Good morning, ladies and gentlemen. Thank you all for braving the weather and joining us this morning. In a few moments, Jeremy's going to provide you with details of our results for 2019 and looking at our five regions where we've again delivered an excellent overall financial performance with revenue, profit, and cash in excess of our medium-term targets. Then I'll come back and provide an update on the operational and financial performance of our Pest Control, Hygiene, and Protect and Enhance businesses. Then I'll briefly take you through our operational model, which we call our machine. Just to set the scene, let me just say a few words by covering the highlights of 2019.
Revenue from ongoing operations increased by 8.6% at constant exchange rates, with organic growth of 4.5%. This is our strongest organic growth rate for over 15 years, with good contributions being made by all of the five regions. During the year, we also passed a landmark in North America with annual revenues exceeding GBP 1 billion for the first time. Both Pest Control and Hygiene performed well, delivering organic growth of 4.9% and 4.3% respectively. Not to be left out, Protect and Enhance also grew organically by 3.2%. Ongoing operating profit grew by 10.5%, with group operating margins up by 20 basis points and up by 50 basis points in North America. Free cash flow was GBP 58.7 million, ahead of 2018, representing an excellent cash conversion rate of almost 100%.
The buyout of our pension scheme is going well and is on track to complete around the end of the year. Turning now to acquisitions. Last year was an outstanding year of M&A execution, with 41 acquisitions, delivering around GBP 137 million in annualized revenues. Of these, 30 deals were in Pest Control and 16 were in North America. We've started the new year with an excellent M&A pipeline. Overall, the company again performed strongly with a combination of organic and acquisitive growth. That performance is down to the relentless execution of our model, and I'll talk more on that later. By continuing to execute our plan at pace, we're confident of delivering further operational and financial progress in 2020, and we're also confident that the decade ahead presents clear opportunities for sustainable and profitable growth.
Before I hand over to the man himself over there, I am sure you will have seen in today's statement that after a decade in the role of CFO, Jeremy is to retire from the company later this year, in line with his long-held plan to move to a non-executive career. I am going to save my fine words and a few stories for JT to later in the year, until the interims, which will be his last results performance. It goes without saying that he has made a huge contribution to the success of the company, and I thank him immensely for his tireless support over the last six and a half years.
Many of you know Stuart Ingall-Tombs. He will be taking over as CFO later in the year. We are very fortunate to have strength in depth. If you have not met Stuart, please say hello to him after the results. With that, let me hand over to Jeremy.
Thank you, Andy, and good morning, everyone. I'll now run through the key financial highlights for 2019 in a bit more detail. Unless I state to the contrary, all of the numbers are at a constant rate of exchange. Ongoing revenue in the year grew by 8.6% with organic growth of 4.5% and growth from acquired businesses of 4.1%. Ongoing operating profit grew ahead of revenue by 10.5% in the year, resulting in an increase in net operating margins to 13.8%. This was driven by an improvement in a number of key regions, and in particular our North American business, but held back slightly by an increase in central costs of GBP 7 million, reflecting the impact of the increase in our share price on LTIP costs.
Adjusted profit after interest at actual exchange rates grew by 10.7%, driven by the increase in operating profit, as well as a small favorable exchange rate movement of GBP 2.6 million. Free cash flow, as Andy said, was again strong in the year, with GBP 251 million, a GBP 59 million increase on 2018. Adjusted EPS at actual exchange rates increased by 10.4%, in line with the growth in adjusted profit before tax. The revenue, profit, and free cash flow results for the year reflect another period of delivery against the financial targets that we set for the business five years ago in 2014, and which were revised upwards at the 2017 interims.
Organic growth of 4.5% is above our target range of 3%-4%. This resulted in revenue growth of 8.6%, again ahead of our 5%-8% target. Ongoing operating profit growth of 10.5% was ahead of our target level of around 10%, reflecting leverage from the organic growth, as well as the continuing impact of our M&A program. Free cash flow continues to be strong, with free cash flow conversion over the last 12 months at over 98%, ahead of our medium-term target of 90%. Looking now at performance by region, starting with North America. Our North American business grew by 11.4% in the year, of which 4.5% was organic, with Pest Control organic growth of 4.4%. Operating profit grew by 15.3%, supported by a 50-basis point improvement in operating margin.
I'll discuss in more detail the progress that we have made towards our revenue and margin targets on the following slides. We made solid progress in 2019 towards our objectives of $1.5 billion of revenue in 2020 and 18% operating margins by the end of 2021. Organic growth of 4.5% is in line with our target growth for the region of 4%-5%. We acquired $135 million of revenues through 16 acquisitions in the year, well ahead of both 2018 and our target of $50 million-$80 million per annum. Pest operating margins improved by 70 basis points, driven by stronger organic growth, acquisitions, and the Best of Breed program. However, margin improvement was held back a little by the mix effect of stronger growth in the lower-margin product sales.
Revenue growth of 8.3% is required to hit our objective of $1.5 billion of revenue in 2020. Given our organic growth momentum and a healthy pipeline of M&A deals, we remain on track to hit this objective. The Best of Breed program continues to deliver benefits in line with targets, and new opportunities are consistently being identified and pursued as the program evolves. As we've previously stated, our targeted improvements in margins is back-end loaded, following the completion of the system replatforming and application deployment. The systems agenda is running to plan. We continue our program of migration of acquisitions to our core operating systems, migrating 16 businesses to one of the core operating systems in 2019. All the data is now on the Google Cloud platform, and we are making good progress implementing the various sales, service, and customer applications that feed off this platform.
While we have a margin target for 2021, I just wanted to make it clear that our ambition does not stop at 18%. This chart shows the distribution of Pest Control margins by U.S. management region. You can see the margins are strongest in the region with the strongest market share and density, the Northeast, where margins are comparable with the rest of the Rentokil group. As our North American business grows through both organic revenues and M&A, and we deliver our Best of Breed program following the replatforming of the business, we plan to improve margins in our Southeast, West, and central regions to similar levels, taking margin levels in North America beyond 18% over time. In Europe, ongoing revenues were up 7.1%, driven by strong performances across the region, including Latin America, which is managed through the European region.
Organic growth continued to be very strong at 4.8%, with Pest Control growing by 6.7% and Hygiene by 3.2%. Ongoing profits grew by 8.3%, reflecting the strong revenue performance, with good growth in Southern Europe, Germany, and the Benelux. 11 acquisitions supported revenue and profit growth in the region, with total acquired revenues of around GBP 14 million. You will remember that at the interims, we announced the sale of our 17.8% stake in the Haniel JV for cash consideration of EUR 430 million. Revenue in the U.K., the rest-of-the-world region, was up 6.3%, of which 4.8% was organic. U.K. organic revenues grew by 6.3% in Pest Control and 7.9% in Hygiene. The U.K. Property Care business declined by 2.5% in the year, although H2 was better, with growth achieved of 2.2%.
