Rohit Talwar - ERA Presentation Oslo - 16 05 12

Driving Future Growth

ERA Convention 2012 – Oslo – May 16th 2012
Rohit Talwar CEO - Fast Future Research
www.fastfuture.com rohit@fastfuture.com
Twitter @fastfuture

Contents
• Presentation p3
• About Fast Future p 57
• Presentation image sources p 66
• Background notes p 71
• Background image sources p 160

‘Future Proofed’ Organisations
Work on 3 Horizons in Parallel

1-12 Months 1-3 Years 4-10+ Years

Operational Drive for Creating the
Excellence Growth Future

Choosing a Future

Markets Capability Mindset and
and and Behaviours
Models Technology

Future Proofing the Business

Markets Mastery Muscle Magic

Message Models Management Mindset

Markets – Growth Poles
2 billion more people in 40 years –
Demographics is Driving Economics

448 739 691 5231
344

1998 4157
729 1030
585

2010 2050 Source : United Nations

Markets - Life Redefined
Lifespans are Increasing
Under 50’s have 90% chance
of living to 100.

Aubrey de Grey suggests we
could live to 500 or 1000

What are the health, housing,
consumption and resource
implications?

What kind of opportunities will
be created?

Adjacent Markets –
Build on your Core Strengths

Markets –
Focus on Growth Industries

Rising Infrastructure Spending
• CIBC projects up to $35
trillion in public works by
2030
• Annual spend:
– North America $180Bn
– Europe $205Bn
– Asia $400Bn
– Africa $10Bn

Green Buildings - $600Bn by 2015

Mastery – Foresight and Insight e.g.
‘Horizon Scanning’ and
Timeline Development by Sector

Mastery -
Service is the ‘Killer App’

Mastery – Data and Technology

New Analytics and a New Knowledge Infrastructure

Convergence and Personalisation

Telephony Connectivity
• Voice • Cellular
• Messaging • Up to 14 bands
• SIM card • WLAN/BT
• Phonebook • GPS
• Ring Tones • NFC
• Security • FM

Data/ Multimedia
Enterprise • Camera 8-16M
• Camcorder
• 100Mbps
• 24M Color Display
• Email
• Memory (160GB)
• IMS
• Multiformat A/V
• Browsing
• HD Video/TV out
• VPN
• Games
• PIM
• Ecommerce
Software (50-100M Tps)
• Protocols • DRM
• Payments
• Middleware
• Applications
• User Interface
• Minimize fragmentation

Mastery – Rapid Innovation e.g. Naspers' New Media Lab
(“Fail fast and cheaply” – Koos Bekker, CEO)

“We are doing research on next-generation technologies
that will influence the ways in which humans interact with
computers, the web and other forms of electronic media”

Research at ‘cutting edge of technological media innovation’ e.g. human-
computer interaction, augmented reality, online gaming, internet television
and semantic text processing

Mastery - New Construction Practices
e.g. Neapo Pre-Fab Apartments

Muscle – Rapid Decision Making

Muscle – Speed of Execution
e.g. Ultra-Quick Construction

Muscle - Eco Materials for Construction
E.g. Meco Brics – 30 Sec construction

Magic – Ideas that Delight
E.g. Virtual Grocery Shopping –
Tesco South Korea

Magic - 3D Printing of Houses
(Contour Crafting)

Message – Engaging the Customer
e.g. Open Innovation

Models - Multiple Streams and Pre-
emptive Solutions

Models –
Access and ‘Usership’ vs. Ownership

Shell – From Asset Ownership to a
Zero Fixed Cost Model

Usership e.g. Movie Digitisation -
Digital Development

Models - Continuous Innovation
E.g. Auctions

£3088 £8791.50 £81

Management – Celebrate Successes

Management -
Make Time and Space for Change

Performance Management - Maximising
Employee Contribution

Supporting lifelong learning - continuous re-
skilling - 61%

Implementing real-time learning / development
solutions - 49%

Improving training / delivery effectiveness - 40%

Management -
Tackling Complexity
• Customer Interface
• Process
• Organisation
• Information /
Systems
• Regulatory
• Human

Mindset - 3 Horizon Thinking

• 12 Months

• 1-3 Years

• 4-10 Years

Mindset –
Broad Scans and Deep Dives

Mindset - Tolerant of Uncertainty

Encourage Experimentation

Mindset –
Curious, Sticky and Magnetic

Conclusions

• New Turbulent Era

• Future is a Journey

• The Door is Open

Fast Future –
Core Services
• Live Events - Speeches, briefings and workshops for executive
management and boards of governments, investment funds, development
agencies , companies, airlines, airports, hotels, venues, CVB’s and
associations
• Future Insights - Customised research on emerging trends, future
scenarios, technologies and new markets
• Immersion - ‘Deep dives’ on future trends, market developments, emerging
issues and technology advances
• Strategy - Development of strategies and business plans
• Innovation - Creation of business models and innovation plans
• Engagement - Consultancy and workshop facilitation

Fast Future
• Research, consulting, speaking, leadership
• 5-20 year horizon - focus on ideas, developments, people,
trends and forces shaping the future
• Clients
– ING, ABN Amro, Laing O’Rourke
– Marks and Spencer
– Airports - Aeroports de Paris / Schiphol Group
– Vancouver Airport Services
– Industry Associations – ICCA, ASAE, PCMA, MPI
– Corporates - GE, Nokia, Pepsi, IBM, Intel, Orange, O2,
Siemens, Samsung, GSK, SAPE&Y, KPMG, Amadeus,
Sabre, Travelport, Travelex, ING, Santander, Barclays,
Citibank, DeutscheBank
– Governments - Dubai, Finland, Nigeria, Singapore, UK, US
– Convention Bureaus – Seoul, Sydney, London, San
Francisco, Toronto, Abu Dhabi, Durban, Athens, Slovenia,
Copenhagen
– Convention Centres – Melbourne,
Adelaide, Qatar, QEIICC
– Hotels - Accor Group, Preferred,
– Intercontinental
– PCO’s - Congrex, Kenes

Hotels 2020 – Objectives
• Identify key drivers of change for
the globally branded hotel sector
over the next decade
• Examine the implications for:
 Hotel strategy
 Brand portfolio
 Business models
 Customer targeting
 Innovation

Convention 2020
• Global strategic foresight study to help the meetings industry prepare for the
decade ahead - Industry-wide sponsors
• Multiple outputs Nov 2009 – December 2011
• Current studies on future strategies for venues and destinations

