Sunbelt Rentals Holdings, Inc. (SUNB)

Investor Update

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Oct 13, 2016

Okay. Good afternoon, everybody. Welcome to this Ashtead Group presentation. Welcome to many of you here who are in the room. And for the first time, we're broadcasting live on the webcast. We'll be checking the footage afterwards to see whether we do it again or not. But for the first time ever, we can be seen live. I know my parents are watching in Newcastle and Brendan's and I know Brendan's parents are watching in Charlotte too. So hi, Eileen. Hi, Ed. Project 2021 is fairly self explanatory. It is a major internal initiative we have to grow our footprint and grow the diversity of our business. The last 5 years, both the Sunbelt and for the rental industry more broadly, has been absolutely incredible. We have seen more change in the last 5 years than the industry probably saw in the previous 20. Today is not about the past. However, with that level of growth and with that level of structural change, we have learned so much. When we started off with our plans previously, it was kind of a rough idea about what was going to happen. But with a number of greenfields, number of bolt ons we have done over the last 5 years, we think we have a far more granular and far more detailed plan, which we're going to share with you today. Let's look at the agenda. It wouldn't be a Sundal presentation without talking about structural change, but the structural change element is really important. We're going to really try and dig into where is rental penetration happening and why are we gaining so much share? We think there's some very clear and obvious reasons why, and we think we can take those learnings and put it into our growth plans to guarantee future success. We're then going to get really into the heart of how many greenfields we're going to open, when we're going to do greenfields, when we're going to do bolt ons, what types of business, what types of geographies as we build out this plan of 2021. And by the very, very end, and I'm sure a lot of you will have gone to the back page right at the beginning, we will look at some of the financial outputs of that plan in terms of our growth initiatives. Far too often, I get to stand up in financial presentations like this and take all of the credit for a great set of financial numbers, which other people have delivered. And so I'm delighted today that we're going to get some key individuals here from Sunbelt. We've got Brendan, who I don't think needs much of an introduction. Brendan is the CEO of Sunbelt. Got John Washburn, who heads up our sales and marketing team at Sunbelt. And we've got Brad Lull, who heads up our initiatives around greenfields and also bolt on acquisitions. Last week, I was firstly surprised and then very, very honored to celebrate 10 years as the CEO of Ashtead. In most companies, that would make me a senior tenured employee. In Sunbelt, it makes me an absolute rookie, as you can see from the tenure of the guys here. So we have 70 years of combined knowledge of the rental industry here. So I'm fairly well covered in terms of any detailed questions. As you can see, it didn't include me on the photographs. It decided I wasn't photogenic enough. And that clearly demonstrates that it is a lot easier to spend 20 years dealing with rental customers than it is 10 years dealing with you. Right. Brief a very brief introduction from me before I hand on to the guys. Our first 5 year plan was set in 2011. It became fairly clear to us as we came out of the recession that there was a massive structural change taking place in the rental industry. We think we got 1st mover advantage from spotting it and being prepared to invest in it. And our objective was really straightforward. We wanted to grow and get bigger, but we also wanted to diversify. We wanted to diversify both from a product perspective, but also from a geographic perspective. And I think we've achieved those objectives fairly well. As you can see, between 2011 2016, we've pretty much tripled our revenue. Our profits have grown 5 fold. We've nearly doubled our market share. We significantly increased our fleet size in the number of locations we've had. Like I said, this is about the future, not the past. But what's interesting about that is I remember signing up in 2011 and saying, we think we can grow a 10% compound annual growth for the next 5 years. And we kind of blew it out the water. And why did we pull it out the order? We got 2 things wrong. We massively overestimated the cyclical recovery, and we massively underestimated the structural opportunity. When we go back and look at our planning, we expected the market to be stronger in 2015 2016 than it actually was. I mean, this has been a relatively modest but consistent recovery in our end markets. What's really changed is the number of markets we access now. It's the increase in rental penetration and it is the relative benefits of scale and technology that have allowed us to take market share. From a geographical perspective, we've done pretty good too. We set out to diversify our business away from construction. We've reached a stage now where construction is less than half of our business. Of course, it's still a really important part of our business. Of course, it will result in us being cyclical at some point in time, but we are significantly less focused on construction as we than we once were. In terms of geographic expansion, back in 2011, we took this rising young star out of the field, Brad, and said, Brad, go west, young man. And as you can see, he certainly did. He opened a number of locations, both in our existing geographies and we spread across the map as we increased our geographical exposure. So if you break down our growth over the last 5 years, we have seen 22% compound annual growth. I think the most important statistic within all of that is 2 thirds of it remains structural growth. Our end the rental market has only grown 8% compound annual growth. So the vast majority of our growth remains structural. And this is what we want to build on today in terms of our 2021 plan. John and Brendan now are going to focus on this section here, which is what is how do we look at our markets, What growth do we see in our markets? But also, why within those markets do we think we will continue to take market share? So that will be the first element of the presentation. Brad and I will then come back and talk about this bit here, which is what is our vision for 2021 in terms of both greenfields and bolt ons? What's our financial capacity? What's our appetite? And therefore, what will that mean in terms of our long term growth? So as I said, it's about the future, not the past. But the past has given us such a good roadmap for the future. And with that, I shall hand on to Brendan to talk about the markets. Thank you, Jeff. Good afternoon, everyone. Before we get into more detail on structural change and talk a bit about why we think we'll continue to be the beneficiaries of that change. We thought it would be good to talk a little bit more about our market and how we view our market. Our business today has a very deep list of sectors and industries in which we service and increasingly rely on our products and our services. And it is wide, but it is also very deep. So if we look at our business, we're calling this Anytown USA, the market. There are facilities. There is infrastructure, roads, bridges, highways, tunnels, there are ports, there are airports, there is construction, there's commercial construction, there's residential construction, there are sporting arenas, there are facility maintenance and management opportunities. All of these things are the way that we view our market. But importantly, when we think about that, it's really how the markets we operate in run. And what we mean by that is how they repair, how they maintain, how they construct and the overall operations of those markets. So bear with me for a bit while we go into a little bit more detail and give you some colors around these particular instances. So construction, certainly it's one we talk about, Jeff alluded to, still a very meaningful part of our business. But the key to understanding construction, whether it be commercial, residential or industrial is the range of that construction. Our markets, it's no surprise, are very active today. But when you look within these markets and we touch on that range, for instance today, there's a very active segment or sector within our space and that is data centers. Data centers are being built all over. Data centers are fantastic rental projects. And they're being built for obvious reasons. You have the whole cloud computing thing these days. Most people carry around something that looks like that just a bit smaller. And these data centers for instance many of which go on today, we may hold 1100, 1200 pieces of rental equipment on that project. Sunbelt Rentals may and these projects last for 2 to 3 years depending on the size. Speaking of again range, on the other end of that spectrum, there's some sort of a remodel, whether that be commercial or it be residential, a bit of scaffold, maybe a light tower, maybe a contractor tool. So there's 2 or 3 pieces on a project that may last 2 or 3 weeks. So that's the construction side of it. Let's now go to something that is really on a very different end of our overall spectrum. So, entertainment and special events. When we talk about this again the way that we view our market, this business has changed significantly over the last 10 even or maybe 15 years. If you think about events or I think about events early on in this business, it was very different. They were sure they were out there, they were a bit more far and few between. But when we look at our markets today, there is a calendar of events that covers January through December thick. Frankly, if you are visiting a market, you can look at the calendar and it is covered weekly rather thick throughout that year. And the events within similar to what we talked about in construction have a wild range in terms of overall size. One that comes to mind, it's been fairly recent for us is a project or an event rather. That is one that happens every year, year after year after year. It's in Chicago. You may know Lollapalooza. So Lollapalooza for us is an event that will take 400 to 500 pieces just from Sunbelt. And the range of those pieces is vast. Now I go back to as I said before 10 years ago or so, Lollapalooza still existed. For Sunbelt, 10 years ago, it was 0 pieces. And for Lollapalooza themselves, it would have been far less rental in general. 5 years ago Lollapalooza would have been perhaps 5 or 10 pieces for Sunbelt because we just weren't quite what we are today. And today, as I said, it's 400 or 500 pieces. I should reference something like Glastonbury. It may resonate a bit better in the room. But there are events like that in markets all over North America all months of the year. If we go to the other end of the spectrum, an event like, you name the city, Charlotte, taste of Charlotte, taste of Charlotte, taste of Tucson, taste of the Bronx. Any of those markets will have a taste of event multiple times a year, it's going to be on one street, maybe 2, it's going to last for a day, I guess maybe 2 and we'll have 4 or 5 pieces of equipment on that event. The point is there are events of all types. We've listed them, but I think that that hopefully gives a little bit of clarity in terms of how we view the entertainment and special event market. Another market that is one that is certainly less visible. I mentioned in the very first slide, facilities a number of times. But when we look at this and we sort of put this in a rather large bucket here, facilities and maintenance. On the facility side, there is just ample opportunity from a rental standpoint. If we were to look at for instance on the kind of every day, we look at hotels and resorts. Hotels and resorts tend to have events like this and they tend to require things like a pallet truck or rollers in order to move in whatever sort of staging devices they have like we would have done here today. On the larger end of that spectrum, there are sporting arenas and whether it just be the event that the arena was built for from a sports standpoint or it be a concert, they're constantly hanging banners. What do you need when you're hanging a banner? You need a lift to put the banner up. Believe it or not, they don't just keep those lifts in the bowels of the arena, they rent those. When they're done with the events, particularly larger ones, they have corridors, they have corridors that have to be cleaned and they rent things like sweepers and scrubbers that you see here pictured. Another part of this is this municipality piece. So, when we think about municipalities, it is the towns and the cities in which we operate in and not so much at least at this point in time am I talking about states, I'm talking more about those more local municipalities. And these have to operate just like our total markets do. And in order to do it increasingly so, they're relying on rental. Whether it be something as simple as repairing a sidewalk with an air compressor package, you'll hear more about an air compressor package later on from John, or it be maintaining their parks. But municipalities as a whole is a very, very big bucket, but I will talk about that in just a bit as well. Finally here, emergency response and this we had in the slide deck long before our recent headline grabber, which I'll get to in a moment. The point here on emergency response, an emergency that requires our services happens every day and every night in every single market that we operate in. The difference is just again the scale of that. So it could be something as simple as a grease fire in a restaurant kitchen that requires a bit of remediation equipment and maybe a hot water pressure washer after in order to clean it and it goes as large as the real headline grabbers I mentioned, Hurricane Matthew. And when you have a Hurricane Matthew, it requires response from multiple markets that we serve and it requires response in terms of choreographing and moving logistically fleet from a number of markets to help with the recovery efforts for a big storm like that. But far but there are so many in between each of those examples. We wanted to go through all these, I know that this is quite a bit of detail. We want to go through all these because I think that far too often our markets are viewed as very narrow, when in reality I think you'll see that they're actually very broad. So with that, I think transitions well into this thing that we always talk about. Jeff alluded to rental penetration in the first 30 seconds of this afternoon's presentation and we talk about it all the time. This particular chart I can tell you not a week goes by when Jeff and I don't talk about rental penetration. We talk about rental penetration by product category that we categories we have today, prospective categories we may bring in tomorrow and we agree on most all of them. But one thing for sure that we agree on is that this is not the best measure. This measure frankly, we think it's pretty crummy. Look, we've reported on it for a long, long time and I know that our other publicly traded peers so to speak have as well. But the reason why I say that is, I think that for the most part talks about the obvious. It talks about most of the markets that would have been on the earlier part of this presentation and less about all these other verticals that we know for sure exist out there and we know for sure have a long way to go. So to better understand that perhaps we talk a little bit more about our products and our customers both being a very important part of this overall piece of structural change. So, oil penetration simply, I know most all of you understand it, but if you want a little 101, here's how it works. On the left, we have products that are very, very highly penetrated, which means they virtually are 100% in rental. If you want 1, you rent it, you don't buy 1. On the far right hand side, we have products that are very low penetrated. And when we say low, certainly there are products that are 0 yet, but there are some that are 1 or 2, but single digit sort of penetration. And in the middle, you have things that we're all familiar with very much so because they've been rather a staple in the rental space. But let's talk about a few of them. Aerial Work platform. I'm not throwing up AWP here to say we don't love AWP because how could we not love AWP when we have $2,000,000,000 worth of it. So we rent it, we rent it every day. It's important to us, it's important to our customers. But a couple of points to make about why it is, what it is in terms of being so penetrated. First and foremost, aerial work platform began in rental. It was never owned, it was always rental. One of the reasons was back when it first came out, it was still expensive, but it was pretty expensive and it was really replacing something that before it this was new sort of technology if you will. This replaced ladder scaffold and at one point bamboo. So, all of these things are material to it, but there's one other very important tie here and that is health and safety. So health and safety has always been prevalent and it has been for obvious reasons. We're putting people 135 feet in the air in a basket that's 6 feet wide. So whenever that happens, of course, you're going to have significant regulations surrounding that. So aerial is very much an important one and one that we deal with every single day. Another one that's interesting but shows a slightly different history is rough terrain forklift. So you'll hear telehandler rough terrain forklift sort of used synonymously. You can see here about 80% penetration. But here's why this one happens to be different. Many of the same drivers as aerial work platform except for it was not began in rental. In other words, contractors very much own this. If I go back to say just 10, 12 years ago, telehandlers rough terrain forklift would have been about 30%, 35% rental penetrated. So what happened over that period of time? Over that period of time, the customers began to realize 1, the cost of capital upfront 2, the overall maintenance, lifecycle, etcetera, but also telehandlers became very much a health and safety piece and it didn't hurt at all that most of them were all bought and consolidated by the OEMs who manufacture aerial work platform, which at one point they were not. So I think if there's an example that says how does something, for instance, the next couple of groups I'm going to talk about really move toward rental in a significant pace, this is a good example that would do that. The next general equipment and this is a rather broad bucket, but just want or you may have heard of because they're very, or you may have heard of because they're very prevalent manufacturers. Bobcat for instance makes a mini excavator and makes a skid steer loader. Those are in that real kind of 35% range. But there are a number of products here that are on the lower end of overall penetration, meaning below 35%. And part of the understanding that you have to get around that is this product just has a deep history of ownership. These are sort of contractors that own them and for a long, long time that's what they did, they just owned. They had a rather reliable network of dealers and this is the important point. Then they did not have a reliable network of rental houses, which today is very different than it was just not too long ago. So general equipment, keep in mind, we love this stuff and it is very much part of our DNA and our origins. The next piece is contractor tools. So if we love general equipment, we really love contractor tools. And I'll put it to you simply and I'm sorry for being so granular in this, but this just has so much room to grow and we see all of the signatures, all of the sort of signs that this will continue to move. So, I've said to my whole team so many times, they've all heard me say this, my two favorite words at one point in time when used sequentially were concrete planer. Why was that? A concrete planer looks a bit like this thing. This is a tile stripper. I suppose that would be favorite as well. But a concrete planer, we bought them for we buy them for about $3,500 we rent them for $300 a day, we keep them for 6 years and we sell them for about $2,200 That's why we love concrete planers. Since then, my favorite words have been replaced by now 4 that we use sequentially, which is 1 ton air conditioner. I like that better now. 1 is we have a much bigger business in air conditioning, which we'll talk about later. But we buy these air conditioners, they're about that big, They plug into a wall, 110 volt. We buy them for $1500 We rent them for $700 a week and we sell them 10 years later for about $1500 So in the rental business that all equates to pretty good. The point here is the reason is about the same as in general equipment as to why we haven't seen that penetration move faster. It's because there hasn't been reliability in that. Having the right tool for a