Herc (HRI) Barclays 43rd Annual Industrial Select Conference summary

Strategic positioning and growth

• Operating as a leading equipment rental supplier in North America with 9,600 employees and over 600 locations, targeting an addressable market nearing $90 billion.

• Focused on above-market growth through fleet investment, greenfield expansion, and disciplined M&A, with 54 transactions in five years, including the major H&E acquisition.

• Emphasizing technology leadership and digital platforms to enhance scalability and customer interaction.

• Diversification strategy centers on top 100 metropolitan areas for resilience and market consolidation.

• Integration of H&E accelerated growth plans by 4-5 years, expanding branch network and customer reach.

Integration and synergy realization

• H&E acquisition integration completed rapidly, including IT and sales territory optimization, with full branch optimization expected within 30 days.

• Achieved $35 million in cost synergies in 2025, targeting $125 million in 2026 EBITDA impact.

• Revenue synergy target of $390 million over three years, with $40 million realized in late 2025 and $100-120 million expected in 2026.

• Specialty fleet cross-selling gaining traction among legacy H&E customers, with all specialty locations to be fully operational for peak season.

• Dis-synergies from the acquisition were higher than expected but have been stabilized.

Market environment and outlook

• Rental market remains disciplined with stable supply-demand balance; local markets are regionally bifurcated, with megaprojects driving activity.

• Participation in megaprojects has grown, with a focus on being a primary or secondary supplier; H&E acquisition enhances scale and support for these projects.

• Megaproject economics align with consolidated margin profiles, benefiting from higher time use and specialty solutions.

• Rate environment for 2026 expected to be stable, with potential for utilization improvements in the back half of the year.

• Market competitiveness remains steady, with disciplined behavior among major players and manufacturers.