Rohit Talwar
• Global futurist and founder of Fast Future Research.
• Award winning speaker on future insights and strategic innovation –
addressing leadership audiences in 40 countries on 5 continents
• Author of Designing Your Future
• Profiled by UK’s Independent Newspaper as one of the Top 10 Global Future
Thinkers
• Led futures research, scenario planning and strategic consultancy projects for
clients in telecommunications, technology, pharmaceuticals, banking, travel
and tourism, environment, food and government sectors
• Clients include 3M, BBC, BT, BAe, Bayer, Chloride, DTC De Beers, DHL, EADS,
Electrolux, E&Y, GE, Hoover, Hyundai, IBM, ING, Intel, KPMG, M&S, Nakheel,
Nokia, Nomura, Novartis, OECD, Orange, Panasonic, Pfizer, PwC, Samsung,
Shell, Siemens, Symbian, Yell , numerous international associations and
governments agencies in the US, UK, Finland, Dubai, Nigeria, Saudi Arabia and
Singapore.
• To receive Fast Future’s newsletters please email rohit@fastfuture.com

Designing Your Future
Key Trends, Challenges and Choices
• 50 key trends
• 100 emerging trends
• 10 major patterns of change
• Key challenges and choices for leaders
• Strategic decision making framework
• Scenarios for 2012
• Key futures tools and techniques
• Published August 2008
• Price £49.95 / €54.95/ $69.95
• Email invoice request to rohit@fastfuture.com

Our Services
Bespoke research; Identification &
Analysis of Future Trends, Drivers &
Shocks
Public Speaking, In-Company
Briefings, Seminars and Accelerated Scenario
Workshops Planning, Timelining &
Future Mapping

Personal Futuring for Leaders
and Leadership Teams Expert Consultations &
Futures Think Tanks

Identification of
Design & Facilitation of Opportunities for Innovation
Innovation, Incubation & and Strategic Investment
Venturing Programmes Strategy Creation &
Development of
Implementation
Roadmaps

Example Projects
• Public and private client research e.g. :
– Development of Market Scenarios, emerging trends and strategies for key clients
– Government and OECD Scenario Projects – e.g. Migration 2030, Future of Narcotics, Chemical Sector,
Family 2030
– Scenarios for the global economy for 2030 and the implications for migration
– Designing Your Future (Published August 2008) – book written for the American Society of Association
Executives & The Center for Association Leadership
– Global Economies – e.g. The Future of China – the Path to 2020
– The Shape of Jobs to Come – Emerging Science and Technology Sectors and Careers
– Winning in India and China
– The Future of Human Resources
– Exploiting the Future Potential of Social Media in UK Small to Medium Enterprises
– Convention 2020 – the Future of Business Events
– Future Convention Cities Initiative – Maximising Long-term Economic Impact of Events
– One Step Beyond – Future trends and challenges for the events industry
– Hotels 2020: Beyond Segmentation – Future Hotel Strategies
– The Future of Travel and Tourism in the Middle East – a Vision to 2020
– Future of Travel and Tourism Investment in Saudi Arabia
– Aviation and Airports e.g. Aviation 2030

Presentation Image Sources
Page

1 - http://i.telegraph.co.uk/multimedia/archive/01016/BUSH-BINOCULARS_1016553i.jpg
3 - http://i.thelocalpeople.co.uk/wisdomleaf/zone6/subzone18/9810518/images/9880875.jpg
http://www.midlands-portable-buildings.co.uk/images/lunapic-124764599116333.gif
http://www.kgwings.com/hawkeye/hawkeye05.jpg
4 - http://www.etftrends.com/wp-content/uploads/2011/07/1_fullsize.jpg
http://blog.engglib2.upd.edu.ph/wp-content/uploads/2009/03/newsweek4.jpg
http://www.ft.com/cms/s/0/4b3799e6-5e04-11df-8153-00144feab49a.html#axzz1LCUOTVNv
http://batonrouge.myhomecareblog.com/files/2011/07/active_seniors4.jpg
http://www.imperial-consultants.co.uk/files/biopharmaceuticals.jpg
http://www.nanotechnologyinvesting.us/images/nanotechnology-480.jpg
http://cdn.lightgalleries.net/4bd5ec0d18599/images/Cocoon_05-2.jpg
http://takemetoyourleader.com/wp-content/uploads/2010/10/010101.jpg
http://www.lostateminor.com/wp-content/uploads/2008/04/vertical_farming_1.jpg
5 - http://www.wadefinancial.co.uk/wp-content/uploads/2010/06/5-Big-Questions.jpg
6 - http://www.alltop10list.com/wp-content/uploads/Big-Wave-Surfing.jpg
http://www.iwmsnews.com/wp-content/uploads/2009/05/globe.jpg
http://www.subhub.com/custom/5ways/m3f85a9df.png
http://hotindiancelebrities.com/wp-content/uploads/2008/05/surya-six-pack-abs-gallery-1.jpg
http://upload.wikimedia.org/wikipedia/en/thumb/8/8e/Tata_logo.svg/451px-Tata_logo.svg.png
http://ricotheclownandmagician.com/IMAGES/magic-hat-stars.gif
http://blog.vavia.in/wp-content/uploads/2011/01/leadership.jpg
http://www.successfulaffiliate.com/images/positive-mindset.jpg

7 - http://www.iwmsnews.com/wp-content/uploads/2009/05/globe.jpg
9 - http://www.ted.com/index.php/talks/aubrey_de_grey_says_we_can_avoid_aging.html
10 - http://www.portakabin.co.uk/uploads/content_gallery/content_gallery_left_image_971_6503-2_590x350.jpg
http://i1211.photobucket.com/albums/cc423/horizonplatforms/MaintenancePage.jpg
http://janikingng.com/Image1.jpg
http://www.atmastudy.com/home-LS.html
http://www.swamptrust.org.uk/images/Tents/Big%20Festival%20tent%20from%20swamp%20Circus%202008.jpg
11 - http://teamaltman.com/wp-content/uploads/2010/10/industry-and-data.jpg
http://www.technologylodging.com/wp-content/uploads/2010/05/food-biotechnology.jpg
http://picturesofcar.blogspot.com/2009/07/future-concept-car-pictures.html
12 - http://www.ljlindhurst.com/images/highway.jpg
13 - http://www.topcarpictures.com/wp-content/uploads/2009/07/2009-brabus-tesla-roadster.jpg
http://solar.calfinder.com/blog/wp-content/uploads/2009/05/electric-car-station.jpg
17 - http://www.tensator.com/blog/post/2011/01/31/London-Luton-Airport-Introduces-Two-New-Staff-Members-Holly-and-Graham.aspx
18 - http://i.techrepublic.com.com/blogs/data-explosion.jpg
19 - http://www.reghardware.com/2010/08/11/video_rim_blackberry_torch_9800/
20 - http://www.dexigner.com/news/22673
http://blog.core-ed.net/derekarchives/NokiaFanPhone.jpg
http://www.livetradingnews.com/wp-content/uploads/hp_3d_laptop.jpg
21 - http://www.argophilia.com/news/wp-content/uploads/2011/03/copenhagen-airport-app.jpg
http://www.blogcdn.com/www.engadget.com/media/2012/04/google-augmented-reality-lady.jpg

