United Rentals, Inc. · NYSE:URI
United Rentals — Investor Day (December 2018)
104 slides from United Rentals's investor day presentation, Dec 11, 2018
Slide 1: 2018 Investor Day: Driving & Extending Our Competitive Advantages
2018 Investor Day: Driving & Extending Our Competitive Advantages December 11, 2018 United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved.
Slide 2: Introductory Information
Introductory Information Certain statements in this presentation are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA. These statements can generally be identi
Slide 3: 2018 Investor Day: Driving & Extending Our Competitive Advantages
2018 Investor Day: Driving & Extending Our Competitive Advantages Jenne Britell and Michael Kneeland December 11, 2018 United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved.
Slide 4: Driving and Extending Our Competitive Advantages
Driving and Extending Our Competitive Advantages • Company transformed to be considerably more profitable and efficient • Operations, technology and culture differentiate us, and make us far more agile • Diversified end market exposure across customers, verticals and geographies • Strong balance she
Slide 5: Driving & Extending Our Competitive Advantages
Driving & Extending Our Competitive Advantages Matt Flannery – President & COO December 11, 2018 United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved.
Slide 6: Matt Flannery
Matt Flannery President & Chief Operating Officer COO since April 2012, named President in March 2018 Joined URI in 1998 as part of the acquisition of Connecticut-based McClinch Equipment 25+ years of sales, management, and operations experience in the rental industry United Rentals, Inc., 100 First
Slide 7: Driving and extending competitive advantages that will benefit customers and shareholders
Driving and extending competitive advantages that will benefit customers and shareholders today and tomorrow Matt Chris Digital and technology capabilities to build Structural changes that position us for new opportunities for growth and customer the long-term service Paul Craig Building sales and s
Slide 8: Strategic evolution over 20+ years
Strategic evolution over 20+ years 1997–2008 2009–2013 2014–present Become a market leader Optimize scale, diversify, Building on and transforming and drive profitable growth the Core 2009: Increased focus on customer service and Continued build-up of 1997: Founded / IPO improving returns through Ge
Slide 9: Who are we now
Who are we now Non-Res Construction Infrastucture Residential Upstream O&G Midstream O&G 2018 YTD Downstream O&G Revenue by Chemical Processing Vertical Power Industrial Manufacturing Metals & Minerals Consumer-related All Other Connected and agile network 18,800 teammates Diversified across custome
Slide 10: Our strategy starts with our Values and Vision
Our strategy starts with our Values and Vision Driven by our Values • Safety first • Customer driven • Leading by example • Continuous innovation • Integrity • Passion for people • Community minded • Sustainability Guided by our Vision Transform the way work gets done Helping our customers to improv
Slide 11: Strategic Pillars support evolution of the Core
Strategic Pillars support evolution of the Core Goal Serve Customers with Excellence Output Vision Strengthen Expand Transform Drive Growth Transform the the the the Innovate Core Core Core and Returns way work gets through the done Economic Cycle Foundation: Safety, Foundation: Safety,People, Peopl
Slide 12: Taking performance to the next level
Taking performance to the next level Safety People productivity Asset productivity TRIR Rental revenue per employee OEC per location ($ thousands) ($ millions) 3 $500 $14 $12 $400 $10 2 $300 $8 (2) $6 $200 1 $4 $100 $2 0 $0 $0 2009 2013 2018 2009 2013 2018 2009 2013 2018 Industry-leading focus on sa
Slide 13: A decade of strong financial results
A decade of strong financial results Total Revenue Adjusted EBITDA(1) Adjusted EPS(1) +$16.76 $10,000M $5,000M $20 $16.00 $8,000M CAGR $4,000M CAGR $15 14.4% 22.3% $6,000M $3,000M $10 $4,000M $2,000M $4.91 $5 $2,000M $1,000M ($0.76) $0 $0 $0 2009 2013 2018F (2) (2) (3) 2009 2013 2018F 2009 2013 2018
Slide 14: Expanding offering beyond Equipment Rentals
Expanding offering beyond Equipment Rentals Unparalleled technology and specialty offerings such as Total Control®, UR Control®, GPS / Telematics, and a complete online equipment catalog and rental system A comprehensive safety solution that leverages cutting-edge technology and engaging course cont
Slide 15: Extending our competitive advantage
Extending our competitive advantage Maximize revenue potential with current & new customers Leverage powerful Leverage growth cash flow; deliver through efficiency industry and productivity leading returns initiatives URI operating model supports self-reinforcing growth, margins, returns and cash ge
Slide 16: Go-to-Market Strategy as a Competitive Advantage
Go-to-Market Strategy as a Competitive Advantage Paul McDonnell – Executive Vice President – Sales & Specialty Operations December 11, 2018 United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved.
