Herc Holdings Inc. · NYSE:HRI
Herc — Q4 2024 Earnings Presentation
34 slides from Herc's earnings presentation, Feb 13, 2025
Slide 1: Scaling for Sustainable Growth: Q4 and Full Year 2024 Earnings Call
Scaling for Sustainable Growth Q4 AND FULL YEAR 2024 EARNINGS CONFERENCE CALL February 13, 2025
Slide 2: Herc Rentals Team and Agenda
Herc Rentals Team and Agenda Agenda Safe Harbor FY 2024 Summary Q4 Operations Review Q4 Financial Review 2025 Outlook Larry Silber Aaron Birnbaum Mark Humphrey Leslie Hunziker Q&A President & Chief Senior Vice President Senior Vice President Senior Vice President Executive Officer & Chief Operating
Slide 3: Safe Harbor Statements and Non-GAAP Financial Measures
Safe Harbor Statements and Non-GAAP Financial Measures Forward-Looking Statements Information Regarding Non-GAAP Financial Measures This presentation includes forward-looking statements within the meaning of Section In addition to results calculated according to accounting principles generally accep
Slide 4: FY 2024: Delivering on Growth Strategies
FY 2024: Delivering on Growth Strategies Optimize branch network for fleet / operating efficiencies at scale • Completed 9 acquisitions—28 locations; opened 23 greenfield locations Strategies to Accelerate ROIC and Increase Enhance fleet mix Shareholder Returns: • Added 15 new specialty locations th
Slide 5: FY 2024: Financial Performance
FY 2024: Financial Performance1 Equipment Rental Revenue Total Revenues Adjusted EBITDA2 $ in millions $3,189 $ in millions $3,568 $ in millions $1,583 $1,452 $2,870 $3,282 11% $1,227 9% 9% $2,552 $2,740 $895 $689 $1,910 $2,073 $1,544 $1,780 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 2020 202
Slide 6: 2025 Perspective
2025 Perspective Revenue • Expect to continue to outpace industry growth rate1 • Managing the complexities of disparate levels of demand across geographies, end markets and project types ◦ Mega and infrastructure projects ramp up, while interest rates weigh on local markets • Balanced approach to M&
Slide 7: Operations Review
Operations Review Aaron Birnbaum Senior Vice President and Chief Operating Officer Herc Holdings Inc. NYSE: HRI Q4 2024 7
Slide 8: Focusing on Safety
Focusing on Safety Full Year 2024: Continuing focus on Perfect Days • All branches reported > 98% Perfect Days • Perfect Days are those with no: • OSHA reportable incidents • At-fault moving vehicle accidents • DOT violations Total Recordable Incident Rate is 0.87 — favorable to industry standard of
Slide 9: Scaling for Sustainable Growth: Expanding Through Acquisitions and Greenfields
Scaling for Sustainable Growth Expanding Through Acquisitions and Greenfields Adding locations increases density and share in urban markets • 451 locations at December 31, 2024, +14% YoY Targeting Top 100 metropolitan markets • Q4: 1 acquisition - 2 locations; 7 greenfield locations • FY 24: 9 acqui
Slide 10: Optimizing Fleet Mix and Lifecycle Performance
Optimizing Fleet Mix and Lifecycle Performance Fleet Expenditures at OEC1 $7.0 billion at OEC1,2 $ in millions 2023 2024 Other $400 Specialty $348 $344 $366 22% 23% $274 $196 $200 $167 Fleet Q1 Q2 Q3 Q4 Composition 20% Fleet Disposals at OEC1 Material 24% $ in millions Handling 2023 2024 11% Aerial
