Herc Holdings unveils new strategic initiatives

Herc Holdings, Bonita Springs, Fla., has created new strategic initiatives to accelerate the company’s rate of growth in both rental revenue and in adjusted EBITDA.

“We are pleased with the progress we have made over the last five years as an independently traded public company and are now shifting into high gear to accelerate our growth and return to shareholders. We have strong momentum and intend to invest in new locations and add to our fleet to enhance our urban density, while improving operating leverage and scale. We intend to increase market share through both organic growth and mergers and acquisitions,” said Larry Silber, president and CEO.

“As we move into the next phase of our journey, we are committing to a capital allocation plan that balances our investment growth options between organic and acquisition growth. We also intend to enhance our returns to shareholders through the establishment of a quarterly dividend. We are well-positioned to execute our strategy and deliver value to all of our stakeholders,” Silber said.

The company outlined new strategic initiatives and set a three-year organic rental revenue goal of 12 to 15 percent compound annual growth from the midpoints of fiscal years 2021 through 2024. It also established an organic adjusted EBITDA goal of 17 to 20 percent on the same basis.

The initiatives include:

• Grow the core: Increase rental equipment capital expenditures at existing locations, while expanding the branch network through new greenfield locations and acquisitions in select markets.
• Expand specialty: Invest in specialty fleet, with a target of 30 percent of total OEC by 2024 and grow the specialty network throughout North America.
• Elevate technology: Enhance the customer experience by enabling mobile solutions and improving fleet utilization tracking and logistics management.
• Integrate ESG: Advance toward newly established 2030 goals for sustainability.
• Allocate capital: Operate against disciplined investment parameters for organic growth, strategic mergers and acquisitions, and dividends.

The company also raised its full-year 2021 adjusted EBITDA guidance range from $840 to $870 million to $870 to $890 million. The net rental equipment capital expenditures guidance is $500 to $550 million in 2021. The adjusted EBITDA guidance for 2022 is $1.05 to $1.15 billion. Net rental equipment capital expenditures guidance is $820 million to $1.12 billion.