Slide 17: Paul McDonnell
Paul McDonnell Executive Vice President, Sales & Specialty After expanding his role in 2016 to include the combined responsibilities of Sales and Specialty Operations, Paul was promoted to Executive Vice President in November 2018 Named Senior Vice President of Specialty Operations in 2008 Joined co
Slide 18: More locations to serve our customers
More locations to serve our customers Total Locations: ~1,200 Total OEC: ~$14.3 billion Total Employees: ~18,800 General Rental Power & HVAC Fluid Solutions Site Services Tools Trench United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved.
Slide 19: Our Customers
Match each customer Provide appropriate with the right suite of UR sales coverage products & services to (Single Point of Contact) meet their needs Leverage tools and OUR CUSTOMERS Leverage tools & technology to empower technology to empower our workforce to provide customers to manage excellent ser
Slide 20: Our sales coverage and support is unmatched in the industry
Our sales coverage and support is unmatched in the industry # of FTEs Single Point of Contact (SPOC) for our National Account Manager (NAM) ~100 largest customers with National footprint Technical experts supporting NAMs & Regional Product Managers (RPDM) ~75 SAMs on our Specialty & Service offering
Slide 21: Channels, services and fleet serving our customers
Digital Sales Channel ~1,200 Branch Locations in North America ~18,800 Employees UR Jobsite GEN RENTS Emergency Response Telematics Customer Power Equipment Tool Solutions Services & HVAC UR Control Fluid Solutions United Academy OUR CUSTOMERS INFRASTRUCTURE INDUSTRIAL LOCAL CUSTOMER VERTICAL VER
Slide 22: Meeting customers where they are: SPOC
Meeting customers where they are: SPOC Value Prop Technology & Strong Coverage Innovation ~60% of UR revenue is under a UROne Single Point of Contact Total Control® Telematics Products & Strong Growth Solutions Accounts with Single Point of General Rentals Contact are growing faster than Fluid Solut
Slide 23: Driving sales productivity through technology
Driving sales productivity through technology GENERAL & AERIAL POWER & HVAC TRENCH SAFETY FLUID SOLUTIONS • Salesforce.com partner David Hamlin David Manstark Casey Driver Tom Hume LY Rev: $1,339,310 LY Rev: $180,704 LY Rev: $2,583 LY Rev: $264,272 Last Call: 10/31/2018 Last Call: 11/1/2018 Last Cal
Slide 24: We continue to invest in our Specialty capabilities
We continue to invest in our Specialty capabilities Specialty involves solving more complex customer problems Power & HVAC Fluid Solutions Trench Safety Tool Solutions Onsite Services • Complete solutions for • Full range of • Excavation support • Tool trailers stocked • Plastic port-a-potties, mobi
Slide 25: Specialty has experienced rapid growth since 2012
Specialty has experienced rapid growth since 2012 as we continue to execute on our four strategic workstreams Specialty strategy summary Specialty total revenue growth ($M) 1,800 ~1,700 Portable 1 • 331 Specialty branches Sanitation Footprint 1,600 • 114 cold starts opened since 2012 (cold starts) T
Slide 26: Winning in Infrastructure: Tappan Zee Bridge
Vertical Case Study Winning in Infrastructure Tappan Zee Bridge Revenue by Type of Fleet Trench Tools Aerial Fluid Solutions PHVAC Dirt Trucks Forklifts UR contributed 90% of core fleet on the jobsite Other GenRent • Gen • Fluid • Aerial $250,000 • Trench Rent Sol. • Heat $200,000 Monthly Revenue $1
Slide 27: Engineering Fluid Solutions
Product Case Study Engineering Fluid Solutions Challenge Solution Results • Municipal water treatment plant building • UR Fluid Solutions designed and new freshwater intake from river implemented a three-stage treatment Account Revenue by Type of Fleet system to remove all sediment and (up 26% YoY)
Slide 28: Driving customer productivity
