Sunbelt Rentals Holdings, Inc. · NYSE:SUNB
Sunbelt Rentals — Investor Day (April 2021)
101 slides from Sunbelt Rentals's investor day presentation, Apr 20, 2021
Slide 1: Capital Markets Day
CAPITAL MARKETS DAY April 20, 2021
Slide 2: Presenters
PRESENTERS BRENDAN MICHAEL BRAD FRANCIS HORGAN PRATT LULL HASSIS ANDY JOHN JP KATY WRIGHT WASHBURN SAINI LOVERING ANTHONY DOUGLAS CHERYL KURT MILLER MCLUCKIE BLACK KENKEL 2 Capital Markets Day 2021
Slide 3: History of Strategic Plans & Project 2021 Overview
HISTORY OF STRATEGIC PLANS & PROJECT 2021 OVERVIEW 3 Capital Markets Day 2021
Slide 4: A Decade of Strategic Planning & Execution
A DECADE OF STRATEGIC PLANNING & EXECUTION Post Financial Crisis Project 2021 Next Strategic Plan • Existing location investment • 5-year US growth plan • US, Canada & UK alignment unlocking latent capacity • Continued expansion with focus • Focus on growth and expansion • Clear early mover benefit
Slide 5: A Lookback at Project 2021
A LOOKBACK AT PROJECT 2021 DELIVERED A BROAD FOUNDATION TO BUILD UPON 2021 OBJECTIVES NORTH AMERICA SUCCESSES 1 Investment in existing locations 29% of rental revenue growth came from locations in existence in FY16 71% of rental revenue growth driven by greenfield and bolt-ons 2 Growth through well-
Slide 6: Growth Delivered
GROWTH DELIVERED THROUGH A MIX OF EXISTING LOCATIONS, GREENFIELDS & BOLT-ONS NORTH AMERICA TOTAL RENTAL REVENUE FROM FY16 TO FY211 ($B) NORTH AMERICA LOCATIONS GT Specialty Total 37% 34% 5.1 29% April 20162 372 136 508 2.9 FY17-FY21 Greenfields 104 139 243 FY17-FY21 Bolt-ons 118 67 185 FY16 Existing
Slide 7: Geographic Expansion into New DMAs
GEOGRAPHIC EXPANSION INTO NEW DMAS ENTERING MARKETS WITH GREAT GROWTH POTENTIAL MAP OF DMAS WITH NEW SUNBELT RENTALS PRESENCE FROM FY16-21 41 New DMAs entered with locations 87 Locations opened in the 41 previously unoccupied DMAs $3.3B Addressable rental market in newly entered DMAs1 1 IHS Markit (
Slide 8: We Invested in Our Specialty Business
WE INVESTED IN OUR SPECIALTY BUSINESS RESULTING IN A STEP CHANGE TO THE PLATFORM TOTAL NORTH AMERICA SPECIALTY RENTAL REVENUE, $M PROJECT 2021 SPECIALTY OVERVIEW 9 distinct Specialty business lines 1,423 +19% CAGR 342 Specialty locations in North America 606 Rental revenue of $1.4B Distinct and reso
Slide 9: Proven Method of Greenfield Expansion
PROVEN METHOD OF GREENFIELD EXPANSION • Understood, tried and tested process North America • Notable increase in pace of greenfield Average greenfield openings per year FY21 rental revenue openings during Project 2021 openings • Only company deploying routine 128 26 $638M and scale to organic strate
Slide 10: Advanced Our Market Clusters
ADVANCED OUR MARKET CLUSTERS INCREASED FROM 6 TO 31 OF THE TOP 100 US MARKETS NORTH AMERICA MARKET BY DMA US CANADA Rental markets Top 25 26-50 51-100 100-210 Top 5 6-10 11-55 Rental market % 57% 19% 16% 8% 46% 25% 29% Cluster definition >15 >10 >4 >1 >10 >7 >1 Clusters 13 markets 8 markets 10 marke
Slide 11: Benefits of Clustered Markets Are Demonstrable
BENEFITS OF CLUSTERED MARKETS ARE DEMONSTRABLE THE STRATEGY REVENUE COMPOSITION CLUSTER VS. NON-CLUSTER Comparison to similar sized Metric / KPI non-clustered markets1 30% Active customer count 2.2x customers 70% Revenue 15% more revenue per customer Broaden customer base Clustered DMAs Time utiliza
Slide 12: So What's Next?
