Slide 1: Full Year Results
AMBITION WITH PURPOSE FULL YEAR RESULTS 13 June 2023
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 prospective investors in the secondary markets about the these forward looking statements are discussed in the Group and does not constitute an offer of securities or Princ
Slide 3: Highlights
HIGHLIGHTS ▪ Record revenue and profit delivered in robust end markets ▪ Group rental revenue 22% ahead of last year; US rental revenue up 24% ▪ Profit before tax 1 up 26% to $2,273m (2022: $1,824m) and EPS 1 up 27% to 388.5ȼ (2022: 307.1ȼ) ▪ $3.8bn invested in capital expenditure ▪ 165 locations ad
Slide 4: 2023/24 Outlook
2023/24 OUTLOOK Guidance Rental revenue1 - US 13 to 16% - Canada2 15 to 20% - UK 10 to 13% - Group 13 to 16% Capital expenditure (gross)3 $3.9 – 4.3bn - of which, rental fleet is: $3.3 – 3.6bn Free cash flow3 c. $300m 1 Represents year-over-year rental revenue growth at constant currency 2 Impacted
Slide 5: Financial Review
FINANCIAL REVIEW MICHAEL PRATT 5 Full year results ¦ 30 April 2023
Slide 6: Group
GROUP $m 2023 2022 Change1 Revenue 9,667 7,962 24% ‐ of which rental 8,698 7,235 22% Operating costs (5,255) (4,353) 24% EBITDA 4,412 3,609 24% Depreciation (1,772) (1,553) 16% Operating profit 2,640 2,056 29% Net interest (367) (232) 59% Profit before amortisation, exceptional items and tax 2,273 1
Slide 7: US
US $m 2023 2022 Change Revenue 8,222 6,477 27% ‐ of which rental 7,503 6,042 24% Operating costs (4,267) (3,356) 27% EBITDA 3,955 3,121 27% Depreciation (1,490) (1,269) 18% Operating profit 2,465 1,852 33% Margins ‐ EBITDA 48.1% 48.2% ‐ Operating profit 30.0% 28.6% Return on investment 27.3% 25.0% T
Slide 8: Canada
CANADA C$m 2023 2022 Change Revenue 827 626 32% ‐ of which rental 696 569 22% Operating costs (490) (345) 42% EBITDA 337 281 20% Depreciation (170) (137) 23% Operating profit 167 144 17% Margins ‐ EBITDA 40.7% 45.0% ‐ Operating profit 20.2% 22.9% Return on investment 18.1% 20.4% The results in the t
Slide 9: UK
UK £m 2023 2022 Change Revenue 685 726 -6% ‐ of which rental 559 544 3% Operating costs (493) (511) -4% EBITDA 192 215 -10% Depreciation (127) (128) -% Operating profit 65 87 -25% Margins ‐ EBITDA 28.1% 29.6% ‐ Operating profit 9.5% 12.0% Return on investment 8.9% 13.7% The results in the table abov
Slide 10: Cash Flow
CASH FLOW $m 2023 2022 EBITDA before exceptional items 4,412 3,609 Cash conversion ratio1 92% 94% Cash inflow from operations2 4,074 3,406 Replacement and non-rental capital expenditure (1,891) (1,228) Rental equipment and other disposal proceeds received 615 369 Interest and tax paid (628) (450) Ca
Slide 11: Net Debt
NET DEBT Leverage (excluding impact of IFRS 16) $m 2023 2022 2.5 2.4 Opening net debt 7,160 5,801 Change from cash flows 1,229 894 2.0 2.0 1.9 1.8 1.8 1.8 Translation impact (38) (47) 1.7 1.7 1.6 1.6 Debt acquired 228 132 1.5 1.4 1.5 New lease liabilities 374 362 Deferred debt raising cost amortisat
Slide 12: Operational Review
OPERATIONAL REVIEW BRENDAN HORGAN 12 Full year results ¦ 30 April 2023
Slide 13: US Trading
US TRADING Rental revenue1 FY22 FY23 ▪ Strong growth present across all General Tool geographies and Specialty rental segments Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY General tool +15% +14% +20% +24% +18% +23% +21% +21% +19% +21% ▪ Ongoing strength in performance evidence of Specialty2 +22% +23% +25% +25% +24
Slide 14: Specialty Trading
SPECIALTY TRADING Rental revenue1 FY22 FY23 ▪ Unique portfolio of Specialty businesses takes advantage of ongoing growth opportunities in Q4 FY Q1 Q2 Q3 Q4 FY lowly penetrated products Power and HVAC +35% +27% +34% +26% +41% +17% +30% Climate Control and Air Quality +6% +20% +36% +25% +38% +21% +29%
Slide 15: US Non-Construction
US NON-CONSTRUCTION ▪ Specialty business activity serves as a proxy for non-construction market strength MAINTENANCE, REPAIR AND OPERATIONS OF THE GEOGRAPHICAL MARKETS WE SERVE ▪ Continuous need for maintenance, repair and operations in our markets ▪ $340bn facility maintenance market; 100bn sq. ft.