project adds efficiency. Part of what John is going to also talk about is having some helping to get those right tools for the right projects. So, contract tools is a big piece of that. So, we've covered our product. It's important that we talk about our customers. And as we did with our market, we started with construction here. So this is construction. Again, this is the visible. And I would just go ahead and call this commercial, industrial, residential, whatever you like. And we just put this in these 3 simple buckets, large national sort of contractor, midsize and your local small contractor. And a couple of points to make on each. Large national contractors, 1st and foremost, they're almost like aerial work platform because they have adopted rental in a big way. A lot of what they rent is Arrow Work platform, but they have fully adopted that. They're a bit more sophisticated as you would imagine. So they've worked through everything that goes into how they make those decisions and they've done that. Another thing I think that's noteworthy, historically Sunbelt has not been very participative on the national account side. Certainly, we have national accounts and certainly we go after those from time to time, but they're very, very visible. So there's 2 big opportunities here for us. 1 is, we haven't participated as much and we always can and we will increasingly so. The second one is that they are very much in rental, but their rental adoption follows the product that I went through earlier and sort of that range ranging from highly penetrated to low. We think there's real opportunity in that. If we look at our midsized contractors, small contractors, it's a bit like general equipment and contractor tool, it's where Sunbelt started. We have focused on this segment of customers for years years and we pride ourselves on being able to service them with our go to market strategy. But in terms of them owning versus rental, I think you could very easily just say there is that range from those that are significant owners to those that are reasonable renters. But if you look at these midsized contractors, I think the biggest thing I've seen over the last several years and it will come into economics in just a minute is that they have a history of owning from those dealers. But 2,009, 2010, 2,008, 2009 depending on who you are and where specifically where geographically, it was a time that changed a lot of their thought and the way that they viewed their plans around equipment. During that time, they were dealing with reducing their staff levels. They were dealing with less projects. They didn't have the diversity like we have to where their equipment which they bought for construction could be deployed somewhere else. So, they're going through all these financial challenges and they look out their window when they're in their office not on a job site and they see a yard full of equipment that they paid for over the years. And we actually saw it on our customers and we heard it from our customers. They said, boy, you know what, I really wish I had not bought all that fleet and I would have left myself more flexibility. That was a fundamental change that we saw even on this side of the contractors. The other one is if we talk about significantly the small local contractors, some open a business and they fail, some open a business and they thrive. Thrive in their world could mean going from like this picture, a single pickup truck with a skid steer loader on the back, you'll notice that's white, they own that, to an individual that has a business that goes from 1 crew to 2 to 5. When they go to 2 or 5 crews, they're thinking again. They go to that dealer they may have a relationship with and they say, hey, I'd like to buy one of those skid steers and they see what the new price is for 1. And 2, they just start thinking through again, what was it like? What was it like in 2,009, 2010? And should I buy again or should I rent? Hey, maybe they buy 1 and they rent 2, but one thing's for sure, they will likely rent more than what they did before. So those are our customers on the construction side. Let's talk a bit about non construction. I know I have talked about special events and I won't linger there. I will just tell you that 10 or 12 years ago, they would have owned a lot more of their fleet, today they don't. And the difference with them is that sector today, they're just far more sophisticated. They're more sophisticated in terms of the production and show that they put on for the people who buy their tickets. They care about the quality and the way that the equipment looks. Yes, sure, they always cared if it worked, but now they care more than that. They want the best because they're giving their fans and their audience the best. And they're understanding that that is not what is core to them. They were forced to do it before because they didn't have a reliable rental alternative, which we and a couple of others have helped create. Remediation and restoration, a very similar story. This is a big group of overall service providers that go and service things like that grease fire I mentioned and Hurricane Matthew as well. They were very big owners of fleet. They were owners of all these little things, these carpet fans and these dehumidifiers and they were owners of big desiccant dehumidifiers and big power generation. Today, they're less inclined to own, why? Because there's reliability in the marketplace, thanks to businesses like ours who have grown. And finally on specifically here municipalities. I just want to talk about this now more about that customer instead level are very big owners of fleet. In some cases, there are states that have more construction equipment and industrial equipment than rental companies within the state. So they're very significant owners. We see this as a mover. Overall, when we add all the little municipalities and the states and the counties across the country, it is a big part of our business, but it's one that is growing very, very quickly And we see that as a very big potential shift from ownership to rental in the coming period. So those are all of the aspects of our customer, of our product and the way that we view our markets. But no matter what, you can't just have all this happen with a lot of anecdotes. In the end, people have to make decisions based on economics. And certainly we have economics from a momentum standpoint. So there was a point in time when our customers simply looked at what the cost of the piece of equipment was new versus what they could rent it for over some period of time based on what they thought about their needs were going to be. And that's about where it stopped. Certainly today that is still true to a degree, but they've gotten better, especially that midsize contract that I mentioned earlier. They've gotten better at looking at the overall lifecycle cost of owning that equipment. As I mentioned before, they think about cash in hand, but now they also think about the facility that they require, the service trucks that they require, the mechanics that they have to have in order to maintain this fleet. And ultimately we have another wind behind our sail and that is technology and regulatory. So you've heard us talk a lot about Tier 4 over the years and how Tier 4 has become a significant change in terms of inflation. Well, it has indeed our equipment costs more today than it used to with that being part of it, But it's far more than that. When you own it, it's the technology required now to maintain and repair that engine. It used to be our mechanic showed up with a crescent wrench and a bag full of tools and they could fix it. Today, they need the crescent wrench and the bag full of tools, but they also need something to plug into the engine to tell so the engine can tell them what's wrong with it. So it's changed very much and it's something that we have to train around. Finally, on this, I also list just all of the logistics and transportation required to move the equipment the way that we do. In the States, it's called Department of Transportation. So there you see DOT, just another regulatory thing that they have to contemplate. So that's what it's all about. The question of course for you maybe, I think we're pretty satisfied that we'll see it is. So why would Sunbelt continue to be that benefactor of all of this? And it forces us to go through and think more and more about where we are today. So today, we have a $6,000,000,000 fleet and we have great range in the fleet. As you can see, I've given some examples here. We have assets that cost $600,000 a piece and we have assets that cost $50 But the key there is, is that range and now that depth. And when we think about that and all of the markets that we serve both our general tool and our specialty businesses, we think about the footprint now. So you heard earlier Brad moved west and we added all these pins on the map, but we also penetrated our markets more deeply to add convenience for our customers. And all of that put together just as this sort of collage, if you will. But when we look at this, we stop and we think about the size of our fleet. That maybe kind of anyone can do. I'm not trying to make it light that you go out and you buy $6,000,000,000 a fleet. But the thing is that is a barrier to enter, but we don't think it's as big as this barrier to enter. And that's the foundation that we have built. The foundation that is very, very different than what it was just 5 years ago. We have over 10,000 employees. We have 2,500 trucks out on the road every day. We've got 1700 drivers as it shows you there. All of these things that make up what our business is about and they all give us the ability to continue to say yes to our customers. Our customers you will find are very sticky. We are a small part of the overall spend when they look at their projects, whether that be construction or it be facility maintenance. So if you service them well, they will keep coming back and you give them no reason to go somewhere else. So for others to do that, it is just very, very difficult. So all in all, we do all of this and we believe in this statement here that you'll see on the right. If we continue to create for our customers availability, reliability and ease, we are bound to be the winners with this continued structural change. And another key element of all of these is our way of looking at innovation and technology and how that continues to help with availability, reliability and ease. And with that, we're going to have John come up and go through it. Thank you, Brendan. Good afternoon, everyone. Yes, it's true. The key to great customer service is definitely rooted in these principles of availability, reliability and ease. That's true for any business. But here at Sunbelt Rentals, we're committed to delivering these principles with some technological tools to help drive that along. Our customers, nothing has changed more, I guess, is a better place to start in our industry over the last 20 years than technology has in the last 5. It has grown leaps and bounds in that period of time and we feel like we've been on the edge on every turn. I'd like to highlight some of those tools for you today. Our customers are becoming more sophisticated as well and they've asked us to become more sophisticated with them. And in that, it creates a competitive advantage, not just for some, but for our customers. We make them better by using the tools that we can deliver. So we've created this complete digital ecosystem here. And it's all aimed at developing this availability, reliability and ease for the customers. Starting with a very customer focused command center and command center mobile, moving through tools for our employees like Accelerate, which is a CRM program for our sales force VDAS, vehicle delivery optimization system that dispatches our drivers and mechanics electronically. Not really a new tool, but we were first to deliver it in the industry and technology continues to power that tool through our system creating great efficiencies for us in the services that we deliver to our customers, all the way through to ToolFlex, which is really a rental product development piece that we've added some spark to from a digital perspective to make it easier for our customers to come and grab this contractor tool bundle that Brendan talked about earlier that is very, very underpenetrated from a rental perspective. So along with me today to help walk through some demonstration of these four tools is my friend here. We call it Padzilla. And I have to tell you, it's been a little challenging this week walking the streets of London with this in my pocket, all right. Also on a safety note, all of you in the front row, you're safe. This is not a Samsung product, it's an Apple product. So no need for goggles or any kind of fire extinguisher as we move along here, okay? First thing I'd like to talk about is Command Center and our website. But maybe before I go through each of these tools, it's probably a good idea to give you a little bit of taste of the history behind and the journey we've been on since myself, Brendan and Brad have entered into the business over 20 years ago. When we began, there was no Internet. So we had no website. And we lugged around the United States with our sales force a bunch of paper catalogs, and we handed them out on job sites and offices, and that's really how we went to market. Certainly, then technology grew and we grew along with it and we established a website like many, but it was fairly static website. It listed out very plainly our product and specifications behind that, giving our customers a real great view of what we had to offer. It also listed all of our locations, certainly not as many as we have today, but it did have those down with the address, the phone number, how to get a hold of us. So that's where we went. Fast forward to today, command center on our website gives us a tremendous advantage. It's a fully interactive website and e commerce suite where our customers have real time access to the rentals and they can manage on their own with complete transparency the entire rental lifecycle. So with that, it's a desktop version as well as a mobile version. Today, I will be overviewing the mobile version, which is available on Apple, Android, Pads and Phones. So we're just going to look through the lens of a customer. Just imagine you're on a job site here and you want to get some information about your history and rental activity with Sunbelt Rentals, and we'll walk through a daily life here. So I pop up, I have my phone in my hand, and I say, what's going on? So I tap the app. You know what, one second here, we timed out. Give me one second for some housekeeping. They say never go live with technology, children or animals. So I am in that zone right now. But no worries. Everyone now knows your volume. Should say okay and we'll be spot on. Okay, back to the day in the life. We quickly tap the app here and right away the customer can see who they are, their customer name. With a tap, they can see any representatives that might be nearby, whether that's a profit center, whether that's a salesperson. They can see reservations. Look, it's not that prevalent for our customers to plan that far ahead. You saw earlier, 73 percent of our deliveries happen from orders that came in today or the day previous, but this customer does have 5 or 6 items in the queue here that will be coming to them in the next day or 2. Certainly, you can see equipment on rent that would be very powerful. There's detail behind this as well. So there's some action items that we can take here from any item that they have on rent, again, from the palm of their hand. We're taking 16 years of customer data and transactions in our website and really moving it in powerfully to the palm of the customer and give them some control here. Really three main things here you can do, which is to tap, you can request a pickup. Once this is requested and you go through this process, that customer gets an email or a text right back that says your equipment has been called off, date stamp, time stamp. So they feel relieved that within a day that equipment is going to be gone, their charges are stopped and they're on to the next job. We don't really like that button that much by the way. Are dealing with machines and every once in a while they break down. We think we're pretty good at getting out there and making them rent ready again for them in no time. But here you go again, You're out in a remote area on one of these data centers that Brendan just spoke about. And you're in there are huge complexes, 15, 20 acres and you've just walked clear to one end and find your back is not working for some reason. So with the palm of your hand, you can queue up some service, type in what's going on, where it's at, send it away. And again, it comes to that servicing location with a text and an e mail and we say we're on the way and we're there to fix it for you. So very, very powerful from our customers' perspective to have that so easy. And our most well, second favorite button in the world in all of our technology is extend the rental, right? Because as you know, with any project that you do, whether it's at your house or this data center we're talking about, they typically run a little long. So as it starts to run wrong, it's pretty easy to just go in and extend the day in a row. Again, all this from the palm of your hand. This certainly wasn't as when we were rookies, anything that was more than a dream from a rental perspective. All right. So let's walk through locations here. Pretty smart, right? It says we're in London, yes, like that. But we'll just, for sake of demonstration, take a stroll across the Atlantic. It was only that easy. We talked about our growth. We'll talk more about our growth. Brad and Jeff will in a couple of minutes. But here's our complete listing of locations. No matter where you are in the U. S. Or London, you can see where the nearest Sunbelt Rentals is and we continue to grow. We're going to put more dots on this map for you as Brad will talk to in a couple of minutes. But more importantly, in orange here, it denotes the customers' job sites. So we know how much gear, they know how much gear they have and how close they are to a Sunbelt Runners location if they need to press up for some more fleet or service. But let's get to the real thing. How do you order a piece of equipment, right? So again, very easy. You tap on equipment. Brendan alluded to the fact that we have 8,500 different classes. The depth and breadth of our product range is all right here in the palm of their hand and it is categorized very easy for them to flick through and find what they need. I mentioned earlier, we have 16 years of data transactions, customer activity. We know more about the customer spend than they know about it themselves. And we've taken that. And unlike others that have tools in this space, we've bundled it for the customer. We're trying to make it easy. They don't have to flip through 8,500 categories. We tell them what they rent most frequently. We just shrink that down and personalize it for the customer. We tell them what they've rented most recently, which is a very easy way to go about it. If you were just working on a project a month ago and you just need the same kit again, you just come through and tap that on and in just one click, you've added to your cart. And my favorite are the favorites, all right? So a customer can go through our list of equipment and just tap a little star. And every time they tap a star, it brings that piece of equipment forward to the favorites. Why is this important? Well, we talk to several customers that use it in a very empowering way. They set up a list of 20, 25, 8 favorites, whatever is right for their business depending on whether they're a large national contractor, whether midsize or a small contractor. And they say to their entire staff, hey, they're project managers. You guys rent whatever you need to rent from Sunbelt Rentals, okay? Anything you want, as long as it's on the favorites page, all right? So they're kind of watching over it, making sure everything's great. If you have to leave these favorites for a piece of equipment to complete your project, give me a call, all right. So we've actually built in some controls here for the customer as well that they feel really, really good about, okay. The other way the favorites comes into play, as would the recent and the frequent as well, if I just get your mind, again, we're looking through the lens of a customer, right? And a customer, we're going to talk a lot about the Washington, D. C, Baltimore market here today. So imagine I'm a concrete contractor and I am working on the National Mall and I'm busting up some sidewalks and curbs, okay? Now, it's traditionally very easy to rent an air compressor or an air compressor package from us in the rental industry. 