Slide 1: Ambition with Purpose: Nine Month Results
AMBITION WITH PURPOSE NINE MONTH RESULTS 5 March 2024
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 ▪ Group revenue 14% ahead of last year (rental revenue: 11%); US revenue up 15% (rental revenue up 12%) ▪ 12% increase in EBITDA to $3,752m, profit before tax¹ of $1,785m (2023: $1,778m) and EPS¹ up 1% to 307.2ȼ (2023: 304.2ȼ) ▪ Third quarter performance affected by absence of large-scale
Slide 4: 2023/24 Outlook
2023/24 OUTLOOK Previous guidance Current guidance Rental revenue1 - US 11 to 13% 11 to 13% - Canada2 14 to 16% 11 to 13% - UK 6 to 9% 6 to 9% - Group 11 to 13% 11 to 13% Capital expenditure (gross)3 $3.9 – 4.3bn c. $4.2bn - of which, rental fleet is: $3.3 – 3.6bn c. $3.5bn Free cash flow3 c. $150m
Slide 5: Financial Review
FINANCIAL REVIEW MICHAEL PRATT 5 Nine month results ¦ 31 January 2024
Slide 6: Group
GROUP $m 2024 2023 Change1 Revenue 8,231 7,224 14% ‐ of which rental 7,317 6,572 11% Operating costs (4,479) (3,886) 15% EBITDA 3,752 3,338 12% Depreciation (1,567) (1,303) 20% Operating profit 2,185 2,035 7% Net interest (400) (257) 56% Profit before amortisation and tax 1,785 1,778 -% Earnings per
Slide 7: US
US $m 2024 2023 Change Revenue 7,072 6,139 15% ‐ of which rental 6,337 5,669 12% Operating costs (3,680) (3,152) 17% EBITDA 3,392 2,987 14% Depreciation (1,311) (1,097) 20% Operating profit 2,081 1,890 10% Margins ‐ EBITDA 48.0% 48.7% ‐ Operating profit 29.4% 30.8% Return on investment 24.5% 27.1% T
Slide 8: Canada
CANADA C$m 2024 2023 Change Revenue 676 609 11% ‐ of which rental 573 524 9% Operating costs (404) (354) 14% EBITDA 272 255 7% Depreciation (166) (124) 35% Operating profit 106 131 -20% Margins ‐ EBITDA 40.2% 41.8% ‐ Operating profit 15.7% 21.6% Return on investment 12.0% 19.1% The results in the ta
Slide 9: UK
UK £m 2024 2023 Change Revenue 524 522 -% ‐ of which rental 441 424 4% Operating costs (378) (372) 1% EBITDA 146 150 -2% Depreciation (105) (95) 11% Operating profit 41 55 -25% Margins ‐ EBITDA 27.9% 28.7% ‐ Operating profit 7.9% 10.6% Return on investment 6.5% 9.9% The results in the table above ar
Slide 10: Cash Flow
CASH FLOW Nine months LTM January $m 2024 2023 2024 EBITDA 3,752 3,338 4,825 Cash conversion ratio1 89% 87% 93% Cash inflow from operations2 3,321 2,897 4,498 Replacement and non-rental capital expenditure (2,212) (1,329) (2,774) Rental equipment and other disposal proceeds received 570 361 824 Inte
Slide 11: Net Debt
NET DEBT Leverage (excluding impact of IFRS 16) $m 2024 2023 3.0 Opening net debt 8,960 7,160 2.6 2.5 Change from cash flows 1,788 1,229 2.3 Translation impact 21 (29) 2.0 2.0 1.9 2.0 1.9 1.8 1.9 Debt acquired 155 181 1.7 1.6 1.6 1.6 1.5 New lease liabilities 238 275 1.5 Deferred debt raising cost a
Slide 12: Robust and Flexible Debt Structure
ROBUST AND FLEXIBLE DEBT STRUCTURE Debt Maturity $6,000m Undrawn $5,000m Drawn Notes ▪ In July, issued $750m 5.950% notes due October 2033 $4,000m $3,000m ▪ In January, issued $850m 5.800% notes due April 2034 $2,000m $1,000m ▪ Borrowing facilities committed for average of six years at a $m FY24 FY2
Slide 13: Operational Review
OPERATIONAL REVIEW BRENDAN HORGAN 13 Nine month results ¦ 31 January 2024
Slide 14: US Trading
US TRADING Rental revenue1 FY23 FY24 ▪ Strong growth on top of Q3 +23% last year Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 YTD General Tool +23% +21% +21% +19% +21% +14% +13% +8% +11% ▪ Ongoing strength in performance evidence of robust end markets and demand characteristics Specialty +39% +31% +31% +17% +29% +17% +1
Slide 15: US Construction Outlook
US CONSTRUCTION OUTLOOK Dodge construction starts 2021 2022 2023 2024 2025 2026 2027 2028 350 Indexed: 2000=100 Construction put in place ($bn) 300 Non-residential 522 580 726 793 816 847 884 912 250 Non-building 301 309 380 457 482 498 511 517 200 Construction (excl. resi) 823 889 1,106 1,250 1,298
Slide 16: Mega Project Landscape: Both Private and Federal Funding
MEGA PROJECT LANDSCAPE: BOTH PRIVATE AND FEDERAL FUNDING Started and planned projects from May 2021 through April 2024 ▪ Sunbelt positioned for ongoing success in this landscape: ▪ Increased rental penetration across broad product range required to complete sophisticated projects of this scale ▪ Hea
Slide 17: Canada Trading
CANADA TRADING Fleet on rent (excluding Film & TV) ▪ 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 ▪ Added 17 locations in period through greenfields and bolt-ons ▪ Healthy demand and mark
Slide 18: UK Trading