Service Case Study Driving customer productivity • Comprehensive fleet management program launched for all owned and rental units on site − Full adoption of Total Control® − Doing business with all six UR business units UR revenue with customer 10 $7.8M 8 Fleet & Tool $812K Mgmt Svc 6 $5.0M Rental r
Slide 29: Industry-leading Go-to-Market strategy
Industry-leading Go-to-Market strategy Creating a competitive advantage via unmatched capabilities Earning customer loyalty and strengthening relationships by meeting customers where they are Creating a platform for profitable growth with a repeatable playbook Driving high returns by competing on va
Slide 30: Operational Excellence as a Competitive Advantage
Operational Excellence as a Competitive Advantage Mike Durand – Senior Vice President, Operations December 11, 2018 United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved.
Slide 31: Mike Durand
Mike Durand Senior Vice President, Operations and West Division SVP, Operations for the West Division since 2015 In 2018 added functional leadership responsibility for Operations Excellence Joined the company in 2002 as a Branch Manager At URI, held roles of Regional Sales & Marketing Director, Dist
Slide 32: Operations Excellence as a competitive advantage
Operations Excellence as a competitive advantage # Employees # Locations • Significant organic and M&A-driven growth in the last decade 1,200 1,200 20,000 1,000 832 15,000 800 600 569 10,000 • Growth has provided the ability to pursue new opportunities to reframe operations 400 • Improve operating a
Slide 33: Driving margins and returns via operational excellence
Driving margins and returns via operational excellence • Driving margin and returns through OpsEx: • Improving safety across the organization • Increasing capacity for growth • Driving labor and asset productivity • Improving customer experience • URI OpsEx team currently consists of approximately 4
Slide 34: Standardizing processes across our network: action
Standardizing processes across our network: action One standard across all stores for a safe, efficient work area Yard efficiency Shop flow Order accuracy Truck utilization drives capacity Stable process leads to Less rework creates more time to serve customers productivity of shop teams to focus on
Slide 35: Standardizing processes across our network: impact
Standardizing processes across our network: impact One standard across all stores for a safe, efficient work area Yard efficiency Shop flow Order accuracy Truck utilization drives capacity Stable process leads to Less rework creates more time to serve customers productivity of shop teams to focus on
Slide 36: Leveraging technology to improve process
Leveraging technology to improve process Inspection and repair Order Ready Inspection App for the UR Max – Intuitive Order Taking Service Tech Standard best practice Pickup Route and load Return App for the Yard Associate optimization FAST FAST Telematics data Delivery Stage Driver Handheld Stager A
Slide 37: We've driven productivity throughout our network
We’ve driven productivity throughout our network Leverage fleet and teams in our biggest markets Centralize key functions in major metros: Logistics, Sales Support Teams, Field & Shop Service Compete & serve customers Compete & serve customers with resources of one store with resources of many store
Slide 38: Integration case study: Boston, MA
Integration case study: Boston, MA 2017 2018 April June September January April August 5S introduction Parts process Yard flow Branch Manager training Employees lead redesign Increase utilization of Introduce basic 5S of Parts Room, cutting trucks through a standard concepts to the team obsolete inv
Slide 39: A Day in the Life
A Day in the Life OPERATIONS EXCELLENCE While we are sitting in this meeting, our 1UR platform of people, processes, and tools are working hard to enable further business growth by delivering a consistent, quality experience 23,000 9,800 11,000 45,000 15,000 25,000 Calls answered New contracts writt
Slide 40: Where do we go from here?