SO WHAT’S NEXT? 12 Capital Markets Day 2021
Slide 13: Growth Resilience
GROWTH RESILIENCE • Ample paths to market • Broad and diverse • Highly fragmented end markets industry • Strength of balance sheet • Structural tail winds • Organizational scale and platform • Significant white space to develop • Free cash flow optionality 13 Capital Markets Day 2021
Slide 14: Sunbelt 3.0 Strategy Powered by Actionable Components
SUNBELT 3.0 STRATEGY POWERED BY 5 ACTIONABLE COMPONENTS 1 Actionable components: GROW GENERAL TOOL Advance our clustered market approach through a proven playbook to meet demand and enable increased rental penetration in North America while optimizing our operational & ADVANCE OUR CLUSTERS network i
Slide 15: Sunbelt 3.0 – More Than Growth and Expansion
SUNBELT 3.0 – MORE THAN GROWTH AND EXPANSION PURPOSE FOR ALL OUR STAKEHOLDERS OUR PEOPLE OUR CUSTOMERS OUR INVESTORS OUR COMMUNITIES 15 Capital Markets Day 2021
Slide 16: Ambition with Purpose
AMBITION WITH PURPOSE. 16 Capital Markets Day 2021
Slide 17: Improving Our Location Network
IMPROVING OUR LOCATION NETWORK FROM A POSITION OF STRENGTH April 2021 Total: 936 17 Capital Markets Day 2021
Slide 18: Location Growth During 3.0
LOCATION GROWTH DURING 3.0 CLEARLY DEFINED April 2021 936 Sunbelt 3.0 – May 2021 – April 2024 +298 April 2024 1,234 April 2021 Sunbelt 3.0 – May 2021 – April 2024 18 Capital Markets Day 2021
Slide 19: Grow General Tool & Advance Our Clusters
GROW GENERAL TOOL & ADVANCE OUR CLUSTERS BRAD LULL 19 Capital Markets Day 2021
Slide 20: Sunbelt 3.0 Strategy: Grow General Tool
SUNBELT 3.0 STRATEGY POWERED BY 5 ACTIONABLE COMPONENTS 1 Actionable Advance our clustered market approach through a proven playbook to meet components: GROW GENERAL TOOL demand and enable increased rental penetration in North America while & ADVANCE OUR CLUSTERS optimizing our operational network i
Slide 21: General Tool Has Delivered Strong Growth & Returns
GENERAL TOOL HAS DELIVERED STRONG GROWTH & RETURNS WHILE OUTPERFORMING THE MARKET Over the last 5 years GT has driven …and has outperformed1 growth … 63% 5x Of North America rental revenue US rental market growth growth 10% 4x CAGR from FY16 – FY21 US construction industry growth 20% Return on inves
Slide 22: GT Growth and Performance Improvements Will Continue
GT GROWTH AND PERFORMANCE IMPROVEMENTS WILL CONTINUE THROUGH EXISTING LOCATION AND GREENFIELD GROWTH Existing location focus is key… …to achieve operational improvements Latent capacity 9% rental revenue CAGR forecast during 3.0 • Recently opened locations below levels of maturity of which: Fleet •
Slide 23: North America Greenfields
NORTH AMERICA GREENFIELDS ESSENTIAL COMPONENT OF 3.0 STRATEGY Expansion strategy Designed with experience and analytics • Sunbelt market share • Construction outlook • Proximity analysis • Competitive positioning to existing locations • Square footage under roof • Population statistics • Sequence of
Slide 24: Our Analytical Process
OUR ANALYTICAL PROCESS A DEEPER LOOK Current market share Millions of dollars of fleet Millions of dollars of fleet accessible per capita per sq ft under roof Construction starts Customer-base statistics Revenue generated via complementary GT and Specialty businesses 24 Capital Markets Day 2021
Slide 25: Targeted Geographical Growth
TARGETED GEOGRAPHICAL GROWTH GREENFIELD VS. BOLT-ON CONSIDERATIONS LARGE Greenfields Bolt-ons Greenfields Bolt-ons MARKET SIZE SMALL Greenfields Greenfields Bolt-ons HIGH LOW SUNBELT MARKET SHARE 25 Capital Markets Day 2021
Slide 26: Efficient Greenfield Process
