Sunbelt Rentals Holdings, Inc. (SUNB)

CMD 2018

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Apr 19, 2018

Okay, everybody. Good morning to those of you in the room, and by the good morning or good afternoon to those watching on the webcast. This morning's presentation forms part of a sort of 3 pronged program. So this morning's presentation, there are some very much hands on breakout sessions this afternoon and then there's the visit to pride the large location acquisition we did here in New York just around about a year ago tomorrow afternoon. All three events are designed to help us achieve the same objectives. And those objectives which are sort of covered by the agenda so those objectives are obviously initially to give everybody an update on the 2021 plan that we first rolled out in 2016. But more importantly, what we are hoping to achieve is to show you how our thoughts and those plans have evolved over time. You need to bear in mind, we are still a very young company in a very young industry that continues to evolve. And as a consequence, the further we execute on our plans, the one consistent theme is the ever increasing range of opportunities that present themselves. And therefore, Brendan initially is going to talk about that in terms of how we see those opportunities as we look at our markets either geographically or indeed how we look at our markets in terms of products and end market segments. So it's all about looking at the real scale of that addressable market. What you'll also hear us talk about a lot over the next 2 days is platform. And by platform, we look at that in 2 separate ways. There is a physical bricks and mortar platform. So the importance of our locations and our logistical support. But ever important ever increasingly important in terms of that platform is the technological support which makes transacting with us easy. And John is going to spend a lot of time talking about that and explaining our technical advantages. Another key objective out of the 2 days is to demonstrate the strength and depth of our management team. So the presentation this morning is going to be led by Brendan Horgan, who I suspect the vast majority of you now know. He'll be supported particularly around the technical side of things by John Washburn, who a lot of you should know. John's head of our sales effort here in the U. S. He became famous in the launch of the 2021 plan back in London by having the biggest iPhone in the world. And so, and as a consequence, having tackled technology live in the Capital Markets Day presentation once before, We've asked him to do it again. And then Michael will be joining me Michael Pratt will be joining me in terms of laying out our financial road map through to the balance of 2021. Of course, Michael, as you well know, very, very recently succeeded Suzanne as our Group Finance Director. But in addition to all of that, we've got a bunch of breakout sessions this afternoon. Brendan will introduce you to the crowd. I would really take the opportunity if I was you to engage with those people as much as you can and indeed the people you're going to see in the locations tomorrow because they have this clear and a deep understanding of the scale of the opportunity that presents us now in rental markets. And if you really want to get to know what's happening on the ground, they're probably the best people for you to speak to. So on that basis, I will then hand over to Brendan, who will take you through some of the opportunities as we see them. Thank you, Jeff. Good morning. As you would have seen in the agenda, part of what we're here for is to give you an update on how we're progressing in our 2021 plan. So probably the best place to begin that would be where it all started back in 2016 when we were in London together to roll out this plan. So just to give you a backdrop or refresher perhaps of what that was, we said in 2016 that we were aiming to add 354 locations by 2021, which would get us to a 900 location number. But the key really to that was how we were going to go about it. We were going to go about this with a mix of general tool businesses and introduction of specialty businesses into the fold and into those markets. We were going to achieve that growth in location count by a combination of a greenfield pipeline of identified target markets to enter, as well as complement it with a bolt on program, which we would have unveiled at the time. Importantly, in terms of maybe a bit of a new concept that we put forward back in 2016 was our concentration from an overall effort standpoint into some of our larger markets, while working to progress our clusters or the maturation of those clusters. So that was something we spent quite a bit of time on. And of course, there are financial elements to any plan, which were part of it, which we will also update you on. So if we look at this from a brick and mortar standpoint, you can see that we've progressed very well. We've added 169 locations in total, a nice balance there between our general tool businesses and our specialty businesses, equally a good balance between our greenfields and bolt ons, all ultimately progressing, as I said, of that 169 out of 354. If you go to the right hand side of this slide, you'll notice that we have 2 things here really we say, hey, we're now at 715 locations, so we're about halfway through our growth, but we're only 2 years through our 5 year plan. So this is all kind of end of April this fiscal year. So we're progressing well from a location count, I. E. Brick and mortar standpoint. To give you a slightly different view here, to bring the 169 locations to life, what we've tried to illustrate here is these red dots will be those the makeup of all the location adds. The yellow dots on the map here show where our footprint was May 1, 2016. What you'll take away from this is, you'll notice most all these red dots are in geographies where we already had presence. So we're adding to those larger markets, we're filling out those clusters as we said. But also you have to think about it in contrast to how we will have grown up until that point in time. So say from 2010, 2011, when we really started advancing the expansion again, a lot of that expansion was moving into new geographies. So we were putting locations and or flags in markets that we didn't serve whatsoever. And after that sort of 5 year growth period, our 2021 plan was very much about building out those clusters in the market. Another key takeaway from this slide will be that we've added some provinces across the top of our states here you can see. And when we were last together, we had a really, really small business in Canada. Indeed, we still have a small business, but that platform is progressing. Most notably there, you'll see the rather large cluster of red ads in Ontario by way of the CRS acquisition. So if you look a little bit further into Canada, this just illustrates here's where we are. We've added these 48 locations since we were all last together and we today have kind of about 60 locations in Canada, still very, very small in terms of the overall potential within that business. But what we have is we have the makings of a platform. Jeff mentioned platform earlier. We have the very beginnings of that platform. And it is from here kind of we do what we do best. And that is we take these locations and we further penetrate that general tool market. So we start to gain share, notable share in that market. Then we fold in the specialty businesses, which we've talked about so often and you'll see later on today. And ultimately, those things lend itself to diversifying the end market. So Canada, make no mistake, is something that we're very excited about. We have very, very small market share, but it is a market that we will look to rapidly increase. So this quantifies that 169 locations here to give you this update. You'll remember for a few of you that wouldn't have been there in the past, these market bans as we call them, we would have broken these into sort of buckets of DMAs. So the DMAs that we would have presented back in 2016, 1 through 25, 26 through 50, etcetera. But the real point here is over 70% of the locations we added in the U. S. In the 1st 2 years of our 2021 plan were in top 50 markets. So kind of giving you that feel for those red dots that we talked about previously. And in Canada as well, you can see 2 thirds of the ads were in Canada's top 10 markets. So all of this going according to plan, how we are progressing these markets. If you look here, again, this will refresh perhaps some of the foundation of this plan. We did a lot of work around where are our opportunities, what are the what's the real addressable market underlying the rental industry in both the U. S. And Canada. And what we found was the vast majority of or a big, big piece of that is in those top 25 and top 50 markets, you can see how substantial that makeup is. And we also said at the time, we said our plan was all built upon advancing these clusters and what it would take, generally speaking, in terms of location count to achieve that cluster. So you can see we had greater than 10 in the top 25, greater than 7, so on and so forth. Back in 2016, we wouldn't have defined Canada, but we've taken a first stab at Canada in terms of what we think we'll need to begin maturing that market and building out those clusters. But you can see also the progression of those clusters. So we've added in every one of these buckets, we've achieved what was then the definition in terms of cluster. And obviously, a big part of that is what does this mean and what do we all benefit from across the board when we build these clusters. So that was the physical element, if you will, of our execution on the 2021 plan. And here is just a an illustration of the financial progress, specifically the revenue. So what revenue growth have we achieved thus far in the plan versus what we said we would achieve? You can see there our plan, as you would all know, it was about 10% compounded annual growth rate over the course of 5 years. Our 1st year out of the gate, we achieved 12. This year to date, you would know having seen our latest results, we have 20% pace. So all in all, we're not only exceeding the pace of our plan from a location count and expansion standpoint, but it's also coming together and we are exceeding our plan thus far from a revenue growth perspective. So something I think a bit different as we move beyond that general update on 2021 is how from our current vantage point, we view the opportunities in the market, but also what is our approach from a geographic view, particularly when it comes to further expansion. I'll share with you this next slide. 1, again, we would have shown this slide in 2016 and used it quite a few times since, but it's important that we continue to talk through this because this is the mindset those that are leading and running our business are thinking about as we think about further expansion in the markets. So this delineates our markets by size and by presence in terms of Sunbelt's market share, so our relative share compared to the rest of the markets we serve. So for instance, if we go to the top right of this, this top right quadrant, what we're saying is, hey, in the really big markets, right, where we have relatively speaking low share for Sunbelt, we're going to go into that market and we're going to be looking very closely for opportunities for bolt ons. So how do we bolster, how do we kind of get a step change in our overall share by adding good businesses in the markets by way of acquisition that are on the larger end of the spectrum. By no means does it mean that we won't continue with Greenfields, but we will be looking for those bolt ons to sort of expedite things and there are a number of qualities that come along with that, which I'll get to. If we go to the top left, for instance, we have a number of markets where our share is higher than the norm or kind of the average for Sunbelt, where we go about it a bit different. We always keep our eyes open for applicable bolt ons, right? Our leadership team in the field in terms of district managers and regional vice presidents, they are constantly looking at the competition and constantly saying asking themselves, is that someone that would be better off with us as opposed to being a competitor? So they're always looking at that. But they're certainly going to have a very strategic plan in terms of where years to deploy and open a new location. And of course, on the lower end, you can see what our overall plan is. So that was the plan. That continues to be the plan. And here I think is another way of demonstrating what that has really looked like. So if you go to that top left, again, where we have more share, it's a large market, you'll notice there are quite a few more green dots, which would indicate greenfields compared to the yellow, which would be the bolt on. We won't do any. We do indeed do some bolt ons as you'll see in markets where we have presence, but we tend to lead that by way of greenfield. And then the top right quadrant you can see there are actually more yellows than there are greens. You get a little bit more green as you move towards the middle, but you'll notice also very notably all of these along the side. So where we have the absolute lowest share and in some cases no presence, we go into those markets by way of bolt on. Obviously, CRS would make up a number of those yellows on that right hand side. And then if you go down, you say, hey, where are the smaller markets that we have really high market share? Well, we haven't done much of anything because we've achieved a relative cluster in those smaller markets and it hasn't been our priority of the overall plan and you can see the same on the bottom right. So to bring some more color to some of these in terms of specifics as to what we've done, The first example is that it is a well, I shouldn't say A, it is the largest market, which is the one that we're in today, New York City. And it is one where we had really quite small share. And what did we do? We looked at our strategic growth plan, the business development team, Brad Law, who you would have met last time around, who was very instrumental in choreographing and building the strategy around those greenfields and the execution of, we come in and we find pride. So pride gave us an opportunity to make a real step change in our overall share within a market. But the most important point with that is not so much the share in terms of numbers, It is the customers that come along with that and the relationships that come along with that. Pride was a business that had 40 years of business under their belt and they had by consequence of that, 40 years of relationships with customers. And these are customers that with pride had just rented aerial work platforms, scissors, booms, telehandlers and not a broader product range. These are indeed customers who have the need and desire for a supplier that can offer them a broader product range. So we go in and that is sort of an entree to those customers. So it acts as a platform in a sense where we can further grow. So certainly that's not the end of our expansion in New York City, but a good example of what that target and strategy is all about. If we move on now to another really large market, but over on the West Coast of the States in LA, there wasn't the pride. So it wasn't kind of the smoking gun as you'd say of that one acquisition you just had to have. Pride of course was the one we felt like we just had to have. But it doesn't mean that there aren't alternatives to that one when you look at the market like LA. So this is just kind of demonstrating how we have an overall collection of bolt ons that in the end give us that same result. So here are some bolt ons we would have done over the last couple of years in LA in conjunction with further greenfield openings. And once again, what do we get? We get a broader customer base, we get a sales force, we get drivers, we get mechanics. These are all things that today are very, very important. And then we fold in those specialty businesses, etcetera, a bit like I talked about when we were just in Canada. So just a different sort of example as to how we do that. Now, if we go to that other end of that quadrant, that top left side, where we enjoy relatively large share in a market and we have a deep history, we pick Atlanta. So still a big, big market, top 10 market in the U. S, been there for a long time, have quite a few locations. As part of our 2021 plan, the point here is all the way down at that market level, the team that is building that business day in and day out, they had a very specific plan that said in this case, we need more locations to service our customers on that sort of Southwest side of the Atlanta metropolitan areas. This would be that Atlanta DMA. And they very much so had zip codes that they wanted to add locations. When they go into those markets, they say, okay, here's some property we can acquire, here's a building that we can take and turn into a Sunbelt location, but there are also some good rental businesses that are there. So if we have the opportunity to add a bolt on like that, that has the right people, has the right history, has the right reputation, even in some of our more clustered markets, we won't hesitate, we will still do the same and Atlanta is a good example of that. Another in that same kind of area, I like to call RGR kind of the pride of the Midwest. So this is an example of a business that was, make no mistake about it, an absolute market leader, a business that had a rich history of customer relationships, outstanding service reputation and a great group of people who came on with the acquisition and have stayed on. Matter of fact, with RGR, we have the ownership team of that. That is our ultimate leadership team in that St. Louis market and then spreading into some of the other markets that they have great experience in. So again, example of why do we do these? How do we mix between greenfield and bolt ons? It's just kind of trying to demonstrate to all of you how we set out to do this and how we accomplish over the course of 2 years a combination of organic and bolt on growth of 169 locations in that relatively short period of time. So when we