1, an air compressor is just a staple of what we do. You have to have that to be in the business. But second of all, we walk you through and guide you through what you might need for the full kit to complete that project. So we'll ask you questions around the concrete. What type of concrete are you busting up? We want to make sure that we send the right PSI air compressor with you. We're going to ask you how many people you're going to have manning hammers, how many hammers will you need. That will go a long way to sizing the air compressor. We're also going to ask you how far away from the machine are you going to operate because the sections of hose are only so long. So how many sections of hose are you going to need? Then we're going to ask you what you're going to do, do you need a chisel, do you need a point, what kind of steel do you need? So typically, in the past, when we started, we would answer all those questions for the customers. And we still do today with our sales force of 1,000, mind you. But when they call RPC as well, our customer service reps will walk them through those questions and make sure that we equip the customer for success in those applications. But how do you do it on the phone, all right? The interaction is not as much. So a month ago, I was on the National Mall. I was doing those curves. The kit worked perfectly, I returned it. It's a month later now. And I'm working at the Ronald Reagan Airport, 30, 40 miles away. And I'm doing a similar type project. I just go back to favorites. The whole kit's there. And in one tap, I just added those 4 items to my cart. I go straight to checkout. So we've tried them. It's about ease, right? We tried to make this as simple as possible for our customers. And I would tell you that's a clear advantage to the tools we're showing you today much different than some others in our space. All right. So that's a little tour around that. Now listen, and I've talked about it a couple of times. Are we the only ones in the space with this tool? No. There are a couple others that have it as well. But mind you, the mid and small rental houses won't invest in this. Sure, we'll try to copycat it to some degree, but they won't have a scale and breadth and depth and they won't capture this customer. The customer won't be able to have the palm in the palm of their hand all this technology and guide them through the rental process like they can here with Sunbelt Run. So we definitely feel this is we've gained some early mover traction with this and we've distanced ourselves from the pack with what we're providing in our website and command center. Okay? You sure can. Thank you. Next, let's talk about our CRM system, Accelerate. We've got a great opportunity, don't we? We have 1,000 sales reps out in the field, a direct sales model. We have this powerful website backing that up. Those sales reps are pointed at discovering relationships and looking to drive revenue across our product range with 500,000 active accounts, which is wildly different than it was 5 years ago as well. And they're tapping into a construction activity market that is right around $40,000,000,000 annually. So you're not going to take advantage of that and share leads and share notes with customers. We knew we had to move further along from where we were when we all started. We all started as sales reps back in the day. So we're going back to the early '90s. And let me tell you about my 1st week as a salesperson in this industry. It started something like this. You have the job at lunch. You got keys to a truck, okay? You got a pager. You got a roll of quarters, okay? You got a paper map, a paper map. And on that paper map were some squiggly lines that was your territory. I really couldn't make out the territory, so I asked for some further explanation about that. My boss said, you cover from that river to that freeway. That was it. I said, okay. What do I have to prospect from? He goes, no problem. I have a phone book in my car. He brings in the yellow pages. Those are down on the desk. This is real. And he says, go after it. There's a lot out there. You get a nice pat on the back and a good luck, right? So we've worked really, really hard to make sure that isn't the experience we give our reps as they onboard today. Today, we give an iPad running this technology. Now, this technology runs on many platforms as well. It's on a mobile app, it's in your phone, It's a computer and there's a desktop version of it as well. So it is a multifaceted tool for our sales force, for our inside sales force and for our managers to help guide our sales folks through the day. But that's how it all started, okay. So in that, the second they open up the iPad, they see an outline of their territory, okay. They have a section where they plan their day. They set appointments with customers, prospective customers, new customers, job sites. We bring in data feeds from prospecting tools nightly that update them on all the construction activity in their territory. They hit a button and these pins fall in, all representing active accounts. Others pop in that show prospective accounts. Another screen, dots pop in showing job sites and projects that are active in their territory. They take notes after a sales call about what a customer needs. They share those notes and leads across the platforms. Our general tool reps share with our specialty reps, pump and power, climate control, ground protection, making sure we can tap into that complete customer spend as we move forward. So that's what it's become, a far cry from where it was 20 some years ago. So I'm going to show you the mobile version of this, the lap or excuse me, the iPad that I spoke about is much more strategic tool, but Padzilla here is a phone. So we're going to show you the tactical side of it and we'll show you what a rep might do when they approach a job site and have a great conversation with the customer. So here we are. I have my phone. I just walked out of the job site. I'm a little excited because I just had a great meeting with the customer. He had immediate need of an air compressor. Again, we're talking about the DC market. We just left the Ronald Reagan airport. Let's stay there, shall we? So I get I walk outside just down the steps and I say, let me check some availability. He said he needed an air compressor. Let's see what we have here. It will take a second. We are in London. It's very, very quick in the field. Okay. So we're having just a little problem with the VPN here. Let me do this magic one more time, okay, close your eyes, my password is going in again. Yes, I might have to change it now, right? By the way, that hasn't happened in quite some time. But here we are coming down the steps, we're pretty excited here. We have a potential rental on the way. But this thing will spool out. But what you're going to see in a second here, we give them real time availability from a utilization perspective. And it's really cool when it pops up. So, what it does is, it knows where I am as a sales rep. And it says, hey, your your owning store has 1 to 10 air compressors available. And the example that we'll show here in a second, if it has 0 and none available, it's very easy. The next line says, how many do I have available in my district? It just takes us up 10,000 feet to see where it is. With a simple click then to the device, you can it will pop up. Anyway, with a simple click to device, you can call that profit center right away. You can also go in and place that order right away as well. So you're in the field, you're doing your deal. We used to have to call back. Sometimes we drive back to the profit center to pick something up. Those days are over. It's all about response time to the customer. And like Brendan said, we're trying to create this reliable marketplace far more differently than we did 20 years ago. Right below that in Accelerate, we also give them real time pricing guidelines, okay? We make suggestions on pricing to that customer based on customer size, based on customer history, based on current utilization trends and also based on seasonality. So we will build a fairway, if you will, with the customer. Thank you, Brendan. So here we are, availability, that's my PC. I have none available. I have no reservations. But let's take a level up and see what we have available. So PC just down the road has 5 available. They have 3 reservations. I can still keep that commitment from my customer to deliver the air compressor in 2 hours. And we just did that from the steps of the job site, okay? So talk about responsive, talk about a clear competitive advantage. You know in anything you sell, there's a small window of opportunity that that buyer is available. So we're closing the gap and trying to capitalize on that as quickly as we can. We'll just walk through this rate exercise that I was just talking about. Again, customer, customer type, utilization, we'll build a fairway from rate. Again, it's just a suggestion. The rep is charged with making the best deal they can make every time they make a deal. And certainly the commission plan that we have supports that. So they're fighting as well as they can to make that best deal every time they make a deal, okay. There's a couple other tools here. The power that we're trying to put at the fingertips of a sales rep while they're in the field is just amazing. We have some customer data. So you're about to make a call, you know who you're going to call on, what's the last thing you should do? Prepare a little bit, right? So you open up your phone, you say, hey, what's this customer's history? What's it all about? What are they doing? We're going to show that to you right here. Who are they? This is a key account, right? What kind of I don't I'm not that familiar with them. What's the strategy and opportunity with this customer? What have some other reps contributed to this? So you can see unique preferences and hot buttons. What's the primary equipment that this customer rents? What's the rental opportunity? This is great. There's several large projects going on now into the start of 2016 and will extend into 2018 also actively bidding work in Region 8. So that's an internal thing, but I would tell you we just pulled up a DC customer they're saying they're going to work on the West Coast. Pretty powerful, right? We couldn't connect those dots 20 years ago. We didn't have the technology to do that. Specialty opportunity, how do we cross sell? So there's some pump and power opportunity here. It looks like there's also some ground protection opportunity here. My point being, our 1,000 sales reps collectively add to this manifest of customer preferences and opportunities and they all get to see it at any time. And how powerful is that to see right before you go into a sales type environment. This is neat, too. I love this button. This is my first favorite button other than Stenderlo. It's called shared lead. We've grown to 1,000 sales reps. 5 years ago, I would have stood in front of me and said we had 700 sales reps. So we're growing, right? It's hard to keep track of where everybody's at. We have great tenure in our sales force. But look, you don't grow from 700,000 without adding a few, right? So no matter where I am, I can look up a sales rep by name, 1st or last or better yet, if I just know where the project is because I don't know who the representative is, I type in a ZIP code here. And it returns for me all the sales reps in that ZIP code responsible for general tool, pump and power, climate control, ground protection, scaffolding, right? All of our business are represented here. The power of Sunbelt is right here and we share those leads all over the place, which is just really, really powerful and much different than it was 5 years ago. Back to the account itself, some really good information to see when you're just hanging out ready to make the sales call, tuning up. Website users, Command Center that we just saw, right? I can see that they have 3 folks that are logged in and registered to Command Center. We can see when they were last in there. So how involved are they into taking control of their rental and using the platforms that we put out for that? It's always good to know. Quotes and reservations, we would have showed you that a couple of seconds ago. Again, equipment on rent, this is pretty neat, 93 pieces for this customer, that's great. But information that they have could be before the sales or could be afterwards. You see the machines by a serial number, right? We see rates. We see how long it's been out and the expected return date. We see the total amount build, all powerful information if you're going to make a call on this customer. Look right here in the middle of this doughnut, this is accounts receivable. Now I'm a salesperson true and true and you love to make that just genuine sales call where you're just asking for the business. But if you're going to make a complete sales call, every once in a while, you just have to ask for some money as well. But we have all that information here. You know how the sales call needs to be set up, right? And extremely powerful to support Brendan's moments earlier about the breadth and depth of our product line. Here's some spend trends for the customer, okay? Probably hard to make out, but these top two bars are AWP, greater than 90% penetration forklift greater than 80% penetration, everything else is are the others that we're underpenetrated in. This customer is taking advantage of all that. And what we see in the next 5 years on the way to 2021, all these bars creeping across, right? We'd love to see them all just pegged over here. We think we have the platform and the technology and the people to make that happen. So that would be show you a couple more things here that have the fingertips tools. This is neat. 1,000 sales reps, a bunch of jobs. We have some quick calculators here. If a customer needs a pump and you're not all that experienced with pricing out of pump, you can figure out how far they're pumping, what are they pumping, put in a little calculator and tell you what they need. From a power perspective, just how much wattage are you trying to put into a temporary power situation, You can plug all in and they'll size the unit for you. National contacts, you pull up on a large job site, you just hear of a customer you've never met before and you want to learn more about them, you click that and figure out who owns them, shoot them a quick phone call, have a chat about it. So you're prepared to go in and make that call. Others in our space are not doing this. And this all fuels the success we've had over the last 5 years. Used equipment with a touch, you can see what we have available to sell. Commissions, we're talking about sales, right? We keep score a different way. We keep score with our wallet to some degree, right? So why wouldn't you just show at any point in time a real time standing over that sales rep stands from a revenue generation perspective and a commissions perspective? So we do. And they wear that button out, trust me, okay? So that is a quick cruise through what is the tactical piece of Accelerate. If that's what's in the phone, you can imagine what's in the iPad that we talked about previous, okay? Vehicle Delivery Optimization System, VDAS. So again, some history behind the tool that we've created. And this is not a new tool. This has been in our business for about 8 years like I alluded to earlier. But technology continues to evolve this product and we feel really, really good about where it is and where it's going. But dispatching from RPCs was traditionally a very manual process. It was very personal process. It was done a lot of times with paper. And we take pickup tickets and put them on a cork board or they would write deliveries on a grease board, okay. All great stuff, very hard to train for, very hard when that dispatcher who had all that knowledge, formal knowledge up in their head versus in a process, they get sick. What happens? They don't go on vacation. How does somebody step in and emulate what they do, from day to day without a system backing it up. So about years ago, we formalized that process. We took a very complicated process, added a little technology to it and we refined it and we picked up tremendous efficiencies. Today when we dispatch, we dispatch much like you see on the screen here. Our dispatcher will click and drag a piece of equipment onto a truck. You can't overload it, it gives you a warning, okay? When our drivers are out, we safely ping them, okay? So we're making a delivery in DC, and we have a call off that happens 2 blocks away. When the driver gets back in his truck for making his delivery, he'll see that he has a pickup just 2 blocks away. He'll go over there and grab that piece of equipment, we'll bring it back, get it in our rent ready line, so we can maximize the time utilization on that asset. We didn't do that 20 years ago. There's no way. We didn't do it all that well 10 years ago, okay. We would have come back to the profit center empty, okay. What are the costs involved with that? Then we would have got right back in the truck and drove right down the street again to pick the piece up. So a lot of efficiencies there that has helped to drive down over time employee cost and vehicle cost as it relates to our delivery vehicles. Let me just show you what for a second here what we can see from the truck view side of VDOS. We're not going to dispatch anybody. We're not going to create a truck here, at all. But just to give you a feel for the visibility that we have from our profit centers. And mind you, this all goes back to command center. So the customer can see all this as well. There's no more back 20 years ago. Yes, your delivery is an hour late? Yes, it's on the way. No problem. We'll be there in 10 minutes. Well, now they can see it. So it better be there in 10 minutes. So here we are. We're in that market we talked a little bit about here, Washington DC. Actually, Washington, D. C. Is down here. So all these pins are trucks. They're out moving around today. Bear with me. Here we have a truck that's going 1 mile an hour. It's probably slowing down for a stoplight or it's about to take off. All right. But it's got a couple of pickups here. So at the raceway, you're going to pick up a mini excavator and a bucket, Okay. Here we have a truck rolling around. Let's see what they're doing. 