Slide 1: Third quarter results
4 Ashtead group Making it happen Third quarter results 6 March 2018
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 Another encouraging quarter with underlying growth in revenue and profitability Momentum established in Q2 continued into Q3 Strong margins and cash generation remain a key feature of our performance Good progress on all of our capital allocation priorities Outlook remains posit
Slide 4: Suzanne Wood
Suzanne Wood 4 Third quarter results ¦ 31 January 2018
Slide 5: Q3 Group Revenue and Profit
Q3 GROUP REVENUE AND PROFIT Q3 (£m) 2018 2017 Change1 Revenue 916 805 22% - of which rental 845 729 24% Operating costs (507) (438) 23% EBITDA 409 367 20% Depreciation (176) (160) 17% Operating profit 233 207 23% Net interest (28) (28) 9% Profit before amortisation, exceptional items and tax 205 179
Slide 6: Nine Months Group Revenue and Profit
NINE MONTHS GROUP REVENUE AND PROFIT Nine months (£m) 2018 2017 Change1 Revenue 2,815 2,356 20% - of which rental 2,619 2,174 21% Operating costs (1,473) (1,232) 20% EBITDA 1,342 1,124 20% Depreciation (517) (443) 17% Operating profit 825 681 22% Net interest (83) (76) 9% Profit before amortisation,
Slide 7: Nine Months Sunbelt US Revenue and Profit
NINE MONTHS SUNBELT US REVENUE AND PROFIT Nine months ($m) 2018 2017 Change Revenue 3,119 2,646 18% - of which rental 2,942 2,452 20% Operating costs (1,551) (1,320) 17% EBITDA 1,568 1,326 18% Depreciation (567) (491) 16% Operating profit 1,001 835 20% Margins - EBITDA 50% 50% - Operating profit 32%
Slide 8: Nine Months A-Plant Revenue and Profit
NINE MONTHS A-PLANT REVENUE AND PROFIT Nine months (£m) 2018 2017 Change Revenue 354 302 17% - of which rental 309 272 14% Operating costs (225) (192) 18% EBITDA 129 110 16% Depreciation (72) (60) 19% Operating profit 57 50 13% Margins - EBITDA 36% 37% - Operating profit 16% 17% 8 Third quarter resu
Slide 9: Cash Flow
CASH FLOW (£m) LTM January LTM January Change3 2018 2017 EBITDA before exceptional items 1,723 1,433 18% Cash conversion ratio1 96.1% 96.0% Cash inflow from operations2 1,656 1,376 17% Replacement and non-rental capital expenditure (531) (491) Rental equipment and other disposal proceeds received 17
Slide 10: Net Debt and Leverage
NET DEBT AND LEVERAGE NET DEBT TO EBITDA IN THE MIDDLE OF OUR RANGE January Leverage (£m) 2018 2017 3.5 3.3 Net debt at 30 April 2,528 2,002 2.9 3.0 Translation impact (214) 304 2.6 2.5 2.2 Opening debt at closing exchange rates 2,314 2,306 2.0 2.0 1.9 Change from cash flows 273 259 2.0 1.7 1.6 Debt
Slide 11: Impact of US Tax Reform
IMPACT OF US TAX REFORM 2017/18 2018/19 onwards Blended effective Group tax rate of 31% Effective Group tax rate of 23-25% Cash tax rate of c. 8% Cash tax rate of c. 10% in 2018/19, increasing in subsequent years towards the effective rate Reduced deferred tax liability results in a one-of
Slide 12: Geoff Drabble
Geoff Drabble 12 Third quarter results ¦ 31 January 2018
Slide 13: Good Sunbelt US Revenue Growth
GOOD SUNBELT US REVENUE GROWTH AHEAD OF ORIGINAL PLAN 9 months to 2017/18 plan Q1 Q2 Q3 January 2018 Same-store1 organic growth2 4 – 6% 7% 10% 13% 10% Greenfields2 3 – 4% 3% 4% 5% 4% Organic growth 7 – 10% 10% 14% 18% 14% Bolt-ons 2 – 3% 5% 5% 5% 5% 2017/18 growth outlook 9 – 13% 15% 19% 23% 19% Ren
Slide 14: Underlying Growth Continues Ahead of Original Plan
UNDERLYING GROWTH CONTINUES AHEAD OF ORIGINAL PLAN INCREMENTAL REVENUE OF $75-85M FROM HURRICANES YoY rental revenue 30% 25% YoY total rental revenue growth 20% 15% Original growth plan 10% 5% 0% May June July August September October November December January February Actual Trend 14 Third quarter
Slide 15: Strong Revenue Growth and Improving Margins