amass all that and we are in that process of maturing these clusters, it's not just a matter of physical locations. It's also a matter of how we view the markets, how we train our team to understand the markets, and then ultimately how we go and we execute and we build the business to better target those markets. So I'm going to share with you a little tool, if you will, that we use internally at Sunbelt from a training standpoint. So whether it be our tenured sales force and managers or it be the new sales force and the new managers that come along with 169 locations of growth, we want to make sure that very early on they understand what our focus is and what we see as the potential for the end markets in which we service. So it's a little easier said than done frankly because let's face it, the rental industry for a long time has been one, even if you are a young man or woman coming out of college and you interview with a company like Sunbelt and we bring you on, just out of the gate they're going to think construction, right? They're going to think tower cranes and dirt. And we're saying, hey, that is an aspect of our business that is important, however, is far broader than that. So you can't sure you spend time, they're out in the truck with the sales trainers and that sort of thing and we're teaching them how to make sales calls and we're teaching about our products and our applications. We need to show them as 3 d as we can here how we actually view a market. So welcome to here what we call Anytown USA, okay? So we named it just as that. And what we see when we look at this market, so I'll begin here. So this is a hospital here in our aptly named Anytown USA. And this is what we talk to our team about. We say a hospital, freestanding. This is not an example of a hospital that is under construction. This is an example of a hospital that is operating. This is MRO is what we talk about all the time in our business, right? Maintenance, repair and operations, the overall MRO of this hospital. The way we view a hospital is there are patients coming in the front door and there's some equipment coming in the loading dock, okay? And we talk to our team about that and we give them hard and fast examples as to what we really mean by that. So from a general equipment standpoint, sure, general equipment and aerial, there are opportunities because every day there is maintenance going on in that hospital. So you see here an example of the scissor lift. We own 5,000 scissor lifts roughly out of the business that you'll all see tomorrow. And lots and lots of those scissor lifts are not on construction sites. Surely there are lots that are, but there are many that are in applications just like this. So we talk about that with our general equipment reps and let them understand that, right? General equipment speaking of again. We say what other opportunities are there in a hospital? Well, one is, what are their contingency plans? When it snows, what contractor do they work with for snow removal? Right. So I understand, of course hospitals are going to have contingency plans and someone's going to come in for snow removal, but think about any building that is that has a parking lot, right? They have to think about things like this and indeed they do. So these are the sort of examples we train. Perhaps one that's a little bit more top of mind to some of you, part of the contingency plan would be standby power, right? No better example than a recent one, a year that was pretty active in terms of hurricanes where we had 3 in a series of about 6 weeks' time that went on and on. We had 1 megawatt, 2 megawatt generators deployed all over And we had quite a few hooked up to hospitals just like this. So literally our sales force who would have engaged for months, quarters and years in their kits, they would be talking to facilities maintenance managers, they would be talking to electrical and mechanical contractors who work for those facilities to get plans in place, which is why our phone rings when the time comes of a hurricane. So then you would say, okay, what about some of our other specialty businesses? You have a business that is becoming near and dear to my heart, which is a flooring business, which we'll unveil a bit later on today to you. But there's a great opportunity in general square footage on the roof for just maintenance from a floor cleaning standpoint. We have examples of climate control, right, whether it be a larger climate control project such as the picture you will see here. So at that hospital when they are replacing their air handlers or they're maintaining them, what happens? They have to have air conditioning and who they call. They call that person who's been there talking to them about the MRO of their overall hospital. So if we leave hospitals for a minute and we take a look at just some of the other opportunities that are there, maybe in a little bit less detail, if we look at, let's just say, a university. So Anytown USA, there are a lot of these universities that are out there. Rest assured, these are in some cases private dollars, in some cases these are municipal or state dollars that are spent to maintain these. These are no cheap builds, right? So yes, there's a construction element, there's a renovation element and there's an addition element, but there is just general operations. And the story I like to talk the most about this because we use it internally all the time was, we acquired a business back in 2013 called Milwaukee High Lift. They had so it was our entree into Wisconsin, 2 location business, pretty small. They focus they had 2 they had one location in Milwaukee and one in Madison. For some of you, you may know that there is University of Wisconsin in Madison, the primary campus. They have about 55,000 undergraduate students. It is a massive complex and a massive campus overall. The team that we brought on with Milwaukee High Lift, they rented in Milwaukee and they rented in Madison and they purely rented to construction sites. It is what their sales force did. The first time I visited them after having made the acquisition, we spent a lot of time on campus. We spent a lot of time on campus talking to the team about the opportunity that is right in front of us is this campus. Tower Cranes will come and Tower Cranes will go, but this campus will stay. So the potential and the opportunity for this is very large, but it all starts with a mindset and leveraging that platform that you have to have in order to enter it. There's an example of a campus. If we go around here a bit and we say what else is out there in every day, Anytown, USA, City Park. So whether it is as grand as Central Park that we have just a couple of blocks over, or really most known to all of us in our business is just the municipal park, the town park, the county park that is in every single one of the markets that we operate. There is not a week in our business and there is not a market in our business that every week does not have opportunities and indeed business that we are doing today for events, whether it be a taste of Charlotte event or it be a small concert in a city park or it be something as large as, say, Lollapalooza in Chicago, where you have multiple weeks worth of load in, broad, broad range of products and specialties that are applicable to those projects. So we have small events that are you bill a couple of 1,000 and we have events where we bill close to $1,000,000 for a single event. So very, very broad in terms of what that overall sort of event space is in Anytown USA. It is hard for me in front of all of you to go through this example without talking about something I'm sure there will be some questions on. And that is another market for us and these are data centers. Of course, following the tax legislation that was put through, a lot of companies came out and said, hey, what are they going to do with all the savings that they have? And a number of the tech companies specifically committed to capital investment in the market over the course of a number of years. Data centers are not brand new. I would categorize them as kind of newish. I can remember walking my first ever data center job back in 2,008, 2009 timeframe actually in North Carolina, where they've booked quite a few of them. And I went with a sales rep who was his name is Dave Smith. He's ultra proud of what he wanted to show me. He wanted to show me all the Sunbelt gear that was on this job site. And indeed, we had a lot of gear on this job site. But what I saw was not so much the green stuff, I saw all the other stuff. I saw the big 2 megawatt generators that were hooked up to the buildings. I saw the load banks that are used to actually load test before these are turned over to the end user, whether that be Facebook, Google, you name it, that has to be tested before it's turned over. I saw very broad buildings. These are literally could be like the perfect rental construction project. They are vast in terms of the scale. They're not very tall. They're kind of 3 or 4 stories for the most part. And a single building is going to be like 400,000 square feet, right, John? But it's not just one building, they tend to build 6 or 7 buildings. And the way our experience has been with these projects, day 1, the first plan is there will be 4 buildings. Year, let's just say this, month 'eighteen, they'd say we're adding 2 more. Very few have we actually come to an end of, but nonetheless they add, but it's such a broad range of product. We have floor cleaning products there. We have climate control products there, dehumidification products there. And what I learned on that very first project was the specialty, if you will, businesses that were servicing them were single line providers. So there was a load bank company who was the largest load bank company in the U. S. And they did load banks, but they did nothing else on that site, right? There's a power generation company on that site who just did power generation, nothing else on that site. And ultimately that Dave Smith, now we have a dedicated team that just does data centers. But the broader point is this, this is a big, big market for us. Yes, it is construction. We see no real end in sight. This is something that will continue to proliferate as people are connected more often. There are more gigabytes flowing through the air than there ever were before and there will certainly be more to come. We estimate this market to be about $45,000,000,000 So that is a one heck of a big number for a segment of a very specialized sort of construction. To put $45,000,000,000 in perspective, that's about the size of the largest rental market in the U. S, which is New York City. So it is certainly one that we are very well aware of, we participate in. We have projects that range from a few 100 pieces on rent to a few 1,000 pieces on rent. So we do very well. We're very well known. Frankly, there are a couple of companies capable of doing what we do on these projects. So this will be a part of our story for years to come. And of course, I should mention, whether it be the data center or anything else here in Anytown, USA, John Washburn made a statement famous in front of 1600 of our sales reps a few weeks ago. He said, remember, when construction ends, facility maintenance begins. So whether it be any of these buildings or any of this also well named square footage under roof, these opportunities go on and on. So I think we'll you'll have some you'll have a chance to play around there with Anytown USA this afternoon during the breakouts. But let's make this a little bit more tangible. So when we talk about square footage under roof for that facility maintenance opportunity, which Anytown USA demonstrated, there are very exacting and quantifiable numbers beneath all of that. So we know that in the United States alone, there are actually 87,000,000,000 square feet under roof. Make sure to understand that that has nothing to do with multifamily housing or single family housing. This is all commercial, retail, office, etcetera. And what's interesting as well, as you would imagine, it's pretty much the same in terms of how that breaks down in the markets as the construction would be because it's very much so population based. So the larger markets have more square footage on the roof, right? This, it's important to say here is, it's not new to us. So this concept of square footage under roof and this concept of facility maintenance and overall MRO is something that we have been doing at Sunbelt for years years. It's something that you have to make sure you understand. It's not the easiest thing in the world to approach. You have to have this platform. Part of the reason why we build out these clusters is what we can put through those clusters to service a market far broader than construction and actually bring that to a material part of our overall business. So when you build that foundation, you can't just have general equipment or aerial work platform, you have to have a broad array of products and services in order to actually service it. So big, big numbers in square footage. What does that actually mean in terms of rental overall? Well, here's how we look at it internally. You'll see some of the tools from some of the team later on today. It gets pretty granular in this. But here's how we frame up the facility maintenance MRO business. A relatively conservative estimate is $4 per square foot. That's what it costs to maintain a square foot of property under roof in general. So you have some, I'm sure the Four Seasons in New York City is a bit more and I'm sure there are places that are substantially less. But in general, we know it to be true that the that four dollars trickles down to about 2% to 3% of that finds its way to rental, okay? So again, that's where it is today, not where the potential is. That number, if you think about it in terms of the broader rental market, that's about half the penetration or even a bit less than half the penetration you would find in construction. Said another way, that data center I talked about, the portion of rental as it relates to the construction project would be higher than that 2% to 3% we point out here. So those all look like small numbers until you multiply that by 80 $7,000,000,000 and then you come up with a market that's addressable to about $7,000,000,000 to $10,000,000,000 The point here is not to say, hey, this is $7,000,000,000 to $10,000,000,000 and great, it's all part of what we've done. The important part is we believe the vast majority of that $7,000,000,000 to $10,000,000,000 today and certainly the prospects of what that will grow to are a large part of those are not part of the overall estimates of the end rental market. Okay. So the $50,000,000,000 number you see as the kind of 2017, 2018 IHS number, lots and lots of that doesn't exist. And certainly in the 2021 forecast, it doesn't take into account the rental penetration growth there. So what we're saying there is 2 things. 1, something that's not new. I think you've heard Jeff say many times. He calls this the rubbish estimate, I believe. But this is that rental penetration estimate. So broadly, it's believed rental penetration is 55%. We think that is simply overstated. We're not here to say what it is. We're just here to say it's too high. When you say that, we're also saying we think our market share is overstated. It's only 8% and we think that that only 8% is too high. So when you say those two things, what you're saying is the overall market estimates in terms of our addressable end market is too low. So that's hopefully helping you get your mind around why we add all these locations and why we focus on these clusters the way that we do and also how our clusters mature over time. So this is just meant to illustrate to you pretty hard examples here of or exactly, I should say examples of how it's worked for us. So if we go to a very early entrant Kansas City, we entered Kansas City, pretty big market with a single greenfield. So we didn't do it by way of acquisition. We opened our first location in Kansas City. And from there, we've added a bit, but still very early in its development. When we opened Kansas City, the vast majority of the business that they took care of was construction because the sales force came in, sure we showed them things like Anytown USA and talked about facility maintenance. But let's face it, they're going to go out there, they're going to go to the job sites, acclimate themselves with sort of a low hanging fruit. And as a result of that, their end market is vastly construction in terms of what they serve. Then if we move over to an LA, which is a market that still has extreme potential for us, as that begins to mature, all the things that we've talked about, them understanding the different customers, they've folded in some specialty businesses, their sales force is gaining some steam, they have more feet on the ground in terms of sales, our marketing campaigns that are led by the marketing team and John are actually gaining some traction. What happens there is our audience, our end market gets larger. So that end market begins to evolve in terms of customers. So they are less reliant on construction and they have a broader mix. Then if we go all the way to a mature market and I would say we could comfortably quantify Tampa as a mature market. It's a place we've been for a long time. We have lots of locations. We have a great mix between general tool and specialty businesses, super strong tenure among the team. What happens? We find that literally more of our business is non construction than is construction. And that would account for our general equipment businesses, our specialty businesses overall. So to make it as clear as we possibly can, we put this together. And what we did was we actually broke down our top 100 DMAs, our top 100 markets. And of course, the locations that make up each of those varying range of clusters and we put them in mature, mid or early, right? And we looked at the business in which they did and here's what we can say comfortably. Our mature markets are going to be plus 60% non construction, or sort of middle markets, as you can imagine how this cascades are about 40% and early on there are about 20%. That early on 10 years ago wouldn't even have been 29 construction. But