2. How will the upturn in the US Economy
help our industry?
❖ As the US economy continues to recover, the housing
market is recovering as well. This alone should increase
demand from homeowners for regular inspections and
treatments of termites and other pests.
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3. What events are increasing the demand
for our services?
❖ Hotel and restaurant industry standards and
regulations are creating increased demand for pest
control services. The recent uptick in bed bug
outbreaks has further propelled the demand for
professional services.
81 bed bug services in 2011 vs. 225
bed bug services in 2012
-source: Pest Pac
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4. What trends could require more visit from
pest control companies?
❖ The trend toward organic and environmentally friendly products
means more opportunity for the pest control industry. Less toxic
pest control products stay in the environment for shorter periods
when compared to toxic products and require more frequent
application. The shift to these newer products will require
commercial and residential customers to request more visits from
pest control companies.
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5. WHAT ARE THE TOP FACTORS PEOPLE
CONSIDER WHEN CHOOSING PEST
CONTROL?
• Professionalism
• Eco-friendly methods/products services offered
• Location
• Prices
There is also projected high demand for professionals who can
manage pests without using harmful pesticides.
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6. ❖ The HACCP, or Hazard Analysis and Critical Control Point, is a program put
forth by the FDA to reduce food contamination. As a result of this and similar
programs (AIB, etc.), clients in the food industry will require increased services
from pest control companies.
We already are seeing this:
Keystone Foods
Del Monte
Hurst Produce
Horizon
and more
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7. Foreign ants have no natural predators. Fire ants are adapting to
colder weather and becoming problems for crops, wildlife, and people
in the northern region of the US.
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8. What technological development s will help our
industry grow?
❖ Sophisticated technological developments have increased the accuracy of
finding termites, pests, or rodents and are becoming more and more common in
the pest control industry. Through the utilization of technology, operators work
more efficiently, thereby increasing operating margins.
K-9 DETECTION
HEAT GENERATORS
MONITORING BAITS
THERMAL IMAGERS
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9. What will make it possible for more
operators to bid on federal contracts?
❖ The US Small Business Administration (SBA) increased the
small business size standard for the pest control service industry
from $7 million to $10 million. Small business size standards
determine eligibility for small business assistance and for federal
contracts set aside for small business Therefore, more operators
will have the ability to bid for federal contracts.
.
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10. 2012 AND 2013 YEAR TO DATE
Mergers & Acquisitions in the Pest
Management Industry
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11. Closed Date
Buyer
Target
12/10/12
Rentokil Initial plc
Eden Advanced Pest
Technologies, Inc..(Wa)
08/06/12
Rentokil Initial plc
Modus FM (London)
10/23/12
Rollins, Inc.. (Orkin
Brand)
Partner's Pest Control of
the Valley(Ca)
10/03/12
Rollins, Inc. (Orkin
Brand)
Hulett Environnemental
Services (Central FL)
09/25/12
Rollins, Inc. (Orkin
Brand)
Tri-County Pest Control
South
11/29/12
Arrow Exterminators,
Inc..
Terminator Pest Control
11/21/12
Arrow Exterminators,
Inc..
Can Eliminate Pest
Control(Fl)
11/09/12
Arrow Exterminators,
Inc..
Norton Exterminating
Consolidation is
occurring at all
MANY STRONG COMPANIES ARE GROWING THROUGH ACQUISITIONS.
levels: national &
10/05/12
Rentokil Initial plc
Maykar Pest
regional
Control(India)
(this is a small
09/25/12
Rentokil Initial plc
Western
sampling)
Exterminators(Ca)
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Many strong
companies are
growing through
acquisitions.
13. KEY THEMES
Continued Interest from Industry “Neophytes”*
Venture capitalists are seeing the potential value in
our industry.
Could they develop into serious players?
It remains to be seen.
(buyers that are new to the pest control industry. Approximately sixteen percent
of transactions completed between 2009 and 2012 involved buyers that were
new to the pest control industry.)
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15. THE OUTLOOK FOR THE EXTERMINATING &
PEST CONTROL SERVICES INDUSTRY IS
POSITIVE. THE FOLLOWING FIVE-YEAR
FORECAST TAKES INTO ACCOUNT BOTH
SHORT-TERM AND LONG-TERM INDUSTRY
TRENDS.
Year
2013
2014
2015
2016
2017
Market Size 10310
($ millions)
10670
11030
11380
11670
Growth
Rate
3.50%
3.30%
3.20%
2.60%
4.20%
Source: Anything research
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16. CONTINUING TRENDS
• Bed bugs and stinkbugs
• Recovering housing market will create a
need for pretreatment termite services
and regular inspections.
• Consumers will spend on hotels and
restaurants again, driving demand from
this market.
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17. CONTINUING TRENDS
• Heightened demand for bed bug extermination has
also caused competition from new specialty
companies.
• Housing sales and residential construction are also
expected to rise, increasing demand for termite
services.
• Increased pest populations across the United States
will characterize the next five years, as the bed bug
population continues rising.
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18. CONTINUING TRENDS
• Green practices are growing more common in the
industry, driven in part by LEED (Leadership in
Energy and Environmental Design.)
• Hospitality and food service industries have
growing needs for pest management.
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20. INCOME STATEMENT (INDUSTRY AVERAGE)
THE DATA COLLECTED IS INDUSTRY-WIDE, COVERING BOTH PUBLIC AND PRIVATE COMPANIES IN THE
INDUSTRY.