STRONG REVENUE GROWTH AND IMPROVING MARGINS ENCOURAGING TRENDS ON RATE, PHYSICAL UTILISATION AND MARGINS Improving rate trend Mix still a factor year on year 1.100 Q3 (YTD) Q3 (YTD) Q3 2018 Q3 2017 2018 2017 1.050 Day 8% 9% 9% 10% Rate index 1.000 Week 19% 21% 20% 21% 0.950 0.900 Month 73% 70% 71% 6
Slide 16: Good Organic Growth Supplemented by Bolt-ons
GOOD ORGANIC GROWTH SUPPLEMENTED BY BOLT-ONS SAME-STORE PERFORMANCE REMAINS STRONG AND THE KEY DRIVER Nine months Organic1 Bolt-ons2 Total1 Proportion of revenue 96% 4% 100% Fleet on rent – % change +13% nm +19% Net yield +1% nm nil% Physical utilisation – actual 73% 72% 73% Dollar utilisation 55% 4
Slide 17: Sunbelt Canada
SUNBELT CANADA Sunbelt Canada Nine months (C$m) 2018 2017 % growth Rental revenue 133 50 164% EBITDA 60 22 174% EBITA 33 7 376% Rental revenue growth in western Canada of 16% Existing western Canada locations New locations acquired with CRS Rental revenue growth in eastern Canada of 23% Canadian
Slide 18: A-Plant Revenue Drivers
A-PLANT REVENUE DRIVERS GROWTH CONTINUES BACKED BY FLEET INVESTMENT Average fleet on rent Physical utilisation 80% +24% +25% +9% 70% 60% 50% 40% 2016-17 2017-18 30% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Q1 Q2 Q3 Year over year change in yield Margins Nine months 2018 2017 EBITDA 36% 37
Slide 19: Continued Focus on Fleet Investment in 2018/19
CONTINUED FOCUS ON FLEET INVESTMENT IN 2018/19 Initial Current 2019 Guidance Forecast Outlook Sunbelt ($m) - rental fleet - replacement 300 – 350 300 – 325 300 – 400 - growth 600 – 850 925 – 1,000 850 – 1,000 - non-rental fleet 100 125 130 1,000 – 1,300 1,350 – 1,450 1,280 – 1,530 A-Plant (£m) - ren
Slide 20: Capital Allocation Policy
CAPITAL ALLOCATION POLICY STRONG CASH GENERATION AND ENCOURAGING OUTLOOK – TOO EARLY FOR FURTHER GUIDANCE, WILL UPDATE IN JUNE Clear priorities Consistently applied Organic fleet growth – Same-store £859m on capital expenditure – Greenfields £315m on bolt-ons Bolt-on acquisitions £100m spe
Slide 21: Summary
SUMMARY We have built on the momentum established in Q2 Executing well on organic growth, M&A and buybacks We will continue to grow responsibly maintaining leverage within our range of 1.5 to 2 times net debt to EBITDA Currency headwinds mitigated by strong underlying performance in North Am
Slide 22: Appendices
Appendices 22 Third quarter results ¦ 31 January 2018
Slide 23: Divisional Performance – Q3
DIVISIONAL PERFORMANCE – Q3 Revenue EBITDA Profit 2018 2017 Change1 2018 2017 Change1 2018 2017 Change1 Sunbelt US ($m) 1,034 860 20% 492 413 19% 298 244 22% Sunbelt US (£m) 766 689 11% 364 332 9% 220 197 12% A-Plant 109 102 6% 36 34 5% 10 13 (20)% Sunbelt Canada 41 13 226% 13 5 215% 7 1 556% Group
Slide 24: Divisional Performance – LTM
DIVISIONAL PERFORMANCE – LTM Revenue EBITDA Profit 2018 2017 Change1 2018 2017 Change1 2018 2017 Change1 Sunbelt US ($m) 3,998 3,442 16% 1,988 1,714 16% 1,247 1,077 16% Sunbelt US (£m) 3,068 2,577 19% 1,526 1,284 19% 957 807 19% A-Plant 471 403 17% 171 149 15% 78 71 11% Sunbelt Canada 107 42 155% 41
Slide 25: Sunbelt US – Revenue Drivers
SUNBELT US – REVENUE DRIVERS NINE MONTHS General Tool Specialty Total % of business 78% 22% 100% Rental revenue growth +18% +28% +19% Fleet on rent +19% +21% +19% Yield -1% +5% nil% Year-on-year physical utilisation +1% +14% +2% Presented on a billing day basis, excluding Canada 25 Third quarter res
Slide 26: Sunbelt Physical Utilisation
SUNBELT PHYSICAL UTILISATION General Tool Specialty 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 2016/17 2017/18 2016/17 2017/18 26 Third quarter results ¦ 31 January 2018
Slide 27: Fleet Continues to Grow
FLEET CONTINUES TO GROW THROUGH GROWTH CAPITAL EXPENDITURE AND BOLT-ON M&A RENTAL FLEET AT ORIGINAL COST Growth in rental fleet 31 January 2018 30 April 2017 31 January 2017 LTM1 Current year1 Sunbelt US in $m 7,229 6,439 6,176 17% 12% Sunbelt US in £m 5,083 4,977 4,906 4% 2% A-Plant 874 774 773 13%
