townsend’s aggregate pension contribution from the 
company is worth 15 of salary this figure is included above
5 alan brown stepped down as a director on 30 september 2013 his 2013 salary benefits and pension to the point when he stepped down from the board are disclosed 
for reference
part 4 – directors’ annual remuneration report 2014
directors’ remuneration in the year to 31 december 2014
annual bonus plan
2014 bonus outcome 
the committee reviewed the 2014 bonus plan outcome for the 
group’s senior management population based on the targets 
set at the start of the financial year the metrics and the levels of 
performance for the executive directors for the 2014 bonus plan 
are set out on page 73 individual performance was also reflected 
using an individual performance modifier this is linked to the group 
performance and development review process details are set out 
below bonuses earned are reflective of the performance of the group 
individual businesses and achievement against specific personal 
objectives where relevant
to support the delivery of profitable growth in 2014 and beyond 
and to align incentives with the group’s strategy revenue targets 
for executive directors were weighted to focus on sectors that were 
critical to the business and to provide focus the following coefficients 
were applied to the revenue generated from the quadrants as 
described in the strategic report on page 10 as in previous years 
95 of profit target has to be achieved before any bonus is paid out 
and in 2014 an additional cash gateway of £81m free cash flow after 
adjustment for the disposal of initial facilities had to be generated at 
group level before any bonus is paid to executive directors
bonus outcomes for 2014 and details of the range around target 
used to assess performance have been disclosed in the table below 
for a bonus to be payable to executive directors two gateway 
conditions had to be met
• 95 of a profit target of £251m 991 achieved therefore the 
condition was met
• cash generation of £81m actual £141m therefore the condition 
was met
quadrant
 coefficient 2014
emerging 14
growth 12
protect  enhance 07
manage for value 04 rentokil initial plc annual report 2014
73
strategic report
corporate governance
financial statements additional information
corporate governance
the individual performance modifier will continue to apply for 
executive directors’ performance ratings are linked to bonus 
through the individual performance modifier as set out in the table 
below the individual performance modifier is also applied to bonus 
payments for all global midlevel management colleagues based 
upon objectives and behaviours as it is for executive directors and 
senior management
an individual performance modifier of 110 was applied to the bonus 
for andy ransom for the period to 31 december 2014 a modifier 
of 110 was applied to the bonus for jeremy townsend the total 
bonus outcomes including modifiers in relation to 2014 are as 
follows
bonus outcomes for 2014 for executive directors are also shown in 
the single total figure for the remuneration of executive directors table 
on page 72 bonuses will be paid in cash
longterm share incentive plans
the executive directors and senior management population 
participate in the performance share plan psp 
the performance share plan
2011 psp vesting
relative tsr performance for 2011 to 2014 was tested on the 
third anniversary of the grant date on 16 june 2014 the company’s 
position relative to the comparator group was below median and 
as such no award vested and the award lapsed the ltip number 
disclosed in the single total figure for the remuneration of executive 
directors on page 72 is therefore nil
2014 psp award 
in 2014 the committee introduced a measure based on earnings 
per share eps as well as the existing relative total shareholder 
return tsr measure for the executive directors and senior 
colleagues approximately 100 individuals the relative tsr and 
eps performance measures apply to twothirds and to onethird of 
the total award respectively additionally an individual performance 
modifier applies to executive directors’ psp awards
• relative tsr performance twothirds of the awards 
 – a relative tsr measure is used to ensure participants are 
incentivised to outperform key peers and to ensure that the 
interests of management are aligned with shareholders tsr 
was also selected to reflect market practice and shareholder 
preferences the structure remains unchanged
 – measured relative to the constituents of the ftse 350 index 
excluding financial services property and primary resources 
sectors the ftse 350 is recognised as a broad index and 
is considered to be an appropriate benchmark for measuring 
performance given the company’s membership of the ftse 250 
the scope and scale of the company’s international operations 
and the diverse nature of companies in the business services 
sector
 – 25 of the award will vest if rentokil initial’s performance is 
positioned at median against the comparator group with the full 
award vesting for upper quartile tsr performance vesting is on 
a straightline basis between these two points no award vests 
for below median performance
annual bonus 2014
andy ransom 
chief executive
 group profit group revenue total
 weighting 50 50 100
 
range around target from 
threshold to maximum
 
 
95 to 110
99 to 102 
see segment 
coefficients
 
 
 
2014 target £251m £183370m 
2014 performance 991 1008 
 bonus achieved  
before modifier
 
2133
 
3468
 
56
£ value bonus before modifier £149343 £242759 £392102
jeremy townsend 
chief financial officer
 group profit group revenue total
 weighting 70 30 100
 
range around target from 
threshold to maximum
 
 
95 to 110
99 to 102 
see segment 
coefficients
 
 
 
2014 target £251m £183370m 
2014 performance 991 1008 
 bonus achieved  
before modifier
 
2987
 
2081
 
5068
£ value bonus before modifier £134408 £93636 £228044
1 the total bonus payment is capped at 120 of base salary for executive 
directors senior management who partake in the group management bonus 
scheme gmbs have the opportunity to obtain 125 of base salary
rating
 1 2 3 4 5
modifier 0 75 100 110 125
1
bonus outcomes
executive director bonus
andy ransom £431312
jeremy townsend £250848 rentokil initial plc annual report 2014
74 corporate governance
part 4 – directors’ remuneration report – continued
2014 psp award outcome
the table below has been audited
participant
date of  
award
form of  
award
no of shares 
awarded
market price 
at date of 
award
exercise 
price
 vesting for 
target levels 
of company 
and individual 
performance
 vesting 
for maximum 
levels of 
company 
and individual 
performance
face value  
of award  
for target 
levels of  
performance 
£
1
face value 
of award for 
maximum 
levels of  
performance 
£
1
performance 
period
andy ransom 310314
nil cost 
option
1134522 1234p 000p 120 200 £839999 £1400000
tsr 
condition 
three 
years to 
310317
jeremy townsend 310314
nil cost 
option
729334 1234p 000p 100 200 £449999 £899998
eps 
condition 
three 
years to 
311216
1 calculation based on value of shares at date of grant of award
achievement against annual bonus 
targets in respect of each financial year 
average over performance period
 
below 
threshold
 
 
threshold
 
 
target
 
 
maximum
individual performance modifier 0 20 100 200
• eps measure onethird of the awards  
 – an eps measure is used to more directly link reward to longterm 
profit performance
 – eps is measured on a point to point basis over the threeyear 
period of the award in order to measure underlying earnings 
improvement eps will be measured after adjusting for 
impairments amortisation pension interest and material oneoff 
items as the committee considers that these items do not reflect 
the underlying performance of the business 
 – given the business’ focus on improving efficiency and reducing 
costs around restructuring the committee felt that it was 
appropriate that restructuring costs are included in the eps 
calculation in order to incentivise management to achieve this 
given the international nature of our business eps will be 
measured on an exchange neutral basis to reflect management 
performance by removing the impact of windfalls and losses as 
a result of exchange rate movements 
the targets in 2014 are as follows with a straightline vesting 
between these figures
the committee recognises that these targets are higher than typical 
market practice and considers them to be very stretching if these 
targets are achieved this will represent significant value creation for 
shareholders part of this growth is anticipated to be driven by a 
reduction of annual restructuring costs although a substantial amount 
will be driven by underlying improvements in the business in this 
context the committee has reduced eps targets for awards to be 
made in 2015 given the expected reduced scope for restructuring 
costs reduction 
in addition when determining the level of vesting the committee will 
also consider the underlying financial performance of the business 
as well as the value added for shareholders during the performance 
periods and may adjust the vesting outcome if it considers this to 
be appropriate 
individual performance modifier 
for executive directors the initial level of vesting of their core psp 
awards is determined by the tsr and eps conditions outlined 
above that level of vesting is then adjusted to reflect the effect of 
the individual performance modifier as set out in the table below the 
individual performance modifier reduces the level of the core award 
that would otherwise vest if an individual fails to reach threshold 
performance under the annual bonus in each of the three years of the 
performance period to zero and increases vesting of the core award 
to a maximum of 200 if maximum bonus performance is achieved 
in each of the three years of the performance period
awards will vest on a straightline basis between each point above
accordingly there is the possibility that awards could vest at 200 
of salary if the business achieves upper quartile tsr performance 
and maximum eps achievement over the performance period and 
financial performance that results in maximum bonus outcomes 
in each of the three consecutive financial years for the relevant 
business unit
awards to executive directors under the 2014 psp award are set 
out in the table below
 
 
 
vesting level
compound eps  
growth per annum 
threshold 25 of maximum 14 per annum
maximum 100 of maximum 20 per annum rentokil initial plc annual report 2014
75
strategic report
corporate governance
financial statements additional information
corporate governance
total psp awards held by executive directors
the table below has been audited
psp 2011
1
date of award plan
market  
price of 
award
scheme 
interest at  
1 january 
2014
shares
vested
during 2014
shares
awarded
during 2014
shares
lapsed
during 2014
shares 
exercisable 
during 2014
shares 
exercised 
during 2014
outstanding at 
31 december 
2014 
performance 
period
andy 
ransom
010811 2011 psp
1
8955p 980394 – – 980394
1
– – – 010814
jeremy 
townsend
010811 2011 psp
1
8955p 925926 – – 925926
1
– – – 010814
psp 2012
2
andy 
ransom
080512 2012 psp
2
835p 1082380 – – – – – 1082380 080515
jeremy 
townsend
080512 2012 psp
2
835p 1042692 – – – – – 1042692 080515
psp 2013
andy 
ransom
3
 
300413 2013 psp
3
109p 458716 – – – – – 458716
3
300416
andy 
ransom
300413 2013 psp
3
960p 937500 – – – – – 937500 300416
jeremy 
townsend
300413 2013 psp 960p 921186 – – – – – 921186 300416
psp 2014
4
andy 
ransom
310314 2014 psp
4
1234p – – 1134522 – – – 1134522 310317
jeremy 
townsend
310314 2014 psp
4
1234p – – 729334 – – – 729334 310317
1  the psp 2011 award was tested in june 2014 the median tsr performance condition for the threeyear performance measurement period was not met therefore the psp 
2011 share awards lapsed on 1 august 2014
2 the maximum psp vesting is only applicable in the event of upper quartile tsr performance and maximum annual bonus outperformance for participants for the threeyear 
performance measurement period no shares will vest if tsr performance is below median at the end of the vesting period or if threshold financial performance conditions are 
not met
3 an additional award was made to andy ransom on his appointment as chief executive calculated on the basis of £90000 additional target shares being the equivalent of 120 
of his salary as an executive director a further supplementary award was calculated on the basis of his new salary as chief executive with the target being 120 of base salary 
the maximum that can be achieved is 200 of applicable salary
4 in 2014 an eps measure was introduced in addition to the existing relative tsr measure for executive directors and senior management the relative tsr and eps performance 
measures apply to twothirds and to onethird of the total award respectively additionally an individual performance modifier applies to executive directors’ psp awards 
the eps performance period for psp 2014 award will be measured to 31 december 2016 the vesting date of the psp 2014 award is 31 march 2017 rentokil initial plc annual report 2014
76 corporate governance
part 4 – directors’ remuneration report – continued
share incentive plan 2008
the 2008 plan was approved by shareholders in 2008 to facilitate the 
appointment of john mcadam alan brown and andy ransom and to 
motivate them to deliver a turnaround in corporate performance
the key features of the plan were that awards would vest based on 
absolute share price performance targets a minimum share price of 
£120 achieved over a sustained period 60 consecutive dealing days 
during the performance measurement period would allow 20 of the 
award to be earned rising on a straightline basis to full vesting at a 
share price of £180 for achieving growth in market value between 
£180 and £280 further shares may be earned on a straightline 
basis up to a maximum of a further 50 of the original award  
during the first half of 2010 the company’s share price achieved 
a 60 day highest average share price of 13082p and therefore 
3443 of the award was earned with onethird vesting in 2011 
a further onethird in 2012 and the remaining third in 2013 no 
further shares were earned when performance was tested in 2012 
or under the final test in may 2013 participants had 12 months 
from 14 june 2013 in which to call for their vested shares no further 
awards may be made under the plan and all remaining shares lapsed 
in 2013 andy ransom and john mcadam exercised their right to 
call for their vested shares on 22 may 2014 which is illustrated in the 
table below
share plan funding 
typically shares granted under the executive incentive plans are 
satisfied by shares purchased in the market or by transfer from the 
company’s employee share trust to the extent shares are newly 
issued to satisfy awards the company complies with investment 
association formerly abi dilution guidelines on their issue
payments to past directors
there were no payments to past directors during 2014
payments for loss of office
there were no payments for loss of office to directors during 2014
single total figure for the remuneration during 2014  of the chairman and nonexecutive directors
the table below has been audited
chairman and nonexecutive directors fees 2014 fees 2013 benefits 2014 benefits 2013
total single  
figure 2014
total single  
figure 2013
john mcadam
1
350 350 20
1
21
1
370 371
peter bamford 55 55 0 0 55 55
richard burrows 55 55 0 0 55 55
alan giles 70 70 0 0 70 70
angela seymourjackson 55 55 0 0 55 55
julie southern
2
32 – 0 – 32 –
peter long
3
60 60 0 0 60 60
duncan tattonbrown
4
26 70 0 0 26 70
1 the benefit relates to the private use by the chairman of a company driver and vehicle
2  julie southern was appointed a director on 21 july 2014
3 peter long stepped down as a director on 31 december 2014
4 duncan tattonbrown stepped down as a director on 14 may 2014
the 2008 plan
the table below has been audited
 
date of 
award plan
market 
price at 
date of 
award
vesting 
period
scheme 
interest at 
010113
shares 
vested  
during  
2010
shares 
released 
during  
2011
shares 
released 
during 
2012
dividend 
on earned 
shares in 
2012
shares 
released 
during 
2013 
dividends 
on earned 
shares in 
2013
shares 
lapsed  
during 
2013 
total 
vested 
shares at 
311213
shares 
called for  
230514 
shares sold 
to meet 
tax liability 
2014
total 
number 
of shares 
over which 
option 
held at 
311214
john  
mcadam
260608
2008 
plan
1
10050p 201113 7500000 2618484
2
872828 872828 14191 872828 34622 8582682 2667318 2667318 1203294 nil
andy  
ransom
260608
2008 
plan
1
10050p 201113 7500000 2618484
2
872828 872828 14191 872828 34622 8582682 2667318 2667318 1256774 nil
1  awards under the plan were subject to performance conditions as set out above relating to share price performance between 1 april 2008 and three specified vesting dates in 2011 
2012 and 2013 these vesting dates were 61 dealing days after the announcement of the company’s financial results for years ending 31 december 2010 ‘first vesting date’ 
31 december 2011 ‘second vesting date’ and 31 december 2012 ‘third vesting date’
2  at the first vesting date on 19 may 2011 61 dealing days after 31 december 2010 preliminary results announcement 3443 of the total plan interest at 1 january 2011 vested 
representing 2585000 shares per participant in total following dividend readjustment the first onethird of 872828 was released to each participant on 19 may 2011 ‘first vesting 
date’ a further 887020 including dividend equivalents were released on 31 may 2012 ‘second vesting date’ and the final onethird of 907470 including dividend equivalents were 
released on 14 june 2013 ‘third vesting date’ the total of vested shares including dividend equivalents for each participant was 2667318 the remaining shares lapsed rentokil initial plc annual report 2014
77
strategic report
corporate governance
financial statements additional information
corporate governance
directors’ shareholdings and share interests
the interests of the directors and their families in the share capital of 
the company on 1 january 2014 or their date of appointment if later 
and at 31 december 2014 are set out below no director has any 
beneficial interest in the shares of any of the company’s subsidiaries 
any changes in the interests of the directors and their families in the 
company and its subsidiary companies during the year and from the 
end of the year to 26 february 2015 are shown below
directors’ shareholdings and share interests
the table below has been audited
rentokil initial plc ordinary shares of 1p each
31 december 2014 
beneficial interests 
number or at  
date of cessation
1 january 2014 
beneficial interests 
number or date of  
appointment
john mcadam
1
1484824 2688118
1
andy ransom
1
1462544 2719318
1
jeremy townsend 148465 148465
peter bamford 38000 38000
richard burrows 25000 25000
alan giles 12000 12000
angela seymourjackson 5826 –
julie southern
2
– –
duncan tattonbrown to 14 may 2014
3
12000 12000
peter long to 31 december 2014
4
2000 2000
1  john mcadam and andy ransom each held a beneficial interest in vested shares held in the 2008 share incentive plan 2008 which they called for on 23 may 2014 
and each sold a proportion of those shares to meet personal tax liabilities which are set out in the table on page 76
2 julie southern was appointed a director on 21 july 2014
3 duncan tattonbrown stepped down as a director on 14 may 2014
4 peter long stepped down as a director on 31 december 2014
executive shareholding requirements
recognising investors’ preferences for executive shareholding 
requirements the company has shareholding guidelines under which 
executive directors will be expected to build if necessary over a period 
of up to five years from appointment and subsequently maintain an 
economic interest in company shares with a market value equivalent 
to 100 of their annual salary the committee may take into account 
directors’ compliance with the shareholding guidelines acknowledging 
any special circumstances that might apply when considering future 
longterm incentive awards the share valuation is based on an 
average share price of 11705p calculated over the last three months 
of 2014
 
 
 
 
 
executive
 
 
 
beneficial interests  
in shares at  
31 december 2014
 
value of shareholding 
at 31 december 2014 
based on three month 
average share price to 
that date
 
 
 
 
shareholding as a 
percentage of salary
 
 
 
 
 
shareholding guideline
interest in psp 
share awards at 
31 december 2014 
nil cost options 
vesting subject to 
performance
chief executive – andy ransom 1462544 £1711907 24456 100 of salary 3613118
chief financial officer – jeremy townsend 148465 £173778 3862 100 of salary 2693212
external appointments
executive directors are entitled subject to board approval of the 
specific appointment to accept a nonexecutive directorship or 
similar appointment outside the company and to retain the fees in 
connection with such appointment
andy ransom is a director and trustee of the charity street league 
for which he received no remuneration jeremy townsend is a 
member of the accounting council of the financial reporting  
council he was paid £5000 during 2014 for fees for his membership  
of the accounting council since his appointment in july 2014  
he is also a director of a business run by a member of his family  
for which he received no remuneration he has no executive 
involvement in the business and the appointment does not represent 
a conflict of interest
chief executive remuneration over sixyear period
 2009 2010 2011 2012 2013 2014
chief executive alan brown alan brown alan brown
1
alan brown alan brown
2
andy ransom
2
andy ransom
total single figure of remuneration £1656000 £989000 £3564971 £1115000 £931562 £287949 £1326045
 annual bonus payout versus maximum 
opportunity
 
72
 
0
 
0
 
13
 
3243
 
3449
 
616
 longterm incentive vesting rates against 
maximum opportunity
 
0
 
0
 
22
 
0
 
0
 
0
 
0
1   2011 single figure for the chief executive includes the value of the 2008 share incentive plan of £2573971 which were valued on the release date of 20 may 2011 
these shares were called for during 2014
2   alan brown was appointed as chief executive on 1 april 2008 and stepped down on 30 september 2013 andy ransom was appointed from that date the total single 
figure has been apportioned to reflect payment during these periods rentokil initial plc annual report 2014
78 corporate governance
part 4 – directors’ remuneration report – continued
tsr performance over a sixyear period relative 
to ftse index
the following graph shows total shareholder return over a sixyear 
period reflecting the holding of the company’s shares plotted 
against the movement of a broad equity market index the following 
graph shows the company’s tsr performance relative to the ftse 
100 index and the ftse 250 index on a consistent basis with the 
graph shown last year which is compliant with the requirements 
the company has been a constituent of both these indices over the 
six year period that is shown the ftse 350 index is also shown on 
the basis that the constituents for the comparator group for long
term incentive purposes are drawn from this index the comparator 
group excludes financial services property and primary resource 
companies the basis of assessment of relative tsr performance in 
respect of awards made under the company’s psp award differs from 
the basis on which this chart is prepared and is described on pages 
71 and 73 of this report this chart has been prepared by deloitte llp 
for the company for inclusion in the annual report for the year ended 
31 december 2014 and is based on data sourced from thomson 
reuters datastream and uses spot return index data at each year end
relative importance of spend on pay
the table below sets out amounts paid in total employee costs 
and total dividends paid for the years ended 31 december 2014 
and 31 december 2013
 2014  
£m
2013  
£m
 
 change
remuneration paid to all 
employees of the group
1
 
£7878
 
£8053
23 
decrease
 
distributions to shareholders
2
 
£431
 
£386
1073 
increase
1 the figures for 2013 and 2014 show employee remuneration for continuing 
operations they do not include discontinued operations following the sale of 
the city link business in april 2013 or the sale of the initial facilities business 
in march 2014
2 the board is recommending a final dividend in respect of 2014 of 182p per 
share this equates to a full year dividend of 259p per share in 2013 a full year 
dividend of 231p per share was paid to shareholders
voting at the 2014 agm
at the agm on 14 may 2014 votes cast by proxy and at the meeting 
in respect of the 2013 directors’ remuneration policy report and the 
directors’ annual remuneration report were as follows
approval of the remuneration report 
 total total
  2013 remuneration 
policy report
2013 annual 
remuneration report 
votes for 1302180656 1349370992
 for 96061 99482
votes against 53393193 7026064
 against 3939 0518
total votes cast 1355573849 1356397056
votes withheld abstentions 1044162 220955
 votes withheld 0077 0016
a vote ‘for’ include those votes giving the chairman discretion a vote 
‘withheld’ is not classed as a vote in law and is not counted in the 
calculation of proportion of votes cast for or against a resolution
the committee is pleased with the level of shareholder support received 
for the 2013 directors’ remuneration report the company remains 
committed to ongoing shareholder dialogue and takes an active interest 
in voting outcomes in the event of a substantial vote against a resolution 
in relation to directors’ remuneration rentokil initial would seek to 
understand the reasons for any such vote and would set out in the 
following annual report any actions in response to it during early 2014 
the committee consulted with shareholders regarding changes to the 
performance measures for longterm incentive arrangements
alan giles 
chairman  
remuneration committee 
26 february 2015
percentage change in remuneration
the table below sets out a comparison of the change in pay for the 
chief executive for the year ended 2014 compared with 2013 and to 
all uk employees excluding initial facilities which was sold in 2014 
over the same period the chief executive is based in the uk and as 
such is impacted by the same economic and legislative environments 
as other uk colleagues based in core businesses 
average base salary for all uk employees includes overtime and 
premium rate pay which is flexed to meet business requirements as 
well as annual and outofcycle pay increases and headcount changes 
during the year all bonus schemes are performance related and reflect 
business performance during the year the impact of changes to the uk 
car scheme and private healthcare drove a reduced cost of benefits
   
base salary
annual 
bonus
 
benefits
 
total
 
chief executive
7 4 4   
decrease
075 
increase
1 0  3   
decrease
5  0  
decrease
 
all uk employees
1
9 7   
decrease
2
25 
increase
3
14   
decrease
4
11 
increase 
1 the figure for 2014 shows employee remuneration for continuing operations 
it does not include discontinued operations following the sale of the initial 
facilities business in march 2014
2 base salary includes overtime and premium rate pay
3 annual bonus includes our group management bonus scheme gmbs and 
any other bonus commission or cash incentive
4 benefits include private healthcare car allowance including trade down cars 
fully expensed fuel cards and commercial vans private use
50
100
150
200
250
300
01 jan
2009
31 dec
2009
31 dec
2010
31 dec
2011
31 dec
2012
31 dec
2014
31 dec
2013
ftse 100
ftse 250
rentokil initial’s total shareholder return compared against total 
shareholder return of the ftse 100 the ftse 250 and the ftse 350
ftse 350
rentokil initial plc
total shareholder return rentokil initial plc annual report 2014
79
strategic report
corporate governance
financial statements additional information
corporate governance
independent auditor’s report to the members of rentokil initial plc
opinions and conclusions arising from our audit
1 our opinion on the financial statements is unmodified 
we have audited the financial statements of rentokil initial plc for  
the year ended 31 december 2014 set out on pages 82 to 141  
in our opinion 
• the financial statements give a true and fair view of the state of the 
group’s and of the parent company’s affairs as at 31 december 
2014 and of the group’s profit for the year then ended 
• the group financial statements have been properly prepared in 
accordance with international financial reporting standards as 
adopted by the european union 
• the parent company financial statements have been properly 
prepared in accordance with uk accounting standards and
• the financial statements have been prepared in accordance with the 
requirements of the companies act 2006 and as regards the group 
financial statements article 4 of the ias regulation 
2 our assessment of risks of material misstatement
in arriving at our audit opinion above on the financial statements the 
risks of material misstatement that had the greatest effect on our audit 
were as follows
impairment assessment and testing of cashgenerating units 
that include goodwill and acquired intangible assets including 
customer lists and relationships and brands carrying values of 
£2910m and £1003m respectively 
refer to page 52 audit committee report and note b4 accounting 
policy and financial disclosures 
the risk the group has significant carrying amounts of both goodwill 
and acquired intangible assets these balances are spread across a 
range of cashgenerating units in different countries 
a valueinuse model is used for impairment testing the estimation 
of the valueinuse of the cashgenerating units requires significant 
judgement in relation to the appropriate discount rates growth rates 
terminal values and forecast cash flows changes to the assumptions 
applied to the model for example a change in the discount rate have 
the potential to significantly affect the impairment testing result
our response in this area our audit procedures included testing of 
the group’s underlying methodology upon which the forecasts are 
based and the principles and integrity of the group’s discounted cash 
flow model we instructed local auditors to evaluate the procedures 
undertaken to identify indicators of impairment in the year our  
testing of the goodwill impairment models included challenge of the 
longterm growth rate and discount rate assumptions by comparison 
to externally derived data such as projected economic growth rates 
discount rate inputs and inflation rates as well as performing break
even analysis on the assumptions we challenged the assumptions 
relating to forecast revenue growth and profit margins by comparison 
to the historical performance of the cashgenerating unit and to the 
forecast approved by the board 
provisions for tax contingencies 
refer to page 52 audit committee report and note a13 accounting 
policy and financial disclosures 
the risk the group holds a number of provisions for outstanding tax 
contingencies which arise in the normal course of business the group 
operates in a number of tax jurisdictions and there are therefore 
complexities in transfer pricing and other international tax legislation 
issues for consideration in addition tax matters usually take a significant 
length of time to be agreed with the tax authorities and as such the 
recognition of these tax provisions requires judgements and estimates to 
be made in respect of the outcomes of the tax authority investigations 
our response with regard to the tax contingencies we have 
performed the following with the assistance of our tax specialists 
assessed the group’s tax positions its correspondence with the 
relevant tax authorities and its external tax advisors and analysed and 
challenged the assumptions used to determine tax provisions using 
our knowledge and experiences of the application of the international 
and local legislation by the relevant authorities and courts we also 
considered the adequacy of the group’s disclosures in respect of tax 
and uncertain tax positions
recognition of uk deferred tax assets 
refer to page 52 audit committee report and note a14 accounting 
policy and financial disclosures 
the risk the group has significant recognised and unrecognised 
deferred tax assets in respect of losses within the uk there is inherent 
uncertainty involved in both evaluating the accessibility of the tax 
losses and estimating the quantum of future taxable profits this is 
exacerbated by the nature of the future uk income and as the losses 
are spread across several different tax entitiesthere is also judgement 
in determining the forecast period which also determines the extent to 
which deferred tax assets are or are not recognised
our response in this area our audit procedures included analysing 
the judgements applied in assessing the likelihood of the utilisation 
of deferred tax assets and the appropriateness of the assumptions 
regarding the forecast period we have involved our own tax 
specialists in testing the underlying methodology and the mathematical 
accuracy of the taxable profit forecast models used to estimate the 
future use of deferred tax assets through assessment and challenge 
of the key input assumptions primarily uk taxable profit forecasts and 
the term covered by the model to information derived internally by the 
group and taking into account our knowledge and experience of the 
application of relevant tax legislation 
we also assessed whether the group’s disclosures about the 
sensitivity of the recognition of deferred tax assets to changes in key 
assumptions reflected the associated inherent risks
3 our application of materiality and an overview of the scope 
of our audit
the materiality for the group financial statements as a whole was set 
at £75m determined with reference to a benchmark of profit before 
taxation from continuing operations of which it represents 5 
we report to the audit committee any corrected or uncorrected 
identified misstatements exceeding £250000 in addition to other 
identified misstatements that warranted reporting on qualitative 
grounds
independent auditor’s report to the members  
of rentokil initial plc rentokil initial plc annual report 2014
80 corporate governance
independent auditor’s report to the members of rentokil initial plc – continued
the components within the scope of our work accounted for the 
following percentages of the group’s results
 group  
revenue
group profit before tax absolute 
from continuing operations
audits for group reporting 
purposes
 
