Sunbelt Rentals Holdings, Inc. · NYSE:SUNB
Sunbelt Rentals — Ashtead Group — 9M FY2025 Earnings Presentation
39 slides from Sunbelt Rentals's earnings presentation, Mar 4, 2025
Slide 1: Nine Month Results
NINE MONTH RESULTS 4 March 2025
Slide 2: Legal Notice
LEGAL NOTICE This presentation has been prepared to inform investors and Some of the factors which may adversely impact some of these prospective investors in the secondary markets about the Group forward-looking statements are discussed in the Principal Risks and does not constitute an offer of sec
Slide 3: Highlights
HIGHLIGHTS ▪ Group rental revenue up 5% and US rental revenue up 4% ▪ Total revenues flat as a result of lower used equipment sales which resulted in gains of $58m (2024: $165m) ▪ 3% increase in EBITDA¹ to $3,874m (2024: $3,752m) with strong fall-through ▪ Profit before tax¹ of $1,698m (2024: $1,785
Slide 4: Financial Review
FINANCIAL REVIEW ALEX PEASE 4 Nine month results | 31 January 2025
Slide 5: Group
GROUP $m 2025 2024 Change1 Revenue 8,262 8,231 -% ‐ of which rental 7,646 7,317 5% Operating costs (4,388) (4,479) -2% Adjusted EBITDA 3,874 3,752 3% Depreciation (1,747) (1,567) 12% Adjusted operating profit 2,127 2,185 -3% Net interest (429) (400) 7% Adjusted profit before tax 1,698 1,785 -5% Adju
Slide 6: US
US $m 2025 2024 Change Revenue 7,047 7,072 -% ‐ of which rental 6,578 6,337 4% Operating costs (3,580) (3,680) -3% EBITDA 3,467 3,392 2% Depreciation (1,471) (1,311) 12% Operating profit 1,996 2,081 -4% Margins ‐ EBITDA 49.2% 48.0% ‐ Operating profit 28.3% 29.4% Return on investment 20.2% 24.5% The
Slide 7: Canada
CANADA C$m 2025 2024 Change Revenue 733 676 9% ‐ of which rental 662 573 16% Operating costs (406) (404) 1% EBITDA 327 272 20% Depreciation (188) (166) 13% Operating profit 139 106 32% Margins ‐ EBITDA 44.6% 40.2% ‐ Operating profit 19.0% 15.7% Return on investment 11.6% 12.0% The results in the tab
Slide 8: UK
UK £m 2025 2024 Change Revenue 536 524 2% ‐ of which rental 461 441 4% Operating costs (383) (378) 1% EBITDA 153 146 5% Depreciation (109) (105) 5% Operating profit 44 41 5% Margins ‐ EBITDA 28.6% 27.9% ‐ Operating profit 8.1% 7.9% Return on investment 7.2% 6.5% The results in the table above are th
Slide 9: Cash Flow
CASH FLOW Nine months LTM January $m 2025 2024 2025 Adjusted EBITDA 3,874 3,752 5,015 Cash conversion ratio1 96% 89% 99% Cash inflow from operations2 3,725 3,321 4,944 Replacement and non-rental capital expenditure (1,624) (2,212) (2,218) Rental equipment and other disposal proceeds received 349 570
Slide 10: Net Debt
NET DEBT Leverage (excluding impact of IFRS 16) $m 2025 2024 2.5 2.3 Opening net debt 10,655 8,960 2.0 Change from cash flows (228) 1,788 2.0 2.0 1.9 1.9 1.8 1.9 Translation impact (48) 21 1.7 1.6 1.6 1.7 1.6 Debt acquired 19 155 1.5 1.5 New lease liabilities 202 238 Deferred debt raising cost amort
Slide 11: Robust and Flexible Debt Structure
