Slide 1: Ambition with Purpose: Nine Month Results
AMBITION WITH PURPOSE NINE MONTH RESULTS 7 March 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 ▪ Strong performance and momentum in robust end markets ▪ Group rental revenue 25% ahead of last year; US rental revenue up 27% ▪ Profit before tax 1 up 28% to $1,778m (2022: $1,406m) and EPS 1 up 30% to 304.2ȼ (2022: 235.1ȼ) ▪ $2.6bn invested in capital expenditure ▪ 120 locations added
Slide 4: 2022/23 Outlook
2022/23 OUTLOOK Previous guidance Current guidance Rental revenue1 - US 20 to 23% 23 to 25% - Canada 22 to 25% 22 to 25% - UK2 Flat 0 to 3% - Group 18 to 21% 21 to 23% Capital expenditure (gross)3 $3.3 – 3.6bn $3.5 – 3.7bn - of which, rental fleet is: $2.7 – 3.0bn $2.9 – 3.1bn Free cash flow3 c. $30
Slide 5: Financial Review
FINANCIAL REVIEW MICHAEL PRATT 5 Nine month results ¦ 31 January 2023
Slide 6: Group
GROUP $m 2023 2022 Change1 Revenue 7,224 5,884 25% ‐ of which rental 6,572 5,360 25% Operating costs (3,886) (3,175) 26% EBITDA 3,338 2,709 25% Depreciation (1,303) (1,130) 17% Operating profit 2,035 1,579 30% Net interest (257) (173) 50% Profit before amortisation, exceptional items and tax 1,778 1
Slide 7: US
US $m 2023 2022 Change Revenue 6,139 4,764 29% ‐ of which rental 5,669 4,468 27% Operating costs (3,152) (2,430) 30% EBITDA 2,987 2,334 28% Depreciation (1,097) (920) 19% Operating profit 1,890 1,414 34% Margins ‐ EBITDA 48.7% 49.0% ‐ Operating profit 30.8% 29.7% Return on investment 27.1% 24.4% The
Slide 8: Canada
CANADA C$m 2023 2022 Change Revenue 609 463 31% ‐ of which rental 524 420 25% Operating costs (354) (251) 41% EBITDA 255 212 20% Depreciation (124) (102) 21% Operating profit 131 110 19% Margins ‐ EBITDA 41.8% 45.7% ‐ Operating profit 21.6% 23.8% Return on investment 19.1% 21.7% The results in the t
Slide 9: UK
UK £m 2023 2022 Change Revenue 522 547 -5% ‐ of which rental 424 406 4% Operating costs (372) (382) -3% EBITDA 150 165 -9% Depreciation (95) (93) 1% Operating profit 55 72 -23% Margins ‐ EBITDA 28.7% 30.1% ‐ Operating profit 10.6% 13.1% Return on investment 9.9% 15.1% The results in the table above
Slide 10: Cash Flow
CASH FLOW Nine months LTM January $m 2023 2022 2023 EBITDA before exceptional items 3,338 2,709 4,239 Cash conversion ratio1 87% 92% 90% Cash inflow from operations2 2,897 2,481 3,822 Replacement and non-rental capital expenditure (1,329) (864) (1,693) Rental equipment and other disposal proceeds re
Slide 11: Net Debt
NET DEBT Leverage (excluding impact of IFRS 16) $m 2023 2022 3.0 Opening net debt 7,160 5,801 2.6 2.5 Change from cash flows 1,229 774 2.3 2.0 Translation impact (29) (31) 2.0 1.9 2.0 1.9 1.8 1.7 Debt acquired 181 81 1.6 1.6 1.6 1.5 New lease liabilities 275 253 1.5 Deferred debt raising cost amorti
Slide 12: 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 $3,000m ▪ Subsequent to notes issue, borrowing facilities committed for average of six years at a weighted a
Slide 13: Operational Review
OPERATIONAL REVIEW BRENDAN HORGAN 13 Nine month results ¦ 31 January 2023
Slide 14: US Trading
US TRADING Rental revenue1 FY22 FY23 ▪ Strong growth present across all General Tool geographies and Specialty rental segments Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 YTD General tool +15% +14% +20% +24% +18% +23% +21% +21% +22% ▪ Ongoing strength in performance evidence of robust Specialty +22% +23% +34% +34% +28%