Where do we go from here? Customer service as a Deploy technology Innovative approach competitive advantage to drive efficiency to our operating model • Lead the market with • Explore new ways to • Further leverage our superior customer service communicate with customers investment in fixed costs th
Slide 41: Fleet Management As a Competitive Advantage
Fleet Management As a Competitive Advantage Dale Asplund – Executive Vice President, Business Services & CIO December 11, 2018 United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved.
Slide 42: Dale Asplund
Dale Asplund Executive Vice President, Business Services / CIO Promoted to EVP, Business Services and CIO in 2017 Currently responsible for Fleet Management, Procurement, and Shared Services Since 2012, also responsible for the company's information technology systems Joined the company in 1998 Unit
Slide 43: The right fleet mix
The right fleet mix Customers know we have the fleet they need Trucks Welders 1% Trench 1% Power 5% 4% Other Light 12% 35% Aerial $14.3 billion of fleet comprised Forks – Rough <1% 1% of approximately 650,000 units 18% Forks – Reach 2% 3% 3% 14% Compaction Compressors Forks – Industrial Earth Moving
Slide 44: Driving returns with fleet management
Driving returns with fleet management Buy the right fleet in the right markets Manage for optimal returns Sell at the right time, through the right channel, for the right price United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved. 44
Slide 45: Vendor negotiation topics
Buy the right fleet Vendor negotiation topics Lead times EDI Technical Freight Training capabilities support support ePro – smartequip Pricing (Mileage, Retail Warranty labor rate, ability travel time, Payment down time) Parts, terms pricing Duration & & discounts coverage Trade options United Renta
Slide 46: United Rentals strategic suppliers
Buy the right fleet United Rentals strategic suppliers United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved. 46
Slide 47: Total cost of ownership
Buy the right fleet Total cost of ownership Brand A Brand B Brand C Acquisition cost 93 95 97 Maintenance cost over life (parts) 7.5 9 6 Maintenance cost over life (labor) 9 9 8 Resale value after 7 years (retail) (50) (53) (54) Total cost of ownership 59.5 60 57 Gap vs. Best of Best +4% +5% Brand C
Slide 48: Time utilization
Manage for optimal returns Focused fleet plan to improve margin High Rate opportunity Fleet growth zone zone Time utilization ~70% of Growth CapEx in high return buckets Fleet transfer/ Sales penetration reduction zone zone Low Low Returns High Capital expenditures focused on profitable growth Unite
Slide 49: Managing our fleet to maximize returns
Manage for optimal returns Managing our fleet to maximize returns YTD time utilization YTD $ utilization % change Fleet category YOY rate Rental Useful Life (YOY change) (YOY change) in units Reach forklifts 81% (flat) +3.1% 32% (+250bps) +6.9% 90 months Skid steers 60% (-180bps) +2.4% 44% (+380bps)
Slide 50: Rental useful life evaluation
Sell assets at optimum price Rental useful life evaluation Rental revenue % of average R&M as % of OEC 120% 2.50% 100% 2.00% 80% 1.50% 60% 1.00% 40% 20% 0.50% 0% 0.00% 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 Year Year Resale value % of replacement cost 140% • Rental useful life evaluat
Slide 51: Used equipment pricing
Sell assets at optimum price Used equipment pricing Utilization > What is the target level? Fair Market Value of the asset? Hours < or > Utilization target hours? Value Hours Asset past RUL? Age Optimize the channel we sell through United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902.
Slide 52: Conclusion
Conclusion Buy the right fleet in the right markets Fleet purchases focused on best total cost of ownership Focused on diversified and Manage for optimal returns profitable growth Assets are sold at the optimal time at the optimal price for Sell at the right time for the right price replacement and
Slide 53: Digital & Technology as Competitive Advantages
Digital & Technology as Competitive Advantages Chris Hummel – Chief Marketing Officer December 11, 2018 United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved.