as the brand gets stronger and as the business platform is better recognized, even that 20 is a pretty good start out of the gate. So what does all that lead to? All that leads to better financial results. And as you can see, the financials would cascade the way that you would expect. And all this really builds that catalyst for us being a change agent in terms of rental penetration for the markets that we serve. So our thinking is a result of all this that I've shared. So this is a bit new for today. We think that what we previously said in terms of the number of locations we need to cluster market has changed. And we changed it really just in a couple of areas. We said back in 2016, we would have set our top 25, our 10 locations today, we're saying we would need at least 15. And then where it was 7, you can see that we've moved it to 10. But in the end, it is the addressable market opportunities that we believe we need to further even build out these foundations or these platforms to better address the market. So I'm going to transition now to a couple of case studies as we call them. And I think these are obviously, we put them in there to touch on some of the things that we've talked about before. But these are perfect examples of how we leverage our platform to develop specialty businesses that address a very broad end market and most specifically that square footage under roof dimension that we have sort of unveiled today. So one of them is climate control and the other one which I'll come on to flooring. Now there are a couple of common denominators in these businesses. First one is, these products that they carry are very, very low rental penetrated. So when I say low, the team will share it with you today, certainly less than 10%, in some cases 1% or 2%. They are products that perform a duty, if you will, that are ready made for rental. By that I mean, if we talk about climate control, they're only used when something else isn't working. So today end users, which is the facilities or square footage under roof, they own them because at some point in time their air conditioning wasn't working and they had to bring something else in. They get rolled off to a closet somewhere and they just stay there. So it's not something that they're using every single day. They have very little use, hence it lends itself to rental. And then the third one of course is, it is very much non construction oriented. So climate control, it is well known within Sunbelt that it is a absolute favorite business of mine. You'll meet John Murray today and John will know that, hey, what John needs, John gets. He just grows the business and why the heck wouldn't you? If you look at that picture we had here at the beginning, I've said this before, but we buy that thing right there for about $1500 or $1600 right about that. We rent it for about $500 or $600 a month. It lasts for about 10 years and then John sells it for about $1500 So what the hell is not like about that? The thing is just by itself 1 or 2 units wouldn't mean much, but the question really is, is there scale and what they've done is they've demonstrated that there is real scale. We first shared a little case study with you when we had just acquired a business called Top. Top was a 15 location business and all they rented were some little air conditioners and some little heaters and we just loved it. We loved the niche aspect of it. We loved the prospects of it. We loved the low penetration of it. Well, what John and team have done since is they've grown from 15 locations to 65 locations today. And I'll point out something specific that you can get into more during the breakout. Back about a year ago, we added a very important product line, a product line that we carry to a degree out of our general equipment business, but a product line that we believe is equally as large as the core lines were that were held from Climate Control in the beginning, And that's that remediation and restoration equipment. So make note of that and you'll see it as we go around, but it just adds to the overall potential of this business. Here's where we are today. We have 65 locations. I pointed this out here in this top 25 just to illustrate something. So there are our top 25 markets, we are in every one of them, but we actually have 33 locations in our top 25 markets. What the team is beginning to realize is we actually need more than 1 in each market to service this sort of product given the vast end markets that they approach. So here we are at 865. When we first talked about this, not to get too detailed or share too many figures with you, we said, hey, we think this can be a $100,000,000 business. And we were all super excited about that. Well, I can tell you today it has surpassed $100,000,000 Our new absolute low watermark for this business is $200,000,000 And if an anecdote helps at all with this one, I can tell you that for the month of March alone, they were 50% better than last March. So by no means is this losing steam in terms of its overall growth. And we think that has an opportunity to be no less than 120 locations. So you kind of fill in the blanks there, but this is a business that will be meaningful and substantial to us. But beyond that, it helps even diversify our base general equipment business. Because when the Climate Control team are bringing Climate Control and remediation products to facilities, they are representing Sunbelt and they're talking about all the other needs that those facilities have, which is one of the important sort of reasons why we focus on this overall. So it's a great lineup of equipment. That's about what it all looks like. And now we'll move on to Flooring Solutions, which I mentioned have some of the very same characteristics. So there's kind of your everyday regular ride on sweeper. And whether you're in the airport this morning perhaps or last night, you're in a facility like this, you're in a coliseum, you're in a convention center, you're in a gas station, you find larger or smaller ones of these everywhere. And the other thing that ties this to being so such an opportunity is this, so many of those customers, they just don't want to own these. But until we began building out this platform, there was no reliable alternative. We talk about that availability, reliability needs all the time. There was no reliable alternative. Well, they are building a platform now that will create a reliable alternative. So this is something we started just from scratch. We opened our first ever greenfield. We partnered with a leading OEM. And that leading OEM, we learned specifically that that rental penetration was 1% or 2% because we knew precisely who they sold to. And you can see what it's evolved to today. We have 26 locations. This is about a $40 or so 1,000,000 business already, completely organic with similar sort of margins and returns as our Climate Control business, which are really good. So today we have 26 and we think this could be a business that is no less than 70. So another example of a business that has significant room for growth, we pump it through the foundation or platform that we create in each of these cluster markets. And there are certainly more of these to come, not certainly some that we will share with you, but we always have these in the works and these are overall representative of how big that market is for us from a potential standpoint and how we continue to grow and move forward. So now that I've given you some color maybe in some backdrop on our approach to clustering these markets or opportunities to further explore the square footage on the roof, John is going to come up and he's going to share with you some great tools that they actually use to make all this happen to expand our customer base. John? Thanks, Brendan. Well, as we go to market, there's definitely some key enablers that we have to have in place to go to market the way we want. You've heard the market's complex, It's just not construction, but the non construction elements alike that really help pull us through. We talked a lot about a platform today. And you've heard availability, reliability and ease used a little bit. Well, make no mistake about it, you have to have a platform to go to market the way we want to. And Jeff spoke about the physical elements of our platform. I would peg those to availability and reliability. It is our range of product. It is our fleet, the youthness of our fleet. It is from a reliability perspective, our brick and mortar locations, our customers, our associates that help our customers find solutions for their applications every day. That's the very physical elements that we have in their platform. And our platform is many, many, many years in the making and it is very, very complex. When you talk about availability and reliability there, we have absolutely innovated in this space. We continue to look for opportunities to become more efficient, whether that is to bring the customer back from a service or dispatch perspective, which you'll see a little bit more in the breakouts a little bit later today. But I really want to spend some time talking about ease, because there's a couple elements in today's business world that are paramount. One would be customer centric. Lot of companies are putting the customer first, that customer experience is everything today, right? And our customers having a lot of opportunity to provide feedback to companies to say, hey, that was a really great experience, I'll be happy to come back or really that was not the best experience in the world. It gives us an opportunity to reach out to them and see how we can do better next The other big piece is mobility, right? So whether it is a B2C business, a B2B business or a service oriented B2B business like ourselves, Mobility and putting the customer all the data that they need and creating that ease of doing business is paramount to moving forward. So I'm going to give you a real quick demonstration of some of the tools we have in place. I'll start inside and move outside, meaning the tools that we use internally to help our sales force engage with our customers in this very large addressable market that we reviewed. And then I'll wrap up with how our customers come along. And we owe it to our customers to create that same ease of doing business that we do internally. So give me a second here and try this out. So back in 2,009, we came to a realization. The iPhone had been out for a couple of years, they were doing some really great things with that. We felt there was an opportunity to make our sales force more efficient. Long had passed the days where if you're trying to interface with a customer and you're trying to understand, can you, with confidence, say yes to a deal, a lot of times you had to run back to your truck, get in, phone the branch and say, hey, do we have availability on X product? Can we get it out here tomorrow? Oftentimes, our reps would find themselves driving back to the branch to prepare a presentation, to do many things to engage with our customer. We just said enough. We think there's a tool out there that if we deploy it appropriately and build a platform, we can really go to market in a different way and put everything that our reps would need at the palm of their hand at the point of contact with the customer, whether it's a traditional construction site in the dirt, whether it's an office call or one of these events that we've spoken about so far. So we set out to do that in 2,009 and we built this tool called Mobile Sales Pro. And Mobile Sales Pro has evolved over the last 7 or 8 years for sure. We continue to add features to it. It is absolutely today our number one adopted tool that we have in the field. Every day about 4,500 unique users pop into Mobile Sales Pro to do their job better, more efficiently and put the customer in front of everything that they do. Yes, that's sales reps, but it's also mechanics and drivers. There's a lot of information in here that helps us engage with the customer expeditiously so we can take care of their business. So I'll walk through a couple of these icons with you and show you how we use it. Just the top row here is we'll spend a lot of our time. We have equipment. We have customer information, reservations. We're trying to give them every tool that they could possibly have in their hand in the field, so we can be as efficient as possible. I won't get into it. You might in your breakouts, but commissions is there as well. We have a pretty tenacious sales force. They're pretty aggressive. And we found that it's never a bad thing in real time, okay? By the way, we're live right now. So for those in London that saw my act when we were live and it didn't go so hot, we're not afraid, we're going right back to it. But if we can show our sales force in real time exactly what they're earning, it's just it's wonderful. And we've gotten some great results from that. So let's just stop here and talk about equipment for a second here. So we have a range of 8,500 products and $8,000,000,000 worth of fleet. Well, they're all classified in the palm of their hand here. We'll start with if we just walk through here and tell a story that we just actually saw the other day as we were going out to Pride. If I just talk about daylight savings came, right? So what happens there is that certainly it's a little darker early in the morning, whether it's an event or roadwork. If I'm a sales rep and I'm out in the field and I'm talking to a customer and this could be by the way a customer who is doing some road work on the Long Island Expressway or it could be an event customer at a place just out here in Queens that's doing the Freeze Art Festival, right? And they need a couple of light towers for me. So I pop up, I say thank you. Let me see just real quickly if we can take care of that for you. So they need 4 or 5 light towers, okay? I get out my phone, I couple of taps as you see in real time I can see that my closest store to me doesn't have the availability, okay? We have 16 available by 19 reservations. So I'm like, okay, what do I do next? Well, we've made it very easy for them with one tap to pop out and zoom up and see what their neighboring locations have available. So very easily our rep now says, hey, Westbury can help me with this, they're just down the road. I can confidently say yes to my customer. We can deliver those to you tomorrow. Not a problem. We get the PO and move down the road. So fantastic, right? When I talk about some of the elements that we brought forward, we also like to we have standard rack rates. Rates are a big component of what we do. And we also give a lot of flexibility in the field to make those decisions. It could be a competitive situation. It could be that it's a new customer for us. So in terms of the loyalty ladder, we're not all the way up the stair step there. And so we have to get competitive from time to time. We wanted to take the opportunity to do a couple of things here. Show them based on real time and availability what our pricing matrix should look like. So we try to guide our reps in terms of pricing. Now that we said we could do the deal, the other side is what are we going to do deal for, right? So very quickly, we show, hey, based on availability, we should be a little bit on the high end of the spectrum, but we give flexibility to the reps. And we also have a pretty simple comp plan. And it basically says, the more you run it for, the more commission you make, right? So we took those two elements and tied them together here. Again, imagine we're with the customer at his job site right now. And I can see pretty quick what happens to me and my commissions based on what rate I achieve. So pretty neat stuff, right? So this thing slides around, which is pretty cool. I'll try to hit $350 here. This might be a hit break for me that says, hey, based on the customer, based on the application, I want to get $3.50 a week for those 4 light towers, okay? And I can see real quick that pays me 2% commission. But it also shows me real quick, if I get 1 more dollar I go from 2 to 2.5, which is pretty cool. So guess what they're going to do? I hope, not what you're thinking, they're going to go to 3 and say, hey, just for $22 more or less than $100 on this complete package, but by the way, we're going to deliver for them tomorrow morning, I get a 50% boost in my commission right away, right? So now we're engaging the customer with some confidence, with some real time data in the field, which is just tremendous. So it's just an example of how we would go to market with that in terms of utilization. Again, we're live and I just caught this, so I'm off script a little bit, but bear with me. Here you see 49% utilization as a company on light towers. And I just told you, it's daylight savings signs. These things are pretty popular, right? And you guys are smart folks for sure. We own quite a few. This is our base. And I think if you allow me for a second, I can demonstrate to you a couple of things. How this base so Brendan would have talked about this data center, right? It's not uncommon. So half of our light towers aren't rent, the other half are not. It's not uncommon on a light tower on a data center rather to have 50 or 60 light towers on a project for 3 or 4 years, okay? So just imagine, that's on the lower end of our pricing spectrum because it's pretty competitive. But when we talked about the art festival, we talked about Public School 53, we talk about Public School 35 on the Upper East Side, or we talk about a highway patrol checkpoint, okay? That's a quick one day, 2 day deal, right? So look at the reservations that we have. So we have 18 35 reservations. If you do the math real quick, after those reservations are converted, we'll be 90 plus percent utilized on light towers. And what that really does is, what we love about that is, it demonstrates the breadth of our customer composition, right? From the very you have to have a base and then you have to be able to build from your base. The other thing that brings us is some really nice blend from a rate perspective, okay? So those quick deals are way on the high end of the range. That base business that you're talking about is a little bit lower on the range, but when you pile them all up, it looks pretty good, okay? So I just wanted to take