Sunbelt Rentals Inc. | Europe Off the Call

Research evidence excerpt

Sunbelt Rentals Inc. | Europe Off the Call

UpdateMrevenue. Local non-residential projects remain stable, with management not yet

ready to call an inflection point here. That said, management feels very good about

momentum in the business and is confident in the FY guidance. The Aries deal

contributes ~1% to the rental growth guide for FY27.

Rate progression improved in 4Q. Sunbelt has active dynamic customer pricing in

15 markets, though this remains in the scaling phase. Management highlighted

potential tailwinds from this, but it is early and these are not embedded in guidance.

Rates are stable, with some early green shoots. Management saw some rate

momentum in 4Q vs 3Qand has included some positive rate in guidance.

Aries acquisition. Management is very excited about the addition of a new Specialty

business line, noting this was a clear solution that had been missing from the

portfolio for a number of years. Aries has only 17 locations currently, so there is

room for expansion. Customers are looking for more breadth and expertise, and

management sees Aries as well suited to meet that need; management believes the

business can double over the next few years.

Guidance mix. Management does not guide by segment, but expects strong growth

in Specialty to continue, supported by non-construction and mega projects. General

Tool should also grow, but is more exposed to local non-residential activity. Mega

project and national account activity should remain strong, while local non-

residential is expected to remain stable.

Phasing through 2027. Management expects top-line growth to be roughly in line

with the FY guide by quarter. Margin progression should improve towards the back

end of the year as operational excellence initiatives are executed and General Tool