Slide 54: Chris Hummel
Chris Hummel Senior Vice President and Chief Marketing Officer Joined the company as SVP and Chief Marketing Officer in 2016 Leads URI’s customer-facing digital efforts Executive sales and marketing roles at Oracle, SAP, Unify (now part of Atos) and Schneider Electric United Rentals, Inc., 100 First
Slide 55: Customers' challenges and URI opportunities
Customers’ challenges URI opportunities • In North America, $530 billion in economic • Deepen our competitive advantage by focusing value is lost each year as a result of the on innovation in customer-facing technology productivity gap in construction and related industries • Improve our productivit
Slide 56: Digital and innovation drive internal and external opportunities
Digital and innovation drive internal and external opportunities Digital strategy Revenue growth Margin expansion • Attract new customers & increase volume • Streamline orders via self-service • Nurture demand & personalize the journey • Accelerate credit, billing & payments • Consumption management
Slide 57: UR.com Online Rental System
UR.com Online Used United Total Control® / Rental System Equipment Academy® UR Control® Sales
Slide 58: A single digital platform with always-on access
UR.com Online Used United Total Control® / Rental System Equipment Academy® UR Control® Sales A single digital platform that offers always-on, one-stop access to the United Rentals products, tools, information and services that help you increase productivity and manage equipment more efficiently.
Slide 59: UR One delivers a modern, consistent customer experience
UR One delivers a modern, consistent customer experience One portal to all services Discover & learn Unified customer experience for all United Rental Find the right tools for the job with rich customers to rent, buy and manage orders, content and expert guides equipment, training and jobsites Unite
Slide 60: Digital channels continue to drive strong growth
Digital channels continue to drive strong growth Powerful search and find Equipment detail Sophisticated search, filter, group, Find specifications, detailed and sort mechanisms to help descriptions, image galleries and customers quickly find the right usage information to support equipment for thei
Slide 61: Total Control adds tangible value for customers
Total Control® (TC) adds tangible value for customers that builds loyalty to United Rentals TC Feature Highlights Customer Growth YTD User Adoption YTD • Rental Fleet Management CUSTOMERS • Find My Fleet “Calls for Pick Up” • Revenue $1.6 billion 120K via TC • Invoices and bill pay • Total Accounts
Slide 62: Customers see the direct benefit of TC and Digital
Customers see the direct benefit of TC and Digital "Total Control will alert us…making us more aware of the budget.“ Before implementing Total Controls billing and coding features processing invoices "was huge waste of time that involved many more >2000 Alerts/Reports folks." Implementing Total Cont
Slide 63: Benchmarking helps customers monetize our insight
Benchmarking helps customers monetize our insight Summary scorecard Detailed benchmarking report >1,600 benchmark reports have been delivered YTD to help customers improve efficiency United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved.
Slide 64: Streamlined processes deliver productivity
Streamlined processes deliver productivity CS KELLY INC REDMOND WA FLANNERY AEROSPACE Manage, extend and call for pickup from anywhere Find equipment, access fleet information from any device, view utilization and usage data, extend rental, rent another or request pick Flexible checkout up with a si
Slide 65: How digital will continue to support growth
How digital will continue to support growth Being of Fleet Worksite service uptime performance • Automate more • Deliver the right • Expand our worksite administrative processes equipment at the right insights and processes time – fueled, serviced • Richer dashboards, KPIs and ready to go • Introduc
Slide 66: Key digital takeaways and benefits
Key digital takeaways and benefits Better growth by attracting new customers and creating more customer loyalty Deeper competitive advantage around our core businesses while injecting more value into our emerging ones More capital-efficient opportunities for revenue growth and margin expansion Unite
Slide 67: People & Culture as a Competitive Advantage
People & Culture as a Competitive Advantage Craig Pintoff – Executive Vice President, Chief Administrative & Legal Officer December 11, 2018 United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved.