a second and show you that. We'll click through a couple more things here on our Mobile Sales Pro. Customers, we always talk about making a complete sales call. You have to have a little intent, right? If you're going to go into somebody's business and disrupt their day, you better have some value, you better have something to talk to. It will probably be the last time you get an opportunity to speak to those folks. So what we try to do is take all the data that we have on our customers, 17 or so years' worth of data on our customers and put it in the palm of the hand. So as we're getting out of our pickup truck on a job site, at an event, at a customer's office, it's really nice and concise here that we can get a pretty nice view of the customer and help develop some of that intent to make a complete sales call. As you can see here, we'll come on to Command Center in a couple of seconds, but I can see how many website users they have. And this company happens to have 2. And guess what, they both logged in, in the last 30 days or so. So we have a really engaged customer. So you feel really, really good about that. We can see the quotes and reservations that are out there because even though they're my customer, they're in my dirt, we have 1400 sales reps that could be engaging with this customer. So it gives us a little idea to the activity and you can dive into that and come up with some strategy. We also see the equipment on rent. Pretty cool, right? So we can see what they have, where they have it across the country. It's sorted from the top would be their older pieces and the bottom would be the most recent. But you can see some really nice data here about it, right? You can pop it up, see where it's at, see if there's photos, you can see who ordered it, POs, right? And you can do some options. So if you're driving down the road, your customer calls you and says, hey, I'm done with this. Instead of waiting to lean in there and forgetting about it, we can maximize this and really sweat the gear and just tap a pickup. Rent stops now. Automatically, our customer gets a time stamp that says your rental is done. Our branch gets a time stamp that says go pick this thing up because we need to find another customer for it, right. From a service perspective, customer calls, look, when you get a service call from a customer most often, it's not the most pleasant call to get, right? They're paying for something that should be delivering for them and for some period of time, it's not working. So driving down the road, you just pull over, type in your service call. So all this without stopping your day, without coming back to the branch, without phoning back to the branch, this mobility that we're able to give our sales reps has gone a long way to help bolster the results that we were talking about. And while we talk about making a complete sales call, it's not done until it's paid for, right? So a nice little aging wheel, So you can go down the hall and talk to Tony or Tonya about this. Or do we have an issue here? There's something we're not doing. Are there reports out there we can help you with to help manage this cash flow a little bit? So it just really gives them a nice layout to make a complete sales call. And again, it's on their iPhone. So cool. Reservations, we're on a big kick here that our reps aren't to call the locations anymore to turn in order. They're putting them through here and move on. All right. Just assume that it's done, go to the next customer. And gives them an opportunity to do that with about 4 or 5 taps. You enter in a customer, you enter in a job site or an event site or an industrial site, you enter in a PO, a piece of equipment and it goes to the location, all right? So they're done, all right? No more does that interrupt their day, just trying to speed that up and get to market a little bit quicker. Of course, we have tools and then any tool they have to do their business and again that commission. You'll see a little bit more about Mobile Sales Pro when we get into our breakout. So I encourage you to ask some questions about that. So back to the 2,009 thing, our reps, they love this. This is fantastic for them. They started asking for a little more, which is really cool position to be in as a company when you put something out like this to drive efficiencies and they say, hey, that's great. Can I have a little more? So we said, yes. Again, our friends at Apple helped us out because they came out with an iPad and gave us a little bit more real estate and we were able to move from this real, I call it, more tactical tool to a more strategic tool. So I'll take you into that here. Cool, it worked. We call this Accelerate and it's our CRM platform, okay? So sorry it's a little bright. I need a little sunscreen up here in front of it. But this is what pops into the rep every day. This is New York City, by the way, here we are. So this is a live rep. This is Brandon O'Connor. We are live again, by the way, and it's working so well. This is great. But Brandon does a great job with this. So Brandon, if you're out there, congratulations. I want to use you as an example plus the geography really, really helped. But it all starts with a plan, right? So the first thing we do in this little widget called my day, we let them plan. Down the left side, you'd see appointments that are there. Those represent the orange dots on the map for the next couple of days of his activity as he goes about. He will complete those appointments. He will log what happened. And the coolest thing about this is the other 1400 reps can see that. They see that he completed an appointment with Delco Electrical. And the task there might be they're working at 53rd and 5th, the task might be they're working in Madison, Wisconsin that Brendan talked about earlier. And we'll show how you can engage that in a couple of seconds. But all really, really neat stuff there in terms of MyDay. So they can clearly see what's out there, clearly see what they're about to do and also builds in some flexibility. So if on Friday here I don't get to JRM Construction with a single swipe, I can pull that down to next Monday and it's right in queue. So I can and hit because planning is one thing, right? That's not time management. It's actually what happened at the end of the week is really time management. So we encourage them to sit down and say, hey, did I get everywhere I needed to get to or what did I miss? Okay. I'll just go around the bottom bar here and give you a little overview. Next thing we show them is what we call companies. This is pretty cool. Again, we're there, you just can't see it. But these are all the companies in this territory of Brandon's that have an open Sunbelt Rentals account. So that's 535 addresses and companies that could pick up the phone, pick up our app and order a piece of equipment today with a PIA. So that's fantastic. We love that. We also love that we can put it out there for Brandon to see because this is his game of risk, right? This is where he goes and takes these pins and drags them over and sets his day. So it's pretty neat stuff there. Let's see, here we are. You see Four Seasons doesn't have a count, that will change by the time we're out here, I can guarantee that. But bear with me a second. The MRO that Brendan talks about, okay? This building was built and it's in great shape by the way, but built probably in the '80s, '70s or '80s, right? It's been up for a long time. It's probably not going to come down for a while. So they take extreme care in keeping it up and going. I can tell you this, to the dock downstairs on the 58 side of the entrance, we've delivered dozens of times to this address for contractors, whether it's a 60 foot boom for a Mason who's doing some tuck pointing keep the building in shape, whether it's a plumber that's here with a sewer snake and a pipe camera to do some work, or whether it's the team in the back from PSAV who needs a 19 foot scissors lift for an event just like this to get ready. But those are the deliverables that we spoke to in terms of MRO, non construction related equipment that comes into addresses just like this every day, okay? And we're able to show it. You might ask, I'll save you here a second, but the red pins are active customers and the grays are inactive, okay? Inactive is not a bad thing. Sometimes it is. But inactive could also be termed infrequent, okay? They don't rent all the time. They're seasonal rentals. They might rent for holiday lights. They might rent for spring cleaning. Their business just might not have a need to rent year round, which is fantastic. We love these customers. Why? Because they really they're pretty sticky. If you make it easy if you make it easy for this customer, they come back and back and back. And what we love about it is we know where they are. There's some other folks in the space that don't give those customers the time of day, and these customers feel that. We do. We put a pin on the map. And again, about our tenacity of our sales force, brands are going to stop by and talk to these customers every once in a while. This is not a once a week call or a 2 times a month call. This is once a quarter just to pop in and say, hey, is everything okay? It's all we need to do. But we are their 1st call when they need something. So it's a very sticky customer for us, one we like and one that quite frankly is a nice annuity once we put them on the map and have them engage them. Moving on here. Every night this is pretty cool. Every night, we get a feed from Dodge that says what are the active projects in this territory. And by the way, we consider all this square foot under roof. This market that we're in New York City has 5,400,000,000 square foot under roof. It's number 1 in the country. This is about a 4 square mile territory in Manhattan. There's about 162,000,000,000 square foot under roof in this territory alone. About 85% of that addressable market of $5,400,000,000 by the way is in the 5 boroughs, okay? So we know this really, really well. And this is not all in terms of project, this is not all construction at all. These are MROs, these are events, these are renovations. It's not all new construction to Brendan's point earlier. And what we love about it is, again, we put pins on the map and we have a great track record with our sales team. If we show them where it's at and get out of their way, they go find the rental opportunity. You can bet on that. So I'll try to demonstrate here a little bit some of what we're talking about that is just not MRO or excuse me, just not construction. Here's 1, pump and tank maintenance repair, okay? Who's going to stop by that? These guys, okay? We're going to get in there and we're going to try to understand what that means. What kind of specialty product can we put in there? This is probably not a this is probably not a 60 foot boom application, but it could be a scaffolding application, okay? There could be some climate control that we need to put in there. If they're perhaps painting, this could be a sandblasting type opportunity. So we will absolutely get in there and understand the unique application here, and we'll do our very best to size that opportunity through our sales force to a great outcome. You saw the church or you will later in Anytown U. S. A. But here's St. Paul the Apostle, it's renovation. So again, huge scaffolding opportunity, facility maintenance opportunity, climate control opportunity. They're not building new church here, okay? They're absolutely not. This church has been around for a very, very long time. But it's a pin on the map and Brandon will get over there and understand what's going on there and make sure he's able to do something with it. Brandon showed you the hospital. Here's Mount Sinai. This is an emergency room. Okay. So they are doing some work in emergency room and I'm building an emergency room. Okay. They're cleaning it up. They're making it easier to bring patients through. Right. They might be upgrading a wing. We're there because we can show the reps the visibility to be there. And then facade repairs, okay? So there's a beautiful building on the upper west side of the park with all the great architecture. Could just be some sand blasting, right, or excuse me, some power washing, some tuck pointing going on there. That's a huge opportunity for us. But these are things you don't find unless it's spelled out for you, and it's in the palm of your hand. As you're driving down the road, you can do something about it. Again, back to my day, if I can, what we call the companies. So Brandon's out, he's got his plan. He's moving around the town and doing what he needs to do. But every day doesn't always go as plan something, there's a little fire drill. A customer has them a request. And because of that relationship, you kind of stop what you're doing and go take care of them because that's what we do. This allows our reps to call on a dormant account that's nearby where you just took a key or just took a fire extinguisher, right? You don't have to double back clear down here to where you were. If you're up here, just pop over next door, right, and take care of that because you're nearby and work your way back to your plan because we already know that if we don't get there, we can just drag that forward, okay? So a really, really cool interactive CRM platform that we feel gives our sales force a huge competitive advantage over others for sure. This has everything MSP has on steroids, okay? More real estate, more opportunity. This is the strategic tool that they would use every day. I would tell you our reps today, if they're eating lunch with a customer and they leave this in the bathroom as they're washing their hands, if they leave this on the tables, they get up to pay the bill, they get out to their truck and they start doing the Kramer, where's my iPad? Because this is their day. Everything's here, right? This is where they're going next, this is where their plan is, and this is where they're going tomorrow. So really neat stuff there. Again, you'll have an opportunity to see a little more of that as you go forward. Then last, talk about the customer. How do we make what we do, the customer experience, a little more engaging? How do we make ourselves easier to interface with? Because if you go to any equipment rental company's website, ours or anyone else's, it's kind of complicated. It just really is. We have a whole lot of products. You have unique application. Those products can be used for many different applications. And if you don't know where to start, you just you might give up. So we try to with Command Center, again, this is a mobile application where the customer logs in, and I'm in as my customer here, and you start here. You can see your representatives, you can see your locations, you can see equipment and the like. And I'll just walk through a little overview of how we're trying to make it easy for our customers to transact with us. First of all, where are we? So here's our footprint, just showed a little different way. We would hit the near me, and we'll zoom into New York City. So you kind of see the locations that are around us. Here's our team down in Maspeth. It tells me that my friend Bill Blaker is the manager there. It tells me the sales reps there if I want to get a hold of them pretty easy. Again, this is in the customer's hands. This is either desktop or mobile for the customer, okay? Talked about a huge catalog, huge range of product, 8,500 SKUs. We've narrowed it down to what they use, okay? We've taken 17 years of customer data, which is a lot. We talk about the platform, I say it's many, many years in the making, this is why, okay? Not many can do that. You have to do this a long time to understand preferences from a customer. You have to do this a long time to understand what they rent and where they rent it. But we're just showing them what they rent. So we've dialed that catalog down. With a couple of taps, we're putting on rent, all right? Just that easy. But we can make it even easier for them, and we have. We can show the customer what they rent most frequently. So again, if I'm a small to medium sized contractor and I don't have a procurement team back in my office, I might be a smaller outfit and I'm driving from job to job to job to check up on my crews to make sure they're doing what they need to be doing. And as I get there, I might see they're behind and needed another piece of gear to get ahead. I can just from someone's driveway, from a parking lot, pull this up, tap and order some more gear to get our job back on progress. We show them the recent orders. This is a great one because we also show bundles. If you look at the top left here, this is an air compressor deal. Back to the platform again. It wasn't so long ago before all this technology was around that this was a phone call. The customer is calling us or walking into one of our locations and saying, Hey, here's my application. I need an air compressor. Then we just start asking questions. What are you trying to accomplish? You're busting up concrete? Are you busting up asphalt? How thick is it? What's the PSI? How many hammers are you going to run? How much hose do you need? How far away from the air compressor are you going to be? What kind of steel do you need to put in the bottom to achieve what you're trying to achieve. That's not easy to size, okay? But our associates at the store would walk someone through that. And they'd leave having the tools they needed to have to get their job accomplished. Today, we've already shown them. So back to the public school deal, one of our contractors gets a bid to chip out some playground asphalt for 4 or 5 schools around the city here. This is the package they used last week to do the school public school 35. 