EFFICIENT GREENFIELD PROCESS OUR PROVEN PLAYBOOK Centralized resources Business Development to support greenfield opening plan; enables field operations to Fleet Human Resources focus on existing locations Learning & Development Real Estate Technology We will set a pace of 2 locations per week durin
Slide 27: General Tool - US Current Footprint
GENERAL TOOL - US CURRENT FOOTPRINT WEST EAST 240 294 APRIL 2021 APRIL 2021 LOCATION COUNT LOCATION COUNT 27 Capital Markets Day 2021
Slide 28: Opportunity Remains in the East
OPPORTUNITY REMAINS IN THE EAST WE WILL CONTINUE TO ADVANCE OUR CLUSTERS 57% Of existing location US GT rental revenue growth is expected to be in the East 29 to 41 Markets advanced to cluster status during 3.0 41 GREENFIELD LOCATIONS 13% Current market share 294 335 16 Markets with current share gr
Slide 29: Baltimore: 26th Largest US Rental Market
BALTIMORE I 26TH LARGEST US RENTAL MARKET ADVANCING CLUSTERED MARKETS MAKING INFORMED DECISIONS Fleet/Capita Unique active accounts $57 33,449 FY16 FY21 3.0 Locations 9 14 16 Market share 17% 23% 24% Cluster status Partial Clustered Clustered Rental revenue $60M $103M ~$120M 29 Capital Markets Day 2
Slide 30: Boston: 9th Largest US Rental Market
BOSTON | 9TH LARGEST US RENTAL MARKET ADVANCING CLUSTERED MARKETS MAKING INFORMED DECISIONS Fleet/Capita Unique active accounts $30 35,657 FY16 FY21 3.0 Locations 9 16 24 Market share 6% 11% 13% Cluster status Partial Clustered Clustered Rental revenue $56M $107M ~$154M 30 Capital Markets Day 2021
Slide 31: Continue Building Our Presence in the West
CONTINUE BUILDING OUR PRESENCE IN THE WEST STRENGTHEN NATIONAL COVERAGE 59% Of US GT greenfield rental revenue growth is expected to come from the West 15 to 26 Markets advanced to cluster status by the end of 3.0 59 9% GREENFIELD LOCATIONS Current market share 240 299 50% Of addressable rental mark
Slide 32: Los Angeles: 2nd Largest US Rental Market
LOS ANGELES I 2ND LARGEST US RENTAL MARKET ADVANCING CLUSTERED MARKETS MAKING INFORMED DECISIONS Fleet/Capita Unique active accounts $21 19,934 FY16 FY21 3.0 Locations 13 27 33 Market share 5% 8% 9% Cluster status Partial Clustered Clustered Rental revenue $83M $198M ~$260M 32 Capital Markets Day 20
Slide 33: General Tool Growth in Canada During 3.0
GENERAL TOOL GROWTH IN CANADA DURING 3.0 BRINGING SHARE TO CURRENT US LEVEL 26 GT greenfield openings 59% Canadian rental revenue growth from greenfield openings ~C$500M 43% GT LOCATION GROWTH GT revenue by the end of 3.0; 22% CAGR 60 86 10% Projected market share at the end of 3.0 when combined wit
Slide 34: Toronto: Largest Rental Market in Canada
TORONTO I LARGEST RENTAL MARKET IN CANADA ADVANCING CLUSTERED MARKETS MAKING INFORMED DECISIONS Fleet/Capita Unique active accounts C$16 10,177 FY16 FY21 3.0 Locations - 10 13 Market share - 6% 7% Cluster status - Partial Clustered Rental revenue - C$59M ~C$90M 34 Capital Markets Day 2021
Slide 35: Continuing to Advance Our Clusters Through 3.0
CONTINUING TO ADVANCE OUR CLUSTERS THROUGH 3.0 US CANADA Rental markets Top 25 26-50 51-100 100-210 Top 5 6-10 11-55 Rental market % 57% 19% 16% 8% 46% 25% 29% Cluster definition >15 >10 >4 >1 >10 >7 >1 Clusters 19 markets 11 markets 19 markets 18 markets 2 markets 2 markets 8 markets AMPLE EXPANSIO
Slide 36: Growing General Tool Throughout 3.0
GROWING GENERAL TOOL THROUGHOUT 3.0 Leverage 126 GT Broaden Larger Drive rental cluster economics greenfield locations customer base addressable market penetration 36 Capital Markets Day 2021
Slide 37: Amplifying Specialty
AMPLIFYING SPECIALTY FRANCIS HASSIS 37 Capital Markets Day 2021