22 - http://www.cambridgemedialab.com/1%20-%20Copy.jpg
23 - www.psfk.com/2011/09/completely-mobile-prefabricated-apartment-complex-incorporates-advanced-steel-technology.html
24 - http://www.tribuneindia.com/2006/20060920/jplus7.jpg
25 - http://mandatemedia.typepad.com/photos/uncategorized/2007/07/10/coca_cola.jpg
http://somewordsandpictures.files.wordpress.com/2009/06/this-water-innocent.jpg
26 - http://images.gizmag.com/gallery_lrg/arkhotelchangsha.png
27 - http://www.isover.com/var/isover_com/storage/images/media/images/sc-life-cycle/12071-1-fre-FR/SC-life-cycle.jpg
28 - http://www.notcot.org/post/37540/
http://www.mecoconcept.com/en/meco-concept/meco-concept.php
29 - http://www.psfk.com/2012/05/%E2%80%98self-healingconcrete-helps-buildings-look-after-themselves.html
30 - http://images.gizmag.com/gallery_lrg/bricks.jpg
31 - http://www.graphicconcrete.com/images/kuva05.jpg
32 - http://ricotheclownandmagician.com/IMAGES/magic-hat-stars.gif
33 - http://trendshq.com/wp-content/uploads/2011/08/South-Korea-Virtual-Supermarket-on-Subway.jpg
34 - http://www.psfk.com/2012/02/3d-printing-buildings.html
http://www.bitrebels.com/geek/3d-printed-eco-friendly-houses-the-future-is-now/
36 - http://www.subhub.com/custom/5ways/m3f85a9df.pnghttp://www.sybase.jp/detail?id=1056075
37 - http://www.greensharecar.com.au/
wheels.blogs.nytimes.com/2010/10/18/daimlers-car2go-sharing-program-continues-to-expand
38 - http://www.whatinvestment.co.uk/trading/markets/market-updates/1598898/market-update-am-royal-dutch-shell-dips-on-fy-results.thtml
39 - http://gaggio.blogspirit.com/archive/2010/12/27/zilok-peer-to-peer-renting.html

40 - http://www.answers.com/topic/cloud-computing
41 - http://www.reagansdisciple.com/much-better-if-you-download-free-movie-and-watch-at-home.html
http://www.gizmag.com/samsung-movies/11739/
42 - http://assets.sbnation.com/assets/828858/kickstarter-project-goal-800.jpeg
http://www.theverge.com/2011/12/20/2644358/kickstarter-success-product-development-revolution
44 - http://blog.vavia.in/wp-content/uploads/2011/01/leadership.jpg
45 - http://www.theepochtimes.com/n2/images/stories/large/2012/05/05/Chelsea143913225.jpg
46 - http://news.nationalgeographic.com/news/bigphotos/images/090305-daylight-saving-time-facts-history_big.jpg
47 - http://2.bp.blogspot.com/-EJhAZaiyA8E/TfRRHfKzDMI/AAAAAAAAAGo/JmTQLz1z0xc/s320/6a00d8341c65c453ef010536d4981b970c-
800wi.jpg
48 - http://www.rapidchange.com/Portals/0/images/Performance-Management.jpg
http://www.dailyblogtips.com/wp-content/uploads/learning.jpg
49 - http://infolific.com/images/fun/metaphor-for-complexity.gif
50 - http://www.successfulaffiliate.com/images/positive-mindset.jpg
51 - http://www.visualphotos.com/photo/2x4524045/businesswoman_on_ladder_looking_through_binoculars_bld005521.jpg
52 - http://www.codeproject.com/KB/grid/DrawingRadarDisplayWithCS/Radar1.jpg
http://www.realmscuba.com/Logos/Dive%20Course/group%20underwater.jpg
53 - http://2.bp.blogspot.com/_MuWNJtJ8XS4/RwrvXTT4e4I/AAAAAAAABJc/pMnDJx06ZQA/s400/DuaneMichels.Uncertainty88.jpg
http://embunpagi2009.files.wordpress.com/2009/02/seedling1.jpg
54 - http://www.ripleys.com/assets/img/upload/bions/magnet_man.jpg

http://www.iwmsnews.com/wp-content/uploads/2009/05/globe.jpg
http://www.subhub.com/custom/5ways/m3f85a9df.png
http://hotindiancelebrities.com/wp-content/uploads/2008/05/surya-six-pack-abs-gallery-1.jpg
http://upload.wikimedia.org/wikipedia/en/thumb/8/8e/Tata_logo.svg/451px-Tata_logo.svg.png
http://ricotheclownandmagician.com/IMAGES/magic-hat-stars.gif
http://blog.vavia.in/wp-content/uploads/2011/01/leadership.jpg
http://www.successfulaffiliate.com/images/positive-mindset.jpg
56 - http://www.oytun.co.uk/wp-content/themes/mimbo2/images//innovation.jpg
59 - http://www.townhousecompany.com/wmslib/Gallery_Bonham/Bon-Check-In-700x500.jpg

Global Long Term Forecasts
• North America: The ARA Rental Market Monitor™ current five-year forecast calls
for continued annual growth in rental revenue to reach a total of $53.1 billion by
20161.

• Growth of the major rental revenue sectors is forecast as follows:

• Construction and Industrial Equipment Rental revenue will grow 7.6% in 2012 and
81.4.0% by 2016.

• General Tool Rental revenue will grow 6.8% in 2012 and 73.0% by 2016.

• Party & Event Rental revenue will grow 2.5% in 2012 and 17.4% by 20162.

Sources: 1 Mfr Tech, 13/02/12 http://www.mfrtech.com/articles/23672.html ( accessed 10/05/12)
2 Alert Management Systems, 2010 http://www.alert-ims.com/blog/?p=224 ( accessed 10/05/12)

Global Long Term Forecasts
• UK: Although only limited market recovery of around 1-2% is expected for 2012-2013,
marginally more positive growth of around 2-3% is predicted for the period 2014-20151.

• India: The construction equipment rental industry is very small as compared to other Asian
countries, such as China and Japan, but its growth prospects are immensely bright.

• With US$ 1 trillion investment planned in infrastructure development during FY 2013-17,
the construction equipment rental business in India is expected to receive a gigantic boost,
and grow at a CAGR of around 33% by 20152.