Slide 16: US Construction Outlook
US CONSTRUCTION OUTLOOK Dodge construction starts 2020 2021 2022 2023 2024 2025 2026 2027 350 Indexed: 2000=100 Construction put in place ($bn) 300 Non-residential 556 522 580 718 704 729 722 769 250 Non-building 300 301 308 394 442 461 479 483 200 Construction (excl. resi) 856 823 888 1,112 1,146 1
Slide 17: Drivers of Unprecedented Levels of Construction Starts
DRIVERS OF UNPRECEDENTED LEVELS OF CONSTRUCTION STARTS ADVANCING TECHNOLOGY AND ONSHORING / RESHORING LEGISLATIVE ACTS MANUFACTURING MODERNISATION ▪ Establishing or reestablishing US based ▪ Ongoing growth in technology related ▪ Infrastructure, Chips and Science, and manufacturing and production. P
Slide 18: Legislative Acts Bolstering and Adding to Activity Levels
LEGISLATIVE ACTS BOLSTERING AND ADDING TO ACTIVITY LEVELS INFRASTRUCTURE INVESTMENT THE CHIPS AND SCIENCE ACT2 INFLATION REDUCTION ACT2 AND JOBS ACT (IIJA)1 ▪ $1.2tn in federal spending, with net new ▪ $250bn act boosting American semiconductor ▪ Investment focused on energy, climate and commitment
Slide 19: Mega Project Landscape
MEGA PROJECT LANDSCAPE FY23 FY23 mega projects demonstrate range Project Project 175 27% OF MEGA $300BN Semiconductor (TSMC) $12.0bn EV battery plant (Blue Oval) $5.7bn START PROJECTS START VALUE LNG plant (Port Arthur) $10.5bn EV plant (Hyundai) $5.5bn DOLLARS STARTED Airport terminal (JFK) $9.5bn
Slide 20: Canada Trading
CANADA TRADING Fleet on rent (excluding Lighting, Grip and Lens) ▪ Sunbelt 3.0 plan progressing well with 5 of the top 10 markets clustered (13 in total) and increasing business maturity delivering strong margins and returns ▪ Amplification of Specialty business progressing well ▪ Healthy demand and
Slide 21: UK Trading
UK TRADING ▪ Strong performance with rental only revenue, excluding the DoH LARGE PROJECT LANDSCAPE work, up 22% Current live large projects: Future projected large projects ▪ HS2 Phase 1 (£44bn) (FY24 and beyond): ▪ End market resilience in infrastructure, industrial and support from ▪ Transmission
Slide 22: Sunbelt 3.0: Strategic Growth Plan Ahead of Plan
SUNBELT 3.0: STRATEGIC GROWTH PLAN AHEAD OF PLAN 1 Actionable GROW GENERAL TOOL Progress in first two years component & ADVANCE OUR CLUSTERS ▪ $6.2bn of capital invested in the business, of which $5.3bn invested in rental assets 2 SPECIALTY AMPLIFY ▪ ▪ Opened 165 greenfield locations in North Ame
Slide 23: Group Fleet Plan
GROUP FLEET PLAN 2022 2023 2024 Actual Actual Guidance1 US ($m) - rental fleet 1,625 2,878 2,900 – 3,200 - non-rental fleet 321 436 500 1,946 3,314 3,400 – 3,700 Canada (C$m) - rental fleet 201 254 290 – 320 - non-rental fleet 39 56 100 240 310 390 – 420 UK (£m) - rental fleet 158 161 140 – 160 - no
Slide 24: Capital Allocation
CAPITAL ALLOCATION CONSISTENTLY APPLIED POLICY CONTINUES CLEAR PRIORITIES APPLICATION Organic fleet growth ▪ Same-store ▪ $3.8bn invested in the business ▪ Greenfields ▪ 77 greenfields opened in North America ▪ $1.1bn spent on bolt-ons, with 88 locations added in North America Bolt-on acquisitions ▪
Slide 25: Summary
SUMMARY ▪ Clear momentum, with strong positions in robust end markets ▪ Onshoring, advancing technology and manufacturing modernisation are drivers of unprecedented levels of construction ▪ Legislative Acts add to the mega project landscape and enhance already strong activity levels ▪ Market dynamic
Slide 26: Appendices
APPENDICES 26 Full year results ¦ 30 April 2023
Slide 27: Divisional Performance: Fourth Quarter Results
DIVISIONAL PERFORMANCE FOURTH QUARTER RESULTS Revenue EBITDA Profit 2023 2022 Change1 2023 2022 Change1 2023 2022 Change1 UK (£m) 163 179 -9% 42 50 -15% 10 15 -36% Canada (C$m) 218 163 34% 82 70 19% 36 33 8% US 2,083 1,713 22% 968 786 23% 575 439 31% UK ($m) 199 236 -16% 52 65 -21% 12 20 -39% Canada
Slide 28: Divisional Performance: Last Twelve Months
DIVISIONAL PERFORMANCE LAST TWELVE MONTHS Revenue EBITDA Profit 2023 2022 Change1 2023 2022 Change1 2023 2022 Change1 UK (£m) 685 726 -6% 192 215 -10% 65 87 -25% Canada (C$m) 827 626 32% 337 281 20% 167 144 17% US 8,222 6,477 27% 3,955 3,121 27% 2,465 1,852 33% UK ($m) 823 986 -17% 231 291 -21% 78 1
Slide 29: Robust and Flexible Debt Structure