Industry Average
Percent of Sales
•Total Revenue
•Operating Revenue
•Cost of Goods Sold
•Gross Profit
Operating Expenses
$899,592
$873,301
$406,348
$466,952
100%
97%
45%
52%
$3,215
•Repairs
$4,456
•Rent paid on business property
$16,118
•Charitable Contributions
$210
•Depletion
$30
•Domestic production activities deduction
$26
0%
•Pension, profit sharing plans, stock, annuity
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0%
2%
0%
0%
0%
21. INCOME STATEMENT (INDUSTRY AVERAGE)
•
Advertising
•
Compensation of officers
•
Salaries and wages
•
Employee benefit programs
$19,180
2%
•
Taxes and Licenses
$40,976
5%
•
Bad Debts
$1,075
•
Depreciation
$9,648 1%
•
Amortization
$3,536 0%
•
Other Operating Expenses
$112,345
12%
•
Total Operating Expenses
$427,409
48%
•
Operating Income
$39,543
4%
•
Non-Operating Income
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$7,723
1%
$24,849
3%
$184,021
20%
0%
$26,055 3%
22. INCOME STATEMENT
(INDUSTRY AVERAGE)
• EBIT (Earnings Before Interest and Taxes) $65,598
7%
• Interest Expense
1%
• Earnings Before Taxes
• Income Tax
• Net Profit
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$8,469
$57,129
6%
$5,729
1%
$51,400
6%
23. PEST CONTROL SERVICES ACROSS THE UNITED STATES
2008 – 2012
Income Statement (figures in 1000's)
YEAR
2008
2009
2010
2011
Revenue
Sales
1796
1806
1796
1801
Cost of Sales
Cost of Goods Sold
967.924 970.73 965.101 968.794
Gross Margin
Gross Margin
828.076 835.27 830.899 832.206
Expenses
Advertising
8.748
8.573
8.527
8.564
Salaries and Wages
303.756 306.359 305.756 305.803
Employee Benefit Program
37.491 37.552 37.209 37.422
Pension and Annuity Plans
3.844
3.833
3.8
3.816
Compensation of Officers
56.811 55.626 55.084 55.449
Bad Debt
2.989
3.005
2.977
2.994
Rent Paid
33.32 33.249
33.2 33.247
Repairs
7.952
7.887
7.806
7.846
Depreciation Depletion Amortization
21.474 21.304 21.114 21.237
Interest Paid
10.999 11.057 11.043 11.056
Miscellaneous Expenses
183.245 183.387 183.026 183.208
Total Expenses
670.629 671.832 669.542 670.642
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2012
1800
967.791
832.209
8.555
305.849
37.37
3.814
55.375
2.991
33.233
7.842
21.209
11.051
183.176
670.465
24. PEST CONTROL SERVICES ACROSS THE
UNITED STATES 2008 – 2012 continued
EBITDA
189.92 195.799 193.514 193.857 194.004
Net Income
Operating Profit
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157.447 163.438 161.357 161.564 161.744
27. SALARY FOR SALES
Average Orkin Pest Control Salesperson Salaries
$44k
Average Clark Pest Control Commercial Sales Associate
Salaries
$43k
Average Truly Nolen Pest Control Specialist Salaries
$33k
Source: CareerBliss.com
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28. SALARY FOR SALES
Average Ehrlich Commercial B2B sales
Base Pay:
$40,000 - $45,000 /Year
Source: Ehrlich/Rentokil web site under Careers
Average Pest Control Sales in De:
$36,000
Source: Simplyhired.com
Average Pest Control Sales in Philadelphia:
$40,000
Source: Indeed.com
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30. SOURCES
• Anything research
• Rkj pest control M/A review
• Heart pest management
• Ad-ology report
• Prime Industries reports
• Pest PAC
• IBISWorld
• eHow.com
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Notas do Editor
I would make the map dominate the slide, and reduce the text to: Fire ants are adapting to colder weather and becoming problems for crops, wildlife, and people in the northern region of the US.
*Too complex a statement; too much financial jargon. Replace it with “Strong companies are growing through acquisitions.”** Replace with “Note: Consolidation is occurring at all levels: national & regional.”Also, add location info (name the states where the targets are)
This might be 2 slides. The first 2 items are conclusions that have already been explained. The 3rd is new. What is its importance? What were these buyers? Do they come from a sector that could develop into a serious player or absorb part of our industry, such as home maintenance or sanitation, or are they just venture capitalists? If venture capitalists, does this mean that outsiders are seeing the potential value in our industry, or does it mean that they are jumping in for quick profits and will sell out quickly, leaving the industry weaker (yet perhaps give us acquisition targets then?) Unless item 3 has a concrete purpose, I’d delete it. It may interest you, but I doubt anyone else will be intrigued, especially since Royal isn’t acquiring other businesses.
More TMI. “Outlook is Positive” Your audience will like this slide. Let them take it in and reach their own conclusions. Also, put the source directly on the slide, as a footnote at the bottom or something like that.
1st point doesn’t follow well from the previous slide. That has 3 trends in the type of work we do; this jumps back to an overall industry trend. Also, what’s the purpose of stating it? Is the point that it means more competition? If so, say “competition from new specialty companies (I assume you mean bed bug dog companies and the like?)Item 2: Do you really have support for residential fumigation for bed bugs? Could your statistics be referring to increased termite fumes in the warmer states? If the former, footnote this one also, as that is significant. Is the 2nd sentence of this bullet point a separate bullet point? What’s behind that conclusion—global warming nonsense? [Oops, pardon the characterization.]
Give the title for which LEED is the acronym—they won’t know it. Add a statement that Royal is right on track on this one.2nd bullet: What I added is in artful, but make that point. Since Royal has committed to go after this sector, perhaps add another statement that we are on top of this one also.
Another very good slide for your audience. Let it speak for itself. Perhaps don’t explain it at all; just ask what they see in this. This one needs a visible footnote also.
Same treatment as the last 2 slides. Add source footnote.