1 mile an hour as well. Interesting. Traffic is bad in D. C. Traffic is bad in D. C. You're absolutely right. They too have a pickup, Aldi Foods, this was is a supermarket. So they're picking up a 40 foot scissors lift, couple of them and an electric fork. This would be exactly what Brendan spoke about earlier about the markets. We're at a shopping center of food service picking up 2 scissors lifts and a forklift. You can't see that driving down the street, okay. You have to have a relationship. You have to have locations that are convenient. You have to have these tools to get that rental right there. That doesn't happen easy, okay? But I think you get the point of our ability here from our VDAS program, not just from the dispatch side, but from this side. And again, the customers see and take advantage of all these tools as well. We do this that was the driver side of VDAS. We also dispatch electronically to our field service techs. And again, it's the same dispatcher that we're doing the same manual services prior that they have now taken advantage of being able to dispatch electronically. This puts the service tech to our customer to the job site repairing that piece of equipment quicker than ever before. And that's key. When a customer is renting something, they expect it to be up and working, not down, right? So we dispatch, they get there quicker. Once they get there, to Brendan's point, it's not a bag of tools and a crescent wrench anymore. They do have that. But on the top when they open it up, it's not a crescent wrench anymore, it's a computer. And they have to plug it into that Tier 4 engine. And they read that computer and it gives them a fault code. And they say, oh, fault code 1. That means I have an electrical problem in this piece of the engine. So on their phone now, they can pull up the electrical schematic of that machine. And they can diagnose that far quicker than ever. It also is a great transfer of knowledge. It used to be that some of the more tenured mechanics were the ones that could troubleshoot a little bit faster. Well, this levels the playing field with that, okay? All of it means we get it fixed for the customer quicker. They have more uptime with our product and they're going to come back. There's nothing better than repeat and referral business and we feel like these two tools really help to solidify the customer service that we deliver and help keep that customer sticky to what Brendan said and keeping to come back. Lastly, I'd like to talk to you about ToolFlex. I will try my best to refrain my excitement around this product. But as you see in front of you and on the screen, it's really as easy as 1, 2, 3, 4 with ToolFlex. First, let's talk about what it is. Let's start with its name, ToolFlex. Let's deal with the tool part of ToolFlex. These are all contractor tools. They are all small assets. They don't cost all that much. The average ToolFlex item cost about $1700 okay? There traditionally has been a huge ownership in around these products. We earmarked just over 200 products and put them in our tool flex corral, if you will. And we said you will have availability of any of these 200 products at any one of our 600 locations anytime. So the reliability, check. Let's talk about the Flex part. The customer then has an opportunity on any of those 200 products to rent a bundle in one time, starting with a package of 3 and going up to a package of 10 for 1 fixed monthly price. All right. So give some complete flexibility to go rent something they typically would have owned. Why did they own it? 1, it didn't cost a whole lot. But other reason why is there wasn't a reliable national marketplace to go rent this product from. That's what we're going to deliver to the marketplace, 600 locations guaranteed in stock on these items, okay? So why would you buy it anymore because it's so hard to have the right product at the right place at the right time. Okay. So I'm going to walk you through how we have digitized, if you will, ToolFlex. So right here from the equipment screen, you see the banner at the bottom. It says Tap Tool Flex to begin. So a little bit about what it is. Let's leave the example we used earlier about the air compressor. Let's say we're a patio installer for someone's backyard. So we're talking residential here. And they're going to put up a patio for a customer. What are you going to need? Well, I'm sure you'll need a plate compactor. Boom, add the tool flex, bam. Okay. What else might I need on this project? Well, probably going to need a saw. I'm going to have to cut some of that brick that we're going to put down. There we go. I had a tool flex. I have 2. I'm on my way. I'm close. What else might I need for that project that's just easy to grab or if I need a generator. Added to TOOLFlex. I now have a TOOLFlex 3 package just like that for a monthly fixed rate price of $900 okay. Left alone each of these items might cost $500 a month on their own to rent right? But if we're going to drive that shift from ownership to rental, it has to be done on a price point that's enticing, okay? And we feel like we struck that balance here and around TOOLFLEX. So let's talk about again more of the flexibility of this program, okay? So we've got their TOOLFLEX 3, they've built a couple of patios, things are going great. But it rained pretty good one day and they were cutting some bricks, a lot of overspray got on the vinyl siding of the house they were doing. And to make it right with our customer, they said, you know what, we'll power wash that off for you. No problem. They want to make sure they get paid and the customer is happy, right? So all they do is they pick up the generator, take it to any one of our Sunbelt locations, give the generator to the counter, they look on the system, oh, you have a TOOLFlex 3, what other item would you like? Well, I really need a pressure washer. No problem, here you go. They take the pressure washer, go back to the project and power wash the deck. Price still stays $900 okay, for that monthly period of time. But complete flexibility, It's flexible in other way as well. So back to Brennan's analogy earlier about the small contractor, what if they just get a little bigger? What if their customer who they just did a great patio for had all their neighbors over on the weekend to show them their patio, they're having a barbecue, the cooler is out, They're having a good time. And they're just talking about it. Hey, it's a great patio. Who did it for you? So and so. How great a job did they do? They were great. We had a couple of bumps in the road like you would on any construction project, but they made it right. They threw some stuff up on the siding. They took a pressure washer and took care of it for us. No problem. Wow, we've been thinking about doing a patio, we'll give them a call. They have another job. They have another crew. So guess what? They can grow this from a TOOLFlex 3 to a TOOLFlex 6. Now they have a Tool Flex 6. They're building 2 patios at once. They have no outlay of cash, well, small outlay of cash. They're not owning the machine. They're running it for a temporary period of time, just under $1800 to do that. So that's ToolFlex. That's really exciting in helping to drive that shift from ownership to rental in this really, really underpenetrated basket of equipment. I'm really excited about it. It's one thing to be excited, but what do we know? We know that we went live with this program the 1st week of June. And since that point in time, we've had 2,500 TOOLFLEX packages come through. So we think the marketplace was right, our timing was right, And everything we drew up on the Board seems to be working really, really well. But we see a day where we have triple that of ToolFlex contracts in perpetuity moving forward, all right? So that's a ToolFlex product. Here's an example, I guess, of all these tools this contractor standing in the middle of. And certainly, there's more around him there, but you can just go grab 1, pick up another. Pretty neat concept and we're really fond of it. So yes, we dazzled you or I tried with Padzilla. We could go on and on with the mirrors. But at the end of the day, we create a lot we feel we create a lot of very cool tools for the customer. We have this validated when we talk to the customer because we're not in the business just creating tools to create tools. That's not how you gain adoption and that's not how you have a competitive advantage. We've tried very hard and will continue to work hand in hand with the customer to understand their needs, their wishes. Man, it'd be so much easier if you guys could do this. Well, that a light bulb comes over our head. We say, how can we do that? And man, our IT department doesn't like me very much because I will wear the carpet out going down there coming back from sales calls saying, hey, we have to do this. They do a good job of delivering it as you've seen. And so next, I guess it's just best for you to hear from the voice of the customer just how much some of these tools, locations and the like mean to them to help them get their job done and create value. Empowered by technology and driven by data, today's customers don't just need equipment, they need action that gets from problem to outcome fast. That's Sunbelt Rentals responsiveness. Any company that you work closely with has to be a real partner. They have to understand you and you have to understand them. The jobs have to stay running. We can't have crews down. So the response of time with the rental houses are very important. And I know that if I call Sunbelt, I'm going to get what I need. They've always been a team player. We could call them last minute and they'll come out here whether it's late at night, past hours, early in the morning first thing. They do whatever it takes to make sure that we're being taken care of and getting the right equipment out here on the site. They need a local connection with the power of nationwide support. Most of the equipment that we rent of any size or magnitude is through Sunbelt. They have done a really good job at dispersing themselves within the markets to be within a short distance from where most of your projects are. Even though they are in a lot of places, we view them as a local partner. We know our sales rep. We know the locations and the proximity into our various jobs. It's seamless for us. They need the expertise of our specialty divisions so they can solve all their challenges with one rental partner. When I have a problem, they can respond and make things happen in a timeline that fits my need, whereas some of the small shops just don't have that horsepower. Not all equipment companies are able to provide the specialty type equipment for you. So having an equipment company that does either have that equipment or is willing to go out and get that equipment for you is a huge asset when building tough technically demanding projects. They need people with the ability to make the hard things easy with innovative solutions from tools to technology. We're always changing the markets that we're getting into and our portfolio is constantly changing. And Sunbelt has absolutely kept up with our pace. Our rep, his ability to respond to anything we needed and to have an open mind about expanding their inventory and opening up new ideas to what we can do to be more efficient. That's the partnership that makes my job a lot easier. All of this comes down to the person on the ground and a firefighter mentality that gets our customers what they need, when they need it, no matter where, no matter what. That's why people count on Sunbelt Rentals because we equip success. So that's kind of like the introduction into our growth program. And why is it an important introduction? Because think about what the guys have been telling you. We see great structural opportunity still in the market. The market is very, very good for us. We believe that our complexity and scale is a significant competitive advantage, which will allow us to grow. And we believe we are enhancing those scale benefits with the technology benefits that John just demonstrated there. And also, I think you'll remember back to the year end presentation, we talked about how we were just dropping so much more of our revenue growth down to the bottom line. I think a lot of the technology, which John showed there, just highlighted that opportunity. And that's why our growth program is a long term investment in the structural growth of this sector. People ask us, well, hey, when will you slow down? What if the cycle changes? We just don't care. At the end of the day, this is not a growth into some short term cyclical upside. This is a long term growth strategy in order to have the appropriate density of locations, the appropriate range of products, the appropriate range of sectors to satisfy the needs of this market. I think as Brendan was highlighting, we believe we can create markets. We believe that availability, reliability and ease will encourage people increasingly to use rental as a flexible alternative to ownership. Sure, they're going to own some stuff. But if Brendan's ex favorite product, a concrete planer, goes from 8% rental penetration to 16% rental penetration. That's a doubling in our opportunity in concrete painters. We're not saying that. That's why Brendan was absolutely spot on. That metric we all stick out all the time, which is 55% rental penetration. It's just a really done average. What you have to do when you look at your growth strategy is look at markets, look at products and look at sectors. And that's what we have done as we have built our plan for 2021. So from my perspective, irrespective of cycles, we have a very firm foundation on which to build this platform of 900 or so locations. Now, before I get Brad up to go into the sort of granular detail of these further locations, just another little way of looking at our growth through the cycle. And again, why we believe this is a structural story, not a cyclical story. The two charts say so our revenue in EBITA all the way through the cycle from 2,008 down through the downturn of 2010 and up to today. So if you look at the green bars, that is the revenue in EBITA of the stores that existed in 2,008. And then the yellow bars are those which we have added since 2011. So look, you can see our primary focus was and always will be same store growth. We're going to add a broader range of products. We're going to add a greater depth of products to our existing stores. And look at those green bars. Here, we went down in 2010. But in the context of the scale of the recession, it was a fairly minor bump. And then as you can see, we started recovering again in 2011 and look how much higher the revenue and the EBITA is in those mature stores. A really, really strong performance from those stores all the way through the cycle. But then what you can see, as I said in the introduction is, in 2011, we spotted the scale of the opportunity and we started to invest in greenfield and bolt ons. And as you can see, the greenfield and bolt on proportion of our growth became more prevalent as we went through time. Look, we are we're sometimes portrayed as spending an awful lot of money on freedom, indeed we are, but we all by nature an unbelievably conservative business. Look at our balance sheet to see that. So we dipped our toe in the water with a few greenfields and a few bolt ons early on and we built it up to around about the 60 locations we will open today. But we've had great success. But not only we've had great success, we have learned so much from doing it in terms of different types of businesses and different types of locations. And based on that knowledge, Brad's gone away with even more granular and developed this plan for 2021. So I will hand over to Brad now, who will take you through that. Thank you, Jeff. Good afternoon, everybody. Before I go on to the 2021 plan, I want to just step back a moment and talk to you about how we view the rental market here at Sunbelt. So we talked a lot about innovation and technology and how it has advanced not only our industry, but our business at Sunbelt Rentals and affected all of us over the years. I think that that is very much true for the stance we take today and the amount of energy and time and the type of focus and analysis we put into all of this big data that we collect, the way we crunch it, the way we view it, the way we process it. That said, we talked about 2011 and how we started this journey. Back then, it was very, very simple, if not an obvious plan that was laid out in front of us. We simply needed to fill out multiple geographic voids on the map, which we have done. And second, we needed to add specialty businesses to our existing footprint, which we have also done successfully. So all of that said in context today, as we have achieved a little bit more high level view into our markets across all of the U. S. And also to a very granular level at a market level, that has become a part of our plan for 2021. So a few things that we have to point out and how we've built this plan, and I'll start by just getting a technical detail out of the way, and that is explaining to you what is a DMA. There are 210 designated market areas across the U. S. Or DMAs. You might hear that term referenced today. So there you go. That's what it means. It's comprised of nearly 1,000 markets across the United States. As we have digested that information and crunched through it, we've learned a few things, as Jeff pointed out. I don't want to go too much back into the past, but we do have to understand how we have grown to this point. And so as we have reviewed that information, we've learned 1 or 2 things. First of all, the top 25 markets represent 56% of the US rental market, okay? Now, not surprisingly, those top 25 markets are where the majority of the population exists. It's where the majority of the construction activity will reside, as well as the non construction activity that you heard us talk so much about. 2nd, you'll notice that in that next tier, that next band, that is where Sunbelt has today its greatest share. And for those of us in the room that have been with the company a long time, it's of no surprise that is the Sunbelt, that's where we got our start, Maryland, Virginia, the Carolinas and Georgia. So proof to be said there as to why that's the case. The other thing that we want to point out here is that, as you will view our growth in these markets, we have outpaced the growth as a company at a low side of 3 times and the high side of 5 times. That's an important thing for us to understand as well. Now, there's a ton of information here and I don't want to move too quickly through, but I want to just point out that while these are a very high level plan that we have developed, the idea for us is to take this information and transfer it among every level of our business, as I think you've heard from Brendan many times in the past, Jeff as well, we are a very much bottom up organization. So while it sounds great for all of us to sit in Charlotte and draw up fancy charts and spreadsheets, This has to translate down to the very local level, and it has to be a plan that can be put into motion by our team in the field because that's where it happens every day. And so it's important to also note that while the easy thing might be to say, hey, go and just focus on those top 25 markets, we can't do that. Why? You heard us talk about today, we serve a very broad market with a wide array of customers because of our products and services. And therefore, we need to be across the map of the United States. You heard directly from our customers, they want us to be accessible, they want us to be easy to do business with. That's why our plan encompasses all of this together. Okay. So as I mentioned to you, part of this is to have the ability to translate it across multiple levels. So what I want to do here real quick for you is just take a look at one of our markets. We've talked a lot about Washington D. C. This afternoon. So what I have visible here for you on the John's iPhone is the District of Columbia. And this is one of our territories in the District of Columbia. It's managed by a sales rep, Joe, who's been with us for 15 years. And you can see it's relatively small. I'll give you an idea. It's 2 square miles. Okay. And 10 years ago, it was a little larger and over time as we've grown, as our business has evolved, it has shrunk. Now, the reason why that we have managed these territories at this level is because we have to understand the opportunity for us as a company and for how that would translate to taking share in the field. So through these tools that John has walked you through, we now begin to have lots of touch points of the data to help us manage that process. One of those would be simply by looking at the amount of customers in Joe's territory. There's 144 of them and it's a wide variety. Companies like Balfour Beatty, a signature flight support hangar and other property management type companies. Yet again, it fits right into the bucket of what we do as an organization. This is a great representation for us as how we do very, very well in the market, serving a wide variety. We also know through the technology that we have at our disposal, where these customers work. So in tracking that information, we'll see 80 some job sites in the Washington DC area that these customers are active. We know through our Dodge data feeds the value of these projects. We know how much revenue we have produced on these projects. And therefore, we understand what our share is. So it's important to understand that this can't plan can't go into motion without it working on the ground, very important part of our plan here as we go forward. Okay? So I do want to go back just a second though in history. Jeff talked to you about what we have done. We talked about that 6% growth from the same store and this is where it has come from. A nice blend of greenfield and bolt on activity that have been equally balanced between our general tool foundation and our specialty businesses alike. So not to belabor on this too long, let's look at where these locations have come from. As you can see on the map behind me here, we have focused over the last 5 years at adding new geographies to our footprint. They've talked a lot about Brad went west. It sounds like I've been on a stagecoach. There was a plane or 2 involved, I assure you. But we did go west and we've done very well. We have opened new markets in towns like Kansas City, Minneapolis and Milwaukee over that time period. And today, those markets are evolving as we continue to invest and build out clusters in those markets. The second thing that we have done is continue to add locations in our existing markets. I'll give you some examples of those alike, San Francisco, St. Louis and Houston, we were there, we had a pretty good share, but we knew we needed to continue to invest and we've done just that. The last leg of this plan over the last period of time that you would have seen is the introduction to our specialty businesses. And I'll give you some examples of that as like, We talked about climate control, which has been a business we have continued to evolve and invest in over time. We recently added a location in Jacksonville, Florida. We've been in Jacksonville, Florida as long as I've been a part of this company, never with that offering to the customer. We've also added an industrial location Cincinnati, Ohio. Again, we've been there since 2000. We just didn't have that product in that market available to the customer. We've done that. In Phoenix, Arizona, we've been in Phoenix a long time, minus a pump and power location, but we've bolted that on. So you can see that, that's what we have largely focused on over the last run of time here, okay? So enough about the past, let's talk about the future. We've talked about adding a location count that pushes us up to 900. And this is probably the most exciting part that I get to talk about here today with all of you. But I think as you'll see represented here, our plan doesn't stray too much from the discipline that we've taken to date, which is to continue to focus on very targeted openings in specific