Herc (HRI) investor relations material

Company overview and growth strategy

• Celebrating 60 years in the equipment rental industry, with over 10,000 employees and 625+ locations across North America.

• Addressable market estimated at $87 billion, with a focus on the secular shift from ownership to rental.

• Growth driven by fleet investments, greenfield openings, specialty market expansion, and over 50 M&A transactions in 4.5 years.

• Recent acquisition of H&E Equipment Services Inc. added 165 locations, fully integrated into the platform.

• Business model is diversified, with no single customer exceeding 3% of revenue and a focus on top 100 MSAs for recession resilience.

Market conditions and macro trends

• Local markets have stabilized but remain soft, primarily due to high interest rates affecting commercial activity.

• Mega projects and national accounts remain robust, with strong participation and growth in specialty business.

• Strongest activity in regions with less regulation, such as Texas, the Gulf, and Southeast; West Coast lags due to regulatory hurdles.

• Local market growth is expected to follow interest rate cuts, with a 6–18 month lag for project initiation.

• Mega project pipeline is robust for the next 30–36 months and less sensitive to interest rate changes.

M&A integration and synergy realization

• H&E Equipment Services Inc. acquisition increased scale by 30% and expanded specialty fleet opportunities.

• Integration included ERP transition and recapturing customer and employee attrition.

• Revenue synergies realized through cross-selling and expanded product offerings; cost synergies targeted at $125 million over two years, with 50% run rate expected by year-end.

• Capital efficiency improved by leveraging scale and consolidating purchasing, with further benefits expected as integration completes.

• Deleveraging is a priority, with a target to return to a 2–3x leverage ratio by 2027; new M&A and greenfields paused until then.