54
 
64
detailed audit procedures 
over all significant accounts
 
27
 
13
total 81 77
this audit work was performed by 16 audit teams in 14 different 
countries covering 91 reporting units the work on 64 of the 
91 components in scope for the group audit was performed by 
component auditors and the rest by the group audit team 
the remaining 19 of total group revenue 23 of group profit 
before tax absolute from continuing operations and 19 of total 
group assets is represented by individually insignificant reporting 
components none of which individually represented more than 
2 of any of total group revenue total group profit before tax 
absolute from continuing operations or total group assets for these 
components we performed analysis at an aggregated group level 
to reexamine our assessment that there were no significant risks 
of material misstatement within these
the group audit team instructed component auditors as to the 
significant areas to be covered including the relevant risks detailed 
above and the information to be reported back the group audit team 
approved the component materialities which ranged from £01m to 
£20m having regard to the mix of size and risk profile of the group 
across the components 
the group audit team visited four component locations france 
belgium the netherlands and the us to meet with the component 
auditors and review the findings as well as to assess the audit risk 
and strategy telephone conference meetings were also held with 
those component auditors visited and all others in scope for group 
reporting that were not physically visited at these visits and meetings 
the findings reported to the group audit team were discussed in more 
detail and any further work required by the group audit team was 
then performed by the component auditor
4 our opinion on other matters prescribed by the companies 
act 2006 is unmodified
in our opinion 
• the part of the directors’ remuneration report to be audited has 
been properly prepared in accordance with the companies act 
2006 and
• the information given in the strategic report and the directors’ 
report for the financial year for which the financial statements are 
prepared is consistent with the financial statements 
5 we have nothing to report in respect of the matters on which 
we are required to report by exception 
under isas uk and ireland we are required to report to you if based 
on the knowledge we acquired during our audit we have identified 
other information in the annual report that contains a material 
inconsistency with either that knowledge or the financial statements 
a material misstatement of fact or that is otherwise misleading 
in particular we are required to report to you if 
• we have identified material inconsistencies between the knowledge 
we acquired during our audit and the directors’ statement that 
they consider that the annual report and financial statements 
taken as a whole is fair balanced and understandable and provides 
the information necessary for shareholders to assess the group’s 
performance business model and strategy or
• the significant issues considered by the audit committee section of 
the audit committee report does not appropriately address matters 
communicated by us to the audit committee
under the companies act 2006 we are required to report to you if 
in our opinion 
• adequate accounting records have not been kept by the parent 
company or returns adequate for our audit have not been received 
from branches not visited by us or 
• the parent company financial statements and the part of the 
directors’ remuneration report to be audited are not in agreement 
with the accounting records and returns or 
• certain disclosures of directors’ remuneration specified by law are 
not made or 
• we have not received all the information and explanations we require 
for our audit 
under the listing rules we are required to review 
• the directors’ statement set out on page 144 in relation to going 
concern and  
• the part of the corporate governance statement on page 44 relating 
to the company’s compliance with the ten provisions of the 2012 
uk corporate governance code specified for our review
we have nothing to report in respect of the above responsibilities 
scope and responsibilities
as explained more fully in the statement of directors’ responsibilities 
set out on page 145 the directors are responsible for the preparation 
of the financial statements and for being satisfied that they give a 
true and fair view a description of the scope of an audit of financial 
statements is provided on the financial reporting council’s website 
at wwwfrcorgukauditscopeukprivate this report is made solely 
to the company’s members as a body and is subject to important 
explanations and disclaimers regarding our responsibilities published 
on our website at wwwkpmgcomukauditscopeukco2014a which 
are incorporated into this report as if set out in full and should be read 
to provide an understanding of the purpose of this report the work 
we have undertaken and the basis of our opinions
paul sawdon senior statutory auditor  
for and on behalf of kpmg llp  statutory auditor
chartered accountants 
15 canada square 
london 
e14 5gl 
26 february 2015 rentokil initial plc annual report 2014
81
strategic report
corporate governance
financial statements additional information
financial statements
financial statements
strategic report
our business 2
rentokil initial at a glance 3
statement by the chairman and the  
chief executive 4
2014 performance 8
our business model 9
differentiated strategy 10
markets – key drivers and considerations 11
strategy in action 13
business overview 18
key performance indicators 19
growth levers 21
business review – regional performance 26
business review – hygiene 29
business review – pest control 30
business review – workwear 32
corporate responsibility 33
risks and uncertainties 36
corporate governance
board of directors 40
executive leadership team 42
chairman’s statement 43
corporate governance report 44
audit committee report 52
nomination committee report 58
directors’ remuneration report 60
independent auditor’s report to the 
members of rentokil initial plc 79
 
financial statements
consolidated income statement 82
consolidated statement  
of comprehensive income 83
consolidated balance sheet 84
consolidated statement  
of changes in equity 85
consolidated cash flow statement 87
notes to the accounts 88
principal operating subsidiary  
and associated undertakings 133
fiveyear summary 134
parent company balance sheet 135
notes to the parent company accounts 136
additional information
directors’ report and other statutory  
disclosures 143
additional shareholder information 146 rentokil initial plc annual report 2014
82
notes
2014  
£m
restated 
2013
£m
revenue a1 17408 17914
operating expenses a7 15387 16309
operating profit 2021 1605
analysed as
operating profit before amortisation and impairment of intangible assets
1
 restructuring costs and oneoff items a1 2322 2361
restructuring costs a1 88 474
oneoff items – operating a1 01 46
amortisation and impairment of intangible assets
1
 212 236
operating profit 2021 1605
interest payable and similar charges c8 562 705
interest receivable c9 109 109
net interest credit from pensions a9 25 55
oneoff items – financing – 15
share of profit from associates net of tax of £28m 2013 £31m b7 39 43
profit before income tax 1632 1122
income tax expense
2
a13 371 289
profit for the year from continuing operations 1261 833
discontinued operations
profitloss for the year from discontinued operations b2 1354 446
profit for the year including discontinued operations 2615 387
attributable to
equity holders of the company 2618 375
noncontrolling interests 03 12
2615 387
basic earnings per share
continuing operations a2 696p 452p
discontinued operations a2 745p 245p
continuing and discontinued operations a2 1441p 206p
diluted earnings per share
continuing operations a2 695p 450p
discontinued operations a2 744p 245p
continuing and discontinued operations a2 1439p 206p
basic adjusted earnings per share
3
a2 805p 736p
diluted adjusted earnings per share
3
a2 804p 733p
1 excluding computer software
2 taxation includes £371m 2013 £306m as restated in respect of overseas taxation
3 earnings per share before the tax adjusted amortisation and impairment of intangibles excluding computer software restructuring costs oneoff items and net interest credit from pensions
 restated as a result of discontinued operations please refer to the general accounting policies section of the notes to the accounts for further details
consolidated income statement
for the year ended 31 december
financial statements rentokil initial plc annual report 2014
83
strategic report
corporate governance
financial statements additional information
notes
2014
£m
2013
£m
profit for the year 2615 387
other comprehensive income
items that are not reclassified subsequently to the income statement
remeasurement of net defined benefit assetliability a9 1143 756
t ax related to items taken to other comprehensive income a13 199 186
items that may be reclassified subsequently to the income statement
net exchange adjustments offset in reserves 177 331
revaluation of availableforsale investments – 05
availableforsale investments reclassified to the income statement – 15
effective portion of changes in fair value of cash flow hedge 01 12
recycling cumulative exchange on disposal of foreign operations 06 –
net incomeloss not recognised in income statement 1126 909
t otal comprehensive incomeexpense for the year 3741 522
attributable to
equity holders of the company 3744 527
noncontrolling interests 03 05
3741 522
consolidated statement of comprehensive income
for the year ended 31 december
financial statements rentokil initial plc annual report 2014
84
notes
2014
£m
2013
£m
assets
noncurrent assets
intangible assets b4 4313 4250
property plant and equipment b5 5055 5371
investment property – 44
investments in associated undertakings b7 144 130
other investments c3 01 02
deferred tax assets a14 35 92
retirement benefit assets a9 1922 706
other receivables a3 115 82
derivative financial instruments c5 14 02
11599 10679
current assets
other investments c3 514 2920
inventories a4 589 638
trade and other receivables a3 3145 4174
current tax assets 60 57
derivative financial instruments c5 06 34
cash and cash equivalents c2 1971 1438
6285 9261
liabilities
current liabilities
trade and other payables a5 3820 4928
current tax liabilities 718 665
provisions for other liabilities and charges a6 245 300
bank and other shortterm borrowings c4 311 4442
derivative financial instruments c5 67 78
5161 10413
net current assetsliabilities 1124 1152
noncurrent liabilities
other payables a5 129 130
bank and other longterm borrowings c4 9761 10225
deferred tax liabilities a14 783 627
retirement benefit obligations a9 258 236
provisions for other liabilities and charges a6 598 629
derivative financial instruments c5 194 –
11723 11847
net assetsliabilities 1000 2320
equity
capital and reserves attributable to the company’s equity holders
called up share capital c11 182 182
share premium account 68 68
other reserves 17720 17902
retained profits 18472 15331
1002 2321
noncontrolling interests 02 01
t otal equity 1000 2320
the financial statements on pages 82 to 132 were approved by the board of directors on 26 february 2015 and were signed on its behalf by
andy ransom  jeremy t ownsend
chief executive  chief financial officer
consolidated balance sheet
at 31 december
financial statements rentokil initial plc annual report 2014
85
strategic report
corporate governance
financial statements additional information
attributable to equity holders of the company
 
called up  
share  
capital  
£m
share  
premium 
account  
£m
other  
reserves  
£m
retained 
earnings  
£m
non  
controlling 
interests  
£m
total  
equity 
£m
at 1 january 2013 181 68 17570 15982 67 1272
profit for the year – – – 375 12 387
other comprehensive income
net exchange adjustments offset in reserves – – 324 – 07 331
remeasurement of net defined benefit assetliability – – – 756 – 756
revaluation of availableforsale investments – – 05 – – 05
availableforsale investments reclassified to the income statement – – 15 – – 15
effective portion of changes in fair value of cash flow hedge – – 12 – – 12
t ax related to items taken directly to other comprehensive income – – – 186 – 186
t otal comprehensive expenseincome for the year – – 332 195 05 522
transactions with owners
issue of ordinary shares 01 – – 01 – –
dividends paid to equity shareholders – – – 386 – 386
cost of share options and longterm incentive plan – – – 20 – 20
transactions with noncontrolling interests
acquisition of noncontrolling interests – – – 89 37 126
dividends paid to noncontrolling interests – – – – 34 34
at 31 december 2013 182 68 17902 15331 01 2320
at 1 january 2014 182 68 17902 15331 01 2320
profit for the year – – – 2618 03 2615
other comprehensive income
net exchange adjustments offset in reserves – – 177 – – 177
remeasurement of net defined benefit assetliability – – – 1143 – 1143
effective portion of changes in fair value of cash flow hedge – – 01 – – 01
cumulative foreign exchange recycled to income statement on disposal  
of foreign operations – – 06 – – 06
t ax related to items taken directly to other comprehensive income – – – 199 – 199
t otal comprehensive income for the year – – 182 3562 03 3741
transactions with owners
dividends paid to equity shareholders – – – 432 – 432
cost of share options and longterm incentive plan – – – 11 – 11
at 31 december 2014 182 68 17720 18472 02 1000
treasury shares of £109m 2013 £111m have been netted against retained earnings treasury shares represent 59m 2013 60m shares 
held by the rentokil initial employee share trust the market value of these shares at 31 december 2014 was £71m 2013 £69m 
dividend income from and voting rights on the shares held by the trust have been waived
consolidated statement of changes in equity
for the year ended 31 december
financial statements rentokil initial plc annual report 2014
86
consolidated statement of changes in equity – continued
analysis of other reserves
capital  
reduction 
reserve 
£m
legal 
reserve 
£m
cash flow 
hedge reserve 
£m
translation 
reserve 
£m
available 
forsale 
reserve  
£m
total 
£m
at 1 january 2013 17227 104 11 456 20 17570
net exchange adjustments offset in reserves – – – 324 – 324
revaluation of availableforsale investments – – – – 05 05
availableforsale investments reclassified to the income statement – – – – 15 15
effective portion of changes in fair value of cash flow hedge – – 12 – – 12
t otal comprehensive income for the year – – 12 324 20 332
at 31 december 2013 17227 104 01 780 – 17902
at 1 january 2014 17227 104 01 780 – 17902
net exchange adjustments offset in reserves – – – 177 – 177
effective portion of changes in fair value of cash flow hedge – – 01 – – 01
cumulative exchange recycled to income statement on disposal of 
foreign operations – – – 06 – 06
t otal comprehensive income for the year – – 01 183 – 182
at 31 december 2014 17227 104 – 597 – 17720
the capital reduction reserve arose in 2005 as a result of the scheme of arrangement of rentokil initial 1927 plc under section 425 of the 
companies act 1985 to introduce a new holding company rentokil initial plc and the subsequent reduction in capital approved by the 
high court whereby the nominal value of each ordinary share was reduced from 100p to 1p
financial statements rentokil initial plc annual report 2014
87
strategic report
corporate governance
financial statements additional information
notes
2014 
£m
2013 
£m
cash flows from operating activities
profit for the year 2615 387
adjustments for
– profitloss on sale of discontinued operations excluding costs of disposal 1460 261
– discontinued operations tax 04 27
– t ax 371 314
– share of profit from associates 39 43
– oneoff items – financing – 15
– net interest credit from pensions 25 55
– interest income 109 109
– interest expense 562 709
– depreciation and impairment of tangible assets 1757 1883
– impairment of investment properties – 35
– amortisation and impairment of intangible assets
1
212 269
– amortisation and impairment of computer software 130 170
– ltip charges 11 20
– other noncash items 08 07
– loss on sale of property plant and equipment 06 34
– profit on sale of investment properties 24 –
– loss on disposalretirement of intangible assets 08 19
– profitloss on disposal of companies and businesses 24 12
changes in working capital excluding the effects of acquisitions and exchange differences on consolidation
– inventories 16 115
– trade and other receivables 199 06
– trade and other payables and provisions 340 260
cash generated from operating activities before special pension contributions 3480 3490
special pension contributions 10 136
cash generated from operating activities 3470 3354
interest received 109 106
interest paid 596 609
income tax paid 301 372
net cash generated from operating activities 2682 2479
cash flows from investing activities
purchase of property plant and equipment 1731 2011
purchase of intangible fixed assets 120 276
proceeds from sale of property plant and equipment 63 63
proceeds from sale of investment properties 68 –
acquisition of companies and businesses net of cash acquired b1 681 120
disposal of companies and businesses b2 2560 20
restricted cash disposed of with companies and businesses b2 167 –
disposal of availableforsale investments – 12
dividends received from associates b7 17 19
net cash flows from investing activities 09 2293
cash flows from financing activities
dividends paid to equity shareholders c10 432 386
dividends paid to noncontrolling interests – 34
interest element of finance lease payments 08 09
capital element of finance lease payments 81 81
cash outflowinflow on settlement of debt related foreign exchange forward contracts 31 57
net investment in term deposits 2407 2921
proceeds from issue of debt 11 2904
bond repayments 3906 500
net cash flows from financing activities 2040 970
net increasedecrease in cash and cash equivalents c12 651 784
cash and cash equivalents at beginning of year c2 1434 2189
exchange lossesgains on cash and cash equivalents 144 29
cash and cash equivalents at end of the financial year c2 1941 1434
1 excluding computer software
consolidated cash flow statement
for the year ended 31 december
financial statements rentokil initial plc annual report 2014
88 financial statements
notes to the accounts
basis of preparation
these consolidated financial statements have been prepared in 
compliance with international financial reporting standards ifrs 
and international financial reporting interpretations committee  
ifric interpretations as adopted by the european union as at  
31 december 2014
the consolidated financial statements have been prepared under the 
historical cost convention as modified by the revaluation of certain 
financial assets and liabilities including derivative instruments
after reviewing group and company cash balances borrowing 
facilities and projected cash flows the directors believe that the group 
and company have adequate resources to continue operations for 
the foreseeable future for this reason they continue to adopt the going 
concern basis in preparing the consolidated financial statements 
see the directors’ report on page 144
consolidation
a subsidiaries
subsidiaries are entities controlled by the group the group controls 
an entity when it is exposed to or has rights to variable returns from its 
involvement with the entity and has the ability to affect those returns 
through its power over the entity in assessing control the group takes 
into consideration potential voting rights that are currently exercisable 
the acquisition date is the date on which control is transferred to the 
acquirer the financial statements of subsidiaries are included in the 
consolidated financial statements from the date that control 
commences until the date that control ceases losses applicable to 
the noncontrolling interests in a subsidiary are allocated to the 
noncontrolling interests even if doing so causes the noncontrolling 
interests to have a deficit balance
the group uses the purchase method of accounting to account for the 
acquisition of subsidiaries the cost of an acquisition is measured as 
the fair value of the assets given equity instruments issued and 
liabilities incurred or assumed at the date of exchange identifiable 
assets acquired and liabilities and contingent liabilities assumed in a 
business combination are measured initially at their fair values at the 
acquisition date irrespective of the extent of any noncontrolling 
interest the excess of the cost of acquisition over the fair value of the 
group’s share of the identifiable net assets acquired is recorded as 
goodwill if the cost of the acquisition is less than the fair value of the 
net assets of the subsidiary acquired the difference is recognised 
directly in the income statement
intercompany transactions balances and gains and losses on 
transactions between group companies are eliminated
changes in the group’s interest in a subsidiary that do not result in a 
loss of control are accounted for as equity transactions
where the group loses control of a subsidiary the assets and liabilities 
are derecognised along with any related noncontrolling interest and 
other components of equity  any resulting gain or loss is recognised 
in profit or loss  any interest retained in the former subsidiary is 
measured at fair value when control is lost
b associates
associates are those entities in which the group has significant 
influence but not control over the financial and operating policies 
significant influence is presumed to exist when the group holds 
between 20 and 50 of the voting power of another entity
general accounting policies 
associates are accounted for using the equity method equity 
accounted investees and are initially recognised at cost the group’s 
investment includes goodwill identified on acquisition net of any 
accumulated impairment losses the consolidated financial 
statements include the group’s share of the total comprehensive 
income and equity movements of equity accounted investees from 
the date that significant influence commences until the date that 
significant influence ceases when the group’s share of losses 
exceeds its interest in an equity accounted investee the carrying 
amount is reduced to nil and recognition of further losses is 
discontinued except to the extent that the group has incurred legal or 
constructive obligations or made payments on behalf of an investee
gains and losses on transactions between the group and its 
associates are eliminated to the extent of the group’s interest in 
the associates
foreign currency translation
a functional and presentation currency
items included in the financial statements of each of the group’s 
entities are measured using the currency of the primary economic 
environment in which the entity operates ‘the functional currency’ 
the consolidated financial statements are presented in sterling which 
is the company’s functional and presentation currency
b transactions and balances
foreign currency transactions are translated into the functional 
currency using the exchange rates prevailing at the dates of the 
transactions foreign exchange gains and losses resulting from the 
settlement of such transactions or from the translation of monetary 
assets and liabilities denominated in foreign currencies at reporting 
period end exchange rates are recognised under the appropriate 
heading in the income statement except when deferred in equity as 
qualifying net investment hedges or where certain intragroup loans are 
determined to be quasiequity normally not expected to be repaid
c group companies
the results and financial position of all the group entities that have 
a functional currency different from the presentation currency are 
translated into the presentation currency as follows
i assets and liabilities for each balance sheet presented are 
translated at the closing rate at the date of the balance sheet
ii income and expenses for each income statement are translated 
at average exchange rates and
iii all resulting exchange differences are recognised as a separate 
component of equity
on consolidation exchange differences arising from the translation of 
the net investment in foreign entities and of borrowings and other 
currency instruments designated as hedges of such investments or 
deemed to be quasiequity are taken to shareholders’ equity when a 
foreign operation is sold such exchange differences are recognised in 
the income statement as part of the gain or loss on sale
goodwill and fair value adjustments arising on the acquisition of a 
foreign entity are treated as assets and liabilities of the foreign entity 
and translated at period end exchange rates rentokil initial plc annual report 2014
89 financial statements
strategic report
corporate governance
financial statements additional information
critical accounting estimates and assumptions
estimates and judgements are continually evaluated and are based on 
historical experience and other factors including expectations of future 
events that are believed to be reasonable under the circumstances
the group makes estimates and assumptions concerning the future 
the resulting accounting estimates will by definition seldom equal 
the related actual results the estimates and assumptions that have 
a significant risk of causing a material adjustment to the carrying 
amounts of assets and liabilities within the next financial year are 
discussed below sensitivities to the estimates and assumptions are 
provided where relevant in the relevant notes to the accounts
a estimated impairment of goodwill note b4
the group tests annually whether goodwill has suffered any impairment 
in accordance with the accounting policy stated in note b4 the 
recoverable amounts of cashgenerating units have been determined 
based on valueinuse calculations these calculations require the use 
of estimates and assumptions consistent with the most uptodate 
budgets and plans that have been formally approved by management 
b valuation of acquired intangible assets note b1
acquisitions may result in customer relationships brands patents and 
reacquired franchise rights being recognised these are valued using 
the excess earnings and relief from royalty methods in applying these 
methodologies certain key judgements and estimates are required to 
be made in respect of future cash flows
c income taxes and deferred tax asset notes a13 and a14
the group is subject to income taxes in numerous jurisdictions 
significant judgement is required in determining the worldwide 
provision for income taxes there are many transactions and 
calculations for which the ultimate tax determination is uncertain 
during the ordinary course of business the group recognises liabilities 
for anticipated tax audit issues based on estimates of whether 
additional taxes will be due where the final tax outcome of these 
matters is different from the amounts that were initially recorded such 
differences will impact the income tax and deferred tax provisions in 
the period in which such determination is made
deferred income tax is provided in full using the liability method on 
temporary differences arising between the tax bases of assets and 
liabilities and their carrying amounts in the consolidated financial 
statements however if the deferred income tax arises from initial 
recognition of an asset or liability in a transaction other than a business 
combination that at the time of the transaction affects neither the 
accounting nor the taxable profit or loss it is not accounted for 
deferred income tax is determined using tax rates and laws that have 
been enacted or substantively enacted by the balance sheet date and 
are expected to apply when the related deferred income tax asset is 
realised or the deferred income tax liability is settled
d provision for vacant property and environmental 
restoration note a6
significant judgement is required in determining the worldwide 
provision for vacant property and environmental restoration vacant 
property and environmental restoration tend to be longterm in nature 
and the required use of an appropriate market discount rate and 
forecast future utilisation based upon management’s best estimate 
determines the level of provision required at the balance sheet date 
the phasing and actual cash spend may be different from the original 
forecast utilisation spend
e retirement benefits note a9
defined benefit schemes are reappraised annually by independent 
actuaries based upon actuarial assumptions significant judgement is 
required in determining these actuarial assumptions refer to note a9 
for the principal assumptions used for the rentokil initial pension 
scheme in the uk
standards amendments and interpretations to 
published standards that are not yet effective
the group has adopted the following new standards and amendments 
to standards including any consequential amendments to other 
standards with a date of initial application of 1 january 2014
• investment entities – amendments to ifrs 10 ifrs 12 and ias 27
• joint arrangements – amendments to ifrs 1 1
• offsetting financial assets and financial liabilities – amendments to 
ias 32
• recoverable amount disclosures for nonfinancial assets – 
amendments to ias 36
• continuing hedge accounting after derivative novations – 
amendments to ias 39
the nature and the effect of the material changes as a result of the 
adoption of the new standards are further explained below
as a result of ifrs 10 201 1 the group has changed its accounting 
policy for determining whether it has control over and consequently 
whether it consolidates its investees ifrs 10 introduces a new control 
model that focuses on whether the group has power over an investee 
exposure or rights to variable returns from its involvement with the 
investee and ability to use its power to affect those returns
in accordance with the transitional provisions of ifrs 10 the group 
reassessed the control conclusion for its investees at 1 january 2014 
no modifications of previous conclusions about control regarding the 
group’s investees were required
as a result of ifrs 1 1 the group has changed its accounting policy 
for its interests in joint arrangements under ifrs 1 1 the group has 
classified its interests in joint arrangements as either joint operations 
if the group has rights to the assets and obligations for the liabilities 
relating to an arrangement or joint ventures if the group has rights only 
to the net assets of an arrangement when making this assessment 
the group considered the structure of the arrangements the legal form 
of any separate vehicles the contractual terms of the arrangements 
and other facts and circumstances previously the structure of the 
arrangement was the sole focus of classification
no modifications of previous conclusions about joint arrangements 
were required rentokil initial plc annual report 2014
notes to the accounts – continued
90 financial statements
the following tables summarise the material impacts resulting from the representation of initial facilities as discontinued operations on the 
group’s income statement and earnings per share
consolidated income statement
for the year ended 31 december 2013
 