2 weeks later, they're doing public school 45. They just tap that same product, that same bundle. And with one tap, all 4 or 5 of those pieces are back on rent again, okay? So it's about convenience, it's about making it easy, it's about putting the power in their hand to be successful. And then we give them some freedom. We have, again, a lot of information here that we'll stock up. We also give them some flexibility to add their own favorites to what they're doing as they move through. So I'll end here quickly by just showing a couple other features of the mobility we give to our customers. They can see their reservations that they have. This is their queue. This is their pipeline. This is what they committed to from us. With a couple of taps, they can push that out a couple of days, maybe the weather wasn't great. They need it on Wednesday. It's snowing in Boston today, by the way. So if you had something in Boston, you might say, I'm not doing it today, I'm going to wait until Monday. They can tap that and also move it up if they have a window of a crew or some weather to take advantage of. Again, equipment on rent, you saw this in MSP. Now they see everything they have on rent. They can see it all. And by the way, how easy at the point of sale for them to say, hey, this forklift here, I'm done with it. So I'm going to just choose a pickup date, Friday, mail. And the pickup ticket goes right to the store, so we can schedule that through our VDAS system, get that equipment picked up, get it processed and get it ready to rent again. Okay? So those are key in helping drive our business forward for sure. I do the same thing with service for extended rental. And then lastly, invoices here. We talked about invoices a little earlier. I think this is pretty cool, actually. You're on a job, and your process is the invoices come to the job. You have to prove them and send them back to the office to be paid, okay? This usually moves a little faster, I apologize. But real quick, this contract is going to pop up. And if I'm in the job trailer, I can just e mail that back to the office. I can text that back to the office and say approved, and it'd be done. And it's in the pipeline to be paid, which is a feature that our customers really, really, really like. But again, it's back to customer centric. It's about using the mobility to enhance the overall customer experience so that we can take care of more customers. It makes them a little bit more sticky, and that's where we're headed. So there's an overview of that. So back to the platform again. I just spent a little bit of time again going through MSP Command Center and Accelerate from a 50,000 foot view. You have an opportunity in the breakouts to dive in a little bit more and ask some questions, and I encourage you to do so because the actual authors and architects of a lot of these tools will be standing in front of those screens downstairs. So the folks that actually developed this are on-site today. So who better to ask a question than that? You also get an opportunity to see our VDoS system downstairs as well. And one of the other breakouts pertains to our market intelligence that we arm our regional and district leadership teams with, so that they can go to market to look for those zip code type bold ins or acquisitions that Brendan had discussed earlier. So you get an opportunity to see that at all as well. I would also encourage you tomorrow at our location 668 in Islip, you have an opportunity to see this entire platform in motion, okay? So it's one thing to be on stage here. It's another to be moving around and just looking at it in isolation. But you'll really see the benefits of this platform when you're with our folks tomorrow at the PC and just how it all comes together very, very crisp so that we can continue to broaden our customer reach and just look to take more market share in what we do. So with that, I'll ask Jeff to come up and Michael and talk a little bit of financial wrap up as well as some concluding thoughts. It worked. It worked. It was cool. We recognize it will be very difficult to get a lot of people here and talk about 2020 one plan and at some moment in time talk about some financials. Obviously, we would have preferred not to, but we recognize that we've got to do. Let's be clear. We're all going to talk about a bunch of financials now, but the primary reason is to demonstrate the number of levers that we have in order to enhance shareholder value. So please don't get hung up on some of the precision of this. It is the direction of travel that's most important. When we kicked off in 2016, obviously we went, as Brendan said, for this 10% compound annual growth through the next 5 years. Let me tell you, when you do a 5 year plan, you may feel pretty good about year 1 year 2. You feel kind of okayish about 3 and 45 is a gamble. They're completely than anybody who tells you anything else. If I was better at reading markets, I'd be in some fancy office here doing just that, not telling you about rental markets. However, 2 years in with 3 years to go, life's looking pretty good. In all honesty, our end markets have probably been better than we anticipated they were going to be. And as we look forward with a greater degree of certainty over another 3 years, they look pretty good indeed. Look, the Dodge data, which is John's just shown you, we download to our staff on a nightly basis, that Dodge Momentum Index, that Dodge Starks, which is, in my opinion, the most important lead indicator, remains very, very strong. As always, the dodge of the ABI, these are very, very volatile metrics on a month by month basis. But if you take them in and around, they're very positive. If you look at the data and if you look at the anecdotes we're getting from our customers, I mean, backlogs are just huge right now. It is a significant problem. But it's also elongating the cycle. And we believe there are further opportunities to come. Brendan mentioned technical businesses spending more due to tax reforms. I think that will take that will also happen in other industries. And we have the real potential at both a federal and a state level for further expenditure on infrastructure. Again, given the tightness of the market, has that changed our outlook in terms of the pace of growth through the 2021? No, probably not. We think it is more likely to elongate the cycle well beyond 2021. Now we have been guilty in the past of only focusing in on our construction markets, which is we're now seeing is currently around half of our business and likely to become an ever decreasing proportion of our business. Look at the event work, the MRO work, the industrial work, much of that is driven by just the general health of the economy. Look, the general health of the U. S. Economy is pretty good. Those of you who've flown in recently from London, walk around, okay? Try and buy something and see how much it costs. Trust me. The U. S. Economy is very, very strong. We've got GDP growth up there at 2.9%. If you look at disposable income, it's strong. You've got unemployment at just over 4%. So the outlook for the non construction element of our markets also remains very, very strong currently. So as a consequence, we are very happy to stick with our sort of 4 ish percent compound annual growth end market assessment that we had back in 2016. Now being us, we aren't very content with just pure 4% compound annual growth. Our view would be, as it was in 2016, if our end markets grow circa 4% per annum, that our organic growth, so that's the organic growth, that's the growth driven by the existing stores or greenfield. So excluding anything to do with bolt on M and A, we'll grow at somewhere between 7% 10%. So we will grow at somewhere around 1.5 to 2x the pace of the market, which is something we have consistently done since about 2010. So we would expect that us to have that extra growth. Now these numbers here are in pounds, and I'm talking about group numbers because I ultimately want to back into the balance sheet and cash. So if you're trying to reconcile some numbers here, like I said, just remember these are now group numbers. So we would expect our group revenues to grow from a purely organic, so not in total, just from an organic perspective 7% to 10%. And that gives you and if you take where we are at the moment and you apply those numbers, you get a range of what we think our revenue will be. You do not have to be a genius to therefore be able to pick a percentage for either EBITDA and EBITDA and you can come up with a range of what that will mean in terms of either our EBITDA or EBITDA. The question, I guess, is what percentages do you pick for EBITDA and EBITDA? So let us try and move on to tell you how we view our current evolution in terms of margins. So chart there on the left, 2016. If you remember, what we did was we broke up our stores into cohorts of age. So we took the stores that had been opened up to financial year 2011 and they at the time were generating an EBITA margin of 39%. And we looked at the stores that we had opened between 2012 2016, and collectively, they had they then, at that moment in time, had EBITDA margins of 30%. And what we said back in 2016 was this. Look, we expected our mature stores to continue to see margin evolution as you leverage our fixed cost base, as you broaden the products that were going into them. And indeed, that's exactly what we have seen. Those mature stores now have and that's incredible for an EBITDA percentage, but those mature stores now generate if you look at 2018, that collection of stores now have an EBITDA margin of 40%. So we have seen good progression in those margin statistics. We said the openings that we did between 'twelve and 'sixteen, they would gravitate into 2021 towards the 39%. So they themselves as a collection, would look like mature stores by the time we got to 2021. So if you look at what they've done, they've gone from 30% in 2016, and they've seen some fantastic growth, and they have moved to a 36% EBITA margin. But if I was on Twitter and I was presidential, I would say mission accomplished. But what we've also done as well as evolving those margins, we've clearly added the 169 extra locations that Brendan has been talking about recently. I think what's really impressive is those stores in just stores we've opened over a 2 year period, they generate a 32% EBITDA margin already. So yes, they're a drag. There's no getting away from the fact that they're a drag relative to the very high margins of our mature stores. But let me tell you, we do not buy very many businesses, which are well established businesses that have 32% at a location level over the course of the last two years, our EBITDA margins have grown 6% to 38%. So we are delighted with that now. The eagle eyed of you will have noticed that actually on a reported basis, our margins have been pretty fly. They stayed at around about 31%. And the reason for that is there has been over the last 2 years a step change in our central overheads, which instead of being 5% have moved to 7%. We see significant growth and more importantly, we see significant growth ahead. And we recognize that in order to have this platform that we've been talking about, we had to make some significant investment. We've made significant investment in IT. We had to make significant investment in our HR. We have had to put in geographical teams to support Canada. We've had to put teams in to support the West Coast more. We've put complete infrastructures in to separately run climate control, to run industrial, to run flow cleaning. So we have made significant investment in terms of the future growth. Our anticipation would be, as we look at our forecast going out, that having made that investment, that this number will now become more of a constant at around 7%. I think if you go out to 2021, there's a real opportunity. We may well by 2021 with the growth we anticipate, leverage even more and it may come down a little bit too. So there has been this step change in our central overheads, which has sort of moderated the reported margin. But nonetheless, in terms of what we're seeing on a location by location business, there is clearly the opportunity for further progression in margins as basically all of these stores mature. Of course, we will be adding more new stores, which will come in at the lower end of this range throughout time, but we see that as being a very strong opportunity. Look, if all we wanted to do is improve metrics and margins, we just wouldn't grow as much. But we think that would be really false economy right now. We're not here to drive a metric. We're here to take market share and to create broader rental opportunities. So based on those margins, and again these are just very broad numbers to lead into where the other levers that we can pull in terms of enhancing shareholder returns. If we were to grow 7% to 10% per annum, and let's say we had 47% to 48% EBITDA margins, and let's say 29% to 50% EBITA margin. Again, I said this is on a group basis, it includes Canada, it includes the U. K. Too. And that will be the small disconnect with just the pure U. S. Numbers. Then in order to support that growth from an organic perspective, we're going to have to spend broadly £3,000,000,000 on CapEx. Now if we then fix our leverage towards the upper end of our at or around 2 times, what that means is we would have £3,500,000,000 left over to spend to further enhance value to shareholders. I think one of the most commonly missed parts of our business model is absent extreme growth. This is an incredibly cash generative business. And increasingly, how we apply that cash and how we use it is going to become an important part of our messaging and probably a shift forward in only the 2 years since we did our last presentation in 2016. And so in order to take us through what we may well do with the $3,500,000,000 while still staying within our leverage target, I'll hand over to Mike. Thanks, Jeff. And so as a starting point, what I'll do is just let's have a recap or let's just go back over what our capital allocation policy is. And I borrowed a slide from our Q3 results presentation, which sets out that policy down the left hand side and then also how we've applied it consistently over the last year. Clearly, our first preference is to spend on organic fleet growth. Whether it be same stores or greenfields, that's the best returning bang for the buck that we get. So that's where we would spend money to start with. In the 1st 9 months, we spent €859,000,000 on capital and we said we'd be spending round about €1,200,000,000 in the full year. After that, we look at bolt on acquisitions as a way of enhancing value. And again, in the 9 months, we spent £315,000,000 we spent about another £50,000,000 dollars in February, as you'd have seen from the Q3 results. And we have a very strong pipeline of opportunities. In reality, they're more likely to 20 eighteen-twenty 19 or on the current financial year, but there is a healthy pipeline in that regard. Then we look to returns to shareholders. We have a progressive dividend policy, which will take account of both the profitability of the business, but also cash generation through the cycle. And with that in mind, we increased the interim dividend to 5.5p in December. After that, we then look to further returns to shareholders and how do we go about that. So taking account of making sure it's we're operating capital efficiency or with efficient manner that we have security within the balance sheet and financial flexibility recognizing that we're a cyclical business, then we'll look to return money through buybacks as long as it's sort of accretive to shareholders. So in that regard, we announced in December a buyback of at least £500,000,000 and up to £1,000,000,000 over the next 18 months. At the time of the announcement of our Q3s, we'd spent £100,000,000 on that. And at the moment, we're going to run rate of roundabout £100,000,000 a quarter in that regard. So that's our capital allocation policy. How do we then apply it to the £3,500,000,000 dollars available for deployment that Jeff referred to? Well, actually, as a first point of call, if the markets are strong and the demand is there, the first thing we do is we're more likely to spend more on CapEx. So that will be the first point of call, it's the best returning opportunity we have. If that's not available to us or as an alternative, let's just consider 2 extremes. If we spend it all on M and A, and if I look back at what we've done over the last couple of years, let's just for argument sake assume we buy businesses at 2.5 times revenue, 5.5 times EBITDA or 10 times EBITDA. Translating that, what would mean is you'll be acquiring revenue over that 3 year period about £1,400,000,000 £600,000,000 of EBITDA and £350,000,000 of EBITDA. That's a growth rate over where we are at the moment of sort of 8% to 10% per annum, which all falls through into EPS. That's what we'd acquire. We don't just acquire business to run it as it is. Invariably, the fleets are often quite narrow. So we invest in the fleet, we'll increase the size of the fleet, we'll broaden the fleet in terms of the products it offers and then there's opportunity for cross selling the specialty businesses as well. So that's what we acquire, but the potential is far greater than that with the businesses that we do acquire. If M and A is not available to us, what's the alternative? Well, turn to share buybacks. Our market capitalization at the moment is around about $10,000,000,000 So for that, if you could buy back roughly 10% a year, which would then deliver an accretion in earnings per share in sort of the 8% to 10% range. In reality, what we would do, it will be a combination of probably all 3, somewhere down the middle. So you're getting a return or an increase in EPS of 8% to 10% from a capital allocation. We can all debate the assumptions that were made there. You'll all have your own models. But what I think you can agree on is the direction of travel. So if you take the capital allocation, you take organic growth, you get into somewhere like 15% to 20% EPS growth per year over the next 3 years. Now we said a lot of time talking about growth and how we spend Monday and deployment. The key to all of that though is we're doing it from a position of strength. Our balance sheet has never been in a stronger position than it is at the moment. And these are all charts that you've seen before, but I think it's a helpful way just to illustrate it. If you look at the top left, it's a way we yes, we have a chunk of debt on the balance sheet, but that is supported by this large asset called the rental fleet on the asset side of the balance sheet, a very liquid asset. The green bars are fleet cost, the original cost of that fleet. The orange one is the second hand value of that fleet