Specialty Rental Rules for Sunbelt Rentals in an Essentially Flat Fiscal Third Quarter

Sunbelt Rentals, including the United States, Canada and the United Kingdom, posted $2.568 billion in its fiscal third quarter of 2025, ended January 31, 2025, compared to $2.658 billion in the fiscal third quarter of 2024, a 3.4-percent decrease. Rental revenue rose from $2.356 billion to $2.381 billion, a 1.1-percent increase. Adjusted EBITDA increased slightly from $1.168 billion to $1.177 billion, a 0.8-percent rise.

For the first nine months of the fiscal year, Sunbelt Rentals revenue reached $8.262 billion compared to $8.231 billion, essentially flat. Rental revenue, however, increased from $7.317 billion to $7.646 billion, a 4.5-percent rise. Adjusted EBITDA increased from $3.752 billion to $3.874 billion, a 3.3-percent jump.

“The group delivered record nine month rental revenue and EBITDA, with growth of 5 percent and 3 percent respectively,” said chief executive Brendan Horgan. “In North America, the strength of mega projects and hurricane response efforts have more than offset the lower activity levels in local commercial construction markets. These local construction markets have been affected by the prolonged higher interest rate environment. However, underlying demand continues to be strong and we expect this segment to recover as interest rates stabilize. Adjusted profit before taxation was $1,698 million (2024 - $1,785 million) with the difference, as expected, a result of lower used equipment sales resulting in gains on sale of $58 million.

“The investments in and expansion of the business over Sunbelt 3.0 and into Sunbelt 4.0 are enabling us to take advantage of the diverse opportunities that we see while maintaining discipline and balance sheet strength that affords us considerable flexibility and optionality. In the period, we invested $2.1 billion in capital across existing locations and greenfields and $56 million on three bolt-ons, adding a total of 54 new locations in North America. We are in a position of strength, with the operational flexibility and financial capacity to take advantage of the ongoing structural growth opportunities we see for the business and enhance returns to shareholders as we follow our Sunbelt 4.0 plan. We expect full year results in line with our previous expectations and the board looks to the future with confidence.”

Breaking down the results by country for the nine-month period, Sunbelt U.S. posted $7.046.5 million in fiscal 2025, compared with $7,072.1 million in the year-ago period, a 3.6-percent decline. Sunbelt Canada posted a gain, $529.6 million compared to $501.3 million a year ago, a 5.6-percent rise. Sunbelt U.S. also posted a gain, from $657.8 million to $686.3 million, a 4.3-percent incline.

Country reports – specialty rises

In the U.S., rental only revenue of $5,203 million (2024: $4,993 million) was 4 percent higher than the prior year, driven by both volume and rate improvement. Organic growth (same-store and greenfields) was 3 percent, while bolt-ons since May 1, 2023 contributed 1 percent of rental only revenue growth.  In the nine months, the General Tool business grew 1 percent, while the Specialty businesses grew 14 percent, demonstrating the benefits of Sunbelt’s strategy of growing its Specialty businesses and broadening its end markets.  Rental revenue increased 4 percent to $6,578 million (2024: $6,337 million). Sunbelt estimates that hurricane response efforts contributed $90 million to $100 million to rental revenue in the period. This hurricane impact, in part, mitigated the weaker local commercial construction market. U.S. total revenue, including new and used equipment, merchandise and consumable sales, was $7,047 million (2024: $7,072 million).  As expected, this reflects a lower level of used equipment sales than last year when the company took advantage of improving fleet deliveries and strong second-hand markets to catch up on deferred disposals.

“We invested in the infrastructure of the business during Sunbelt 3.0 to support the growth of the business now and into the future,” Sunbelt said in its reporting statement. “Our intention is to leverage this infrastructure during Sunbelt 4.0 as we look to improve operating performance. This, combined with our focus on the cost base and lower scaffold erection and dismantling revenue, contributed to U.S. rental revenue drop through to EBITDA of 71 percent for the period.  This resulted in an EBITDA margin of 49.2 percent (2024: 48.0 percent). Lower used equipment sales and weaker second-hand values resulted in lower gains on sales. This, combined with higher depreciation on a larger fleet, contributed to segment profit decreasing by 4 percent to $1,996 million (2024: $2,081 million) with a margin of 28.3 percent (2024: 29.4 percent).    

Canadian rental jumps 16 percent

Canada’s rental only revenue increased 16 percent to C$530 million (2024: C$457 million).  Markets relating to the major part of the Canadian business are performing in a manner similar to the U.S. with volume growth and rate improvement.  In addition, following settlement of the Writers Guild of America and Screen Actors Guild strikes, activity in the Specialty Film & TV business has recovered, although it is below pre-strike levels, which is likely to be the new normal.  Rental revenue increased 16 percent to C$662 million (2024: C$573 million), while total revenue was C$733 million (2024: C$676 million).  

“Our Canadian business continues to develop and invest to expand its network and broaden its markets.  This, combined with the recovery in the Film & TV business, contributed to an EBITDA margin of 44.6 percent (2024: 40.2 percent) and a segment profit of C$139 million (2024: C$106 million) at a margin of 19.0 percent (2024: 15.7 percent),” the company said.

The UK business generated rental-only revenue of £357m, up 2% on the prior year (2024: £350 million).  Rental only revenue growth has been driven by both rate and volume improvement.  Rental revenue increased 4 percent to £461 million (2024: £441 million), while total revenue increased 2 percent to £536 million (2024: £524 million).  

In the U.K., the focus remains on delivering operational efficiency and long-term, sustainable returns in the business.  While we continue to improve rental rates, this remains an area of focus.  The U.K. generated an EBITDA margin of 28.6 percent (2024: 27.9 percent) and a segment profit of £44 million (2024: £41 million) at a margin of 8.1 percent (2024: 7.9 percent).

Sunbelt Rentals is No. 2 on the RER 100.