as previously 
reported 
£m
adjustment for 
discontinued 
operations 
£m
as restated 
£m
revenue 23271 5357 17914
operating expenses 21558 5249 16309
operating profit 1713 108 1605
analysed as
operating profit before amortisation and impairment of intangible assets
1
 restructuring costs and oneoff items 2619 258 2361
restructuring costs 517 43 474
oneoff items – operating 120 74 46
amortisation and impairment of intangible assets
1
 269 33 236
operating profit 1713 108 1605
interest payable and similar charges 709 04 705
interest receivable 109 – 109
net interest credit from pensions 55 – 55
oneoff items – financing 15 – 15
share of profit from associates net of tax 43 – 43
profit before income tax 1226 104 1122
income tax expense 314 25 289
profit for the year from continuing operations 912 79 833
discontinued operations
loss for the year from discontinued operations 525 79 446
profit for the year including discontinued operations 387 – 387
1 excluding computer software rentokil initial plc annual report 2014
91 financial statements
strategic report
corporate governance
financial statements additional information
earnings per share
for the year ended 31 december 2013
as previously 
reported 
£m
adjustment for 
discontinued 
operations 
£m
as restated 
£m
profit from continuing operations attributable to equity holders of the company 900 79 821
restructuring costs and oneoff items amortisation and impairment of intangibles
1
 before tax and net interest credit  
from pensions 836 150 686
t ax on restructuring costs and oneoff items amortisation and impairment of intangibles
1
 and net interest credit  
from pensions 205 35 170
adjusted profit from continuing operations attributable to equity holders of the company 1531 194 1337
profitloss from discontinued operations attributable to equity holders of the company 525 79 446
weighted average number of ordinary shares in issue 18171 – 18171
adjustment for share options and ltips 60 – 60
weighted average number of ordinary shares for diluted earnings per share 18231 – 18231
basic earnings per share
continuing operations 495p 043p 452p
discontinued operations 289p 044p 245p
continuing and discontinued operations 206p – 206p
diluted earnings per share
continuing operations 494p 044p 450p
discontinued operations 289p 044p 245p
continuing and discontinued operations 206p – 206p
basic adjusted earnings per share
2
842p 106p 736p
diluted adjusted earnings per share
2
840p 107p 733p
1 excluding computer software
2  earnings per share before the aftertax effects of amortisation and impairment of intangibles excluding computer software restructuring costs oneoff items and net interest credit from pensions rentokil initial plc annual report 2014
notes to the accounts – continued
92 financial statements
a1 segment information
revenue recognition
revenue comprises the fair value of consideration received from the customer for the rendering of services net of valueadded tax vat and 
other similar salesbased taxes rebates and discounts and after eliminating sales within the group for noncontractbased business revenue 
represents the value of goods delivered or services performed for contractbased business revenue represents the sales value of work carried 
out for customers during the period contract income is recognised in accounting periods on a straightline basis over the life of the contract 
for longterm contracts involving the installation of equipment revenue is recognised using the percentage completion method and represents 
the sales value of work executed during the period
segment reporting
segmental information has been presented in accordance with ifrs 8 operating segments which the group has implemented with effect from 
1 january 2009 this statement reflects internal organisation changes made in 2014 in 2013 our core businesses were run on a daytoday basis by one 
manager per country each responsible for the core activities in hisher region and the countries were grouped into three geographic regions east west 
and asia in 2014 the east and west regions ceased to exist and have been replaced by regional clusters prioryear comparisons have been restated
reporting segments reflect the internal management organisation and reporting structures each segment is headed by a regional managing 
director who reports directly to the chief executive and is a member of the company executive board responsible for the review of group 
performance operating businesses within each segment report to segment regional managing directors 
segmental revenue represents the total revenue of each individual business unit within a reporting segment segmental profit is the profit measure 
used to measure performance internally and is calculated as profit before tax interest amortisation and impairment of intangibles excluding 
computer software restructuring costs and oneoff items adjusted operating profit
revenue and operating profit relate to the following main groups of business category and activity as described on page 3 pest control hygiene 
and workwear ‘other’ represents a number of small businesses outside of the main categories the largest being the plants business central and 
divisional overheads represent corporate expenses that are not directly attributable to any reportable segment a reconciliation of segmental 
revenue and operating profit to business category and activity is shown in the business overview on page 18
revenue and profit from continuing operations
 
revenue 
2014 
£m
restated 
revenue 
2013 
£m
operating 
profitloss 
2014 
£m
restated 
operating 
profitloss 
2013 
£m
france 3708 3698 666 642
benelux 2362 2478 397 512
germany 2069 2028 477 463
other europe 879 749 138 126
europe 9018 8953 1678 1743
uk  ireland 1967 1843 376 382
rest of world 1251 1211 291 292
uk  rest of world 3218 3054 667 674
asia 1058 1037 91 77
north america 3669 3443 429 371
pacific 1440 1427 287 271
central and divisional costs – – 661 775
t otal segmental at constant exchange rates 18403 17914 2491 2361
foreign exchange 995 – 169 –
at actual exchange rates 17408 17914 2322 2361
restructuring costs – – 88 474
oneoff items – operating – – 01 46
amortisation of intangible assets
1
– – 212 202
impairment of goodwill – – – 34
operating profit at actual exchange rates – – 2021 1605
interest payable and similar charges – – 562 705
interest receivable – – 109 109
net interest credit from pensions – – 25 55
oneoff items – financing – – – 15
share of profit from associates net of tax – asia – – 39 43
profit before income tax and discontinued operations – – 1632 1122
1 excluding computer software
a operating  rentokil initial plc annual report 2014
93 financial statements
strategic report
corporate governance
financial statements additional information
revenue from external customers attributed to the uk amounted to £1802m 2013 £1685m with overseas countries accounting for the 
balance of £15606m 2013 £16229m the only other countries accounting for more than 10 of revenue from external customers are france 
totalling £3524m 2013 £3698m and usa totalling £3338m 2013 £3293m no major customer accounts for more than 10 of total revenue 
other segment items included in the consolidated income statement are as follows
amortisation and  
impairment of intangibles
1
2014 
£m
2013 
£m
europe 57 41
uk  rest of world 28 33
asia 10 45
north america 100 104
pacific 02 03
central and divisional 15 10
total 212 236
t ax effect 68 65
after tax effect 144 171
1 excluding computer software 
analysis of revenue by category
total 
2014 
£m
total 
2013 
£m
contract service revenue 13979 14533
noncontract service revenue 2309 2241
sales of goods 1120 1140
17408 17914 rentokil initial plc annual report 2014
notes to the accounts – continued
94 financial statements
restructuring 
costs  
2014 
£m
oneoff  
items 
2014 
£m
restructuring 
costs  
2013 
£m
oneoff  
items 
2013 
£m
europe
restructuring costs – france 24 – 99 –
restructuring costs – benelux 08 – 71 –
restructuring costs – germany – – 49 –
restructuring costs – other europe 08 – 19 –
gain on sale – spain medical – 24 – –
oneoff items – europe – 14 – 11
t otal – europe 40 10 238 11
uk  rest of world
restructuring costs – uk  ireland 08 – 57 –
restructuring costs – rest of world – – 17 –
oneoff items – uk – 02 – –
oneoff items – rest of world – 11 – –
t otal – uk  rest of world 08 09 74 –
asia
restructuring costs – asia 02 – 04 –
oneoff items – asia – 02 – –
loss on disposal – south korea – – – 02
t otal – asia 02 02 04 02
north america
restructuring costs – us 15 – – –
oneoff items – us – 02 – 25
release of unpaid contingent consideration – 04 – 04
t otal – north america 15 02 – 21
pacific
restructuring costs – australia 11 – 23 –
restructuring costs – new zealand 02 – – –
oneoff items – australianew zealand – 01 – –
t otal – pacific 13 01 23 –
central and divisional overheads
restructuring costs – central and divisional overheads 10 – 135 –
oneoff items – 08 – –
impairment of computer software – 23 – –
gain on sale of investment properties – 24
vacant property provisions – 06 – 12
t otal – central and divisional overheads 10 01 135 12
total 88 01 474 46
t ax effect 17 03 119 02
t otal after tax effect 71 04 355 44 rentokil initial plc annual report 2014
95 financial statements
strategic report
corporate governance
financial statements additional information
a2 earnings per share
basic
basic earnings per share is calculated by dividing the profit attributable to equity holders of the company by the weighted average number of 
shares in issue during the year excluding those held in the rentokil initial employee share trust for uk employees see note at the bottom of the 
consolidated statement of changes in equity which are treated as cancelled and including share options for which all conditions have been met
2014 
£m
restated 
2013 
£m
profit from continuing operations attributable to equity holders of the company 1264 821
profitloss from discontinued operations attributable to equity holders of the company 1354 446
weighted average number of ordinary shares in issue 18171 18171
basic earnings per share from continuing operations 696p 452p
basic earnings per share from discontinued operations 745p 245p
basic earnings per share from continuing and discontinued operations 1441p 206p
diluted
for diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to include all potential dilutive ordinary 
shares the group has two types of potential dilutive ordinary shares – those share options granted to employees where the exercise price is 
less than the average market price of the company’s ordinary shares during the period and the contingent issuable shares under the group’s 
longterm incentive share plans to the extent the performance conditions have been met at the end of the period
2014 
£m
restated 
2013 
£m
profit from continuing operations attributable to equity holders of the company 1264 821
profitloss from discontinued operations attributable to equity holders of the company 1354 446
weighted average number of ordinary shares in issue 18171 18171
adjustment for share options and ltips 25 60
weighted average number of ordinary shares for diluted earnings per share 18196 18231
diluted earnings per share from continuing operations 695p 450p
diluted earnings per share from discontinued operations 744p 245p
diluted earnings per share from continuing and discontinued operations 1439p 206p
basic adjusted
adjusted earnings per share is the basic earnings per share adjusted for the aftertax effects of restructuring costs and oneoff items 
amortisation and impairment of intangibles
1

 
and net interest credit from pensions prior year comparatives have been restated to adjust 
for discontinued operations – please see general accounting policies section for further details
2014 
£m
restated 
2013 
£m
profit from continuing operations attributable to equity holders of the company 1264 821
restructuring costs and oneoff items amortisation and impairment of intangibles
1
 before tax and net interest credit from pensions 276 686
t ax on restructuring costs and oneoff items amortisation and impairment of intangibles
1
 and net interest credit from pensions
2
77 170
adjusted profit from continuing operations attributable to equity holders of the company 1463 1337
weighted average number of ordinary shares in issue 18171 18171
adjusted earnings per share from continuing operations 805p 736p
1 excluding computer software
2  includes tax on restructuring costs and oneoff items – operating of £14m 2013 £121m note a1 oneoff items – financing of £nil 2013 £03m amortisation and impairment of intangibles of 
£68m 2013 £65m and net interest credit from pensions £05m 2013 £13m rentokil initial plc annual report 2014
notes to the accounts – continued
96 financial statements
diluted adjusted
2014 
£m
restated 
2013 
£m
adjusted profit from continuing operations attributable to equity holders of the company 1463 1337
weighted average number of ordinary shares in issue 18171 18171
adjustment for share options and ltips 25 60
weighted average number of ordinary shares for diluted earnings per share 18196 18231
diluted adjusted earnings per share from continuing operations 804p 733p
a3 trade and other receivables
trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method less 
provision for impairment a provision for impairment of trade receivables is established when there is objective evidence that the group will 
not be able to collect all amounts due according to the original terms of the receivables the amount of the provision is recognised in the 
income statement
book value approximates fair value because of the shortterm nature of the receivables and the low interest environment in which they are held
there is limited concentration of credit risk with respect to trade receivables due to the group’s customer base being large and diverse 
the maximum amount of credit risk with respect to customers is represented by the carrying amount on the balance sheet customer credit 
facilities for new customers are approved by designated managers at business level credit limits are set with reference to trading history and 
reports from credit rating agencies overdue accounts are regularly reviewed and impairment provisions are created where necessary with due 
regard to the historical risk profile of the customer there were no new customers in 2014 where the group considered there was a risk of 
significant credit default there are no trade receivables that would otherwise be past due or impaired whose terms have been renegotiated
2014 
£m
2013 
£m
trade receivables 2802 3580
less provision for impairment of receivables 161 198
trade receivables – net 2641 3382
other receivables 364 327
prepayments 255 547
total 3260 4256
less noncurrent portion
other receivables 115 82
current portion 3145 4174
the creation and release of provisions for impaired receivables have been included within operating expenses in the income statement 
amounts charged to the allowance for doubtful debts are generally written off when there is no expectation of recovering additional cash
during the year the group entered into a nonrecourse factoring arrangement in france under the terms of the facility the group sells invoices 
for services performed and receives payment early at year end the value of debtors sold under the facility was £154m 2013 £nil
on 24 december 2014 the city link business which was sold by the group to better capital llp in 2013 was placed into administration 
under the terms of the sale of the city link business the group has the benefit of a first ranking fixed charge over the first £50m of city link’s 
receivables this fixed charge can be used to reimburse the group against expenditure incurred under guarantees against certain leasehold 
properties previously occupied by city link a provision has been recognised in the year for these liabilities note a6 rentokil initial plc annual report 2014
97 financial statements
strategic report
corporate governance
financial statements additional information
analysis of the group’s provision for impairment of trade receivables is as follows
2014 
£m
2013 
£m
at 1 january 198 212
acquisition of companies and businesses 06 11
disposal of companies and businesses 28 10
additional provision 69 73
receivables written off as uncollectable 52 53
unused amounts reversed 25 34
exchange differences 07 01
at 31 december 161 198
the ageing of trade receivables is as follows
2014 
£m
2013 
£m
neither impaired nor past due 1037 1596
not impaired but overdue by less than 1 month 942 858
not impaired but overdue by between 1 and 3 months 434 638
not impaired but overdue by between 3 and 6 months 93 156
not impaired but overdue by between 6 and 12 months 72 69
not impaired but overdue by more than 12 months 22 43
impaired 202 220
allowance for doubtful debts 161 198
2641 3382
the carrying amounts of the group’s trade receivables are denominated in the following currencies
2014 
£m
2013 
£m
pounds sterling 386 912
euro 1439 1798
us dollar 370 321
other currencies 607 549
2802 3580
a4 inventories
inventories are stated at the lower of cost and net realisable value cost is determined using the firstin firstout fifo method the cost of 
finished goods and work in progress comprises design costs raw materials direct labour other direct costs and related production overheads 
based on normal operating capacity it excludes borrowing costs net realisable value is the estimated selling price less applicable variable 
selling expenses
2014 
£m
2013 
£m
raw materials 87 124
work in progress 15 24
finished goods 487 490
589 638
there were no material inventory impairment charges in 2014 and 2013 rentokil initial plc annual report 2014
notes to the accounts – continued
98 financial statements
a5 trade and other payables
2014 
£m
2013 
£m
trade payables 965 1367
social security and other taxes 594 763
other payables 325 578
accruals and deferred income 1912 2240
deferred and contingent consideration on acquisitions 153 110
total 3949 5058
less noncurrent portion
other payables 126 120
deferred and contingent consideration on acquisitions 03 10
t otal noncurrent portion 129 130
current portion 3820 4928
a6 provisions for other liabilities and charges
vacant property environmental selfinsurance and other provisions are recognised when the group has a present legal or constructive 
obligation as a result of past events it is probable that an outflow of resources will be required to settle the obligation and if the amount is 
capable of being reliably estimated if such an obligation is not capable of being reliably estimated it is classified as a contingent liability
when the effect of the time value of money is material provision amounts are calculated on the present value of the expenditure expected to be 
required to settle the obligation the present value is calculated using forward market interest rates as measured at the balance sheet reporting 
date which have been adjusted for risks already reflected in future cash flow estimates
vacant 
properties 
£m
 
environmental 
£m
self 
insurance 
£m
 
other 
£m
 
total 
£m
at 1 january 2013 463 174 189 158 984
exchange differences – 02 02 02 02
additional provisions 140 10 70 255 475
disposal of companies and businesses – – – 12 12
unused amounts reversed 73 15 21 14 123
unwinding of discount on provisions 05 02 – – 07
used during the year 99 12 36 257 404
at 31 december 2013 436 161 200 132 929
at 1 january 2014 436 161 200 132 929
exchange differences – 05 08 04 01
additional provisions 90 06 62 117 275
acquisition of companies and businesses – – – 06 06
unused amounts reversed 50 – 17 22 89
unwinding of discount on provisions 09 02 – – 11
used during the year 98 12 53 125 288
at 31 december 2014 387 152 200 104 843
provisions analysed as follows
2014 
£m
2013 
£m
noncurrent portion 598 629
current portion 245 300
843 929 rentokil initial plc annual report 2014
99 financial statements
strategic report
corporate governance
financial statements additional information
vacant properties
the group has a number of vacant and sublet leasehold properties with the majority of the head leases expiring before 2020 provision has 
been made for the residual lease commitments together with other outgoings after taking into account existing subtenant arrangements and 
assumptions relating to later periods of vacancy
the total future minimum sublease payments expected to be received under noncancellable subleases at 31 december 2014 is £40m 
2013 £49m
on 24 december 2014 the city link business which was sold by the group to better capital llp in 2013 was placed into administration under 
the terms of the sale of the city link business the group retained certain guarantees against five leasehold properties occupied by city link  
the estimated cost of settling this obligation is £50m and a provision has been made for this amount the group also has the benefit of a first 
ranking fixed charge over the first £50m of city link’s receivables this asset has been recognised in other receivables note a3
environmental
the group owns a number of properties in the uk europe and the us where there is land contamination and provisions are held for the 
remediation of such contamination these provisions are expected to be substantially utilised within the next ten years
selfinsurance
the group purchases external insurance from a portfolio of international insurers for its key insurable risks historically the group selfinsured 
its risks during the latter part of 2008 other than for third party motor liability uk  us workers compensation us and the global property 
damagebusiness interruption this practice was stopped and these became fully covered in the insurance market provision is still held for 
selfinsured past cover primarily in relation to workers compensation us for the continuing selfinsured programmes individual claims are met 
in full by the group up to agreed selfinsured limits in order to limit volatility in claims the calculated cost of selfinsurance claims is based on an 
actuarial assessment of claims incurred at the balance sheet date and is accumulated as claims provisions
other
other provisions principally comprise amounts required to cover obligations arising warranties given and costs relating to disposed businesses 
together with amounts set aside to cover certain legal and regulatory claims these provisions are expected to be substantially utilised within the 
next five years
the above provisions have been discounted where appropriate using discount rates of between 07 and 13 2013 24 for the uk 06 
2013 19 for europe and 22 2013 26 for the us
a7 operating expenses by nature
operating expenses from continuing operations include the following items
2014 
£m
restated 
2013 
£m
employee costs note a8 7868 8053
subcontract labour costs 596 437
depreciation – owned assets 1512 1650
 – under finance leases 245 233
amortisation – intangible assets
1
212 235
 – computer software 107 118
impairment – intangible assets
1
– 34
 – computer software 23 52
impairment of investment properties – 35
cost of inventories expensed 947 873
loss on disposal of property plant and equipment 06 20
loss on disposalretirement of intangible assets 08 19
audit and nonaudit services note a11 28 33
hire of machinery and equipment 21 27
other operating lease rentals 412 446
net foreign exchange losses – 01
research and development costs external 16 18
restructuring costs note a1 88 474
oneoff items – operating note a1 01 46
other operating expenses 3297 3505
t otal operating expenses 15387 16309
1 excluding computer software rentokil initial plc annual report 2014
notes to the accounts – continued
100 financial statements
a8 employee benefit expense
profitsharing and bonus plans
the group recognises a liability and an expense for bonuses and profitsharing based on a formula that takes into consideration the probability 
of certain performance criteria being achieved a provision is recognised where a contractual obligation exists or where past practice indicates 
that there is a constructive obligation to make such payments in the future
holiday pay
paid holidays are regarded as an employee benefit and as such are charged to the income statement as the benefits are earned an accrual 
is made at the balance sheet date to reflect the fair value of holidays earned but not yet taken 
termination benefits
termination benefits are payable when an employment is terminated before the normal retirement date or whenever an employee accepts 
voluntary redundancy in exchange for these benefits the group recognises termination benefits when it is demonstrably committed to either 
terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination 
benefits as a result of an offer made to encourage voluntary redundancy benefits falling due more than 12 months after the balance sheet date 
are discounted to present value where the effect of discounting is material
total 
2014 
£m
restated
total 
2013 
£m
wages and salaries 6488 6648
social security costs 1175 1202
sharebased payments 11 20
pension costs
 – defined contribution plans 190 169
 – defined benefit plans 04 14
7868 8053
average number of people employed by the group during the year
2014
number
restated 
2013
number
processing and service delivery 20760 19843
sales and marketing 3299 3243
administration and overheads 4002 3907
28061 26993
emoluments of the directors of rentokil initial plc are detailed below further details are also given in the directors’ remuneration report on 
pages 60 to 78
highest paid 
director
2014 
£000
other 
directors
2014 
£000
highest paid 
director
2013 
£000
other 
directors
2013 
£000
aggregate emoluments excluding share options 8965 10083 9944 22267
aggregate value of company contributions to defined contribution pension schemes 1750 675 – 490
10715 10758 9944 22757
2014
number
2013
number
number of directors accruing retirement benefits 
 – defined contribution schemes 2 3
 – defined benefit schemes – –
number of directors exercising share options 2 –
number of directors receiving shares as part of longterm incentive schemes – – rentokil initial plc annual report 2014
101 financial statements
strategic report
corporate governance
financial statements additional information
a9 retirement benefit obligations
apart from the legally required social security state schemes the group operates a number of pension schemes around the world covering many 
of its employees
the principal pension scheme in the group is the rentokil initial pension scheme rips in the uk which has a number of defined benefit 
sections which are now closed to new entrants and a defined contribution section the defined benefit scheme is funded through payments 
to a trusteeadministered fund determined by periodic actuarial calculations 
a number of much smaller defined benefit and defined contribution schemes operate elsewhere which are also funded through payments 
to trusteeadministered funds or insurance companies
defined benefit pension plans
a defined benefit pension plan is a plan that defines an amount of pension benefit that an employee will receive on retirement usually dependent 
on one or more factors such as age years of service and compensation 
the asset or liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit 
obligation at the balance sheet date less the fair value of plan assets the defined benefit obligation is calculated annually by independent 
actuaries using the projected unit credit method the present value of the defined benefit obligation is determined by discounting the estimated 
future cash outflows using interest rates of high quality corporate bonds that are denominated in the currency in which the benefits will be paid 
and that have terms to maturity approximating to the terms of the related pension liability the group will recognise a pension surplus as an asset 
where there is an unconditional right to a refund or where the group has a right to reduce future pension contributions
current and past service costs to the extent they have vested and curtailments are recognised as charges or credits against operating profit in 
the income statement interest costs on the net defined benefitobligation are recognised in finance costs actuarial gains and losses arising from 
experience adjustments and changes in actuarial assumptions are charged or credited to the consolidated statement of comprehensive income
defined contribution pension plans
a defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity
the group pays contributions to publicly or privately administered pension insurance plans on a mandatory contractual or voluntary basis 
the group has no further payment obligations once the contributions have been paid the contributions are recognised as an employee benefit 
expense when they are due prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future 
payments is available
other postemployment obligations
some group companies provide postemployment healthcare benefits to their retirees the entitlement to these benefits is usually conditional 
on the employee remaining in service up to retirement age and the completion of a minimum service period the expected costs of these 
benefits are accrued over the period of employment using an accounting methodology similar to that used for defined benefit pension plans 
actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to the 
consolidated statement of comprehensive income
rentokil initial pension scheme rips
the assets of the rips are legally separated from the group the trustee of the pension fund is rentokil initial pension trustee limited the board 
comprises six company nominated directors and three member nominated directors the trustee is required by law to act in the best interests of 
the plan participants and is responsible for setting certain policies eg investment contribution and indexation policies of the scheme
actuarial valuations of the uk scheme are usually carried out every three years at 31 december 2014 rips was valued at an accounting surplus 
of £1922m on the group’s balance sheet the trustee values the scheme on a different basis and in the valuation at 31 march 2013 a deficit of 
£17 8m was agreed it is expected that this deficit will be made good by excess returns above the discount rate over the period to 31 january 
2019 however the group will make contributions of £32m each year into escrow over this period subject to a review as part of the actuarial 
valuation as at 31 march 2016  in the event that the deficit is not cleared by the time of the 31 march 2019 valuation it will be funded from the 
escrow account 
the group has recognised the pension surplus as an asset because the group has an unconditional right to a refund of the surplus at the end 
of the scheme’s life
the group has put in place a guarantee in favour of the trustee of the rips which provides that the group will make payments to the scheme up 
to a maximum amount equal to the lowest nonnegative amount which when added to the assets of the scheme would result in the scheme 
being at least 105 funded on the date on which any liability arises calculated on the basis set out in section 179 of the pensions act 2004 
this amount will vary and is in any event capped at £219m the amount assessed at 31 march 2009 the provision of the guarantee is reviewed 
on an annual basis rentokil initial plc annual report 2014
notes to the accounts – continued
102 financial statements
the defined benefit schemes are reappraised biannually by independent actuaries based upon actuarial assumptions in accordance with 
ias 19r requirements the assumptions used for the rips scheme are shown below
2014 2013
weighted average 
discount rate 34 44
future salary increases na 43
future pension increases 32 34
rpi inflation 33 36
cpi inflation 22 26
risks
the scheme exposes the company to a number of risks the most significant of which are
asset volatility
the liabilities are calculated using a discount rate set with reference to corporate bond yields if assets underperform this yield this will create 
a deficit the scheme holds a significant proportion of growth assets global equities and diversified growth funds which though expected to 
outperform corporate bonds in the long term create volatility and risk in the short term the allocation to growth assets is monitored to ensure 
it remains appropriate given the scheme’s longterm objectives
changes in bond yields
a decrease in corporate bond yields will increase the value placed on the scheme’s liabilities for accounting purposes although this will be 
partially offset by an increase in the value of the scheme’s bond holdings
inflation risk
a significant proportion of the scheme’s benefit obligations are linked to inflation and higher inflation will give rise to higher liabilities although 
in most cases caps on the level of inflationary increases are in place to protect against extreme inflation the majority of the assets are either 
unaffected by or only loosely correlated with inflation meaning that an increase in inflation will also reduce the surplus
life expectancy
the majority of the scheme’s obligations are to provide benefits for the life of the member so increases in life expectancy will result in an increase 
in the liabilities
profile of the scheme
the defined benefit obligation includes benefits for current employees former employees and current pensioners approximately 43 of the 
liabilities are attributable to current and former employees and 57 to current pensioners the scheme duration is an indicator of the weighted
average time until benefit payments are made for the scheme as a whole the duration is around 16 years
there have been no significant changes to the membership of the scheme over the year
mortality assumptions
the mortality assumptions are based on the recent actual mortality experience of scheme members and allow for expected future 
improvements in mortality rates
the mortality tables used are
• 94 of the saps all base tables for male pensioners and male and female dependents
• 106 of the saps all base tables for female pensioners
• 104 of the saps all base tables for male nonpensioners and
• 107 of the saps all base tables for female nonpensioners
further improvements are made in line with cmi2013 core projections with a longterm rate of future improvement of 125 pa
sensitivity of significant assumptions
impact on pension obligations £m
sensitivity increase decrease
discount rate 10 1831 2294
inflation 10 1169 1058
mortality 1 year 569 567 rentokil initial plc annual report 2014
103 financial statements
strategic report
corporate governance
financial statements additional information
pension benefits
the amounts recognised in the balance sheet are determined as follows
uk rips  
2014 
£m
other
1
 
