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ServiceMaster2016 Investor DayMay 17, 2016Waldorf AstoriaNew York CityConfidential
Jim ShieldsVice President, Investor Relationsand TreasurerConfidential
Cautionary StatementSafe Harbor StatementThis presentation contains “forward-looking statements” that are based on management’s beliefs and assumptions and on information currently available to management. Most forwardlooking statements contain words that identify them as forward-looking, such as “anticipates,” “believes,” “continues,” “could,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans,”“potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms that relate to future events. Forward-looking statements involve knownand unknown risks, uncertainties and other factors that may cause ServiceMaster’s actual results, performance or achievements to be materially different from any projected results,performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent the beliefs and assumptions of ServiceMaster only as ofthe date of this presentation and ServiceMaster undertakes no obligation to update or revise publicly any such forward-looking statements, whether as a result of new information,future events or otherwise. As such, ServiceMaster’s future results may vary from any expectations or goals expressed in, or implied by, the forward-looking statements included in thispresentation, possibly to a material degree. ServiceMaster cannot assure you that the assumptions made in preparing any of the forward-looking statements will prove accurate or thatany long-term financial or operational goals and targets will be realized. For a discussion of some of the important factors that could cause ServiceMaster’s results to differ materiallyfrom those expressed in, or implied by, the forward-looking statements included in this presentation, investors should refer to the disclosure contained under the heading “Risk Factors”in our Annual Report on Form 10-K for the year ended December 31, 2015 and our other filings with the SEC.Note to Non-GAAP Financial MeasuresThis presentation contains certain non-GAAP financial measures. Non-GAAP measures should not be considered as an alternative to GAAP financial measures. Non-GAAP measuresmay not be calculated or comparable to similarly titled measures used by other companies. See Non-GAAP reconciliations in our SEC filings for a reconciliation of these measures tothe most directly comparable GAAP financial measures. Adjusted EBITDA, Adjusted Net Income, Adjusted earnings per share and Free Cash Flow are not measurements of thecompany’s financial performance under GAAP and should not be considered as an alternative to net income, earnings per share or any other performance measures derived inaccordance with GAAP or as an alternative to net cash provided by operating activities or any other measures of the company’s cash flow or liquidity. We believe these non-GAAPfinancial measures are useful for investors, analysts and other interested parties as they facilitate company-to-company operating and financial condition performance comparisons byexcluding potential differences caused by variations in capital structures, taxation, the age and book depreciation of facilities and equipment, restructuring initiatives, consultingagreements and equity-based, long-term incentive plans.Adjusted EBITDA is defined as net income before: loss from discontinued operations, net of income taxes; provision for income taxes; loss on extinguishment of debt; interestexpense; depreciation and amortization expense; 401(k) Plan corrective contribution; non-cash stock-based compensation expense; restructuring charges; gain on sale of Merry Maidsbranches; and other non-operating expenses. Adjusted net income is defined by the company as income from continuing operations before: amortization expense; 401(k) Plancorrective contribution; restructuring charges; gain on sale of Merry Maids branches; loss on extinguishment of debt; other expense; and the tax impact of all of the aforementionedadjustments. Adjusted earnings per share is calculated as adjusted net income divided by the weighted-average number of dilutive shares outstanding. Free Cash Flow is defined asnet cash provided from operating activities from continuing operations before: call premium paid on retirement of debt; less property additions.Confidential