Slide 38: Sunbelt 3.0 Strategy: Amplify Specialty
SUNBELT 3.0 STRATEGY POWERED BY 5 ACTIONABLE COMPONENTS 1 Actionable components: GROW GENERAL TOOL Drive accelerated growth by leveraging recently realized Specialty scale, unique cross-selling capabilities, and demand in the early phases of rental penetration & ADVANCE OUR CLUSTERS North America UK
Slide 39: Our Specialty Charter
OUR SPECIALTY CHARTER AND CURRENT SPECIALTY BUSINESS LINES A product and service which intuitively lends itself to a degree of Climate Industrial rental penetration when a reliable Control & Air Quality Tool alternative to ownership is available through rental. Sunbelt Rentals focuses on products wi
Slide 40: The Platform Is More Than What Meets the Eye
THE PLATFORM IS MORE THAN WHAT MEETS THE EYE Our people Technology Leveraging our GT business Physical assets THE POWER OF Customer relationships SUNBELT Brick & mortar Entrepreneurial spirit Delivery and service network 40 Capital Markets Day 2021
Slide 41: Dedicated Resources to Advance Our Specialty Business Lines
DEDICATED RESOURCES TO ADVANCE OUR SPECIALTY BUSINESS LINES Vice President Regional Managers Technicians Subject matter experts in each business line allow our team to: THE • Delight our customers Sales POWER OF • Drive rental penetration SUNBELT • Create solutions • Deliver product & Branch Manager
Slide 42: Where Does Specialty Go From Here?
WHERE DOES SPECIALTY GO FROM HERE? 42 Capital Markets Day 2021
Slide 43: Entering 3.0 with Momentum and Foundation
ENTERING 3.0 WITH MOMENTUM AND FOUNDATION Track record of strong growth… …to amplify from here NORTH AMERICA SPECIALTY RENTAL REVENUE, $M BUSINESS LINES Specialty FY21 Locations Power & HVAC 539 79 +19% CAGR 31% Climate Control & Air Quality 233 88 $1,423 37% Scaffold Services 227 28 32% Pump Soluti
Slide 44: Specialty Market Sizing, Rental Penetration & Share
SPECIALTY MARKET SIZING, RENTAL PENETRATION & SHARE REVENUE WILL GROW BY $1B IN 3.0 WITH AMPLE OPPORTUNITY BEYOND CURRENT, PROJECTED AND ILLUSTRATIVE RENTAL BY BUSINESS LINE, $M FY21 total rental 10% RENTAL MARKET Incremental projected FY24 total rental via existing locations and greenfields PENETRA
Slide 45: Growth Through Existing Locations and Greenfield Openings
GROWTH THROUGH EXISTING LOCATIONS AND GREENFIELD OPENINGS Existing location rental revenue growth by division Greenfields will be a significant contributor ~$700M 172 Greenfield locations are In increased annual rental revenue through 3.0 from the planned, with 102 coming from existing 342 locations
Slide 46: Business Development and White Space R&D
BUSINESS DEVELOPMENT AND WHITE SPACE R&D PIPELINE OF FUTURE OPPORTUNITY • Broad based team with culture of PRODUCT INNOVATION PIPELINE identifying rental product ideas in keeping with Specialty charter Folds into one of our established – Routine concept sessions business lines – Process of sizing Pi
Slide 47: Amplifying Specialty Throughout 3.0
AMPLIFYING SPECIALTY THROUGHOUT 3.0 Increase rental Scale less- ESG – a structural Larger addressable Leveraging the penetration via developed tailwind market Power of Sunbelt reliable alternative Specialty to ownership businesses 47 Capital Markets Day 2021
Slide 48: Sunbelt Rentals UK
SUNBELT RENTALS UK ANDY WRIGHT 48 Capital Markets Day 2021
Slide 49: Year One: Course Correction for the Future
YEAR ONE COURSE CORRECTION FOR THE FUTURE SHARED VISION, Project Unify Business turnaround Re-invented business Building a business MISSION AND • Intensive review • Course correct • Re-branded to be proud of CORE VALUES process declining business • Re-focused • COVID–19 response • Collaborative • Re