2014 
£m
total 
2014 
£m
uk rips 
2013
£m
other
1
 
2013
£m
total 
2013
£m
present value of funded obligations 13189 333 13522 11850 316 12166
fair value of plan assets 15111 215 15326 12556 217 12773
1922 118 1804 706 99 607
present value of unfunded obligations – 140 140 – 137 137
assetliability in the balance sheet 1922 258 1664 706 236 470
presented on the balance sheet as
retirement benefit assets 1922 – 1922 706 – 706
retirement benefit obligations – 258 258 – 236 236
1922 258 1664 706 236 470
the amounts recognised in the income statement are as follows
uk rips  
2014 
£m
other
1
 
2014 
£m
total 
2014 
£m
uk rips 
2013
£m
other
1
 
2013
£m
total 
2013
£m
current service cost
2
06 08 14 07 11 18
past service cost
2
06 03 09 – 04 04
settlement cost 01 – 01 – – –
administration expenses
2
17 – 17 18 – 18
t otal operating costs 16 05 21 25 07 32
interest on net defined benefit assetliability 31 06 25 61 06 55
t otal pension incomecost 15 11 04 36 13 23
the movement in the fair value of pension plan assets recognised in the balance sheet is as follows
uk rips  
2014 
£m
other
1
 
2014 
£m
total 
2014 
£m
uk rips 
2013
£m
other
1
 
2013
£m
total 
2013
£m
at 1 january 12556 217 12773 12760 222 12982
exchange differences – 16 16 – – –
interest income on scheme assets 541 03 544 555 04 559
remeasurement gainloss on scheme assets 2526 03 2529 356 01 355
contributions received from employees 01 02 03 01 01 02
contributions received from employer 08 12 20 134 17 151
benefits paid 521 06 527 538 28 566
at 31 december 15111 215 15326 12556 217 12773
total contributions payable to defined benefit pension schemes in 2015 are expected to be £32m 
the fair value of plan assets at the balance sheet date is analysed as follows
uk rips  
2014 
£m
other
1
 
2014 
£m
total 
2014 
£m
uk rips 
2013
£m
other
1
 
2013
£m
total 
2013
£m
equity instruments 3522 21 3543 3658 33 3691
debt instruments – quoted 9303 – 9303 6080 – 6080
debt instruments – unquoted – 110 110 01 44 45
interest and inflation rate hedging instruments 1225 – 1225 1412 – 1412
property – 04 04 – 05 05
other 1061 80 1141 1405 135 1540
t otal plan assets 15111 215 15326 12556 217 12773
1  other retirement benefit plans are predominantly made up of defined benefit plans situated in australia belgium france germany ireland and norway
2  service costs settlement and administration expenses are charged to operating expenses and interest cost and return on plan assets to net interest credit from pensions rentokil initial plc annual report 2014
notes to the accounts – continued
104 financial statements
where available the bid value of assets has been used in other cases the market value as provided by the investment managers has been used 
the scheme’s liability hedge is made up of interest rate and inflation swaps corporate bonds fixed gilts and lpi swaps the overall objective of 
the hedge is to match 85 of the interest rate and inflation sensitivity of the scheme’s liabilities c 100 of assets
the current portfolio’s return seeking assets consist of equities 9 and diversified growth funds 14 diversified growth funds invest in a range 
of asset classes including developed equities emerging market equities hedge funds infrastructure commodities private equity property high 
yield credit emerging market debt investment grade credit reinsurance and leveraged loans
matching assets consist of 48 gilts 14 credit and 15 cash  swaps
the actual holdings in return seeking assets are currently higher than the target portfolio this is monitored on a regular basis and there are no 
plans to rebalance at present
the movement in the present value of the defined benefit obligation recognised in the balance sheet is as follows
uk rips  
2014
£m
other 
2014
£m
total 
2014
£m
uk rips 
2013
£m
other
 
2013
£m
total 
2013
£m
at 1 january 11850 453 12303 11499 465 11964
exchange differences – 31 31 – 03 03
interest expense 510 09 519 494 16 510
current and past service costs – 05 05 07 07 14
actuarial loss during the year
1
 1349 37 1386 387 14 401
pensions transferred on disposal of business – – – – 07 07
other transfers – 09 09 – – –
contributions received from employees 01 – 01 01 01 02
contributions received from employers – 09 09 – – –
benefits paid 521 18 539 538 40 578
at 31 december 13189 473 13662 11850 453 12303
1  the actuarial movement on the uk rips scheme comprises actuarial gain arising from changes in demographic assumptions of £49m 2013 £235m loss actuarial losses arising from changes in 
financial assumptions of £1529m 2013 £232m actuarial gains arising from experience of £104m 2013 £80m gain and settlement of £27m 2013 £nil
the history for the current and prior periods is as follows
2014 
£m
2013 
£m
2012 
£m
2011 
£m
2010 
£m
present value of defined benefit plan liabilities 13662 12303 11964 11490 10821
fair value of plan assets 15326 12773 12982 12744 10702
net surplusdeficit 1664 470 1018 1254 119
experience adjustments on plan liabilities 104 80 161 53 28
experience adjustments on plan assets 2529 355  13 1917 569
the cumulative actuarial loss recognised in the consolidated statement of comprehensive income was £854m 2013 £1997m 
an actuarial gain of £1 143m 2013 £756m loss was recognised during the year rentokil initial plc annual report 2014
105 financial statements
strategic report
corporate governance
financial statements additional information
a10 sharebased payments
sharebased compensation
the group operates a number of equitysettled sharebased compensation plans the economic cost of awarding shares and share options to 
employees is recognised as an expense in the income statement equivalent to the fair value of the benefit awarded the fair value is determined 
by reference to option pricing models principally monte carlo and adjusted blackscholes models the charge is recognised in the income 
statement over the vesting period of the award at each balance sheet date the group revises its estimate of the number of options that are 
expected to become exercisable any revision to the original estimates is reflected in the income statement with a corresponding adjustment 
to equity immediately to the extent it relates to past service and the remainder over the rest of the vesting period
the proceeds received net of any directly attributable transaction costs are credited to share capital nominal value and share premium when 
the options are exercised
the company has share option schemes for approximately 300 senior executives worldwide the exercise price for share options is the 
midmarket closing price on the day immediately preceding the date of grant share options are equitysettled the total net charge for the year 
relating to equitysettled sharebased payment plans was £1 1m 2013 £20m
executive share option schemes
no awards have been made under the executive share option schemes since 2004 the last executive share options granted under the 
discretionary approved and discretionary schemes the ‘discretionary schemes’ was in august 2004 which lapsed on the tenth year 
anniversary of grant on 31 august 2014  no further grants of share options will be made under the discretionary schemes in the future
executive share options were calculated by reference to base salaries and management grade in the company there were two levels of 
qualification under these discretionary schemes level 1 applied to senior executives including executive directors all level 1 awards have 
lapsed level 2 awards applied to executive directors and sector managing directors the level 2 exercise condition was by reference to total 
shareholder return tsr ie the appreciation of the share price including reinvested dividends versus the performance of the ftse 100 index 
and a defined comparator group of support services companies over three consecutive calendar years commencing in the year in which the 
option was granted if the company achieved a median performance in relation to the ftse 100 index then 25 of the level 2 share options 
would vest rising pro rata to 50 if the company achieved a performance in the upper quartile of the ftse 100 and in addition if the company 
achieved a median performance in the group of support services companies then 25 of the level 2 share options would vest rising pro rata 
to 50 if the company achieved a performance in the upper quartile in the comparator group of support services companies
movements in the number of executive share options outstanding and their related weighted average exercise prices are as follows
weighted 
average 
exercise price 
p per share
number of 
share options  
000
outstanding at 1 january 2013 171863 2158
expired 19936 905
outstanding at 31 december 2013 15200 1253
expired 15200 1253
outstanding at 31 december 2014
1
– –
1  no options were exercised during the period all remaining 1252635 executive share options outstanding lapsed on 31 august 2014 the tenth anniversary of the share options granted in 2004 
there are no further options capable of vesting under the discretionary schemes rentokil initial plc annual report 2014
notes to the accounts – continued
106 financial statements
performance share plan
the company introduced a new sharebased performance plan in 2006 and granted 7 987 718 shares at various dates throughout 2014
year of 
grant
vesting 
year
scheme  
interest at  
1 january 2014
shares  
awarded  
during 2014
shares  
vested  
during 2014
shares  
lapsed  
during 2014
outstanding at  
31 december 2014
shares  
exercisable at  
1 january 2014
shares  
exercised  
during 2014
shares  
exercisable at  
31 december 2014
2008 2011 – – – – 184181 248059 63878 184181
2011 2014 11704221 – – 11704221 – – – –
2012 2015 13296489 – – 2587934 10708555 – – –
2013 2016 12815868 – – 4397685 8418183 – – –
2014 2017 – 7987718 – 1108635 6879083 – – –
the performance conditions for the 2008 awards were share price and the financial performance ‘bonus multiplier’ of the group division or 
business whichever is applicable to the award holder the share price condition was based on the highest average share price of rentokil initial 
plc over any 60 consecutive dealing days during the initial threeyear period the performance period for the share price element of the 
award began on 1 april 2008 and ended 61 dealing days following the announcement of the company’s results for the financial year ended 
31 december 2010 the annual bonus multiplier measured the extent to which the annual bonus targets had been achieved in respect of each 
financial year during the performance period the 2008 awards in the above table reflect that during the first half of 2010 the company’s share 
price achieved a 60day highest average price of 13082p participants were entitled to the value of dividends that were paid during the vesting 
period on the number of shares that ultimately vested in the form of additional shares transferred at the end of the vesting period
the performance conditions for the 201 1 2012 and 2013 awards are total shareholder return tsr and the financial performance ‘bonus 
multiplier’ of the group division or business whichever is applicable to the award holder for the 201 1 2012 and 2013 awards the bonus 
multiplier measures the extent to which the annual bonus targets have been achieved in respect of each financial year during the performance 
period the 201 1 2012 and 2013 awards in the above table assume a tsr performance in the upper quartile or above is reached at the end of 
the vesting period and that participants achieve their target bonus in each of the three years over the vesting period for the 201 1 2012 and 2013 
awards no shares will vest if the share price does not reach median tsr performance at the end of the vesting period and 150 200 for 
executive directors will vest if the tsr performance is above the upper quartile and all participants attain maximum bonus targets participants 
are entitled to the value of dividends that are paid during the vesting period on the number of shares that ultimately vest in the form of additional 
shares transferred at the end of the vesting period
in 2014 following consultation with major shareholders the company introduced earnings per share eps as an additional performance 
measure to tsr for approximately 100 participants at senior manager level including executive directors to further strengthen the link between 
performance and reward the individual annual bonus multiplier was also retained for executive directors the performance condition for the 
2014 award for participants below the board and executive leadership team level is solely relative tsr performance the tsr condition is 
measured relative to the tsr achieved by constituents of a comparator group made up of the ftse 350 companies at the date of grant but 
excluding financial services primary resource and property sector companies the performance period for the share price element of the 2014 
award began on 31 march 2014 running to 30 march 2017  the tsr performance is measured using a threemonth average with the start 
period average being 31 december 2013 to 30 march 2014 and the end period average being 31 december 2016 to 30 march 2017  for the 
2014 award no shares will vest if the share price does not reach median tsr performance at the end of the vesting period and 150 200 for 
executive directors will vest if the tsr performance is above the upper quartile and all participants attain maximum bonus targets participants 
are entitled to the value of dividends that are paid during the vesting period on the number of shares that ultimately vest in the form of additional 
shares transferred at the end of the vesting period
the fair value of the 2014 awards made under the 2006 performance share plan is charged to the income statement over the vesting period 
based on values derived from a model developed by deloitte llp  this is a closedform solution similar to a monte carlo simulation which takes 
account of the correlation between share price performance and the likelihood of a tsr performance condition being met for the shares 
awarded on 31 march 2014 the significant inputs into the model were a share price of 1234p 2013 83 15p an expected share price volatility of 
26 a share price correlation of the companies in the comparator group of 24 and an expected life commensurate with the performance
vesting period the share price volatility assumption is based on analysis of historical daily share prices as the awards are nilcost ie there is no 
exercise price the assumed riskfree rate of return has minimal impact on the fair value of the awards similarly as dividend equivalents are paid 
on the vesting portion of awards the fair value of these awards is not reduced to reflect dividends paid during the vesting period
the fair value of shares granted during 2014 was £7 2m
2008 share incentive plan
in 2008 the company introduced a longterm incentive plan for the chairman chief executive and one other executive director and granted 
22500000 shares during the year no further awards will be made under this 2008 share incentive plan in the future
year of grant
vesting 
period
scheme  
interest at  
1 january 2014
shares outstanding at 
31 december 2014 and still 
subject to performance criteria
shares  
exercisable at  
1 january 2014
shares  
exercised  
during 2014
shares  
exercisable at  
31 december 2014
shares vested but not  
yet exercisable at  
31 december 2014
2008 2011–2013 – – 5334634 5334634 – – rentokil initial plc annual report 2014
107 financial statements
strategic report
corporate governance
financial statements additional information
the performance condition for the award was share price and was only satisfied if the share price target was achieved over a sustained period 
demonstrating realisable value creation for shareholders this was measured on the basis of an average share price over any 60 consecutive 
trading days during the performance measurement period until a minimum share price of 120p per share was met over a sustained period no 
shares were earned at 120p per share 20 of the award was earned rising on a straightline basis to full vesting at a share price of 180p per 
share for achieving growth in market value between a share price of 180p per share and 280p per share further shares could be earned up to a 
maximum of a further 50 of the original award the 2008 awards assumed an on target share price of 180p per share is reached at the end of 
the vesting period up to onethird of the award could vest at the end of the third year another onethird at the end of the fourth year and a further 
onethird following at the end of the fifth year based on the extent to which performance targets were achieved the unvested portion of the 
award following the end of the fifth year lapsed in june 2013 participants were entitled to the value of dividends that are paid during the vesting 
period on the number of shares that ultimately vested in the form of additional shares transferred at the end of the vesting period see the 
directors’ remuneration report on pages 60 to 78 for further details 
the fair value of the 2008 awards made under the rentokil initial 2008 share incentive plan was charged to the income statement over the 
vesting period based on values derived from a bespoke monte carlo simulation model the significant inputs into the model were a share price 
of 1020p an expected share price volatility of 21 an expected dividend yield of 5 per annum and an expected life commensurate with the 
performancevesting period the share price volatility assumption is based on analysis of historical daily share prices measured until october 
2007 therefore excluding the significant volatility during the last months of 2007  which the company would not expect going forward as the 
awards were nilcost ie there is no exercise price the assumed riskfree rate of return had minimal impact on the fair value of the awards
during the first half of 2010 the company’s share price achieved a 60day highest average price of 13082p and therefore under the terms of the 
plan 3443 of the award vested with participants receiving onethird of the award in may 2013 participants were entitled to a second onethird 
a year later and the balance in june 2014 additional amounts could be earned based on share price appreciation beyond the 13082p level 
during the remaining life of the scheme the final onethird of 907 470 including dividend equivalents per participant were released on 14 june 
2013 ‘third vesting date’ the total vested shares including dividend equivalents for each participant was 2667 318 the remaining shares 
lapsed in june 2013 participants had 12 months from 14 june 2013 in which to call for their vested shares all participants called for their vested 
shares during that 12 month period see the directors’ remuneration report on page 76 for further details all shares have now been exercised 
and no further shares will be awarded under this share incentive plan
a11 audit and nonaudit services
2014 
£m
2013 
£m
fees payable to the company’s auditor for the audit of the parent company and group accounts 05 05
fees payable to the company’s auditor and its associates for other services
audit of accounts of certain associates of the company 17 20
auditrelated assurance services 02 03
t otal audit and auditrelated assurance services 24 28
fees payable to the company’s auditor and its associates for other services
t axation compliance services 01 01
t axation advisory services 02 –
all other nonaudit services 01 04
t otal nonaudit services 04 05
t otal audit and nonaudit services 28 33
the amounts included in the above table relate to fees payable to kpmg llp and its associates rentokil initial plc annual report 2014
notes to the accounts – continued
108 financial statements
a12 operating leases
leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases 
payments made under operating leases net of any incentives received from the lessor are charged to the income statement on a straightline 
basis over the period of the lease
the group leases properties vehicles plant and equipment under noncancellable operating lease agreements the leases have varying terms 
escalation clauses and renewal rights the lease expenditure charged to the income statement during the year is disclosed in note a7 
the future aggregate minimum lease payments under noncancellable operating leases are as follows
2014 
£m
restated 
2013 
£m
not later than one year 402 298
later than one year and not later than five years 812 624
later than five years 157 143
1371 1065
a13 income tax expense
the tax expense for the period comprises current and deferred tax 
tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity in this case the tax is also 
recognised in equity 
the current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the 
countries where the company’s subsidiaries and associates operate and generate taxable income management periodically evaluates positions 
taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation it establishes provisions where 
appropriate on the basis of amounts expected to be paid to the tax authorities
2014 
£m
restated 
2013 
£m
analysis of charge in the year
uk corporation tax at 215 2013 2325 17 19
overseas taxation 326 288
adjustment in respect of previous periods 51 36
t otal current tax 394 343
deferred tax credit 46 80
deferred tax adjustment in respect of previous periods 23 26
t otal deferred tax 23 54
t otal income tax expense 371 289
the deferred tax credit comprises movements on the following major components of deferred tax assets and liabilities note a14
accelerated tax depreciation 02 10
deferred tax on retirement benefit obligations 39 57
unremitted overseas profits 05 02
customer lists and other intangibles amortisation and impairment 08 14
t ax losses 82 122
sharebased payments 16 04
other temporary differences 09 01
deferred tax credit 23 54
tax on items charged to equity     
deferred tax debitcredit in respect of items taken directly to reserves 199 186
t otal tax debitedcredited to equity 199 186 rentokil initial plc annual report 2014
109 financial statements
strategic report
corporate governance
financial statements additional information
the tax on the group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to 
profits of the consolidated companies as follows
2014 
£m
restated 
2013 
£m
profit before income tax 1632 1122
t ax calculated at domestic tax rates applicable to profits in the respective countries 416 294
adjustment in respect of previous periods 74 62
deferred tax recognised on losses 87 160
expenses not deductible for tax purposes – restructuring costs and oneoff items 14 27
expenses not deductible for tax purposes – interest payable 25 23
expenses not deductible for tax purposes – other 29 22
income not subject to tax 18 15
utilisation of previously unrecognised tax losses 138 27
deferred tax on unremitted overseas profits 06 02
goodwill impairment – 06
overseas withholding tax suffered 21 23
losses not relieved 13 21
provisions utilised for which no deferred tax assets were recognised 05 14
local business taxes 21 27
other – 02
t otal tax expense 371 289
a deferred tax asset of £247m 2013 £160m has been recognised in respect of uk tax losses carried forward as at 31 december 2014 
this amount has been calculated by estimating the future uk taxable profits for 2015 to 2017  against which the uk tax losses will be utilised 
and applying the tax rates substantively enacted as at the balance sheet date applicable for each year remaining uk tax losses of £199 1m 
have not been recognised as at 31 december 2014
as a substantial proportion of profits are generated outside the uk the standard rate of tax has been determined as the weighted average of the 
standard rates of tax in each of the different countries where profits are generated the relevant rates were approximately 26 2013 27 
the group is subject to income taxes in numerous jurisdictions significant judgement is required in determining the worldwide provision for 
income taxes there are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of 
business the group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due where the 
final tax outcome of these matters is different from the amounts that were initially recorded such differences will impact the income tax and 
deferred tax provisions in the period in which such determination is made
the 2014 budget on 20 march 2014 announced that the uk corporation tax rate will reduce to 20 effective from 1 april 2015 and this rate 
change was substantively enacted on 2 july 2014 this will reduce the company’s future current tax charge accordingly the deferred tax liability 
at 31 december 2014 has been calculated based on the rate of 20 substantively enacted at the balance sheet date rentokil initial plc annual report 2014
notes to the accounts – continued
110 financial statements
a14 deferred income tax
deferred income tax is provided in full using the liability method on temporary differences arising between the tax bases of assets and liabilities 
and their carrying amounts in the consolidated financial statements however if the deferred income tax arises from initial recognition of an asset 
or liability in a transaction other than a business combination that at the time of the transaction affects neither the accounting nor the taxable 
profit or loss it is not accounted for deferred income tax is determined using tax rates and laws that have been enacted or substantively 
enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax 
liability is settled
deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary 
differences can be utilised
deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates except where the timing of the 
reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not reverse in the foreseeable 
future
tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity in which case it is recognised 
in equity
the movement on the deferred income tax account is as follows
2014 
£m
2013 
£m
at 1 january 535 744
exchange differences 38 14
acquisition of companies and businesses 79 08
disposal of companies and businesses 06 21
transfers to current taxation 02 01
credited to the income statement 23 65
chargedcredited to equity 199 186
at 31 december 748 535
deferred taxation has been presented on the balance sheet as follows
deferred tax asset within noncurrent assets 35 92
deferred tax liability within noncurrent liabilities 783 627
748 535
the major components of deferred tax assets and liabilities at the year end without taking into consideration the offsetting of balances within the 
same tax jurisdiction are as follows
customer 
lists 
intangibles 
£m
accelerated 
tax 
depreciation 
£m
retirement 
benefits 
£m
unremitted 
earnings from 
subsidiaries 
£m
tax 
losses 
£m
sharebased 
payments 
£m
other 
£m
total 
£m
at 31 december 2013 187 577 47 50 166 27 133 535
recognised in income statement 08 02 39 05 82 16 09 23
recognised directly in equity – – 230 – – – 31 199
exchange differences recognised in other 
comprehensive income 01 39 – – – – – 38
transferred to current taxation 02 – – – – – – 02
acquired in business combinations 79 – – – – – – 79
released on business disposal 19 09 01 – – – 03 06
at 31 december 2014 242 545 317 55 248 11 152 748
at the balance sheet date the group has tax losses of £2794m 2013 £3892m on which no deferred tax asset is recognised of the losses 
£124m will expire at various dates between 2015 and 2033 in addition there are capital losses carried forward of £2852m 2013 £288 1m 
on which no deferred tax asset is recognised other deferred tax assets relating to gross temporary timing differences of £104m 2013 £98m 
have not been recognised due to the uncertainty regarding their utilisation
deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the 
balances net rentokil initial plc annual report 2014
111 financial statements
strategic report
corporate governance
financial statements additional information
b1 business combinations
under the requirements of ifrs 3 all business combinations are accounted for using the purchase method ‘acquisition accounting’ the cost 
of a business combination is the aggregate of the fair values at the date of exchange of assets given liabilities incurred or assumed and equity 
instruments issued by the acquirer the cost of a business combination is allocated at the acquisition date by recognising the acquiree’s 
identifiable assets liabilities and contingent liabilities that satisfy the recognition criteria at their fair values at that date the acquisition date is the 
date on which the acquirer effectively obtains control of the acquiree an intangible asset is recognised if it meets the definition of an intangible 
asset in ias 38 intangible assets the intangible assets identified in all acquisitions made since 1 january 1998 are goodwill customer lists and 
relationships brands and contract portfolios consideration in excess of net identifiable assets acquired in respect of noncontrolling interests 
in existing subsidiary undertakings is taken directly to reserves deferred and contingent consideration are accounted for at fair value at the 
acquisition date with subsequent changes to the fair value of contingent consideration being recognised in the consolidated income statement
costs directly attributable to business combinations made after 1 january 2010 are charged to the income statement as incurred and presented 
as oneoff items costs directly attributable to business combinations prior to this date were included as part of the purchase price of the 
business combination
during the year the group purchased 100 of the share capital or the trade and assets of 30 smaller companies and businesses the total 
consideration in respect of all acquisitions was £768m and the cash outflow from current and past period acquisitions net of cash acquired 
was £68 1m 
details of goodwill and the fair value of net assets acquired are as follows
2014 
£m
2013 
£m
purchase consideration
– cash paid 639 74
– deferred and contingent consideration 129 24
– business exchanged – 35
t otal purchase consideration 768 133
fair value of net assets acquired 444 101
goodwill from current year acquisitions 324 32
goodwill represents the synergies workforce and other benefits expected as a result of combining the respective businesses none of the 
goodwill recognised is expected to be deductible for tax purposes
contingent consideration from current year acquisitions up to a maximum of £83m is payable over the next four years based on earn out 
conditions on revenue profit and customer retention deferred consideration from current year acquisitions of £50m is payable over the next 
four years the group incurred acquisition related costs of £15m in respect of the above acquisitions
the provisional fair value
1
 of assets and liabilities arising from acquisitions in the year are as follows
2014 
£m
2013 
£m
noncurrent assets
– intangible assets 399 77
– property plant and equipment 48 30
current assets
2
177 30
current liabilities 87 25
noncurrent liabilities
3
93 11
net assets acquired 444 101
1  the provisional fair values will be finalised in the 2015 financial statements the fair values are provisional since the acquisition accounting has not yet been finalised as a result of the proximity of 
many acquisitions to the year end
2  includes trade and other receivables of £104m which represents the gross and fair value of the assets acquired
3  includes £76m of deferred tax relating to acquired intangibles
the £399m of intangible assets acquired include £384m of customer lists and relationships and £15m of other intangibles
b investing  rentokil initial plc annual report 2014
notes to the accounts – continued
112 financial statements
changes in fair values of acquired assets and liabilities and consideration in respect of provisional assets and liabilities recorded as at 
31 december 2013 have been adjusted in the current year as follows
2013
adjustment 
£m
purchase consideration
– consideration –
– contingent consideration 01
t otal purchase consideration 01
reduction in fair value of net assets acquired 05
goodwill on priorperiod acquisitions 06
these adjustments have been reflected in the disclosures in this note
the adjustments to fair value of assets and liabilities in respect of priorperiod acquisitions are as follows
2013
adjustment 
£m
noncurrent assets
– intangible assets 11
current assets 03
current liabilities 09
noncurrent liabilities deferred tax 04
net assets acquired 05
the cash outflow from current and past acquisitions are as follows
2014 
£m
2013 
£m
t otal purchase consideration 768 133
businesses exchanged – 35
consideration payable in future periods 129 24
purchase consideration paid in cash 639 74
cash and cash equivalents in acquired companies and businesses 37 –
cash outflow on current period acquisitions 602 74
deferred consideration paid 79 46
cash outflow on current and past acquisitions 681 120
from the dates of acquisition to 31 december 2014 these acquisitions contributed £317m to revenue and £54m to operating profit
if the acquisitions had occurred on 1 january 2014 the revenue and operating profit of the group would have amounted to £17732m and 
£237 5m respectively
b2 discontinued operations and disposals 
a discontinued operation is a component of an entity which has either been disposed of or is classified as held for sale which represents 
a separate major line of business or geographical area of operations and is part of a single coordinated plan to dispose of a separate line 
of business or geographical area of operations
on 18 march 2014 the group sold the initial facilities division the division was not previously classified as held for sale or as a discontinued 
operation management committed to a plan to sell this division early in 2014 following a decision to concentrate on the group’s core 
international businesses in pest control hygiene and workwear the comparative consolidated income statement has been represented 
to show the discontinued operation separately from continuing operations
on 26 april 2013 the group sold the city link division the comparative consolidated income statement shows the discontinued operation 
separately from continuing operations 
during the year the group also disposed of two smaller businesses that are not classified as discontinued operations rentokil initial plc annual report 2014
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the results of the discontinued operations are as follows
2014 
£m
2013 
£m
revenue 853 6305
operating expenses 849 6339
operating profitloss 04 34
interest payable – 04
income tax chargebenefit 04 02
operating profitloss net of tax – 36
profitloss on sale of discontinued operation 1354 410
profitloss for the year 1354 446
basic earnings per share note a2 745p 245p
diluted earnings per share note a2 744p 245p
the profit from discontinued operations of £1354m 2013 £446m loss is attributable entirely to the owners of the company 
details of cash flows from discontinued operations are as follows
2014 
£m
2013 
£m
net cash used in operating activities 312 142
net cash used in investing activities 2245 81
effect on cash flows 1933 223
details of net assets disposed and disposal proceeds in the year relating to all disposals are as follows
initial  
facilities
£m
other 
disposals
£m
total  
£m
noncurrent assets
– intangible assets 398 25 423
– property plant and equipment 76 01 77
current assets 1380 – 1380
current liabilities 814 – 814
noncurrent liabilities – – –
net assets and liabilities 1040 26 1066
cumulative foreign exchange recycled 06 – 06
pension curtailment 06 – 06
costs of disposal 106 15 121
consideration 2500 60 2560
deferred consideration – 05 05
profit on disposal 1354 24 1378
consideration 2500 60 2560
cash and cash equivalents disposed of 167 – 167
net cash inflow from discontinued operations 2333 60 2393 rentokil initial plc annual report 2014
notes to the accounts – continued
114 financial statements
b3 disposal group held for sale
noncurrent assets or disposal groups comprising assets and liabilities are classified as held for sale if it is highly probable that the carrying 
value will be recovered primarily through sale rather than through continuing use
immediately before classification as held for sale the assets or components of a disposal group are remeasured in accordance with the group’s 
other accounting policies thereafter generally the assets or disposal group are measured at the lower of their carrying amount and fair value 
less costs to sell any impairment loss on a disposal group is allocated first to goodwill and then to the remaining assets and liabilities on a pro 
rata basis impairment losses on initial classification as held for sale and subsequent gains and losses on remeasurement are recognised in the 
income statement gains are not recognised in excess of any cumulative impairment loss
once classified as held for sale intangible assets and property plant and equipment are no longer amortised or depreciated
at 31 december 2014 there were no disposal groups held for sale
b4 intangible assets
intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses where applicable the main categories 
of intangible assets are as follows
intangible assets – indefinite useful lives
goodwill
goodwill represents the excess of the cost of an acquisition over the fair value of the group’s share of the net identifiable assets of the acquired 
subsidiaryassociate at the date of acquisition goodwill in respect of business combinations made since 1 january 1998 is included in intangible 
assets goodwill on the acquisition of associates is included in investments in associates goodwill in respect of the acquisition of subsidiaries 
made prior to 1 january 1998 remains eliminated against reserves
goodwill is tested annually for impairment and carried at cost less accumulated impairment losses impairment losses previously recognised are 
not reversed goodwill is allocated to cashgenerating units for the purpose of impairment testing gains and losses on the disposal of an entity 
include the carrying amount of goodwill relating to the entity sold
intangible assets – finite useful lives
intangible assets with finite useful lives are initially measured at either cost or fair value and amortised on a straightline basis over their useful 
economic lives which are reviewed on an annual basis the fair value attributable to intangible assets acquired through a business combination 
is determined by discounting the expected future cash flows to be generated from that asset at the risk adjusted weighted average cost of capital 
for the group the residual values of intangible assets are assumed to be nil
the estimated useful economic lives of intangible assets are as follows
customer lists and relationships 5 to 16 years 
brands and patents 2 to 15 years 
computer software 3 to 5 years 
product development up to 5 years
the following are the main categories of intangible assets
customer lists and relationships
customer lists and portfolios acquired are initially measured at fair value and amortised on a straightline basis over their useful economic lives 
separate values are not attributed to internally generated customer lists or relationships
brands
brands acquired as part of a business combination are initially measured at fair value and amortised on a straightline basis over their useful 
economic lives expenditure incurred to develop maintain and renew brands internally is recognised as an expense in the period incurred 
separate values are not attributed to internally generated brands
product development
research expenditure is recognised as an expense as incurred costs incurred on development projects relating to the design and testing of 
new or improved products are recognised as intangible assets when it is probable that the project will be a success considering its commercial 
and technological feasibility and only if the cost can be measured reliably capitalised development expenditure is measured at cost less 
accumulated amortisation and any accumulated impairment losses 
other development expenditure is recognised as an expense as incurred
development costs previously recognised as an expense are not recognised as an asset in a subsequent period development costs that have 
been capitalised are amortised from the date the product is available for use on a straightline basis over the period of its expected benefit rentokil initial plc annual report 2014
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computer software
acquired computer software is capitalised on the basis of the costs incurred to acquire and bring into use the specific software and is amortised 
over its estimated useful life  costs that are directly associated with the production of identifiable and unique software products controlled by the 
group and that are expected to generate economic benefits exceeding costs beyond one year are recognised as intangible assets direct costs 
include the software development and employee costs
costs associated with maintaining computer software programs are recognised as an expense as incurred computer software development 
costs recognised as assets are amortised over their estimated useful lives
 