valued on the basis that Rous determined OLV and then you've got our net debt on the right hand side. You can see there's a significant difference between the fleet, its value being £1,500,000,000 roundabout, pounds greater than the net debt. If I go back to the last cycle, that gap, it was positive, but it was minimally positive. So just looking at how the business has developed over the last 10 years, that balance sheet strength is just far greater than it has ever been before. That's replicated term. Look across the right on leverage. Coming out of the last downturn, we're over 3 times levered. We're now comfortably within our 1.5 to 2 times range. And using that range and the flexibility that provides us is what gives us the opportunity to deploy further capital whether through M and A or share buybacks. Last year, we took advantage of good debt markets. So we refinanced the ABL and we refinanced some of our bonds, which means that our facilities are committed for 6 years on average. The average cost is around about 4%. So what I think all that means and the take here is that, yes, we will grow responsibly. We will deploy capital responsibly, but we do it from a position of significant strength from a balance sheet perspective. And so with that, I'll hand back to Jeff for a wrap up. All right. Let me try and finish this off. That's great, Mike. Thanks a lot. And summarize this really, really quickly. And then we get on the more interesting bit, which will be Q and A. So what I would hope would be the key conclusions from this morning's presentation. Look, we had a plan in 2016. We're executing on it well. We're ahead of our targets, be those physical or financial, and we continue to see good opportunities ahead. I hope the biggest takeaway is this, because I look at our business in the most incredibly simple way, which is this, that the more we establish this platform, the more we have either this physical capability or this technical capability, that which we can put through it and the breadth of customers that we can ultimately target continues to grow and exceed our expectations. In my opinion, we create a rental market. Our mantra of availability and reliability and ease at a time where people are averse to debt and there is a greater acceptance of a sharing economy. As Brendan said with the MRO, look at this space. I don't know how many floors we are down here. Nobody wants a huge storeroom full of floor scrubbers. It's wasted space. That space would be better deployed as another conference room like this, and that can be achieved if people are confident enough in rental. So we believe we can create a whole new range of rental opportunities, leveraging the platform that we are establishing. I'm sure there's going to be all kinds of markets in the future that we can't even imagine. This afternoon, you're going to see some of our sort of like skunk work on new opportunities, and I think you'll see 1 or 2 of those. Now typically, when businesses stand up and say, hey, we're building this fantastic platform for the future, that's just before they tell you that they're not making any money, okay? That is not the case in this specific instance. So we are doing all of this and at the same time generating very strong margins and a whole ton of cash too. So as Mike rightly pointed out, look, we have no idea really over the course of a 3 year period what the balance is going to be between capital expenditure, bolt ons and the quantity of returns to shareholders. We don't know. What we do know is, given our balance sheet strength and given our ability to pull one of those three levers, a target of 15% to 20% EPS growth through to 2021 is a perfectly realistic expectations. And I think the sophistication in which we look at our opportunities and the sophistication with which we look at our balance sheet and the cash generation is definitely something that's moved on since 2016. So with that, the plan will be I will sort of be the master of ceremony Q and A, but I'm trying not to answer very many at all. So the guys will come up on stage here and I will sort of like pass on the questions to the most appropriate person. If you do the normal stuff, which you've done before, which is people are sitting on the web, kind of see who you are and where you're from so people can understand what's happening. We got microphones, which will come around. Hi, Greg Gigliotti from Trilogy Advisors. Last time around when you laid out your plan, you also pointed out a unique feature that you thought was going to be there in your platform and your growth strategy for how to handle what happens when the market starts to turn down. And you had expected that maybe different from past cycles, there would be the opportunity, instead of having to sell off equipment as you might shrink with a secular decline in the market, you'd be able to redeploy that market that equipment from your stronger, more mature locations into these greenfield locations. So essentially, instead of seeing the same declines that you might historically, you'd be able to maintain higher margins by essentially taking share in the markets you were still growing into. Can you talk a little bit about how and if that strategy has evolved at all in the context of what you've done the past couple of years? And how that may change what we could expect in another cycle versus what you've had in the past? Brendan, do you want to take that? Yes, sure. Look, I think it's not all that different than what we've talked about. I think underlying that perhaps is, hey, you're opening all these locations. So thus you are spending at this point in time bringing all that fleet. There is if you look at our business about like the slide Jeff went over and said, okay, here are mature stores pre-twenty 11, so on and so forth. We will have two things. We will have tranches of very, very new stores, okay? So even if we're in a market of decline, we're not in a period of decline where all those locations are declining. So we'll have availability in terms of redeploying our fleet from one location to the next. We'll also have albeit part of what we talked about was not selling nothing, but having good tranches of actual OEC, original equipment cost and thus the most appreciated fleet available to sell. So some of the things that we've done as a response to some things we've seen in the market a bit and the fact that we've invested so much in new fleet, we are comfortably now aging some bands maybe a bit further than we would have even aged them a couple of years ago. So I think we're not at the point today given our runway in terms of prospects for further expansion to get worried about what precisely we'll do with that gear come that year? Yes. Look, I mean, the key is that relative to the previous cycle, when again, quite frankly, look, I spent forever looking back in cycles, our numbers and our competitors are looking forward at cycles. These guys rent stuff and I don't. The last cycle, in the grand scheme of things, there's a relatively small bump along the way. And at that moment in time, we had a very old fleet and we had very high leverage and we had no track record of greenfield expansions, okay? We now have a track record of greenfield expansions. We have them in the pipeline and we have a young enough fleet to deploy. Therefore, look, the original 2016 plan said we're going to go to 900 locations. Look, it's probably going to be somewhere between 9.50 and 1,000 now. We stay committed to that plan. A short term bump in terms of an economic cycle does not change our vision of the fleet. 2nd hand equipment markets fell about 23%, and they stayed down 23% for about a year. You've got to be dumb to sell your equipment. It's that low point of minus 23% if it's a very young fleet. We did it because everybody panicked. Look, we have the experience of that cycle now. We have the experience of a very young fleet, and we have the experience of everybody in this room. So I just think we have different we're back to what we've created is lots of different levers to play. Back in the downturn, we just didn't have that many levers to pull. And we did some dumb things. Edward Stanley from Redburn. When did you bring in your Anytown training system? And is there any demonstrable evidence yet of the sales team achieving better KPIs from the back of that? You want to? No, go ahead. Yes. So we have done that in the last 6 months or so. We are working on a plan right now to onboard several sales reps across the country to keep up the pace of the expansion as well as the fleet across the country. And this is a cornerstone to helping them understand in real time and with real life examples just how to look at a market different. Look, things are good, Jeff said it. And if you haven't experienced a cycle as a sales rep, you just think this is as good as it gets. You can kind of cherry pick your deals across job sites and the like. And we're really trying to share the experience that we learned through the downturn that you have to hunt a little harder, you have to dig in a little bit more. And if we can do that in a good market, we should absolutely be able to do that in a down market. Keep in mind, Anytown USA is just a new fold in terms of trading and exposure. So by no means is it a new sort of something we see is terribly different than what we've seen in the past. So the tools that John went through in terms of Accelerate, I. E, our CRM, we've populated that data for years years. So we have onboarded on that. Our commission plan is structured in a way that promotes diversity in terms of products and end markets. So it is just the way that we John said it, we really unveiled that at a big event that we hosted the last week of January in Washington DC, where we had 1300 of our sales reps plus all of our management team in one place. So we would have shown them that. But it's absolutely not new to us in terms of the addressability of that market. I think just to wrap that, we tried to do it in London in 2016, if you remember. We had a flat 2 d deal, which was an oval and had all these offshoots on it. We went through it. And so we have been talking about it for a while. We just felt this was a much better way to engage and tell the story than a 2 d slide. Quickly following up. You gave the example of New York, which is clearly a pretty lucrative opportunity. I think you said the reps could all see each other's timetables and successes almost in a lifetime. Are they able to compete against each other to win a region like that because presumably you want your best reps in the best locations? So is it sort of Hunger Games type? Yes, I'd answer that two ways. Yes, that's great. Formally, no. Informally, yes, right. So we do move talent around as it should as we should. But there's relationships. This is a relationship business. And again, we're at the top of a cycle. And you put a lot of risk in disengaging a rep from a territory they've been for a very long time to enter them into a new market. Will they be great? Yes, they will. But it takes some time to do that. And without a crystal ball to understand you're at the bottom of the cycle, you do run a little bit of risk. But that said, we have reps that move from general tool to climate control to pump and power and HVAC and pump solutions all the time. The better they do, the less their territory shrinks because in the end, the way that that's managed. Thank you. Hi, it's Rob Wertheimer, Melius Research. Have you done any internal studies on the volatility of revenue on construction versus non construction in a given market, maybe when there's a downturn, if you have data going back to 'nine even? Yes. No, we have. And it's really, really interesting, right, because we're talking a lot now about those top 25 markets. And what that will if you look at through this cycle, then what happened during the last downturn is the top 25 markets crushed and burned. And that was because they have a greater proportion of these big construction projects. And so if you track what happened to the top 25 markets, they were kind of up here. They crushed and burned. And they stayed down from like 9 or 10 till 13 or 14 and then started to come up. Actually, the reason why we continue to open markets in the non top 25 markets is actually, they were really quite steady because you didn't have those you didn't have Hudson Yards, you didn't have LaGuardia and those projects stopped. People still opened a strip mall, people still opened still did a care home and all the MRO work and all of the other work continued on. So yes, we have tracked this through the cycle, which is why making sure you have this balance of work. Look, if people want to rent $20,000,000 of fleet on a data center for the next 5 years, we're going to rent them $20,000,000 of fleet for the next 5 years. You're not going to turn that work down, but it's why a lot of this work right now is about broadening the breadth of our model. So yes, it is measurable and we're very conscious of how we balance our efforts. It's a bit like the fleet question earlier in terms of how you redeploy. And part of it is simply, it's just very different today than it was. So we looked at all that, we analyzed it all, but you just have to look at it from a very practical sense. So think about the customers we're renting to in that MRO space. I mean we rent to fire departments, right? We don't you don't not rent to fire departments during a recession. So it is more than just something we can point to based on our internal data, which we have 17 years of as John says from a customer standpoint. It's just that it's plainly obvious. What's key is you've got to look at it by product. I hope no one's about to ask these questions, but the 2 dumbest questions we always get asked is, is there an excess supply of fleet and what's happening to rates? Well, which fleet and which rates? For which product, for what time horizon? So for example, if construction fell down, are you going to have an excess supply of telehandlers? Absolutely. Are you going to have to do something in terms of redeploying telehandlers? Absolutely. Are you going to have to do anything with flow cleaning, climate control? No, there will not be an excess supply of any of those products. So you have to look at it, yes, by market, yes, by type of construction, but then you have to narrow it down and make sure you've got this breadth of product. It will be a very narrow range of product, which actually is an excess supply. It will disproportionately affect ROUSS secondhand values because Brendan will still get $1500 for an air conditioning unit at the bottom of the next cycle. He won't get the same price for a telehandler. So that's why the breadth of product, the breadth of the like an average rate, there is an oversupply fee. Like everybody said in oil and gas, there's an excess supply fee. Well, that was nonsense. There was an excess supply of 3 or 4 bits of equipment in 3 or 4 geographies. Everywhere else is fine. And so that's why this breadth is important. And if I may, I'm sorry if I missed the disclosure, but do you have the pure MRO portion of your revenue like 5 years ago and today and then the non construction portion of your revenue? Yes, look, we just we have to have something, which is a secret. You will know how long we've talked about small contractors and this kind of until the point of, okay, anytime U. S. A. Look, inbuilt in this business has always been, for those of you who have sold for this for a long time, small contractors, small transactional business. It's what we do. Ryan and Eric, you'll get those questions today during that breakout. Just only go so low because it's on the screen. Just don't go too granular. Yes. There's a guy in the back there called Ryan who could tell you it by zip code. Don't answer. Andrew Nussey from Peel Hunt. A couple of questions, if I may. First of all, 18 months ago or 2016, one of the themes coming out of the Capital Markets Day was the opportunities at Small Tool and the rental penetration there. It's not been mentioned yet. I just wonder if maybe that's been slightly deemphasized because of the opportunities elsewhere. No, not at all. No, there is a point that I didn't make in the MRO section under square footage under roof. Okay, so there's a construction element of that that is still very tangible and a big opportunity in terms of the maturing from a shift from ownership to rental. But part of that MRO in terms of square footage on the roof, a key deliverable there was that is a that is the best remaining example of an area of our end market where penetration is very, very low. So that is universal. I mean, look out of any window when we're at lunch and you will see on a rooftop ladders, you will see scaffolding, you will see hand tools, 9 out of 10 of those are owned. And that is in essence MRO. But no, our TOOLFLEX program continues. We talked about TOOLFLEX last time. Frankly, it's one that we probably wish we didn't share quite broadly as we would have shared, hence the reason it's not in the presentation. But I think best to say it's grown considerably since we've been together. Jeff mentioned during one of the breakouts, you'll see some of our sort of future product development and technology applications and you will see one there that we think will really bolster even further that growth. And secondly, just typical example of how long it would take to get a bolt on acquisition onto the CRM platform, maybe use Pride as an example? Onto the CRM platform? Very quick. So we would have bought CRS as an example. We were up there, some fellows in the back of the room were up there in January and they were salivating for it. They had nothing like that. They're working with diaries and sticky notes. And put this in front of them and they're just amazed. So we go up and do some familiarization with them. We come back a month later and do some ride alongs and see how they're deploying it and then just get out of their way very, very quick. It is a cornerstone to what we do to bring the sales reps up to speed. The vast majority, however, are brought on to the Wynn Rental Man platform within 60 days. The minute the Wynn Rental Man platform is on is the minute that they are on CRM. So it happens at the same time. Hi, it's Joe O'Dea from Vertical Research. First, when