Agenda8:00 a.m.Welcome and Opening Remarks8:30 a.m.Part I – ServSmart10:00 a.m.Break10:15 a.m.Part II – Business Units11:15 a.m.Part III – Finance11:45 a.m.Closing RemarkssmConfidential
ServiceMaster2016 Investor DayMay 17, 2016Waldorf AstoriaNew York CityConfidential
Rob GilletteChief Executive OfficerConfidential
Our Story: 87 Years Dedicated to Growing Essential ires:ServiceMasteracquiresServiceMaster istaken private, ledby CD&RServiceMastergoes public19291947194719521929ServiceMasteris founded byMarion Wadein Chicago1952196219621971ServiceMasterestablishes oneof the firstfranchisebusinesses inthe U.S.1971 198619881989198819861989A new brandis unveiledServSmartis launched1996 2007201419962007AmericanServiceMasterHome Shieldacquirespioneers Masterspins offTruGreen &completesInitial erviceMasteracquiresLong history of competing and winning in new marketsConfidential
Business SegmentsTerminix56% ReportedRevenue1: 1.4 billion Customer-Level Revenue1,2: 1.7 billion EBITDA1 %:24% U.S. Locations: Coverage:AmericanHome Shield35% 300 company-owned 25 LicensesOther 1%46 states / 22 countries Reported Revenue1: 917 million EBITDA1 %: Service Coverage:Requests4:22.4% 3 million50 statesFSG9%FSG10% 1Represents results for full year 2015represents (i) reported revenue and (ii) revenue earned by our franchisees,less (iii) royalty fees (reported by us, based on revenue earned by our franchisees)3 U.S. locations include franchises and company-owned Merry Maid branches4 Full-year 2015 service activityReported Revenue1: 232 million Customer-Level EBITDA1 %:33.2% U.S Licenses 5,500 total Coverage:50 states /15 countriesRevenue1,2: 2.4 billion2Customer-levelConfidential
#1 in Attractive Markets2Terminix22%1Others( 20,000)59%Others38%AHS42%Rollins19%1Old Republic9%U.S. Market: 8BFirst American11%U.S. Market: 2BSources: Specialty Products Consultants, LLC, SEC filings and management estimates based on industry data1As measured on a customer-level revenue basis. Rollins customer-level revenue derived from company filings and management estimates2Compared to franchise networks on a customer-level revenue basis; management estimates based on industry dataConfidential
Multiple Delivery tomersCustomerAwarenessCustomerSatisfaction 5,000 service technicians 2.8 million customers Market share leader 1.5x brand awarenessof competitors 80%-85% retention rate Strong net promoter scoresContractorsFranchisees 11,000 contractors 5,500 franchise licenses 45,000 service technicians 33,000 individuals 1.6 million customers 2.4 billion CLR 3 million service requests 200k homes served/month 42% market share #1 market position inrespective categories #1 market position 75% retention rate “2015 Top Rated” byHome Warranty Review National network Strong net promoter scoresTrustedprofessionals 75,000a dayTrustedprofessionals 75,000 servicevisitscalls eachdayConfidential
Consistent Financial PerformanceRevenueSERV Performance millions 2,293’12-’15 CAGR 6.4% 2,457 2,59420142015 250Return: 120% 200 1502013Adj. EBITDA1Return: 10% 557 622 475 505/31/145/31/15SERV23%24%21%SP500Adj. EBITDA Margin1 millions 100’12-’15 CAGR 14.4%1AdjustedEBITDA and Adjusted EBITDA Margin reflects the annualized benefit of transferring 25m ofcorporate costs to TruGreen201320142015Confidential
Market Trends Are In Our FavorDo It For Me(DIFM)EmergingConsumerSegmentDecreasingLabor arketsFew QualityCompetitorsof ScaleBut, the world has changedConfidential
The OpportunityOn-Demand economyraises expectationsThe way consumerswant to shop, buy andschedule is changingEssential servicesrequire expertise andknow-howLimited competitionof scalePhysical repairs, servicecannot bedelivered digitallyCombining physical delivery with digital convenienceConfidential
