Aug. 18, 2021
Rental companies are expanding their fleets as rental rates and fleet utilization rise. Residential and non-residential construction trends are improving.
Fundamentals continue to improve for equipment rental companies as residential and non-residential construction demand rebounds following the pandemic slowdown.
Rental rates and equipment utilization trends are positive, signaling an increased need for more fleet capital expenditures. Some manufacturers are experiencing issues ramping up production, which could impact equipment deliveries in the second half of 2021.
| Company | Outlook | Date |
| Alta Equipment | Positive | 8/12/2021 |
| United Rentals | Positive | 7/28/2021 |
| Herc Rentals | Positive | 7/22/2021 |
| Ashtead | Neutral | 6/15/2021 |
“Our second quarter performance reflects a positive operating environment across the material handling and construction markets we serve. The constrained supply-chain affecting our manufacturing partners has driven demand for higher margin product support offerings and greater rental utilization. Tightened supply has further elevated equipment pricing across the industry and provides unique opportunities to strategically sell rental fleet, satisfy customer demand for equipment, and achieve field population targets traditionally designated for new equipment installs. We believe our performance in the second quarter further validates our ability to adapt quickly and efficiently to a variety of market conditions, which has led to healthy year over year and sequential adjusted EBITDA growth," said Ryan Greenawalt, Chief Executive Officer of Alta.
"The strength of our first half results, coupled with a record backlog in our Construction and Material Handling businesses, position us well to meet our full year growth objectives."
"Customer demand increase each month throughout the second quarter, while new equipment supply constraints persisted and lead times extended for deliveries of new equipment. The supply/demand imbalance is also driving price appreciation of new and used equipment, and increased rental rates."
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"(Our results reflect a) continued recovery across our construction and industrial markets. Looking forward, we remain encouraged by the gains we’ve seen in end-market indicators, including our customers’ sentiment and project visibility. We are raising our guidance to reflect the expected contribution from our recently completed acquisitions, as well as accelerated momentum in our underlying business. Combined, we believe this positions us well to deliver strong growth and returns in the second half of the year," said Matthew Flannery, CEO of United Rentals.
"Our operating environment continues to recover. Our customers are increasingly optimistic about their prospects."
"Customer optimism is a great barometer and the trend that we see in the field support their view. 2021 is a pivotal year for us. It confirms our return to growth, including our 19% rental revenue growth in the second quarter. I'll point to some of the drivers of that growth, starting with geography. The rebound in our end markets continues to be broadly positive with all geographic regions reporting year over year growth in rental revenue."
"I also want to give you some color on project types. There are two takeaways, the diversity of the projects in Q2, and the fact that each region contributed to growth in its own way. The recovery has taken root across geographies and verticals on both coasts, with solid activity and heavy manufacturing, corporate campuses, schools and transmission lines. And this quarter, we're also seeing project starts in power, transit and technology."
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"Our second quarter performance provides momentum for the rest of 2021," said Larry Silber, president and CEO. "Tight supply of new equipment and steady demand from a number of key markets have provided a positive operating environment. Second quarter total revenues were up 33% and adjusted EBITDA increased 39% compared with last year. Adjusted EBITDA margin rose 170 basis points year-over-year to 42.3% in the second quarter, reflecting solid overall performance and excellent growth in our specialty businesses."
"Our strong free cash flow supports our fleet expenditures, greenfield expansion and M&A activity. We are excited to carry our momentum from Q2 into the balance of 2021 for what looks likely to be a record year for Herc Rentals revenues and net income."
"Given the current operating environment, we also decided to invest an additional fleet before the end of the year and have raised our 2021 net fleet capital expenditure guidance by $100 million to $500 million to $550 million. Our year-to-date momentum is expected to drive a year of record performance."
"The current market environment of tight equipment supplies and steady demand, have supported our focus on rate and our team continues to deliver rate lift. We believe we are leading the market as we continue to benefit from our excellent pricing tools and the discipline and professionalism of our sales team. We have got momentum back into our pricing and you can see from our 2019 results, the performance we can deliver in a favorable environment."
"We are clearly in the early stages of the next construction up cycle, with steady demand even before we get into any potential benefit from any future boost to infrastructure spending. Equipment suppliers are tight, with our OEMs struggling to manufacture and deliver new equipment, due to worldwide supply chain bottlenecks."
"There is plenty of demand, in most of our end markets to support growth for the remainder of 2021 and into 2022."
"Our purchasing department continues to excel and has been able to source additional fleet in an incredibly tight market for new equipment. As a result, we're taking up our net rental equipment CapEx guidance to $500 million to $550 million. We are pleased with the performance we have reported for the quarter and are excited about the performance we anticipate over the next couple of years."
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"The current activity levels we are experiencing in the business, which I covered on the previous slide aligns with the positive Dodge momentum index, which is at its highest levels since 2007, and the strong ABI figures. Importantly, we can say the same for our business and non-construction segments, such as MRO, emergency response, and the very early return to live events. There seems to be an abundance of momentum in the markets. As I said a moment ago, these are good conditions," said Brendan Horgan, CEO of Ashtead Group (parent company of Sunbelt Rentals).
"Residential construction, which has been a positive surprise throughout the year, and showing no signs of slowing."
"Our usual and extensive fleet planning exercise carried out last fall and early winter proved more important this year, as the supply constraints are significant, as OEMs work through supply chain and workforce challenges, while ramping back up their production levels."
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