Slide 1: Availability, Reliability, Ease
Availability, Reliability, Ease 19 June 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 strong year with growth in revenue and profitability Continued progress on our growth and capital allocation priorities – £1,239m invested in capital expenditure – £392m spend on bolt-ons – 114 locations opened / added – £161m spend on share buybacks £386m of free cash flow
Slide 4: Michael Pratt
Michael Pratt 4 Full year results ¦ 30 April 2018
Slide 5: Group Revenue and Profit
GROUP REVENUE AND PROFIT (£m) 2018 2017 Change1 Revenue 3,706 3,187 20% - of which rental 3,418 2,901 21% Operating costs (1,973) (1,683) 20% EBITDA 1,733 1,504 19% Depreciation (696) (607) 18% Operating profit 1,037 897 19% Net interest (110) (104) 9% Profit before amortisation, exceptional items a
Slide 6: Sunbelt US Revenue and Profit
SUNBELT US REVENUE AND PROFIT ($m) 2018 2017 Change Revenue 4,153 3,525 18% - of which rental 3,887 3,232 20% Operating costs (2,090) (1,779) 17% EBITDA 2,063 1,746 18% Depreciation (770) (665) 16% Operating profit 1,293 1,081 20% Margins - EBITDA 50% 50% - Operating profit 31% 31% 6 Full year resul
Slide 7: Sunbelt Canada Revenue and Profit
SUNBELT CANADA REVENUE AND PROFIT (C$m) 2018 2017 Change Revenue 223 77 191% - of which rental 185 67 175% Operating costs (155) (46) 236% EBITDA 68 31 123% Depreciation (40) (21) 91% Operating profit 28 10 192% Margins - EBITDA 30% 40% - Operating profit 13% 13% 7 Full year results ¦ 30 April 2018
Slide 8: A-Plant Revenue and Profit
A-PLANT REVENUE AND PROFIT (£m) 2018 2017 Change Revenue 472 418 13% - of which rental 405 365 11% Operating costs (305) (265) 15% EBITDA 167 153 10% Depreciation (97) (81) 20% Operating profit 70 72 (2)% Margins - EBITDA 35% 37% - Operating profit 15% 17% 8 Full year results ¦ 30 April 2018
Slide 9: Cash Flow
CASH FLOW (£m) 2018 2017 Change3 EBITDA before exceptional items 1,733 1,504 19% Cash conversion ratio1 97.0% 96.0% Cash inflow from operations2 1,681 1,444 20% Replacement and non-rental capital expenditure (517) (527) Rental equipment and other disposal proceeds received 161 161 Interest and tax p
Slide 10: Net Debt and Leverage
NET DEBT AND LEVERAGE NET DEBT TO EBITDA TOWARDS THE LOWER END OF OUR RANGE April Leverage (£m) 2018 2017 3.5 3.2 Net debt at 30 April 2,528 2,002 3.0 3.0 Translation impact (141) 229 2.5 2.3 Opening debt at closing exchange rates 2,387 2,231 2.0 2.0 1.8 1.8 Change from cash flows 282 273 1.7 1.7 1.
Slide 11: Impact of US Tax Reform
IMPACT OF US TAX REFORM 2017/18 2018/19 onwards Blended effective Group tax rate of 32% Effective Group tax rate of 23-25% Cash tax rate of 10% Cash tax rate of mid to high single digits in 2018/19, increasing in subsequent years towards the effective rate Reduced deferred tax liability re
Slide 12: Geoff Drabble
Geoff Drabble 12 Full year results ¦ 30 April 2018
Slide 13: Balanced Growth Anticipated in Line with 2021 Plan
BALANCED GROWTH ANTICIPATED IN LINE WITH 2021 PLAN 2017/18 2018/19 Q1 Q2 Q3 Q4 Full year plan outlook Same-store1 organic growth2 4 – 6% 7% 10% 13% 10% 10% nm Greenfields2 3 – 4% 3% 4% 5% 6% 5% nm Organic growth 7 – 10% 10% 14% 18% 16% 15% 8 – 11% Bolt-ons 2 – 3% 5% 5% 5% 4% 5% 3 – 4% Rental revenue
Slide 14: Encouraging Trends on Rate, Physical Utilisation and Margins
ENCOURAGING TRENDS ON RATE, PHYSICAL UTILISATION AND MARGINS Improving rate trend Mix still a factor year on year 1.100 Q4 2018 Q4 2017 FY18 FY17 1.050 Day 8% 10% 9% 10% Rate index 1.000 Week 19% 20% 20% 21% 0.950 0.900 Month 73% 70% 71% 69% Jun-16 Nov-16 Dec-16 Jun-17 Nov-17 Dec-17 Jul-16 Jul-17 Se
Slide 15: Good Organic Growth Supplemented by Bolt-ons