markets, continue to advance our cluster approach as we go to market, which you've heard us talk about quite a bit and continue to invest in specialty businesses. So let's get a little more color into what that looks like. I think as you study this, you continue to see the same progression forward in an equal balance of general tool and specialty businesses alike. So as we've talked about lots and lots today, our customers demand both from us. But we have to make sure that we invest them in the right types of markets. Over the previous period of time, a great amount of focus was on new markets. There continues to be opportunity for us to grow in those new markets. But the majority of our focus really becomes a part around the partial clustered markets to build those up to where we need them to be and also our current clusters because we have to continue to advance those. Those markets, as we see through our data, are just getting bigger and the opportunity is increasing. The other part of this that I just want to mention is on fleet size. So we throw out a lot of big numbers, you hear Brendan talk about $50 tools and $600,000 generators. It's all part of what we do. So as we plan out this opening dialogue here and how this will go to our plan of adding these locations, it's important to understand that they're not all the same. We have locations in our Flooring Solutions and Climate Control businesses that are about $1,000,000 investment to get the doors open and they do really, really well. Our general tool businesses, some will start fairly small, and they will build over time. But it shouldn't shock anybody that we will have to go make some heavy investment in certain markets to open larger businesses with larger fleets because that is also part of moving the needle. So I think what you see there is, this is not a cookie cutter approach. And remember, what we've talked about here has to also work in markets like DC, and it has to work in markets like New York City, where our go to market plan is detailed and dedicated around what works for that market. All right. So as we talked about general tool and specialty growth, the other thing that I want to point out is we have a plan for each one of these. What you see here is a view from our perspective as we are going to go into a market and expand our general tool business. As we've demonstrated, we are open to both the greenfield path and the bolt on path. So here's quite simply how we look at it. In a smaller market across the U. S. Where we would have a larger share but are looking to grow, more than likely, our path forward will simply be a greenfield. Take, for example, a market like Greensboro, North Carolina, more than likely that will be our option there. But if I draw that in comparison to a market like New York City or LA, where we have smaller share, but it's a massive, massive market, we are certainly looking at the bolt on opportunity as our best path forward, always considering the add on to general tool locations. Okay. So I think that that gives a pretty fair representation to how we're viewing these things and we certainly understand it in all the markets. On the flip side to that though, I'll talk a bit about specialty. Now, we've talked about this some here today and I want to reference some of the images on the slide behind me. Climate control, let's start there, that's a great one. In 2012, through the acquisition of Top Portable Air, we created our own climate control division within Sundal and it did really, really well, continues to do fantastic today. Following that acquisition, we got right at it and adding greenfield locations. A short time later, we added a couple of small bolt ons. So what we've experienced is that we are entirely comfortable and successful in taking either one of those paths forward and that type of business. It will really just depend on what the opportunities out there in the marketplace look like. 2nd on Pump and Power, that's a business that is actually has the award of being the 1st ever Sunbelt Specialty Business and it goes way, way back and it has really been the cornerstone to our specialty business. It's been great for us. But up until a few years ago, we had never acquired any business in the pump and power segment, more than likely because they just didn't look a lot like us. But we've had some great opportunities that have presented themselves, we've done well and we continue to move on as that being an opportunity. But again, we are not forced into either one of those paths forward. The other would be scaffolding. Scaffolding was also a specialty business that we added through an acquisition some time ago. And over a course of time, we have largely grown through organic greenfields. However, we are looking into the future and understanding what type of M and A opportunities might there be on the scaffold side as well. So I have a couple of things up there, Industrial and Flooring Solutions to talk a bit about those. Industrial rental is an interesting one. It is a business that has been very deeply bred into the industrial space for a lot of reasons, one being that these large industrial projects and shutdowns tend to require massive quantities for short periods of time and they're shipped all over the United States. Most contractors have looked at that as a rental solution. And so it's a fairly mature rental business in the industrial side. But if you draw that in comparison to flooring solutions, which we feel at Sunbelt, we have created that market going forward. You've heard us talk a lot about these scrubbers and sweepers. Look, there really is not a rental business today in that space. We feel we are literally creating that on our own. So we're just going to have to do all the heavy lifting ourselves and we're committed to doing that. So in talking about the bolt on opportunities that we have both experienced to date and we see going forward, we feel really good about them. We're very comfortable about the process of working through bolt on acquisitions and successfully integrating them into our business. We have become better by adding some of these businesses and their people to our portfolio and making them part of the Sunbelt team. And as we go forward, we feel very optimistic about the bolt on opportunities. I can tell you that I have personally sat face to face with many, many of these owners and talked and engaged with them to understand why they are selling their rental business, what they think the future of the rental market looks like. And I think consistently I would say that they see the consolidation happening into the future. They also see us as a great partner in the future for their businesses. And we see a great pipeline of opportunity in that part of our growth plan. So it's one we're entirely comfortable with. But enough hearing from me, I would like you to hear it from some of these owners and share their thoughts with you. Thank you. Business since the early days has stayed the same in terms of the focus on the customer and just good old fashioned customer service. At the end of the day, that's what matters most. What's really changed is the sheer size of it, the number of competitors that are in it, the level of sophistication that's necessary to service customers and really the level of expectation from the customers as to what a rental company should and could be for them is really advanced. My old rental company built itself on a positive relationship with the customer. Sunbelt was absolutely the best fit for Theros equipment to become part of because of their same attention to those fine details around small customers as well as large customers. It's led by an excellent management team that is hands on that wants to know what's going on at the most base level. My rental business as it used to exist is a supercharged version with Sunbelt. I'm able to do so much more and give so much more to the same customer base that followed us over here. And my value relationship with just about every customer we have has gone to the next level. Since we started our business in 2006, the rental market has really grown quite a bit in the temporary power market. When it was our own business, it was very tough for us to get a vendor to listen to us, trying to design, specially design certain pieces of equipment. We weren't buying enough. But as we became Sunbelt, they obviously the purchase in power, we can go out and work with their engineers to design a piece of equipment specifically for our needs. And the amount of fleet is just incredible. The ability to move fleet around as required, it is much easier to compete since we joined Sunbelt. We took really their processes, their procedures, and we really ran with them. The command center win, MSP, these are all very, very effective tools that we never had as a small business. Right now, it's just a click of a mouse and send a quick email and we can get a lot of things done. It really took a lot of time before. Sunbelt Rentals is really a large company with a small company feel. They're going to give you advice, but at the end of the day, they allow you to make the decisions that you need to run your business. It really allows you to control your own destiny. Selling your company is a hard decision. It takes a lot of proper planning. And one of the reasons we went into it, we looked at where the market was, where the market was growing, how we could compete in that market. Customers are looking for better ways of renting equipment, quicker ways of renting equipment, different ways of renting equipment. As a younger generation grows up and with the technology, a company like Sunbelt Rentals grows as fast as the customers are growing. Us as an independent couldn't keep up with that. We were approached by other consolidators, but Sunbelt Rentals for myself as well as my employees was the best fit. It has been 3.5 years since we were acquired by Sunbelt. We still retain over 95% of our current employees. Being on the Sunbelt Rentals team, has expanded our market tremendously, growing from $11,000,000 worth of fleet to having over $200,000,000 available within 75 miles, it just brought us up to the top. Brad's been going through there is we now have a very flexible two path approach to our growth. We can do greenfields and we can do bolt ons, but absolutely central to how we now look at markets is understanding a cluster. And we've just got to understand it a lot better. We've got to understand it better because we've done more and we've done different things. Last guy on the video there, Mark Lancourt, we purchased a business from him, as he said, 3.5 years ago. He had 2 locations. And historically, it was a business we would have shied away from. What we typically like is relatively small, broad general tool locations. What Mark had was big area locations. But it was a geography where we had no presence whatsoever, again, vast territory where we had no presence whatsoever. So you see the stats there, which came up at the end. We bought Mark's 2 businesses, which had about $11,000,000 of fleet 3.5 years later, purely by greenfield. We have 12 locations and $120,000,000 worth of fleet. That $120,000,000 of market share we have taken from somebody else. Because what we discovered was that actually some of those big, more narrower product categories aren't so bad. They're aren't so bad as long as you mix them up with our model too. And we were perhaps a little bit too wedded to our model. And we got to understand there is a range of models. And what we think this is what makes us different. We have 1 or 2 large competitors who are really, really good at big narrow range products. And they're really, really good at and it's the best way to serve bigger cans, big national customers, because you can just move so much quantity through it. But what you also want to have in your cluster is some of those smaller general tool locations too, because you still want to be able to satisfy that very profitable mid- to small sized contractor. And we've got a bunch of small competitors who are actually very, very good at those smaller general tool locations. But what we also have within our clusters is our specialty offering. If you remember back to the customer video earlier, that specialty product is what really differentiates us and people like it. It opens up new markets to us and it gives us a one stop shop to our other customers. Look, people in this industry, look, if you ask anybody in any market, they're going to say they're interested in price and they're not. As Brendan said, we are a small proportion of their product cost. They want availability, reliability and ease. And large locations, small locations mixed with specialty locations is what gives you that opportunity. Let me try and get into this in a little more detail by looking at a very specific cluster. And that's the we keep using it all the way through is the Baltimore and Washington, D. C. Cluster. It's a good cluster to use as an example for two reasons. First and foremost, within this cluster is a location where a young sales rep called Brendan Hogan started his 1st day at work. The profit center manager there is still the same profit center manager some 20 years later, who was the profit center manager when Brendan joined. And he loves to tell you stories about the early days of Brendan Horgan's career and how his first day at work he spent it in the wash bay washing equipment. The other reason is the young gentleman who we took out and said, hey, you're the business development department all by yourself, Not so long ago, Brad was actually the district manager in this territory too. So if you get any questions about the cluster in the Baltimore and D. C. Area, I am well covered in terms of experience. It's also a very good market as an example, because the first guy in the video of the people who sold his business, we bought that business about 18 months ago. In fact, when we were some of us were together in Miami last year, we were literally about to sign the deal. And we sort of agonized about this deal because it was in this Washington, Baltimore cluster. 18 months ago, we would have told you we were fully penetrated in Baltimore and Washington. And Joel had 4 locations. And if you go to this, this is his locations, right, you can see our locations across the street from his locations. And the question was, and Brett and I discussed this for hours, were we just going to be over penetrated? Was it going to be 2 were we just going to overlap? Or would 1 plus 1 truly equal to? And what we found because of the different product mix and the different customer mix, he had a very, very large, small contractor customer base that 1 plus 1 actually equaled 3. And the growth from us having that extra penetration, being able to serve our customers allowed us to further grow the cluster. And therefore, we are taking those learnings of big anchor locations like Milwaukee High Lift and the smaller locations and doing bolt ons and getting deeper penetration like the Ferros rentals. And we're redefining what a cluster looks like. And you can see why we might like a cluster. I mean, look at this cluster here. We've got 299,000,000 dollars of fleet in this market. We've got 12% market share, and we're delivering 44% EBITDA, and we're delivering 31% ROI. What's not to like about Baltimore and Washington DC? But let's get a bit more granular and let's look at some of those 31 locations that we have in that DC. And let's see how they look in terms of but they're different locations with different characteristics. So their difference is important. But what is equally important is not so much their difference, but how they interact for the cluster as a whole to deliver the sort of returns that we like to see. So let's start with what I was talking about earlier, one of these like large anchor locations, a large general 2 location. We got a location there called Laurel. It opened in the early '90s. So it's a really well established business with a deep understanding of its customer base and the market that it serves. We've got $40,000,000 of fleet, $21,000,000 of rental revenue. So the mathematicians amongst you can work out, we've got about a 50% dollar utilization in that particular location. And it's $40,000,000 for us is a big fleet. That is one of our larger locations. Let's contrast that with Parkville. Parkville has only got $6,000,000 of fleet. It was also opened in the '90s. So it's not like this is a brand new greenfield. This is again a well established PC that really understands its market and is deeply embedded in its community. It's got $6,000,000 of fleet and it's generating $4,000,000 of revenue. Again, you can work out that's about a 66% utilization, a really good business generating very, very good returns. Now the question is, why have a 40, why have a 6, why have the different dollar utilizations? And this is how the interaction of different sized depots can provide the overall cluster opportunity, not only from a service to customer, but from a financial perspective too. And then hopefully trying to explain this, we might also be able to get across this kind of like mystique, which we never seem to get across in the financial presentations is what's the difference between yield and rate and what difference does mix appear. So I'm hoping this one specific example between these two locations and this one product may help. I doubt it, but we shall try. So let's look at those two locations. And let's pick a rough terrain forklift. As Brendan said, an 80% rental penetrated product, we have a lot in our fleet, dollars 1,000,000,000 worth of rough terrain forklifts we have in our fleet. So it's not like it's a product we don't know a little bit about. Now Laurel has 99 units. Parkville has 12. We decided to add this slide in 2 days ago, so all of this information is really good. We went under the system and dragged out the information. So we looked at examples of live contracts as of 2 days ago. We picked a typical contract from Laurel, a major commercial project. It's actually a project called The Wharf, which is on the Pontiac River in D. C. It is a 50 acre, Brad, 50 acre riverfront development in D. C. If anytime you go to D. C. In Baltimore and you drive between the 2 drive between the 2 airports, it is one big construction site. I mean, it is the most incredible area you've ever seen. Now that project, we've got 100 pieces of equipment on that one project, okay? But this particular customer, we have 4 units. And those 4 units are going to be out on rent for a very long period of time, many, many months. We don't even really know yet how many months they'll be on rent, but it will be multiple months. Now, if you go up to the regional rate guide on the top left there, that product is going out at somewhere towards the flow rate of our monthly rates. So it's going out pretty much towards that $2,390 per month. Why? Because it's a big contractor. It's going to be out there for a long period of time. The upside is look at the physical utilization. Now look at Parkville. Typical project there, it was a residential landscaping project. Somebody wanted a forklift for 2 days and they wanted 1. So what price do you think those guys are paying? They're paying pretty much just between the average and the high of the daily rate. So the more longer term projects we get, it has a negative impact on our yield from a mix perspective. However, let's go back a couple of slides. Let's look at the relative EBITAs of the large general tool location, which is 44%, and Parkville, which is 44% as well. They're the same. Why? Because you're giving up yield for longer term rentals in much smaller transactional cost. So from a yield perspective, it kind of all works out. But now let's look at ROI. If you go back to Laurel, Laurel's ROI is 29%, okay? Parkville is 32. So why does Parkfill with the same EBITA have a higher ROI than normal? And the answer is really, really simple. And again, this is where our understanding of how a cluster work has evolved over the last 5 years. Rough Terrain forklifts are about 20% of the fleet in Laurel, and they're only 10% of the fleet in Parcel. Because what we have learned is that if we transfer those big longer term transactional higher rental penetrated products in bigger quantities to bigger locations, we can serve the national accounts better from those single locations. That allows the Parkfields of this world to further invest in a far broader range of the contractors tools products, which Brendan mentioned earlier. So we can put a greater density of the transactional higher ROI products into POG fill. The natural inclination at a time like this is to fill pog fill with telehandlers because the market's great. Any fool can rent a telehandler right now. Look, they're at 85% nationally. What are we, 80% to 85% Trust me, anybody can rent, even in this room, anybody can rent a rough terrain forklift in North America at the moment. So the key is being able to actually, at the April Capital Day, somebody raised a really good point with me. And they said, you know, when you're talking about national accounts, it's kind of got us scared because the last time the likes