Ongoing revenue growth was also strong in the rest of the world at 7%, driven by growth in all of its regional clusters. An ongoing operating profit increased by 9.3% in the year, reflecting the organic growth in Pest Control and Hygiene, and the improved second half performance in Property Care, leading to an increase in operating margins overall of 60 basis points.
Revenues in Asia increased by 11.1%, with organic revenue growth of 4.7%, and with good performance in both Pest Control and Hygiene, and acquisitions contributing growth of 6.4%. Performance was particularly strong in our Indonesian business through both organic and inorganic growth. Progress on the integration of PCI, our 28 acquisition in India, has been steady, although delivery on the business plan has been slower than we'd have expected at this stage. Operating profit in the region was up 11.1%, with operating margins in line with the prior year.
Six acquisitions were completed in the region, with annualized revenues of around GBP 17 million. The Pacific business had a solid year, delivering ongoing revenue growth of 2.6%, of which 2.3% was organic. Hygiene operations were the main driver of growth. However, Pest revenues were less strong, in part due to fumigation services increasingly being provided at the point of departure rather than on arrival into Australia and New Zealand. Operating profit increased by 2.5%, in line with ongoing revenue growth. Operating cash flow of GBP 343 million was up GBP 60 million, reflecting the increased profitability of the business and the timing of dividend payments from the Haniel JV. The 2019 numbers reflect adjustments relating to IFRS 16, which has effectively increased the level of depreciation and CapEx by similar offsetting amounts.
Continuing free cash flow of GBP 251 million was GBP 59 million higher than last year, reflecting the increase in operating cash flow previously noted. Cash interest payments were GBP 3 million higher than in 2018. This is largely an IFRS adjustment, with underlying cash payments in line with the prior year. Cash tax payments were GBP 2 million lower, with phasing benefits offsetting the impact of higher group profits. With a cash dividend spend of GBP 86 million, a 15.6% increase on 2018, and a GBP 360 million spend on acquisitions, largely funded by the GBP 392 million generated from disposals, underlying net debt decreased by GBP 240 million in the year. Sterling strengthened quite significantly in the second half, resulting in an overall reduction in the sterling value of our EUR and USD-denominated debt by GBP 24 million.
The adoption of IFRS 16 on the 1st of January 2019 added GBP 184 million of lease liabilities to our reported net debt figure. Taking all the above into account, our net debt reduced by GBP 80 million in the year to GBP 1.073 billion. Looking now at the balance sheet, our net debt to EBITDA ratio, adjusted for IFRS 16, stood at 1.8 x at the year-end, compared to an unadjusted 2.4 x at the 2018 year-end. On an unadjusted basis, the ratio would have been 1.7 x at the end of 2019. The group's credit rating remains at BBB, with a stable outlook.
In May 2019, we were able to issue a EUR 500 million bond at a coupon of 0.8%. As the chart on the right shows, our net debt levels are broadly in line with where they were six years ago and substantially below FX movements and the impact of IFRS 16 are excluded. Just before I get onto guidance for 2020, just a few words on the coronavirus. As you might expect, our priority is the health and safety of our employees. To date, the main impact of the virus has been on our operations in China. This has been partially offset by demand for handwashing and hand sanitizing services in other parts of the group. The majority of products that we source from suppliers in China are covered by existing stocks for the next few months.
Consequently, at this point in time, we'd expect only a small net impact on the business in Q1. We're monitoring the situation very closely, looking to mitigate the risk of the impact that the virus may have on our colleagues, customers, and supply chain. Should the situation continue for an extended period or become materially worse, obviously, this could have a more negative impact for the rest of the year. Before I hand back to Andy, some numbers for your models in relation to 2020. We continue to maintain our medium-term targets of ongoing revenue growth of 5%-8%, with organic growth in the range of 3%-4%, ongoing profit growth of around 10%, and free cash flow conversion of around 90%. As I just mentioned, interest costs are expected to be lower in 2020 by GBP 8 million.
This includes GBP 3 million in relation to IFRS 16, which is consistent with 2019. Following the sale of our stake in the JV, shares of profits from associates will be around GBP 10 million lower than 2019. At the interims, we guided to a positive impact for 2020 from foreign exchange in the region of GBP 10 million-GBP 15 million. As I previously noted, sterling has strengthened significantly in the second half of 2019, and if today's rates were continue for the rest of the year, there would now be an adverse impact of exchange movements in the range of GBP 10 million-GBP 15 million. All of the above items have been reflected in market expectations. Based on our performance in 2019, we are confident of another strong performance in 2020.
In terms of cash flow, working capital outflows are estimated in the region of £10 million to £20 million, in part reflecting favorable phasing in 2019. CapEx, including IFRS 16, is estimated in the region of £260 million to GBP 270 million. Spend on provisions is expected to be in line with 2019, but I note that from 2021, the spend will reduce by GBP 5 million per annum as legacy property-related issues are completed. Following the bond refinancing in 2019, cash interest costs are expected to be £14 million lower than in 2019. Cash tax flows are likely to be in the range of GBP 55 million -GBP 60 million in 2020, reflecting the ongoing operating profit growth, as well as the impact of phasing from 2019.
As I've already noted, dividends will be no longer received from the Haniel JV. We received GBP 26 million or so in 2019. This is partially offset by an anticipated special dividend from our Japanese associate of GBP 6 million. As Andy's already mentioned, following the buy-in of the U.K. pension scheme in 2018, we are anticipating a pre-tax cash surplus of around GBP 30 million to be returned later in the year. I'll leave you with a slide summarizing our key achievements in 2019 and now hand back to Andy to continue with the rest of the presentation.
Thanks, Jeremy. Excuse me. Over the next few minutes, I'm going to take you through an update on the performance of our three business areas of Pest Control, Hygiene, and Protect and Enhance. I'll then quickly take you through the components of our operating model, what I refer to as our machine. It's our relentless execution of that model that has given us success over the last few years, and it is that continued relentless execution that will drive our progress over this new decade. Starting with Rentokil. This, and I never tire of saying this, is the world's leading pest control company, and it is strongly positioned for the decade ahead. We already have global scale as the number one pest control provider in 55 of our 80 markets.
