Slide 1: Making it happen
Making it happen 13 June 2017
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 Group’s audited results for
Slide 3: Highlights
HIGHLIGHTS Once again a strong year with market leading growth in revenue and profitability Continued progress on our growth and capital allocation priorities – £1,086m invested in capital expenditure – £437m spent on bolt-ons – 101 locations opened / added – £48m spent on share buybacks £319m
Slide 4: Suzanne Wood
Suzanne Wood 4 Full year results ¦ 30 April 2017
Slide 5: Q4 Group Revenue and Profit
Q4 GROUP REVENUE AND PROFIT Q4 (£m) 2017 2016 Change1 Revenue 831 666 11% - of which rental 727 585 11% Operating costs (451) (358) 13% EBITDA 380 308 9% Depreciation (163) (123) 18% Operating profit 217 185 3% Net interest (28) (22) 11% Profit before amortisation and tax 189 163 2% Earnings per sha
Slide 6: Full Year Group Revenue and Profit
FULL YEAR GROUP REVENUE AND PROFIT Full year (£m) 2017 2016 Change1 Revenue 3,187 2,546 10% - of which rental 2,901 2,260 13% Operating costs (1,683) (1,368) 9% EBITDA 1,504 1,178 12% Depreciation (607) (450) 19% Operating profit 897 728 7% Net interest (104) (83) 9% Profit before amortisation and t
Slide 7: Lower Replacement Capex Reduces Revenue and Gains from Sale of Used Equipment
LOWER REPLACEMENT CAPEX REDUCES REVENUE AND GAINS FROM SALE OF USED EQUIPMENT Full year (£m) 2017 2016 Change1 Revenue 3,187 2,546 10% Sale of used equipment (162) (191) (25)% Revenue excluding sale of used equipment 3,025 2,355 13% Underlying profit before taxation as reported 793 645 7% Gains on s
Slide 8: Full Year Sunbelt Revenue and Profit
FULL YEAR SUNBELT REVENUE AND PROFIT Full year ($m) 2017 2016 Change Revenue 3,584 3,277 9% - of which rental 3,283 2,924 12% Operating costs (1,815) (1,693) 7% EBITDA 1,769 1,584 12% Depreciation (681) (570) 19% Operating profit 1,088 1,014 7% Margins - EBITDA 49% 48% - Operating profit 30% 31% 8 F
Slide 9: Full Year A-Plant Revenue and Profit
FULL YEAR A-PLANT REVENUE AND PROFIT Full year (£m) 2017 2016 Change Revenue 418 365 15% - of which rental 365 314 16% Operating costs (265) (228) 16% EBITDA 153 137 12% Depreciation (81) (70) 16% Operating profit 72 67 7% Margins - EBITDA 37% 38% - Operating profit 17% 18% 9 Full year results ¦ 30
Slide 10: Cash Flow
CASH FLOW (£m) 2017 2016 Change3 EBITDA before exceptional items 1,504 1,178 12% Cash conversion ratio1 96% 91% Cash inflow from operations2 1,444 1,071 18% Replacement and non-rental capital expenditure (527) (562) Rental equipment and other disposal proceeds received 161 180 Interest and tax paid
Slide 11: Net Debt and Leverage
NET DEBT AND LEVERAGE NET DEBT TO EBITDA IN THE MIDDLE OF OUR RANGE April Leverage (£m) 2017 2016 3.5 3.2 Net debt at 30 April 2,002 1,687 3.0 3.0 Translation impact 229 82 2.6 2.5 2.3 Opening debt at closing exchange rates 2,231 1,769 2.0 Target range 2.0 1.8 1.8 Change from cash flows 273 230 1.7
Slide 12: Geoff Drabble
Geoff Drabble 12 Full year results ¦ 30 April 2017