Sources: 1 Business Wire,31/08/211 http://www.businesswire.com/news/home/20110831005881/en/Research-Markets-Construction-Equipment-Rental-Market-
Report (accessed 10/05/12)
2 RNCOS, 01/02/2012 http://www.rncos.com/Press_Releases/India-Construction-Equipment-Rental-Biz-set-for-Record-Breaking-Growth.htm (accessed

10/05/12)

‘Rental Attitudes’ Survey
Proportion of the IRN’s survey 800 respondents who will significantly grow
use of rental in next five years
30%
25%
20%
15%
10%
5%
0%

Source: International Rental News, March-April 2012 http://edition.pagesuite-
professional.co.uk/launch.aspx?referral=other&pnum=&refresh=zY0618Qp7Tk0&EID=17a9e557-d0e3-4f67-bc61-2f666fed5b28&skip= ( accessed 30/04/12)

Which factors are important in leading you to rent more?

Western North East/Cen Middle Asia South Australia Central Brazil
Europe America tral East Pacific Asia /NZ & South
Europe America
& Russia
Rental supply has 32% 42% 38% 44% 62% 53% 58% 69% 70%
grown
We save money 36% 63% 75% 57% 68% 70% 59% 55% 68%
by renting
Reduced 50% 62% 76% 57% 66% 75% 75% 59% 74%
management time
for own fleet
Difficult to finance 31% 37% 76% 43% 74% 45% 33% 35% 31%
purchasing own
equipment
Gives flexibility in 60% 72% 87% 72% 78% 70% 75% 67% 57%
uncertain
economic times
Focus of capital 54% 60% 50% 72% 64% 85% 58% 67% 70%
on own business


Proportion of the IRN’s survey 800 respondents who said financial crisis
made it more likely to rent
80%
70%
60%
50%
40%
30%
20%
10%
0%


Proportion of the IRN’s survey 800 respondents willing to pay more for latest
technology machines
80%
70%
60%
50%
40%
30%
20%
10%
0%


Outlook:North America
• ARA and IHS Global Insight forecast North American equipment rental revenue
growth of 6.9 percent in 2012, to reach $33.5 billion (the revenue totals
include construction, industrial, general tool, and party and event — in the United
States and Canada).

• In the US alone, total equipment rental revenue is forecasted to increase by 7 % in
2012 and reach $30.6 billion, more than 3 times the expected GDP growth.

• Demand is driven by the recovery of the construction industry.

• Tight credit availability and uncertain job prospects influence contractors and
construction companies to turn to rental in order to meet equipment need.

• More manufacturers expect to sell a higher percentage of their equipment into the
rental channel in 2012.
Source: Rental Management, 05/03/12:
http://www.rentalmanagementmag.com/Article/tabid/670/articleid/16058/Default.aspx?dnnprintmode=true&mid=1266&SkinSrc=%5BG%5DSkins%2F_defa
ult%2FNo+Skin&ContainerSrc=%5BG%5DContainers%2F_default%2FNo+Container ( accessed 30/04/12)

• National, publically traded equipment rental companies are focusing on expanding rental
into a variety of niche markets as well as industrial equipment rentals.

• Many equipment rental companies, including United Rentals and Greenwich, Conn. say
they are seeing a “secular shift” in North America as customers — including contractors,
construction businesses and homeowners — recognize the advantages of the fixed cost
of renting, which also covers maintenance, storage and delivery.

• Christine Wehrman, ARA’s Executive Vice President and CEO says:

“Equipment rental businesses have a significant opportunity to gain further market
penetration by aggressively selling the value of equipment rental at this point in the
economic recovery.”

Source: Rental Management, 05/03/12
http://www.rentalmanagementmag.com/Article/tabid/670/articleid/16058/Default.aspx?dnnprintmode=true&mid=1266&SkinSrc=%5BG%5DSkins%2F_default%2FNo+
Skin&ContainerSrc=%5BG%5DContainers%2F_default%2FNo+Container ( accessed 30/04/12)

Consolidation on the US Market:

• United Rentals’ has announced plans to acquire RSC Equipment Rental for $1.87
billion, plus $2.3 billion in net debt, creating a mega-firm that is expected to hold
about 15 % of the US rental market. The combined company will be three times the
size of rivals Sunbelt and Hertz.

• Rebecca Mallett of Hoover’s suggest that the merger highlights the consolidation
and increasing competitiveness in the rental industry over the past few years. While
top companies account for half of the industry revenue, local and regional companies
still struggle to compete with giant firms1.

• Murray Pollok, Editor of International Rental News, claims that further consolidation
on the US market is likely, United sketching the picture of the equipment rental
market in decades to come, with a relatively small number of global giant players2.
Sources: 1 Hoover’s, 20/04/12 http://bizmology.hoovers.com/2012/04/20/united-rsc-deal-to-create-rental-giant/ ( accessed 30/04/12)
2 International Rental, January-February 2012 http://www.khl.com/magazines/international-rental-news/pdf-archive/( accessed 27/04/12)

Outlook: Europe
• The combination of tightening government spending and companies with massively
overstretched balance sheets is likely to create difficulties in countries such as
Greece and some of the rest PIIG countries. “Zombie businesses” – dead but still
walking might be unable to reinvest in the business and might gradually reduce in
size and importance over a 5-10 year horizon.

• In other parts of Europe businesses are more likely to undertake a sensible
reinvestment provided that they make a clever choice as for how to use their capital.

• Radical reallocation: repositioning in the market and capital shifts from troubled
regions into the sectors and geographies that are, or can become, clear market
leaders is key to future success.

Source: International Rental, March-April 2012
http://edition.pagesuiteprofessional.co.uk/launch.aspx?referral=other&pnum=&refresh=zY0618Qp7Tk0&EID=17a9e557-d0e3-4f67-bc61-
2f666fed5b28&skip= (accessed 30/04/12)

Outlook: Europe
• Promising future is expected for businesses that have solid balance sheets and a
rational and progressive approach to capital allocation in the right product and
geographies.

• A five-year decline is projected in the number of rental companies owned by private
equity or short-term investors. Get-rich-quick investors are expected to get out and the
‘zombies’ to die1.

• Although Europe is hindered in its attempts to create a pan-European market by
national boundaries and cultural differences, recent deals by Loxam, Kiloutou, Bouls,
Cramo and Ramirent reveal that consolidation is starting up in Europe again2.

Source: 1 International Rental, March-April 2012
http://edition.pagesuiteprofessional.co.uk/launch.aspx?referral=other&pnum=&refresh=zY0618Qp7Tk0&EID=17a9e557-d0e3-4f67-bc61-2f666fed5b28&skip=
(accessed 30/04/12)

Source:2 International Rental, January-February 2012 http://www.khl.com/magazines/international-rental-news/pdf-archive/ (accessed 30/04/12)

Outlook: Russia
• RusRental estimates that the Russian
rental market grew by almost 35% in
2011, reaching an estimated value of
€700 million. It is expected to triple its
size by 2015.