goodwill 
£m
customer lists and 
relationships 
£m
brands 
£m
reacquired 
franchise rights 
£m
product 
development
£m
computer  
software  
£m
total 
£m
cost
at 1 january 2013 5317 5172 360 254 40 783 11926
exchange differences 136 117 08 – – 10 271
additions – – – – 59 217 276
disposalsretirements – 08 – – – 57 65
acquisition of companies and businesses 28 73 – – – – 101
disposal of companies and businesses 2033 606 – 254 – 89 2982
at 31 december 2013 3176 4514 352 – 99 844 8985
at 1 january 2014 3176 4514 352 – 99 844 8985
exchange differences 27 75 08 – – 17 111
additions – – – – – 118 118
disposalsretirements – – – – 04 26 30
acquisition of companies and businesses 330 395 17 – – 02 744
disposal of companies and businesses 309 268 33 – – 74 684
at 31 december 2014 3170 4566 344 – 95 847 9022
accumulated amortisation and impairment
at 1 january 2013 2267 4329 170 254 – 385 7405
exchange differences 08 112 06 – – 08 134
disposals – – – – – 38 38
disposal of companies and businesses 2030 613 – 254 – 40 2937
impairment charge 34 – – – – 52 86
amortisation charge – 197 32 – 06 118 353
at 31 december 2013 263 3801 196 – 06 469 4735
at 1 january 2014 263 3801 196 – 06 469 4735
exchange differences 03 80 04 – – 13 92
disposals – – – – – 22 22
acquisition of companies and businesses – – – – – 01 01
disposal of companies and businesses – 196 24 – – 40 260
impairment charge – – – – – 23 23
amortisation charge – 179 27 – 11 107 324
at 31 december 2014 260 3704 203 – 17 525 4709
net book value
at 1 january 2013 3050 843 190 – 40 398 4521
at 31 december 2013 2913 713 156 – 93 375 4250
at 31 december 2014 2910 862 141 – 78 322 4313
amortisation of £319m 2013 £353m has been charged to operating expenses rentokil initial plc annual report 2014
notes to the accounts – continued
116 financial statements
impairment tests for goodwill
goodwill is allocated to the group’s cashgenerating units cgus identified according to country of operation and reportable business unit 
a summary of the 2014 goodwill allocation by reportable segment is shown below
2014 
£m 
2013 
£m
france 43 103
benelux 147 146
germany 175 322
other europe 416 157
europe 781 728
uk  ireland 148 89
rest of world 176 191
uk  rest of world 324 280
asia 245 232
north america
1
1106 924
pacific 454 465
initial facilities – 284
total 2910 2913
1 includes £1044m 2013 £827m relating to the us pest control cgu
key assumptions
the recoverable amount of a cgu is determined based on the higher of valueinuse calculations using cash flow projections and fair value less 
costs to sell if appropriate the cash flow projections are based on financial budgets and longrange plans approved by management and the 
board covering a threeyear period which are prepared as part of the group’s normal planning process cash flows for years four and five use 
management’s expectation of sales growth operating costs and margin based on past experience and expectations regarding future 
performance and profitability for each cgu cash flows beyond the fiveyear period are extrapolated using estimated longterm growth rates it 
can be demonstrated that there is material headroom in the recoverable amount of the cgu goodwill balances based on the assumptions made
the key assumptions used by individual cgus for valueinuse calculations were longterm growth rates of between 2 and 5 2013 2 and 
4 and pretax discount rates of between 10 and 14 2013 10 and 14 the key assumptions used by the us pest control cgu were a 
longterm growth rate of 3 2013 3 and a pretax discount rate of 14 2013 14 the growth rates used by individual cgus are based on 
the longterm growth rates predicted for the relevant sector and country in which a business operates they do not exceed the longterm 
average growth rate for that industry or country the pretax discount rates are based on the group’s weighted average cost of capital adjusted 
for specific risks relating to the relevant sector and country
impairment charges
2014 
£m
2013 
£m
asia – 34
– 34
all impairment charges have been recorded in the income statement within operating expenses
b5 property plant and equipment
property plant and equipment is stated at historical cost less depreciation with the exception of freehold land and assets under construction 
which are not depreciated historical cost includes expenditure that is directly attributable to the acquisition of the items 
depreciation of assets is calculated using the straightline method to allocate the difference between their cost and their residual values over their 
estimated useful lives as follows
freehold buildings 50 to 100 years 
leasehold buildings shorter of the lease term or estimated useful life 
vehicles 4 to 5 years 
plant and equipment including service contract equipment 3 to 10 years 
office equipment furniture and fittings 3 to 10 years rentokil initial plc annual report 2014
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assets’ residual values and useful lives are reviewed annually and amended as necessary fixed assets are reviewed for impairment whenever 
events or changes in circumstances indicate that the carrying amount of the fixed asset may exceed its recoverable amount an asset’s carrying 
amount is written down immediately to its recoverable amount if its carrying amount exceeds the higher of its fair value less cost to sell or 
valueinuse
for the purposes of assessing valueinuse assets are grouped at the lowest levels for which there are separately identifiable cash flows 
cashgenerating units and cash flow forecasts are made using assumptions consistent with the most uptodate budgets and plans that have 
been formally approved by management these cash flows are discounted using a pretax discount rate based on the weighted average cost 
of capital for the group adjusted for the particular risks of the cashgenerating unit being reviewed for impairment
when assets are sold the difference between sale proceeds and net book value is recognised in the income statement
the category of service contract equipment represents the pool of assets used by the group in delivering contracted services to customers 
land and buildings comprise mainly factories and offices
land and  
buildings 
£m
service contract  
equipment 
£m
other plant and  
equipment 
£m
vehicles and office  
equipment 
£m
total 
£m
cost
at 1 january 2013 1725 6850 2666 2454 13695
exchange differences 15 34 32 82 69
additions 75 1341 255 394 2065
disposals 58 1014 106 372 1550
acquisition of companies and businesses – 27 02 01 30
disposal of companies and businesses 121 56 77 171 425
reclassification 87 – – – 87
at 31 december 2013 1549 7114 2772 2224 13659
at 1 january 2014 1549 7114 2772 2224 13659
exchange differences 85 392 152 36 665
additions 38 1355 140 256 1789
disposals 62 1693 201 335 2291
acquisition of companies and businesses 13 28 12 27 80
disposal of companies and businesses 07 15 234 108 364
at 31 december 2014 1446 6397 2337 2028 12208
accumulated depreciation and impairment
at 1 january 2013 496 4399 1826 1471 8192
exchange differences 01 34 22 45 56
disposals 34 991 99 329 1453
disposal of companies and businesses 64 31 55 120 270
depreciation charge 52 1264 203 364 1883
reclassification to investment property 08 – – – 08
at 31 december 2013 443 4607 1897 1341 8288
at 1 january 2014 443 4607 1897 1341 8288
exchange differences 28 257 105 28 418
disposals 55 1671 196 300 2222
acquisition of companies and businesses – 21 06 04 31
disposal of companies and businesses 01 15 179 88 283
depreciation charge 51 1258 166 282 1757
at 31 december 2014 410 3943 1589 1211 7153
net book value
at 1 january 2013 1229 2451 840 983 5503
at 31 december 2013 1106 2507 875 883 5371
at 31 december 2014 1036 2454 748 817 5055 rentokil initial plc annual report 2014
notes to the accounts – continued
118 financial statements
leases
leases of property plant and equipment where the group has substantially all the risks and rewards of ownership are classified as finance 
leases finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased property and the present value of the 
minimum lease payments each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the 
finance balance outstanding
the corresponding rental obligations net of finance charges are included in other payables the interest element of the finance cost is charged 
to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for 
each period the property plant and equipment acquired under finance leases are depreciated over the shorter of the useful life of the asset or 
the lease term
the net carrying amounts of assets held under finance leases are as follows
2014 
£m
2013 
£m
other plant and equipment 04 05
vehicles and office equipment 230 204
total 234 209
b6 capital commitments 
capital expenditure contracted for at the balance sheet date but not yet incurred is as follows
2014 
£m
2013 
£m
property plant and equipment 130 263
intangible assets 13 14
143 277
b7 investments in associated undertakings
2014 
£m
2013 
£m
at 1 january 130 139
exchange differences 08 34
share of profit
1
39 43
dividends 17 18
at 31 december 144 130
1 share of profit is net of tax of £28m 2013 £31m
investments in associates at 31 december 2014 include goodwill of £nil 2013 £nil
the group’s interest in its principal associate which is unlisted was as follows
name 
country of 
incorporation
assets 
£m
liabilities 
£m
revenue 
£m
profit 
£m
interest 
held
2014
nippon calmic ltd japan 244 91 335 39 49
2013
nippon calmic ltd japan 228 85 356 43 49 rentokil initial plc annual report 2014
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financial instruments
financial assets and financial liabilities are recognised when the group becomes a party to the contractual provisions of the relevant instrument 
and derecognised when it ceases to be a party to such provisions
financial assets
the group classifies its financial assets in the following categories financial assets at fair value through the income statement loans and 
receivables availableforsale financial assets and other investments the classification depends on the purpose for which the financial assets 
were acquired management determines the classification of its investments at initial recognition and reevaluates this designation at every 
reporting date the group assesses at each balance sheet date whether there is objective evidence that financial assets are impaired
all financial assets are held at amortised cost except for derivatives which are classified as held for trading unless in a hedging relationship 
and certain assets classified as availableforsale which are held at fair value
a financial assets at fair value through the income statement 
assets are included in current assets except if they are expected to be realised after 12 months of the balance sheet date in which case they 
are classified as noncurrent assets
b loans and receivables
loans and receivables are nonderivative financial assets with fixed or determinable payments that are not quoted in an active market they arise 
when the group provides money goods or services directly to a debtor with no intention of trading the receivable they are included in current 
assets except for maturities greater than 12 months from the balance sheet date which are classified as noncurrent assets loans and 
receivables include trade and other receivables and cash and other equivalents loans and receivables are measured at amortised cost using 
the effective interest rate method subject to impairment
c availableforsale financial assets
availableforsale financial assets are nonderivatives that are either designated in this category or not classified in any of the other categories 
they are included in noncurrent assets unless management intends to dispose of the investment within 12 months of the balance sheet date
availableforsale investments are fair valued and changes to market values are recognised in equity on subsequent disposal or impairment the 
accumulated gains and losses previously recognised in equity are recognised in the income statement as ‘gains and losses from investment 
securities’ the group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial 
assets is impaired in the case of equity securities classified as availableforsale a significant or prolonged decline in the fair value of the security 
below its cost is considered as an indicator that the securities are impaired if any such evidence exists for available forsale financial assets the 
cumulative loss – measured as the difference between the acquisition cost and the current fair value less any impairment loss on that financial 
asset previously recognised in the income statement – is removed from equity and recognised in the income statement impairment losses 
recognised in the income statement on equity instruments are not reversed through the income statement 
d other investments
other investments comprise financial investments with a maturity date of greater than three months on the date the investment was made 
the group commonly invests in money market instruments for periods of greater than three months where funds are expected not to be needed 
for example if funds are reserved for a maturity or for a dividend payment investments with a maturity date more than one year from the balance 
sheet date are recorded as noncurrent
financial liabilities
all financial liabilities are stated at amortised cost using the effective interest rate method except for derivatives which are classified as held 
for trading except where they qualify for hedge accounting and are held at fair value
financial liabilities held at amortised cost include trade payables vacant property provisions deferred consideration and borrowings
accounting for derivative financial instruments and hedging activities
derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value 
at the balance sheet date the method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging 
instrument and if so the nature of the item being hedged the group designates certain derivatives as either
a hedges of the fair value of recognised assets or liabilities
b hedges of net investments in foreign operations
c cash flow hedges
at the inception of the transaction the group documents the relationship between hedging instruments and hedged items as well as its risk 
management objective and strategy for undertaking various hedge transactions the group also documents its assessment both at hedge 
inception and on an ongoing basis of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes 
in fair values of hedged items
c financing rentokil initial plc annual report 2014
notes to the accounts – continued
120 financial statements
certain derivative instruments are not designated or do not qualify for hedge accounting typically the group will not designate financial 
instruments for hedge accounting where a perfect or near perfect offset is expected between the change in value of assets and liabilities 
changes in the fair value of any derivative instruments in this category are immediately recognised in the income statement
a fair value hedge
changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement together 
with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk
b net investment hedge
any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in equity the gain or loss relating to the 
ineffective portion is recognised immediately in the income statement gains and losses accumulated in equity are included in the income 
statement when the foreign operation is disposed of
c cash flow hedge
the portion of the gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in equity any ineffective portion 
is immediately recognised in the income statement the gains or losses that are recognised in equity are transferred to the consolidated income 
statement in the same period in which the hedged cash flows affect the consolidated income statement in the event the hedged item occurs or 
is no longer expected to occur accumulated gains or losses held in the cash flow hedge reserve are immediately recognised in the income 
statement in the event the hedged item is expected to occur but no longer meets the requirements of hedge accounting accumulated gains or 
losses remain in equity and are only recognised in the income statement when the forecast transaction occurs or is no longer expected to occur 
fair value estimation
the fair value of any financial instruments traded in active markets is based on quoted market prices at the balance sheet date the quoted 
market price used for financial assets held by the group is the current bid price the appropriate quoted market price for financial liabilities is the 
current ask price
quoted market prices or dealer quotes for similar instruments are used for longterm debt other techniques such as estimated discounted cash 
flows are used to determine fair value for the remaining financial instruments the fair value of interest rate and currency swaps is calculated as 
the present value of the estimated future cash flows 
the fair value of forward foreign exchange contracts is determined using forward exchange market rates at the balance sheet date the fair value 
of financial instruments that are not traded in an active market is determined by using valuation techniques the group uses a variety of methods 
and makes assumptions that are based on market conditions existing at each balance sheet date
the nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate to their fair values the fair 
value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate 
that is available to the group for similar financial instruments
c1 financial risk factors
the group operates a central treasury function which manages cash and borrows on behalf of the group and provides finance to group 
companies in their home currencies
the main financial risks faced by the group relate to the availability of funds to meet business needs fluctuations in interest and foreign exchange 
rates and credit risks relating to the risk of default by counterparties to financial transactions the management of these risks is set out below
capital risk
the group is committed to maintaining a debtequity structure which allows continued access to a broad range of financing sources and sufficient 
flexibility to pursue commercial opportunities in a timely manner as they present themselves without onerous financing terms and conditions 
the group’s policy is to maintain a strong capital base so as to maintain investor creditor and market confidence and to sustain future 
development of the business capital consists of ordinary shares retained earnings and noncontrolling interests in the group management 
monitor the return on capital as well as the level of dividends to ordinary shareholders
debt credit rating
the group’s debt is rated by standard  poor’s as bbb with a stable outlook the group targets a rating of bbb or above for debt issuance over 
the medium term a rating of bbb or above is an ‘investment grade’ rating financial markets which have been closed to new debt issues from 
certain borrowers at times since 2008 have been receptive to debt issuance for investment grade borrowers throughout this period 
both the group’s €500m 3375 bond maturing 24 september 2019 and €350m 325 bond maturing 7 october 2021 contain a ‘coupon 
stepup’ increasing the coupon payable by 125 in the event that the group is downgraded to bb or below subinvestment grade 
financial covenants
the group has bonds in issue under its mediumterm note programme and revolving credit facility see note c4 for details the group’s 
revolving credit facility contains covenants requiring that ebitda  interest should be at least 4010 and that net debtadjusted ebitda 
should be no greater than 3510 at each semiannual reporting date the group remains compliant rentokil initial plc annual report 2014
121 financial statements
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financial statements additional information
change of control
the group’s mediumterm notes may be recalled by their investors at par in the event of a change of control of the group or within 120 days if
a the group’s debt is downgraded below investment grade or the rating is withdrawn and
b the rating agency confirms in writing either publicly or to the issuer or the trustee that the rating action occurred either wholly or in part due 
to the change of control
liquidity risk
the group is committed to ensuring it has sufficient liquidity to meet its payables as they fall due to achieve this and in accordance with the liquidity 
ratio requirements of the credit rating agency standard  poor’s significant maturities are financed at least 12 months in advance either through 
existing cash balances forecast cash flows or new debt issuance management models financing requirements at least 12 months ahead and aims 
to maintain average headroom of at least £150m and minimum headroom of at least £100m at 31 december 2014 the group’s earliest maturity was 
the £300m bond due march 2016 the group had available funds held centrally to meet this of £190m and £270m of undrawn available committed 
headroom under its revolving credit facility giving combined headroom of £460m 2013 £690m combined available funds and headroom
market risk
interest rate risk
at the year end sensitivity to interest rate changes was limited as all of the group’s bond debt is fixed to maturity with the earliest maturity 
in march 2016
within net debt the group held interest bearing sterling cash on deposit with counterparty banks amounting to £190m earning an average 
interest rate of approximately 05 a 10 increase in sterling deposit rates to 15 would result in an improvement in interest receivable 
of £19m and a 10 decrease to 05 would result in a decrease in interest receivable of £19m 2013 £03m increasedecrease
the group entered into opposing interest rate swaps on €800m of its bonds the €500m bond due in 2019 and €300m of the €350m bond due 
in 2021 which resulted in the group receiving a fixed interest payment of approximately €9m in 2014 and making fixed repayments annually to 
2021 in order to minimise the cost of this structure a break clause has been included requiring the group to repay the present value of all 
outstanding payments in september 2015 and october 2017  the instruments are held at fair value on the balance sheet and a 10 risefall 
in euro interest rates would result in an interest benefitcost of £03m shown in mark to market movements within interest
assuming both euro and sterling interest rates moved by the same amount the overall impact on interest in the income statement of a risefall 
in interest rates of 10 is therefore an increasedecrease of £22m 2013 £0 1m
as disclosed in note c4 the group had outstanding debt issues at 31 december 2014 with a fair value of £10810m this exceeds the book 
value of £9842m as a result of reductions in interest rates in the uk and europe and improved investor credit appetite
the market value is disclosed in the financial statements but there are no circumstances where the group would be forced to pay the market 
value the group could however decide to redeem some or all of its bonds early and the market price is indicative of the price that would be 
required to do so
a hypothetical 10 increase in euro and sterling interest rates would reduce the market value of the group’s bond liabilities by £43m at 
31 december 2014 the income statement impact is nil as changes in interest rates do not change the expected cash flows on the bonds 
however in the event it is decided to redeem bonds early it will be necessary to pay the fair value
foreign exchange risk
the group’s worldwide operations generate profits and cash flows in foreign currencies sales and purchases are typically denominated in the 
same currency but some crossborder procurement takes place the most significant is in us dollars amounting to approximately 15m per 
year sterling procurement and central costs mean that foreign currencies constitute more than 100 of group apbita at approximately 1 15
the group’s primary exposure is the £€ exchange rate with euro apbita approximately 70 of group apbita the next most significant 
currency group is us dollars forming approximately 15 of group apbita australian dollars emerging market currencies and other currencies 
including nordic currencies each contribute approximately 10 of group apbita
at 31 december 2014 the group’s net debt was approximately 80 euro 2013 70 reflecting that it is the group’s principal cash flow exposure 
and the low cost of euro funding and 20 us dollars 2013 5 reflecting the size of the us market and the group’s strong growth in this 
region the increase in the proportion of net debt held in foreign currencies is largely as a result of sterling cash being received from the sale of 
the initial facilities division reducing net debt the retranslation of the interest element of euro and dollar debt provides a partial income statement 
offset to the retranslation of earnings
the group calculates the impact on the income statement and equity of a 10 shift in foreign exchange rates the group’s principal foreign 
currency exposure is to euro and a 10 shift in £€ would result in a £17 6m increasedecrease 2013 £155m in adjusted operating profit 
offset by a £24m decreaseincrease 2013 £28m in interest payable
for us dollars a 10 shift in £ would result in a £38m increasedecrease 2013 £38m in adjusted operating profit offset by a £08m 
decreaseincrease 2013 £nil in interest payable
where possible currency cash flows are used to settle liabilities in the same currency in preference to selling currency in the market rentokil initial plc annual report 2014
notes to the accounts – continued
122 financial statements
foreign currency balances including cash debt and intragroup balances are hedged on a net basis to the extent that balances naturally offset 
retranslation gains and losses are recognised in the income statement at 31 december 2014 a 10 shift in the £€ rate would result in a net 
impact of nil made up of a gain of £2755m offset by an equal loss 2013 net impact of nil made up of a £2054m gain offset by an equal loss 
foreign currency debt is designated for hedge accounting by the group as a hedge of its currency net assets thereby reducing its net currency 
assets retranslation gains and losses are recognised in reserves rather than in the income statement the impact of a 10 strengthening of 
sterling versus the euro would be a decrease in equity reserves due to retranslation of euro denominated assets offset by gains in equity from 
the net investment hedge of £202m 2013 £208m
credit risk
the group has no significant concentration of credit risk sales are typically low value high volume spreading the risk across a number of 
customers policies are in place to ensure that sales are only made to customers with an appropriate credit history derivative counterparties 
and cash transactions are limited to highcreditquality financial institutions and there is no significant concentration of exposure to any single 
counterparty the group monitors the creditworthiness of its derivative counterparties using a combination of credit ratings and other market 
indicators the group’s core bank group of nine counterparties were all rated a or above by standard  poor’s however in some territories 
particularly in emerging markets the group has exposure to some lower rated banks who conduct limited local cash management 
at 31 december 2014 the group had a total of £32m deposited with banks rated below a by standard  poor’s the highest concentration 
with any single bank was £07m 
the group operates in some territories where there is increased exposure to trade credit risks and in those cases the group puts in place 
appropriate additional measures where possible to manage its credit exposure
treasury risk
the company utilises financial instruments to manage known financial exposures in line with policies agreed by the board and outlined above 
the company does not enter into any speculative derivative contracts
c2 cash and cash equivalents
cash and cash equivalents include cash in hand deposits held at call with banks and other shortterm highly liquid investments with original 
maturities of three months or less and subject to insignificant changes in value in the cash flow statement cash and cash equivalents are 
shown net of bank overdrafts bank overdrafts are shown within borrowings in current liabilities on the balance sheet
2014 
£m
2013 
£m
cash at bank and in hand 1369 1382
shortterm bank deposits 602 56
1971 1438
cash and cash equivalents includes the following for the purposes of the cash flow statement
cash and cash equivalents 1971 1438
bank overdrafts note c4 30 04
1941 1434
included within cash at bank and in hand is £9 1m 2013 £165m of restricted cash this cash is held in respect of specific contracts and can 
only be utilised in line with terms under the contractual arrangements available funds also include £514m 2013 £292 1m of fixed rate cash 
deposits recognised within other investments note c3
offsetting financial assets and liabilities
gross amounts 
before 
offsetting 
£m
gross amounts 
set off 
£m
net amounts 
presented 
£m
at 31 december 2014
cash at bank and in hand 11078 9709 1369
bank overdraft 9739 9709 30
1339 – 1339
at 31 december 2013
cash at bank and in hand 17782 16400 1382
bank overdraft 16404 16400 04
1378 – 1378 rentokil initial plc annual report 2014
123 financial statements
strategic report
corporate governance
financial statements additional information
credit interest rates on bank balances range between 00 and 565 and debit interest rates range between 00 and 03 as far as practical 
cash balances are held centrally and are used first to repay borrowings under the group’s revolving credit facility before being placed on deposit
cash
floating rate cash earns interest at commercial rates in line with local market practice central treasury companies invest all significant cash 
surpluses in major currencies £ us and € at money market rates shortterm deposits are placed with banks usually for maturities of up 
to three months and earn interest at market rates related to the currency and the sums invested
c3 other investments
2014 
£m
2013 
£m
at 1 january 2922 575
additions 514 2921
disposals 2921 574
at 31 december 515 2922
less noncurrent portion 01 02
current portion 514 2920
financial assets include the following
availableforsale
– unlisted equity securities – continental europe 01 01
01 01
loans and receivables
– fixed rate cash deposits 514 2921
515 2922
other investments classified as availableforsale financial assets are valued based on public price quotations as appropriate fair value hierarchy 
level 1 changes in fair values of availableforsale financial assets are recorded directly in equity other investments classified as loans and 
receivables are held at amortised cost loans and receivables financial assets are deposits placed with counterparty banks receiving interest at 
a rate of 10 2013 08 per annum other investments were not impaired in 2014 or 2013 
fixed rate cash deposits include shortterm deposits of £487m held centrally 2013 £2899m fixed rate cash deposits also include 
£14m 2013 £12m invested with counterparty banks which are held by the group’s insurance operations in accordance with local insurance 
regulations these deposits are used to meet insurance liabilities as they fall due the weighted average effective interest rate earned is 10 
2013 08 and the weighted average rate was fixed for 10 years 2013 10 years 
2014 
£m
2013 
£m
financial assets are denominated in the following currencies
– pounds sterling 501 2911
– us dollar – –
– euro 01 01
– other 13 10
515 2922
none of the financial assets are either past due or impaired rentokil initial plc annual report 2014
notes to the accounts – continued
124 financial statements
c4 bank and other borrowings
borrowings are recognised initially at fair value net of transaction costs incurred borrowings are subsequently stated at amortised cost any 
difference between the fair value net of transaction costs and the redemption value is recognised in the income statement over the period of 
the borrowings using the effective interest method
borrowings are classified as current liabilities unless the group has a continuing right to defer settlement of the liability for at least 12 months after 
the balance sheet date
2014 
£m
2013 
£m
noncurrent
rcf and other bank borrowings 02 02
bond debt 9606 10086
finance lease liabilities 153 137
9761 10225
current
bank overdrafts note c2 30 04
bank borrowings 13 05
bond debt – 4027
bond accruals 187 334
finance lease liabilities 81 72
311 4442
t otal bank and other borrowings 10072 14667
mediumterm notes and bond debt comprises
bond interest coupon effective hedged interest rate
noncurrent
£300m bond due march 2016 fixed 575 fixed 448 
€500m bond due september 2019 fixed 3375  fixed 362
€350m bond due october 2021 fixed 325  fixed 355
£13m perpetual debentures fixed 500 fixed 500
£03m perpetual debentures fixed 450 fixed 450
current
€500m bond paid march 2014 fixed 4625  fixed 493
average cost of bond debt at year end rates 397
borrowings under the group’s committed revolving credit facility rcf of £270m accrue interest when drawn at libor plus a margin  
the cost of borrowing under the group’s rcf at the year end was 15 however the facility was undrawn during the year the group’s 
committed borrowing also includes a £40m letter of credit facility maturing december 2016 
at 31 december 2014 the rcf was undrawn 2013 undrawn and £305m 2013 £362m of letters of credit were in issue
the committed borrowing facilities are subject to guarantees by rentokil initial 1927 plc
on 27 january 2015 a new combined £315m facility of which £270m can be used for cash drawings was signed maturing in january 2020
the group’s rcf  bank borrowings and bonds are held at amortised cost rentokil initial plc annual report 2014
125 financial statements
strategic report
corporate governance
financial statements additional information
the carrying values and the fair values of the group’s borrowings are shown below fair values are based on cash flows discounted at the 
current market rates
carrying 
amount 
2014 
£m
carrying  
amount 
2013 
£m
 
