United Rentals, Inc. · NYSE:URI
United Rentals — Investor Day (December 2012)
24 slides from United Rentals's investor day presentation, Dec 4, 2012
Slide 1: Operations
Operations Matthew Flannery EVP, Chief Operating Officer Investor Day December 4, 2012
Slide 2: Matthew Flannery
Matthew Flannery EVP, Chief Operating Officer More than 20 years of experience in the industry Joined the company in 1998 as part of the company’s acquisition of Connecticut-based McClinch Equipment Appointed as COO in April 2012 Previously served as EVP, Operations and Sales Regional Vice
Slide 3: RSC Combination: Fully Capturing Cost and Revenue Synergies
RSC Combination Fully Capturing Cost and Revenue Synergies
Slide 4: Combination Overview
Combination Overview United Rentals – RSC Combined Fleet at Original Cost of $7.1 Billion 2011 Revenue of $4.1 Billion Strong Margin and Free Cash Flow Generation Capabilities Best-in-Class Management Team Balanced Customer Mix Industry-leading Capabilities Total Synergy Potential of $280 Million* F
Slide 5: 2012 Integration Accomplishments
2012 Integration Accomplishments 3rd Quarter 4th Quarter Successfully consolidated to a Complete branch closures and single IT platform in less than back office functional six weeks with minimal disruption consolidation Executed 187 branch closures Harmonize customer price agreements and exp
Slide 6: Cost Synergy Target of $230M–$250M
Cost Synergy Target of $230M–$250M Cost Saving Breakdown Increasing Cost Synergy Targets Realized EBITDA Impact Other Branch $300M Efficiencies Consolidation ~200 ~20 $200M 29% 34% ~230 ~100 $100M 28% 10% $0M Regional 2012 2013 2014 Corporate Field Overhead Overhead ~$230– Run Rate ~$180 ~$220 $250
Slide 7: "Best of Both" to Serve Customers Better
“Best of Both” to Serve Customers Better Combined best practices to improve safety culture Safety Enhanced customer safety training resources Strengthened key accounts sales force with deep industry expertise Sales Total Control® to deepen customer relationships Leading CRM technology CO
Slide 8: Revenue Synergy Opportunities
Revenue Synergy Opportunities Utilize Total Control® to deepen share of wallet Cross sell Trench, Power/HVAC, and tools Harmonize contract structures and terms Sales best practices Fleet disposal best practices Capture Net Revenue Synergy of $50M (EBITDA) in 2014 8
Slide 9: 2013 Priorities – Beyond the Integration
2013 Priorities – Beyond the Integration Conduct first Newco Annual Management meeting in January Capture remaining cost synergies – G&A: Procurement and IT – Operational excellence in the branches Gain market share through a superior value proposition Win in the Marketplace 9
Slide 10: Operations
Operations Drive Superior Performance Through Enhanced Services and Processes
Slide 11: Safety is a Core Value
Safety is a Core Value OSHA Recordable Rate 3.0 2.0 1.0 0.0 2009 2010 2011 2012 YTD* On the Road to Zero Through October 2012 Note: Pro-forma URI + RSC data 11
Slide 12: Company Overview
Company Overview 848 locations in 49 states and 10 Canadian provinces Presence in 99 of the top 100 MSAs $7.4B of OEC, up 10% YoY 11.2K total employees 12
Slide 13: Broadest Branch Footprint in North America
Broadest Branch Footprint in North America Large Customers Value Broad Geographic Reach 13
Slide 14: Strong Operating Fundamentals
Strong Operating Fundamentals Fleet on Rent Rates Average Fleet on Rent YoY Rate Growth $4.8B $4.4B 7.3% 7.4% 7.5% $3.6B $3.8B 6.4% 5.4% 5.7% 2.8% 2009 2010 2011 2012 Q3 2011 2011 2011 2011 2012 2012 2012 YTD Q1 Q2 Q3 Q4 Q1 Q2 Q3 Customer Demand for Rental Fueling Growth * As of 3Q for United Rental
Slide 15: 2013 Operations Priorities
2013 Operations Priorities Focus on growing with Key Accounts Operation Enhance value proposition by improving service levels United Measure and share results with customers Drive down cost per rental day Leverage scale in metro areas to improve service levels Cost Position while reducing
Slide 16: Targeting Key Accounts & Industrial Segments
Targeting Key Accounts & Industrial Segments Key Accounts and Industrial Customers Smooth Out Cyclicality Q3 YoY growth % of Revenue – Key Accounts +17% – Unassigned Accounts +8% Unassigned Non-Residential Residential Value proposition driving Accounts accelerated growth from: 4% 38% – Increased
Slide 17: Drivers of Loyalty – Raise the Bar in 2013
Drivers of Loyalty – Raise the Bar in 2013 Customers Told Us What Mattered: Fleet availability On-time delivery Service call response time Pick-up Invoice accuracy Share Results with the Customer 17
Slide 18: Continue Driving Down Cost per Day
Continue Driving Down Cost per Day Revenue and Cost per Day Trends 60 55 52.49 51.96 50.35 50 48.67 45 40 35.95 35.38 34.83 35 33.37 30 2009 2010 2011 LTM* 2012 Revenue/Day Cost/Day * LTM is last twelve months as of October 2012 Note: Cost per day defined as rental cost excluding depreciation + SG&A
Slide 19: Improving Key Drivers of Productivity
Improving Key Drivers of Productivity Revenue per FTE OEC per Branch Monthly Rent Revenue per FTE Average OEC per Branch $8.7M $28.2K $24.4K $6.7M $20.7K $5.7M 2010 2011 2012 YTD Q3 2010 Q3 2011 Q3 2012 Capturing Benefits of Scale 19
Slide 20: Introducing Metro Model – Improving Efficiency and Service Response Time
Introducing Metro Model – Improving Efficiency and Service Response Time Current Model Metro Model Each branch dispatches Logistics and field their own trucks and service is managed field service techs centrally to improve efficiency and response time Individual branches Dedicated repair con
Slide 21: FAST – Improving Logistics with Technology
FAST – Improving Logistics with Technology Sources of Expected Total Branches Financial Benefits: on FAST: 486 Fuel Labor Cost Full FAST: FAST Lite: Savings Savings 405 81 OEC Paperless Trucks: Drivers: Scheduled Delivery ~1,700 ~1,500 for Pick-up Process Complete Roll Out of FAST in 2013 21
Slide 22: Fleet Life Cycle Management Process
Fleet Life Cycle Management Process Key Processes Goals Automated Leverage scale Sourcing requisition system to buy better Metro model, FAST, Improve asset Utilization and Fleet Sharing utilization Service and warranty Extend asset life Maintenance management systems and reliability Optimal fleet ag
Slide 23: Conclusion
Conclusion Successful completion of integration and achieve synergies Create the industry standard – Safety – Sales – Operations Generate higher returns – Profitability – Returns on capital 23
Slide 24: United Rentals: Driving Value Creation
() United Rentals: Driving Value Creation | 24