• The rental market is projected to grow at
a faster rate than other sectors of the
Russian economy such as mining,
construction and utilities.

• Growth is expected in Eastern Russia.

Source: International Rental News, 27/04/12: http://www.khl.com/magazines/international-rentalnews/detail/item73241/Russian-rental-market-to-triple-by-2015says-report/ (
accessed 30/04/12)

Outlook: Russia
• Revenues generated by tools and small equipment – on-site equipment, power and
temperature control equipment, portable accommodation, scaffolding, concrete
pumps is predicted to grow from 6% of the total in 2011 to closer to 18% in 2015.
That would mean revenues expanding from around €40 million to more than €370
million in just four years.

• Rental in Russia is currently dominated by lifting equipment (cranes and aerial
platforms) and large construction machines. High growth of smaller equipment is
expected as contractors progressively switched to rental.

• Realizing that small equipment and tools might be more profitable than large
machines, companies are adding more of this equipment to their fleets. As a
consequence there is likely to be a shift towards non-operated plant, which is
expected to increase to 45% by 2015 from 30% in 2012.
Source: International Rental News, 27/04/12: http://www.khl.com/magazines/international-rentalnews/detail/item73241/Russian-rental-market-to-triple-
by-2015says-report/ ( accessed 30/04/12)

Outlook: MENA

• The Middle East and Africa is set to be an area of flourishing growth for rental power
companies in 2012.

• Saudi Arabia is an important priority for rental power companies, primarily because of
the lack of infrastructure. However, North Africa offers the biggest opportunity for
growth. The huge demand for rental power in the African region is driven by the need
to renovate the cities recently devastated in the political unrest as well as by the
economic uncertainty prevalent throughout the region.

Source: Construction Week Online, 09/01/12 http://www.constructionweekonline.com/article-15206-unrest-in-mena-to-fuel-rental-power-growth-in-2012/
(accessed 30/04/12)

Growth Rate of Construction
Industries

Source: Roland Berger, 2011 http://www.rolandberger.com/media/pdf/Roland_Berger_Brazilian_construction_equipment_market_20110414.pdf ( accessed 30/04/12)

Outlook:Brazil
• The construction equipment market is experiencing strong growth. It is expected to
continue to grow at 15 % per year.

• Main driving factors:

- government investment program PAC ( Growth Acceleration Plan)

- government support schemes and regulation favour local investment

- strong long term demand is driven mostly by residential and infrastructural
construction

- FIFA World Cup 2014 and Olympic Games 2016 drive further investments in
infrastructure and civil construction


Outlook:Brazil
• Strong market dynamics offer a
window of opportunity to enter and
expand while Chinese players are still
in a niche position.

• Rental business within construction
equipment market is increasing in
attractiveness.


Outlook:Brazil
Eight strategic aspects for successful growth strategy

Source: Roland Berger, 2011
http://www.rolandberger.com/media/pdf/Roland_Berger_Brazilian_construction_equipment_market_20110414.pdf
( accessed 30/04/12)

Outlook: Brazil
• According to the Roland Berger report (2011), the rental business suits the needs
of the Brazilian market very well. This is an opportunity which rental companies
should consider.

• Reasons:

- easier financing

- good and regular service

- flexibility offered by rental as the operator is not responsible for the transport
along the long distances between construction sites

- some of the biggest construction projects are developed by syndicates for which
rental is less complicated than buying (valuation issues, attribution of wear on
handover etc.)
Source: Roland Berger, 2011 http://www.rolandberger.com/media/pdf/Roland_Berger_Brazilian_construction_equipment_market_20110414.pdf
( accessed 30/04/12)

Outlook: Brazil

Source: Roland Berger, 2011 http://www.rolandberger.com/media/pdf/Roland_Berger_Brazilian_construction_equipment_market_20110414.pdf
( accessed 30/04/12

New Construction Practices
• A multi-story modular apartment complex that can be prefabricated indoors and shipped
by barge to other locations has been created by Finnish construction company NEAPO.

• In order to produce the complex, innovative steel core panel technology and the tested
modular construction methods used in the shipbuilding industry have been combined.

• The design’s structure incorporates advanced FIXCEL steel core panels which enable
relatively large modular sizes without requiring supporting beams or trusses even while
en route to future destinations. Due to FIXCEL’s unique load-bearing capabilities, an
entire apartment complex can be assembled indoors on the factory floor and then
shipped.

Source: PFSK 11/09/11 http://www.psfk.com/2011/09/completely-mobile-prefabricated-apartment-complex-incorporates-advanced-steel-
technology.html#ixzz1tkwXMrge ( accessed 12/05/12)

From Asset Ownership to Rental
• Enabled by networking, tracking and embedded intelligence technologies and
encouraged by cost cutting and environmental concerns, new forms of shared
ownership, shared access, usage and ‘rental’ are creating a move from ownership
to ‘usership’ in a growing number of markets.

• In transport, ‘usership’ may encourage new models of publicly owned transport
enabled by intelligent systems.

• Instead of having to pay more to travel at peak times on trains, we could move to a
model where we pick up a car and pay to access the road network with relative
pricing according to time of day, location and number of passengers.

Source: Shaping Tomorrow, 06/07/2011 http://www.shapingtomorrow.com/trendAlert.cfm?id=17015 ( accessed 10/05/12)

From Asset Ownership to
Rental
• Daimler: from manufacturer to a service provider

• Reflecting the trend of manufacturers becoming service providers, Daimler launched
the car2go pilot project in 2008.Car2go is a subsidiary of Daimler and provides highly
personalized, flexible car sharing service.

• Launching the project required a transformation of Daimler’s business model – the
company now operates both as a manufacturer and a service provider.

• The model, if implemented successfully, can enable manufacturers to focus more on
providing innovative, high-quality services – and, as a result, become more
competitive and increase revenues.

• Peugeot and BMW have also initiated similar schemes.

Source: SAP, 06/05/2011 http://en.sap.info/bts-daimler-mercedes-car-rental/51434 ( accessed 10/05/12)

• Car2go is currently available in the German cities of Ulm and Hamburg, as well as
in Austin (Texas).

• The service in Austin: there are 300 Car2go Fortwos. Customers can locate an
available vehicle by using one of the third-party Car2go smart phone apps. No
reservations are required.

• Operation: Driving a car2go costs 35 cents per minute or $12.99 per hour. The
vehicle’s doors are unlocked by putting a membership card (one-time cost: $35) up
to the window near the device on the dashboard. Then, an input of a 4-digit PIN
follows, confirming that there is no damage or a massive mess in the car. The car
does not need to be brought back to the location where it was picked up.

