Responsible investment in growth Second quarter results | 31 October - PowerPoint PPT Presentation

Responsible investment in growth Second quarter results | 31 October 2015 Issued: 9 December 2015

Legal notice Some of the factors which may adversely impact some of This presentation has been prepared to inform investors these forward looking statements are discussed in the and prospective investors in the secondary markets Principal Risks and Uncertainties section on pages 24-25 about the Group and does not constitute an offer of of the Group’s Annual Report and Accounts for the year securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for ended 30 April 2015 and in the unaudited results for the second quarter ended 31 October 2015 under “Current or otherwise acquire securities in Ashtead Group plc or trading and outlook” and “Principal risks and any of its subsidiary companies. uncertainties”. Both these reports may be viewed on the Group’s website at www.ashtead-group.com The presentation contains forward looking statements which are necessarily subject to risks and uncertainties This presentation contains supplemental non-GAAP because they relate to future events. Our business and financial and operating information which the Group operations are subject to a variety of risks and uncertainties, many of which are beyond our control believes provides valuable insight into the performance of the business. Whilst this information is considered as and, consequently, actual results may differ materially from those projected by any forward looking important, it should be viewed as supplemental to the Group’s financial results prepared in accordance with statements. International Financial Reporting Standards and not as a substitute for them. Page 1 Second quarter results | 31 October 2015

̶ ̶ ̶ Overview  Another strong financial performance Group revenue +18% First half profits of £343m (2015: £266m) Group RoI of 19%  Markets are strong with favourable structural and cyclical trends  We have executed well with significant share gains  Capital guidance increased from £1bn to £1.1bn  Financial disciplines maintained – responsible growth  Interim dividend raised to 4.0p per share  We now anticipate a full year result ahead of our previous expectations Page 2 Second quarter results | 31 October 2015

Suzanne Wood Finance director Page 3 Second quarter results | 31 October 2015

Q2 Group revenue and profit Q2 Change 1 (£m) 2015 2014 Revenue 649 529 16% - of which rental 589 478 17% Operating costs (340) (283) 14% EBITDA 309 246 19% Depreciation (107) (85) 21% Operating profit 202 161 18% Net interest (20) (16) 18% Profit before amortisation and tax 182 145 18% Earnings per share (p) 24.1 18.6 23% Margins - EBITDA 48% 46% - Operating profit 31% 30% 1 At constant exchange rates 2 The results in the table above are the Group’s underlying results and are stated before intangible amortisation Page 4 Second quarter results | 31 October 2015

H1 Group revenue and profit H1 Change 1 (£m) 2015 2014 Revenue 1,267 987 21% - of which rental 1,129 896 18% Operating costs (675) (532) 20% EBITDA 592 455 22% Depreciation (210) (160) 23% Operating profit 382 295 21% Net interest (39) (29) 27% Profit before amortisation and tax 343 266 21% Earnings per share (p) 45.1 33.9 25% Margins - EBITDA 47% 46% - Operating profit 30% 30% 1 At constant exchange rates 2 The results in the table above are the Group’s underlying results and are stated before intangible amortisation Page 5 Second quarter results | 31 October 2015

H1 Sunbelt revenue and profit H1 ($m) 2015 2014 Change Revenue 1,685 1,368 23% - of which rental 1,504 1,247 21% Operating costs (866) (702) 23% EBITDA 819 666 23% Depreciation (272) (217) 25% Operating profit 547 449 22% Margins - EBITDA 49% 49% - Operating profit 32% 33%  Excluding gains on equipment disposals, EBITDA margins were 51% (2014: 50%) Page 6 Second quarter results | 31 October 2015

H1 A-Plant revenue and profit H1 (£m) 2015 2014 Change Revenue 178 166 8% - of which rental 157 147 7% Operating costs (109) (106) 4% EBITDA 69 60 15% Depreciation (34) (30) 12% Operating profit 35 30 18% Margins - EBITDA 39% 36% - Operating profit 20% 18% Page 7 Second quarter results | 31 October 2015

Capital expenditure update 2015 2016 plan 2016 outlook Sunbelt ($m) - rental fleet 1,268 1,200 – 1,300 1,300 – 1,400 - non rental fleet 100 100 100 1,368 1,300 – 1,400 1,400 – 1,500 A-Plant (£m) - rental fleet 154 130 – 150 125 – 135 - non rental fleet 19 15 15 173 145 – 165 140 – 150 Group capital expenditure forecast (£1 : $1.54) £1bn c. £1.1bn Page 8 Second quarter results | 31 October 2015