you talked about the $7,000,000,000 to $10,000,000,000 opportunity in MRO, Can you talk about the kind of competitive landscape in that market today? And you talk about the breadth of opportunity you have and how important that is. But is it still a market that's largely served by kind of single equipment providers? And just if you think about Sunbelt with 8% share, when you think about the MRO market, kind of how do you think about your share there and how quickly will that evolve? Yes. Well, first of all, our share is low, but our biggest battle is actually selling the concept of rental and letting them understand the concept of rental. So it's not a matter of who we compete against. Now there are for instance, if we look at the climate control space because it's so prevalent in that, there is a player or 2 out there remaining that has 40 locations or so maybe, right, John? That would be fairly prevalent in that and that quickly we believe we will cannibalize their growth or their business as it exists. But it almost takes us back to when John and I started. So when John and I started in this business, we were out selling the concept of rental versus ownership. The vast majority of our sales force today in the general applications that we're more familiar with, they no longer sell that, right? That ship has sailed, rental penetration is underway. The businesses that formerly owned have gotten rid of all the parts and pieces required for ownership, whether it be facilities to store the equipment, mechanics and technicians and trucks to repair it and maintain etcetera. It is simply getting to all those dots John showed. And it's not all just feet on the ground. Believe me, we have a robust marketing program that gets to a lot of these. We have a couple of very significant accounts that are sort of buying group things that get us to 1,000 and 1,000, but it's really just letting them understand that there is a alternative to ownership. They just think all you can do is buy it. So as that proliferates, we don't just believe we've seen that move. But we are without a doubt the leader in MRO space. I'd back that point up just if I could. Some of our large customers that we partner with in that space, they win a bid for a building and it's a 3 to 5 year bid. And their job is to manage the facility's maintenance within that building and lower cost. And we'll routinely walk in and the first thing we'll see is an old dead man left in the corner that's kind of leaking and they say, come here for a second, can you fix this for us? And we're like, why would we fix that? Why don't we rent you on? You're only going to be here 3 to 5 years, you need to make money. Why would we invest in anything that's going to live for 15 years? We buy it. Our sales reps are just saying, we'll buy that from you. We buy it for virtually exactly what we sell it for at auction the next day. And now they're a renter. Yes. And they have a partner. And then Michael, on some of the capital deployment side of things, when you talk about the bolt ons, just a framework for thinking about what you are buying some of those bolt ons on and use the 5.5x EBITDA. Can you talk about kind of the range? Is 5.5 times a pretty reasonable figure to be thinking about with those bolt ons? I'd say we've covered that, that's looking back what we've done over the last couple of years. So it's a broad average. All these things that we buy for less than that. There are some businesses buy, we can see the potential of them, but they can be making 0 profit. And that's because their fleet is only half utilized. It's not as big as it should be for the facility, etcetera, but you can see that opportunity. Also take 1 or 2 of the LA ones, we were one of them was is really the location we're after. It was a part of town where we could not we couldn't find zoned new property. So we actually bought a business because that was a prime we've been looking for 18 months, couple of years, it's the ideal place to go. So that's an average. And I think the thing to think about though is that's what we pay or that that's an average of what we pay. The great opportunity is what you can then do with that by putting more fleets in it, putting the breadth of fleets in it and then driving that. So ultimately the effective multiples are somewhat lower, but that's a reasonable average of what we've been seeing. Things have been down. I know the Nordics like this EBITDA multiples are the most exciting thing on the planet. We put down there a selection of the valuation criteria that we use. And arguably, EBITDA multiple is the least relevant of them. So for example, the multiple of the OLV of the fleet is probably more important because at the end of the day, we can open a greenfield. We can open a greenfield and we can and the cost of that is pretty much the cost of the fleet. So the question is what multiple of either the OEC or the OLV are you paying to get that customer list or to get that piece of real estate that you really desperately want. Now of course, we then go back and say, what's that as a multiple of revenue, what's that as a multiple of EBITDA? But the starting point is typically a far more practical starting point in terms of what are we acquiring. So look, for example, if you take Pride, what do we buy is an OEC fleet? 150,000,000. Yes, 150,000,000. 150,000,000. 100 and 50,000,000. 100 and 50,000,000. 100 and 50,000,000. 100 and 50,000,000. 100 and 50,000,000. 100 and 50,000,000. 100 and 50,000,000. 100 and 50,000,000. 100 and 50,000,000. What we also bought was a fantastic location, in my opinion, probably the best independent rental business we will ever, ever buy. But we should have said, Al didn't buy it because of the convenience of the location. It's an isolate. But what we did buy it for was this customer list and this fleet. So there are a whole host of reasons. It was on the more mature end of the spectrum, which was a hot why it was a bit higher multiple of OEC of that fleet, but it was one of those that actually is very profitable from an EBIT and EBITDA standpoint. So be careful because it's not all the combined EBITDA. There's no one measure. There is no one measure. Colin Decharme from Sterling Capital. I had a quick question for Michael and John. Just to drill down a little bit on the increase in overheads, you're talking about going from 5% to 7% of the top line. Just so we can better understand the buckets therein, you talked a little bit about IT, but if you'd care to just offer as half of that IT or what proportion? And then as a follow-up with John to drill down and maybe ask a different way in terms of how you look at the return on the IT spend. I know it's a you said you've only implemented some of these tools in the last 6 or so months. What type of metrics going forward will you use to judge the success of those implementations? Will it be number of customers called on, commissions paid out? How will we be able to kind of gauge that you're achieving success? I had a quick follow-up. Michael, why don't you take the hard one? Well, I say, let's not try you as a business or me probably in finance, I love to blame everything on IT. But IT is only one small piece of it. So let's not tag the whole thing with IT. It's a component. I think if and Brendan can chip in on this one as well. I think if you look at our business and you look at it sort of 2, 3 years ago, we'd have said we're probably underinvested in some of those support functions, both centrally and then ultimately out in the field. So we've been investing. IT is one of them and you can see that's probably the most tangible and visible to people. Jeff mentioned HR, etcetera, but collectively across the functions, the support team. But then when you start to have this level of growth and you move out into the field, you've got new regional structures, you've got management teams for climate control. But when we talk about this, that 36% to 38%, that's a purely a profit center level. So, this regional structures and the support and the management that goes with that is below that. So, it's in that central piece. So, it's not all this cost that's sitting in Fort Mill in Charlotte, it's spread across Let's be clear. When we say it's IT, it's not because we bought some fantastic expensive software program which has increased the depreciation of its heads. Now those heads happen to be IT heads. Those people happen to be how do we measure the return? Well, we do it from a broad perspective, which is ROI through the cycle. In our opinion, for a capital intensive business, it has to come through an ROI in the cycle. How do we know it's working at the moment? Because we grow, on average, 3% to 4% 3% to 4x the pace of the market. And we believe the reason why, over a 10 year period, we have consistently grown 3x to 4x the pace of the market is the superiority of that platform. Do we try and say, hey, we just put Workday in as an HR system. What is the return on investment from Workday from a staff turnover perspective? No, we haven't done that. But if we look at it in and around, then based on our margins and we, by some distance, have the fastest organic growth in this marketplace, and that's driven by the competency of our platform. And that look, it's a hard thing to get across. It's this chicken and egg situation. People will rent if rental is good enough to satisfy their needs. It is incumbent upon us to create this platform and thereby continue to expand our end markets. So just on your point, the MSP was 2,009. So it's been a tool for 9 years. The Accelerate has been a tool since 2011 launch and we continue to bring it on as we acquire businesses. The Anytown USA is relatively new in the design, but the heart and soul of that has been spoken to PowerPoint slides before that it was in 3 ring binders and it's something that we talk about all the time. To just go a little more granular, by sales rep, we understand what their market share is. We understand how much of their revenue is driven by construction and non construction. Understand how much is only we, they. They see how much of it's driven by specialty business versus general tool. We understand how many appointments they have. We understand their transportation. We have dashboarding for all that. And we put all that at the fingertips of our managers because our managers are doing a lot of other things other than managing sales reps. So we just try to make it as easy as we can for them. And it's a dashboard. So it's a green, yellow, red. If it's green, it's good. If it's red, it's bad. And if yellow, which way is it trending. But it just in a quick moment allows them to put their fingerprint on a sales rep a day before they do a ride along so they can coach them through something. Hope that answers it. Yes, thanks. And then just as a quick follow-up, another way to achieve leverage over time with the increased spend is an increased proportion of specialty business. And you guys do a great job of thinking top down of your financial model. I haven't heard you guys articulate a target milestone out there in terms of specialty as a percentage of the overall business in the 2021 plan or any other timeframe. The $1500 air conditioner residuals are fantastic. Why not have some form of an explicit target there given the leverage and return benefits? Thanks. Well, of course, we do internally. We come back to look, again, we grow the fastest. Go compare our presentations with everybody else out there and let's see who actually is the most granular. I mean, okay, we don't fill our packs up with 3 pillars of cultural excellence. We fill them up with facts and figures, okay? So look, we do have a target in there. It's clearly a growing percentage. Our desire to have more specialty, more construction is out there. It's incumbent in our numbers and I think the best way to say, look, every single market that we operate, they have a 2021 plan. Our specialty businesses frankly have a plan beyond 2021 because the 65 locations and the 120 locations, those aren't necessarily done by 2021. We have a customer mix that we're looking for. We have an end market mix that we're looking for. So rest assured, it's in the business. So without Ryan giving away any trade secrets, if you're going to be around this afternoon, like dig into the guys who do this data for us, we have market share by general tool and specialty by zip code targets, okay? So you're right, we should have targets. The question is how much do we share when we are developing a brand new market where we think we're a clear market leader. It's Roy McKenzie from UBS. I'm trying to understand your opening plans. You now see clusters needing more locations, but your total number of locations is unchanged. So do you know do you now plan to be in fewer geographic markets on the same timeline, if that makes sense? I thought what you said at the start. And you highlighted a lot of your openings have so far been in your existing markets. When will geographic expansion become more important for Sunbelt's growth plans? And what does that imply for national account ambitions and the margins and returns of that growth? Well, first of all, when you I think you have to look at it in stages. So as I said, if you look at when we first came out of the recession, what do we do? First things first, we invested in our same stores. We invested in our same stores, which led to investment in our existing customers. Beyond that, we went on a route we went on the largest organic expansion program that there was in the business between 2011 2015 or the completion of fiscal year 2016. And from there we said, hey, we have spread geographically. I mean, where are we not left? We're not left in Montana and Vermont, okay? And we could fill in Alaska as well in terms of overall states of coverage, you know where we are in Canada and we've said that's just the beginning. So there will clearly be geographic expansion there. But we will remain true to what our program is at this point, which is filling out those clusters. We've added locations in those smaller markets. And as you can see, certainly in terms of progressing those clusters, look where the business is. Those national accounts you speak of, we like the proportion of our business today that is more sort of national or managed as an umbrella. You can see what our end market difference is. We focus on some national accounts, others wouldn't necessarily call national accounts that are these groups that are very significantly penetrating that square footage on the roof that we talked to. So we're very much comfortable with that overall landscape in terms of where we are. But just go back just like the question on overheads. We entered Wisconsin, as I said, with an acquisition at 2 locations. That grew to a market where one district manager was running from Milwaukee, Wisconsin, which is right on the lake, all the way through the state of Wisconsin, ran the entire state of Minneapolis and part of North Dakota, right? So one district manager did all that. Minneapolis alone is larger than Charlotte. And in Charlotte, we have $140,000,000 worth of fleet to be employed. So over time, we will build out that cluster in Minneapolis. And part of it is injecting that infrastructure that you just have to have, but yes, right as well. Look, in terms of direction of travel, we've seen that investment, right? And now we're working to build out that platform. Also, let's clarify something. We haven't said we're sticking with 900 locations. Well, we would now expect if we to what we said 900 locations. 900 locations. So, about between 950 and 1000. So we haven't okay, we may not have articulated well on the slide, for which I apologize. But no, no one say, look, clearly, given where we are, GBP 900,000,000 is no longer relevant in the same way as I'm pretty sure there's an investor from the U. K. Watching who bet me a sum of money that we would hit our 2021 plans by 2020. I am clearly going to have to pay them out. And so similarly, we're ahead of our plans in terms of locations. So we would set about 950 to 1000. But I think, Roy, you've got to turn it around as well because that cluster going from 10 to 14 is not to say you need 14 to realize what we could have realized before. What we're saying is actually there's far more potential in those markets and actually you can open more locations and access more of that potential than it being constrained to where we were before. Makes sense. Thank you. It's worth spending some time. But if you go around and talk to people like John and Adam in terms of why do they think look, this is not the first time we've tried to go into specialty markets. It's not the first time that other rental businesses have tried to get into specialty markets, and they have consistently failed. And the reason why they've consistently failed is they've just tried to whack it in with general tool construction markets. You need a dedication to this. You need a management team that's focused on it. You need people like John who are experts in their field. And we're the 1st person who have done it by scale. So Mike's right. Look, it's why again, next to my least favorite question of what's happening to rate and what's happening to fleet is what's your revenue per store? Well, what size store? Okay. So a lot of those incremental stores are going to be relatively small air conditioning and flow cleaning units, but they're absolutely essential to target that broader market. Sylvia Barker from Deutsche Bank. A couple of questions, please. First on MRO, I'm not going to ask about the sizes, as you don't want to say, but just maybe some of the characteristics of that, maybe by region. Are you underpenetrated in certain regions compared to others? And then also, who are actually the customers? Are you kind of subcontracted to the facility management company or who actually employs you? And how did the economics of that look compared to some of the other business? Yes, good question. First of all, we do best as we've matured the cluster as you might imagine. Hence, the strategy of building out this cluster had data and rationale behind it. So where we have a further penetration is where we are the most successful. The customers is another good question. Anything from the actual property owner or tenant themselves and certainly