Source: Autoblog Green, 24/03/11 http://green.autoblog.com/2011/03/24/daimler-car2go-program-carsharing-smart-fortwo/ ( accessed 10/05/12)

• SaaS is the service enablement of all three primary software markets: applications,
application development and deployment (AD&D) and system infrastructure software
(SIS).

• Currently all software vendors are at various stages in transition as for how they build,
sell, and deliver their products as services. SaaS delivery is expected to significantly
outpace traditional software product delivery, growing nearly five times faster than the
software market.

• According to IDC, by 2015, about 24% of all new business software purchases will be
of service-enabled software with SaaS delivery being 13.1% of worldwide software
spending. IDC further predicts that 14.4% of applications spending will be SaaS-
based in the same time period.

Source: IDC, 2012: http://www.idc.com/getdoc.jsp?containerId=232239 ( accessed 10/05/12)

• Fast adoption of cloud computing in enterprises:

• Forrester forecasts that the global market for cloud computing will grow from $40.7
billion in 2011 to more than $241 billion in 2020.

• The total size of the public cloud market is expected to grow from $25.5 billion in
2011 to $159.3 billion in 2020.

• Deloitte predicts that cloud-based applications will replace 2.34% of enterprise IT
spending in 2014, rising to 14.49% in 2020.

• Cisco forecasts that global cloud IP traffic will increase twelvefold over the next 5
years, accounting for more than one-third (34 %) of total data centre traffic by
2015.

Source: A Passion for Research, 17/01/12 http://softwarestrategiesblog.com/2012/01/17/roundup-of-cloud-computing-forecasts-and-market-
estimates-2012/ ( accessed 10/05/12)

• Digital movies are expected to be a $61.6 billion global market by 2015. An
innovative company – Digital Development Group is taking advantage of this trend:

• The company has proprietary software which converts movies to digital format for
1/10th cost of competitors. This means that Digital Development could have the
world’s largest library of films within 12 months.

• The innovative business model enables film libraries and archives to convert the
films at zero cost upfront, which is already attracting hundreds of film owners. It has
been estimated that Digital Development will make huge profits by receiving 40-
50% of every dollar spent renting their movies, with little fulfilment costs.

Source: Stock Market Watch, 10/05/12 http://thestockmarketwatch.com/newsletters/2012/05/10/didg-shares-could-soar-to-more-than-9-00-within-18-
months/ ( accessed 10/05/12)

• Peer-to-peer rentals:

• The disappearance of the sense of ownership, the financial crisis, and other
factors have given rise to peer-to-peer rentals:

• Peer-to-peer rentals allows people to rent out various items in their household that
they don't use every day, from circular saws to cars.

• Several sites function as the middlemen to make the transaction as fail-proof and
risk-controlled as possible such as Zilok, Rentalic and Irent2u

Source: Daily Finance, 01/05/2011 http://www.dailyfinance.com/2011/01/05/peer-to-peer-rentals-own-less-stuff-make-cash-with-what-you-d/ (accessed
10/05/12)

• Zilok started in Europe but has recently spread to the U.S.

• People can go onto the Zilok site and offer items for rent at whatever rate they
chose. Potential renters pay a fee for the service .

• In France there are around 200,000 items available for 100,000 members (owner
of stuff or just renter). More than 1,500 professionals have joined Zilok . The
transactions/contacts per month are around 6 000 (by phone, by quote request, or
by direct booking with the payment of a retainer fee).

Source: Daily Finance, 01/05/2011 http://www.dailyfinance.com/2011/01/05/peer-to-peer-rentals-own-less-stuff-make-cash-with-what-you-d/ (accessed
10/05/12)

Zero-fixed Cost Model
• In 2010 Shell designed a 3-year strategic plan, which aim was to drive forward its
investment programme, deliver sustainable growth and provide competitive returns
to shareholders.

• From asset ownership to a zero-fixed cost model: in 2009 a substantial corporate
reorganization simplified the company, reduced costs, and created a platform for
faster delivery of Shell’s strategy.

• Divestments are expected to be $2-3 billion in 2012, with $17 billion of asset sales
completed in 2009-11, signalling Shell's intent to move towards a zero-fixed cost
model.

Source: Shell, 2012 :http://www.shell.com/home/content/investor/news_and_library/2012_media_releases/shell_sets_out_new_growth_agenda_02022012.html ( accessed
10/05/12)

Zero-fixed Cost Model
• Shell’s IT strategy also reflects the shift to a zero-fixed cost model:

• The cloud infrastructure was the solution for the company’s rising energy costs
driven by high energy use in Shell’s 3 worldwide and 400 regional data centers as
well as to the need for agile deployment of IT services across various locations.

• Today, the company's in-house server infrastructure is 60% virtual. The other 40% is
made up of physical servers because the company's legacy applications can't be
supported on a virtual infrastructure. Shell's end goal is to eventually create a hybrid
cloud model, where some applications run in a public cloud and others in an on-
premises private cloud.
Source: Computerworld 04/04/12
http://www.computerworld.com/s/article/9225827/Shell_Oil_targets_hybrid_cloud_as_fix_for_energy_saving_agile_IT?taxonomyId=158&p
ageNumber=1 ( accessed 10/05/12

3D Printing of Houses
• A new construction technology – Contour Crafting – could make the printing of a
house in a day possible.

• Contour Crafting is a form of 3D printing that uses robotic arms and nozzles to
squeeze out layers of concrete or other materials, moving back and forth over a set
path in order to fabricate a large component.

• The technology has a great potential for low-cost, customized buildings that are
quicker to make and can therefore reduce energy use and emissions.

• The aim is to build curves and domes as easily as straight walls. Compared to a
conventional house, the speed of construction will be increased 200-fold and the
building costs will be reduced to a fifth of what they are today.

Source: PFSK, 07/02/12: http://www.psfk.com/2012/02/3d-printing-buildings.html ( accessed 01/05/12)

Eco Materials for Construction
• An innovative hydraulic press developed by
French company Meco’Concept turns ordinary
clay into structural blocks.

• Using only mud mixed with a binder material,
the hydraulic press creates a brick similar to
those found in boxes of Lego in less than 30
seconds1.

• The Meco Brics are compact and solid with low
carbon footprint2.

Sources: 1 PFSK , 21/01/11 : http://www.psfk.com/2011/01/real-life-lego-bricks-for-eco-construction.html#ixzz1tkgjjg4R ( accessed 1/05/12)
2 Meco’Concept 2012: http://www.mecoconcept.com/en/meco-concept/meco-concept.php ( accessed 01/05/12)

Utility Lessons from Nature
• Buildings can look after themselves with the
help of bacteria:

• Bacilla Filla are bacteria genetically
programmed to seek out cracks in the
concrete. The bacteria secrete a combination
of calcium carbonate (one of the most basic
and widespread building materials) and a
"bacterial glue" to fill in the cracks.