fair value 
2014 
£m
 
fair value 
2013 
£m
noncurrent
bank borrowings 02 02 02 02
£300m bond due march 2016
1
3048 3086 3158 3237
€500m bond due september 2019 3862 4124 4319 4302
€350m bond due october 2021 2686 2866 3080 2887
£16m perpetual debentures 10 10 17 17
finance lease liabilities 153 137 153 137
9761 10225 10729 10582
current
€500m bond paid march 2014 – 4027 – 4062
finance lease liabilities 81 72 81 72
total 9842 14324 10810 14716
1  the £300m bond was revalued for changes in interest rates during the period march 2006 to april 2009 during which the group paid floating interest rates at the end of this period the group 
reverted to paying fixed interest rates and revaluation of the bond ceased as the hedge relationship ended the bond is recorded in the financial statements at amortised cost and revaluation 
differences are amortised to the consolidated income statement over the life of the bond thus producing the effective rate indicated above
the bonds are level 1 and the debentures finance lease and bank borrowings are level 2 of the fair value hierarchy
the group considers the fair value of other current liabilities to be equal to the carrying value
finance leases
finance lease payments fall due as follows
2014 
£m
2013 
£m
not later than one year 81 72
between
– one and two years 70 59
– two and three years 55 45
– three and four years 27 31
– four and five years 06 08
– over five years – –
239 215
future finance charges on finance leases 05 06
finance lease liabilities 234 209 rentokil initial plc annual report 2014
notes to the accounts – continued
126 financial statements
c5 derivative financial instruments
fair value 
assets 
2014 
£m
fair value 
assets 
2013 
£m
fair value 
liabilities 
2014 
£m 
fair value  
liabilities 
2013 
£m
interest rate swaps
– nonhedge – 24 79 03
– cash flow hedge 04 – 31 –
– net investment hedge 10 08 128 –
foreign exchange swaps
– nonhedge 06 04 23 75
20 36 261 78
analysed as follows
current portion 06 34 67 78
noncurrent portion 14 02 194 –
20 36 261 78
cash flow hedge accounting has been applied to derivatives marked as ‘cash flow hedge’ in accordance with ias 39 where no hedge 
accounting has been applied related derivatives have been marked as ‘nonhedge’ any ineffectiveness on the cash flow hedge is taken directly 
to finance costs there was no ineffectiveness to be recorded from net investment in foreign entity hedges or those derivatives in a cash flow 
hedge relationship
cash flow hedge accounting has been applied to €544m of the €500m 2019 bond using a crosscurrency interest rate swaps which match the 
terms of the bond the group has also applied hedge accounting to nok 105m of intercompany loans using crosscurrency interest rate swaps 
matching the terms of the loans the purpose of both hedges is to eliminate the risk to the cash flow due to changes in the £€ and £nok 
exchange rate the balance in reserves in regards to cash flow hedge accounting was £0 1m loss 2013 £nil
the effective nominal value of foreign exchange swaps is £567m 2013 £2636m and foreign exchange forwards is £168m 2013 £0 1m
the group had no outstanding commodity contracts at year end
fair value hierarchy of derivative financial instruments
for all financial instruments held by the group those that are held at fair value are to be classified by reference to the source of inputs used to 
derive the fair value the following hierarchy is used
level 1 – unadjusted quoted prices in active markets for identical assets or liabilities
level 2 – inputs other than quoted prices that are observable for the asset or liability either directly as prices or indirectly through modelling based 
on prices
level 3 – inputs for the asset or liability that are not based on observable market data
the group holds all derivatives at fair value using discounted cash flow models based on market rates which are observable therefore all 
derivative financial instruments and availableforsale assets held by the group fall into level 2 deferred and contingent consideration payable by 
the group falls into level 3 it is valued based on the group’s best estimate of the amount payable based on the future forecasts of the acquired 
businesses discounted where the impact is considered material no financial instruments have moved between levels in the year rentokil initial plc annual report 2014
127 financial statements
strategic report
corporate governance
financial statements additional information
the table below analyses the group’s derivative financial instruments which will be settled on a gross basis into relevant maturity groupings 
based on the remaining period at the balance sheet date to the contractual maturity date the amounts disclosed in the table are the contractual 
undiscounted cash flows and so may not reconcile to the balance sheet
less than 
1 year 
£m
between 
1 and 2 years 
£m
between 
2 and 5 years 
£m
over 
5 years 
£m
 
total 
£m
at 31 december 2014
crosscurrency swaps
– outflow 101 1492 655 – 2248
– inflow 96 1391 576 – 2063
foreign exchange swaps
– outflow 706 – – – 706
– inflow 689 – – – 689
foreign exchange forwards
– outflow 112 – – – 112
– inflow 111 – – – 111
net outflow 23 101 79 – 203
at 31 december 2013
crosscurrency swaps
– outflow 839 – – – 839
– inflow 869 – – – 869
foreign exchange swaps
– outflow 3734 – – – 3734
– inflow 3661 – – – 3661
foreign exchange forwards
– outflow 20 – – – 20
– inflow 20 – – – 20
net outflow 43 – – – 43
c6 financial liabilities
the table below analyses the undiscounted contractual cash flows of the group’s financial liabilities including interest payments
less than 
1 year 
£m
between  
1 and 2 years 
£m
between  
2 and 5 years 
£m
over 
5 years 
£m
 
total 
£m
at 31 december 2014
borrowings 394 3405 4542 2905 11246
derivative financial instruments 73 118 118 – 309
trade and other payables 2224 125 – – 2349
finance leases 81 70 83 – 234
other 265 72 152 51 540
3037 3790 4895 2956 14678
at 31 december 2013
borrowings 4628 407 3876 7490 16401
derivative financial instruments 77 94 – – 17
trade and other payables 3131 121 – – 3252
finance leases 72 59 84 – 215
other 214 95 160 81 550
7968 776 4120 7571 20435
other includes £386m 2013 £466m in respect of provisions related to onerous lease contracts and £153m 2013 £1 1 1m in respect of 
deferred consideration rentokil initial plc annual report 2014
notes to the accounts – continued
128 financial statements
the carrying amounts of the group’s financial liabilities are denominated in the following currencies before the effect of any derivatives used 
to transform the currency of the cash flows
 
 
borrowings 
2014 
£m
 
 
borrowings 
2013 
£m
trade  
payables 
and other 
2014 
£m
trade  
payables 
and other 
2013 
£m
 
 
total 
2014 
£m
 
 
total 
2013 
£m
pounds sterling 3188 3226 840 1521 4028 4747
euro 6703 11291 1097 1365 7800 12656
us dollar 159 139 462 448 621 587
other currencies 22 11 490 465 512 476
10072 14667 2889 3799 12961 18466
further information on the currency of the group’s debt and foreign currency management policies is shown in note c1
c7 reconciliation of total financial instruments
the table below reconciles the group’s accounting categorisation of financial assets and liabilities based on initial recognition to the classes 
of assets and liabilities as shown on the face of the balance sheet
 
fair value 
through income
statement
£m
 
loans and 
receivables 
£m
 
available 
forsale 
£m
financial
liabilities held
at amortised
cost 
£m
not
categorised
as a financial
instrument 
£m
 
total 
£m
noncurrent 
£m
 
 
current 
£m
at 31 december 2014 
assets
other investments – 514 01 – – 515 01 514
trade and other receivables – 3005 – – 255 3260 115 3145
derivative financial instruments 20 – – – – 20 14 06
cash and cash equivalents – 1971 – – – 1971 – 1971
liabilities
derivative financial instruments 261 – – – – 261 194 67
trade and other payables – – – 2503 1446 3949 129 3820
bank and other borrowings – – – 10072 – 10072 9761 311
at 31 december 2013
assets
other investments – 2921 01 – – 2922 08 2914
trade and other receivables – 3709 – – 547 4256 82 4174
derivative financial instruments 36 – – – – 36 02 34
cash and cash equivalents – 1438 – – – 1438 – 1438
liabilities
derivative financial instruments 78 – – – – 78 – 78
trade and other payables – – – 3362 1696 5058 130 4928
bank and other borrowings – – – 14667 – 14667 10225 4442 rentokil initial plc annual report 2014
129 financial statements
strategic report
corporate governance
financial statements additional information
c8 interest payable and similar charges
2014 
£m
restated 
2013 
£m
hedged interest payable on mediumterm notes issued
1
407 540
interest payable on bank loans and overdrafts
1
12 09
interest payable on revolving credit facility
1
14 41
interest payable on foreign exchange swaps 99 101
interest payable on finance leases 08 09
amortisation of discount on provisions 11 03
foreign exchange loss on translation of foreign denominated loan
2
02 –
fair value loss on other derivatives
34
09 02
t otal interest payable and similar charges 562 705
1 interest expense on financial liabilities held at amortised cost
2 comprises retranslation loss on financing instruments of £1951m offset by gains of £1949m 2013 gains of £597m offset by losses of £594m
3 loss on financial assetsliabilities at fair value through the income statement 
4 the fair value loss on other derivatives includes fair value losses relating to interest rate swaps of £09m 2013 £02m and fixed price commodity contracts of £nil 2013 £nil
c9 interest receivable
interest income is recognised on a timeapportioned basis using the effective interest method when a receivable is impaired the group reduces 
the carrying amount to its recoverable amount being the estimated future cash flow discounted at the original effective interest rate of the 
instrument and continues unwinding the discount as interest income interest income on impaired loans is recognised either as cash is collected 
or on a costrecovery basis as conditions warrant
2014 
£m
2013 
£m
bank interest
1
20 15
interest receivable on foreign exchange swaps 83 87
foreign exchange gain on translation of foreign denominated assets and liabilities – 03
fair value gain on other derivatives
23
06 04
t otal interest receivable 109 109
1 interest income on loans and receivables
2 gain on financial assetsliabilities at fair value through the income statement 
3 the fair value gain on other derivatives includes fair value gains relating to interest rate swaps of £06m 2013 £04m
c10 dividends
dividend distribution to the company’s shareholders is recognised as a liability in the group’s financial statements in the period in which the 
dividends are approved by the company’s shareholders interim dividends are recognised when paid
2014 
£m
2013 
£m
2012 final dividend paid – 143p per share – 259
2013 interim dividend paid – 070p per share – 127
2013 final dividend paid – 161p per share 292 –
2014 interim dividend paid – 077p per share 140 –
432 386
an interim dividend of 077p per share was paid on 16 september 2014 amounting to £140m a dividend in respect of 2014 of 182p  
2013 161p per 1p share amounting to £33 1m 2013 £292m is to be proposed at the annual general meeting on 13 may 2015  
these financial statements do not reflect this recommended dividend rentokil initial plc annual report 2014
notes to the accounts – continued
130 financial statements
c11 share capital
ordinary shares are classified as equity incremental costs directly attributable to the issue of new shares or options are shown in equity as 
a deduction net of tax from the proceeds
where any group company purchases the company’s equity share capital treasury shares the consideration paid including any directly 
attributable incremental costs net of income taxes is deducted from equity attributable to the company’s equity holders until the shares are 
cancelled reissued or disposed of where such shares are subsequently sold or reissued any consideration received net of any directly 
attributable incremental transaction costs and the related income tax effects is included in equity attributable to the company’s equity holders
2014 
£m
2013 
£m
authorised
4100000000 ordinary shares of 1p each 410 410
issued and fully paid
at 31 december – 1822832965 shares 2013 1817498329 182 182
c12 reconciliation of net change in cash and cash equivalents to net debt
2014 
£m
2013 
£m
net increasedecrease in cash and cash equivalents 651 784
movement on finance leases 12 23
movement on other investments 2407 2921
movement on loans 3895 2404
increase in debt resulting from cash flows 2127 290
foreign exchange translation and other items 471 170
other noncash movements – 07
movement on net debt in the year 2598 453
opening net debt 10348 9895
closing net debt 7750 10348
closing net debt comprises
cash and cash equivalents 1971 1438
other investments – loans and receivables 514 2921
fair value of debt related derivatives 163 40
bank and other shortterm borrowings 311 4442
bank and other longterm borrowings 9761 10225
t otal net debt 7750 10348
included within net increase in cash and cash equivalents is £3 1m paid in cash settlement on debt related foreign exchange forward contracts 
2013 £57m foreign exchange gains on debt amounted to £387m for 2014 with the gain primarily resulting from a weakening of the euro by 
8 cents but partially offset by losses due to strengthening of the us dollar by 9 cents 2013 loss of £1 13m
the group’s interest rate swaps and foreign currency derivatives with a fair value of £163m 2013 £40m were included within net debt for the 
first time in 2013 as this better reflects the underlying nature of these contracts 
foreign exchange contracts are used to convert the group’s bond debt to debt in different currencies or where cash has been generated 
overseas to convert it to sterling to either deposit or repay shortterm debt during the life of these contracts which are typically shortterm 
they will be revalued and the gains or losses will be substantially the same as if the group held debt or cash in the foreign currency 
the group also includes fair value hedge accounted interest rate swaps and nonhedge accounted interest rate swaps in net debt interest rate 
swaps are used to transform the group’s bonds from fixed to floating rate or floating rate to fixed rate rentokil initial plc annual report 2014
131 financial statements
strategic report
corporate governance
financial statements additional information
c13 operating and free cash flow
2014 
£m
2013 
£m
cash generated from operating activities 3470 3354
add back special pension contributions 10 136
3480 3490
purchase of property plant and equipment 1731 2011
purchase of intangible fixed assets 120 276
leased property plant and equipment 93 103
proceeds from sale of property plant and equipment 63 63
proceeds from sale of investment properties 68 –
dividends received from associates 17 19
operating cash flow 1684 1182
interest received 109 106
interest paid 596 609
interest element of finance lease payments 08 09
income tax paid 301 372
special pensions contributions 10 136
disposal of availableforsale investments – 12
free cash flow 878 174 rentokil initial plc annual report 2014
notes to the accounts – continued
132 financial statements
d1 contingent liabilities
the group has contingent liabilities relating to guarantees in respect of leasehold properties pensions third parties environmental issues tax 
and litigation the possibility of any significant loss in respect of these items is considered to be remote
d2 related party transactions
the group’s strategy and policy are managed by the executive board executive directors and senior management as shown on pages 40 to 42 
their compensation and the compensation payable to the nonexecutive directors is shown below
2014 
£m
2013 
£m
salaries and other shortterm employee benefits 38 56
postemployment benefits 04 06
sharebased payments 04 09
46 71
rentokil initial b sdn bhd 90 and rentokil delta libya for environmental protection jsco 65 are nonwholly owned subsidiaries of 
rentokil initial plc all transactions between these entities and the group were transacted at arm’s length during the ordinary course of business 
and have been eliminated on consolidation 
nippon calmic ltd 49 was an associate during 2014 and 2013 and its balances are disclosed in note b7  there are no significant transactions 
between nippon calmic ltd and other group companies
the group bears the costs of administration and independent pension advice of the rentokil initial pension scheme the total amount of costs in 
the year ended 31 december 2014 was £2 1m 2013 £22m of which £04m 2013 £04m was recharged to the scheme
d3 post balance sheet events
there were no significant post balance sheet events affecting the group since 31 december 2014
d other rentokil initial plc annual report 2014
133
strategic report
corporate governance
financial statements additional information
principal operating subsidiary and associated undertakings
at 31 december 2014
subsidiary undertakings
uk
dudley industries ltd
initial medical services ltd
peter cox ltd
rentokil initial 1927 plc
rentokil initial holdings ltd
rentokil initial services ltd
rentokil initial uk ltd
rentokil insurance ltd
australia
rentokil initial pty ltd
austria
initial austria gmbh
initial hygiene austria gmbh
rentokil initial gmbh
bahamas
rentokil initial bahamas ltd
tropical exterminators ltd
barbados
rentokil initial barbados ltd
belgium
ambius nv
initial nv
rentokil nv
brazil
asseio saneamento ambiental ltda
brunei
rentokil initial b sdn bhd 90
canada
rentokil pest control canada ltd
chile
bestway sa
colombia
bestway colombia sas
czech republic
initial ecotex sro
denmark
rentokil initial as
estonia
rentokil oü
fiji
rentokil initial ltd
finland
rentokil initial oy
france
ambius sas
cafi sas
initial sas
rentokil initial sas
t echnivap sas
french guiana
rentokil initial guyane sarl
germany
initial hygieneservice gmbh
initial t extil service gmbh  co kg
medentex gmbh
rentokil initial gmbh
greece
rentokil initial hellas epe
guadeloupe
rentokil initial guadeloupe sarl
guyana
rentokil initial guyana ltd
hong kong
rentokil initial hong kong ltd
india
rentokil india private ltd
indonesia
pt calmic indonesia
pt rentokil indonesia
italy
rentokil initial italia spa
jamaica
rentokil initial jamaica ltd 
kenya
rentokil initial kenya ltd
lithuania
uab dezinfa
luxembourg
initial sàrl
rcontrol désinfections sa
rentokil luxembourg sàrl
malaysia
rentokil initial m sdn bhd
martinique
rentokil initial martinique sarl 
mexico
balance urbano control de plagas sa de cv 
mozambique
rentokil initial mozambique limitada
netherlands
ambius bv
holland herstel groepureco bv
initial bv
rentokil initial bv
new zealand
rentokil initial ltd
norway
rentokil initial norge as
people’s republic of china
rentokil initial china ltd
philippines
rentokil initial philippines inc
poland
rentokil initial sp zoo 
portugal
rentokil initial portugal – serviços 
de protecção ambiental lda
republic of ireland
initial medical services ireland ltd
rentokil initial ltd
singapore
rentokil initial singapore private ltd
slovakia
initial t extile services sro
south africa
rentokil initial pty ltd 75
south korea
rentokil initial korea ltd
spain
rentokil initial españa sa
sweden
ambius ab
initial sverige ab
rentokil ab
sweden recycling ab
switzerland
initial schweiz ag
rentokil schweiz ag
taiwan
initial hygiene co ltd
rentokil ding sharn co ltd
thailand
rentokil initial thailand ltd
trinidad
rentokil initial trinidad ltd
tunisia
cap tunis
turkey
rentokil initial çevre sağlığı sistemleri ticaret  
ve sanayi aş
uae – dubai
rentokil initial pest control llc
uganda
rentokil initial uganda limited
usa
jc ehrlich  co inc
vietnam
rentokil initial vietnam company ltd
associated undertakings 
japan
nippon calmic ltd 49
the activities of the major subsidiaries are referred to in the business review on pages 26 to 32 
notes
1  rentokil initial plc owns directly 100 of the shares of rentokil initial holdings ltd and indirectly 100 of the shares in all subsidiaries except where a lower percentage is shown
2 undertakings operate and are incorporated in the country underneath which each is shown
3 a full list of subsidiaries will be attached to the company’s annual return
financial statements rentokil initial plc annual report 2014
134
five y ear summary
2010 
£m
2011 
£m
2012 
£m
restated 
2013 
£m
2014 
£m
revenue from continuing operations 24965 25443 22267 17914 17408
operating profitloss from continuing operations 615 102 1741 1605 2021
adjusted operating profit
1
 from continuing operations 2393 2247 2473 2361 2322
profitloss before income tax from continuing operations 145 505 1077 1122 1632
profitloss for the year from continuing operations 203 671 736 833 1261
profitloss for the year from discontinued operations – – 237 446 1354
profitloss for the year including discontinued 203 671 499 387 2615
profitloss attributable to equity holders of the company 234 697 476 375 2618
profit attributable to noncontrolling interests 31 26 23 12 03
203 671 499 387 2615
basic earnings per share
continuing operations 129p 384p 392p 452p 696p
continuing and discontinued operations 129p 384p 262p 206p 1441p
adjusted earnings per share
2
 – continuing operations 781p 748p 824p 736p 805p
dividends for the period per 1p share – 133p 210p 231p 259p
gross assets 18015 17989 19762 19940 17884
gross liabilities 19267 19031 21034 22260 16884
net assetsliabilities 1252 1042 1272 2320 1000
share capital 181 181 181 182 182
reserves 1538 1278 1520 2503 820
noncontrolling interests 105 55 67 01 02
capital employed 1252 1042 1272 2320 1000
1 before amortisation and impairment of intangibles excluding computer software restructuring costs and oneoff items
2 earnings per share before the tax adjusted amortisation and impairment of intangibles excluding computer software restructuring costs oneoff items and net interest credit on pensions
financial statements rentokil initial plc annual report 2014
135
strategic report
corporate governance
financial statements additional information
parent company balance sheet
notes
2014 
£m
2013 
£m
noncurrent assets
investments 4 2646 2637
debtors – amounts falling due after more than one year 6 24579 –
derivative financial instruments due after more than one year 7 10 02
27235 2639
current assets
other investments 5 487 2549
debtors – amounts falling due within one year 6 3621 28292
derivative financial instruments due within one year 7 – 30
shortterm deposits and cash 1208 3823
5316 34694
current liabilities
creditors – amounts falling due within one year 8 12271 9342
bank and other borrowings 9 186 8132
derivative financial instruments 7 44 03
12501 17477
net current liabilitiesassets 7185 17217
noncurrent liabilities
creditors – amounts falling due after more than one year
bank and other borrowings 9 9596 10076
derivative financial instruments 7 194 –
9790 10076
net assets 10260 9780
equity capital and reserves
share capital 10 182 182
share premium 11 68 68
profit and loss account 12 10010 9530
capital employed 10260 9780
the financial statements on pages 135 to 141 were approved by the board of directors on 26 february 2015 and were signed on its behalf by
andy ransom  jeremy t ownsend
chief executive  chief financial officer
financial statements rentokil initial plc annual report 2014
136
notes to the parent company accounts
1 accounting convention
the financial statements have been prepared under the historical cost convention as modified by the revaluation of certain financial assets 
and liabilities including derivatives and are in accordance with generally accepted accounting principles and standards in the uk uk gaap 
and comply with the companies act 2006
2 principal accounting policies
investments
investments held as fixed assets are stated at cost less provision for any impairment in the opinion of the directors the value of such investments 
are not less than shown at the balance sheet date
borrowings
borrowings are recognised initially at fair value net of transaction costs incurred borrowings are subsequently stated at amortised cost where 
hedge accounting is not applied any difference between the proceeds net of transaction costs and the redemption value is recognised in the 
profit and loss account over the period of the borrowings using the effective interest method
where fair value hedge accounting is applied the borrowings are subsequently revalued at each balance sheet date and the difference is offset 
against the fair value movement of the derivative the hedging instrument in the profit and loss account
borrowings are classified as current liabilities unless the company has a continuing right to defer settlement of the liability for at least 12 months 
after the balance sheet date under both its committed bank credit facility and euro mediumterm note programme
deferred tax
deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions 
or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date 
timing differences are differences between the taxable profits and results as stated in the financial statements that arise from the inclusion of gains 
and losses in tax assessments in periods different from those in which they are recognised in the financial statements
a net deferred tax asset is regarded as recoverable and therefore recognised only when on the basis of all the available evidence it can be 
regarded as more likely than not that there will be suitable profits against which the future reversal of the underlying timing differences can 
be deducted
deferred tax is not recognised when fixed assets are sold and it is more likely than not that the taxable gain will be rolled over being charged to tax 
only if and when the replacement assets are sold neither is deferred tax recognised on overseas profits where there is no commitment to remit 
those profits to the uk
deferred tax is measured at the average rates that are expected to apply in the periods in which the timing differences are expected to reverse 
based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date deferred tax is measured on a non
discounted basis
pension commitments
rentokil initial plc is the sponsoring company of a multiemployer defined benefit pension scheme rentokil initial pension scheme rips
an actuarial valuation of the defined benefit scheme is carried out every three years the most recent actuarial valuation was at 31 march 2013 
it was carried out using the projected unit credit method and the principal assumptions made by the independent professional actuary are 
disclosed in the consolidated financial statements of rentokil initial plc
as the company is unable to identify its share of the underlying assets and liabilities in rips it treats the scheme on a defined contribution basis 
in accordance with frs 17  retirement benefits
financial instruments and risk management
the company and group’s policy in respect of financial instruments and risk management are disclosed in the financing section of the notes 
to the consolidated financial statements disclosures have been made on financial instruments as required by the companies act 2006
financial statements rentokil initial plc annual report 2014
137
strategic report
corporate governance
financial statements additional information
share capital
ordinary shares are classified as equity incremental costs directly attributable to the issue of new shares or options are shown in equity as a 
deduction net of tax from the proceeds
where the company purchases the company’s equity share capital treasury shares the consideration paid including any directly attributable 
incremental costs net of income taxes is deducted from equity attributable to the company’s equity holders until the shares are cancelled 
reissued or disposed of where such shares are subsequently sold or reissued any consideration received net of any directly attributable 
incremental transaction costs and the related income tax effects is included in equity attributable to the company’s equity holders
sharebased compensation
the company operates a number of equitysettled sharebased compensation plans the economic cost of awarding shares and share options 
to employees is recognised as an expense in the profit and loss account equivalent to the fair value of the benefit awarded the fair value of 
options over the company’s shares awarded to employees of subsidiary companies is treated as a capital contribution resulting in an increase 
in investments the fair value is determined by reference to option pricing models principally monte carlo and adjusted blackscholes models 
the charge is recognised in the profit and loss account over the vesting period of the award at each balance sheet date the company revises 
its estimate of the number of options that are expected to become exercisable any revision to the original estimates is reflected in the profit 
and loss account with a corresponding adjustment to equity immediately to the extent it relates to past service and the remainder over the rest 
of the vesting period
the proceeds received net of any directly attributable transaction costs are credited to share capital nominal value and share premium when 
the options are exercised
dividend distribution
dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the period in which the dividends are 
approved by the company’s shareholders interim dividends are recognised when paid see note c10 of the consolidated financial statements 
for details of dividends paid in the year
3 company profit and loss account
under section 408 of the companies act 2006 a profit and loss account for the company alone is not presented the profit attributable  
to shareholders in the year was £894m 2013 £892m which includes a special pension contribution of £nil 2013 £125m a charge  
of £66m 2013 £3 1m charge in respect of exchange adjustments and £04m 2013 £04m in respect of audit fees
4 investments
2014 
£m
2013 
£m
at 1 january 2637 2625
sharebased payments to employees of subsidiaries 09 12
at 31 december 2646 2637
the company’s sole subsidiary undertaking is rentokil initial holdings ltd it has no other direct subsidiary undertakings
5 other investments
2014 
£m
2013 
£m
at 1 january 2549 561
additions 487 2549
disposals 2549 561
at 31 december 487 2549
loans and receivables financial assets include the following
– fixed rate cash deposits 487 2549
other investments classified as loans and receivables are held at amortised cost loans and receivables financial assets are deposits placed 
with counterparty banks receiving interest at a rate of 10 per annum 2013 08 other investments were not impaired in 2014 or 2013 
all loans and receivables financial assets are denominated in pounds sterling none of the financial assets are either past due or impaired
financial statements rentokil initial plc annual report 2014
138
notes to the parent company accounts – continued
6 debtors
2014 
£m
2013 
£m
amounts falling due within one year
amounts owed by subsidiary undertakings 3343 28073
deferred tax 264 200
other debtors 14 19
3621 28292
amounts falling due after more than one year
amounts owed by subsidiary undertakings 24579 –
amounts owed by subsidiary undertakings due after more than one year are made up of an interest bearing loan of £2457 9m with an 
effective interest rate of 50 amounts owed by subsidiary undertakings due within one year are made up of noninterest bearing loans 
repayable on demand
7 derivative financial instruments
fair value 
assets 
2014 
£m
fair value 
assets 
2013 
£m
fair value 
liabilities 
2014 
£m 
fair value  
liabilities 
2013 
£m
interest rate swaps
– nonhedge – 24 79 03
– cash flow hedge – – 31 –
– net investment hedge 10 08 128 –
10 32 238 03
analysed as follows
current portion – 30 44 03
noncurrent portion 10 02 194 –
10 32 238 03
cash flow hedge accounting has been applied to derivatives marked as ‘cash flow hedge’ in accordance with frs 26 financial instruments 
measurement where no hedge accounting has been applied related derivatives have been marked as ‘nonhedge’ any ineffectiveness on the 
cash flow hedges is taken directly to finance costs there was no ineffectiveness to be recorded from net investment in foreign entity hedges or 
those derivatives in a cash flow hedge relationship
cash flow hedge accounting has been applied to €544m of the €500m 2019 bond using a crosscurrency interest rate swaps which match the 
terms of the bond the group has also applied hedge accounting to nok 105m of intercompany loans using crosscurrency interest rate swaps 
matching the terms of the loans the purpose of both hedges is to eliminate the risk to the cash flow due to changes in the £€ and £nok 
exchange rate the balance in reserves in regards to cash flow hedge accounting was £0 1m loss 2013 £nil
the effective nominal value of foreign exchange swaps is £127 4m 2013 £830m
the company had no outstanding commodity contracts at year end
8 creditors
2014 
£m
2013 
£m
amounts due to subsidiary undertakings 12262 9332
other creditors 09 10
12271 9342
financial statements rentokil initial plc annual report 2014
139
strategic report
corporate governance
financial statements additional information
9 bank and other borrowings
2014 
£m
2013 
£m
amounts falling due within one year 186 8132
amounts falling due after one year 9596 10076
current and noncurrent loans include £187m 2013 £436 1m and £9606m 2013 £1007 6m respectively of notes issued under the 
company’s €25bn mediumterm note programme
mediumterm notes and bond debt comprises
bond interest coupon effective hedged interest rate
noncurrent
£300m bond due march 2016 fixed 575 fixed 448 
€500m bond due september 2019 fixed 3375  fixed 362
€350m bond due october 2021 fixed 325  fixed 355
current
€500m bond paid march 2014 fixed 4625  fixed 493
average cost of bond debt at year end rates 397
the group has one committed revolving credit facility rcf of £270m expiring in december 2016 which accrued interest at libor for the 
period drawn plus a margin the cost of borrowing under the group’s rcf at the year end was 15 
the group’s rcf  bank borrowings and bonds are held at amortised cost
10 share capital
2014 
£m
2013 
£m
authorised
4100000000 ordinary shares of 1p each 410 410
issued and fully paid
at 31 december – 1822832965 shares of 1p each 2013 1817498329 182 182
financial statements rentokil initial plc annual report 2014
140
notes to the parent company accounts – continued
performance share plan
the company introduced a new sharebased performance plan in 2006 and granted 7 987 718 shares at various dates throughout 2014
year of 
grant
vesting 
year
scheme  
interest at  
1 january 2014
  