We've got our, excuse me, very successful Employer of Choice program in place, where we give our pest control technicians the very best training and career pathway they've ever had. The Rentokil brand is second to none in our industry. We've got core strengths in the highly attractive commercial sector. The size of the M&A opportunity in a largely fragmented market remains significant. All of this in a $20 billion global market that is expected to continue to grow at around 5% over the coming years. In 2019, Rentokil delivered another excellent performance, with ongoing revenues increasing by 10.8%, of which 4.9% was organic growth. As you can see there on the right-hand side, this is a consistently strong performer with a five-year revenue growth CAGR of almost 17%.
Profits in Pest Control were up by 11.6% to over GBP 300 million, and they now account for 68% of group profits. Undoubtedly, one of the biggest changes in the pest industry over the coming decade will be the growth of digital pest control, and this is particularly so in the commercial sector, and Rentokil is leading that digital revolution. Our PestConnect, that's our Internet of Things platform, is now live in over 25 countries and present in over 4,000 customer sites. The myRentokil online customer reporting platform is now rolled out to over 96% of our commercial customers around the world. Our command center, which is our central hub for data and analytics from all of those digital units across the field, is processing 9 million records every day.
Our commitment to innovation is something that I've spoken about many times before, our aim is to launch both new premium solutions which are valued by customers as premium services, but also innovations designed to lower our cost to serve. Most of our innovations are conceived at our global science facility. That's The Power Centre in the U.K., but we also have dedicated innovation teams in the U.S., in Europe, and in Asia. Just to mention two very quick examples, Lumnia, that's our range of groundbreaking LED insect light traps. Lumnia reduces energy usage by 62% in comparison to traditional products. To date, we've sold over 100,000 units, and we increased sales by 32% last year. Another example is Eradika. That's our new global bait box for rodent control. We'll launch that later this year.
Following three years in development, this is a new single multipurpose unit that has the flexibility to replace over 20 different existing products and designs, while at the same time addressing 57 specific requirements from our local businesses all around the world. Last year, we highlighted the excellent growth opportunity in mosquito control services and vector control, and we continue to be excited by this large and growing market, with market revenues expected to grow at around 7% each year and set to become over a $4 billion market in 2025. I was in Latin America just a couple of weeks ago to see for myself the scale of the opportunity there, and I was hugely impressed by the quality of our Ecovec team. That's a company we acquired just last year.
We have now, I'm pleased to say, finally secured our first public sector vector control contract in Brazil, along with several ongoing discussions with other local authorities. Jeremy's already covered the North American region in a little bit of detail. I just want to add two quick points really. First, on the right of the slide there, you can see that the revenue growth trend for the region over the last five years, we've got a CAGR of almost 20%, indeed 22%, in Pest Control. Second, in our medium-term model for the region, as Jeremy said, we're looking to deliver organic growth in the 4%-5% range.
Organic growth will be driven by national accounts, where we are enjoying excellent progress by innovation, where we're at least two to three years behind the rest of the group, but where we're now beginning to accelerate from digital marketing and from growth in new focus areas such as mosquito control. In addition to driving that organic growth in North America, we've obviously been continuing to execute our city-targeted acquisition strategy, where over the last five years, we've acquired 67 companies with annualized revenues of $689 million. This is another good example of our relentless execution. As I've said, the M&A pipeline remains strong. While North America obviously remains our primary growth market in the near term, changing demographics and urbanization are creating a really strong medium-term opportunity for the company, primarily in the emerging markets.
In these developing economies, we tend to deliver organic growth which is higher than national GDP, and in part that's because population growth and urbanization and economic growth is typically much higher in the bigger cities. Today, approximately 4.2 billion of the world's population live in cities, and according to UN statistics, this is expected to rise by a further 1 billion people over the next decade. We can already see what the future holds when we consider the current list of mega cities, that's cities with over 10 million inhabitants. By targeting these cities over the last few years, we are now already operating in 18 of them. The challenge going forward is to build bulkheads of scale in tomorrow's mega cities, where future demand for pest control services will grow at rates considerably in excess of GDP.
At the very top of the list of most populated cities by 2035 is Jakarta, which is forecast to have a population of 38 million people. Here in Jakarta, we have already built the leading pest control company through a combination of strong organic growth and several acquisitions over the last few years. Along with increasing urbanization locally, we've seen increasing demand for higher standards of pest control, particularly in offices and food and beverage and pharma customers. We've seen the creation of wealthy residential suburbs where we can focus our digital marketing and sales activities, and we've seen an inflow of international businesses demanding international standards. A great example of this is the expansion of the global hotel chains, where we now serve 60% of all hotels in Jakarta and about 70% of all four and five-star hotels.
We've got an outstanding business in Indonesia which delivered organic growth in 2019 of 20%. That's four times the country's GDP level. Last year, we entered three new major city markets, Amman in Jordan, Colombo in Sri Lanka, and Montevideo in Uruguay, and you should expect to see this trend continue as we target the higher growth city markets of the future. Turning now to Hygiene. On the screen there, you'll see a summary of our operational strategy in Hygiene. It's a combination of building market leading positions where we're number 1 in 22 of our 46 countries, a strong people agenda with high levels of engagement and training. We've got a strong Initial Hygiene brand.
We've got best-in-class products, and we enjoy leadership in innovation and digital, where we are benefiting from the expertise we've already developed in Pest Control. We use our detailed understanding of both customer and product density, and increasingly, we now have an overlay on that operational plan with a city-focused approach to M&A, which is similar to Pest Control. In 2019, we continued to make very good progress, with ongoing revenues increasing by 5.8%, of which organic revenues grew by an excellent 4.3%, and ongoing profits were up by 8.1%. Hygiene now accounts for 22% of group operating profits and made a 40 basis point improvement in operating margins during the year. Following the progress being made with our digital Pest Control services, we are now extending our Hygiene lineup with the launch of our first range of digital Hygiene services using our remote sensing expertise.
The premium Rapid range includes digital taps, digital soap dispensers, and footfall counters to enable a more effective washroom maintenance regime and to improve the customer experience. As an example, with the digital soap dispenser you can see on the screen, each container will deliver over 16,000 hand washes, and that's a tenfold increase in the number of hand washes between service intervals in comparison to standard units. One of the first markets to deploy digital Hygiene in 2020 will be Australia, where a strong health and wellbeing culture creates a positive environment for us to pilot and to launch our new Hygiene services. Our business there has been the test bed for other category extensions as well, such as first aid kits and our move into air care as we seek to build density through additional service lines.