• When these secretions harden, they have
properties essentially matching those of the
concrete.

Source: Material Science and Engineering, 27/01/11 http://matscieng.blogspot.co.uk/2011/01/self-
healing-concrete-and-utility-of.html ( accessed 01/05/12)

Successful Partnerships
• An unconventional business model based on partnership turns Hunan
Zhengdao from a housing construction company with a few dozen employees to a
road, bridge and earthworks company with annual revenues of more than RMB1
billion (US$156 million)1.

• Having realized the benefits of renting, Hunan Zhengdao has been partnering with
Cat dealer China Engineering Ltd. (CEL) since 2007.

• Zhengdao doesn’t own the Cat machines, but it has the right to use them while CEL
maintains ownership and management authority. The machines are replaced every
two years, or if they reach 5,000 hours of service. Zhengdao provides the
warehouse, while CEL provides professional teams and parts to repair machine
failures on-site2.

Sources: 1 CAT, 2012 http://china.cat.com/cda/layout?m=459275&x=7( accessed 10/05/12)
2 CAT, 2012 http://china.cat.com/cda/layout?m=459255&x=7( accessed 10/05/12)

• The partnership helped the company reduce investment in fixed assets. Renting a full-
set of Cat machines enabled it to eliminate the need for maintenance, repair teams and
a spare parts warehouse. The resulting savings in human resources, material and
capital costs allowed Zhengdao to focus on road and bridge construction and project
quality improvement which helped it win more projects.

• The innovative equipment rental solution has allowed Zhengdao to maintain excellent
quality in its operations and become an industry pioneer in equipment rental, which is
becoming a development trend in China.

• Zhengdao has expanded to participate in projects across the country, such as the
Xinjiang-Tajikistan expressway.

. Source: CAT, 2012 http://china.cat.com/cda/layout?m=459255&x=7 ( accessed 10/05/12)

• In order to respond to the demand for dust control business in South Korea, Mitsui
& Co., Ltd. and Duskin Co., Ltd. have developed a cleaning equipment rental
business in South Korea in partnership with the South Korean company Pulmuone
Holdings Co., Ltd.

• Mister Donut Korea Co., Ltd. ("MDK"), a joint venture established by Mitsui and
Duskin, and Foodmerce Co., Ltd., a wholly owned subsidiary of Pulmuone,
founded a joint venture company, Pulmuone Duskin Co., Ltd

• Pulmuone Duskin will act as the headquarters for the dust control business. It will
develop a franchise business by recruiting local companies to become franchisees.

Source: Mitsui & Co., Ltd, 05/03/12 http://www.mitsui.com/jp/en/release/2012/1197695_3607.html ( accessed 10/05/12)

Capital Structure


• Pulmuone has already built a strong consumer support base in the natural food
market, and by combining the Pulmuone and Duskin brands, the new business
aims to attract 400,000 household customers and achieve customer-level sales of
¥4,000 million by 2020 (total sales at company-owned and franchised shops).

• The business further aims to open 90 outlets and to popularize the household
cleaning equipment rental business in South Korea.


Caterpillar’s Strategy on
European Rental

European Rental
• Caterpillar has changed its approach to the development of its Cat Rental Store
network in Europe.

• Unlike dealers like Zeppelin and Avesco, who have separate rental operations, Cat
has opted for more integrated policy encouraging dealers to focus on key
segments. The strategy aims to respond to customers’ preferences for one-stop-
shop.

• Flexibility: two of the European markets where Cat dealers have sold their rental
businesses - Finning in the UK and more recently Bergerat Monnoyeur (BM) in
France are each taking particular approaches to rental.

Sources: Rock and Dirt, 02/05/12 http://blog.rockanddirt.com/industry-news/caterpillar-updates-strategy-on-european-rental/ ( accessed 10/05/12)

European Rental
• In France, BM rents from its own locations, targeting the smaller and medium sized
rental companies who are facing tough competition from national renters.

• BM aims to partner with these smaller rental firms not as a franchise, but as a part
of an allied network, which could display the Cat Rental Store brand.

• Such partnerships are believed to be suitable for locations where BM does not
already have branches.


European Rental
• In the UK, Finning is already renting heavy equipment through its Finning Rents
operation.

• Finning would also target partnerships with smaller rental companies as well as try
to maintain contacts with certain key customers, such as Select Plant.

• David Picard, Director of product support and sales operations for Europe, Africa
and the Middle East, expects higher investment in equipment by the rental
channel in Europe this year, which Cat Rental Stores should take advantage of.


Hertz
Venturing into new territories:

• Rental broadening its footprint in terms of
the equipment that it provides:

• Hertz Equipment Rental Co. and its
parent, Hertz Corp., Park Ridge, N.J.,
have purchased a handful of companies
to expand its entertainment services
division, bringing rental more forcefully
into the movie and television production
space.

• Currently, Hertz Equipment Rental
provides full line of products and services
Sources: Source: Rental Management, 06/04/12:
to the Entertainment Industry. http://www.rentalmanagementmag.com/Article/tabid/670/smid/1276/ArticleID/16280/r
eftab/685/t/Default.aspx

HSS Hire
Innovative partnership approach: HSS confirms the trend of negotiating
rental contracts with ultimate clients:

• HSS Hire has won a contract with London's Gatwick Airport to supply all tools and
equipment used on the airport, covering not just equipment used by the airport
operator but also by contractors working on the site.

• HSS said the contract will offer one point of contact and a 24 hour service to any
and all onsite contractors at the airport.

• The online management system of the company, HSS Live Hire, will be available
to Gatwick to manage its rentals giving an unprecedented transparency and control
over Gatwick’s equipment portfolio.

Source: International Rental News, 10/04/12 http://www.khl.com/magazines/international-rental-news/detail/item72734/
(accessed 30/04/12)

HSS Hire

• Liz Townsend, head of procurement
at Gatwick, says the contract would
help the airport improve in the most
sustainable way.

• HSS chief executive Chris Davies
claims that the partnership would
provide Gatwick with more
transparency and operational
efficiency.

Source: International Rental News, 10/04/12 http://www.khl.com/magazines/international-rental-news/detail/item72734/
(accessed 30/04/12)

Neff Rental
Improving operation through technology:

• Neff Rental utilizes SmartEquip software.

• SmartEquip provides a software platform that links fleet owners to their suppliers,
allowing for efficient transactions on parts, warranty, servicing, training manuals and
technical support. Many of the largest rental companies in the US - including United
Rentals, RSC and Sunbelt Rentals - are already members of the network.

• Neff's system will help support service and parts personnel, fleet managers and
procurement activities across all its 64 locations.

• Graham Hood, Neff Rental's President and CEO says that SmartEquip will further
raise the efficiency of the service operations and increase the utilisation of the fleet,
while also reducing the transactional costs of doing business across all suppliers.