Slide 15: Specialty Trading
SPECIALTY TRADING Rental revenue1 FY22 FY23 ▪ Unique portfolio of Specialty businesses takes advantage of ongoing growth Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 YTD opportunities in lowly penetrated products Power and HVAC +24% +22% +30% +35% +27% +34% +26% +41% +34% Climate Control and Air Quality +25% +31% +17% +
Slide 16: US Construction Outlook
US CONSTRUCTION OUTLOOK Dodge construction starts 2019 2020 2021 2022 2023 2024 2025 2026 350 Indexed: 2000=100 Construction put in place ($bn) 300 Non-residential 546 556 523 646 745 719 734 784 250 Non-building 291 300 301 325 384 449 480 499 200 Construction (excl. resi) 837 856 824 971 1,129 1,1
Slide 17: Canada Trading
CANADA TRADING Fleet on rent (excluding Lighting, Grip and Lens) ▪ Sunbelt 3.0 plan progressing well, with cluster development and increasing business maturity delivering strong margins and returns ▪ Amplification of Specialty business progressing well ▪ Healthy demand and market dynamics contributi
Slide 18: UK Trading
UK TRADING Fleet on rent ▪ Strong underlying performance with rental only revenue, excluding the DoH work, up 22% ▪ End market resilience in infrastructure and industrial, as shut- down work resumes ▪ Unique range of general and specialty products in the UK market resulting in customer wins across d
Slide 19: Sunbelt 3.0: Strategic Growth Plan Ahead of Pace
SUNBELT 3.0: STRATEGIC GROWTH PLAN AHEAD OF PACE 1 Actionable GROW GENERAL TOOL Progress component & ADVANCE OUR CLUSTERS ▪ $5.0bn of capital invested in the business, of which $4.2bn invested in rental assets 2 SPECIALTY AMPLIFY ▪ ▪ Opened 139 greenfield locations in North America, of which 112
Slide 20: Initial Group Fleet Plan for 2023/24
INITIAL GROUP FLEET PLAN FOR 2023/24 2022 2023 2023 2024 Actual Q3 actual (YTD) Current guidance1 Initial guidance1 US ($m) - rental fleet 1,625 1,951 2,600 – 2,700 3,000 – 3,300 - non-rental fleet 321 322 500 500 1,946 2,273 3,100 – 3,200 3,500 – 3,800 Canada (C$m) - rental fleet 201 190 200 – 230
Slide 21: Summary
SUMMARY ▪ Clear momentum, with strong positions in robust end markets ▪ The recent CHIPS Act and Inflation Reduction Act enhance and add clarity to an already strong construction market, flush with mega projects ▪ Supply constraints, inflation and skilled trade scarcity are agents of structural chan
Slide 22: Appendices
APPENDICES 22 Nine month results ¦ 31 January 2023
Slide 23: Divisional Performance: Third Quarter Results
DIVISIONAL PERFORMANCE THIRD QUARTER RESULTS Revenue EBITDA Profit 2023 2022 Change1 2023 2022 Change1 2023 2022 Change1 UK (£m) 160 179 -10% 40 50 -19% 7 18 -58% Canada (C$m) 220 153 44% 85 64 33% 40 29 36% US 2,070 1,639 26% 989 767 29% 608 444 37% UK ($m) 193 240 -19% 48 66 -27% 9 24 -61% Canada
Slide 24: Divisional Performance: Last Twelve Months
DIVISIONAL PERFORMANCE LAST TWELVE MONTHS Revenue EBITDA Profit 2023 2022 Change1 2023 2022 Change1 2023 2022 Change1 UK (£m) 700 738 -5% 200 222 -10% 71 94 -25% Canada (C$m) 772 607 27% 324 277 17% 165 144 14% 1,753 US 7,853 6,147 28% 3,773 2,977 27% 2,329 1,753 33% UK ($m) 860 1,012 -15% 245 305 -
Slide 25: 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 -10.0% GFC: 30% rental Ten years of growth -20.0% revenue decline CAGR: 18% peak to tro
Slide 26: US Construction Outlook: Residential Building Starts