of Speedy and HSS started talking about national accounts is when it all went to pot. And so we don't like national accounts. And we've talked in the past about the relative benefit of small transactional customers. The key to the cluster and the key to being able to deal with both national accounts and small transactional customers is your ability to have the configuration that meets all kinds of requirements because customers' requirements in a service led industry are very different. I was trying to understand how to explain this as we were preparing for this. And I was thinking about it as I was going home on Monday evening. And look, but I don't do it. My wife occasionally does a big Waitrose shop because it's cost effective and it's easy. At least 2 nights a week, on the way home, next to the underground station, I call into a small Waitrose store because I don't have what I want or I just want something different for that particular easy for that particular evening. I have no doubt that it is more expensive. And if I plan better, it's better to get it delivered by their online delivery service. But I just need a den, and I just want a den, and it's convenient. And that's how you've got to think of our clusters. It's all about availability, reliability and ease. And so to finish off the clusters, we said you have to have the specialty businesses too. In this cluster, we have 2 Pump and Power locations. Maryland Pump and Power, I remember it very, very well. The first ever awards ceremony I participated in with the guys 10 years ago, a guy called Donfer got up, won the profit center of the Manager of the Year award. It was this huge trophy that you could hardly lift. I give it to him and say, congratulations, you must be super, super proud. He said, this is the 5th year running. And so this is a store which always won our profit center of the year for every single metric we've got. Look, it's got a $16,000,000 fleet, dollars 10,000,000 in rental, 42% ROI. We loved it. We loved it so much that we opened another one in the territory. So there's now 2 pump and power locations in that territory. Let's go to climate control. Remember, Brendan's favorite word, I don't know why he has to use all four words, just climate control generally would do as his is his 2 favorite words. There's always he's overcomplicated it. But look at this business. It's got a $4,000,000 fleet size. It's a $4,000,000 fleet size that generates $4,000,000 of revenue. That's 100 percent dollar utilization. This is never going to be a $15,000,000 feet sized business. But look at the ROI, 69%. There is not a city in America that can't have 2, 3 or 4 climate control businesses. So getting the breadth of product, getting the different types of location. So any analysis that says average revenue per store in our business model is a nonsense. We're going to always have this big range of products, okay? Why do we like clusters? We like clusters because they're good in terms of generating availability, reliability and ease, but we also like them because they just do well. So what we're showing here is, look, between 'eleven and 'sixteen, our clustered markets grew on average for same store. So listen, we aren't adjusting for greenfields and boaters, 17% per annum. And we've got typically 10% market share versus 5% market share. Look at the relative EBITDA margins and look at the relative ROIs. There's just a real benefit from clusters. And so Brad's plan, as you saw, focused very, very heavily on clusters. So you got the 3 29 locations you're planning on opening, 262 of them in the next wave are going to be in either existing clusters or partial clusters. But our understanding of what a cluster is has matured over the last 5 years. When we were together as recently as in Miami, our definition of a cluster is anywhere where we had more than 5 stores. But what's become clear is that was utter nonsense. And it's just not enough because it depends on the size of the market. We're just talking about Washington and Baltimore with 31 locations. Okay. So how we've defined clusters now is, if it's a top 25 market, it's 10 or more. And you can see how it's changed as we get to smaller location. So we actually have a lot less clusters than we ever dreamt we had. That's the downside. The plus side is we have significantly more opportunity than we ever thought we had in terms of developing prisoners. And again, you need to look at these different markets. Look, clearly, we're going to target those top 25 markets. As Brad showed you, look, it's 56% of the rental market. Why would you not target that market? So of course, with a mixture of bolt ons and greenfields, we're going to target the top 25. Now the other thing that's different in our view of clusters between now and when we talk to you in Miami is before, we only looked at the top 100 markets. And now we look at the top 200 markets. Now you might think, well, why worry about this extra 100 locations? It's only 10% of the market. Remember Brad's slide from earlier, and the top 25 are growing at 3% through the cycle. And the bottom 100 are only growing at 2%. You're going for a smaller proportion of the market with lower growth, but it's hiding 2 important trends. First trend, remember what Brendan talked about. He talked about the opportunity from municipalities. And the opportunity from some of those small municipalities in terms of structural change is massive. And that's why we are starting to focus on these markets too. The other thing to bear in mind also is that statistic, which Brad gave you, which is 100% accurate, that there's been more growth in the top 25 markets and the bottom 100 markets is a good start, but it's also a misleading start because when you dig into it, because we've done this by zip code, by location, you saw fundamentally more volatility during the cycle in those top 25 markets than you did in those bottom 100 markets. The rate of increase between 2011 and now is actually twice the pace of growth as these top 100 markets. However, the rate of decline between 2,008 2010 was twice the pace of decline as these markets here. So we have built our model for these incremental locations, bearing in mind what's happening at an individual market basis, what behavior the markets exhibited during the cycle and what behavior our individual locations generated through the cycle too, because we just now have this data, which we didn't have before. So we believe that our opportunity to be far more precise and surgical in all growth in locations over the next 5 years is significantly greater than it was 5 years ago. Look, Brad said, we could have thrown a dart at a map 5 years ago, and it was probably somewhere where we needed a location. But those days, unfortunately, are behind us. Now we think we've got a great plan for growth for 2021. It's a plan which we have rolled out across the whole of the business. In my experience of strategic plans, they go wrong the most when they start with the output and not with the input. And what does that mean? You start off with a financial plan and think I want to get there financially and then you work backwards. In my experience, they're nonsense. They never, ever, ever work. This plan is very, very much based on inputs. And those inputs are what we've discussed today. The market is good. We see real opportunity broaden our exposure. We see further opportunity from rental penetration and we see further opportunity from consolidation. So I think the absolute foundations are fantastic. However, there's various things you have to consider when you do a strategic plan. Will the market bear it? Will your balance sheet bear it and will your operation bear it. And we have been very cautious to grow at a pace where, as you know, we've maintained high drop through and we've been able to maintain that growth whilst retaining the identity of Sunbelt Rentals. And that's a really important part of our 2021 plan. We're going to come on to the financial outputs in a moment, but in terms of the inputs, that culture piece is very, very important. I just want to hand back to Brendan for a moment to talk through more of that important culture input into our 2021 plan. Thanks again. I think it's been documented well our success over the last several years and it's something that we're extraordinarily proud of, but it's also something that we take very seriously. And when we look back at what we did well and how we go to shape our future plan, the execution of this 2021 plan, we've got to really make sure that we understand that. And part of that was actually the communication within our organization. And if you think about it, I mean there's really 2 things here. There are the physical elements and then there are the very specific financial elements. And the physical elements for us as a business from an execution standpoint, I mean rest assured when we set ourselves out to open those locations which Brad has outlined, we will open those locations. But if we look back from 2021 through the years that we will have spent during that time and we say were we successful, we actually believe as a company that a very big part of that is that we are a bit different and it is our culture that is a very prevailing, very driving aspect or part of that. And when we think about that, we can't forget. Yes, we have these plans, but Brad talked about tools that go all the way to the sales territory level. In our business, we really do promote more of a bottom up sort of design. So these numbers that we have, keep in mind the architects of this will very much be our profit center managers, our district managers and our regional managers as the ones that are driving it because they are closest to the actual business, they're closest to the actual customer and they're closest to our communities. So with that part, we have to think about, I think about now back to that slide that I said was a bit of a collage, how what we've become and indeed we are, we've become a large company and we have large scale potential to service our customers. But you think about what Patrick Manning said, he's one of the previous owners, now he's part of our team. He said, hey, this is a big company, but it has a small company feel. And keep in mind who that came from, that came from a previous small business owner, but that owner or that manager today still very much feels that way. When we think about the 10,000 employees we have today, when we're thinking about the 2021 plan, we think about the 15,000 or so employees we will have then and the 4,000 drivers that we will have at that point in time in our business and our ability to actually make this plan one that everyone has bought into and one that everyone celebrates in order to execute the way that we want. So keep in mind, we've done a lot of this today, but a lot of this we've also been rolling out throughout our organization. So when Jeff and I travel around market by market by market, we do and we do these town halls and we roll this out if you will to our employees, we show them some videos. As you can tell by today, we like our videos. I'm going to show you one more. But keep in mind, this video is really built for our team, our people to make sure that we are reinforcing who we are today and make sure that we don't lose that when we set our sights on the future. The future starts today Because owning the future, where things get planned and built, where cities rise, where industries thrive and communities prosper begins now. And it belongs to those who know where to turn when challenges arise, who make things happen, make the obstacles disappear, and get things done. The day starts with a core belief that you're empowered. That's why you're here for the planned, for the unplanned, for business leaders, for industries, for the community. Because Sunbelt Rentals is part of the fabric of the community, Communities where we live, where we work, where we play. At Sunbelt Rentals, it's a simple idea that unleashes amazing power. And with each one of us who helps bring solutions to our customers, the power grows from a single location to more than 600 across North America. As it grows, so does the range of equipment and tool solutions for nearly any application. And so does our expertise, as customers across industries and markets turn to us for robust solutions. So we're ready for more, ready for anything, but most important, ready for whatever is needed. This bold new way of doing and building and creating that thrives on speed and is charged by technology, but driven by you. We're on the move and our success is evident. Our business has doubled in size over the last 5 years and we are not done yet. We've set our sights on doubling again with an aggressive plan of continued growth, leading the way in innovation, service and opportunity. We will invest in existing branches to meet our customers' growing demands for product and service availability. We will add new locations through our greenfield strategy, strengthening existing market coverage and entering new markets to bolster reliability in underdeveloped areas. We will accelerate targeted market growth with bolt on acquisitions of proven businesses led by skilled, passionate people. This will broaden our product range, strengthen our specialty solutions and pave the way to serving our customers' many needs, So our customers can do more and depend more on a rental partner who has the agility the future will require. And we have one more advantage. We have each other. I'm on the ground and I make things happen. I'm empowered to make the right decisions for our customers. Today, that's rare. I'm with the customer every step of the way. I can make decisions that better serve their business no matter what. My priorities are my people and my customers. We're the ones who can move a job from need to get it done to done. It's a vision built on providing uncommon responsiveness, no matter where, no matter what. On supporting our customers with solutions that bring value to any project, on making the hard things easier and having the vision to anticipate and exceed the needs of everyone we serve. That's the future. A future of equipping customers for success. A future we'll own, beginning today. So as Brendan says, we are rolling out this program across the country. A number of you have been to our locations. A common comment we get whenever anybody visits one of our locations is just how on message everybody is. It's because we spend an awful lot of time making sure people are on message. And it's simple to do because we our business model is remarkably simple. Our strategy is remarkably simple. But because of that, I couldn't be more confident in sharing the output of our strategic look, which is some of the numbers because if any team is going to deliver it, it is certainly this team. So what we've done here is broken out how we see a growth plan to 2021, broken it down in kind of the ways we look at it because we think it's sensible buckets of location. So we start with our mature locations. The ones we opened up in 2011, there's 310 of them. Then look at the 2 36 openings that we have done between 'eleven and 'sixteen and the 329 that we are planning to open. We've got all conservative on us. We have been growing at 2x the pace of the market. We think that our mature stores will continue to grow at a minimum of around 1.5 times the pace of the market. We think we have sufficient competitive advantage to continue to do that in our existing stores. We think we will see a similar pace of growth in the recent openings, and we anticipate the evolution of revenue from the stores we opened in the next 5 years will look not dissimilar to the evolution in revenue from the stores we've opened over the course of the last 5 years. In terms of EBIT evolution, we see some exciting opportunity there. We fully expect the mature stores to peak 39%. We showed you a cluster just recently where it was 44%. As all of those stores continue to mature, as we leverage scale, as we drive technology, we expect a marginal improvement in the EBITDA of those stores. The recent openings will mature. They will get a broader customer base. They will get a broader product offering. They will be supported better by the growth in our clusters. Therefore, we would expect those recent openings to evolve towards where the mature stores currently are. We think that's a natural evolution and we shared some numbers with you in the past, which says that is a that's a logical progression. And we would expect our future openings to again evolve from a margin perspective in a not dissimilar fashion to what we have experienced over the course of the last 5 years. So we see a real opportunity for both revenue growth and margin enhancement. Now if you do the math, and I'm sure someone's already done it, you're kind of at around about 10% per annum compound annual growth, which takes me all the way back to 2011 when I said the beginning of that 5 year plan, we would do 10% compound annual growth for the next 5 years. And that's basically what we're seeing again. Now if that proves to be true and if we're broadly correct, look at the cash, think about the cash. We have told you many, many times before that we can fund 15% revenue growth whilst keeping debt flat. So if we if compound annual growth happens to be 10%, 11%, 12%, whatever the number is, percent growth, then we are going to be generating a huge amount of cash. Now remember what we said about capital allocation priorities at the year end. Clearly, if the market is stronger, we will absolutely invest more in our mature stores. We will invest more in organic fleet growth. We clearly have the capability, and we now believe we have the confidence and expertise to accelerate the pace at which we do bolt on acquisitions. And we and so we have both the financial capability to do that. If the market is such that we decide there are the returns from organic investment or indeed bolt on acquisitions, we will absolutely have cash to again look at returns to shareholders. And so we will look continue to have a progressive dividend policy, which we think is important, but we will also look to continue to buy back shares because we believe remaining in our leverage range of around 1.5 to 2 times leverage is a sensible point, given the strength of our balance sheet and the scale of the liquid assets we have on the other side of the balance sheet in the sense of our fleet. So whatever the growth here is, we believe we can supplement that in terms of EPS growth, as I said, either by further investment in the business or potentially returns to shareholders. So we think it's a simple plan. Guys have said it many, many times, it's a bottom up plan, and we think it works. So to summarize, look, we said this so many times, it's all about the structural change. We think we have a competitive advantage. Increasingly scale and technology make a difference. People buy bundles of products. People don't buy individual products. The guys who will use our app here will want that equipment immediately. So they aren't going to use it to shop around. They're going to use it to get quick access to a bundle of products very, very quickly. And we think we can continue to differentiate ourselves as we have done over the last 5 years. So that's it from us. So we will move over now to the Q and A section. Oh, it was the interesting bit. And especially now we've got Brendan's mom and dad, my mom and dad and probably everybody else is watching. Please, if you could just say your name and organization before you ask a question. I think, bearing in mind, he asked about 3 hours ago. We should allow the first question down here. And I'll pass the question on to the guys who are best able to answer it. Andrew Nussey from Peel Hunt. Just hopping back to the command center and then moving into the cart, is the pricing that the customer then sees, is that dynamic? Or is it based on an existing schedule of rates that he might have? John, why don't you come up? I guess we'll all end up here eventually. No, that's a great question. Pricing is absolutely dynamic and it is also very much market based. So we have over 50 dynamic pricing markets all across the country. And we review that pricing on a very consistent basis and update it with market trends, utilizations and availabilities by product. So it's a very sophisticated system that we go through to do that. Back to the bottom up approach though, we send a lot of data out to the field and we let the field make those decisions in around what those rates should be. But for certain managed accounts, there will be set rates. There will be pre agreed rates and it will be their rates. When they go in the command center, they'll see their rates. If you're not managed account, then you will move into the you log in, you get a dynamic pricing model. That's right. And just on those technology apps, does A Plant have something similar? Are they doing something similar? Yes, very, very similar. In fact, our next Investor Day is going to be here in London where we're going to go through the A Plant 2021 plan, and we can share with you some of their technology too. We'll pass it to this one here, who's