Slide 50: Making It Happen – Sunbelt 3.0
MAKING IT HAPPEN – SUNBELT 3.0 IMPROVE AND GROW GENERAL TOOL AMPLIFY SPECIALTY • Drive improved performance • Build on current momentum • Optimize network • Leverage customer base through improved cross selling • Efficient use of assets • Optimize existing facilities • Embed quality across the organ
Slide 51: Sunbelt Rentals UK 3.0 – We Plan to Deliver
SUNBELT RENTALS UK 3.0 – WE PLAN TO DELIVER Organic Enhanced and Strong free Sustainable returns growth focused sustained margins cash flow 12–14% RoI Three-year transformational plan 51 Capital Markets Day 2021
Slide 52: Our End Markets & Our Customers
OUR END MARKETS & OUR CUSTOMERS JOHN WASHBURN 52 Capital Markets Day 2021
Slide 53: Anytown North America
ANYTOWN NORTH AMERICA • Broad and diverse end markets • Wide range of unique product categories (‘SKUs’) • Individual products have many applications 53 Capital Markets Day 2021
Slide 54: Diverse End Markets
DIVERSE END MARKETS UTILIZING PRODUCT DIVERSITY IN APPLICATIONS Markets • Hospitals • Landscaping • Hotels & resorts • Live sporting events • Hospitals • Community events • Zoos and wildlife venues • Hotels & resorts • Data centers • Farms and livestock • Community • Concerts & festivals • Forestry
Slide 55: Cross Selling
CROSS SELLING CUSTOMERS DESIRE A WIDE RANGE OF SOLUTIONS 72% of revenue comes from customers that rent from General Tool and one or more Specialty business lines $47 spent with Specialty businesses for every $100 39% spent by customers with General Tool of revenue comes from customers who rent from
Slide 56: Our Standard for Customer Experience
THE DIFFERENCE BETWEEN ORDINARY CUSTOMER SERVICE AND OUR STANDARD FOR CUSTOMER EXPERIENCE IS MORE COMPLEX THAN ONE MAY THINK… 56 Capital Markets Day 2021
Slide 57: The Perfect Rental
ENABLING THE CUSTOMER EXPERIENCE DELIGHTING OUR CUSTOMERS People Physical assets The • Safety always culture • Customer centric • Clustered markets • Brick & mortar facilities Perfect • Experienced leadership • Skilled trade professionals: ― Commercially licensed drivers • Diverse rental product ran
Slide 58: Enhance Technology
ENHANCE TECHNOLOGY JP SAINI KATY LOVERING 58 Capital Markets Day 2021
Slide 59: Sunbelt 3.0 Strategy: Advance Technology
SUNBELT 3.0 STRATEGY POWERED BY 5 ACTIONABLE COMPONENTS 1 Actionable components: GROW GENERAL TOOL Make the move from industry-leading technology platform, to a leader among the broader industrial and service sector; further improving our customer value & ADVANCE OUR CLUSTERS proposition and capture
Slide 60: Focus on Positive Impacts to Our Customers
WHEN WE FOCUS ON POSITIVE IMPACTS TO OUR CUSTOMERS… WE CAN CONFIDENTLY EXPECT POSITIVE BUSINESS OUTCOMES TO FOLLOW. 60 Capital Markets Day 2021
Slide 61: Robust Tech Stack Supporting Proprietary Systems
ROBUST TECH STACK SUPPORTING PROPRIETARY SYSTEMS POWERING THE PERFECT RENTAL Proprietary Sunbelt Rentals solutions HIGH VDOS Chronos rAe Command Center MSP XLR8 Que Leveraging our intellectual property Platforms Data & analytics Hybrid cloud infrastructure Network & security LOW 61 Capital Markets D
Slide 62: Our Wealth of Data Positions Us to Innovate
OUR WEALTH OF DATA POSITIONS US TO INNOVATE THE CUSTOMER EXPERIENCE 20 YEARS of customer data 30M contracts 50M invoices 7M customers 1.2M assets rented 936M days on rent $40B+ revenue US only 62 Capital Markets Day 2021
Slide 63: Our Technology Focus Centers on Continuous Improvement