Slide 11: Delivering Growth and Resiliency through Diversification
Delivering Growth and Resiliency through Diversification Contractors 37% 25% Q4 Revenue Industrial Q4 Local vs. 46% National by Customer1 Local 54% National Mix 7% Other 13% 18% Commercial Facilities Infrastructure & Government • Local account revenue increased due to acquisitions and greenfields, a
Slide 12: Capitalizing on Growth Trends Across Diverse Customer and Project Base
Capitalizing on Growth Trends Across Diverse Customer and Project Base Infrastructure Commercial Contractors (37%) Industrial (25%) Other (7%) & Gov. Direct (18%) Facilities (13%) • Electrical • Agriculture • Aerospace • Airports • Banks • Sporting Events • General Contractors • Chemical Processing
Slide 13: Financial Review
Financial Review Mark Humphrey Senior Vice President and Chief Financial Officer
Slide 14: Q4 and FY 2024 Financial Results
Q4 and FY 2024 Financial Results Three Months Ended December 31, Year Ended December 31, 2024 vs 2023 2024 vs 2023 2024 2023 2024 2023 $ in millions, except per share data % Change % Change Equipment Rental Revenue $839 $748 12.2% $3,189 $2,870 11.1% Total Revenues $951 $831 14.4% $3,568 $3,282 8.7%
Slide 15: Q4 and FY 2024 Financial Results Excluding Cinelease Studio Entertainment
Q4 and FY 2024 Financial Results Excluding Cinelease Studio Entertainment1 Three Months Ended December 31, Year Ended December 31, 2024 vs 2023 2024 vs 2023 2024 2023 2024 2023 $ in millions % Change % Change Core Equipment Rental Revenue $823 $738 11.5% $3,102 $2,820 10.0% Core Total Revenues $934
Slide 16: Q4 24 YoY Results Bridge Excluding Cinelease Studio Entertainment
Q4 24 YoY Results Bridge Excluding Cinelease Studio Entertainment1 Core Equipment Rental Revenue Core Adjusted EBITDA $823 $436 $385 $738 2023 Equipment Gain on DOE SG&A Other 2024 2023 Pricing OEC on Rent Mix Ancillary 2024 Rental Sale of Revenue Rental Equipment Q4 24 Core Adjusted EBITDA Margin d
Slide 17: Disciplined Capital Management
Disciplined Capital Management Ample liquidity2 of $1.9 billion provides financial flexibility Maturities As of December 31, 2024 $ in millions Net leverage3 of 2.5x, within target range of 2.0x to 3.0x ABL Credit ABL Credit Facility Facility $1,621 Free cash flow of $314 million for full year 2024
Slide 18: Continued Strength in Key End Markets
Continued Strength in Key End Markets Industrial Spending1 Mega Project Starts3 $564 $ in billions $465 $ in billions $453 $446 $447 $434 $432 $352 $322 $290 $328 $310 $317 —$309 — — — — — — — — — — — — — — — — $298 17 18 19 20 21 22 23 24 25E 26E 27E 28E 23 24 25E Non-Residential Starts2 $552 Infra
Slide 19: 2025 Outlook excluding Cinelease
2025 Outlook excluding Cinelease Metric 2024 Actual Excluding Cinelease 2025 Guidance Equipment Rental Revenue 10% +4% to 6% Adjusted EBITDA $1.562 billion $1.575 billion to $1.650 billion Net Rental Equipment Expenditures $760 million $400 to $600 million Gross Capex $1.048 billion $700 to $900 mil
Slide 20: Purpose, Vision, Mission and Values
Purpose, Vision, Mission and Values We equip our customers and communities to build a brighter future Herc Holdings Inc. NYSE: HRI Q4 2024 20
Slide 21: Appendix
Appendix oe a aw .