Cash flow Significant reinvestment in our rental fleet H1 H1 (£m) 2015 2014 Change EBITDA before exceptional items 592 455 30% Cash conversion ratio 1 85.1% 82.7% Cash inflow from operations 2 504 377 34% Payments for capital expenditure (733) (534) Rental equipment and other disposal proceeds received 81 42 (652) (492) Interest and tax paid (53) (56) Exceptional costs paid - (1) Free cash flow (201) (172) Business acquisitions (29) (113) Dividends paid (61) (46) Purchase of own shares by the ESOT (11) (20) Increase in net debt (302) (351) 1 Cash inflow from operations as a percentage of EBITDA 2 Before fleet changes and exceptionals Page 9 Second quarter results | 31 October 2015

Net debt and leverage Net debt to EBITDA continues to reduce as we invest in the fleet 3.5 Leverage Oct Oct 3.1 3.0 (£m) 2015 2014 3.0 2.7 Net debt at 30 April 1,687 1,149 2.5 2.4 2.5 Translation impact (9) 69 2.1 Opening debt at closing exchange rates 1,678 1,218 2.0 1.9 2.0 Change from cash flows 302 351 At constant (October 2015) exchange rates 1.5 Non-cash movements 2 2 2008 2009 2010 2011 2012 2013 2014 2015 Net debt at period end 1,982 1,571 £m Comprising: 4,000 First lien senior secured bank debt 1,076 700 Second lien secured notes 905 874 3,000 £1.0bn Finance lease obligations 6 4 2,000 Cash in hand (5) (7) Total net debt 1,982 1,571 1,000 Net debt to EBITDA leverage* (x) 1.9 2.0 0 *At constant exchange rates Fleet Net Fleet cost OLV debt Fixed/floating rate mix – 46%/54%  Page 10 Second quarter results | 31 October 2015

Geoff Drabble Chief executive Page 11 Second quarter results | 31 October 2015

Capitalising on structural and cyclical factors to drive revenue growth Six months ended 31 October 2015 Quarter ended 31 October 2015 BOLT-ONS TOTAL RENTAL BOLT-ONS TOTAL RENTAL SAME STORE SAME STORE AND AND ONLY REVENUE ONLY REVENUE + = + = GROWTH GROWTH GREENFIELDS GREENFIELDS GROWTH GROWTH +13% +13% +9% +22% +8% +21% END MARKET STRUCTURAL END MARKET STRUCTURAL GROWTH GROWTH SHARE GAINS SHARE GAINS +7% +6% +7% +6% Page 12 Second quarter results | 31 October 2015

Sunbelt revenue drivers – rental only Continuation of strong performance Average fleet on rent Physical utilisation 80% +23% +22% 70% 60% 50% 2013-14 40% 2014-15 2015-16 30% Q1 Q2 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr  Volume growth of $675m (2014: $519m) Fleet size and growth +24% +32% Year over year change in yield +25% +17% +14% +3% 0% 0% Q1 Q2 2011 2012 2013 2014 2015 Q2 FY 15/16 Page 13 Second quarter results | 31 October 2015

Good progress across the business Driven by same-store growth Q1 Same-stores* Greenfields* Bolt-ons* Oil & Gas Total Proportion of revenue 89% 4% 4% 3% 100% Fleet on rent – % change +13% +1,084% +365% +25% +23% Net yield +1% +32% +12% -30% 0% Physical utilisation – actual 74% 66% 63% 54% 72% Dollar utilisation - LTM 59% 41% 47% 85% 59% Drop through 58% 51% 50% -193% 52% * US only – excludes Canada * Excluding Oil & Gas Q2 Same-stores* Greenfields* Bolt-ons* Oil & Gas Total Proportion of revenue 89% 5% 4% 2% 100% Fleet on rent – % change +13% +498% +249% -12% +22% Net yield +2% +17% +29% -44% 0% Physical utilisation – actual 76% 69% 72% 50% 75% Dollar utilisation - LTM 59% 43% 50% 66% 58% Drop through 64% 51% 52% -54% 60% * US only – excludes Canada * Excluding Oil & Gas Page 14 Second quarter results | 31 October 2015

Rental penetration will continue to grow our market 2010 2015 2020s Rental penetration Low 40s % Low 50s % Mid 60s % +20 to 25% +20 to 25% Market growth Why?  Rental industry a more viable option  Cost of ownership (Tier 4)  Legislation – Health & Safety, Environmental, Department of Transport Page 15 Second quarter results | 31 October 2015

We have the right fleet to benefit from these changes Rental penetration Rental penetration upside c. 80% Low c. 80% c. 30% c. 30% High c. 10% Page 16 Second quarter results | 31 October 2015

The big are getting bigger which provides further opportunity US market share 2010 2015 2020s 6% 4% 13% 4% United Rentals Others 3% 8% RSC - mid Sunbelt 7% Top 3% 30s Hertz Equipment Rental Co. (HERC) 47% 100 61% Top 4-10 10% - mid Top 11-100 15% Others 60s 19% +33% +20 to 25% Shift to larger players Page 17 Second quarter results | 31 October 2015