Slide 13: Sunbelt – US Revenue Drivers
SUNBELT – US REVENUE DRIVERS 12 MONTHS General Tool Specialty1 Total % of business 79% 21% 100% Rental revenue growth +15% +9% +14% Fleet on rent +18% +13% +17% Yield -2% -4% -3% Year-on-year physical utilisation - +5% +1% Presented on a billing day basis, excluding Canada 1 Including Oil & Gas ● Sp
Slide 14: Sunbelt – US Revenue Drivers: Physical Utilisation
SUNBELT – US REVENUE DRIVERS PHYSICAL UTILISATION General Tool Specialty (inc. Oil & Gas) 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr 2014/15 2015/16 2016/17 2017/18 2014/15 2015/16 2016/17 2017/18 14
Slide 15: Continued Strong Drop-Through
CONTINUED STRONG DROP-THROUGH 12 MONTHS Same-stores1 Greenfields2 Bolt-ons2 Oil & Gas Total Proportion of revenue 91% 5% 2% 2% 100% Fleet on rent – % change +11% nm nm +1% +17% Net yield -3% nm nm -13% -3% Physical utilisation – actual 72% 62% 61% 70% 71% Dollar utilisation 54% 47% 53% 56% 54% Drop-
Slide 16: Clear Progression in Profit Centre Contribution
CLEAR PROGRESSION IN PROFIT CENTRE CONTRIBUTION SUNBELT US $m 2014/15 2015/16 2016/17 Rental revenue 2,468 2,895 3,232 Total revenue 2,734 3,241 3,525 Profit centre contribution excluding gains 1,408 51% 1,683 52% 1,911 54% Gains 37 1% 55 2% 34 1% Central overhead (154) (6)% (167) (5)% (199) (6)% EB
Slide 17: Understanding Our Growth
UNDERSTANDING OUR GROWTH CYCLICAL AND STRUCTURAL Rate and fleet on rent index 600 2.000 3.250 1.900 500 2.750 1.800 400 1.700 2.250 Fleet on rent index 1.600 Rate index 1.750 300 1.500 1.250 1.400 200 1.300 0.750 100 1.200 0.250 1.100 0 1.000 -0.250 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Slide 18: Understanding Rate vs Yield
UNDERSTANDING RATE VS YIELD DRIVER OF NEGATIVE YIELD IS MIX NOT RATE Revenue split by term 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 Day 14% 14% 13% 11% 10% 10% 10% Week 25% 25% 25% 24% 23% 22% 21% Month 61% 61% 62% 65% 67% 68% 69% This cycle has seen unprecedented structural change
Slide 19: Good Progress on 2021 Plan
GOOD PROGRESS ON 2021 PLAN ACQUISITIONS AND GREENFIELDS Market Consideration Broad General Tool Power and climate control 2016/17 I&L Rentals $67m LoadBanks $6m Portable Rental Solutions $11m CanSource Direct C$9m Tower Tech $13m Post Falls $4m Rick’s Action Rental $0.4m New Mexico / E
Slide 20: Execution of 2021 Plan
EXECUTION OF 2021 PLAN CIRCA DOUBLE-DIGIT GROWTH ANTICIPATED Market growth 2017/18 plan Mature stores (up to FY11) 3 – 4% 4 – 6% c.1.5x market growth Recent openings (FY12 – FY16) 3 – 4% 4 – 6% c.1.5x market growth Organic growth – same-store 4 – 6% Greenfields 3 – 4% Organic growth 7 – 10% Bolt-ons
Slide 21: Sunbelt 2017/18 Fleet Plan Consistent with 2021 Plan
SUNBELT 2017/18 FLEET PLAN CONSISTENT WITH 2021 PLAN 2018 2015 2016 2017 Outlook Sunbelt ($m) - rental fleet - replacement 395 572 403 300 – 350 - growth 873 871 657 600 – 850 - non-rental fleet 100 133 111 100 1,368 1,576 1,171 1,000 – 1,300 21 Full year results ¦ 30 April 2017
Slide 22: A-Plant Revenue Drivers