Feedback from the first digital Hygiene pilots has been really positive, particularly from high footfall locations such as airports and shopping centers. We've already seen data presented back to us by customers demonstrating a higher level of customer satisfaction. Turning now to Protect and Enhance. Here, revenues increased by 3.5% in 2019, while profits increased by a very respectable 6.6%. Net operating margins increased by 40 basis points to 12.3%, and that's very much in line with our Protect and Enhance strategies. Workwear, Ambius, and dental services all posted increased revenues for the full year, and our U.K. Property Care business delivered revenue growth in the second half of 2.2%. Clearly, the main business in Protect and Enhance is French Workwear. It accounts for just over half the revenues and 55% of the profits in Protect and Enhance.
In France, as you can see on the screen there, the business continued to make good operational progress in year two of its three-year turnaround plan. Organic revenue and Workwear increased by 3.4% in 2019. Whilst underlying profits improved year-on-year, the profits have now reached the level where statutory employee profit share has been triggered, resulting in a slight overall decline for 2019. We've also made the decision to separate our French Hygiene and Workwear operations into two standalone businesses during 2020, which will allow greater specialization in each area. A significant proportion of our French Hygiene business has historically been run by the Workwear operations and has therefore suffered from a lack of focus. This new focus will enable us to extend our services to our Hygiene customers and to bring in more direct expertise and innovation.
The initial stage will involve some duplication of cost as we split the businesses, and we anticipate this will be around GBP 1 million of stranded overhead this year. All in all, the businesses had an excellent 2019 and are very well-placed to continue good progress in 2020. Now, over the last six years, I've mentioned to you several times that we have built a very strong operating model, which we've deployed consistently across the group. As I've said, I call it the machine. In essence, this is a series of interconnected, well-oiled cogs or processes. If executed well, indeed if executed relentlessly, the cogs each turn positively impacting on the next one, and over time, creating a virtuous circle or flywheel. Great people deliver great service, in turn, creating happy customers who buy more services. They remain customers for longer. They accept inflationary price increases.
They pay their bills. We have a high level of cash conversion, and after paying dividends and interest, that cash is then completely reinvested back into the business, into training, into technology, into innovation, into M&A. The acquisitions are then focused on density building to enhance margins and on building leading positions in the big cities of the future. By running the business in the right way and consistent with our long-term purpose of protecting people and enhancing lives, and indeed by running the machine in a low-carbon way, this in turn makes us more attractive to stakeholders, particularly to our customers and, of course, to our incredibly important colleagues. I'm going to take you for a very quick spin around the machine, starting with the biggest and most important cog, and that is becoming a great Employer of Choice.
In 2019, Rentokil Initial were rated as the U.K.'s top employer, and that's on the global job site Indeed. Anyone who's interested, Apple were rated number two. We were named as Britain's most admired company for diversity. We were the winner of the best interview experience in the U.K. on Glassdoor. According to an independent survey of our colleagues globally, we again delivered world-class levels of colleague engagement and enablement across the group. As you can see on the screen, we also delivered record levels of job applications, more training than ever before, and all of this, in turn, resulting in increased colleague retention levels up 3.7% to a pretty impressive 87%. In safety, in my view, there is typically a strong correlation between safety and financial performance.
Pleasingly, 2019 was our safest year ever with world-class levels of lost time accidents, which improved by 16%, and with the associated working days lost reducing by 26%. Happy and engaged colleagues typically delight our customers, and in 2019, we delivered high levels of customer service with our levels of customer satisfaction improving by 2.4 points, and the all-important output measure of customer retention increasing by 0.3% up to 86.2%. Broadly speaking, each 1% of retention is worth around £20 million or nearly 1% of organic growth. Clearly, every reason for us to focus on that important KPI. In addition to customer retention, our organic revenues come from several other places. Growth also comes from selling more services to existing customers. In total, services sold to existing customers generated revenues around GBP 100 million in 2019, or about a third of our gross sales.
It also comes from pricing, which continues to be tightly managed. High levels of customer service, innovative new products, great customer relationships all enhance our ability to pass on cost inflation to our satisfied customers through annual price increases. Our organic growth obviously also comes from creating innovations to sell to our existing and our new customers. I mentioned earlier we've got a strong innovation pipeline in both Pest Control and Hygiene focused on delivering new premium services and on lowering our cost to serve.
Our pipeline for 2020, and indeed beyond, continues to be focused on digital solutions, but also on products with improved environmental claims. For example, the Lumnia insect light trap I mentioned earlier, and we'll see further additions to that range in 2020. This is all executed through our low-cost operating model with single country management teams, integrated properties and back offices, and shared technologies and infrastructures.
IT is a key enabler of our cost efficiencies. As an example, in 2019, we've now developed our first artificial intelligence tool for the effective scheduling of technicians. Field trials were undertaken in Malaysia. This is now set for rollout in Asia during 2020. As Jeremy highlighted earlier, one of our most important keys to margin expansion is, of course, route and product density. City-focused acquisitions, routing technology, targeting new sales, training, and how we incentivize our people are all used to ensure that our technicians spend less time behind the wheel and more time with customers. The next cog in the machine is M&A, where we target cities to build that density or enter new cities of the future. Last year, we delivered 41 deals with GBP 137 million of annualized revenues.
We completed 16 deals in North America during the year. This included the acquisition of Florida Pest Control. It's an outstanding business. It's also excellent for adding density in the Southeast region. Our pipeline remains strong for the year ahead. This year, we anticipate spending around GBP 250 million, again on density building and on major new city acquisitions. From this focus on people, on low-cost model, on innovation, on digital and organic growth and M&A, we drive our profit and cash growth that Jeremy showed you earlier. This in turn has delivered total shareholder returns of 330% over the last five years. Finally, at the heart of our machine is our social purpose of protecting people and enhancing lives. We've already got strong ESG credentials. You can see them at the bottom of the chart.
We believe that there is a strong social and business case for taking action on the environment, and we've established seven work streams to execute our environmental plan, including on vehicles, supply chain, NonTox products, and on property. Not only is this the right thing to do, but by establishing genuine environmental leadership in our industries, we believe this will give us further differentiation and competitive advantage. The combination of Lumnia, our protected connected products, our NonTox range, innovations such as AutoGate are already setting us apart from the competition. In the decade ahead, we plan to evolve our services significantly to reflect the changing needs of our customers and those of society. We've already introduced some innovative thinking in this area, working with Cool Earth to protect vital rainforests, and in doing so, preventing the release of carbon into the atmosphere equivalent to our entire annual carbon footprint.