Our Approach: ServSmart sm Enhance the customer experience and servicedelivery – on-time, quality service with simplicity Combine digital-first, self-service capability withour unmatched network Continue to drive customer-first mindset andcultural change throughout our company Create customer awareness, insightsand advocacy Drive growth and productivity simultaneouslyLeverage our legacy differentiate with convenienceConfidential
ServSmartsm BenefitsMakes it easy to find us, buy fromus and stay with usEmphasizes self-service/schedulingPromotes sales andservice mobilityGo to market with Minimally ViableProduct (MVP) Growth Awareness Reduced acquisition cost Customer satisfaction Reduces cost to serve Improves customer experience Reduces technician/sales workload Start with the basics Build momentum Drive changeImprove customer experience and our efficiencyConfidential
ServiceMaster2016 Investor DayMay 17, 2016Waldorf AstoriaNew York CityConfidential
Raj MidhaVice President, Strategy & MarketingConfidential
The Homeowner’s Dilemma Who can I trust to help me with my problem? What are the options to solve my problem? Which service solution is right for me? When can someone come fix my problem? How do I receive ongoing protection?Confidential
Convenient access to essential home servicesHomeowner’sDilemmaServSmart smVision Who can Itrust to helpme with myproblem?Easy toFind Websites Mobile SEO/SEMServiceMasterBrand What are theoptions tosolve myproblem? Whichservicesolution isright for me?Easy toSelf Educate Content Social Media EmailEasy toBuy Buy Online Live Chat SalesMobilityInstill Trustdependable – accountable – expert When cansomeonecome fix myproblem?Easy toGet Service ScheduleOnline Where’s MyTech InstantFeedback How do Ireceiveongoingprotection?Easy toPay & Stay My Account eNewsletters MonthlyBillingDrive Empowermentresponsive – respectful – accessibleConfidential
Investments in targeted, measurable advertising% of 2015 Spend Overview 61% of spend on directresponse radio and TV Demographic andgeographic targeting Cost per call / cost persale analysis 62% of spend on modeleddirect mail to pure prospects Targeting to individualhouseholds based onpredictive modelsCRM, Social& Other14%Broadcast14% 89% of spend on paidsearch advertisingDigital45% Keyword targeting Cost per lead / cost persale analysisDirect Mail37%Confidential
1st Year Direct-to-Consumer Home WarrantyRevenue Growth (%)Gross Margin %32%31%30%02013201420152013Confidential
Centralized marketing team to leverage talent, bestpractices and ServSmart sm solutionsDigitalMarketingDirectMarketingBroadcast Paid searchadvertising Direct mailadvertising Brand TVadvertising Mobileadvertising Emailmarketing Searchengineoptimization Databasemarketing Directresponse TVadvertising Buy online Cross-selling sSocial MediaBrand Social media Customerresearch Customeronboarding Rate cardprices Brandstrategy Customerengagement Discountingstrategy Creativedevelopment Customerexperience Priceincreases Contentmarketing Onlinereputationmanagement Renewal andpaymentConfidential
Centralized marketing team to leverage talent, bestpractices and ServSmart sm solutionsDigitalMarketingDirectMarketing Paid searchadvertising Direct mailadvertising Mobileadvertising Emailmarketing Searchengineoptimization Databasemarketing Cross-sellingBroadcastSocial MediaBrand Brand TVadvertising Directresponse TVadvertising Radio Social media Contentmarketing Onlinereputationmanagement Customerresearch Brandstrategy CreativedevelopmentCustomerRelationshipManagement Customeronboarding Customerengagement Customerexperience Renewal andpaymentPricingAnalytics Rate cardprices Discountingstrategy Priceincreases Buy onlineConfidential
Centralized marketing team to leverage talent, bestpractices and ServSmart sm solutionsDigitalMarketingDirectMarketing Paid searchadvertising Direct mailadvertising Mobileadvertising Emailmarketing Searchengineoptimization Databasemarketing Cross-sellingBroadcastSocial MediaBrand Brand TVadvertising Directresponse TVadvertising Radio Social media Contentmarketing Onlinereputationmanagement Customerresearch Brandstrategy CreativedevelopmentCustomerRelationshipManagement Customeronboarding Customerengagement Customerexperience Renewal andpaymentPricingAnalytics Rate cardprices Discountingstrategy Priceincreases Buy onlineConfidential
