Jon Ward, Chairman and CEO
Raymond James
27th Annual Institutional Investor Conference
March 7, 2006
Forward-Looking Statement
This presentation contains statements concerning future results and other matters that may
be deemed to be “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. The Company intends that these forward-looking statements,
which look forward in time and include everything other than historical information, be subject
to the safe harbors created by such legislation. Forward-looking statements involve risks and
uncertainties that may affect the Company’s results of operations, financial condition or cash
flows. Factors that may cause actual results to differ materially from those expressed or
implied in a forward-looking statement include the following (among others): weather
conditions that affect the demand for the Company’s services; changes in the source and
intensity of competition in the markets served by the Company; labor shortages or increases
in wage rates; unexpected increases in operating costs, such as higher insurance premiums,
self insurance and healthcare claim costs; higher fuel prices; changes in the types or mix of
the Company’s service offerings or products; increased governmental regulation including
telemarketing and environmental restrictions; general economic conditions in the United
States, especially as they may affect home sales or consumer spending levels; and other
factors described from time to time in documents filed by the Company with the Securities and
Exchange Commission. A copy of this presentation is available on our website at
www.svm.com in the Investor Relations Section.
Values Based Company
We are accountable to:
Honor God
in all we do
Excel with
customers
Grow
profitably
Help people
develop
Do the right thing.
Treat each person with
dignity and respect.
Respect each person’s
spirituality.
Protect and maintain our
world.
Serve others as we
would be served.
Make it easy for the
customer.
Stand behind our work.
Help people to do
their best every day.
Build proud,
dynamic teams.
Help people reach
their goals.
Act as good stewards of
our investors’ capital.
Constantly improve and
innovate.
Meet our commitments.
Highly Fragmented and
Under-penetrated Markets
15%
23%
Residential Lawn, Shrub and
Tree Care
#1
11%
5-12%
37%
3%
22%
Market
Share
6%
1-7%
4%
NA
12%
Household
Penetration
Commercial Landscape
Maintenance
#1
#1
#1
#1
#1
Market
Position
Maid Services
Disaster Restoration,
Cleaning, Janitorial, Furniture
Repair
Home Warranty and
Inspection
Pest and Termite Control
Services
Brand
Financial Goal:
To Be a Top-Quartile Performer who consistently grows revenue twice as fast as the
industry and delivers double-digit earnings growth.
Become
Systematically
Stronger
Be the
Preferred Service
Employer
Expand Market
Share and the
Category
Satisfy Customers
at Every Touch
Point
Our Strategic Framework for
Accelerating Growth
Vision: To Win Big by Transforming the Experience
of the Home and Business Owner
The Foundation of the Strategic Plan for Every Brand
Satisfy
Customers at
Every Touch
Point
Our Strategic Framework for
Accelerating Growth
Strategies
Keep more customers by
delivering our service as
promised every time
Make it easier for the customer
to do business with us
Expand
Market Share
and the
Category
Our Strategic Framework for
Accelerating Growth
Strategies
Reach more new customers
with a differentiated brand
experience
Strengthen and expand
commercial services
Market leader in commercial disaster restoration
Revenue base of $130m; rapid growth and solid margins
Excellent strategic fit with ServiceMaster Clean
ServiceMaster provides #1 national presence in mitigation
InStar provides commercial relationships and construction expertise
Combination provides key competitive advantages
Full continuum of service
National footprint
Immediate response, limiting business disruption
Be the
Preferred
Service
Employer
Our Strategic Framework for
Accelerating Growth
Strategies
Recruit, train and retain
the best people
Create a safety-first culture
Become
Systematically
Stronger
Our Strategic Framework for
Accelerating Growth
Strategies
Connect the service specialist
to the customer through
technology
Simplify services centers and
functional processes
Performing as We Transform
+9%
+9%
+6%
2005
+2%
+1%
+4%
2003
Growth Rates
+10%
+12%
+6%
2004
Pre-Tax Income*
EPS*
Revenue
* Excludes unusual items in 2002 - 2004
Outlook: Growth Acceleration
Our Company will be comprised of leading service brands that
collectively have strong cash flow, higher revenue growth potential,
greater operating margins and stronger returns on invested capital.
… will enable us to deliver mid to high single-digit revenue growth and
low double-digit earnings per share growth in 2006 and to achieve
EPS growth in the mid-teen level during 2007 and beyond.
Driving Accelerated Growth
16%
13%
9%
EPS Growth
0.80
0.69
0.61
Total
(0.01)
(0.01)
Option Accounting
0.04
0.02
--
Accelerate
0.02
0.01
--
InStar
(0.05)
(0.04)
(0.04)
ARS/AMS
0.80
0.71
0.65
ServiceMaster
2007P
2006P
2005A
Compelling Business Model
High recurring revenue
Low volatility and risk
Returns exceeding cost of capital
Strong, reliable dividend
Solid balance sheet
Exceptional cash flows
Compelling Business Model
Note: Income from continuing operations and cash from operations excludes unusual items
$ millions
Cash from Operations
Multiple 1.7X 2.1X 1.8X
Average
1.9X
Exceptional Cash Flows are
Based on Reliable Fundamentals
Low fixed asset requirements
Significant prepayments
Quick accounts receivable turnover
Minimal inventories
Recurring deferred tax benefit
Deferred Tax Benefit of $.19
Impacts Valuation
* Current Multiple based on 02-28-06 price divided by fiscal ’05 EPS. Cash EPS = EPS plus the change in deferred taxes on the Cash Flow Statement.
Peers: Cintas, Aramark, Rollins, Cendant, Ecolab, Scotts
P /E Multiple* Comparison to Peer Group
.61
.80
22X
21X
22X
15X
Book EPS
Cash EPS
Dividend Growth
Evaluating increasing rate of
growth based on improving
cash flows
Share Repurchase
$80m - $100m targeted in 2006
Strong History and
Commitment of Cash Returns
1970 - 2005
3.5% Current Yield
35 years of
consecutive
growth
Dividends
Large, expanding markets
Strong competitive position
Compelling business model
Multiple growth accelerators
Excellent dividend and total return
A Compelling
Investment Opportunity