Slide 68: Craig Pintoff
Craig Pintoff EVP, Chief Administrative and Legal Officer EVP, Chief Administrative and Legal Officer since March 2017 Assumed responsibility for legal function in January 2016 Responsible for leading human resources organization since 2005 Joined United Rentals in 2003 United Rentals, Inc., 100 Fir
Slide 69: People and culture as a competitive advantage
People and culture as a competitive advantage With over 18,800 team members, our employees represent our most important asset Together, we have created a powerful and engaging customer-focused culture that has become the key driver behind our business success Our industry-leading human capital metri
Slide 70: We've come a long way in 10 years
We’ve come a long way in 10 years 2009 2018 Total Employees (end of year) ~7,975 ~18,800 Rental Revenue per Employee ~$200K ~$430K Driven by our Values Safety Customer Leading Continuous first driven by example innovation Integrity Passion Community Sustainability for people minded United Rentals, I
Slide 71: Culture as a competitive advantage
Culture as a competitive advantage Employee engagement Training hours per employee “I work beyond what is required to help United Rentals succeed.” 97% 49+ Engagement score 93% 37% Increase YOY (2018 vs. 2017) 2017 survey results across all categories at or better than the Assess Develop Promote Tow
Slide 72: The power of culture
The power of culture Our culture has created a powerful platform for welcoming new team members that have joined us through acquisition Let’s hear from them: Voluntary turnover reduced by 45% in the first year following acquisition(1) UnitedRentals.com/Welcome (1) Data with respect to employees join
Slide 73: Culture does not happen by accident
Culture does not happen by accident We’ve been on a journey over the past decade to create the most outstanding team in the industry Communication Leadership a and transparency priority Unique family Diversity and environment commitment to military veterans Ingredients for success United Rentals, In
Slide 74: Communication and transparency
Communication and transparency Communication is key in creating a common culture across ~1,200 locations Listen Inform Persuade Share • Town Halls • Quarterly All • 1UR Initiative • Workplace Social • Engagement Survey Employee Calls • Annual Management Platform • UR Ideas • MyUR Meeting • Mentoring
Slide 75: Leadership development is a priority
Leadership development is a priority Creating a platform to identify and develop leaders was critical LEAP LEAP LIFT LeadSTART • Assessment Platform: • Prepare the next • All People Managers Leadership Future Branch Managers generation of high required to attend Development assessed on their ability
Slide 76: UR operates with a unique family environment
UR operates with a unique family environment United Compassion Fund Commitment to Veterans • The United Compassion Fund is an employee- funded, first-response 501(c)(3) charity 10% of our current intended to assist employees in distress who workforce is made have experienced an uncontrollable crisis
Slide 77: And, our employees agree
And, our employees agree • External data(1) aligns with the strength of our culture and suggests that we are well positioned to attract high potential talent Company 1 Company 2 Company 3 Overall rating(2) Overall rating Overall rating Overall rating 3.9 3.2 3.2 3.4 Culture & values Culture & values
Slide 78: United Rentals in the top 15% of a highly selective group
United Rentals in the top 15% of a highly selective group We encourage each of you to visit one of our branches to see firsthand what we’ve shared today United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved. 78
Slide 79: Financial Strength as a Competitive Advantage
Financial Strength as a Competitive Advantage Jessica Graziano – Executive Vice President, Chief Financial Officer December 11, 2018 United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved.