OUR TECHNOLOGY FOCUS CENTERS ON CONTINUOUS IMPROVEMENT DELIVERY OVER THE COURSE OF 3.0 CUSTOMER EXPERIENCE • Enabling The Perfect RentalTM • Support an omni-channel experience • Predictive analytics will aid customer experience ORDER CAPTURE AND • Creating a larger funnel FULFILLMENT • Process optim
Slide 64: Harnessing Technology Through Operational Excellence
HARNESSING TECHNOLOGY THROUGH OPERATIONAL EXCELLENCE KATY LOVERING 64 Capital Markets Day 2021
Slide 65: Saying Yes with Increased Confidence
SAYING “YES” WITH INCREASED CONFIDENCE RELATIONSHIPS MATTER AND SO DOES TIME IN THIS INDUSTRY OUR CHALLENGE Time Hesitant Optimizing inefficiency promises order capture >65% of Sunbelt orders placed today OUR GOAL Enable our sales force to say “YES” with confidence are for delivery within 24 hours 6
Slide 66: Our Solution: Chronos
OUR SOLUTION: CHRONOS POWERING THE PERFECT RENTALTM A proprietary sourcing engine Sunbelt Rentals • Cloud-based, custom software product • Developed 200+ logic rules based on different variables and situations • Created automated workflows connected to and powering our point Customer of sales and lo
Slide 67: A Look into Chronos Logic
A LOOK INTO CHRONOS LOGIC ORDER INQUIRY OPERATIONAL SYSTEMS WHAT? WHEN? CUSTOMER NEEDS WHERE? FULFILLMENT OPTIMIZATION CHRONOS makes decision AVAILABLE based on data TO PROMISE and routes order ALTERNATIVE TIME to optimal INVENTORY NEEDED location SUGGESTIONS ORDER CAPTURED 67 Capital Markets Day 20
Slide 68: Chronos in Action
CHRONOS IN ACTION Pilot Market Testing Chronos Today 2 30 $444M Operational in North America locations mature cluster markets locations in OEC Results • 2.1% increase in utilization YoY in the pilot Available to promise inventory • Continual improvements in markets 75% – book it! 85% ATP due to enha
Slide 69: Chronos: Continuous Improvement
CHRONOS: CONTINUOUS IMPROVEMENT IMPROVING EFFICIENCY AND EASE PROCUREMENT OPPORTUNITIES • Automated equipment and parts ordering based on real (SUPPLY CHAIN) time need • Flexibility in final mile of new rental asset delivery SERVICE OPERATIONS • Remote fleet assistance powered by Chronos and Interne
Slide 70: Technology Enhancement Targets for 3.0 Period
CUSTOMER FOCUS, TECHNOLOGY DEVELOPED, OP-EX IMPLEMENTED TECHNOLOGY ENHANCEMENT TARGETS FOR 3.0 PERIOD Increase order Improve time Enhance capture utilization dynamic pricing to drive improved rate 70 Capital Markets Day 2021
Slide 71: Environmental, Social & Governance
ENVIRONMENTAL, SOCIAL & GOVERNANCE ANTHONY MILLER DOUGLAS MCLUCKIE CHERYL BLACK 71 Capital Markets Day 2021
Slide 72: Sunbelt 3.0 Strategy: Lead with ESG
SUNBELT 3.0 STRATEGY POWERED BY 5 ACTIONABLE COMPONENTS 1 Actionable components: GROW GENERAL TOOL Embracing responsible sustainability and success for our people, our customers, our communities and our investors; while unlocking structural benefits ESG will & ADVANCE OUR CLUSTERS bring to rental ac
Slide 73: Environmental Benefits of Rental vs. Ownership
ENVIRONMENTAL BENEFITS OF RENTAL VS. OWNERSHIP Supply Chain Operations Customer Use End of Rental Life • World class OEMs • Consistent utilization • Improved efficiency • Life extension • Responsible sourcing • Maintained to OEM • Right equipment for through refurbishing • Latest engine standards by
Slide 74: Benefits of Increasing Rental Penetration
BENEFITS OF INCREASING RENTAL PENETRATION A CASE STUDY IN REDUCED CARBON This single rental asset replaces the need for 10 JCB 2.5 Ton Mini Excavator owned assets saving the equivalent of • Built to Sunbelt Rentals specifications • Born: May 1, 2016 • Birthplace: Pooler, GA • Delivered to: Sunbelt R
Slide 75: Environmental – Carbon Intensity