ROBUST AND FLEXIBLE DEBT STRUCTURE Debt maturity ▪ In November, increased $4.75bn ABL facility and extended $6,000m Undrawn maturity to November 2029 $5,000m Drawn Notes $4,000m $3,000m ▪ Borrowing facilities committed for average of six years at $2,000m a weighted average cost of 5% $1,000m $m FY25
Slide 12: 2024/25 Outlook
2024/25 OUTLOOK Previous guidance Current guidance Rental revenue1 - Group 3 to 5% 3 to 5% - US 2 to 4% 2 to 4% - Canada 15 to 19% 9 to 13% - UK 3 to 6% 3 to 6% Capital expenditure (gross)2 $2.5 to 2.7bn $2.5 to 2.7bn - of which, rental fleet is: $1.9 to 2.1bn $1.9 to 2.1bn Free cash flow2 c. $1.4bn
Slide 13: Operational Review
OPERATIONAL REVIEW BRENDAN HORGAN 13 Nine month results | 31 January 2025
Slide 14: US Trading
US TRADING Rental revenue1 FY24 FY25 ▪ General tool growth reflects slower local Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 YTD non-residential construction market offset by ongoing General tool +14% +13% +8% +7% +11% +3% +1% -2% +1% mega projects Specialty +17% +14% +8% +15% +14% +17% +14% +10% +14% Total +15% +13% +
Slide 15: US Construction Outlook
US CONSTRUCTION OUTLOOK 2022 2023 2024 2025 2026 2027 2028 2029 Construction put in place ($bn) Dodge construction starts 400 Indexed: 2000=100 Non-residential 608 744 772 817 844 877 925 978 350 Non-building 314 363 415 477 508 522 526 519 300 Construction (excl. resi) 922 1,107 1,187 1,294 1,352 1
Slide 16: Canada Trading
CANADA TRADING Fleet on rent (excluding Film & TV) ▪ Rental revenue up 16% driven by market share gains ▪ Canada has a strong foundation, with 5 of the top 10 markets clustered (13 in total), to deliver strong margins and returns during Sunbelt 4.0, as the business continues to mature ▪ Added five l
Slide 17: UK Trading
UK TRADING ▪ Rental revenue up 4%, driven by market share gains Sunbelt 4.0 ▪ Overall market conditions remain subdued ▪ Diversify the customer base ▪ Mega project activity expected to improve in CY2026 with strong pipeline ▪ Broaden the total addressable market ▪ Expertise and range of product to d
Slide 18: Summary
SUMMARY ▪ Well positioned in supportive end markets ▪ Robust mega project landscape mitigating weaker local commercial construction markets ▪ Sunbelt 4.0 progressing well ▪ Results demonstrate the benefits of structural progression and our business model ▪ Strong free cash flow deployed in accordanc
Slide 19: Appendices
APPENDICIES 19 Nine month results | 31 January 2025
Slide 20: Proposed US Primary Listing
PROPOSED US PRIMARY LISTING We believe the US market is the natural long-term listing venue for the Group. In arriving at this conclusion, the Board has considered several factors and potential benefits, including: ▪ alignment of the primary listing location with the majority of the Group’s business
Slide 21: Divisional Performance: Third Quarter Results
DIVISIONAL PERFORMANCE THIRD QUARTER RESULTS Revenue Adjusted EBITDA Profit 2025 2024 Change 2025 2024 Change 2025 2024 Change Canada (C$m) 225 229 -2% 92 81 13% 28 25 11% UK (£m) 165 165 -% 44 44 -% 7 9 -18% US 2,202 2,280 -3% 1,065 1,060 -% 564 600 -6% Canada ($m) 158 170 -7% 64 60 6% 19 19 3% UK