Centralized marketing team to leverage talent, bestpractices and ServSmart sm solutionsDigitalMarketingDirectMarketingBroadcast Paid searchadvertising Direct mailadvertising Brand TVadvertising Mobileadvertising Emailmarketing Searchengineoptimization Databasemarketing Directresponse TVadvertising Cross-selling RadioSocial MediaBrand Social media Contentmarketing Onlinereputationmanagement Customerresearch Brandstrategy CreativedevelopmentCustomerRelationshipManagement Customeronboarding Customerengagement Customerexperience Renewal andpaymentPricingAnalytics Rate cardprices Discountingstrategy Priceincreases Buy onlineConfidential
Centralized marketing team to leverage talent, bestpractices and ServSmart sm solutionsDigitalMarketingDirectMarketingBroadcast Paid searchadvertising Direct mailadvertising Brand TVadvertising Mobileadvertising Emailmarketing Searchengineoptimization Databasemarketing Directresponse TVadvertising Cross-selling RadioSocial MediaBrand Social media Customerresearch Contentmarketing Onlinereputationmanagement Brandstrategy CreativedevelopmentCustomerRelationshipManagement Customeronboarding Customerengagement Customerexperience Renewal andpaymentPricing Rate cardprices Discountingstrategy Priceincreases Buy onlineConfidential
Centralized marketing team to leverage talent, bestpractices and ServSmart sm solutionsDigitalMarketing Paid searchadvertising Mobileadvertising Searchengineoptimization Buy onlineDirectMarketing Direct mailadvertising Emailmarketing Databasemarketing AnalyticsBroadcastSocial MediaBrand Brand TVadvertising Directresponse TVadvertising Radio Social media Contentmarketing Onlinereputationmanagement Customerresearch Customeronboarding Rate cardprices Brandstrategy Customerengagement Discountingstrategy Creativedevelopment Customerexperience Priceincreases Renewal andpaymentConfidential
Centralized marketing team to leverage talent, bestpractices and ServSmart sm solutionsDigitalMarketingDirectMarketingBroadcast Paid searchadvertising Direct mailadvertising Brand TVadvertising Mobileadvertising Emailmarketing Searchengineoptimization Databasemarketing Directresponse TVadvertising Cross-selling RadioSocial MediaBrand Social media Contentmarketing Onlinereputationmanagement Customerresearch Brandstrategy CreativedevelopmentCustomerRelationshipManagement Customeronboarding Customerengagement Customerexperience Renewal andpaymentPricingAnalytics Rate cardprices Discountingstrategy Priceincreases Buy onlineConfidential
ServiceMaster2016 Investor DayMay 17, 2016Waldorf AstoriaNew York CityConfidential
Chelsea SumrowDirector, Marketing Strategy and PlanningAmerican Home ShieldConfidential
ServSmartsm is a Shift in Mindset and CultureConfidential
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45% Increasein Online Transactions YoY at AHS for 20154X More Sales YoY2X More Sales YoYConfidential
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Doubled Mobile SalesYoY for Q1 20164X more sales from this channel in 2015Confidential
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Doubled Online Salesfrom the emailremarketingchannel at AHSfor 2015eCommerce Sales from email15% Growth forQ1 this yearConfidential
Email OptimizationOld CreativeNew Creative70% Lift inConversion RateConfidential
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ServiceMaster2016 Investor DayMay 17, 2016Waldorf AstoriaNew York CityConfidential
Jamie SmithSenior Vice Presidentand Chief Information OfficerConfidential
Open, API-FirstPlatformServiceMasterIT StrategyEnabling theServSmart ntial
A Modern Platform for Home Services API first, microservices architecture allows openconsumption across brands and externally “Leapfrog” of technical generations from previous legacyplatforms Allows rapid value capture never before possible Enables true cross-brand experiencesConfidential
Open, API-First PlatformConsumerMobile terEmployeeAppsMachine toMachinePartnerExternalIntegration IntegrationsSmartServePlatformAPIsExisting Appsand DataNew AppsAnd ServicesPlatformIntegrationsConfidential