This is all funded by our Rentokil Initial Cares unclaimed dividend scheme. Here's our machine supporting colleagues, customers and shareholders with our purpose of protecting people and enhancing lives at the very heart. In summary, in 2019, we delivered another strong overall performance. We made great progress on our people agenda, resulting in improvements in colleague and customer retention. We continued to create a higher quality business through innovations and digital expertise. We delivered organic growth of 4.5%. That's our highest level for 15 years. We maintained a disciplined approach to M&A with 41 acquisitions. Encouraged by the company's performance in 2019 and the outlook for the year ahead, the board is recommending a final dividend of GBP 0.0364 per share, equating to a full year dividend of GBP 0.0515 per share, an increase of 15.2% year-on-year.
2019 was another year of relentless execution of our model, and we remain confident of delivering further progress in 2020 and indeed in the new decade. Jeremy and I will now be happy to take any questions.
Hi. Good morning. Sylvia Barker from JP Morgan. Three please. First of all, on North America, could you comment on what's happened to your pipeline in terms of the number of deals and potential valuations, after ServiceMaster effectively seems to have exited the market for M&A? Secondly, on your acquisition contribution in 2019, it seems like there were some high margin deals within that, probably contributing a fair share of the 20 basis points. Could you maybe talk about which regions those were in? Then finally, you've mentioned a large digital installation in Australia within your report. Could you maybe talk about how the economics work on a contract like that? Do you get more revenue than on a normal contract? Is it more profitable? Do you take any of the risk on, given it seems to be quite an important contract for the customer? Thank you.
We could do an hour and a half on the last one alone, Sylvia, but I'll try not to. I'll take the first and the third, Jeremy, you take the second.
Yeah.
Look, you made the comment that ServiceMaster have appeared to exit the M&A market. I wouldn't draw that conclusion. I think they may have paused activity, but I wouldn't assume for a moment that they've exited. As I've said many times before, it only takes two parties to make an auction. There is plenty of competitive tension in the M&A processes in North America and across the world. I've said many times, it is possible that at some point in the future, the pipeline for M&A will look different. At the moment it doesn't. It looks strong, it looks full. I think valuations remain where they are. They have certainly not increased, in my view, in the last 12 months. There are some commentators who believe that they have peaked and are coming down a little bit. My view is they are high, they've remained high.
I haven't seen them go up. I've not yet seen them come down. The pipeline's good. Plenty of opportunities. I can't see any change in that, positive or negative, to be honest, at the moment. Nothing to see here. Pretty much as it was. Jeremy, perhaps you can cover number two.
Most of our M&A or the big chunk of our M&A in 2019 was actually quite back-end loaded. If you remember in Q3, our run rate was actually behind our guidance, and it was actually Florida Pest Control in Q4 that took our overall spend up. The impact on our margins from M&A in 2019 from 2019 deals was relatively small. What we did benefit from was 2018 M&A flowing through and helping margins. It's less of a 2019 piece, but certainly that 70 basis points improvement in North American pest margins was around good organics, the Best of Breed, and some of that M&A in 2018 flowing through. Apart from that, the impact on the rest of the group was relatively small, and it was those North American margins feeding through. There's a bit of IFRS and then the central costs abating that was the main bridge.
I'll try and give you a really quick answer on the third question because it's a complex question. What Sylvia was referring to is that part of our digital suite of products means that we can put bait stations in place that will send us digital alarms when there is activity taking place at the customer site as opposed to the way we currently find out whether there's been pest activity is we open the box and we see whether the bait has been taken or whether there's little teeth marks in the bait blocks, then we know there's been activity. This is the digital signal saying there's been activity here. And is referring to our single biggest deployment to date, although there are others where we're working on a similar scale, where we've put that in the field.
The model that we have, and to be absolutely honest with you, the model is evolving as we and customers learn from that model. At the moment, with the conventional non-Internet of Things service, if you have a problem between service intervals, you see a mouse running around or a rat running around, you call us up and say, "There's a mouse running around, come down and sort it," and we come down and sort it. That's all within the contract, all within the pricing of the contract. The technology, of course, is much more efficient at spotting and identifying mice and rats and activity. If we end up in a situation where we sell a service that every time a device is triggered, we're going to send someone down to the customer, that's probably not going to be a very good model.
The economics are a little bit uncertain. It's a premium product for which we are charging a premium price. We are working with customers as to, well, what sort of response regime do you want? Do you want gold-plated? Do you want us to drop everything and come to you when there's an issue? If you're a pharmaceutical tablet bottling facility, you probably do want us down immediately if there's a mouse running around in the tableting facility of a pharma outfit. If it's a distribution warehouse, you might be comfortable if we come down tomorrow, next week, the next scheduled visit. It's not an easy one to answer. We're certainly looking to recover the cost of the product, the hardware that we have to put down.
Our model says this is better pest control because we can see problems happening and occurring and anticipate them. If we can solve them before you get an infestation, before you get lots and lots of mice and rats running around, that's got to be better for you, but that's more expensive. The real balance in the discussion is, well, okay two things. One, are you going to visit the customer less frequently because you've got the technology in place? Two, what sort of service regime does the customer want and is willing to pay for? Like all technology, we do get some false triggers. One of the things we're trying to work out is make sure we don't get too many false triggers, otherwise that's not good for anyone.
As I say, if you want to learn more, I can bore for Britain on this one. It's complex. The intention is it's a premium product for premium solutions, but it also ultimately will lower our cost because we won't have to visit. Probably will visit as frequently, but not for as long on each customer visit. That's to be proven out. Hopefully that's enough to be going on with.
Hi, it's Andy Grobler from Credit Suisse. Just three, please. The French workwear and Hygiene business which you are splitting apart, is there a sense that that's getting the French workwear business ready for sale at some point? Would that make it easier? In terms of group margins, can you let us know how much IFRS 16 added to the group margin, and again, for North America? Thirdly, termites have been a bit of a story within the pest industry in North America. Where are you on that, and are there any liabilities we should know about?
That's good. I'll do one of the three.
Yeah, that's good. Yeah.
Thanks, Andy. You shouldn't interpret the decision to split the business as anything other than as I've explained it. The Hygiene business that's within the Workwear business really has been an orphan child. We haven't really supported it. The vans go out from the big laundries to drop off the workwear to their customers, and they will do some limited Hygiene services for those customers, which is completely different to how we look after our other Hygiene customers. They don't get as many services, nor indeed do they probably get the quality of service, if I'm honest. The primary reason is separation and specialization and focus is good, and that will drive performance. Clearly, I've said many times, there may come a time where we decide that not being the owner of the French Workwear business is in the shareholders' best interest.
