Slide 1: Powering the platform
Powering the platform 8 September 2020
Slide 2: Legal Notice
LEGAL NOTICE This presentation has been prepared to inform Some of the factors which may adversely impact investors and prospective investors in the secondary some of these forward looking statements are markets about the Group and does not constitute an discussed in the Principal Risks and Uncertai
Slide 3: Highlights
HIGHLIGHTS Continue to deliver for all our stakeholders: our people; our customers; our investors; and our communities Strong performance in challenging markets demonstrating strength of model, diverse end markets and structural tailwinds Record first quarter free cash flow of £447m (2019: £16
Slide 4: 2020/21 Outlook
2020/21 OUTLOOK Guidance1 Rental revenue1 • US -5% to -9% • Canada Broadly flat • UK Broadly flat • Group -5% to -9% Capital expenditure (gross)2 £485m – £540m Free cash flow2 Greater than £1 billion 1 Represents year over year rental revenue growth, assuming no further significant COVID-19 shutdown
Slide 5: Michael Pratt
Michael Pratt 5 First quarter results ¦ 31 July 2020 Alternative Care Facility – Houston, TX
Slide 6: Group
GROUP First quarter (£m) 2020 2019 Change1 Revenue 1,203 1,278 -7% - of which rental 1,081 1,165 -8% Operating costs (655) (651) -% EBITDA 548 627 -14% Depreciation (283) (254) 10% Operating profit 265 373 -30% Net interest (57) (54) 4% Profit before amortisation and tax 208 319 -35% Earnings per sh
Slide 7: US First quarter
US First quarter ($m) 2020 2019 Change Revenue 1,284 1,381 -7% - of which rental 1,174 1,279 -8% Operating costs (663) (665) -% EBITDA 621 716 -13% Depreciation (297) (269) 10% Operating profit 324 447 -27% Margins - EBITDA 48% 52% - Operating profit 25% 32% Return on investment 19% 24% The results
Slide 8: Canada
CANADA First quarter 2020 2019 Change1 (C$m) As reported WFW Exc. WFW Revenue 90 6 84 95 -12% - of which rental 74 6 68 76 -11% Operating costs (60) (10) (50) (57) -13% EBITDA 30 (4) 34 38 -10% Depreciation (30) (7) (23) (22) 6% Operating profit - (11) 11 16 -32% Margins - EBITDA 33% nm 40% 40% - Op
Slide 9: UK First quarter
UK First quarter (£m) 2020 2019 Change Revenue 123 131 -6% - of which rental 99 109 -10% Operating costs (87) (87) -1% EBITDA 36 44 -17% Depreciation (28) (29) -1% Operating profit 8 15 -46% Margins - EBITDA 29% 33% - Operating profit 7% 12% Return on investment 5% 6% The results in the table above
Slide 10: Cash Flow
CASH FLOW First quarter LTM July (£m) 2020 2019 2020 EBITDA before exceptional items 548 627 2,297 Cash conversion ratio1 99% 86% 106% Cash inflow from operations2 543 542 2,432 Replacement and non-rental capital expenditure (125) (185) (799) Rental equipment and other disposal proceeds received 84
Slide 11: Net Debt and Leverage
NET DEBT AND LEVERAGE (£m) 2020 2019 Net debt at 30 April 5,363 3,745 Leverage (excluding impact of IFRS 16) Impact of transition to IFRS 16 - 883 2.5 2.4 Opening debt including IFRS 16 5,363 4,628 Translation impact (156) 291 2.1 Opening debt at closing exchange rates 5,207 4,919 2.0 1.9 1.9 Change
Slide 12: Brendan Horgan
Brendan Horgan 12 First quarter results ¦ 31 July 2020 Sports Arena – Miami, FL
Slide 13: US: Current Trading
US: CURRENT TRADING Rental revenue Sunbelt US: fleet on rent Feb March April Q1 August General tool +6% +1% -15% -9% -7% Specialty +10% +10% +9% +6% +18% Oil and gas -14% -19% -39% -62% -56% Total +6% +2% -12% -8% -3% Rental only revenue presented on a billing day basis Feb Mar Apr May Jun Jul Aug 2
Slide 14: US Construction Market Outlook
US CONSTRUCTION MARKET OUTLOOK Dodge construction starts Indexed: 2000=100 Construction forecasts showing signs of solidifying after 210 initial COVID-19 driven adjustments 190 170 150 2020 put in place forecast remains -7%; returning to 130 previous cycle peak in 2022 110 90 70 Recent starts
Slide 15: Canada
CANADA Our strategy to bring the Power of Sunbelt to Canada Fleet on rent through the specialty business created opportunity during COVID-19: – Climate Control – Power / HVAC – Flooring Solutions We anticipate outperformance to forecast rental industry decline demonstrating market share gains th
Slide 16: UK: Current Trading
UK: CURRENT TRADING Strong revenue recovery with August volumes back to Fleet on rent prior year levels Significant outperformance to market driven by: – COVID-19 response efforts – Share gains in construction rental space – Project Unify deliverables – Despite live events business near zero Feb
Slide 17: Supporting the COVID-19 Response in the UK