Delivering at the Speed of Digital Business Completely transformed from traditionalbig-bang waterfall to scaled agile delivery Multiple release trains allow rapid innovation andtime to market DevOps delivers multiple releases per day intoproduct for real-time value Speed allows opportunity captureConfidential
Delivering at the Speed of Digital BusinessSelf-organizing Agile TeamsAgile TeamsIntegrated and Committed Product Primarily On Site Development TeamsDevOpsDevOps and Agile InfrastructureConfidential
The ServSmart sm Experience Data driven approach to winning the“critical moments” in the customer and serviceprovider experience Overarching goal is to reduce friction at allpoints of interaction Contemplates both the digital and the “last mile”of the analog experience Shared ServiceMaster experience creates customervalue propositionConfidential
Enabling the ServSmart sm ExperienceCustomer ExperienceService Provider ExperienceServiceMaster ExperienceConfidential
The Future of ServSmart smConsumer Consumer InternalContact Employee Machine to PartnerExternalMobile Apps Websites Applications CenterAppsMachine Integration IntegrationsServSmartsmPlatformAPIsExisting Appsand DataNew AppsAnd ServicesPlatformIntegrationsConfidential
ServiceMaster2016 Investor DayMay 17, 2016Waldorf AstoriaNew York CityConfidential
Mary Kay WegnerSenior Vice President, Serviceand OperationsConfidential
ServSmart sm Experience: Redesigning the ExperienceServiceMaster is this guy . being amazing for these folks.Confidential
ServSmart sm Experience: Winning the critical moments Mapping customer experience journey Measure importance and performanceof each activity Prioritize investmentOne critical moment we must win:On-time deliveryOn-Time Delivery90%80%70%60%50%40%30%20%Confidential
ServSmart sm Experience: Hire and Train Well Leveraging ServiceMaster recruiting and hiring capabilities Expanded service and technical training Leadership development programHire for attitude and train for skillsConfidential
ServSmart sm Experience: Empower the CustomerIncrease self-service optionsInvest in helpful contentConfidential
ServSmart sm Experience: Empower our EmployeesService Coalition Sales and Service MobilityService techniciansIdentify the highest friction pointsFeedbackGuide change managementConfidential
ServSmart sm Experience: Service Mobility for Customers Notification when technician isen route via text and e-mail Photo of technician Link to see an ETA and location oftechnician Rate service experienceConfidential
ServSmart sm Experience: Service Mobility for Technicians Smart device enabled New service order notification Schedule visibility Customer notified when technicianis en route Turn-by-turn directionsConfidential
ServiceMaster2016 Investor DayMay 17, 2016Waldorf AstoriaNew York CityConfidential
ServSmart Panel DiscussionsmConfidential
ServiceMaster2016 Investor DayMay 17, 2016Waldorf AstoriaNew York CityConfidential
Tim HaynesPresident, American Home ShieldConfidential
American Home Shield SnapshotMarket Share2Revenue1:2010 – LTM 3/31/16CAGR:Adjusted EBITDA1: 935m7.0%Others38% 195m1Adjusted EBITDA margin :AHS42%20.8% Serves 1.6m customers in 50 states; 3m servicerequests1 Significant market leadership: 4 times larger thanlargest competitors High and stable customer retention rates National network of 11,000 pre-qualifiedcontractors Significant direct-to-consumer marketing and leadgeneration capabilitiesOldRepublic9%First American11%Revenue By Channel1Home resales20%Renewals65%Direct-toconsumer15%Drives stability of financial resultsLeading provider of home warranties in the U.S.1Representsresults for LTM 3/31/16; 2Sources include SEC filings and company estimatesConfidential
AHS OverviewWho we areWhat we do The nation’s #1 home warranty provider Offer reliable repairs from the nation’s largestnetwork of independent, pre-screened homeservice professionals. Over 42% market share Culture of innovation 45 years of experience Experts in contractor management Real Estate Sales – “Peace of mind” Coverage for sellers during listing period Coverage for buyers after transaction Consumer Sales – “Financial Protection” Buy independent of real estate sale “Convenience” a growing selling point Plans cover the repair and replacement of upto 21 major home appliances and systemcomponents that wear down over time.Confidential
