IRN100 – the €40 billion club

The 2016 edition of the IRN100 – International Rental News’s exclusive ranking of the largest rental companies in the world – has been published in the June issue of IRN.

With combined 2015 revenues of €39.6 billion, the largest 100 rental companies in the world have worked hard to change and expand amid unpredictable global markets.

On a like-for-like basis (stripping out the impact of currency fluctuations between 2014 and 2015), the value of the IRN100 grew 5% year-on-year, with the combined total of the top five companies jumping 13% to reach €12.3 billion at constant exchange rates, and €13.4 billion in real terms.

The vast majority of this growth came from rental companies that generate their revenues in the US - firms which were still enjoying a buoyant environment, at least until the second half when the oil and gas downturn started to bite.

Revenues at the big Japanese rental companies were pretty much flat (after adjusting for currency changes), while in Europe, they were around 4% up year on year for the top 50. Much of this growth will have come through acquisitions and through growing revenues at the largest UK renters.

Headwinds impacting the global rental industry in 2015 included the oil and gas crisis, over-fleeting, and tough competition. Currency volatility also hit individual company results, particularly multinationals trading in many different currencies, as well as the results of this table, which is presented in Euros – see the notes box for the details of the exchange rates used.

Despite this, rental companies capitalised on the growth they could find in construction equipment rental markets as well as other sectors such as events, temporary accommodation and power rentals to grow their revenues.

This year, the top 25 spenders in the table invested €7 billion on their fleets, down 7.9% year-on-year. There are 41 companies headquartered in Europe in this year’s table, up from 39 last year, while there were 35 companies from North America and 10 from Japan – the same as last time.

It was a different story in South America, however, where the commodity price dip and wider instability continued to bite in major economies, notably Brazil – hitting local rental companies hard.

Three companies from South America made it onto this year’s IRN100, down from six in last year’s table, while Solaris Equipamentos E Servicos landed in 110^th position on the near misses table and others (A Geradora Aluguel de Maquinas and Makro Engenharia) dropped out of the ranking entirely.

The big five

But looking back at the top of the ranking; a year of strong growth saw United Rentals cross the €5 billion revenue threshold, maintaining number one position on the IRN100 and showcasing the resilience and flexibility of the business in the face of the oil and gas downturn.

Ashtead – which owns A-Plant in the UK and Sunbelt in North America – followed again in second position with rental revenues totalling €3.2 billion for the 2015 calendar year. It is still a way off from taking the number one spot, but expanded significantly last year both organically and through acquisitions. The company reports its results in Pound Sterling, but the majority of its business (84%) is generated in the US, so its value is eroded somewhat by the strong pound.

Meanwhile, power rental specialist Aggreko also maintained third position in this year’s ranking, despite seeing a 3% drop in revenues thanks to the impact of lower commodity prices and difficult trading conditions.

However, the jostling starts at positions four and five, with Japan’s Aktio rising to fourth place this year, knocking Algeco Scotsman back to fifth place. US-headquartered modular space specialist Algeco reported a 10% drop in revenues year-on-year for 2015, thanks in part to its sale of Brazilian portable accommodation business Eurobras, as well as lower modular rentals in Canada and Asia Pacific.

Conversely, Aktio’s revenues were actually flat year-on-year, but the company benefitted from the conversion from Japanese Yen into Euros – a factor which applies to most of the large Japanese companies.

To read the full article, see the June issue of International Rental News.

The IRN100 Extended Toplist – a more detailed look at this year’s IRN100 survey – will also be available in the coming months from the KHL.com Information Store.

This stand-alone, extended version of the table will not only include data on company revenues, fleet investment and industry consolidation, but also new commentary on each of the companies in the IRN100, as well as extra graphs analysing the trends.

A video featuring editor Helen Wright analysing this year’s table will also be available soon on khl.com