A-PLANT REVENUE DRIVERS GROWTH CONTINUES BACKED BY FLEET INVESTMENT Average fleet on rent Physical utilisation 80% +17% +15% +22% +19% 70% 60% 50% 2014-15 40% 2015-16 2016-17 2017-18 30% May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Q1 Q2 Q3 Q4 Year over year change in yield Fleet size and growth
Slide 23: Good Progress at Diversifying Business
GOOD PROGRESS AT DIVERSIFYING BUSINESS ACQUISITIONS AND GREENFIELDS Market Consideration (including Broad Power and Industrial Entertainment acquired debt) General Tool climate control Acquisition 2016/17 Mather & Stuart £14m Tool and Engineering Services £1m Lion Trackhire £38m Opti-cal Surve
Slide 24: A-Plant and Group Fleet Plan for 2017/18
A-PLANT AND GROUP FLEET PLAN FOR 2017/18 ANTICIPATED A-PLANT VOLUME GROWTH DOUBLE-DIGIT TO MID-TEENS 2018 2015 2016 2017 Outlook1 A-Plant (£m) - rental fleet - replacement 46 95 74 50 – 60 - growth 108 47 90 40 – 50 - non-rental fleet 19 22 16 15 173 164 181 105 – 125 Sunbelt ($m) - rental fleet - r
Slide 25: Capital Allocation
CAPITAL ALLOCATION OUR PRIORITIES FOR USING CAPITAL ARE RETURNS FOCUSED 1. Organic growth Invest in same-store fleet growth Continue programme of opening around 60 greenfield locations per year in North America 2. Bolt-on acquisitions Targeted bolt-on acquisitions to support geographic expansi
Slide 26: Summary
SUMMARY Markets remain very supportive Shift to rental and consolidation continue to provide further opportunities as we optimise the benefits of scale Remain committed to 2021 plan for further market share gains and profitable growth over the medium term Strong margins result in significant
Slide 27: Appendices
Appendices 27 Full year results ¦ 30 April 2017
Slide 28: Divisional Performance – Q4
DIVISIONAL PERFORMANCE – Q4 Revenue EBITDA Profit 2017 2016 Change1 2017 2016 Change1 2017 2016 Change1 Sunbelt ($m) 894 809 11% 427 393 8% 248 243 2% Sunbelt (£m) 714 565 26% 341 275 24% 199 170 17% A-Plant 117 101 15% 42 38 11% 21 20 5% Group central costs - - - (3) (5) (22)% (3) (5) (22)% 831 666
Slide 29: Divisional Performance – Twelve Months
DIVISIONAL PERFORMANCE – TWELVE MONTHS Revenue EBITDA Profit 2017 2016 Change1 2017 2016 Change1 2017 2016 Change1 Sunbelt ($m) 3,583 3,277 9% 1,769 1,584 12% 1,088 1,014 7% Sunbelt (£m) 2,769 2,181 27% 1,366 1,054 30% 841 675 25% A-Plant 418 365 15% 153 137 12% 72 67 7% Group central costs - - - (1
Slide 30: Understanding Rate vs Yield
UNDERSTANDING RATE VS YIELD SHIFT TO LONGER RENTAL PERIODS IMPACTS YIELD NOT RATE Monthly Rate1 Contract mix Revenue2 Change revenue2 ($) ($) FY17 FY16 FY15 FY17 FY16 FY15 17 v 16 16 v 15 Daily 420 10,080 10.0% 10.5% 11.0% 1,008 1,058 1,109 Weekly 1,015 4,060 20.0% 21.0% 21.5% 812 853 873 Monthly 2,
Slide 31: Cash Flow Funds Organic Fleet Growth, Healthy EBITDA Margins
CASH FLOW FUNDS ORGANIC FLEET GROWTH HEALTHY EBITDA MARGINS ENSURE SIGNIFICANT TOP LINE CASH GENERATION THROUGH THE CYCLE (£m) 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 EBITDA before exceptional items 1,504 1,178 908 685 519 381 284 255 359 380 310 225 170 147 EBITDA marg