closest. Great. Thank you. David Phillips from Redburn. Could I I think, Brendan, you said 1500 head 15,000 headcounts by 2021. So you got 50% branch increase and a 50% headcount increase. Would you not expect to get a bit leverage there and see the drop through get better on that? Yes, I would. I just threw out a number to be completely honest with you. So we have built out the roadmap of the size and the general makeup of the businesses. We are not as far as to say what exactly our headcount. We will look, if you look at our track record in terms of fall through, we expect that to continue. So certainly we wouldn't add pound for pound. That's positive. Like Brad has got it by like dollar, by location, by people. Look, we're trying to send a message to the organization, which is, hey, guys, there have to be various work streams flow from this. HR department get you around the fact that there might be 5,000 more people. It doesn't we're not trying to say it's 3,326. It really won't generate fleet department. You've got a fleet department of $6,000,000,000 right now. It's probably going to be a $10,000,000,000 fleet. Suppliers get your mind around the fact that we're going to own a fleet of $10,000,000,000 That means our replacement expenditure is likely to be in excess of $1,000,000,000 every single year. What are you going to do to support us? So this plan has very work streams going out, but so it wasn't meant to be the detailed financial model there. And 3.29 new branches in the future over a 5 year period, and the targeted revenue is anywhere maximum $1,000,000,000 So give or take, $3,000,000 in about $1,000,000 per location. Now that's a bit lower than what you've been doing in the ramp ups. I'm not sure. I know, I think it all depends on the timing and the mix of what size locations they are. But I'm sure that we're very happy to work through the actual detail of the model with you. But it's not it is the same pace. It depends on size of locations and type of locations under the timing thereof. Okay, great. Thank you. Because remember, we've been putting a lot of big anchor stores in brand new geographies recently. And what was a lot of remember, I think it's over 100 locations in specialty, 150 locations in specialty, and a lot of those are climate controlled locations. Sorry, Andrew. Yes, hi. Andy Murphy from Bank of America Merrill Lynch. Just one question. I was very interested in your comment about the municipalities being some of the largest sort of rental operators in the country. I just wonder, I assume you've had the conversation with them and said, look, we can do this better for you, more cost effective, etcetera. I wonder what opportunity that throws up and what they've said when you've had that conversation? Yes. So you said some of the biggest rental operations, some of the biggest equipment owners out there. We've had a number of conversations. Some of those take a bit longer because they have infrastructures, they have sites, etcetera. And it is something that we're seeing some early signs of movement on. But think about how it's going to work, Andy, It's going to work not dissimilar to the U. K. Model. If you look at people like Amy managing sort of like street lighting in Nottingham or cutting grass for TFL, What you really need is a labor owning component of this who will be the middle ground. In some instances, Brendan's right, we will take fleet directly off municipalities. But what we're starting to see, and I'm sure some of you follow Carillon, they're starting to do it more and more in Canada. You're going to see a growth of that service sector outsourcing by municipalities. But for it to really gain significant traction, you're going to need those guys in the middle too. And we're not talking about it all that much. Thank you. Justin Jordan, Jefferies. Sorry if I'm going to sound like I'm pouring cold water in all of this, but I just need to talk about macro and just obviously, you're generating great return on investment. And who knows what the hell is going to happen in November 8, but certainly none of us know what's going to happen over the next 5 years. What could derail these growth plans? And what are the sort of indicators that you would look to that might give you pause for thought or indeed to accelerate this? Because of course, we remain cyclical, and we will continue to look at in terms of the overall investment, particularly in existing locations, we will look at the indicators we've always looked at. We look at GDP growth, Brendan said, so much of our work now is built around the general health of the economy, the entertainment space, the sports space, the maintenance and vacation space. So GDP is an important element of it. Construction remains an important element. We will continue to look at construction employment, and we will continue to look at starts. Our base case thesis, which has been the same for some period of time now, is that we will see long term moderate growth. I think we've been saying that to you for 5 years. The worst thing that could happen, the thing which would spook us the most was massive growth because invariably after that, you start you get a decline and you perhaps attract overly inward investment into the space. What we've got now is this perfect dynamic, in my opinion, which is we've got a good pace of growth, which is giving us a tailwind from the economy, but we don't have enough growth where there is an explosion in either any of the construction sectors or there's a massive influx of capital. There is enough uncertainties in the world to stop that happening. But in the meantime, construction keeps ticking along at around about the same pace as it did, 4%, 5%. We aren't exactly nobody knows precisely what the numbers are until they look back at them historically. But we're ticking along at around that 4%, five percent growth per annum. We expect that to continue because the great thing is we're not having a bubble in anything. And so our base case is that, but we will look at the same general economic indicators. In terms of our greenfield opening program and our bolt ons, I don't think unless we're looking at some kind of financial Armageddon, I don't think it changes our plans very, very much. Look how quickly our existing stores, yes, they went backwards. The moment we hit a downturn, it's not like it's the end of the game. It's a pause in the game. And then we come back out of it again because we just believe in the structural opportunity. So we look at the same economic indicators. We give the details here. Look, the market is just great at the moment. Year to date, these guys are like 13%, 14% up year to date, like up until the end of September. AFAN sits in the back there somewhere, it's up 18% year on year. So the markets are pretty good. Clearly, we're assuming somewhere around 10% compound annual growth. Well, we're going to be way ahead of that in year 1 and 2016. So but we've tried to develop a sensible plan, but the structural opportunity remains through the cycle. It's not a cyclical investment. Just one very quick follow-up, just being very topical for a second. Hurricane Matthew, are we going to see any impact, positive or negative, of that within Q2? Well, you'll see less in Q2 because you kind of get pluses and minuses in the 1st month. Because remember, we closed a bunch of locations for 2 days whilst the storm was coming in, and then we've got a pile of business thereafter. So in the month of October, which is the only impact in Q2, it'll probably about wash its face. That's right. Going forward, it's pretty good. Brendan's got some great videos he can show you in the bar later on his iPhone and some stats. Brendan, do you want to kind of cover Matthew a bit? Good response. We will have ballpark 400, 500 truckloads that we would have sent in outside from outside of the actual markets from what we call our storm center. So we've had that staffed now for over a week. We would have staffed it beginning last Tuesday. We have customers that range from having 1,000 pieces that we have on rent to them today to just a couple of pieces to some of the other sort of customers that we've mentioned. So I mean certainly it is significant. But as Jeff mentioned, I think you'll see a bit of a lag to overnight for 100 telehandlers, roughly in focus that we're talking about. Bearing in mind, we said we're at about 85% utilization. Ask yourself this, who else in the world overnight could find 100 rough terrain forklifts and get them to Florida overnight? That's why we win. It's Emily Roberts from Deutsche Bank. A couple of questions from me, please. So first of all, if we look at the clusters, are there any clusters that have a similar level of rental penetration as the U. K. At the moment? That's a good question. Probably not quite. I mean, it is true. You're absolutely right that the major conurbations but that mean I mean the really central major conurbations have higher rental penetration than everywhere else. But no, I don't think it's I don't I can't think of a market where it's as high as the UK, mainly because there's not there hasn't remember what has inhibited rental penetration in North America. It's not been the desire to rent, it's been the quality of the rental company. And still, we look at those markets and your ability to service downtown Manhattan, downtown LA, we don't think there's yet the density of and the quantity of fleet available for people to rely on rental to that degree. You're right. When we say we think rental penetration will get to somewhere in the mid-60s, we presume that those major contributions will look like the U. K. There'll be other geographies. We if you remember the map we showed, it showed a light green from Montana and Vermont. Yes, we have no locations there because like what's there? Sorry if you live in Montana and Vermont. But so there is going to be you're absolutely spot on. There will be a range of density, but we're not quite there yet. And now that you've done a lot of the heavy lifting in terms of making rental a much more attractive prospect for your customers, is there a chance that over the next 5 years, the market changes with perhaps some of the suppliers looking at renting as a more feasible option for them or, I don't know, pay to Yes. Look, again, it's a good question. Look, 10 years ago, there was a guy who held himself out to be the industry expert, a guy called Dan Kaplan. Both Brendan and I have decided when we retire, we're going to do Dan because you just talk nonsense about an industry that changed. And I'll be able to do that in 10 years' time too. So and he said, all the manufacturers are going to buy the rental companies because they want to control the route to market. It kind of doesn't work. If you look at it, Caterpillar tried it here in the UK, they bought Hudens. They then sold Hudens for nothing because it didn't work. And why does it not work? Remember what Brendan put up there, 8,500 classes of equipment. People want to rent a broad range and a broad equipment. The problem is, if you're Caterpillar, you try and sell or rent Caterpillar equipment. What if a Bobcat skid steers better? What if you want somebody wants to rent a telehandler and Caterpillar don't make telehandlers? Do you just say, sorry, you can't have 1? And so I think unless they're going to absolutely buy up all of the infrastructure and be prepared to spend as much money with their competitors buying fleet as they spend with themselves, it strikes me as being a flawed business model. It's worth mentioning, Volvo tried. Yes, Volvo tried also, yes. And they failed. Yes. So Caterpillar and Volvo both tried and both gave it up as a bad job. And the final question is on margins and where they could be in 2021. What do you think is peak maybe same margin? We have given you a good road map to kind of model something out yourself. And everybody, we know you're good at modeling. So we couldn't have got very much more granular other than to give you a number. And we don't know precisely a number, but we think there is clearly further evolution for the reasons that we did. Again, remember, at the year end, we went through that detail of look, our most mature stores now are commonly delivering mid-40s percent EBITA margins. Now we won't get there for all of those all of our locations. It will take us a long time to mature there. But our currently declared margins are being dragged down by all the greenfields and bolt ons. So there's clearly an opportunity. But Thank you very much. Thank you very much. Chris Gallagher, JPMorgan. A couple of questions. The first around the recent openings, I think the average size in 2021 will be about $4,000,000 which is materially smaller than the mature stores are at the minute. Why do you think they'll get to the same or similar market? Yes. Look, again, we spend a lot of time and money looking at this. I mean, heavens above, we have 2 people in from Ernst Chung who we got in as consultants. I hate consultants. But we had so much data that we had to crunch to understand how our markets have performed, how our locations have performed and how our margins had evolved that we just had to get someone in to help us both crunch the data and just in Veritigm. They will tell you from the report that they did that on average, it takes about 3 years for the greenfield to reach a mid storm maturity of margin. And we would expect that to be about the same. However, it differs whether it's a GT or whether it's a specialty, it differs whether it's in a cluster or not in a cluster. And we have built our model based on those assumptions. But in on average, and we said they have validated what we kind of said generally for a while, which was about 3 years. And we're a bit quicker if we do bolt ons and we're slightly less variable in the pace of doing it with greenfields than we are at bolt on. See, I did listen to the presentation. And the second question then, you said what you want the new openings look like in 2021. Can you talk through the priorities as to what you'd look to open 1st in terms of how you focus that in terms of geography and type? Yes. Brad? Sure. Yes, it's a good question. I think that as we built out this plan, it's fairly well balanced, right? So I think we have filled in the major geographic voids today as a company in servicing the customers in the right end markets. So I think what we probably will continue to see is a balanced approach of these new markets. But in these cluster markets that we've talked so much about, that probably is the next priority for us to continue to balance that out with additional general tool locations. And look, our specialty business is built on the foundation of our general tool markets. And so we have to build those out to the right strength as well. So that's really the blend that we'll look for more than anything. Good. Thank you. Thanks. Yes. Hi. It's Josh Puddl from Berenberg. You talked a lot today about your growth plans. Can you tell us how you're thinking about returns and whether you think you can do this either maintaining or perhaps growing returns or if you think returns might take a hit? No. Again, it's a good question. And again, as you'd expect us to do, we have modeled both EBITDA and we've modeled return on investment. I mean, clearly, there will be a drag as you put a large quantity of newer locations in. But as we've said, a lot of the focus is going to be on specialty to where I think we better understand the ability to leverage our GT presence and they are typically higher ROI products. And we are going to overcome this hiccup that we've had over the last 12 to 18 months about the inflation in our replacement cost. The biggest drag on our ROI, look, well, there's 2. 1 is the impact of greenfields, but the other biggest single one has been we've just been replacing so many assets. And the inflation cost because of Tier 4 has been so high. And frankly, whilst rates have been ticking up very gently, they have not been picking up at the pace at which we have been inheriting inflation from Tier four engines. Now as our fleet ages naturally, as our replacement expenditure moderates, there is a natural reduction in the denominator of the ROI calculation. And as a consequence, our ROI will improve. Now are you expecting them to go up through the roof? Probably not. If we could have a business twice the size at a 19% ROI, we'd probably take it. But I do think we will stop the downward trend that we've seen over the last 12 to 18 months. But the biggest impact will be replacement cost. Keep in mind too, I mean, as we're adding locations, we have a lot of maturing locations that are coming behind it. Let's not forget, just last fiscal year, we opened 60 we had 69 locations. So we have that wave of locations which are maturing and reaching that getting closer to that 3 year point as we execute on our plan for our openings in the next 5 years. Look, we're busy with this right now. Brad, how many locations we own to date this year? Well, 40. So we're off and running. Trust me for this one. Steve Wall from Numis. Just in terms of the technology side of things you mentioned, I can see where it's a differentiator certainly from the smaller guys. Just sort of where do you think your competitive advantage is versus say some of the larger peers who might or might not match range or have locations, etcetera? Yes, that's a great question. And kind of like we said earlier, we feel like the way we've been taking the customer data and mining that data and presenting it back to them in a useful form as a clear competitive advantage. It's hard to rent that air compressor package that we talked about without that interaction from another human. So when you're out on the job site trying to get that done, we just made it convenient for you. We'll walk you through all that. That favorites, those recents, those frequent order bundles that we have, we feel are a huge competitive advantage. Also behind that, this was just the mobile version. The desktop version. There's a whole suite of reporting there. It's just in time for the customer, giving them complete transparency to what they've rented, the frequency they've rented it. The fact that make sure this doesn't do that. The fact that what's on rent today, RPOs open and done from an AR perspective, e billing, electronic payment, all those are the forefront of what we're trying to do. We're just trying to make it easy. Like Amazon, right? We said they're delivering same day. Isn't that awesome that you can go on an Amazon site and click and 3 hours later have something show up at your house. That's what our customers want because 73% of time they're ordering today or yesterday a backhoe 30 miles away and we just have to make it easy for them. See the reality is, look, have United got something not dissimilar to this? Yes, of course. Like United got what's called total control, the system inherited from RSC, which is a well accepted tool. So look, we accept that United will ultimately like we're fathers to this week. We think our child is prettier than somebody else's child. I'm sure they would give an alternative view. The key is 70% to 80% of the market will not have this. So you're absolutely right. There will be others who will copy this. At some point in time, a greater proportion of people will copy exactly what we've got, but we will be somewhere else. But yes, look, United have got great and we will copy one another. It's the everybody else. The key to this is that structural consolidation, not whether it's a 0 sum. So the 70% that will never do this, their only customers are the littles in the middles. They do not have the national accounts. They just aren't there for them. So if you think about our technology advantage, forget about it against United and a couple others, it's about those independents and that's the technology advantage that we have such a far and away head start on, that's the big difference. And that's a pile on. We're seeing all our customers use this. Our big national customers, those are procurement officers who are sitting in an office, they're used to being on a computer all day, they have staff to do this. The littles in the middles, the small and medium sized contractors, they don't have the staff to do this. They're sitting in a job site or in a driveway trying to figure out what their next project is. So they're adopting these tools because they don't have anyone else to delegate to. There's the big adopters, which is would surprise, I think, most. And that works for our customer makeup, to Brendan's point. Hi, yes. One sort of Hello, George. Come on. For the guys on the camera. George, please. Exact. Zoom in. Jeff, we talked in the past about how rental is very much a local business. But as your brand strengthens, you mentioned Amazon. Is there a point at which it becomes less local, you need fewer branches and you can leverage your scale more? Will the contractor always want to go into the branch and play with the compactor? It's a good question. There is no question that our brand identity has moved on enormously. We used to talk about it taking about 18 months for the greenfield to breakeven, and it's now about 6 months. 