ENVIRONMENTAL – CARBON INTENSITY LONG-TERM COMMITMENT BY 2030, REDUCE OUR CARBON INTENSITY 35% 75 Capital Markets Day 2021
Slide 76: Our Environmental Roadmap
OUR ENVIRONMENTAL ROADMAP DOUGLAS MCLUCKIE 76 Capital Markets Day 2021
Slide 77: Environmental Roadmap
ENVIRONMENTAL ROADMAP INITIATIVES ON THE PATH TO 35X30 NEAR TERM: 3.0 PERIOD MEDIUM LONG TERM TARGET: 15% BY 2024 TERM GOAL: 35% BY 2030 Retrofit of heating and hot Migration to alternative 1 water infrastructure energy for HGVs/tractors 2 Step change in 3 service/sales vehicle All new vehicles use
Slide 78: Areas of Environmental Focus
AREAS OF ENVIRONMENTAL FOCUS TRANSPORTATION • Reduce tailpipe emissions • Route optimization • Vehicle telematics FACILITIES WE OPERATE • Sustainable energy • Waste • Water usage SUPPLY CHAIN • Packaging • Supply chain efficiencies • Partners in innovation RENTAL FLEET • Highest emission standards •
Slide 79: Our People & Our Communities
OUR PEOPLE & OUR COMMUNITIES CHERYL BLACK 79 Capital Markets Day 2021
Slide 80: Social: Our People, Our Communities
SOCIAL OUR PEOPLE OUR COMMUNITIES 80 Capital Markets Day 2021
Slide 81: Supporting Our Team Members During the Pandemic
SUPPORTING OUR TEAM MEMBERS DURING THE PANDEMIC At the outset of OUR PEOPLE OUR COMMUNITIES COVID-19, we quickly outlined and communicated to • No pandemic related layoffs or • As an essential service provider, our team members redundancies we supported our customers in an that our core focus uninte
Slide 82: Engagement Survey
ENGAGEMENT SURVEY 2020 RESULTS UK RESULTS 80% engagement score 72% participation rate NORTH AMERICA RESULTS 89% engagement score 88% participation rate 82 Capital Markets Day 2021
Slide 83: Our Ongoing Commitment
OUR ONGOING COMMITMENT OUR PEOPLE OUR COMMUNITIES Commitment to Safety • Continue to make the health and safety of our team members our top priority Employee engagement • Enhance communication and further build trust Diversity & Inclusion • Respecting collective experiences & unique perspectives Mil
Slide 84: ESG Targets for 3.0
ESG TARGETS FOR 3.0 Continuously Carbon intensity Group sustainability >85% engagement rate improving safety reduction of 15% by report to be published across the Group performance in 2024 and 35% by by April 2022 including keeping with our 2030 a roadmap to culture science-based targets 84 Capital
Slide 85: History of Bolt-On Performance
HISTORY OF BOLT-ON PERFORMANCE KURT KENKEL 85 Capital Markets Day 2021
Slide 86: Our Bolt-On Strategy
OUR BOLT-ON STRATEGY A RICH HISTORY OF ACQUISITIONS April 2016 Businesses selected to align with our growth roadmap Leaders in their products and geography We value prospective businesses on fit, people, reputation, customer opportunities, and fleet April 2021 Revenue synergy approach We believe our
Slide 87: Strong Track Record of Bolt-On Performance
STRONG TRACK RECORD OF BOLT-ON PERFORMANCE INTEGRAL TO 3.0 NORTH AMERICA ACQUISITIONS SINCE 2011 Purchase price # of acquisitions Combined EBITDA 5.5x purchase price1 multiple Average EBITDA multiple paid <$100m 96 1,551 5.2 2.1x Average revenue >$100m 7 1,287 6.1 1.5x 103 2,838 5.5 Average equipmen
Slide 88: How This Materializes Over Time
HOW THIS MATERIALIZES OVER TIME LET US TAKE A DEEPER DIVE NORTH AMERICA ACQUISITIONS SINCE 2011 • Increased pace of acquisitions with Fiscal # of acquisitions Purchase Purchase price to ROI2 growing capabilities year price1 ($m) FY21 revenue2 2012 1 34 2013 5 58 25% excl. GW • Disciplined return 201
Slide 89: Ample Runway Remains for Bolt-On Activity