shares awarded  
during 2014
  
shares vested  
during 2014
  
shares lapsed  
during 2014
outstanding at  
31 december 2014
shares  
exercisable at  
1 january 2014
 
shares exercised  
during 2014
shares  
exercisable at  
31 december 2014
2008 2011 – – – – 184181 248059 63878 184181
2011 2014 11704221 – – 11704221 – – – –
2012 2015 13296489 – – 2587934 10708555 – – –
2013 2016 12815868 – – 4397685 8418183 – – –
2014 2017 – 7987718 – 1108635 6879083 – – –
2008 share incentive plan
in 2008 the company also introduced a longterm incentive plan for the chairman chief executive and one other executive director and granted 
22500000 shares during the year no further awards will be made under this 2008 share incentive plan in the future
year of 
grant
vesting 
period
scheme  
interest at  
1 january  
2014
shares  
vested 
during 2014
shares outstanding at  
31 december 2014 
and still subject to 
performance criteria
shares  
exercisable at  
1 january 2014
shares  
exercised  
during 2014
shares  
exercisable at  
31 december 2014
shares vested  
but not yet  
exercisable at  
31 december 2014
2008 2011–2013 – – – 5334634 5334634 – –
for more information regarding the company’s share option schemes performance share plan and 2008 share incentive plan see note a10 
of the consolidated financial statements
11 share premium
2014 
£m
2013 
£m
at 1 january and 31 december 68 68
12 profit and loss account
2014 
£m
2013 
£m
at 1 january 9530 8994
profit for the financial period note 3 894 892
sharebased payments charged to profit and loss 02 08
sharebased payments debited to investments 09 12
movement on cash flow hedge 02 12
net exchange adjustments offset in reserves 09 02
dividends paid to equity shareholders 432 386
at 31 december 10010 9530
treasury shares of £109m 2013 £1 1 1m have been netted against retained earnings treasury shares represent £59m 2013 60m shares held 
by the rentokil initial employee share trust the market value of these shares at 31 december 2014 was £7  1m 2013 £69m dividend income 
from and voting rights on the shares held by the trust have been waived
financial statements rentokil initial plc annual report 2014
141
strategic report
corporate governance
financial statements additional information
13 contingent liabilities
the company has provided guarantees in respect of bank and other borrowings held by its subsidiary undertakings in addition there are 
contingent liabilities in respect of litigation none of which are expected to give rise to any material loss 
14 employees
the company has three employees 2013 six employees for information on employee costs see note d2 of the consolidated financial 
statements services for finance taxation treasury legal hr and it are provided by rentokil initial 1927 plc and recharged to the company
15 pension commitments
at 31 december 2014 the rips pension asset under ias 19r employee benefits amounted to £1922m 2013 £706m the directors are  
of the opinion that there is no material difference between an frs 17  retirement benefits and an ias 19r valuation for more information 
on pension commitments see note a9 of the consolidated financial statements
16 sharebased payments
sharebased payments for the financial period were £1 1m 2013 £20m of which £02m 2013 £08m was charged to the profit and loss 
account and £09m 2013 £12m debited to investments share options relating to the board are disclosed in the directors’ remuneration 
report and detailed sharebased payment disclosures are shown in note a10 of the consolidated financial statements
17 related party transactions
the company has not undertaken any transactions with related parties during the year other than transactions with wholly owned fellow 
members of rentokil initial plc such transactions are exempt from disclosure under frs 8 there were no transactions with nonwholly 
owned fellow members of rentokil initial plc
18 post balance sheet events
there were no significant post balance sheet events affecting the company since 31 december 2014
financial statements rentokil initial plc annual report 2014
142 additional information
strategic report
our business 2
rentokil initial at a glance 3
statement by the chairman and the  
chief executive 4
2014 performance 8
our business model 9
differentiated strategy 10
markets – key drivers and considerations 11
strategy in action 13
business overview 18
key performance indicators 19
growth levers 21
business review – regional performance 26
business review – hygiene 29
business review – pest control 30
business review – workwear 32
corporate responsibility 33
risks and uncertainties 36
corporate governance
board of directors 40
executive leadership team 42
chairman’s statement 43
corporate governance report 44
audit committee report 52
nomination committee report 58
directors’ remuneration report 60
independent auditor’s report to the 
members of rentokil initial plc 79
 
financial statements
consolidated income statement 82
consolidated statement  
of comprehensive income 83
consolidated balance sheet 84
consolidated statement  
of changes in equity 85
consolidated cash flow statement 87
notes to the accounts 88
principal operating subsidiary  
and associated undertakings 133
fiveyear summary 134
parent company balance sheet 135
notes to the parent company accounts 136
additional information
directors’ report and other statutory  
disclosures 143
additional shareholder information 146
additional information  
directors’ report
this corporate governance report for the year on pages 39 to 78 forms part 
of the directors’ report disclosures elsewhere in the 2014 annual report are 
crossreferenced where appropriate and taken together fulfil the 
requirements of the companies act the dtrs and the lrs the directors’ 
report and other statutory disclosures can be found on pages 143 to 145 
other information
information relevant to the directors’ report can be found  
elsewhere in this annual report on the following pages 
statutory information location in this annual report
accountability and audit page 144 
acquisitions and disposals  page 44 and notes b1 and b2  
financial statements
appointment of directors page 6
board of directors and  
committee membership page 49
directors’ conflicts of interest pages 40 and 41
directors’ interests in shares page 77
directors’ liabilities  
and protections page 49
employees and gender diversity page 33
going concern page 144
greenhouse gas emissions pages 34 and 35
key performance indicators pages 19 and 20
operating model page 9
pension schemes note a9 financial statements
post balance sheet events note d3  financial statements
risks and uncertainties pages 36 to 38
share capital  note c11 financial statements and  
note 2 parent company accounts
substantial interests in shares page 50 rentokil initial plc annual report 2014
143
strategic report
corporate governance
financial statements additional information
additional information
directors’ report and other statutory disclosures
the directors’ report is a requirement of the companies act 2006 
the ukla’s disclosure and transparency rules dtrs and listing 
rules lrs also require the company to make other disclosures the 
corporate governance report for the year on pages 39 to 76 forms 
part of the directors’ report disclosures elsewhere in the 2014 annual 
report are crossreferenced where appropriate and taken together 
fulfil the requirements of the companies act the dtrs and the lrs
the directors submit their report and audited financial statements of 
the company and the group to the members of rentokil initial plc  
the company for the year ended 31 december 2014
the company
constitution 
rentokil initial plc is a company incorporated in england and wales 
with company number 5393279 the company is a holding company 
with limited trading in its own right and with subsidiary undertakings in 
over 60 countries the material subsidiary undertakings are listed on 
page 133
articles of association and directors’ powers 
the articles of association set up the internal regulations of the 
company and cover such matters as the rights of shareholders  
the conduct of the board and general meetings 
under the articles the directors are responsible for the management 
of the business of the company and may exercise all the powers of 
the company subject to the provisions of relevant statutes and the 
company’s articles of association for example the articles contain 
specific provisions and restrictions regarding the company’s power to 
borrow money
powers relating to the issuing of shares are also included in 
the articles of association and such authorities are renewed by 
shareholders each year at the agm the articles do not contain 
special control rights or restrictions on transfer or limitations on the 
holding of ordinary shares and no requirements for the prior approval 
of any transfers no person holds securities in the company carrying 
special rights with regard to control of the company the company is 
not aware of any agreements between holders of securities that may 
result in restrictions on the transfer of securities or on voting rights 
the articles of association also give power to the board to appoint 
and replace directors but also require directors to retire and submit 
themselves for reelection at the first agm following the appointment 
and for reelection by rotation although directors now submit 
themselves for reelection annually the articles themselves may be 
amended by special resolution of the shareholders
in accordance with the articles of association directors can be 
appointed or removed by the board or shareholders in general 
meeting amendments to the articles of association have to be 
approved by at least 75 of the votes cast by those voting in person 
or by proxy are in favour of the resolution subject to company law 
and the articles of association the directors may exercise all the 
powers of the company and may delegate authority to committees 
and daytoday management and decisionmaking to individual 
executive directors the articles of association are available 
upon request and are displayed on the company’s website at  
wwwrentokilinitialcom
directors and reelection of directors
information on our board of directors and changes during 2014 can 
be found in the corporate governance report on page 40 the uk 
corporate governance code 2012 ‘the code’ provides for all 
directors to stand for election or reelection each year and accordingly 
all board members will seek reappointment or reelection at the 2015 
agm full biographical details of all current directors are set out on 
pages 40 to 41 
directors’ interests in shares
the beneficial interests of the directors’ in the share capital of the 
company are shown on page 77 during the year no director had 
any material interest in any contract of significance to the group’s 
business
dividend
information on the final dividend payment for 2014 can be found in 
the strategic report on page 6
outlook for 2015 
information on the company outlook for 2015 can be found in the 
strategic report on page 7
share capital 
the company’s share capital during the year consisted of ordinary 
shares of 1p each there were 1822832965 shares on issue at 
31 december 2014 2013 1817498329 each ordinary share 
other than treasury shares which have no voting rights carries the 
right to vote at a general meeting of the company at any general 
meeting a resolution put to the vote of the meeting shall be decided 
on a show of hands unless a poll is duly demanded on a show 
of hands every member who is present in person or by proxy at a 
general meeting of the company shall have one vote on a poll every 
member who is present in person or by proxy shall have one vote for 
every share of which they are a holder
the company is not directly or indirectly owned or controlled by 
another corporation or by an individual and there are no arrangements 
which may at a subsequent date result in a change in control of the 
company as at 26 february 2015 the shareholders shown in the 
‘accountability to shareholders’ section of the corporate governance 
report on page 50 had indicated that they had an interest in 3 or 
more of the company’s issued share capital and were not subject to 
the 5 disclosure exemption under the disclosure and transparency 
directive no other interests have been disclosed to the company in 
accordance with disclosure and lr 5 either during the year or as at 
26 february 2015 
authority for the company to make purchases of its own shares of up 
to 181154313 shares was obtained at the agm on 14 may 2014 
no purchases of its shares were made by the company during 2014 
the authority is normally renewable annually and approval will be 
sought from shareholders at the 2015 agm to renew the authority for 
a further year 
authority for the company to allot shares or grant rights to subscribe 
for shares was obtained at the agm on 14 may 2014 the authority 
remains in force and approval will be sought from shareholders at the 
2015 agm to renew the authority for a further year during the year 
5344634 shares were issued to satisfy the exercise of the vested 
rights under the share incentive plan approved by shareholders 
in 2008 rentokil initial plc annual report 2014
144 additional information
change of control provisions 
there are a number of agreements that take effect alter or terminate 
upon a change of control of the company such as some financial 
and commercial agreements and employee share plans none of 
these are deemed to be significant in terms of their potential impact 
on the group as a whole a description of the group’s debt funding 
arrangements is set out in note c1 to the financial statements which 
also describe the change of control provisions relating to the group’s 
euro mediumterm note programme
reporting accountability and audit
the directors are responsible for preparing the annual report and 
accounts in accordance with applicable law and regulations uk 
company law requires that the directors must not approve financial 
statements unless they are satisfied that they give the true and fair 
view of the state of affairs of the group in preparing the financial 
statements the directors are required to apply them consistently 
make judgements and estimates that are reasonable and prudent 
state the basis on which they are prepared and prepare the financial 
statements on a going concern basis
the directors must keep adequate accounting records for the parent 
company to enable them to ensure that its financial statements 
comply with the companies act 2006 the directors have a general 
responsibility for taking such steps as are reasonable to safeguard 
the assets of the group and to prevent and detect fraud and other 
irregularities the directors are also responsible for preparing a 
strategic report directors’ report directors’ remuneration report 
and corporate governance report that comply with law and 
regulations the directors are responsible for the maintenance and 
integrity of the corporate and financial information included on the 
company’s website
the strategic report which includes the chairman’s and chief 
executive’s letter provides an overview of the development 
and performance of the company’s business in the year ended 
31 december 2014 and its position at the end of the year and covers 
the likely future developments in the business of the company and 
the group for the purposes of compliance with dtr 415r 2 and 
418r the required content can be found in the strategic report and 
the directors’ report including material incorporated by reference
the independent auditor’s report on pages 79 to 80 includes a 
statement by the auditor about their reporting responsibilities the 
directors recognise that their responsibility to present a fair balanced 
and understandable assessment extends to interim and other price
sensitive public reports reports to regulators and information required 
to be presented by law
statement of the directors as to the disclosure of information 
to the auditor
the directors confirm that insofar as each of them is aware there 
is no relevant audit information as defined by s418 2 of the 
companies act 2006 of which the company’s auditor is unaware 
and each director has taken all of the steps that should have been 
taken to ensure that they are each aware of any relevant audit 
information as defined and to establish that the company’s auditors 
are aware of that information
financial risk management
details of financial risk management and the relevant policies are  
disclosed in note c1 on pages 120 to 122 of the financial statements
going concern 
the directors having made enquiries consider that the company 
and the group have adequate resources to continue in operation for 
the foreseeable future for this reason they consider it appropriate to 
adopt the going concern basis in preparing the financial statements 
further details on the group’s net debt borrowing facilities and 
financial risk management policies is provided in the c financing 
section of notes to the accounts on pages 119 to 131
key contracts 
the group does not have any dominant customer or supplier 
relationships
post balance sheet events
there are no post balance sheet events
political donations 
it is the company’s policy not to make payments to political 
organisations the company does however maintain a shareholder 
authority to make payments of a political nature but does so only in 
order to ensure that the company has authority from shareholders for 
the limited number of activities associated with the operation of the 
business which might be caught by the broad definition of payments 
of a political nature contained within current legislation there were no 
payments to political organisations during 2014 2013 £nil 
directors’ indemnity and insurance
information on the directors’ indemnities can be found in the 
corporate governance report on page 49
social community employment policies gender 
diversity issues
information on our colleagues employment policies and community 
can be found in the corporate responsibility section of the strategic 
report on page 33
human rights
the company supports the rights of all people as set out in the 
universal declaration of human rights udhr we acknowledge 
the responsibility of businesses to respect human rights by acting with 
due diligence to avoid infringing on the rights of others and to address 
any adverse impacts in which they are involved in line with the un 
guiding principles on business and human rights these human 
rights principles reinforce the behaviours expected of our colleagues 
as set out in the company’s code of conduct
environment and greenhouse gas ghg emissions reporting
information on our environment and ghg reporting can be found in the 
corporate responsibility section of the strategic report on page 34
research and development 
information on innovations can be found in the strategic report on 
page 24
related party transactions 
other than in respect of arrangements relating to the employment 
of directors details of which are provided in the directors’ 
remuneration report or as set out in note d2 on page 132 there 
is no indebtedness owed to or by the company to any colleague 
or any other person considered to be a related party
directors’ report and other statutory disclosures – continued rentokil initial plc annual report 2014
145
strategic report
corporate governance
financial statements additional information
additional information
statement of directors’ responsibilities in respect of 
the annual report and the financial statements
the directors are responsible for preparing the annual report and the 
group and parent company financial statements in accordance with 
applicable law and regulations company law requires the directors 
to prepare group and parent company financial statements for each 
financial year under that law they are required to prepare the group 
financial statements in accordance with ifrs as adopted by the eu 
and applicable law and have elected to prepare the parent company 
financial statements in accordance with uk accounting standards
under company law the directors must not approve the financial 
statements unless they are satisfied that they give a true and fair 
view of the state of affairs of the group and parent company and of 
their profit or loss for that period in preparing each of the group and 
parent company financial statements the directors are required to
• select suitable accounting policies and then apply them consistently
• make judgements and estimates that are reasonable and prudent
• for the group financial statements state whether they have been 
prepared in accordance with ifrs as adopted by the eu
• for the parent company financial statements state whether 
applicable uk accounting standards have been followed subject 
to any material departures disclosed and explained in the parent 
company financial statements and
• prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the group and the parent 
company will continue in business
the directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the parent company’s 
transactions and disclose with reasonable accuracy at any time 
the financial position of the parent company and enable them to 
ensure that its financial statements comply with the companies act 
2006 they have general responsibility for taking such steps as are 
reasonably open to them to safeguard the assets of the group and to 
prevent and detect fraud and other irregularities
under applicable law and regulations the directors are also 
responsible for preparing a strategic report directors’ report 
directors’ remuneration report and corporate governance 
statement that complies with that law and those regulations the 
directors are responsible for the maintenance and integrity of the 
corporate and financial information included on the company’s 
website legislation in the uk governing the preparation and 
dissemination of financial statements may differ from legislation in 
other jurisdictions
each of the directors whose name and functions are set out on 
pages 40 to 41 confirms that to the best of their knowledge
a the financial statements prepared in accordance with the 
applicable set of accounting standards give a true and fair view 
of the assets liabilities financial position and profit or loss of the 
issuer and the undertakings included in the consolidation taken as 
a whole and
b the strategic report and directors’ report include a fair review 
of the development and performance of the business and the 
position of the issuer and the undertakings included in the 
consolidation taken as a whole together with a description of the 
principal risks and uncertainties that they face
the directors’ report on pages 40 to 78 and pages 143 to 145 
and the strategic report on pages 1 to 38 were approved by a duly 
authorised committee of the board of directors on 26 february 2015 
and signed on its behalf by daragh fagan the company secretary
daragh fagan 
company secretary 
26 february 2015
registered office  
riverbank meadows business park blackwater camberley  
surrey gu17 9ab 
registered in england and wales no 5393279 rentokil initial plc annual report 2014
146 additional information
2015 key dates
preliminary results 27 february 2015 
q1 trading update 1 may 2015
annual general meeting 13 may 2015
interim results 30 july 2015
q3 trading update 5 november 2015
registrars 
all enquiries relating to the administration of shareholdings should  
be directed to 
capita asset services ‘capita’ 
the registry 
34 beckenham road 
beckenham 
kent  
br3 4tu
telephone from the uk 0871 664 0300  
calls cost 10p per minute plus network extras lines are open  
900 am to 530 pm monfri
telephone from overseas 44 20 8639 3399  
call charges depend on local network rates lines are  
open 900 am to 530 pm monfri
email shareholderenquiriescapitacouk
capita share portal
an online service at wwwcapitashareportalcom gives shareholders 
access to detailed information including
• cast your proxy vote online
• view your holding balance any movements on your holding and get 
an indicative valuation
• view the dividend payments you have received and registerchange 
bank mandate instructions
• update your address and contact details
• elect to receive shareholder communications electronically
the capita share portal has a dedicated helpline and email address 
for enquiries
telephone from the uk 0871 664 0391  
calls cost 10p per minute plus network extras lines are open 
900 am to 530 pm monfri
telephone from overseas 44 20 8639 3367  
call charges depend on local network rates lines are open  
900 am to 530 pm monfri
email shareportalcapitacouk
capita share dealing services
this service allows you to trade at ‘real time’ at a known price you will 
need your full name investor code full postcode and date of birth 
please have the appropriate information to hand when you log on or 
call so that capita can verify your identity
capita provide the following two services for buying and selling shares
• telephone share dealing 0871 664 0454 calls cost 10p per minute 
plus network extras lines are open 800 am to 430 pm monfri
• online share dealing wwwcapitadealcom 
sharegift 
shareholders with small holdings in shares whose value makes 
them uneconomical to sell may wish to donate them to sharegift 
registered charity no 1052686 further information about sharegift 
and the charities it supports may be obtained from their website  
wwwsharegiftorg or by calling 44 0 20 7930 3737 or emailing 
helpsharegiftorg
share price information and history 
the primary listing is on the london stock exchange and the current 
price of the company’s shares is available on the company’s website 
at wwwrentokilinitialcom
midmarket price 31 march 1982 – 7 5375p
 adjusted for the 1983 bonus issue and the 1990 1992 and 1997 share splits
midmarket price 31 december 2014 – 1213p
2014 highlow – 1 1 1p133 1p
results and dividends
the adjusted operating profit before amortisation and impairment of 
intangibles excluding computer software restructuring costs and 
oneoff items for the financial year ended 31 december 2014 was 
£2322m 2013 £236 1m 
the directors’ recommend payment of a final dividend in respect of 
the year to 31 december 2014 of 182p per ordinary share which 
subject to approval at the agm on 13 may 2015 will be paid on  
20 may 2015 to shareholders on the register on 17 april 2015  
when taken with the interim dividend of 077p per share paid on 
16 september 2014 2013 070p this gives a total dividend of  
259p per share 2013 231p 
dividend reinvestment plan drip
this is a convenient way to build up your shareholding by using your 
cash dividends to buy more shares in the company if you would 
prefer to receive shares for your next dividend instead of cash please 
complete an application online at wwwcapitashareportalcom  
or call capita irg trustees limited on 0871 664 0381 from the uk 
calls cost 10p per minute plus network extras lines are open 900 am 
to 530 pm monfri or 44 20 8639 3402 from overseas 
additional shareholder information rentokil initial plc annual report 2014
147
strategic report
corporate governance
financial statements additional information
additional information
dividend history 
  payment date payment rate record date year end date
2014 interim dividend 16 sept 2014 077p 15 august 2014 31 dec 2014
2013 final dividend 21 may 2014 161p 11 april 2014 31 dec 2013
2013 interim dividend 24 sept 2013 070p 23 aug 2013 31 dec 2013
2012 final dividend 21 may 2013 143p 19 apr 2013 31 dec 2012
2012 interim dividend 26 oct 2012 067p 14 sep 2012 31 dec 2012
2011 final dividend 15 may 2012 133p 10 apr 2012 31 dec 2011
2010 final dividend no final dividend –  – –
2009 final dividend no final dividend –  – –
2008 final dividend no final dividend – – –
2008 interim dividend 17 oct 2008 065p 12 sep 2008 31 dec 2008
2007 final dividend 23 may 2008 525p 18 apr 2008 31 dec 2007
2007 interim dividend 19 oct 2007 213p 14 sep 2007 31 dec 2007
2006 final dividend 18 may 2007 525p 13 apr 2007 31 dec 2006
2006 interim dividend 27 oct 2006 213p 29 sep 2006 31 dec 2006
2005 final dividend 02 jun 2006 525p 05 may 2006 31 dec 2005
2005 interim dividend 28 oct 2005 213p 30 sep 2005 31 dec 2005
american depository receipts adr
the company has an adr programme that trades on the overthe
counter market in the united states this is a sponsored level 1 adr 
programme for which the bank of new york mellon acts as depositary 
each adr is equivalent to five rentokil initial plc ordinary shares 
for shareholder enquiries please contact
bny mellon shareowner services 
po box 30170 
college station tx 778423170 
united states
exchange otc over the counter 
symbol rtoky 
cusip 760125104 
ratio adr ord 15 
email shrrelationscpushareownerservicescom 
wwwmybnymdrcom 
freephone from the us 1 888 269 2377 
international calls  1 201 680 6825
indirect owners of shares with ‘information rights’
please note that beneficial owners of shares who have been 
nominated by the registered holder of those shares to receive 
information rights under s 146 companies act 2006 are required to 
direct all communications to the registered holder of their shares rather 
than to capita asset services
share fraud warning boiler room scams
the company is aware that its shareholders have received unsolicited 
telephone calls or correspondence concerning investment matters 
these are typically from overseas based ‘brokers’ they target uk 
shareholders out of the blue and offer to buy existing shares at an 
inflated price or offer to sell your shares that often turn out to be 
worthless or nonexistent while high profits are promised those 
who buy or sell shares in this way usually lose their money these 
operations mostly based abroad are commonly known as ‘boiler 
rooms’ these ‘brokers’ can be very persistent and extremely 
persuasive if these calls persist hang up
tips on protecting your shares
• get the correct name of the person and organisation contacting you
• check that they are properly authorised by the financial conduct 
authority fca before getting involved by visiting the financial 
services register wwwfcaorgukconsumersscams
• report the matter to the fca helpline by calling 0800 1 1 1 6768  
or complete the unauthorised firms reporting form at  
wwwfcaorgukconsumersscamsreportscam
unsolicited mail
the company is legally obliged to make its register of members 
available to the public subject to a proper purpose test as a 
consequence of this some shareholders may receive unsolicited mail 
shareholders wishing to limit the amount of such mail should write to 
the mailing preference service mps at 
mps freepost lon20771  
london w1e 0zt 
or call on 0845 703 4599 
or online at wwwmpsonlineorguk rentokil initial plc annual report 2014
148 additional information
annual general meeting
the agm will be held at the hilton london gatwick airport ascot 
suite south terminal gatwick airport crawley west sussex rh6 0ll 
on wednesday 13 may 2015 at 12 noon the notice of meeting is 
available on the company’s website wwwrentokilinitialcom
published information
if you would like to receive a hard copy of this annual report or a 
copy in large print please contact the company secretariat at the 
company’s registered office below a pdf copy of this report can 
also be downloaded from our website 
registered office and headquarters 
rentokil initial plc – registered in england and wales no 5393279 
riverbank meadows business park blackwater camberley  
surrey gu17 9ab 
telephone 44 0 1276 607444 
contact investorrentokilinitialcom 
company website wwwrentokilinitialcom 
cautionary statement 
this report contains statements that are or may be forwardlooking regarding the group’s financial position and results business strategy plans and 
objectives such statements involve risk and uncertainty because they relate to future events and circumstances and there are accordingly a number 
of factors which might cause actual results and performance to differ materially from those expressed or implied by such statements forwardlooking 
statements speak only as of the date they are made and no representation or warranty whether expressed or implied is given in relation to them 
including as to their completeness or accuracy or the basis on which they were prepared other than in accordance with the company’s legal or regulatory 
obligations including under the listing rules and the disclosure and transparency rules the company does not undertake any obligation to update 
or revise publicly any forwardlooking statement whether as a result of new information future events or otherwise information contained in this 2014 
annual report relating to the company or its share price or the yield on its shares should not be relied upon as an indicator of future performance 
nothing in this 2014 annual report should be construed as a profit forecast this report is printed on  
lumisilk paper and has been 
independently certified on behalf  
of the forest stewardship council 
fsc
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vegetable oil based
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cover image
marcos edson magalhães
pest control specialist são paulo brazil
wwwrentokilinitialcom
wwwrentokilcom
wwwinitialcom rentokil initial plc annual report 2014
rentokilinitialcom