5 months. It's down to 5 months now. And what we find, I told you it was good at detail. What you find at that point in time is I'm not going to stay steady, how much is existing customers? Pardon me? How much of after 5 months, when it break even, what proportion of our revenue is from customers who deal with us elsewhere? 87%. 87% of the business is someone who knows Sunbelt. It's kind of like they open up a new Itsu or Starbucks and you go in because you know exactly what you're going to get. And that and that's what I think the brand identity is important, but we need that density. You really do. It's we're moving heavy bits of equipment. People want them quickly. We they order typically in bundles. It is a bit of a supermarket model. We are going to have to have a mixture. So we will do more from bigger out of town stores that are the big distribution centers for the big national accounts. And they will become a bigger proportion of our business, and they will have the more technology will have its scale. But again, I come back to my metro supermarket model. There's still where we're really taking market share at the moment is by having those 2 and then supplementing it with the specialty. But I do think what you'll see is, is we probably get a greater proportion of national accountants, more of it will go through that. It's courses for courses in terms of model. And that's been a big learning for us over the last 5 years. We kind of didn't like the big out of time shopping centers once before, and now we sort of love them if it's got the right fleet and the right customer configuration. And just one market question. A lot of people have been worrying about oil and gas for 18 months. Ever. Well, if that feels like No currency and Deutsche. Deutsche. Is the industry seeing any benefit of the improvement in the rig count? No. Look, it's I think is there more look, it's just it's kind of where it is right now. So there's no I think we're beyond the down. And who knows when there will be something that comes positive from it. So it's just kind of worked its way through. But the improving rig count is not translating to No, yes. But we've as we said remember where we are on where our piece, we talked all about oil and gas in Miami almost 2 years ago. So remember where our piece of oil and gas is. So it's different than some of the others. We have stopped going but we in fairness, we stopped going backwards towards the back end of last year. We have been at a fairly even keel through this fiscal year. I think we're a way off sort of seeing any meaningful recovery. Look, we still like the business. We built a business. We've got a great team running it, and we're there for the long haul. But I think it is a long haul. It's Rory McKenzie from UBS. Just on your pyramid of openings, the last layer would be good to have would be that breaks down, whether top 25 to 51 to 100. So how can you talk about that maybe for us? Or alternatively, if you just give to you by zip code. We have that some competitive advantage here. In fairness, we could give you the names of the leases, the zip codes and where we're going to open them. That would be great. Let's have a look at it, and we'll see how much further we can go. And then with clusters overall, because about pricing, when you have a cluster or higher market share, does that give you a better price in aggregate for that region? Or how would that break down? I mean, overall, our clusters perform better. And one of the key performance metrics would be it's 2 really. It's time utilization and it's rate. In our clusters, we have better time utilization as you would imagine. And by virtue of the range in product and the range in customer base, you get better rate. Okay. And pure like for like rate? Yes. When I talk about less so pure rate. Yes. Look, on a big, big contract like the war. That's different. But that's the blend. Yes. Then that big contract site, the rate the pure rate on that contract won't look that similar to a big contract site in Nauticlustre. No, I don't. But what we get is the blend. So our blended yield and our blended dollar utilization is materially better. But no, that would be great if that was true, but it's not. And then one on the rental penetration increase. So you see all the big ugly stuff in rental penetration in the past 20 years, you said. Now you're looking at all these small items like saws and compactors. How fast can that actually grow? And how many saws do you keep renting? Because the whole industry grew by this 8% within your growth as the deep penetration. Is that not going to get much more or will it slow down as you focus on the small end of kit? No, look, whilst there is I think Brendan covered it pretty well. We don't see big growth in rental penetration in things, for example, we talked a lot today about telehandlers, Roughtree and Forklift. That doesn't say we don't see growth, and I don't just mean cyclical growth. What we're seeing with telehandlers is just a broader range of applications. Like what you need to understand is, as product has developed, people are just adopting it and using it more for a whole broader range of things. So we still see growth. We never called it ugly stuff. We just called it higher rental penetrated, lower dollar utilization stuff. But one of the big initiatives we have had over the last 12 months is to invest in those contracted tools. There is no point rolling out the ToolFlex program unless you've got the stuff you can't say to everybody, hey, try rental for the first time and not have the stuff. And our physical utilization, as a consequence, has suffered because of that, but it's the right thing to do. There will come a point in time when we can run at much higher physical utilization than we do today, and there will become a point in time where we can run with an older fleet than we have today, both of which will significantly improve our return on investment. And if there was not for the structural opportunity, we would do that today. We deliberately take a decision that, look, given the people will rent if we give them a good service. Some people are trying rental for the first time or they're trying us for the first time. We just want it to be great because we then get an annuity from that customer. As Brendan said, they're super, super sticky customers. So how much do we invest in contractor tools for the ToolFlex program? Every location would have had an original package that would have been about $300,000 So we did 600 times $300,000 Like on day 1, when we put that stuff in, the physical utilization was 0%. That's the right thing to do. If you want to look, you can't talk about structural shift and manage the business like a purely cyclical business. You have to invest in the technology. You have to invest in the fleet. You have to invest in the footprint, which is why we will continue to do so. Rajesh Kumar from HSBC. Just looking at Slide 55, where you've given the growth profile. You just explained that 3 29 stores, 0.8 to 1 is a function of how the greenfield phases in, in terms of time growth. And you later said that you're looking at about basically 6 months to maturity now earlier. No, you said 6 months to breakeven. Okay. In any case, we can say that it matures quicker than past. Have you assumed that in this analysis or okay? Yes. Look, we have built up the model literally split, which is why we needed some help, split by cluster, non cluster, specialty, non specialty, big store, small store because we have had different growth profiles. It has been a really fascinating exercise. I mean, one of the things which was super fascinating was the data I told you before, which is how differently different markets performed in the downturn. Some of our stores performed remarkably differently in the downturn and some of the and so you our problem is we have to try and give you some broad averages. And yet, there is no such thing as that actual store. There is a range of performance, which averages to that performance. So just trying to understand that profile. When we look at 2018 to 2021, you would have the replacement CapEx from 2012 to 2014. Yes. And you would have all this capital investment programs in these branch expansion. Have you stress tested for cyclical force? We have. As Mark well knows, because he helps us talk about it. Ian Robson, actually, our previous finance I'm delighted to say is in the back here too. Somewhere between the 2 of them, they came up with this terminology called the crash test dummy. And yes, we, of course, have played all of our models through our crash test dummy. The key is our margins and our cash generation when we just decide to stop capital. And that's the key to this is so yes, I absolutely would recommend putting it through all kinds of models with it. Look, we know we're going to end up with that many locations. We believe we're going to have 3% to 5% market growth for the next 5 years. But my guess is as good as yours in terms of the cycle and what economic events may or may not overtake us. So of course, we model those. But whatever those events are, we still believe that coming out the other end of it, we want 900 locations probably going on to 1,000. Therefore, we will keep doing it. Of course, we therefore model that we can financially do it. But it's a good point and I recommend all of you to play with it because what surprises you when you do it is when you stop spending growth CapEx. It just flows. And of course, with such a young fleet age, if you had one terrible year, could you defer replacement expenditure? Of course, you could. You can't do that if you have a very old fleet age. That's why we believe the two tenants of having a strong balance sheet to get through a downturn is not only low leverage, but it's a young fleet age also. And that's why those two things are very important because it does give you that ability because you're right, we're going to face some big, big years of replacement expenditure. The ability to spread those out by having young affiliates is super important. Understood. Also, if you look at the CapEx spend by small medium small players, you mentioned in the last call that's going up in the U. S. And are you seeing any price inflation coming from Tier 4, which small players would be Overall, we're seeing deflation right now, not inflation. We had our Tier 4 inflation like a couple of years ago. Look, now we're benefiting from currency. We have European suppliers who are supplying us equipment. The prices look pretty good right now. There has been a fall in commodity prices like steel that make up a large part of the material cost of most of our equipment. So no, we're actually seeing fairly meaningful deflation in our original cost this year. Part of your question was about our spending and our versus some of our small and midsize competitors. And we have a very meaningful difference in terms of our price versus theirs. The reason why we put the video remember, all those videos are mainly for our staff. Patrick mentioned it. But Patrick mentioned it in the thing that the guys just get blown away by how little we our equipment cost us versus that. It's like the first thing that shocks them. They go, no wonder I can't compete. And we reckon it's around about for some of those guys, around about 20%. That's interesting. And the final one on the Tool Flex product where you're bundling the thing. If that takes off really big time, and it looks like it is, should we expect a bigger gap between time or physical utilization and dollar utilization over a period of next 12 to 18 months? Yes, I mean, no, no, no, no. I mean, look, this is John said we have 2,500 contracts at let's just say $900 a piece if they were all 3. I mean it is not moving the needle yet. That was meant to give you an idea overall. That is one tool, not to tie the 2 of those together, that is one way to market that we believe will overall encourage a shift from ownership to rental in the contract tool space. Over a long time as it gets more meaningful, you're absolutely spot on. Dollar utilization should go up and physical utilization should go down. That is absolutely good. But remember, this is like still very, very new. Brendan and I went, I think, to the very first tailgate at Greensboro in what June was did we go to that? Prop Centre number 2. Yeah, Prop Centre number 2. We're all going to the very last tailgate presentation where we roll this out because it's October. So who wouldn't want to go to Miami? So we're going to Miami again next week to see the very, very, very last tailgate being rolled out. And at that point, we will have educated all of our staff and locations on how to run through a phase. So it is very, very much brand new. But we're super excited by it. Thank you. It's Carl Green from Credit Suisse. Just a couple of questions from me. Firstly, Jeff, you laid out very clearly why the rental penetration statistic is, as you said, a dumb average. I mean, that's pretty clear from what you've said. Do you think the American Rental Association is underestimating some of the penetration changes that the small end of the year. I think so much of it is so hard to do. So yes, Carl, I absolutely agree with you. Look, we quote our market share. There isn't a single person in this room think that's anywhere close to being a statistic. There are so many markets we serve that are not in the denominator of our market share that it's just not fully. And therefore, look, if we say we've got 7% market share, if we look at all of our market, if it's more than 2% or 3%, I will be absolutely stunned. In fact, when Brad does his calculation by district, he strips out all the specialty and non construction revenue. So this we've had to tweak Brad's slides to reconcile back to the data, which is what ARA do, because Brad would have us down to 2% to 3% market share, not 7% market share. And I think exactly the same holds true of rental penetration. They have no concept of all of the applications with the equipment. So they're doing it against just construction data, and that's less than half of the market. So yes, I just think what we have learned over the last 5 years is there's so many more layers to this than we ever really fully understood. Okay. And the second question, which is slightly longer term perhaps for John. I mean, technology has taken quantum leap in the last 5 to 6 years, as you've already mentioned. Could you foresee at any point in the future, maybe in the next 5 to 10 years, there being a price comparison site for construction rental equipment? We've had it we've seen it in auto rentals. Is that just completely inconceivable or something that's potentially down the line? I think it's always possible, but I do think there's a service element to what we do as well. Look, there are some folks out there today that are trying to go to market and play in our sandbox, which is equipment rental, owning no assets. And that's really challenging to do. They're competing against a completely different market than we are. And we feel that over time, those customers will swing back to us because we'll find them. Those are the ones you can't find. But we really feel to be in this market and to have scale and market share you have to have some ownership. You have to live and breathe the business. You have to have the equipment because it's a service driven industry at the end of the day. And that's where we are. You need to have that collage, which Brent had put up. Look, equipment breaks down. It's not like people all want to take an Uber from here to Moorgate, and then their experience is over. They want to rent pieces of equipment that's going to do tough work. It has to be delivered. It has to be picked up. It has to be serviced. Typically, they want to order it in a bundle. So like everything else, like cycles, it's a space we should watch carefully. I think that's perfectly logical. You're right. It's popped up in many industries. Talking and we've talked to ourselves about this. We've talked to our customers about it. We just think rental, that 8,500 categories ordered in bundles, doing so many different applications makes it very difficult to specify in that price comparison website what actually it is you want and what actually the service you is. It's going to have to be like an order form like 3 pages long, which they're then going to have to do. It's not like saying I want a telehandler for the a telehandler. If that's all it was, 1 telehandler, one day, what's the price? It would probably work. But it's just kind of not like that. It's the pack. I guess skid steer, I guess skid steer, how many attachments go on the end of a skid steer? Count. Let's just say 50. Yes. And so what do you want to track skid steer, do you want to wheel skid steer, do you want which attachment do you want on it? Where do you want it delivered on a job site? It's should we watch it? You're absolutely yes, of course, we should watch it. Like, we should watch many other things. But we really can't see it taking getting any traction anytime soon. I'm afraid we'll have one more question. But then, look, we have drinks in this incredible room just around the corner there, which I recommend you all come to, and we will all be available for questions after that. One more, as we mentioned, is crash test dummy. Can we bring it all the way down and let Mark ask a question, please? Yes. Thanks. Mark Haslam with HSBC. I won't ask about questions, just tell me. Just two questions for me. Just on the VDOS system. I mean, when we went down to Miami a year or 2 ago, we saw that up and running there. Yes. I was estimating it at a couple of 100 basis points to your gross margin. But I mean, at that point, it was already going. I mean, are you now is that now rolled out to all of the mature and recently opened Yes, but that's the key. It's like any technology, it evolves. Look, first of all, we're all done. But now we can just do so much. A, more locations do it. And B, we just do so much more. Remember, again, at the year end, I think we kind of tried to go through this, how our margin had evolved in some mature stores. And one of the metrics was the number of trucks compared to the volume growth. What's delivered that is VDOS. Like John said, it's one of the sinful things when you're driving one of the greatest things when you're driving down a highway in America is to say your Sunbelt rental truck with a beautiful green equipment heading down the highway. The worst thing to see is an empty truck on the way back. And Vido solved that. It's in every single location, fully operational. Brad's team cranes on it, day 2, like when new employees are coming in. And I should mention this, I mean, it is intuitive. So frankly, the new men and women who join the team, they learn it pretty quick. And not to pile on, but it has a we treat it as an asset. It has a product owner that lives and breathes it every day. And finally, on ToolFlex, can you give us a feel for what the size revenue is in ToolFlex at the moment? And when I get this, I don't know, but where do you think it could go to in the future? Yes. I mean, well, you can do the math. We've had 2,500 we have plus or minus 2,000 open contracts that do on average $1,000 a month. So where it can go in the future is the is we wouldn't be talking about it today nor would we have invested the time and effort into it if we weren't extraordinarily excited about that space. And that could be something really big for us. And I think, again, we need to wrap up now. This is the key to this, which is the key to what we have discovered over the last 5 years. We have it in our own destiny to create markets and to improve rental penetration. For us to make a difference in an area which has such growth potential as contracted tools, we have to improve availability, reliability and ease. It is down to us. What we have seen is if we put fleet in, if we put technology in, if we put locations in, Brendan's famous saying, build it and they will come. And that's what's happened. And that's what we have to do with that. It's what we have to do for municipalities. We're going to have to invest in it. It's what we're going to have to do for contract. The market doesn't exist. The market didn't really exist for climate control, and it's now $100 plus 1,000,000 business. Well, yes, a little bit more than that. The market didn't exist for flooring solutions, and now it does. But people want to rent. It's just easier to rent. It's a pain in the ass to own equipment. It's expensive and it's difficult. We have to provide the solutions. So on that note, as I said, let's finish off with some drinks over here. But before you go, can you do it? What's it? Yes, because this genuinely is his phone. We just need to do our biggest ever selfie. Everybody say cheese. You're so good at giving technology. Sorry, got a little confused. Stay still. There we go. We shall e mail that to all of you. Thank you very much for your time, and we'll see you for a drink in a few more. Sorry, that's why we're setting it up earlier. Fortunately, that is my wife, and she is here. I could have ended up a lot worse. Thank you.

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