If that time comes, you know what you can expect us to do. You shouldn't interpret this as we've put the business up for sale. We haven't put the business up for sale. In any event, the separation process will take us all of 2020. If that day comes in the future that we do decide to monetize the asset because we think it's in the shareholders' best interest, having separated it will, of course, have made our lives considerably easier in the process. They're not connected in as binary a way as the question suggests. Hopefully that's the answer.
On IFRS 16, the impact in profit terms for the year was about GBP 3 million. The impact on margins is just slightly less than 10 basis points for the group. This is mainly operating leases coming onto the balance sheet. Proportionately, in North America, actually, we've got less operating leases. We tend to do more CapEx base for vehicles, and we do have some freehold buildings. There is an element of the margin in there, but it's less than 10 basis points for North America because there's proportionately more. Of that 50 basis points of which 70 was Pest, there's 10 basis points of ours. It's one of the bits in the bridge, as I've just said to Sylvia. There was a big impact of LTIP costs going the other way in terms of the overall bridge.
Year on year, it was around just under 10 basis points.
Yeah, on termites, again, for those who've not followed the story, we've got one of our competitors that has got some exposure to ongoing termite claims from customers. Two or three points to make for us, really. One, we're not a big termite player. Commercial is our strongest suit, but we do have termite operations. We typically are spending around about $200,000 on termite remediation claims each year. We'll have a few at any one point in time. We have got three claims in our entire business, all from businesses that we've acquired over the last few years. The average settlement is about $10,000 or just under $10,000, all fully reserved. We don't have that exposure that some others do. We don't have the geographic exposure. Our claims are met and dealt with quickly as and when they occur. Absolutely no exposure in our business.
Thank you.
Matija Gergolet from Goldman Sachs. Three questions from me as well. First one on North America. You did sorry, 70 basis points of margin improvement in the Pest business. You have the 18% margin target by the end of 2021. Is it fair, should we be assuming that in 2020 there's an acceleration in the margin improvement, or is it going to be really back-end loaded towards 2021? Secondly, just one of your comments on North America, if I got you correctly, you mentioned that you're a bit behind your, say, your peers of the group on the innovation in North America. Is that something like two, three years behind? Can you elaborate on that and on where are you catching up on them? Lastly, just on the coronavirus, the inevitable question.
Can you give us a bit of, say, color about what are you seeing happening in China? I think China's pretty small for you, but just any color about how is the business there at this point in time would be welcome. Are you seeing any also maybe any developments in any other countries at this stage? Thank you.
Sure. You want to take the first one?
Number one? Yeah. As you say, Matija, 70 basis points in 2019. There are a number of moving parts in this equation, organic growth, the flow-through of M&A and when that lands, when the Best of Breed program lands. We had good momentum in organics in 2019, and we're looking to 4%-5% in 2020, that should flow. Depending on the timing of M&A, that should support margin improvement as well. We should get something from the Best of Breed in 2020, although that is back-ended towards 2021. We've got a very good plan. We've been through a very thorough plan with the North American business. That plan would take us somewhere into the 15%, we are looking for some improvement.
You're absolutely right, as we said before, most of the margin improvement is back-end loaded to 2021 when we've got the systems and the processes replatform in place. There should be improvement in 2020, but the majority comes through in 2021.
Do you want to come in? The second question related to my comment that we're two or three years behind in innovation deployment in North America. There's a couple of reasons for that. The first reason J.T.'s just covered. Many of our innovations require our IT system in place before we can deploy them. Until we've finished the IT replatform, we can't deploy many of the digital solutions. If we do, then it's going to be a lot of manual workarounds, which isn't really the idea of a digital solution. Those we just can't really do much with. That said, we are piloting Connect, the one we just talked about. We're piloting Connect in a number of our American customers in isolated sites as opposed to networks of sites. That's an example of where we are now getting on with it.
I think North America was one of the last big territories for us to take Lumnia. We're now catching up with that. The second main reason why we're behind in America is they are busy. This is a very, very busy team. That nice little chart with all of those arrows going from left to right, which looks great as a nice chart, isn't it? That's a huge amount of work that's going on behind all of that. We've been very deliberate, and some might say slow, but we've taken our time in the IT redeployment because we get basically one time in a year to do this. We get the quieter season, which is Q4 and Q1, to do the IT. In Q2 and Q3, we stop the project again. We just don't want to mess up the operations in our busy season.
That's the other reason. On a long list of priorities for the U.S. team to work through to get the IT replatformed, to get the Best of Breed, to take on another 16 acquisitions to be integrated. Then a memo from the Chief Executive saying, "Would you mind awfully selling a lot of innovation?" is probably one too far. I've protected our U.S. team from being pushed to take more and more things on the to-do list. As the IT is finished, we can start to take up more. As we get through Best of Breed, we can start to take up more. That, for me, is one of the exciting things that the upside on taking our innovations to the U.S. is something I really look forward to. That's the reason. coronavirus.
As Jeremy mentioned in his slide there, first off, the primary concern we have is safety and protection of our people. As you'd imagine, PPE, personal protective equipment, has been the priority, getting face masks, gloves, and other equipment to our Chinese team. We've been very successful in that. We acted quickly enough, we've put all of that in place. The Chinese operations are impacted. Obviously, customers have closed down. We've got around about half of our team working, the other half at home. We try to make sure if you're at home that you're doing online training, you're doing all the things that we don't have to do later. We'll have to see. We've got no crystal ball as to where this goes next. We have some impact in northern Italy, in the towns that are isolated because of the incident.
We've got a little bit of impact in South Korea, although not very much, which is also another very small business for us. At the moment, our supply chain actions have been well taken and anticipated. We had the Chinese New Year shutdown, in any event. Most companies did, all built stocks. We've got some stocks. Some of the products which are most critical are, for us, down the road a few months out, are our innovations. For most of our innovations, we've got non-innovation products. We've got the old products as well. It doesn't mean our customers, we stop doing Pest Control. We just don't give them the innovation until it's available again. On the other side, and honestly, I don't know what this will look like, the phone is ringing a lot from customers and potential customers who want more Hygiene services.
They want more hand sanitizers. They want more soaps. Over the medium term, who knows what the impact of this pandemic or potential pandemic is. One might imagine that some people that didn't take hand hygiene as seriously as perhaps they should, will take it more seriously in the future. Being the world's largest Hygiene services company, I would imagine that some of this will flow through in the future. In the immediate short term, as the brief statement that Jeremy said, made, we don't think this will have a material impact in the first quarter, given we're two months of the quarter gone. What happens next, frankly, is anyone's guess, but I think we're as well prepared as most companies in the situation.
