20 March 2008
There are around 14000 rental companies in Europe alone, so looking at what the world's top 100 are doing only tells you a part of the story. However, it is undeniably the dynamic part: these 100 companies represent around half of all global rental revenues and are at the forefront of developing the rental market worldwide.
At its most basic level, the list tells us that rental companies are growing quickly – the top 100 revenues are up over 20%, with the top 5 increasing by almost a third. This isn't just telling us that revenues are growing, it also illustrates the impact of consolidation. Higher revenues in the top five, for example, reflect Sunbelt's acquisition of NationsRent (and also our decision to consider Ashtead Group as a single entity).
There are also some immediate things to note about the list: the Japanese presence is much greater this year simply because we left out some big companies last year, most notably Kanamoto. There are 12 Japanese companies in the top 100 compared to 5 last year, and these 12 include some interesting names, such as Komatsu and Hitachi, who both have very big rental businesses in their domestic market. They are evidently taking different strategies to rental in different continents.
This influx of Japanese players has big consequences in the list, driving up the ‘threshhold’ revenue figure-the revenues you need to get into the top 100-from €43 million last year to €56 million this. There is no escaping it, you need to be a big rental company to get into the IRN-100.
Other than the Japanese companies, new entrants reflect a wide range of rental company. There is a new party and events entrant-the acquisitive, California-based Classic Party Rentals-and several new crane specialists, including Amquip in the US and Spain's Eurogruas. Consolidation in Norway has meanwhile resulted in the addition of DNE-JJ, scraping in at number 96.
United Rentals, of course, remains the global number one, while RSC drops one place to three because Ashtead Group (A-Plant and Sunbelt) has grown dramatically through the acquisition of NationsRent.
In Europe, Loxam is number one, although it will be closely challenged by Speedy Hire next year following its acquisition of Hewden's tool hire division. The Loxam figures in the survey, however, exclude the €124 million revenue Laho Equipement business. Speedy has risen eight places this year to reach number 8 in the world. (See the separate ERN-50 list of the top 50 renters in Europe, using only those revenues generated in Europe.)
Revenues are going up because fleets are growing, so it's not surprising that capital expenditure on equipment also remains very high. Although there is some debate about how much North American renters will invest this year, there is little doubt that 2006 was a record year for spending: US companies take five of the top 10 positions in the spending table.
The top five spenders together invested €5,1 billion in 2006 (compared to €4,5 billion in 2005), and the top 100 as a whole spent around €6,6 billion, 20% more than in 2005.
Some bottom-50 companies are also spending a lot. Riwal, for example, invested €100, placing it in the top 25 list, even though it is placed number 66 in the top 100. Spain's GAM is 39th in the IRN-100 but was the 19th biggest spender in 2006.
Looking closely at the list you can also identify some fast growing companies. These include Ramirent (#9), Home Depot Rentals (#11), Australia's Emeco (#20), LiebherrMietpartner (#23), HKL (#34), Carrier Rental Systems (formerly Longville Group,45), Boom Logistics (#50) and National Hire (#52). In many cases these companies have grown through acquisitions.
Yet, even if the story is one of growth, there are still very few companies that can genuinely describe themselves as global rental companies. In table 4 we list the top 10 ‘global’ players, where ‘global’ is defined as any company with rental activities in more than one continent, even if these activities are modest in size (such as Coates Hire's UK business).
The leader in this list is Ashtead, followed by Aggreko, Finning (including Hewden) and Coates. It would be fair to describe only Aggreko as a truly global rental business. (How long before Energyst starts to compete on a global basis?) Caterpillar could also lay claim to being global through its dealer-led Cat Rental Stores. Cat dealer renters represent €1,4 billion revenues in the top 100 this year.
So that's the IRN-100 for another year. In the meantime, our thanks to all of these companies and individuals who contributed advice and information. And remember, if you are reading this and think you should be in the list, then let us know.