Summary:
 rentokil initial plc annual report 2014
4 strategic report
2014 has been a year of tangible progress at rentokil initial in 
february we announced the divestment of the initial facilities business 
and the creation of a new differentiated strategy to drive profitable 
growth the sale of initial facilities has allowed us to focus on our core 
categories of pest control hygiene and workwear our new strategy 
which we presented in february is focused on delivering medium
term improvements in revenue and profit and a sustainable 
improvement in free cash flow which enables us to execute and 
accelerate our acquisition plans implement a progressive dividend 
policy and pay down debt in addition our strategy utilises a quadrant 
analysis to group categories and geographies into a growth potential 
and profit contribution matrix and to focus resources on delivering 
improved levels of growth and to prioritise capital allocation for 
investment and ma 
we have implemented our strategy at pace in 2014 and in the year 
achieved total revenue growth from ongoing operations of 36 
at cer a 65 increase in ongoing adjusted profit at cer and a 
significant enhancement in free cash flow which improved by £93m 
to £129m at aer restructuring costs fell by £38m year on year 
working capital outflows improved by £17m and net capex of £179m 
was £49m lower than 2013 reflecting our more focused approach to 
capital allocation and the phasing of investment at aer with a 
significant reduction in restructuring costs and with capital expenditure 
now in line with depreciation we anticipate achieving over £100m per 
annum in free cash flow on a sustainable basis and expect to make 
further progress towards our mediumterm revenue and profit targets 
in 2015 in addition we made 30 acquisitions during the year of 
which 77 are in the growth and emerging quadrants generating 
£66m of annualised revenue at aer 
we exit 2014 in a much stronger financial position than in 2013 
group net debt at aer has been reduced by £260m to £775m 
our lowest net debt in 15 years and our liquidity position is strong 
comprising over £190m of funds and £270m of available undrawn 
committed facilities interest payments including finance lease interest 
were £17m lower than last year at £495m t otal tax payments were 
£301m compared with £372m in 2013 our pension scheme is one 
of the strongest in the ftse 350 with an actuarial surplus in excess 
of £50m at the year end and an accounting surplus of around 
£190m our strategy of focusing on core growth categories with 
leading market positions has been well received by our debt credit 
rating agency standard  poor’ s resulting in a credit rating upgrade 
to bbb during the year
while much has been achieved this year there remains more to do in 
a number of areas of our business as we note below north america 
had a challenging h1 but performance improved in h2 and 
performance in the benelux was disappointing with profits down 
by £99m the outlook for europe remains mixed due to continuing 
economic weakness in certain parts please see further details below 
based on our overall performance in 2014 the board is 
recommending a final dividend of 182p per share to make a total 
of 259p – a 121 increase year on year 
regional performance 
in the north america region revenue grew 66 for the full year 
revenue growth was stronger in q4 84 supported by 
acquisitions organic revenue growth of 17 for the year was held 
back by adverse weather conditions on the east and west coasts 
during h1 but strengthened in h2 up 33 in q4 profit rose by 
156 again supported by acquisitions and by back office and 
property rationalisation delivering margin expansion of 09 further 
margin improvement opportunities exist through acquisitions scale 
efficiencies and service productivity 
statement by the chairman and the chief executive 
“  our growth in profits this year reflects 
the benefit of more efficient businesses 
and reduced overheads and has been 
achieved despite ongoing economic 
challenges in europe we have 
executed our new strategy at pace 
throughout the year in order to drive 
improved revenue profit and cash”
john mcadam  
chairman
putting our differentiated 
strategy into action
36
total revenue growth from 
ongoing operations
1
 
24
acquisitive revenue growth
£93m 
improvement in free 
cash flow
3
 at £129m at aer
12 
organic revenue
65 
ongoing adjusted 
operating profit
2
£66m 
30 acquisitions purchased in 
year with combined annualised 
revenues of £66m at aer 
2014 financial highlights at cer
aer – actual exchange rates cer – constant 2013 exchange rates 
1  ongoing revenue represents revenue with disposals removed and includes revenue from acquisitions 
2  before amortisation and impairment of intangibles excluding computer software restructuring 
costs and oneoff items and net interest credit from pensions represents profits with disposals 
removed and includes profit from acquisitions 
3  cash flow before acquisitions disposals foreign exchange adjustments and discontinued operations
andy ransom
chief executive
john mcadam 
chairman rentokil initial plc annual report 2014
5 strategic report
strategic report
corporate governance
financial statements additional information strategic report
corporate governance
financial statements additional information
despite economic weakness ongoing revenue growth in the europe 
region was 17 in 2014 21 in q4 ongoing revenue growth in 
germany up 23 france up 03 and latin america managed 
out of the europe region and up 308 was offset by a decline in 
benelux down 20 profit in europe declined by 37 due to the 
performance of our benelux hygiene and workwear business which 
was impacted by the continued effect of poor service levels in 2013 
and tough economic conditions resulting in both contract terminations 
and pricing pressure 
the outlook for our european businesses is mixed our german 
belgian and italian businesses are experiencing more positive trading 
conditions and are expected to make good progress during the year 
however the outlook for our businesses in the netherlands and 
france is more uncertain with these regions continuing to face 
challenging economic conditions and competitive markets overall 
we expect profitability in our europe region to be broadly in line with 
last year our strategy to protect margins in this region includes a 
focus on yield management service productivity customer density 
and further back office rationalisation 
in the uk  rest of world region ongoing revenue rose by 56 
in 2014 83 in q4 with organic growth for the year of 32 
the uk operations saw good revenue growth aided by increased 
pest jobbing work but margins were held back by national contract 
wins with large multipremises set ups and the cost of integrating the 
previously lossmaking green compliance acquisition in december 
2013 the rest of world operations also delivered good revenue 
growth particularly in the middle east and the caribbean but this 
was offset by lower revenues in south africa impacted by customer 
industrial action in the mining sector and pricing pressures in this 
high inflationary market margin improvement in the uk is expected  
in 2015 as new contracts and acquisitions mature
our asia region had another good year with ongoing revenue growing 
by 81 in 2014 119 in q4 both the pest control and hygiene 
categories performed well the emerging markets of china india and 
vietnam delivered combined revenue growth of 291 combined 
highsingle digit revenue growth of 85 was delivered in our more 
established businesses in indonesia and malaysia profit grew by 
182 in 2014 reflecting leverage from rising revenues and back 
office rationalisation with margins higher by 12 there are further 
opportunities to grow margins in the region through operational 
leverage from revenue growth and back office rationalisation
in the pacific region revenue increased by 09 for the full year 25 
in q4 reflecting growth in contract revenue across pest and hygiene 
offset by a decline in pest jobbing revenue and contract revenue in 
ambius profit grew by 59 in 2014 supported by business 
efficiencies cost savings and branch administration rationalisation 
further margin improvement opportunities will be sought through 
improved service productivity and targeted acquisitions 
central and divisional overheads 
central and divisional overheads decreased by £114m in the year 
beating our original target of £10m by £14m reflecting the successful 
implementation of a programme which included implementation of our 
lowcost country operating model cost reductions at head office and 
the sale of the initial facilities business in march 2014 
restructuring costs and oneoff items – operating 
a more efficient organisation exercising greater operational discipline 
resulted in a significant reduction in restructuring and oneoff operating 
items restructuring costs in the year amounted to £93m 
2013 £474m representing a reduction of over £38m on 2013 
these consisted mainly of redundancy costs consultancy and plant 
and office closure costs 
oneoff items in the current year netted out to £nil 2013 £46m 
these costs included acquisition costs disposal costs impairment 
of computer software and profits or losses on the sale of continuing 
businesses and property 
details of restructuring costs and oneoff items operating incurred 
in the period are set out in note a1 
interest at aer
net interest payable was £453m at actual exchange rates compared 
to £596m in the prior year a decrease of £143m the decrease is 
due to the refinancing of the group’ s €500m 4625 bond which 
matured in march 2014 and lower net debt levels following the sale 
of the initial facilities business the average cost of gross debt for the 
group is now less than 4 
tax at aer
the income tax expense for the year at actual exchange rates was 
£371m on the reported profit before tax of £1632m after adjusting 
profit for the amortisation of intangible assets excluding computer 
software restructuring costs and oneoff items and the net pension 
credit from pensions the effective tax rate for the year was 235 
2013 254 as restated this compares with a blended rate of tax 
for the countries in which the group operates of 26 2013 27 as 
restated the reduction is principally due to the benefit of tax losses 
brought forward being offset against uk profits and an increase in 
the deferred tax asset recognised on the uk tax losses 
net debt and cash flow at aer
operating cash inflow of £2095m at actual exchange rates for 
continuing operations was £724m higher than 2013 mainly due 
to reductions in restructuring costs working capital outflows and 
capex in 2014 
interest payments including finance lease interest were £17m lower 
than last year at £495m t otal tax payments were £301m compared 
with £372m in 2013 and the company made pension funding 
payments of £10m during the year compared to £136m in 2013 
free cash inflow of £1289m was £926m higher than in the prior year 
cash spent on acquisitions totalled £681m proceeds from disposals 
totalling £2560m including the disposal of the initial facilities 
business included in the sale were £167m of transferred restricted 
cash balances relating to private finance initiative pfi contracts 
the company made dividend payments of £432m in 2014 £46m 
119 higher than 2013
free cash flow from continuing operations of £1289m more than 
covered total investment in acquisitions £681m and dividend 
payments £432m in the year 
foreign exchange translation and other items reduced net debt 
by £440m leaving an overall reduction in net debt of £2598m 
and closing net debt of £7750m
capital expenditure 
gross capital expenditure from continuing operations of £1916m was 
£424m lower than 2013 broadly in line with depreciation the lower 
level of expenditure reflects more rigorous prioritisation towards capital 
investment including reduced levels of investment in restructuring 
activities and it  as well as phasing of spend on 2014 projects  rentokil initial plc annual report 2014
6 strategic report
pensions 
at 31 december 2014 the company’ s uk defined benefit pension 
scheme which is closed to new members was valued at an 
accounting surplus of £1922m on the company’ s balance sheet 
the trustees value the scheme on a different basis the most recent 
actuarial valuation showed that at 31 march 2013 the scheme was 
987 funded with a deficit of £178m however based on 
movements since 31 march 2013 the scheme was estimated to have 
a surplus in excess of £50m at 31 december 2014 it is anticipated 
that the scheme will remain in surplus over the period of the recovery 
plan in order to mitigate the risk that it does not however annual 
contributions of £32m per annum over the sixyear period will be paid 
into a joint escrow account by the company the first payment was 
made in october 2014 in the event that the deficit is not cleared by 
the time of the 31 march 2019 valuation it will be funded from the 
escrow account the company has recognised the pension surplus 
as an asset because the group has an unconditional right to a refund 
of the surplus at the end of the scheme’ s life
acquisitions and disposals 
in line with our strategy this year we accelerated our ma programme 
to pursue targets in higher growth markets and in areas which add 
local density to our existing operations in 2014 we acquired 30 
businesses in brazil brunei india ireland italy lithuania 
netherlands singapore south korea spain sweden the uk and 
us and entered new markets in the bahamas chile colombia 
and mozambique to exploit underserved and increasingly affluent 
markets combined annual revenues of these businesses prior to 
acquisition were approximately £66m at aer 
in pest control we acquired 23 businesses with revenues of £44m 
17 of which are in the emerging or growth quadrants of our capital 
allocation approach in hygiene we reentered the south korean 
washrooms market through the acquisition of a small business in 
seoul in plants we acquired five small boltons generating annual 
revenues of approximately £2m in december we acquired uk 
property care business peter cox limited which generated revenues 
approaching £20m in its last financial year 
building density in the north american pest market continues to be 
a priority and during the year we expanded our geographic presence 
with seven boltons in connecticut indiana mississippi oregon 
virginia washington and west virginia 
in the manage for value quadrant we completed the sale of initial 
facilities to interserve plc in march for a total consideration of £250m 
and also sold the spanish medical and austrian products businesses 
combined annual revenues from these operations in 2013 were £547m
t o date in 2015 we have completed three pest acquisitions in north 
america colombia and australia buffalo exterminating represents an 
important strategic bolton giving us a market leading position in new 
york state and building density in markets in which we are already 
active as do the acquisitions of fumighar pest control in colombia 
and the neil younger pest business in australia combined annualised 
revenues prior to acquisition of the three businesses totalled £68m
we monitor the integration and performance of acquired businesses 
closely and in aggregate profits across all acquisitions made over 
the last two years are in line with the business plans for those 
transactions the group will continue to seek further acquisitions in 
2015 particularly within the growth and emerging quadrants we 
estimate our targeted spend to be in the region of £50m but this is 
dependent on finding acquisition opportunities that meet our financial 
hurdles and resourcing abilities 
funding
at 31 december 2014 the group had net debt of £775m and a strong 
liquidity position comprising over £190m of centrally held funds and 
£270m of available undrawn committed facilities net debt to ebitda 
at the year end was 19x 
the group has since refinanced its revolving credit facility replacing 
a £270m december 2016 maturity with a £270m facility maturing in 
january 2020 the group has two options both at zero cost to 
extend the maturity date to january 2022 exercisable in january 
2016 and january 2017
the group has a £300m bond maturing in march 2016 which can be 
repaid using the group’ s cash balances and available credit facilities 
the group will review funding requirements during 2015 to provide 
additional headroom following repayment of the bond and will provide 
an update in due course 
the directors continue to adopt the going concern basis in preparing 
the accounts on the basis that the group’ s strong liquidity position and 
ability to reduce operating capital expenditure or expenditure on 
bolton acquisitions are sufficient to meet the group’ s forecast funding 
needs including those modelled in a downside case
dividend
following a strong performance in 2014 and in anticipation of further 
progress in 2015 the board is recommending a final dividend in 
respect of 2014 of 182p per share payable to shareholders on the 
register at the close of business on 17 april 2015 to be paid on 
20 may 2015 this equates to a full year dividend of 259p per share 
an increase of 121 compared to 2013 
board changes 
on 22 july 2014 the company announced the appointment of julie 
southern to the board as a nonexecutive director and chairman of 
the audit committee julie succeeds duncan t attonbrown who after 
nine years on the board also stood down as a nonexecutive director 
at the conclusion of the agm on 14 may 2014 peter long who 
joined the board in 2002 stood down as a nonexecutive director on 
31 december 2014 the board thanks peter and duncan for their 
significant contributions to the company over the years and wishes 
them the very best for the future 
strategy 
we describe our strategy as ‘differentiated’ as each of the four different 
quadrants in which we have categorised our businesses operates 
different strategies for profitable growth with a number of businesses 
well positioned in high growth territories such as brazil china and 
india but also with businesses in the low growth and highly 
competitive european markets we need to match the right strategy to 
each country’ s ability to grow or to protect profitability we now match 
differentiated financial performance expectations to market opportunity
in february 2014 as well as presenting the quadrant analysis  
we also presented targets for revenue profit and cash 
• mediumterm midsingle digit revenue growth 
• mediumterm highsingle digit profit growth and 
• immediate significant sustainable improvement in free cash flow 
in 2014 we have focused on putting our strategy into action
• our commitment to deliver an immediate improvement in free cash 
flow has been delivered with significant reductions in restructuring 
costs and capex 
statement by the chairman and the chief executive – continued rentokil initial plc annual report 2014
7 strategic report
strategic report
corporate governance
financial statements additional information
core competencies 
we articulate our strategy as the right people doing the  
right things in the right way  this is in line with our core 
competencies of expertise delivered through our people  
service category leadership and highly efficient lean operations
right people  
our colleagues as experts
our people are our assets and we strive to 
build motivated and engaged teams across 
the organisation we train them to be 
‘experts in what they do’ and to have a 
relentless focus on customers and service
right things 
category leadership
we are focused on our three core 
categories of pest control hygiene and 
workwear together they comprise 89  
of group revenue have generated 97  
of total growth over the last three years  
and 95 of group profits
right way  
lean multibusiness 
operations
our move to an integrated country operating 
model enables our service lines to be 
combined within single country businesses 
run by one local management team 
operations administrative and back office 
functions are integrated enabled and 
underpinned by technology 
• we have reinvested free cash flow in our ma pipeline at  
a faster rate than the £50m per annum targeted – spending 
some £68m acquiring 30 companies – 23 in the growth  
and emerging quadrants 
• profit growth has been driven by overhead reductions and a more 
efficient organisation despite a larger reduction in benelux profits 
than anticipated and slower rate of growth in the second half in 
france 
• we have delivered an £114m reduction in central and divisional 
overheads 
• restructuring costs were reduced significantly from £474m in 
2013 to £93m at cer in 2014 and
• capex levels are now in line with 2013 depreciation a £424m 
reduction year on year
the most significant execution risk to the plan is the performance 
of the european economy and we are focusing on cost saving and 
pricing initiatives in this area to maintain profits we are also taking 
action to change the shape of the portfolio by investing in the growth 
and emerging quadrants and away from lower growth lower margin 
businesses
people 
in 2014 we have welcomed into rentokil initial new colleagues 
through the many good businesses we have acquired and through 
the ongoing process of improving the capability and efficiency of the 
business we thank all our colleagues who have put in a huge effort 
over the last year to meet the needs of our customers as well as to 
contribute to new programmes designed to improve the financial and 
operational fitness of the group colleague participation in learning 
and development programmes during 2014 has been particularly 
impressive with participation in over 66000 training courses on u 
our online learning system further details of our training initiatives can 
be found on page 33 and in our 2014 corporate responsibility report
outlook for 2015
this time last year we set out our new differentiated strategy and 
introduced mediumterm targets for midsingle digit revenue growth 
highsingle digit profit growth and a significant improvement in cash 
generation we have implemented our strategy at pace and one year 
on we have delivered ongoing revenue growth of 36 ongoing 
adjusted profit growth of 65 and a £93m improvement in free cash 
flow we are encouraged by our performance in 2014 and by the 
progress we are making towards these targets 
while prospects in the majority of our key markets are good 
conditions in parts of europe remain challenging notwithstanding this 
we are confident of making further progress in the coming year
john mcadam andy ransom 
chairman chief executive 
26 february 2015 rentokil initial plc annual report 2014
8 strategic report
2014 performance
progress against mediumterm targets
no progress
progress
good progress
achieved ambition
target and key activities progress in year one
mediumterm target midsingle digit revenue growth 
ongoing revenue growth of 36
    
organic growth of 12 
    
acquired 30 companies adding £66m of revenue mainly in growth and emerging quadrants 
    
launched new digital presence in uk australia and north america 
    
launched new product ranges in hygiene and workwear and additional services in pest control 
    
mediumterm target highsingle digit profit growth 
ongoing operating profit growth of 65 
    
£114m reduction in central and divisional overheads 
    
branch administration rationalisation – good progress in france australia and north america
    
profit improvement initiatives including pricing yield management and service productivity 
    
significant reduction in profit in benelux business although underlying metrics improved h2 on h1 
    
 divested lowermargin noncore businesses – initial facilities spanish medical and austrian products 
    
mediumterm target significant improvement in sustainable cash flow 
£93m improvement in free cash flow of £129m 
    
£38m reduction in restructuring costs 
    
£424m reduction in capex 
    
£108m reduction in it capex 
    
£17m reduction in interest payments to £495m 2013 £512m
    
£260m reduction in net debt from £1035m to £775m 
    
 ongoing revenue and profit metrics exclude the financial performance of disposed businesses but include results from acquisitions