GOOD ORGANIC GROWTH SUPPLEMENTED BY BOLT-ONS SAME-STORE PERFORMANCE REMAINS STRONG AND THE KEY DRIVER Full year Organic Bolt-ons2 Total1 Proportion of revenue 96% 4% 100% Fleet on rent – % change +14% nm +19% Net yield +1% nm nil% Physical utilisation – actual 72% 69% 72% Dollar utilisation 56% 45%
Slide 16: Margin Evolution as Stores and Clusters Mature
MARGIN EVOLUTION AS STORES AND CLUSTERS MATURE Individual store evolution Cluster evolution EBITA margin % Non- Profile EBITA %1 ROI2 construction Store vintage Locations 2016 2018 Mature stores (up to FY11) 325 39 40 Mature >60% 41% 29% Initial openings (FY12-FY16) 207 30 36 Recent openings (FY17-F
Slide 17: Markets Remain Strong Across All Sectors
MARKETS REMAIN STRONG ACROSS ALL SECTORS US rental revenue forecasts Dodge construction starts Square footage under roof rental opportunity Indexed: 2000=100 180 2017 2018 2019 2020 2021 160 140 $4 ~2-3% 2016-2022 MRO p/sq ft MRO spend CAGR: +2% Industry rental 120 +4% +6% +6% +6% +5% revenue 100 80
Slide 18: US Market Share
US MARKET SHARE THE BIG ARE GETTING BIGGER AND WILL CONTINUE TO LEVERAGE SCALE Rental revenue growth (2010 – 2017) 2010 – 2017 CAGR in revenue 30% 25% YoY growth (%) 20% Sunbelt 19% 15% Top 10 (exc. Sunbelt) 10% 10% Market 6% 5% 0% 2010 2011 2012 2013 2014 2015 2016 2017 -5% Sunbelt US RER Top 10 (e
Slide 19: Sunbelt Canada
SUNBELT CANADA (C$m) 2018 2017 % growth Rental revenue 185 67 175% EBITDA 68 31 123% EBITA 28 10 192% Rental revenue growth in western Canada of 20% Rental revenue growth in eastern Canada of 25% Canadian rental revenue forecasts Total market size 2017 2018 2019 2020 2021 ($bn) US UK Canada Indu
Slide 20: A-Plant Revenue Drivers
A-PLANT REVENUE DRIVERS GROWTH CONTINUES BACKED BY FLEET INVESTMENT Average fleet on rent Physical utilisation 80% +24% +25% +9% +10% 70% 60% 50% 40% 2016-17 2017-18 30% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Q1 Q2 Q3 Q4 Year over year change in yield Margins Full year 2018 2017 EBITDA
Slide 21: Continued Focus on Fleet Investment in 2018/19
CONTINUED FOCUS ON FLEET INVESTMENT IN 2018/19 2019 2016 2017 2018 Outlook1 Sunbelt US ($m) - rental fleet - replacement 558 391 347 300 – 400 - growth 818 648 921 850 – 950 - non-rental fleet 125 108 142 120 1,501 1,147 1,410 1,270 – 1,470 Sunbelt Canada - rental fleet - replacement 17 17 21 10 – 2
Slide 22: Capital Allocation Policy
CAPITAL ALLOCATION POLICY STRONG CASH GENERATION AND ENCOURAGING OUTLOOK Clear priorities Consistently applied Organic fleet growth – Same-store £1.2bn on capital expenditure – Greenfields £392m on bolt-ons Bolt-on acquisitions £200m spent on share buybacks under Returns to shareholders
Slide 23: Capital Allocation and EPS Growth to 2021
CAPITAL ALLOCATION AND EPS GROWTH TO 2021 2021 assumptions Group underlying EPS Organic growth 7-10% p.a. 140 128 Group EBITDA margin 47-48% 120 104 Group EBITA margin 29-30% 100 85 Three year capital expenditure spend c. £3bn 80 63 Leverage in range of 1.5 to 2.0 times EBITDA 60 47 40 31 17 20 4 Av
Slide 24: Summary
SUMMARY Good momentum carried into 2018/19 with supportive markets We have a clear plan to 2021 to deliver 15 – 20% EPS growth per annum Leverage maintained within our 1.5 to 2.0 times range as we focus on responsible growth Final dividend of 27.5p making 33.0p for the year as we remain comm
Slide 25: Appendices
Appendices 25 Full year results ¦ 30 April 2018
Slide 26: Divisional Performance – Q4
DIVISIONAL PERFORMANCE – Q4 Revenue EBITDA Profit 2018 2017 Change1 2018 2017 Change1 2018 2017 Change1 Sunbelt US ($m) 1,034 879 18% 495 420 18% 292 246 19% Sunbelt Canada (C$m) 62 20 218% 8 9 (4)% (5) 3 (278)% Sunbelt US (£m) 738 702 5% 352 336 5% 208 197 5% A-Plant 118 117 1% 39 42 (8)% 13 21 (36