Slide 32: Robust and Flexible Debt Structure
ROBUST AND FLEXIBLE DEBT STRUCTURE £2,500m £2,250m £2,000m £1,750m Debt facilities committed for average of 4 years £1,500m £1,250m No amortisation £1,000m £750m No financial monitoring covenants whilst availability exceeds $310m (April 2017: $1,305m) £500m £250m £m 2017 2018 2019 October 2021
Slide 33: $1,305m of Availability at 30 April 2017
$1,305M OF AVAILABILITY AT 30 APRIL 2017 Book value Borrowing base Senior debt £5,133m (April 16 : £4,086m) Calculation: £592m Inventory – 50% of book value £3,726m (April 16 : £3,089m) Receivables – 85% of net eligible receivables £382m Fleet and vehicles – 85% of net appraised market value of elig
Slide 34: Debt and Covenants
DEBT AND COVENANTS Facility Interest rate Maturity $3.1bn first lien revolver LIBOR + 125-175 bps July 2020 Debt $900m second lien notes 6.5% July 2022 $500m second lien notes 5.625% October 2024 Capital leases ~7% Various S&P Moody’s Ratings Corporate family BB+ Ba1 Second lien BBB- Ba2 Availabilit
Slide 35: The Big Are Getting Bigger Which Provides Further Opportunity
THE BIG ARE GETTING BIGGER WHICH PROVIDES FURTHER OPPORTUNITY US MARKET SHARE 2010 2017 2020s 5% 4% 10% 3% 3% 7% Others United Rentals Sunbelt 6% 3% - mid RSC Herc Rentals Top 7% 30s Top 4-10 Top 11-100 100 13% Others 66% - mid 57% 16% 60s Note: Restated to reflect latest IHS Global insight market s
Slide 36: We Have Increased Our Footprint and Gained Significant Market Share
WE HAVE INCREASED OUR FOOTPRINT AND GAINED SIGNIFICANT MARKET SHARE April 2012 April 2017 stores – April 2012 store growth – May 2012 to April 2017 36 Full year results ¦ 30 April 2017
Slide 37: Benefit of Diversification Will Remain a Key Element of Strategy
THE BENEFIT OF OUR DIVERSIFICATION HAS BEEN SHOWN IN RECENT RELATIVE PERFORMANCE WILL REMAIN A KEY ELEMENT OF OUR STRATEGY Year ended 30 April 2007 Year ended 30 April 2017 General Tool Specialty General Tool Specialty 85% 15% 79% 21% Non Non Construction Construction construction construction 65% 6
Slide 38: Working Cluster
WORKING CLUSTER Baltimore/Washington DC Fleet Size $299 million GT Locations 21 Specialty Locations 10 Market Share 12% EBITA 44% General Tool Pump & Power ROI 31% Climate Control Flooring Industrial Scaffold 38 Full year results ¦ 30 April 2017
Slide 39: Large General Tool Location
LARGE GENERAL TOOL LOCATION General Tool location Laurel, MD Fleet Size $40 million Rental $21 million Employees 46 Avg. Open 866 Contracts ROI% 29% EBITA 44% 39 Full year results ¦ 30 April 2017
Slide 40: Midsize General Tool Location
MIDSIZE GENERAL TOOL LOCATION General Tool location Parkville, MD Fleet Size $6 million Rental $4 million Employees 8 Avg. Open 150 Contracts ROI% 32% EBITA 44% 40 Full year results ¦ 30 April 2017
Slide 41: Different Size General Tool Locations Satisfy Multiple Needs