AMPLE RUNWAY REMAINS FOR BOLT-ON ACTIVITY ACQUISITION LANDSCAPE TARGET LANDSCAPE, SEGMENTED BY REVENUE AND BUSINESS LINE • Cluster analysis reflects robust GT opportunity <$50M $50–150M $150M+ • Specialty expansion focus (existing & white space) GENERAL TOOL 1,500+ ~25 ~7 • Estimated relevant 1,500
Slide 90: How It All Comes Together
HOW IT ALL COMES TOGETHER BRENDAN HORGAN MICHAEL PRATT 90 Capital Markets Day 2021
Slide 91: Sunbelt 3.0 Strategy: Dynamic Capital Allocation
SUNBELT 3.0 STRATEGY POWERED BY 5 ACTIONABLE COMPONENTS 1 Actionable Consistent application of our capital allocation policy to optimize components: GROW GENERAL TOOL capital deployment for the benefit of all stakeholders & ADVANCE OUR CLUSTERS Allocation priorities: 2 SPECIALTY AMPLIFY • Organic gr
Slide 92: Economic Backdrop to 3.0
ECONOMIC BACKDROP TO 3.0 • US GDP growth ahead of long-term rate at 3%–5% • Interest rates increase moderately over the period • Moderate inflation of 2%–3% • US job market adds back all the jobs lost during the pandemic by the end of 2023 92 Capital Markets Day 2021
Slide 93: US Construction Market Outlook
US CONSTRUCTION MARKET OUTLOOK DODGE CONSTRUCTION STARTS (INDEXED: 2000=100) • Construction starts return to 210 190 pre-COVID-19 levels in 2022 170 150 130 • Non-residential put-in-place 110 construction declines 10% in 2021 90 70 before returning to pre-COVID-19 50 2005 2007 2009 2011 2013 2015 20
Slide 94: Direction of Travel – Organic Growth Assumptions
DIRECTION OF TRAVEL – ORGANIC GROWTH ASSUMPTIONS ASSUMPTIONS • US rental revenue growth of twice the rate of the rental market Based on three year organic rental revenue CAGR • Canadian rental revenue growth US 9 – 11% reflects geographic expansion and Canada 20 – 25% Specialty growth UK 0 – 3% • UK
Slide 95: Direction of Travel – Organic Growth
DIRECTION OF TRAVEL – ORGANIC GROWTH LTM JAN 2021 (£M) FY24 (£M)2 Total rental revenue 4,413 5,600 – 5,800 Total revenue 4,885 6,200 – 6,400 EBITDA 2,214 2,900 – 3,100 Operating profit 1,089 1,600 – 1,800 EPS CAGR3 ~15% Cumulative amount available for further organic growth, bolt-ons and buybacks1 ~
Slide 96: Capital Allocation
CAPITAL ALLOCATION CONSISTENTLY APPLIED POLICY CONTINUES CLEAR PRIORITIES APPLICATION THROUGH PROJECT 2021 Organic fleet growth • Same-store £6.1B on capital expenditure • Greenfields Bolt-on acquisitions £1.8B on bolt-ons Returns to shareholders • £790M paid in dividends • Progressive dividend poli
Slide 97: How Can We Deploy a Further £3B?
HOW CAN WE DEPLOY A FURTHER £3B? 100% BOLT-ONS 100% SHARE BUYBACKS If you assume average transactions of: If you assume an average purchase price of £55 per share • 2.5 times revenue • 5.5 times EBITDA Buyback 55 million shares or 12% of share capital • 10 times EBITA + Initially acquired: • £1.2B r
Slide 98: We Lift Our Long Term Market Share Target
WE LIFT OUR LONG TERM MARKET SHARE TARGET • 20% market share in North America • We have experienced no limiting factors in geographies where we remain below our current average • Continue to outpace market in areas with share at or above 20% • ESG: a catalyst for further structural change • Scale ve
Slide 99: Our Plan Is Clear
OUR PLAN IS CLEAR 1 GROW GENERAL TOOL & ADVANCE OUR CLUSTERS 2 AMPLIFY SPECIALTY 3 ADVANCE TECHNOLOGY 4 WITH ESG LEAD 5 CAPITAL ALLOCATION DYNAMIC We believe this is a compelling opportunity for all our stakeholders 99 Capital Markets Day 2021
Slide 100: Ambition with Purpose
AMBITION WITH PURPOSE. 100 Capital Markets Day 2021
Slide 101: Q&A
Q&A US: +1 646-813-7960 UK: +44 33 0606 1122 CAN: +1 877-216-7005 Room Number: 386225 Participant Pin: 1856 101 101 Capital Markets Day 2021