Jane Sparrow from Barclays. Three questions, please. Just on Hygiene, where you were comfortably above your 2%-3% target range, did you contemplate increasing that medium-term organic growth target, or are there some one-off features in that 2019 number that make that unsustainable going forward? Secondly, on PCI, could you expand a bit on your comments around the business plan being slower than expected, what you need to do there to get back on track? Thirdly, just on below the line, restructuring and integration costs, which for the last couple of years have been in the sort of GBP 20 million, and prior to that, they were around GBP 7 million a year. Obviously, it depends on the M&A pipeline, but if you spend around GBP 250 million this year, what should we expect that below the line restructuring costs to be?
Thank you, Jane. Good to see you've all got the memo about three questions each. Two for me, one for Jeremy. It's okay. First one. It's a good question. I've been a bit reticent to up the target for Hygiene. Mainly because the growth drivers for the Hygiene industry are not as strong as they are for Pest Control. In Pest Control, I can see with growth in the market of 5% and all of the long-term drivers looking to push that on in the future, and how strong we are in our business, I can be much more confident about our abilities there. In Hygiene, the industry doesn't grow at 4.5%. I've been a bit more cautious about that. In the first half of last year, there were some reasonably chunky one-off contract wins.
In the second half, it was some of that flowing from the first half, but it was good solid execution of the plan across the piece. It really is a very operational business, and I've said many times. If we turn up on time, in full, for every customer, every day, the business grows. Saying that is quite easy. Doing it is actually quite a challenge with thousands of people. I think the second half, we did that very well. Operationally, we performed very well. Put it this way, I've got no conviction to tell you that it's going to be 2%, it's going to slide back. One of your lovely phrases. I've got no reason to say it's going to do that, but I'm not yet brave enough to say, going forward, you can put us down for 3%-4%.
What I will say is it performed strongly in the second half. I don't see any reason why it will perform less strongly going forward operationally. We're just going to have to see. If there comes a moment where I think it's appropriate to guide that organics look a bit different to how I've previously guided, I will. We haven't done that at the moment. No major reason. I just want to see the track record develop over a longer period of time. PCI, I tell you, I could not be more confident that over time, what we're creating in India will be a fantastic business. I'm just utterly convinced of that. I've not seen anything about the country, the opportunity, our business, that throws me in any other direction other than this is going to be a big, strong business.
I got to be honest, I think it's taken longer to do what we needed to do. The first excuse is IT. I mean, we took over a business, or we joint ventured with a business that has largely relied on paper processes, paper everywhere in the business. By the end of April 2020, in a couple of months, we will have our core IT across the entire of our business. That removes excuse number 1, because without the IT, it's actually quite difficult to monitor what's going on in the business because you haven't got that, so you're having to add it all up manually. I think the other big reason, excuse if you like, is the cultural journey. This was really a reverse in many respects. We had about 1,000 people. PCI had about 6,000 people.
We're trying to invite, actually, probably the combined total is now about 6,500. We're trying to invite the combined organization to take the best of the PCI culture, but also to embrace the change of the Rentokil culture. Cultural change is difficult. To do it on that sort of scale, where the predominant culture is the existing one, and we're very respectful when we do this. We don't go in and rip it all up, but we do need the business to look and feel and behave like every other business. I'll give you just one example. I know that's a long answer, but safety. Safety is absolutely critical to me and everyone in the organization. We will not run a business at lower standards in a part of the world just because it's accepted or the legal standard is low. We just won't do that.
To try to get everyone in our business to perform to the standards that we demand of them has been a challenge. We've shut down operations in our India business. We've shut down fumigation operations in our India business several times because we are not satisfied to the standard to which it's being done. Everyone gets retrained and we go again. Long answer, I know. Incredibly important business. It will be very successful. I'm confident of that. The cultural journey is moving nicely. The IT journey is moving nicely. We're probably 18 months, a year, 18 months behind the plan where we were, but I'm confident we'll get there.
I'll give you a three-part answer, Jane, to your question number 3. Restructuring costs, which are not on M&A related, they're much more around internal. They've been running at GBP 7 million a year for the last two, three years, and that's what I'd guide for 2020. In terms of one-off costs, they are more one-off by their nature, so a bit harder to predict. With the GBP 250 million of M&A, there will be some integration costs relating to M&A, but a reasonably big chunk of the 2018 and 2017 costs related to the whole Cannon and Mitie situation, let me put it like that, and those costs clearly won't recur now that that issue's been resolved. I'd expect overall chunk to come down.
It's hard to know without knowing what the M&A is, but I'd expect it to come down somewhat now that we're through the Cannon and Mitie situation.
Hi, James Gilbert from Jefferies. Just a few from me, keeping the trend. On the free cash flow and specifically working capital, the guidance is GBP 10 million-GBP 20 million. I don't think you've been explicit in at least your statements, typically I think we've been guided sort of more of a GBP 20 million-GBP 30 million outflow from working capital side. Is it correct to read this as some sort of step change in your cash collection and a positive change in how you see working capital on a full year basis? With regard to M&A, your guidance is about GBP 250 million net debt to EBITDA at 1.8x. Would you be comfortable reiterating sort of medium term guidance of you being comfortable with 2x-2.2x net debt to EBITDA? I think you can spend about GBP 250 million without increasing your leverage pretty much at all next year.
Lastly, in terms of margins in the products division, North America obviously still dilutive with some better growth to the overall division part of your bridge that you get to that 18% is dependent on some increase of economies to scale in that division. I'm wondering if you saw any improvement year-over-year in 2019.
Do you want me to pick up all three of those?
No, I could do some.
Okay. Do you want to do number 2, then?
I'll do number three.
Okay.
Then you can correct.
Yeah. Working capital, I can't remember what we've guided previously. I would have thought we were nearer GBP 10 million -GBP 20 million than GBP 20 million -GBP 3 0 million . We actually have been inside that number in the last two years. Our actual outflows have been more in the naught to GBP 10 million rather than the GBP 10 million -GBP 20 million . Some of that is around phasing, as I've intimated. I don't think there's any step change, just a bit of color. What we do see, and Andy is continuing to look to the finance community to offset this trend, but we are seeing a trend increasingly around the world of increased key accounts.
