2014-15 Annual Review

Driving the turnaround of the leading provider of lawn care services

CD&R Fund VII and Fund VII (Co-Investment) acquired ServiceMaster in 2007. TruGreen initially performed well as a division of ServiceMaster, however in 2012 and 2013, the business endured several sales & marketing and operational challenges. In January 2014, ServiceMaster Global Holdings, Inc., the ultimate parent company of ServiceMaster completed the separation of TruGreen from ServiceMaster through a tax-free spin-off of TruGreen via a pro rata dividend to its stockholders._For TruGreen, now a standalone business with $940 million of annual revenue, the transaction has allowed the company the

time and focus to rebuild customer count and profitability, which in 2014 produced strong results.

Company Profile

TruGreen is the nation’s largest lawn care company, serving approximately 2 million residential and commercial customers across the United States with lawn, tree and shrub care. As an industry leader, TruGreen continues to pioneer the development of new technology for lawn care and devotes substantial resources to evaluate new products and equipment. The company is committed to responsible lawn care, including offering and promoting the use of natural services and sustainable practices. Today, there are approximately 235 TruGreen branches in the United States and Canada, including about 35 franchise locations.

Value Building Strategies

Since the spin-off, TruGreen has been executing a turnaround plan to grow the business and improve profitability. Key initiatives include:

• Upgraded senior leadership. David Alexander, who joined ServiceMaster in late 2012, is TruGreen’s CEO. He has built a strong and highly motivated leadership team to drive TruGreen’s return to sustainable growth and profitability.
• Productivity focus. In 2014, the company implemented a series of operational initiatives to significantly improve routing and scheduling and improve labor productivity. Improved routing and scheduling capabilities through software improvements are driving route density and reducing service calls. Process improvement initiatives are also driving significant cost savings by reducing “non-productive” time (wash and fill time, vehicle fueling, timekeeping automation, etc.).
• Customer retention improvement. Continued focus on Easy Pay / Prepay penetration (70% of new

• sales in 2014) will drive customer retention. Better new sale expectation scripting and introduction of a customer touch point after initial service visits are more effectively managing customer expectations, and “live gant chart” allows service managers to see the status of lawn specialists in real time and ensure that service commitments are met.
• Innovative product offerings and pricing. The company has introduced multiple product offerings to segment and penetrate the market more effectively. The company also continues to explore adjacent market opportunities.
• Reinvestment in sales labor to drive customer count growth. TruGreen has launched more targeted digital and direct mail campaigns with improved sales scripting. The company has focused on improving both outbound telesales - with better planning, execution and

• accountability, including increased new sales audits - and neighborhood door-to-door sales - with better training and higher weekly quotas. The rollout of a new sales mobility tool allows management to track the productivity of salespeople, provide real time signature capture and allow for credit card payments.

Going Forward

The company will continue to focus relentlessly on executing key initiatives, including labor productivity, improving customer experience, product offering enhancements, and sales force effectiveness. These initiatives are expected to provide the foundation for a successful path to exit. Following a successful 2014, TruGreen is positioned to grow the business and improve profitability over the next several years.