DIFFERENT SIZE GENERAL TOOL LOCATIONS SATISFY MULTIPLE NEEDS Day Week Month Rough Terrain Laurel, MD Parkville, MD Suggested $419 $990 $2,695 Forklifts Book $415 $990 $2,695 High $445 $1,065 $2,860 Quantity 99 units 12 units Average $420 $1,015 $2,590 Utilization 85% 72% Floor $400 $970 $2,390 Examp
Slide 42: Pump & Power Location
PUMP & POWER LOCATION Pump & Power location Maryland Pump & Power Fleet Size $16 million Rental $10 million Employees 23 Avg. Open 155 Contracts ROI% 42% EBITA 44% 42 Full year results ¦ 30 April 2017
Slide 43: Climate Control Location
CLIMATE CONTROL LOCATION Climate Control location DC Climate Control Fleet Size $4 million Rental $4 million Employees 8 Avg. Open 103 Contracts ROI% 69% EBITA 49% 43 Full year results ¦ 30 April 2017
Slide 44: Clusters – A Proven Track Record of Enhanced Performance
CLUSTERS – A PROVEN TRACK RECORD OF ENHANCED PERFORMANCE SEGMENTAL ANALYSIS Same Store Rental Revenue CAGR (FY11-FY16) EBITA margin ROI Market share 17% 17% 38% 38% 27% 27% 10% 10% 36% 36% 14% 14% 23% 23% 5% 5% Cluster Non-Clustered Cluster Non-Clustered Cluster Non-Clustered Cluster Non-Clustered 4
Slide 45: Significant Opportunity to Build Out Further Clusters
SIGNIFICANT OPPORTUNITY TO BUILD OUT FURTHER CLUSTERS Rental Markets Top 25 26-50 51-100 100-210 Rental Market % 56% 19% 16% 9% Cluster Definition >10 >7 >4 >1 11 markets 10 markets 3 markets 14 markets Clustered 176 stores 101 stores 20 stores 33 stores 14 markets 15 markets 44 markets 38 markets N
Slide 46: Our Financial Road Map to 2021
OUR FINANCIAL ROAD MAP TO 2021 Revenue ($bn) 2016 EBITA Store vintage Locations 2016 2021 Evolution margin %1 - Continue to build at circa 1.5x Mature stores market growth 310 2.5 3.3 – 3.5 39 (up to FY11) - EBITA improvement through scale and efficiency - Growth at rate of mature stores as we broad
Slide 47: 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 20 19 19 19 50 46 47 120 45 17 42 105 18 45 16 38 38 100 16 15 40 14 35 35 85 33 34 14 13 35 12 30 30 80 12 30 63 10 10 25 60 47 8 7 20 5 40 32 6 15 4 10 15 12 17 20 11 10 2 5 4 0 20
Slide 48: ROI Remains Very Strong
ROI REMAINS VERY STRONG RECENT PRESSURES SET TO EASE AND CHANGE TRAJACTORY Return on Investment US 50 30% Fleet age 40 25% 20% 30 15% 20 10% 10 5% 0 0% Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Mature stores Total Sunbelt Greenfield and bolt-ons Physical utilisation YoY Rate change and
Slide 49: Current Rate Trend
CURRENT RATE TREND VERY STABLE OVER THE PAST YEAR 1.100 1.050 Rate index 1.000 0.950 0.900 Apr 2016 May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016 Oct 2016 Nov 2016 Dec 2016 Jan 2017 Feb 2017 Mar 2017 Apr 2017 May 2017 49 Full year results ¦ 30 April 2017
Slide 50: Cyclical Cash Generation
CYCLICAL CASH GENERATION CASH POSITIVE AS GROWTH MODERATES – HIGHLY GENERATIVE DURING DOWNTURN High growth Moderate to flat growth Declining market 2011 2012 2013 2014 2015 2016 2017 Moderate growth Cyclical downturn Cash flow from 280 365 501 646 841 1,071 1,444 Growing Decreasing but remains posit
Slide 51: Full year results ¦ 30 April 2017
51 Full year results ¦ 30 April 2017