Slide 27: Divisional Performance – Twelve Months
DIVISIONAL PERFORMANCE – TWELVE MONTHS Revenue EBITDA Profit 2018 2017 Change1 2018 2017 Change1 2018 2017 Change1 Sunbelt US ($m) 4,153 3,525 18% 2,063 1,746 18% 1,293 1,081 20% Sunbelt Canada (C$m) 223 77 191% 68 31 123% 28 10 192% Sunbelt US (£m) 3,103 2,724 14% 1,542 1,348 14% 966 835 16% A-Plan
Slide 28: Sunbelt US – Revenue Drivers
SUNBELT US – REVENUE DRIVERS FULL YEAR General Tool Specialty Total % of business 78% 22% 100% Rental revenue growth +18% +30% 20% Fleet on rent +19% +24% +19% Yield -1% +5% nil% Year-on-year physical utilisation nil% +15% 1% Presented on a billing day basis 28 Full year results ¦ 30 April 2018
Slide 29: 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 29 Full year results ¦ 30 April 2018
Slide 30: Fleet Continues to Grow
FLEET CONTINUES TO GROW THROUGH GROWTH CAPITAL EXPENDITURE AND BOLT-ON M&A RENTAL FLEET AT ORIGINAL COST 30 April 2018 30 April 2017 Growth in rental fleet1 Sunbelt US in $m 7,552 6,439 17% Sunbelt Canada in C$m 394 168 135% Sunbelt US in £m 5,482 4,977 10% A-Plant 862 774 11% Sunbelt Canada in £m 2
Slide 31: Good Progress on 2021 Plan
GOOD PROGRESS ON 2021 PLAN ACQUISITIONS AND GREENFIELDS Acquisition Consideration Acquisition Consideration Noble May 2017 $34m Nickell February 2018 $15m RGR May 2017 $58m Beaupre February 2018 $57m MSP June 2017 $23m WGE February 2018 $3m Green Acres June 2017 $5m DJ’s March 2018 $6m CRS August 20
Slide 32: 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 (April 2018: $1,115m) Drawn £m 2018 2019 2020 2021 Jul 2023 Oct Aug 2026 Aug 202
Slide 33: 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) 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 EBITDA before exceptional items 1,733 1,504 1,178 908 685 519 381 284 255 356 364 310 225 170 EBITDA ma
Slide 34: 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 2018 Moderate growth Cyclical downturn Cash flow from 280 365 501 646 841 1,071 1,444 1,681 Growing Decreasing but re
Slide 35: $1,115m of Availability at 30 April 2018
$1,115M OF AVAILABILITY AT 30 APRIL 2018 Book value Borrowing base Senior debt £5,604m (April 17 : £5,133m) £669m Calculation: Inventory – 50% of book value £4,053m (April 17 : £3,726m) Receivables – 85% of net eligible receivables £430m Fleet and vehicles – 85% of net appraised market value of elig
Slide 36: 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 37: We Have Increased Our Footprint and Gained Significant Market Share
WE HAVE INCREASED OUR FOOTPRINT AND GAINED SIGNIFICANT MARKET SHARE April 2012 April 2018 stores – April 2012 store growth – May 2012 to April 2018 37 Full year results ¦ 30 April 2018
Slide 38: Working Cluster
WORKING CLUSTER Small GT location Baltimore/Washington DC Parkville, MD Fleet Size $299m Fleet Size $6m GT Locations 21 Rental $4m Specialty Locations 10 Employees 8 EBITA 44% ROI% 32% ROI 31% EBITA 44% Large GT location Climate Control location Laurel, MD DC Climate Control Fleet Size $40m Fleet Si
Slide 39: Significant Opportunity to Build Out Further Clusters
SIGNIFICANT OPPORTUNITY TO BUILD OUT FURTHER CLUSTERS USA Canada Rental markets Top 25 26-50 51-100 100-210 Top 10 11-25 26-76 Rental market % 57% 19% 15% 9% 64% 22% 14% Cluster definition >15 >10 >4 >1 >10 >4 >1 5 markets 5 markets 5 markets 12 markets 1 market 2 markets Clustered 0 113 stores 58 s
Slide 40: Our Financial Road Map to 2021
OUR FINANCIAL ROAD MAP TO 2021 Revenue ($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 41: Important Not to 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 47 140 45 128 18 17 18 45 42 16 120 15 38 38 16 40 104 14 35 35 33 34 14 13 35 100 12 30 30 85 12 30 80 10 10 25 63 7 60 8 20 47 6 5 15 40 31 4 10 17 20 11 10 15