Slide 22: Divisional Performance: Last Twelve Months
DIVISIONAL PERFORMANCE LAST TWELVE MONTHS Revenue Adjusted EBITDA Profit 2025 2024 Change 2025 2024 Change 2025 2024 Change Canada (C$m) 955 894 7% 418 354 18% 171 142 21% UK (£m) 719 687 5% 206 189 9% 60 51 18% US 9,281 9,155 1% 4,481 4,360 3% 2,548 2,655 -4% Canada ($m) 693 663 5% 303 263 15% 124
Slide 23: Capital Allocation
CAPITAL ALLOCATION CONSISTENTLY APPLIED POLICY CONTINUES CLEAR PRIORITIES APPLICATION Organic fleet growth ▪ Same-store ▪ $2.1bn invested in the business ▪ Greenfields ▪ 43 greenfields opened in North America ▪ $56m spent on three bolt-ons, which added 11 locations in North America Bolt-on acquisiti
Slide 24: Sunbelt 4.0
SUNBELT 4.0 5 ACTIONABLE COMPONENTS UNDERPINNED BY STRONG FOUNDATIONAL ELEMENTS CUSTOMER Progress Actionable component 1 ▪ $2.1bn of capital invested in the business of which $1.8bn invested in rental assets GROWTH ▪ Opened 43 greenfields in North America 2 ▪ $56m spend on three bolt-on acqu
Slide 25: Mega Projects Endure
MEGA PROJECTS ENDURE A KEY FEATURE OF THE CONSTRUCTION LANDSCAPE ONGOING AND PLANNED PROJECTS FROM MAY 2022 THROUGH APRIL 20271 PLANNED MEGA PROJECT VALUE $974bn $509bn 689 projects 414 projects FY22-24 FY25-27 • Mega projects typically take ~3 years to complete • FY25-27 project count and values co
Slide 26: Major Non-Construction End Markets
MAJOR NON-CONSTRUCTION END MARKETS INCREASINGLY LARGE AND RESILIENT WITH VAST OPPORTUNITY FOR GROWTH MAINTENANCE, ENTERTAINMENT EMERGENCY STATE & LOCAL AGRICULTURE REPAIR & SPECIAL EVENTS RESPONSE GOVERNMENT Annual operating budget for crop and & OPERATIONS & RESTORATION livestock production Highly
Slide 27: A Broad and Diverse Customer Base
A BROAD AND DIVERSE CUSTOMER BASE POSITIONED TO INCREASE SHARE FROM THE LARGEST TO THE SMALLEST CUSTOMERS US CREDIT MEDIAN CUSTOMER $63 AVG. LINES Dollars spent with REVENUE 79% DECILE CUSTOMER OF BUSINESS CUSTOMER PERSONA Speciality, Revenue for comes every COUNT ($’ 000) USED $100 spent with from
Slide 28: Customer Annuity Value
CUSTOMER ANNUITY VALUE DEMONSTRATING GROWTH AND CONTINUED OPPORTUNITY RENTAL REVENUE GROWTH FROM FY21 US CREDIT CUSTOMERS1 ($M) NEW US CREDIT CUSTOMERS DURING 3.0 $4,578 $6,232 108,422 = $1.4bn New credit customers Rental revenue from added during 3.01 new customer accounts2 FY21 FY24 Rental revenue
Slide 29: Group Fleet Plan
GROUP FLEET PLAN 2023 2024 2025 Actual Actual Current guidance1 US ($m) - rental fleet 2,878 3,170 1,600 – 1,800 - non-rental fleet 436 577 450 3,314 3,747 2,050 – 2,250 Canada (C$m) - rental fleet 254 318 230 – 250 - non-rental fleet 56 87 100 310 405 330 – 350 UK (£m) - rental fleet 161 174 100 –
Slide 30: US Fleet Profile
US FLEET PROFILE $16bn $14bn ▪ Smooth fleet profile $12bn ▪ Benefits of prolonged cycle and our growth strategy $10bn ▪ Strong position providing optionality through the cycle $8bn ▪ Flexibility to turn replacement into growth and vice versa $6bn $4bn ▪ Strengthens partnership with suppliers through
Slide 31: Cash Flow Funds All Fleet Investment