Focused on Our CustomersAvailable however/wherever our customers choose 7 service channels (Phone, IVR, Web, Chat, E-mail, Mobile, Social Media) 10 Million annual contacts 37% of DTC sold through eCommerce Over 70,000 sales chats online with 8MM in revenue Over 115,000 service chats with 90% resolution 268,000 likes on Facebook 30,000 sales/ 16.5 million in revenue through email last year 275,000 operational emails 55% request service without talking to a service agentDelivering Omni-channel Customer ExperienceConfidential
Continuously Improving Service DeliveryImproving the Customer Experience YOY 173K dispatches using interactive scheduling/messaging 11% decrease in customer escalations 6% improvement in after call survey resultsScheduleappointmentfast (immediateis desired)Fix/replace in areasonabletimeRespondquicklywhen customerneeds usKeep MoreCustomersProvidetransparencythroughout therepairInvesting in the Future Real-time scheduling Next-gen dispatch capability Advanced demand/capacity management Online appliance ordering Integrated parts ordering Automated warranty checkServSmart sm is Improving Service Delivery Efficiency, Effectiveness and Customer ExperienceConfidential
Unrivaled Contractor Management Expertise Contractors want to work for us Contractor obligation- Consistent/predictable quantity of work- Appointments scheduled within 24 hours- Fast payment- Timely status updates- Lead source for retail work- Service customer within 48 hours Mon.-Fri.- Consultative assistance to grow theirbusiness- Allow time slots for emergency service Acceptance Criteria- Reputation review Performance Measurement- Insurance verification- Scored regularly, equally weighting cost andquality performance- Licensing verification- Customer surveys sent after every repair- Background check- Contractors regularly visited to reviewperformance83% of surveyed contractors say “AHS is the best warranty company to work with”Confidential
Unmatched Scale and Cost ManagementCostDirect DispatchNetworkPreferredNumber of DispatchesConfidential
Category DynamicsReal Estate5.3m3.9m soldwithouthomewarranty1.4m soldwith homewarrantyHome resalesDirect to Consumer1.4m68.7m73%Competitors2.6m withhome warranty66.1mwithouthomewarranty27%AHS / HSAHome resales with homewarrantyOwner-occupied households(less home resales)2.6m48%Competitors52%AHS / HSAHouseholds with homewarrantyConfidential
Home Warranty Market Penetration SurveyOwn a Home74MClaimed HomeWarranty Owners19MVerified WarrantyOwners5MOnly 3% - 7% Category PenetrationConfidential
ServiceMaster2016 Investor DayMay 17, 2016Waldorf AstoriaNew York CityConfidential
Marty WickPresident, Franchise Services GroupConfidential
Franchise Services Group SnapshotRevenue1: 222m2010 – LTM 3/31/16 CAGR:1.0%Customer-Level Revenue1: 2.4bAdjusted EBITDA1: 77mAdjusted EBITDA margin1:Revenue By Channel1OwnedBranches15%35% Operate in 50 U.S. states and 15 countriesRoyalties53%NationalAccounts18% 5,500 franchise licenses2Products8% Strong and trusted brands Leading market positions in all brands Attractive value proposition to franchisees Scale to service national accountsOther6% 96% of royalty fees are generated bySM Restore, SM Clean and Merry MaidsMarket-leading residential and commercial services1 Represents2results for LTM 3/31/16Active licenses related to franchise agreements managed by FSG as of December 31, 2015Confidential
Leading Market PositionsDisasterRestoration 1929: started business 1952: began franchisingEstablished# of States 50NorthAmericanLicenses1 NorthAmericanCLR2% of totalJanitorialCleaning 50 1,300 licenses 2,000 licenses2 owned branchesHome CleaningHome InspectionCabinet & FurnitureRepair 1980 1988 1992 48 42 45 1,000 licenses 280 licenses 14 owned branches 280 licenses 1,041 million 553 million3 320 million 35 million 33 million 53% 28% 16% 2% 2%1 Licensesheld as of April 26, 2016customer level revenue results for full year 2015Includes 74 million of commercial and residential floor care.2 Represents3Confidential