Slide 80: Jessica Graziano
Jessica Graziano Executive Vice President and Chief Financial Officer Promoted to Chief Financial Officer on October 12, 2018 Prior role of Controller and Principal Accounting Officer included oversight of Financial Planning & Analysis and Insurance programs Joined URI in 2014 Certified Public Accou
Slide 81: Financial strength as a competitive advantage
Financial strength as a competitive advantage Where We’ve Been Where We Are Where We’re Going Balancing growth and returns for the long-term United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved. 81
Slide 82: Strong top-line growth and focus on operational excellence drives margin improvement
Strong top-line growth and focus on operational excellence drives margin improvement +2,180 bps improvement 10,000 47.8% 48.7% 47.9% 47.6% 48.4% 50.0% 46.3% 9,000 43.0% 45.0% 7,940 8,000 40.0% 35.6% 7,000 6,641 35.0% 30.9% 5,685 5,817 5,762 6,000 26.6% 30.0% 4,955 5,000 25.0% 4,117 4,000 20.0% 2,611
Slide 83: Improved returns support stable growth for the long-term
Improved returns support stable growth for the long-term 12.0% 12.0% 11.0% 10.6% 10.6% 10.6% 10.0% 10.0% 10.7% 10.0% 9.1% 9.2% 8.4% 8.8% 8.8% 8.8% 8.0% 8.3% 8.0% 7.5% 7.6% 7.0% 6.0% 6.0% 4.7% 4.0% 4.0% 2.9% 3.9% 2.0% 2.4% 2.0% 0.0% 0.0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 9/30 2018 ROIC(1)
Slide 84: Transforming our cash flow profile
Transforming our cash flow profile Adjusted Free Cash Flow ($M) $1,800 FCF/EBITDA(1) $1,300 27.5% $800 FCF/EBITDA(1) 20.4% $300 -$200 (2) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F Durable Free Cash Flow generated throughout the cycle Note: Free Cash Flow (
Slide 85: Where we are
Where we are What Sustainable Business Model How Capital Allocation Strategy Why Drive Value for Stakeholders Results over the last 10 years provide fuel for continued growth and investment United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights res
Slide 86: What: Extending our competitive advantage
What: Extending our competitive advantage Maximize revenue potential with current & new customers Leverage powerful Leverage growth cash flow; deliver through efficiency industry and productivity leading returns initiatives Operating model supports self reinforcing growth, margins, returns and cash
Slide 87: How: Capital allocation strategy
How: Capital allocation strategy – focus on value generation 1 Free 4 Cash Flow 2 3 Disciplined, efficient, and opportunistic approach to capital allocation United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved. 87
Slide 88: Step 1: Manage leverage within 2.5x – 3.5x range
Step 1: Manage leverage within 2.5x – 3.5x range Leverage Ratio(1) Acquired NES and Neff for $2.3B Acquired RSC for 4.8x $4.2B 5.0x Acquired National Acquired BlueLine and BakerCorp 4.5x Pump for $0.8B for $2.8B 4.0x 4.0x 3.6x(2) 3.5x 3.3x 3.0x 2.9x 2.9x 3.0x 3.0x 2.8x 2.7x 2.8x 2.5x 2.0x 1.5x 1.0x
Slide 89: No maturities of long-term debt until 2023
No maturities of long-term debt until 2023 ($M) $3,000 3000 $786 $2,550 ABL 2500 Unused $2,100 $1,000 2000 Term Loan B(2) $1,100 $1,673 6.5% 1500 Senior $750 Unsecured 4.625% Notes(2) $2,214(1) $1,000 Senior $1,000 $875 Unsecured 1000 ABL Used $850 $9 A/R Unused Notes $1,000 $800 $866 A/R 4.625% 5.7
Slide 90: Step 2: Invest in growth
Step 2: Invest in growth ($M) Organic M&A 2,050 2,000 1,701 1,769 RSC (2012) $4.2B (cash and stock) 1,580 1,534 850 1,500 1,272 685 1,246 726 National Pump (2014) $0.8B (cash) 640 530 463 329 1,000 NES (2017) $1.0B (cash) 774 318 1200 Neff Rentals (2017) $1.3B (cash) 500 940 1016 1004 1043 346 809 9
Slide 91: Step 3: Return excess cash to shareholders: share repurchase programs
Step 3: Return excess cash to shareholders: share repurchase programs # Shares Purchased Under Repurchase Programs 5 4 Restarting Shares Repurchased (MM) 3.5 $1.25B Program 3 2.7 2.7 2.6 1.9 2.0 2.1 2 1.7 1.7 1.4 1.4 1.0 1.0 1 0.5 0.5 0.1 0.2 0.0 0.0 0.0 0 Repurchased 27 million shares for $2.4B sin
Slide 92: Where are we going: positioned for continued growth
Where are we going: positioned for continued growth Positioned today for the future What about 2019? • Sustainable business model focused on • Expect another year of growth growth and returns • Cycle continues into 2019 • Indicators suggest macro intact and 2019 should • Durable Free Cash Flow full-
Slide 93: 2019 Guidance
2019 Guidance Total Revenue $9,150 – $9,550M Adjusted EBITDA(1) $4,350 – $4,550M Gross CAPEX $2,150 – $2,300M Net CAPEX $1,400 – $1,550M Free Cash Flow(2) $1,300 – $1,500M Another solid year of growth expected in 2019 (1) Adjusted EBITDA is a non-GAAP measure, as discussed in the Appendix. Informati
Slide 94: Driving and extending our competitive advantages
Driving and extending our competitive advantages Sustainable competitive advantages across sales, operations, fleet management, technology and digital, people and culture, and financial strength All indicators suggest macro intact and 2019 should be a solid year for both our construction and industr
Slide 95: 2018 Investor Day: Q&A
2018 Investor Day: Driving & Extending Our Competitive Advantages Q&A December 11, 2018 United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved.