We've just talked about it for North America in terms of the increased mix of key accounts, and as SMEs consolidate into key accounts, credit terms tend to move out and there is pressure on our working capital, and we look to mitigate that through the systems replatforming, through electronic billing, and other ways of managing more professionally our debtor collection to offset that impact. GBP 10 million-GBP 20 million is a very small number on GBP 2.5 billion of revenue. It sounds quite an exact number. There's quite a lot of swings and puts and takes in the overall piece. I think GBP 10 million-GBP 20 million is a good number to go on. I don't think there's any real change year-on-year.
There's just a bit of phasing between the two years in terms of what's driving that slightly bigger guidance for 2020 versus what we actually achieved in 2019. In terms of the balance sheet, we tend to run the balance sheet and our M&A totally separately. The M&A guidance is really based as a product of what we see in the pipeline, what the current trends in the marketplace, where we see the opportunities around the group. The balance sheet clearly is very strong at the moment, but it has varied quite a lot in the last 5-6 years. We've had even lower net debt to EBITDA ratios. We've had net debt to EBITDA ratios at 2.5x+. I think we've got a reasonably good transparency as to where the balance sheet is. I'm very comfortable with it being at 1.8 x.
It gives them some capacity, that doesn't mean that given we've got that capacity, we're looking to push that number at GBP 250 million beyond that. It really is totally separate feel in terms of can we drive value out of the M&A program, and then where do we source the financing for that, whether it's balance sheet or other sources. Two unrelated topics, but you're right. At the moment, the balance sheet is very strong, and we do have some capacity.
North American products margins, you're absolutely right to point out that within our North American business, we have a products distribution business, chemical products distribution. Those are products that we are selling to the pest industry, we're selling to other distributors. We've been in that business for quite a long time, every products distribution business in the world operates at a substantially lower margin point than a well-run services business. It's a good business. It's growing well. Margins year-over-year in the first half of last year were up a little bit, the second half were down a little bit. They hover around about the 5% net margin business.
Our ambition is to improve those margins over the next two or three years, and the biggest building block to do that is the new ERP system, and the ERP system went live last-
Yes.
...last week. We haven't seen any distress flares going up from North America. There will be teething problems, but if that ERP system lands well, that will be the first time ever we've been able to have visibility of our coast-to-coast distribution business. From there, we can start to drive much better margins. It is part of the story. It is part of the waterfall bridge. It's a 5% margin business. Could we get it to 7%, 8%, 9% over the next few years? We should be able to. 7%, 8%, 9%. 9% would certainly take it to world-class in products distribution. There's a ways to go. Got a great team running it well. If we want to cheat our way to higher margins in North America, we wouldn't be in the products distribution business.
I think it's a great business to be in, and it gives us some really good visibility on what's going on in the North American Pest Control market. Just occasionally, some of our customers decide to sell their businesses to us, and we get to know them that way. It's part of the story, and I think we can now start to make some progress off the back of the ERP system. Did I get that right?
That's very good. Yeah.
It's all right.
Hello, good morning. Lucas Ferhani from Deutsche Bank. I have just two. The first one is on capital expenditure. It was slightly higher this year than I think what we expected. The guidance seems also to be slightly higher. Is it simply IFRS 16? Do you ramp up investment in anything in particular, digital or the Workwear business may be driving some of that? The other one is on the emerging markets opportunity, more longer term. When you look at your business now, can you give us a bit more of an idea on market share? If you are the number one player or leader with 5% or 20% market share? The competition you see there, especially, let's say Asia and Latin America. Is it the big U.S. players? There's just nobody else covering those markets? Thank you.
Yes. The increase in 2019 versus 2018 is absolutely down to IFRS 16. The guidance for 2020 is simply based on revenue increase and CapEx increase. I don't think there's any particular underlying increase. We continue to invest in, as Andy's shown, in digital. We continue to invest in innovation, there's no step change in that relative to 2019. It's pretty much a similar CapEx as a percentage of sales as it was in the prior year, adjusted for IFRS 16.
On the emerging markets, it is a bit of a blended answer. Inevitably, they are not all the same. We have been in a few of the countries for a long time, so we have celebrated our 50th anniversary in Malaysia and in Singapore. There we will be in the 20s%, 25%. Indonesia, we have got a strong position. I highlighted that one, and that is something that in the last two years we have done two acquisitions on the back of already having a decent position. Strong market share there. Typically, for most of the others, it is more like, I would not say necessarily 5%, but it is very fragmented. Lots and lots of players, very small. The competition, I would say, is more typically local regional players. Our American brethren are not big in Latin America. They are not really big in Asia.
Anticimex, the Swedish-owned company, is more present in Asia. They've gone into Asia. One of the challenges for anyone who's not Rentokil is, unless you started a few years ago, there's not so much that you can buy to give you any scale because they're all lots and lots and lots of small ones. For us it's great. We're trying to build the small ones bolting onto what we've already got. In some cases, it also means going into a few territories which are not for the faint-hearted. Some people travel better than others. We have an experienced team that sets the businesses up in the right way, process-wise, business practices, and ethics-wise. I think that model is working well for us. We've just gone into Sri Lanka for the first time.
We've got a nice list of some really interesting territories that I think wouldn't be the natural list for some of our other competitors. For us, we know that we can run the businesses properly and in the right way. That was the reason why I was sort of highlighting what I think is a really exciting play by us. That if we can secure good businesses and make them great businesses over the next five, 10, 15, 20 years, I think that will be a pretty exciting play for us. I'm not saying the competitors are letting us have it, they're just not turning up. I think they've got other focus areas that are more important to them. At the moment, I think it's a playbook that's going reasonably well. Any more? Maybe just on the M&A spend 2020.
Sorry. Erik Karlsson, CapeView. Maybe just on M&A spend 2020. Is the guidance the same, GBP 250 million-GBP 300 million?
It's circa GBP 250 million. I know you big high rollers, that means ±GBP 50 million, but it's circa GBP 250 million is what we've said. As Jeremy said, we do our best to give you the best guidance we can, and that is based on what we can see in our pipeline. What do we think we're going to execute? It isn't worked back how much cash will the finance director let me have to spend? It's much more what can we see at this moment in time. Last year, we guided at this time, from memory, around GBP 250 million. At the half year we said GBP 250 million-GBP 300 million, and then we did GBP 320 million or whatever it was.
It's very difficult because I don't know what's around the corner. Right now, we would say pipeline looks good. We think it's going to be about GBP 250. It could be less. It certainly could be more. It's not based on how much we've got to spend. It's based on what we can see at the moment.
Very good. Thank you.
That's all right. Any more?