Slide 28: Good Progress on 2021 Plan
GOOD PROGRESS ON 2021 PLAN ACQUISITIONS AND GREENFIELDS Consideration Q4-2016/17 Arsenal $39m Pride $277m Van’s Equipment $25m Q1-2017/18 Noble $34m RGR $58m MSP $23m Green Acres $5m Q2-2017/18 CRS C$287m Lift $9m RentalCo $1m Q3-2017/18 Maverick $22m 42 greenfield locations added in addition to t
Slide 29: Robust and Flexible Debt Structure
ROBUST AND FLEXIBLE DEBT STRUCTURE £2,500m £2,000m Debt facilities committed for average of 6 years £1,500m No amortisation £1,000m £500m No financial monitoring covenants whilst availability Undrawn exceeds $310m (January 2018: $1,124m) Drawn £m 2017 2018 2019 2020 2021 Jul 2023 Oct Aug 2026
Slide 30: Cash Flow Funds Organic Fleet Growth
CASH FLOW FUNDS ORGANIC FLEET GROWTH HEALTHY EBITDA MARGINS ENSURE SIGNIFICANT TOP LINE CASH GENERATION THROUGH THE CYCLE LTM Jan (£m) 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 EBITDA before exceptional items 1,723 1,504 1,178 908 685 519 381 284 255 356 364 310 225 170 E
Slide 31: 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 32: $1,124m of Availability at 31 January 2018
$1,124M OF AVAILABILITY AT 31 JANUARY 2018 Book value Borrowing base Senior debt £5,264m (April 17 : £5,133m) Calculation: £628m Inventory – 50% of book value £3,889m (April 17 : £3,726m) Receivables – 85% of net eligible receivables £420m Fleet and vehicles – 85% of net appraised market value of el
Slide 33: Debt and Covenants
DEBT AND COVENANTS Facility Interest rate Maturity $3.1bn first lien revolver LIBOR + 125-175 bps July 2022 $500m second lien notes 5.625% October 2024 Debt $600m second lien notes 4.125% August 2025 $600m second lien notes 4.375% August 2027 Capital leases ~7% Various S&P Moody’s Ratings Corporate
Slide 34: The Big Are Getting Bigger
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 Top 4-10 Top 11-100 7% 30s 100 13% Others 66% - mid 57% 16% 60s Note: Restated to reflect latest IHS Global insight market s
Slide 35: Increased Footprint and Significant Market Share Gain
WE HAVE INCREASED OUR FOOTPRINT AND GAINED SIGNIFICANT MARKET SHARE April 2012 April 2017 stores – April 2012 store growth – May 2012 to April 2017 35 Third quarter results ¦ 31 January 2018
Slide 36: Working Cluster
WORKING CLUSTER Baltimore/Washington DC Fleet Size $299 million GT Locations 21 Specialty Locations 10 EBITA 44% ROI 31% General Tool Pump & Power Climate Control Flooring Industrial Scaffold 36 Full year results ¦ 30 April 2017
Slide 37: 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% 37 Full year results ¦ 30 April 2017
Slide 38: 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% 38 Full year results ¦ 30 April 2017
Slide 39: Climate Control Location
CLIMATE CONTROL LOCATION Climate Control location DC Climate Control Fleet Size $4 million Rental $4 million Employees 8 Avg. Open 103 Contracts ROI% 69% EBITA 49% 39 Full year results ¦ 30 April 2017
Slide 40: Clusters – A Proven Track Record of Enhanced Performance
CLUSTERS – A PROVEN TRACK RECORD OF ENHANCED PERFORMANCE SEGMENTAL ANALYSIS Same Store Rental Revenue CAGR (FY11-FY16) EBITA margin ROI Market share 17% 17% 38% 38% 27% 27% 10% 10% 36% 36% 14% 14% 23% 23% 5% 5% Cluster Non-Clustered Cluster Non-Clustered Cluster Non-Clustered Cluster Non-Clustered T
Slide 41: Significant Opportunity to Build Out Further Clusters
SIGNIFICANT OPPORTUNITY TO BUILD OUT FURTHER CLUSTERS Rental Markets Top 25 26-50 51-100 100-210 Rental Market % 56% 19% 16% 9% Cluster Definition >10 >7 >4 >1 11 markets 10 markets 3 markets 14 markets Clustered 176 stores 101 stores 20 stores 33 stores 14 markets 15 markets 44 markets 38 markets N
Slide 42: Our Financial Road Map to 2021
OUR FINANCIAL ROAD MAP TO 2021 Revenue ($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 43: Important 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