SUPPORTING THE COVID-19 RESPONSE IN THE UK UK COVID-19 testing centres Supporting DoH testing centres across the UK – 76 regional drive through sites – 48 local walk in sites – >100,000 assets deployed The essence of Project Unify epitomised through delivery across many of our business lines C
Slide 18: Capital Allocation
CAPITAL ALLOCATION 1. Organic growth Fleet investment supporting COVID-19 response Greenfield openings resumed in the quarter 25-30 greenfields planned for 2020/21 2. Bolt-on acquisitions Bolt-on opportunities continue to be assessed based on strategic business rationale, timing, capital all
Slide 19: Summary
SUMMARY A strong performance in a challenging environment Strength of the model and breadth of markets demonstrated with growth in specialty and resiliency in general tool businesses Sunbelt UK’s Project Unify progressing as planned, setting course for an improved business Well-placed to opt
Slide 20: Appendices
Appendices 20 First quarter results ¦ 31 July 2020 Sunbelt UK teammates
Slide 21: Divisional Performance – Q1
DIVISIONAL PERFORMANCE – Q1 Revenue EBITDA Profit 2020 2019 Change1 2020 2019 Change1 2020 2019 Change1 Sunbelt US ($m) 1,284 1,381 -7% 621 716 -13% 324 447 -27% Sunbelt Canada (C$m) 90 95 -5% 30 38 -21% - 16 -100% Sunbelt US (£m) 1,027 1,091 -6% 497 566 -12% 259 353 -27% Sunbelt UK 123 131 -6% 36 4
Slide 22: Divisional Performance – LTM
DIVISIONAL PERFORMANCE – LTM Revenue EBITDA Profit 2020 2019 Change1 2020 2019 Change1 2020 2019 Change1 Sunbelt US ($m) 5,393 5,202 4% 2,626 2,579 2% 1,437 1,606 -10% Sunbelt Canada (C$m) 416 362 15% 149 133 12% 38 57 -32% Sunbelt US (£m) 4,273 4,037 6% 2,080 2,003 4% 1,138 1,247 -9% Sunbelt UK 461
Slide 23: Group Fleet Plan for 2020/21
GROUP FLEET PLAN FOR 2020/21 2021 2021 2019 2020 Plan1 Q1 Actual US ($m) - rental fleet 1,607 1,452 425 – 475 74 - non-rental fleet 168 234 95 19 1,775 1,686 520 – 570 93 Canada (C$m) - rental fleet 156 116 30 – 35 6 - non-rental fleet 20 12 15 2 176 128 45 – 50 8 UK (£m) - rental fleet 95 57 40 – 5
Slide 24: US Fleet Profile
US FLEET PROFILE Sunbelt US rental fleet Smooth fleet profile Benefits of prolonged cycle and our growth strategy Strong position providing optionality through the cycle Flexibility to turn replacement into growth Strengthens partnership with suppliers through predictability 24 First quart
Slide 25: Robust and Flexible Debt Structure
ROBUST AND FLEXIBLE DEBT STRUCTURE Debt maturity £4,000m £3,000m Facilities committed for average of 6 years at a weighted average cost of less than 4% £2,000m Fixed / floating external borrowings ratio: 61% / 39% £1,000m No financial monitoring covenants whilst availability exceeds £m $460m (
Slide 26: Cash Flow Funds All Fleet Investment
CASH FLOW FUNDS ALL FLEET INVESTMENT LTM (£m) Jul-20 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 EBITDA before exceptional items 2,297 2,376 2,107 1,733 1,504 1,178 908 685 519 381 284 255 356 364 310 225 170 EBITDA margin 46% 47% 47% 47% 47% 46% 45% 42% 38% 34% 3
Slide 27: $2,831m of Availability at 31 July 2020
$2,831M OF AVAILABILITY AT 31 JULY 2020 Book value Borrowing base Senior debt £6,876m (April 20: £7,360m) £641m £5,164m (April 20: £5,532m) Calculation: £547m Inventory – 50% of book value Receivables – 85% of net eligible receivables £5,861m Fleet and vehicles – 85% of net appraised market Availabi
Slide 28: Debt and Covenants
DEBT AND COVENANTS Facility Interest rate Maturity $4.6bn first lien revolver* LIBOR + 125-175 bps December 2023 $600m senior notes 4.125% August 2025 Debt $600m senior notes 5.250% August 2026 $600m senior notes 4.375% August 2027 $600m senior notes 4.000% May 2028 $600m senior notes 4.250% Novembe
Slide 29: Increased Footprint and Market Share
INCREASED FOOTPRINT AND MARKET SHARE 29 First quarter results ¦ 31 July 2020
Slide 30: Continuing Opportunity to Build Out Further Clusters
CONTINUING OPPORTUNITY TO BUILD OUT FURTHER CLUSTERS USA Canada Rental markets Top 25 26-50 51-100 100-210 Top 10 11-25 26-76 Rental market % 59% 18% 15% 8% 65% 21% 14% Cluster definition >15 >10 >4 >1 >10 >4 >1 Clusters 11 markets 7 markets 10 markets 14 markets 2 markets 0 2 markets Only 28 of t
Slide 31: US Market Share
US MARKET SHARE 2010 2020 5% 4% 14% 3% 3% 6% 10% 47% 3% 13% 7% 66% 19% Expect the large to get larger with the top 100 sharing 60-70% of the market 31 First quarter results ¦ 31 July 2020
Slide 32: Important to Not Lose Sight of Through the Cycle Key Metrics
IMPORTANT TO NOT LOSE SIGHT OF THROUGH THE CYCLE KEY METRICS Group RoI Group EBITDA margin Group underlying EPS % % p 19 19 20 19 50 46 47 47 47 47 200 18 18 45 18 17 45 42 180 174 175 16 15 15 38 38 16 40 160 14 35 35 33 34 14 13 35 140 128 12 30 30 12 30 120 104 10 10 25 100 85 8 7 20 80 63 6 5 15