Ashtead Group PLC Q1 2022 Earnings Call (Bondholders) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jed Bruss - Baird Advisors - Analyst : Good morning. Thanks for doing the call. I had a quick question, I guess, on your M&A pipeline. Could you just talk about how active it is and what kind of deals you're looking at? Are they more tuck-in or any large kind of deals going on?

Question: Jed Bruss - Baird Advisors - Analyst : Great. Thanks. And then I guess my last question is so the -- your leverage is a little below your target right now. Is that going to be M&A that drives that kind of back to the lower end of your target?

Question: Joseph Engel - Federated Investors - Analyst : Hey guys, thanks for doing the bondholder call there and good to see your results today for sure. I joined the call a little late, so I apologize if you guys discuss this earlier as well. But just want to talk about the dynamics that you're seeing on the supply side in terms of your raw material inputs and how your supply chain is working through some of the challenges we've talked about and the methods you have to mitigate those factors. And I think to this point, on the demand side, some of the supply chain challenges for other companies really benefits the (inaudible) market. So, that's great, but maybe focusing more on yourself and how you can combat finding the right materials, as well as meeting some of the demand. So, thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 16, 2021 / 3:00PM, AHT.L - Q1 2022 Ashtead Group PLC Earnings Call (Bondholders)

Question: Joseph Engel - Federated Investors - Analyst : Yes, and to your point, the aftermarket is something you mentioned is what I was referencing, so that is good. And then secondly, taking it a step further on, right, you're going to need as much fleet as you have. How do you expect that to impact your borrowings on your ABL given the lower disposal that you described? Now obviously your cash flow will be better in this kind of environment. But does this change the way you think about the use of the ABL? And maybe just talk to me broadly, maybe strategically, how I should think about the borrowings that you have in certain periods of strength. I saw how it was in 2020, so I just want to get a sense of those short-term cash needs in different environments like the one you described.

Question: Joseph Engel - Federated Investors - Analyst : And understood there. And then just like as you're -- taking it a step farther to your longer-term debt stack and how to think about that. Do you guys think about liability management transactions? Obviously you have a lot callable bonds, they're not all due, but those kind of elements of those things. And then also just other sources of funding. I mean, as you move up the credit chain here do you ever think about using commercial paper as a source? Is that cheaper for you guys or potentially something to think about versus the ABL? Or will it always be the ABL on the short-term side? So, I guess just to summarize, other markets for short-term paper or other short-term markets that you may consider? But also, how do you think about the longer dated part of your stack just given your credit profile improving?

Question: Joseph Engel - Federated Investors - Analyst : Perfect. Thanks again, guys. Really appreciate the bondholder call.

Question: Jessica Raymond - American Century Investments - Analyst : Hi, thank you for having the call. I was also interested in the supply chain dynamics, so appreciate the additional color there. I also joined a little bit late, so I don't know if you discussed this earlier in your presentation. But was interested if you could also talk about the inflationary labor costs that you are experiencing. And if you are experiencing any challenges with staffing up your new locations. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 16, 2021 / 3:00PM, AHT.L - Q1 2022 Ashtead Group PLC Earnings Call (Bondholders)