ROBUST AND FLEXIBLE DEBT STRUCTURE $5,000m Debt Maturity ▪ In August 2022, issued $750m 5.50% notes due 2032 and in Undrawn January 2023, issued $750m 5.55% notes due 2033 Drawn $4,000m Notes $3,000m ▪ Subsequent to notes issues, borrowing facilities committed for average of six years at a weighted
Slide 30: Our Business and Industry Has Changed Fundamentally
OUR BUSINESS AND INDUSTRY HAS CHANGED FUNDAMENTALLY STRUCTURAL CHANGE HAS PROGRESSED 30.0% 20.0% 10.0% 0.0% Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 -10.0% -20.0% GFC: 30% rental Ten years of growth revenue decline CAGR: 18% peak
Slide 31: US Construction Outlook
US CONSTRUCTION OUTLOOK US RESIDENTIAL BUILDING STARTS 2,500 ▪ Single family housing starts forecasted to slow to c. 2018/19 levels driven by mortgage rate increase and supply chain constraints ▪ This despite the US demographic trends putting housing in an 2,000 undersupply position 1,500 1,017 1,62
Slide 32: IIJA Update and Progression
IIJA UPDATE AND PROGRESSION IIJA funding $bn $bn Example: road / bridges Total package 1,200.0 ▪ Funding is allocated to each state over the life of the programme Less existing funding 650.0 Net new 550.0 ▪ Signed into law 15 November 2021 and fully funded once passed Net new comprises: ▪ Distribute
Slide 33: Market Dynamics Enhance Structural Opportunity
MARKET DYNAMICS ENHANCE STRUCTURAL OPPORTUNITY Dynamic Anticipated duration Current environment ▪ Supply chains improved from most constrained SUPPLY CHAIN period THESE DYNAMICS ARE CONSTRAINTS New normal ▪ Long range fleet planning critical to ensure supply meets needs ALL TAILWINDS TO Longer lead
Slide 34: US Fleet Profile
US FLEET PROFILE ▪ Smooth fleet profile ▪ Benefits of prolonged cycle and our growth strategy ▪ Strong position providing optionality through the cycle ▪ Flexibility to turn replacement into growth and vice versa ▪ Strengthens partnership with suppliers through predictability 34 Full year results ¦
Slide 35: Cash Flow Funds All Fleet Investment
CASH FLOW FUNDS ALL FLEET INVESTMENT ($m) 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 EBITDA before exceptionals 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 EBITDA margin 46% 45% 46% 47% 47% 47% 47
Slide 36: $2,573m of Availability at April 2023
$2,573M OF AVAILABILITY AT 30 APRIL 2023 Book value Borrowing base Senior debt $12,611m (April 22: $10,238m) $1,385m $9,693m Calculation: (April 22: $7,755m) Inventory – 50% of book $1,108m value Receivables – 85% of net eligible receivables $10,359m Fleet and vehicles – lower of 85% of net appraise
Slide 37: Debt and Covenants
DEBT AND COVENANTS Facility Interest rate Maturity $4.5bn first lien revolver SOFR / SONIA + 125-150 bps August 2026 $550m senior notes 1.500% August 2026 $600m senior notes 4.375% August 2027 Debt $600m senior notes 4.000% May 2028 $600m senior notes 4.250% November 2029 $750m senior notes 2.450% A
Slide 38: Location Growth During 3.0
LOCATION GROWTH DURING 3.0 CLEARLY DEFINED April 2021* 936 Sunbelt 3.0 +298 April 2024 1,234 April 2021 Sunbelt 3.0 – May 2021 – April 2024 * Excludes two Sunbelt 3.0 locations opened in April 2021 38 Full year results ¦ 30 April 2023
Slide 39: 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 40: Specialty Market Sizing, Rental Penetration & Share
SPECIALTY MARKET SIZING, RENTAL PENETRATION & SHARE REVENUE WILL GROW BY $1BN IN 3.0 WITH AMPLE OPPORTUNITY BEYOND CURRENT, PROJECTED AND ILLUSTRATIVE RENTAL BY BUSINESS LINE, $M LTM January 2021 total rental 10% RENTAL MARKET Incremental projected FY24 total rental via existing locations and greenf
Slide 41: 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 42: US Market Share
US MARKET SHARE 2010 2023 Future 5% 4% 3% 17% 20%+ 3% 6% 37% 13% All others 13% 4% One or two 66% others 8% 21% United Rentals Sunbelt RSC Herc Rentals Top 4-10 Top 11-100 Other Two or three have 50%+ of the market 42 Full year results ¦ 30 April 2023
Slide 43: 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 adjusted EPS % % ȼ 19 19 20 19 50 46 47 47 47 47 46 450 19 18 45 45 46 18 17 18 18 45 42 388 16 400 15 15 38 38 16 15 40 14 35 35 350 33 34 307 14 13 35 12 30 30 300 12 30 250 227 222219 10 10 25 200 171