Slide 22: Glossary of Terms Commonly Use in the Industry
Glossary of Terms Commonly Use in the Industry OEC: Original Equipment Cost which is an operating measure based on the guidelines of the American Rental Association (ARA), which is calculated as the cost of the asset at the time it was first purchased plus additional capitalized refurbishment costs
Slide 23: Cinelease Studio Entertainment Assets Held for Sale
Cinelease Studio Entertainment Assets Held for Sale Cinelease is Herc's studio management and lighting and grip business • Market preference for lighting and grip equipment to be part of studio ownership • Owning studio real estate does not align with Herc strategy • Lighting and grip equipment repr
Slide 24: Reconciliation of Net Income to Adj. EBITDA and Adj. EBITDA Margin, Rental Adj. EBITDA
Reconciliation of Net Income to Adj. EBITDA and Adj. EBITDA Margin, Rental Adj. EBITDA (REBITDA), REBITDA Margin and Flow-Through EBITDA, Adjusted EBITDA, and REBITDA—EBITDA represents the sum of net income, provision (benefit) for income taxes, interest expense, net, depreciation of rental equipmen
Slide 25: Reconciliation of Net Income to Adj. EBITDA and Adj. EBITDA Margin, Rental Adj. EBITDA
Reconciliation of Net Income to Adj. EBITDA and Adj. EBITDA Margin, Rental Adj. EBITDA (REBITDA), REBITDA Margin and Flow-Through Three Months Ended December 31, Year Ended December 31, $ in millions 2024 2023 2024 2023 Net income (loss) ($46) $91 $211 $347 Income tax provision 3 32 80 100 Interest
Slide 26: Reconciliation Excluding Studio Entertainment, Three Months Ended December 31
Reconciliation of Net Income to Adj. EBITDA and Adj. EBITDA Margin, Rental Adj. EBITDA (REBITDA), REBITDA Margin and Flow-Through, Excluding Studio Entertainment Three Months Ended December 31, 2024 2023 $ in millions Herc Studio Entertainment Herc, excl Studio Herc Studio Entertainment Herc, excl S
Slide 27: Reconciliation Excluding Studio Entertainment, Year Ended December 31
Reconciliation of Net Income to Adj. EBITDA and Adj. EBITDA Margin, Rental Adj. EBITDA (REBITDA), REBITDA Margin and Flow-Through, Excluding Studio Entertainment Year Ended December 31, 2024 2023 $ in millions Herc Studio Entertainment Herc, excl Studio Herc Studio Entertainment Herc, excl Studio Eq
Slide 28: REBITDA Margin and Flow-Through Quarterly Trend
REBITDA Margin and Flow-Through Quarterly Trend $ in millions Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY 2024 Net income (loss) $67 $76 $113 $91 $347 $65 $70 $122 ($46) $211 Income tax provision 8 27 33 32 100 16 23 38 3 80 Interest expense, net 48 54 60 62 224 61 63
Slide 29: REBITDA Margin and Flow-Through Annual Trend
REBITDA Margin and Flow-Through Annual Trend $ in millions 2019 2020 2021 2022 2023 2024 Net income $47 $74 $224 $330 $347 $211 Income tax provision 16 20 67 104 100 80 Interest expense, net 174 93 86 122 224 260 Depreciation of rental equipment 410 403 420 536 643 679 Non-rental depreciation and am
Slide 30: Reconciliation of Net Income and Adjusted Earnings Per Diluted Share
Reconciliation of Net Income and Adjusted Earnings Per Diluted Share Adjusted Net Income and Adjusted Earnings Per Diluted Share - Adjusted Net Income represents the sum of net income, transaction related costs, restructuring and restructuring related charges, spin-off costs, loss on extinguishment
Slide 31: Calculation of Net Leverage Ratio
Calculation of Net Leverage Ratio Net Leverage Ratio –The Company has defined its net leverage ratio as net debt, as calculated below, divided by adjusted EBITDA for the trailing twelve- month period. This measure should be considered supplemental to and not a substitute for financial information pr
Slide 32: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow Free cash flow is not a recognized term under GAAP and should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP. Further, since all companies do not use identical calculations, our definition and presentation
Slide 33: Historical Fleet at OEC
Historical Fleet at OEC1 $ in millions FY 2019 FY 2020 FY 2021 FY 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY 2024 Beginning Balance $3,777 $3,822 $3,589 $4,381 $5,637 $5,915 $6,211 $6,217 $5,637 $6,328 $6,416 $6,714 $7,088 $6,328 Expenditures 627 348 725 1,218 34
Slide 34: For additional information, please contact
For additional information, please contact: Leslie Hunziker SVP Investor Relations, Communications & Sustainability leslie.hunziker@hercrentals.com 239-301-1675 Herc Holdings Inc. NYSE: HRI Q4 2024 34