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 1,626 1,01
Slide 27: 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 28: Mega Project Landscape
MEGA PROJECT LANDSCAPE ▪ Projects over $400m represent an ever increasing proportion of total non-residential construction starts (30% today compared with 13% in 2000-2009) Increase in ▪ c. 200 projects with a value of over $400m currently ongoing/under construction, with an average value $1.2bn meg
Slide 29: Legislative Acts Supporting End Market Demand
LEGISLATIVE ACTS SUPPORTING END MARKET DEMAND INFRASTRUCTURE INVESTMENT THE CHIPS AND SCIENCE ACT2 INFLATION REDUCTION ACT2 AND JOBS ACT1 ▪ $1.2tn in federal spending, with net ▪ $250bn act boosting American ▪ Investment focused on energy, climate additional funding of $550bn semiconductor research,
Slide 30: Market Dynamics Enhance Structural Opportunity
MARKET DYNAMICS ENHANCE STRUCTURAL OPPORTUNITY Dynamic Anticipated duration Our advantage ▪ Partnership and trust with OEMs SUPPLY CHAIN ▪ Long range fleet planning where supply THESE DYNAMICS ARE ALL CONSTRAINTS 12 – 18 months constraints mitigate industry over-fleeting TAILWINDS TO RENTAL ▪ Financ
Slide 31: US Fleet Profile
US FLEET PROFILE ▪ Smooth fleet profile ▪ Benefits of prolonged cycle and our growth strategy ▪ Strong position providing optionality through the cycle ▪ Flexibility to turn replacement into growth and vice versa ▪ Strengthens partnership with suppliers through predictability 31 Nine month results ¦
Slide 32: Cash Flow Funds All Fleet Investment
CASH FLOW FUNDS ALL FLEET INVESTMENT LTM- ($m) 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 Jan 23 EBITDA before exceptionals 4,239 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%
Slide 33: $2,642m of Availability at 31 January 2023
$2,642M OF AVAILABILITY AT 31 JANUARY 2023 Book value Borrowing base Senior debt $12,068m (April 22: $10,238m) $1,481m $9,292m Calculation: (April 22: $7,755m) Inventory – 50% of book $1,182m value Receivables – 85% of net eligible receivables $9,727m Fleet and vehicles – lower of 85% of net apprais
Slide 34: 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 35: Capital Allocation
CAPITAL ALLOCATION CONSISTENTLY APPLIED POLICY CONTINUES CLEAR PRIORITIES APPLICATION Organic fleet growth ▪ Same-store ▪ $2,621m invested in the business ▪ Greenfields ▪ 51 greenfields opened in North America ▪ $970m spent on bolt-ons, with 69 locations added in North America Bolt-on acquisitions ▪
Slide 36: 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 36 Nine month results ¦ 31 January 2023
Slide 37: 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 38: 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 FY22 total rental 10% RENTAL MARKET Incremental projected FY24 total rental via existing locations and greenfields PENETR
Slide 39: 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 40: US Market Share
US MARKET SHARE 2010 2022 Future 5% 4% 3% 16% 20%+ 3% 6% 44% 12% All others 13% 4% One or two 66% others 7% 17% United Rentals Sunbelt RSC Herc Rentals Top 4-10 Top 11-100 Other Two or three have 50%+ of the market 40 Nine month results ¦ 31 January 2023
Slide 41: 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 46 350 18 45 45 18 17 18 18 45 42 307 16 300 15 15 38 38 16 15 40 14 35 35 33 34 14 13 35 250 227 222 219 12 30 30 12 30 200 171 10 10 25 8 7 20 150 128 1