UK TRADING ▪ Rental only revenue up 9%, driven by market share gains LARGE PROJECT LANDSCAPE Current live large projects: Future projected large projects ▪ Market conditions softening but support from infrastructure, (2024 and beyond): ▪ HS2 Phase 1 (£44bn) industrial and large projects ▪ Transmissi
Slide 19: Initial Fleet Plan for 2024/25
INITIAL FLEET PLAN FOR 2024/25 2023 2024 2024 2025 Actual Q3 actual (YTD) Guidance1 Initial guidance1 US ($m) - rental fleet 2,878 2,629 2,900 – 3,200 2,000 – 2,300 - non-rental fleet 436 457 500 550 3,314 3,086 3,400 – 3,700 2,550 – 2,850 Canada (C$m) - rental fleet 254 245 290 – 320 230 – 250 - no
Slide 20: Summary
SUMMARY ▪ Strong nine months with Group revenue 14% ahead of last year ▪ Onshoring, advancing technology and manufacturing modernisation are drivers of unprecedented levels of construction ▪ Mega project landscape remains robust driven by private and public sector investment ▪ Strong positions in su
Slide 21: Looking Forward to the Launch of Sunbelt 4.0
LOOKING FORWARD TO THE LAUNCH OF SUNBELT 4.0 GROWTH RESILIENCE PERFORMANCE RUNWAY 4 SUCCESS 21 Nine month results ¦ 31 January 2024
Slide 22: Appendices
APPENDICES 22 Nine month results ¦ 31 January 2024
Slide 23: Divisional Performance: Third Quarter Results
DIVISIONAL PERFORMANCE THIRD QUARTER RESULTS Revenue EBITDA Profit 2024 2023 Change1 2024 2023 Change1 2024 2023 Change1 Canada (C$m) 229 220 4% 81 85 -5% 25 40 -36% UK (£m) 165 160 3% 44 40 10% 9 7 15% US 2,280 2,070 10% 1,060 989 7% 600 608 -1% Canada ($m) 170 164 4% 60 63 -5% 19 29 -36% UK ($m) 2
Slide 24: Divisional Performance: Last Twelve Months
DIVISIONAL PERFORMANCE LAST TWELVE MONTHS Revenue EBITDA Profit 2024 2023 Change1 2024 2023 Change1 2024 2023 Change1 Canada (C$m) 894 772 16% 354 324 9% 142 165 -14% UK (£m) 687 700 -2% 189 200 -6% 51 71 -28% US 9,155 7,853 17% 4,360 3,773 16% 2,655 2,329 14% Canada ($m) 663 589 12% 263 248 6% 105
Slide 25: Strong Platform for Sunbelt 4.0
STRONG PLATFORM FOR SUNBELT 4.0 1 Actionable GROW GENERAL TOOL Progress component & ADVANCE OUR CLUSTERS ▪ $3.5bn of capital invested in the business, of which $3.0bn invested in rental assets 2 SPECIALTY AMPLIFY ▪ Opened 58 greenfield locations in North America, of which 42 were Specialty
Slide 26: Capital Allocation
CAPITAL ALLOCATION CONSISTENTLY APPLIED POLICY CONTINUES CLEAR PRIORITIES APPLICATION Organic fleet growth ▪ Same-store ▪ $3.5bn invested in the business ▪ Greenfields ▪ 58 greenfields opened in North America Bolt-on acquisitions ▪ $906m spent on bolt-ons, with 48 locations added in North America ▪
Slide 27: 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 28: 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 ▪ $340bn facility maintenance market; 100bn sq. ft.
Slide 29: Drivers of Recent and Forecast Starts
DRIVERS OF RECENT AND FORECAST STARTS ADVANCING TECHNOLOGY AND ONSHORING / RESHORING LEGISLATIVE ACTS MANUFACTURING MODERNISATION ▪ Establishing or reestablishing US based ▪ Ongoing growth in technology related ▪ Infrastructure, Chips and Science, and manufacturing and production. Private constructi
Slide 30: US Fleet Profile
US FLEET PROFILE ▪ Smooth fleet profile ▪ Benefits of prolonged cycle and our growth strategy ▪ Strong position providing optionality through the cycle ▪ Flexibility to turn replacement into growth and vice versa ▪ Strengthens partnership with suppliers through predictability 30 Nine month results ¦
Slide 31: Cash Flow Funds All Fleet Investment
CASH FLOW FUNDS ALL FLEET INVESTMENT LTM ($m) 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 Jan 24 EBITDA before exceptionals 4,825 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 45% 46% 4
Slide 32: $2,208m of Availability at 31 January 2024
$2,208M OF AVAILABILITY AT 31 JANUARY 2024 Book value Borrowing base Senior debt $14,954m (April 23: $12,611m) $1,671m $11,506m Calculation: (April 23: $9,693m) Inventory – 50% of book $1,293m value Receivables – 85% of net eligible receivables $12,200m Fleet and vehicles – lower of 85% of net appra
Slide 33: 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 $600m senior notes 4.000% May 2028 Debt $600m senior notes 4.250% November 2029 $750m senior notes 2.450% A
Slide 34: 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 34 Nine month results ¦ 31 January 2024
Slide 35: 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 36: 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 37: 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 38: 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 38 Nine month results ¦ 31 January 2024
Slide 39: 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 227222 10 10 25 219 200 171