CASH FLOW FUNDS ALL FLEET INVESTMENT Jan-25 ($m) 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 LTM Adjusted EBITDA 5,015 4,893 4,412 3,609 3,037 3,008 2,748 2,319 1,947 1,769 1,452 1,098 817 607 444 409 597 730 593 399 316 Adjusted EBITDA margin
Slide 32: $3,174m of Availability at 31 January 2025
$3,174M OF AVAILABILITY AT 31 JANUARY 2025 Book value Borrowing base Senior debt $15,189m (April 24: $14,974m) $1,601m $11,422m (April 24: $11,466m) Calculation: $1,246m Inventory – 50% of book value Receivables – 85% of net eligible receivables $12,436m Fleet and vehicles – lower of 85% of net appr
Slide 33: Debt and Covenants
DEBT AND COVENANTS Facility Interest rate Maturity $4.75bn first lien revolver SOFR / CORRA / SONIA + 125-137.5 bps November 2029 $550m senior notes 1.500% August 2026 $600m senior notes 4.375% August 2027 $600m senior notes 4.000% May 2028 Debt $600m senior notes 4.250% November 2029 $750m senior n
Slide 34: Realisation of Structural Progression
REALISATION OF STRUCTURAL PROGRESSION STRUCTURAL CHANGE OUTPUTS Shift from ownership to rental • Rental has become core rather than top up • Big getting bigger in a growing market Rental increasingly essential for • Larger and more diversified addressable market customer success • Pricing discipline
Slide 35: Benefit of Structural Progression
BENEFIT OF STRUCTURAL PROGRESSION RENTAL RATE DISCIPLINE AND PROGRESSION Major events 2008–09 2014–16 2020–21 2022–23 GREAT FINANCIAL OIL & GAS CRISIS COVID-19 PANDEMIC LAST 6 QUARTERS CRISIS Structural progression • Top 3 rental companies • Industry consolidation and big getting bigger • Top 3 rent
Slide 36: Specialty Market Sizing, Rental Penetration & Share
SPECIALTY MARKET SIZING, RENTAL PENETRATION & SHARE REVENUE IS EXPECTED TO GROW BY ~$2 BILLION IN 4.0 WITH AMPLE OPPORTUNITY BEYOND CURRENT, PROJECTED AND ILLUSTRATIVE RENTAL REVENUE BY BUSINESS LINE ($M) LTM 31 January 2024 Line of business 4.0 growth Incremental illustrative Sunbelt potential tota
Slide 37: Our Pathway to Net Zero
OUR PATHWAY TO NET ZERO SCOPE 1 AND 2 2050 2024 Increasing use of HVO across 2030> West Coast Only EV purchased MEDIUM & HEAVY DUTY LIGHT DUTY NEARLY ALL ON-ROAD 2022 2026–2027 2035 FLEET IS EMISSION FREE EV trials – ~10% 2nd Near 100% EV 1st gen gen in fleet in fleet LIGHT DUTY LIGHT DUTY LIGHT DUT
Slide 38: The Rental Industry Landscape
THE RENTAL INDUSTRY LANDSCAPE THE BIG GETTING BIGGER IN A GROWING MARKET NA RENTAL MARKET SIZE1 ($BN) MARKET SHARE BREAKDOWN1,2 94 2023 Future 93.5 11% 77 20%+ 77.0 15% 56.5 42% Two or 57 All three have others 50%+ of the 4% market 4% One 8% or two 8% others 21% 20% 2018 2023 2027 Sunbelt URI Herc T
Slide 39: Key Metrics Through the Cycle
IMPORTANT TO NOT LOSE SIGHT OF THROUGH THE CYCLE KEY METRICS Group RoI Group EBITDA margin Group adjusted EPS 19 19 20 19 50 46 47 47 47 47 46 450 19 18 45 45 46 45 18 17 18 18 45 42 388 387 16 16 400 15 15 38 38 16 15 40 14 35 35 350 33 34 307 14 13 35 12 30 30 300 12 30 250 227222 10 10 25 219 200