Growth FocusIncrease Franchisee Network Capacity‒Target under-penetrated markets‒Transition low performers outDrive Sales Growth‒Increase National Accounts‒Strengthen franchisees’ local sales capabilitiesInnovation‒Develop complementary services for customers‒Improve quality of service and customer interactions‒Leverage ServiceMaster’s capabilities and purchasing powerConfidential
Growing National Insurance PartnershipsGaining Share of Insurance ClaimsReconstructionKey Insurance Partner Total Water Claims Share49%56% Most water mitigation claimsrequire reconstructionSM RestoreOther Increase revenue per job claim Core competency of network20142015Leveraging Technology0%-10%% Decrease in Pending DR Claims Over 30 Days-20%Cabinet Repair High percent of home disasters impact cabinets Emerging trend-30% Reduces total repair time for the homeowner-40%-50%-60%18- 20- 22- 25- 27- 29246911Apr Apr Apr Apr Apr Apr May May May May May0% -15% -23% -25% -36% -41% -39% -45% -49% -49% -52%Confidential
Leveraging the ServiceMaster OrganizationMerry Maids eCommerceDigital Journeys Dispatch: Improving service journey Sales Mobility: Real-time sales process Respond 365: End-to-end insuranceclaims processServiceMaster Answers! Provide fee-based call centerservices to franchisees Call center agents understand homeservices Screen sales leads, schedule serviceFranchise AHS Trades AHS and insurance carrier claimvolume ServiceMaster purchasing power ServiceMaster franchising expertiseConfidential
ServiceMaster2016 Investor DayMay 17, 2016Waldorf AstoriaNew York CityConfidential
Bill DerwinPresident, TerminixConfidential
Terminix SnapshotMarket Share2Revenue1: 1.5b2010 – LTM 3/31/16 CAGR:4.7%Customer-Level Revenue1: 1.8bAdjusted EBITDA1: 353mAdjusted EBITDA margin1:24.0%Terminix22%Others59%Rollins19%Operate in 22 countries and 46 U.S. statesRevenue By Service Type1U.S. locations include 300 company-ownedbranches and 25 franchise agreementsLarge and attractive U.S. market ( 8b)Competitive strength: brand, scale, expertise, etc.Positioning for growth: core and new services1Represents2Sources:results for LTM 3/31/16Specialty Products Consultants, LLC, SEC filings and management estimates based on industry data as measured on a customer-level revenue cialPestOther Commercial17%5%Termite3%Confidential
Market DynamicsEssential service: “Darwin” at work; real health andnuisance problemsTermite MarketTMX#1Others33%Terminix42%Recession-Resistant Demand: High cost of inaction orineffective treatmentArrow4%Rollins17%Total market: 1.4 billionPrice Inelastic: Protects most valuable assetPest Control MarketFragmented Industry: 20,000 termite and pest controlcompanies in U.S.Scale Advantages: Large providers offer standardized andscalable Rentokil6%Total market: 6.4 billion1Sources:Specialty Products Consultants, LLC: PCT Top 100Confidential
Competitive AdvantagesIndustry LeadershipIndustry-Leading Brand: Unaided awareness 60%; 1.5x greater than nearest competitorServSmartsm: Technology powering customerexperience, productivity and growthTechnical Expertise: Industry leading expertsincluding industry-renowned mosquito expertExperienced Leadership: Branch managers andtechnicians with significant tenureLeadership TenureNational Footprint: Ability to serve national andregional customersSize: Sourcing leverage in marketing, chemicalsand vehiclesAverage branchmanager tenureAverage techniciantenure11 years7 yearsWell-trained and empowered to exceedcustomers’ expectationsConfidential
Terminix Historical Financial GrowthRevenue and GrowthAdjusted EBITDA and Margin( in millions)( in millions)2010 – 2015 CAGR: 4.5% 1,157 1,193 1,265 1,309 1,370 1,444 309 2232010% growth
American Home Shield 35% Reported Revenue1: 232 million Customer-Level Revenue1,2: 2.4 billion EBITDA1 %: 33.2% U.S Licenses 5,500 total Coverage: 50 states /15 countries Business Segments FSG 9% 1 Represents results for full year 2015 2Customer-level represents (i) reported revenue and (ii) revenue earned by our franchisees,
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