Slide 96: Driving and Extending Our Competitive Advantages
Driving and Extending Our Competitive Advantages • Company transformed to be considerably more profitable and efficient • Operations, technology and culture differentiate us, and make us far more agile • Diversified end market exposure across customers, verticals and geographies • Strong balance she
Slide 97: Appendix
Appendix Investor Day December 11, 2018 United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved.
Slide 98: Historical Adjusted Earnings Per Share GAAP Reconciliation
Historical Adjusted Earnings Per Share GAAP Reconciliation Adjusted EPS (earnings per share) is a non-GAAP measure that reflects diluted earnings (loss) per share from continuing operations excluding the impact of the special items (determined at the time of the historic reporting) described below.
Slide 99: Historical Adjusted EPS GAAP Reconciliation (cont'd)
Historical Adjusted Earnings Per Share GAAP Reconciliation (cont’d) (1) We have made a number of acquisitions in the past and may continue to make acquisitions in the future. Merger related costs only include costs associated with major acquisitions that significantly impact our operations. The acqu
Slide 100: Historical EBITDA and Adjusted EBITDA GAAP Reconciliations
Historical EBITDA and Adjusted EBITDA GAAP Reconciliations ($M) EBITDA represents the sum of net income (loss), loss on discontinued operations, net of tax, provision (benefit) for income taxes, interest expense, subordinated convertible debentures, net, depreciation of rental equipment, and non-ren
Slide 101: EBITDA and Adjusted EBITDA Reconciliations (cont'd)
Historical EBITDA and Adjusted EBITDA GAAP Reconciliations ($M) (cont’d) 2009 2010 2011 2012 2013 2014 2015 2016 2017 Net cash provided by operating activities $ 438 $ 452 $ 612 $ 721 $ 1,551 $ 1,801 $ 1,987 $ 1,941 $ 2,209 Adjustments for items included in net cash provided by operating activities
Slide 102: EBITDA and Adjusted EBITDA Reconciliations (cont'd)
Historical EBITDA and Adjusted EBITDA GAAP Reconciliations ($M) (cont’d) (1) In 2013, we retired all outstanding subordinated convertible debentures. (2) We have made a number of acquisitions in the past and may continue to make acquisitions in the future. Merger related costs only include costs ass
Slide 103: Historical Free Cash Flow GAAP Reconciliation
Historical Free Cash Flow GAAP Reconciliation ($M) We define “free cash flow” as net cash provided by operating activities less purchases of, and plus proceeds from, equipment, and plus excess tax benefits from share-based payment arrangements. The equipment purchases and proceeds are included in ca
Slide 104: Free Cash Flow GAAP Reconciliation
Free Cash Flow GAAP Reconciliation ($M) We define “free cash flow” as net cash provided by operating activities less purchases of, and plus proceeds from, equipment, and plus excess tax benefits from share-based payment arrangements. The equipment purchases and proceeds are included in cash flows fr