Our business, even under normal circumstances, 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 in an 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 2020, we achieved 19% compound annual growth in the US, of which two-thirds was from structural share gain. Our markets remain full of potential despite the near-term impact of COVID-19 on economies and activity levels. 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. 

placeholder image

Our goal in the medium term is to achieve 15% market share in the US, take a 10% 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. As we enter the final year of our Project 2021 plan we have achieved our targets of 900 locations in North America and being a $5bn+ revenue business. We will use the coming year, 2020/21, to ensure we continue to be better positioned and stronger than our competitors, enabling us to continue to take market share post COVID-19. We will launch the next phase of our strategy in 2021 although, it is fair to say, a significant component of it will be more of the same.   

Strategic priorities

Build a broad platform for growth

Strategic priorities

Build a broad platform for growth:

  • target 15% US market share
  • take 10% Canadian market share
  • increase UK market share

Key initiatives

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

Update

  • 10% US market share
  • 5% Canadian market share
  • 8% UK market share
  • 11% increase in US rental fleet at cost
  • 10% increase in US fleet on rent
  • 15% increase in Canadian fleet on rent
  • 48 greenfield openings in the US
  • $364m spent on US acquisitions
  • C$263m spent on Canadian acquisitions
  • £10m spent on UK acquisitions

Relevant KPIs & related 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

  • Focus on safety
  • 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 & related 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 2.0 times net debt to EBITDA (excluding IFRS 16)
  • ensure financial firepower at the 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

  • RoI of 15% (2019: 18%)
  • Sunbelt US dollar utilisation of 51% (2019: 55%)
  • Sunbelt Canada dollar utilisation of 47% (2019: 49%)
  • Sunbelt UK dollar utilisation of 46% (2019: 47%)
  • Drop-through of 35% in Sunbelt US
  • Sunbelt US EBITDA margin of 50% (2019: 49%)
  • Sunbelt Canada EBITDA margin of 37% (2019: 36%)
  • Sunbelt UK EBITDA margin of 32% (2019: 35%)
  • Leverage of 1.9x EBITDA (excluding IFRS 16)
  • Fleet age remains appropriate at this stage of the cycle:
    • Sunbelt US 36 months
      (2019: 33 months)
    • Sunbelt Canada 33 months (2019: 30 months)
    • Sunbelt UK 43 months
      (2019: 38 months)

Relevant KPIs & related risks

KPIs

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

Risks

  • Economic conditions
  • Competition
  • Financing