ranging from contractors, it's a word I wish I could come up with another one. But when John talks about small to midsize contractors, everyone's heads go to construction, right? Adams customers are what do they call the janitorial contractors? BSC. BSCs. So there are BSCs out there. They don't build anything. But we rent to BSCs, which are building service contractors. So there are lots of little nooks and crannies of individuals, but there are also some, let's just say, umbrellas over rather large groups that have significant understanding and reach to get to those markets, but it's very, very broad. So it's safe to assume that for a large contractor or BSE, the pricing is probably lower than for obviously Yes, but very, very different than the construction space. So you have to remember again, so for the in the grand scheme of what they spend, rental is still a small portion of their overall spend, right? So I can say very comfortably in that space and today you can ask Adam and John what their discounts are and they will give you average discounts. Sure there are some that are higher and some that are lower, but it all comes down to dollar utilization in that business and the dollar utilization comes through in spades. And I can also confidently say that that scissor lift I showed you a picture of in Anytown USA, if we're renting on the data center, it's $300 a month or something like that. If we're renting it to that hospital, it's likely $675,000,000 Okay. And just a second quick one. Just in terms of the cost, so if customers can quickly say, I've had enough of this forklift or whatever, and they want it to return quickly, time stamp, does that mean that you need to be quicker on your feet to deliver things or pick things up? Does that increase the cost to serve at all? Yeah, there's no question about it. I mean, if you look at a highly transactional component of the business, which that would be to a degree, There's going to be a higher cost to serve, which comes into the rental rate and dollar utilization. But I think in general, again, when you look at those specialty businesses as standalones, we didn't get into detail in terms of margin, but let's just say they are really, really good. Take into account all that transactional nature, they're still in really good shape. Good morning, guys. Andy Murphy from Bank of America Merrill Lynch. Just one question on your MSP, the IT systems the guys on the ground are using. Can you give us a flavor for what people say about that, who are you to? Does it allow you to attract talent into the business? And does it give you any sort of feel for where you are at versus the major competition? Yes, without a doubt. I can speak from my experience first in the early 90s when I received the sales territory for the first time and it was a map and had magic marker drawn on it and I got a roll of quarters and a pager and a tap on the back and a phone book, right, that's how you went to war. Today, we give a pad that has the data on 5 35 customers where they are, the contacts, lead share back and forth, it's phenomenal how much more quickly we can penetrate a sales territory and bring a sales rep up to speed compared to before, without a doubt. I hope that answers that question. Yes. So who else is going to be even close to this? Way you look at it is this in terms of competition. The other significant bigs, they're going to have good established CRM, well, I shouldn't say established. One would have a very established CRM platform. We've chosen a different one. Ours is a bit different user interface, just a bit easier if you ask us in terms of using. It's less about pipeline sailing, it's more about that tactical tool that John talked about and just this great access to data. The real key though is everyone else. It is that 70% of the market that are these tenants that have no CRMs whatsoever. I mean, think about it. CRS was a relatively big rental company in Ontario. And CRS, just like the other businesses about that size in our space, they have virtually nothing in terms of a CRM. They had just tried to roll out Salesforce and they hung up the cleats on that some 6 months before because it just didn't work. So it is a there's a big separation there between who does and who does not. And then it's all a matter of what do they turn the focus on. I think we demonstrated today our focus in terms of end market. It is a bit different than the rest. In terms of your question about attracting talent, you're absolutely spot on. It's a really important element in terms of I think we've shown you a video once before, I think in October, where we had sort of testaments of why certain people had sold their business. And one of those was Joel Theras who sold us Theras. He often recumbs to me the reason why he sold his business because you say, look, this business is great. You've got a great lifestyle. Why are you selling this business? And his argument was, look, historically, he was able to compete. But as we've added product range and as we've added sophistication, it was becoming more difficult. But the one thing that scared him the most was as his sales force aged and he had to replace them with new guys, who are the new guys who are the new hotshots going to go and work for? Him with no system or us with all of these iPads, all this cool fleet and all this breadth of fleet. So it clearly is a differentiator in us being able to attract talent, and it's a big generational thing. You try and take somebody out of college now and try and get them to come and work in what is a fast paced, ever more sophisticated industry. Unless you've got those tools, good luck. One more piece just to carry on. Brendan mentioned the other bigs would have a platform similar. But I would tell you from an adoption perspective and just what we went through today, to our team, this feels like a tool, okay, something we can give them, they can knock it out of the park with, not a bad or a big brother type deal that they feel they have to do. They gravitated to this because it helps not because it helps their manager. And that's fundamentally directionally a really good You've got a great opportunity. You're going to receive Pride tomorrow. So that's been in our stable for 1 year now. So they've now got all of our IT capabilities, and they had none of them 1 year ago. Ask them what they think. Is their adoption as high as some of you have thought? No, probably not. But do they love it? Yes. Speak to it. Ask them how they used to do things and ask how they do it now. It's our ability to take these businesses, put them on the system, take them to the next level because you can't do this breadth of end market and you can't do this breadth of customer without it. You've got to target all of those customers unless you've got this technology. That's the key. This is all interconnected. It's like Andy's point. Look, we need people to write MRO. ToolFlex is going to be a good way of convincing them to do that. It's all sort of interlinked in just making it easier for a far broader instrument. That's what this is all designed to do. And we can talk about individual specifics, but in order to have that availability, reliability and ease to a far broader market, these are the tools we need. Given the comments that the rental market is underestimated size wise and the need for larger clustering now 15 and top 25 markets as opposed to 10. Does this change the scale or scope of any potential M and A that you would consider instead of the 10 to 40, maybe the 50 to 100 to 280? It's never been quite the financial issue people attribute. I think anyone thinks Agedei doesn't do big M and A. Well, that's not true. We clearly have the financial capability of doing it. So but it's where it makes the most sense. We fundamentally believe that given the opportunity to grow, not in historical both in historical markets and newer rental markets, we need to target specific products and specific geographies. Yes, there's cost savings available if you buy businesses with a ton of overlap, but I'm just struggling to see the relative value in those versus what we're doing. Now if there was a huge MRO rental business, trust me, we would buy it. There's probably 2 or 3 very big specialty rental businesses that we would take a look at. There's 1 or 2 in that sort of, I don't know, 50 to 100 range that would fill in big gaps of geography, like say, RS did. So we always look at them. You'd be stunned at how many we turn down. Unfortunately, like we do tend to now get like investment bankers coming around and the big ones saying, well, here's the book that you're not going to buy. It's in this probably true. With lots of adjustments. There were lots of adjustments to D and A. And by the way, buying tax losses is great because the fact that they always make losses doesn't matter, but you've got tax losses carried forward, which always confuses me just a little bit. So it's yes, we would. But again, they don't exist. John we've mentioned John Murray a lot, and you're going to go and see. I remember Brendan mentioned us buying Tops. I remember going to Tops with Brendan the first time we bought it. And look, how big was tops then? 15 locations, dollars 12,000,000 in rentals. So it's $12,000,000 in rental. Plus realized. That was what we bought for a business that we now expect to be 200 €1,000,000 okay? Why did we buy the business? We quite like the business, and we loved John. I embarrassed John all the time by saying he's the reason why we bought Tops because he just did this great presentation to us. So there's just lots of these 2. And so if the right one comes along, we will do it. It's worth mentioning that there's a strong pipeline out there. We have after years years of Brad and his team being out in the markets, you just you generate a Hey, John, it's Neil. Jeff, are you busy? But as a result of doing that, you end up in a lot of Rolodexes. A lot of our M and A work is done with boots on the ground and tapping a lot of shoulders. Thanks very much. It's Carl Green from Credit Suisse. When you're engaging with potential MRO customers, do you tend to find that they overestimate their own physical utilization of assets? I got you. Yes. Or do they underestimate the total cost of ownership in terms of all of the storage and the maintenance and the handling, etcetera? And following on from that, I mean, just thinking about certain product categories, if we took, say, a floor care piece of equipment in a hospital, which is going to get used pretty heavily every day. Can you talk about perhaps particular products or customer verticals where that conversation is a little bit more difficult because they are doing pretty good physical utilization? I mean the contingency stuff that goes without saying. Yes, of course. So I mean first thing in terms of what do they think, most of them you have to keep in mind about how small it is. They don't think, right? They just think there is no alternative to buying that floor scrubber that you'll see later. You are right about hospitals in terms of owning that because they use it quite often. But then there's also the supplemental time. And as much as I hate to take away from one of these breakouts, but use for instance, there's a gas station and a convenience store in the U. S. That's grown rather rapidly. It's called QT. And QT at every single one of their locations, I know this for a fact, they have 2 of these things that Adam will show you later, which are T1s. They're these little tiny walk behind scrubbers. And what they do with those is they clean after all the traffic that comes in the stores. And they tend to use 1 almost all year round. And then they use that second one when there's snow because of all the salt and sand etcetera that's applied through the parking lot and all the rest. They have cash registers who are now fixing and maintaining the T1s because there's no distributor there's no manufacturing distributor network built in that can service those things. The last thing they really want to do is own them. But when they would have been buying those, there was no network like the network that we're building out today. So what do I think actually happens? There are some big boxes out there that have just recently bought 1200, 1500 units on the larger size at one time. And I'm also certain they don't want to own them. So we will ultimately land big deals within this platform that we're building out where we will have individual customers that will have 100 or 1000 that they will choose to rent from us rather than buying from us. And what's nice about that is, will you get it? Will that rental rate be a bit different? Sure it will, but not necessarily the dollar utilization, right? So you look at the dollar utilization, for instance, John showed light towers and bam, it said 49% time utilization and he did a bit of a whoops. But that dollar utilization, I had to get a quick text out for that. Our dollar utilization on light towers over the last 12 months is 70%. And we run 70% dollar utilization and we run about 50% time utilization at periods because there are peaks and valleys. But if you can't have availability, then you can forget about reliability and ease. And the same thing goes for FM. You really have to create that platform that delivers availability, reliability and ease. Did I miss any there? Good. Thank you. James Barry from Barclays. Just one on command center. How many of your customers use that regularly as their primary source of interacting with you because my perhaps outdated industry would be that so we caught a few guys operating in it who quite enjoy the banter with their regular sales guy and perhaps a bit immune to the sort of mobile iPad app. No, you nailed it. And in the spirit of not oversharing, I'll try to get to roundabout number for you. But just think about it, Jeff talked about the 25 year old that comes on and they're ordering things right away. We have 20 year old purchasing agents we engage in every day that live and breathe in command center. That's just what they do. We also have 60 year old procurement agents who kind of fight with it. They're kind of half in half out. So you just don't know what's going on with that. The trend is positive and it will continue to pull through as the 60 somethings work out, the 25 year olds become 30 or 35 and the young folks come on. Tell you what's encouraging, we love our trend by the way in a positive way and that's the key. The other key to take away is when we had started this, this is table stakes for a large national account. You have to have this. They look in fact, they look for bespoke systems to bolt on to this. But what we've seen over the last 18 months as a contractor is actually growing at a pace quicker than our large national accounts in terms of their engagement command center. So that tells us we're on point, that tells us we're moving in the right direction. Does that answer for you? Thank you. And then just the second one, the $3,500,000,000 of surplus capital that you talked about is obviously based on 2 times net debt to it, not just knowing your comment at the beginning that none of us know what's going to happen in the next 3 years. How realistic is it to be at the top end of your target leverage range in 3 years' time? I'm very I mean, okay, it is the top end of our range and it will be the lowest leverage in the industry. And bear in mind, we went into the last downturn and ultimately prospered with over 3x leverage. So under no circumstances, it happens to be a number, it happens to be a range we had, but if you do any, under any scenarios, it's a very, very comfortable level of leverage. Do you think that actually means you've got the wrong leverage range target? Should it be 2 to 2.5? I don't want to point to people in this room who absolutely think we do because we're in the U. S. I could also there's a whole bunch of people watching from the U. K. Saying, don't say no. Look, we think it works for us. It clearly gives us a huge amount of potential to still grow. So look, I believe that's shared by everyone on the stage here. It's about right. Do we feel a bit more comfortable about life right now while we have to work towards 2 than we were towards 1.5 year? But if you hear, if you do any math, if you just say, hey, let's slow down CapEx, we go from 2 to 1.5 in a heartbeat. It's sort of self The nature of the cycle, the nature of the margins and how we have grown, I think, have disproved us. And the I think there is a perfectly reasonable proposition. As we sit here right now, it feels about right. Okay, guys. And lunch is still here. We're going to be ready for questions. We've got some great breakout sessions. Let me hand over to Brendan in terms of how it's going to work. We turn that slide back on guys if you don't mind. So go after lunch as Jeff mentioned and then we'll go into some of these breakouts. They're really convenient. They're organized around the hotel. We'll show you the way. After lunch, we're going to gather up, believe it or not, we're going to break you up into some groups. So we're going to try to get you to about as close to we have 4 stations to go through, stay as long as you like. You'll walk through some of them and I'm sure some of you will have more conversations. Our team will be there when we're finished, so you can go back and spend all the time you like. As anything else, I really look forward to you getting the opportunity to meet a group of our team. There's a group of people who are incredibly experienced. They understand our this through and through and they have a great passion for what they do. And we've told them all, it is a relatively open book. So all questions can be asked. I suspect most all of them will be answered. But anyway, we really think you'll get a lot out of that. This will give you a good sense for those of you that are going to our location out in Islip tomorrow in terms of a backdrop. And for many of you who know us better maybe than others, you know that we're big, big fans of videos. I told you we hosted that meeting in DC, the last week of January, early in the year. So we've got a little video here for you that we've modified just a bit for this audience. So we'll go ahead and roll that and then we'll be on our way.

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