Our business will always be cyclical, but the continuing level of structural change in our markets, particularly in the US and Canada, combined with our proven strategy, makes us better able to capitalise on good economic environments and be more resilient to economic downturn.

Our strategy to optimise the opportunities presented by structural change is growth through same-store investment, greenfields and bolt-ons. From 2011 to 2019, we achieved 20% compound annual growth in the US, of which two-thirds was from structural change. Our markets remain full of potential and we do not see that changing in the short term. If the situation does change we will be well prepared. We are always conservative in our approach to maintaining a stable and secure balance sheet throughout the cycle and this enables us to maintain the flexibility we require to manage changes to the business and its environment, as and when they occur. Our focus remains on responsible, sustainable growth.

Our goal in the medium term is to achieve 15% market share in the US, take a 5% share in Canada and grow the UK market share. We continue to believe these are realistic goals given the way the rental market is evolving and the way we do business. Consistent implementation of our strategy across the economic cycle will ensure we are in a strong position at all times to take advantage of the opportunities presented. In the near term, our Project 2021 plan is to grow to 900 locations in North America and be a $5bn+ revenue business by 2021 and we are on track to deliver that ahead of schedule.    

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Strategic priorities

Build a broad platform for growth

Strategic priorities

Build a broad platform for growth:

  • target 15% US market share
  • take 5% Canadian market share
  • increase UK market share

Key initiatives

  • Same-store fleet growth
  • Greenfield expansion
  • Bolt-on M&A
  • Develop speciality products
  • Develop diversified clusters in key areas
  • Increased focus on renting out non-traditional rental equipment

Update

  • 9% US market share
  • 4% Canadian market share
  • 8% UK market share
  • 20% increase in US rental fleet at cost
  • 20% increase in US fleet on rent
  • 70 greenfield openings in US
  • $684m spent on US acquisitions
  • C$128m spent on Canadian acquisitions
  • £15m spent on UK acquisitions

Relevant KPIs & risks

KPIs

  • Fleet on rent

Risks

  • Competition
  • People

Operational excellence

Strategic priorities

Operational excellence:

  • improve operational capability and
    effectiveness
  • continued focus on
    service

Key initiatives

  • Operational improvement:
    • delivery cost recovery
    • fleet efficiency
  • Increased use of technology to drive optimal service and revenue growth
  • ARE initiative: Availability, Reliability, Ease
  • Focus on culture

Update

  • Continued focus on improvement programmes designed to deliver improved dollar utilisation and EBITDA margins

Relevant KPIs & risks

KPIs

  • Dollar utilisation
  • Underlying EBITDA margins
  • RoI
  • Fleet on rent
  • Staff turnover
  • Safety 

Risks

  • Business continuity
  • People
  • Health and safety
  • Environmental
  • Laws and regulations

Maintain financial and operational flexibility

Strategic priorities

Maintain financial and operational flexibility:

  • RoI above 15% for the Group (excluding IFRS 16)
  • maintain leverage in the range 1.5 to 2 times net debt to EBITDA (excluding IFRS 16)
  • ensure financial firepower at bottom of cycle for next 'step-change'

Key initiatives

  • Driving improved dollar utilisation
  • Maintain drop through rates
  • Increasing US store maturity
  • Maintaining financial discipline
  • Optimise fleet profile and age during the cyclical upturn

Update

  • Strong RoI at 18% (2018: 18%)
  • Sunbelt US dollar utilisation of 55% (2018: 55%)
  • Sunbelt Canada dollar utilisation of 49% (2018: 60%)
  • A-Plant dollar utilisation of 47% (2018: 48%)
  • Fall through of 49% and 52% in Sunbelt US and A-Plant
  • Sunbelt US EBITDA margin of 49% (2018: 50%), Sunbelt Canada EBITDA margin of 36% (2018: 30%)
  • A-Plant EBITDA margin of 35% (2018: 35%)
  • Leverage of 1.8x EBITDA
  • Fleet age remains appropriate at this stage of the cycle:
    • Sunbelt US 33 months (2018: 32 months)
    • Sunbelt Canada 30 months (2018: 28 months)
    • A-Plant 38 months (2018: 32 months)

Relevant KPIs & risks

KPIs

  • RoI
  • Dollar utilisation
  • Underlying EBITDA margins
  • Leverage
  • Net debt

Risks

  • Economic conditions
  • Competition
  • Financing