Source: International Rental News, 24/04/12 http://www.khl.com/magazines/international-rental-news/detail/item73059/ ( accessed 27/04/12)

Lifting Gear Hire
•UK based Lifting Gear Hire – growing lifting equipment hire in USA, Holland and
Germany.
•In order to effectively address attitudes to rental and overcome the prevailing ownership
culture in those countries, LGH adopted an active agile business model, identifying
prospective early adopters and persuading key decision makers within each segment of
the benefits of equipment rental.

Source: Communisage 2012: http://www.communisage.com/#/diffusing-the-innovation/4543215612 ( accessed 02/05/12)

Lifting Gear Hire
• The resulting integrated sales and marketing programme in the US yielded $6.6
million revenue growth over three years.

• Over a 4 year period, the German business grew 194%.

• Insightful marketing planning and market education programmes, aligned with
country business culture, helped underpin demand creation activity via an effective
marketing campaign.

• A twelve-month direct mail campaign sold the rental concept and competitive
differentiation for LGH. The subsequent implementation of rolling year-on-year
national awareness and multi-state customer acquisition programmes in support of
distribution and field sales activity consolidated the company’s gains.

Source: Communisage, 2011: http://www.communisage.com/#/diffusing-the-innovation/4543215612 ( accessed 01/03/12)

Expanding in Recession: RSC
Equipment Rental
• RSC Equipment Rental, one of the largest equipment rental providers in
North America, leads its industry with operational, financial, service and leadership
excellence.

• The company recorded more than $1 billion in revenue during each of the past three
years. In the second quarter of 2011, it increased rental volume 15.2 percent year-
over-year.

• RSC excels in several industry sectors, servicing a host of industrial firms, non-
residential construction contractors, federal, state and municipal governments with
$2.5 billion of equipment at original cost. The company’s unique value proposition
includes premium fleet, industry leading reliability and service, and a long history of
innovation.
Source: Grading and Excavation Contractor,
01/03/12http://www.gradingandexcavation.com/GX/Articles/Billion_Dollar_Equipment_Rental_Company_Bucks_Tren_16324.aspx( accessed 01/05/12)

Equipment Rental
• Key to success: Rather than tightening its business model during the downturn,
RSC invested to better position the company. By continuing strategic investment in
dozens of new branches, RSC experienced a net location reduction of just 4 %from
2007-2010, far lower than any other operator in the industry. In 2011, the company
enhanced its customer centric service and delivery model by adding more than 250
new employees last year.

• Focus on the customer: The company uses a third party vendor to conduct more
than 23,000 customer surveys annually to ensure it is exceeding expectations, the
results of which are used to calculate a globally recognized Net Promoter Score.



Equipment Rental
• Innovation: Total Control® (RSC’s proprietary) is a web-based fleet management
system which allows customers to reduce consumption, control costs and maximize
profitability of equipment assets. With Total Control, customers are afforded complete
visibility into their equipment utilization to ensure maximum productivity. Customers
can save as much as 35 percent of overall rental costs on an ongoing annual basis.

• Sustainability: RSC is focused on sustainable initiatives that benefit customers and
the environment. E2T, RSC’s groundbreaking emissions tracking solution, enables
customers to precisely calculate greenhouse gas and criteria pollutant emissions from
rental equipment. In addition, RSC enables customers to be carbon neutral on their
equipment rentals through available carbon offsets.


Volvo Rents
Shift in strategy:

• Volvo Rents, Shippensburg, Pa., part of Volvo Construction Equipment, shifted its
strategy in 2011 and has been buying up independents to build a company-owned
network of rental stores instead of its previous Volvo Rents franchise model.

• Volvo is hiring and building a regional management team in order to build a highly
polished network.

• According to Dan Kaplan, a rental industry expert and founder of Daniel Kaplan
Associates ‘’ the new approach will take time, but this way, they [ Volvo ] do have an
advantage as a manufacturer-owned rental company because Volvo can mandate to
its own consistency.”

Source: Rental Management, 04/06/12
http://www.rentalmanagementmag.com/Article/tabid/670/smid/1276/ArticleID/16280/reftab/685/t/Default.aspx
(accessed 30/0412)

Ramirent
• Ramirent – a leading general equipment company in the Nordic countries and
Eastern Europe, operating in 13 countries.

• Strategy: focus on growth opportunities and outsourcing deals. In 2011 the
company made two outsourcing deals in Finland (Destia) and one in Denmark
(Phil & Søn) and nine acquisitions in Sweden, Norway, Finland, Denmark and
Czech Republic by which the company extended its geographic presence, product
offering and came closer to its customers.

Ramirent, 2012: http://www.ramirent.com/portal/en/group/strategy/ ( accessed 01/05/12)

Ramirent
• The acquisition in Norway, Rogaland Planbygg A/S, helped Ramirent strategically move into
a new customer sector (oil &gas). With Rogaland, Ramirent partly entered a new business
area, high-class modules the rental agreements which are a bit longer than those of
Ramirent’s other product groups. The acquisition also supported our goal of extending the
average rental period.

• In order to be closer to the customer, Ramirent continued improving its outlet network - the
number of outlets at the end of the year was a record high - 406, an increase of 28
compared to end of 2010.

• In 2011, Ramirent’s net sales totalled 650 million Euros. At the end of the year, the

company’s market capitalisation was 594 million Euros.

Sources: 1Ramirent, 2012: http://www.ramirent.com/portal/en/group/strategy/ ( accessed 01/05/12)
2 Ramirent, 2012 http://www.ramirent.com/data/attachments/annual_report_2011/Ramirent_AnnualReport2011_EN.pdf ( accessed 01/05/12)

Aggreko
• Aggreko – a global leader in the rental of power and temperature control. The
company’s customer base is very diverse both in terms of geography and market
segment.

• Two business models:

• Local business: In the local business Aggreko hires the equipment to customers who
operate it for themselves, although the company retains responsibility for servicing and
maintenance.

• The local business runs with high volumes of generally quite low value transactions,
renting equipment to enable customers to respond quickly to requirements for power
and temperature control. Average contract sizes range from £10,000, £200 to over
£1,000,000.

Source: Aggreko, 2011: http://ir.aggreko.com/agk_ir/finreps/2011/ar-2011/ar-2011.pdf ( accessed 03/05/12)

Aggreko
• Although most of this business has a lead-time of 24 hours or more, about 25% of
the revenue comes from responding to emergencies.

• The local business operates from 165 service centres in North, Central & South
America, Europe, the Middle East, Africa, Asia and Australasia. The service
centres in the various locations look after customers who are normally within a
radius of 200 miles, ensuring that a complete range of products and services is
being offered.

• In 2011, the local business had revenues of £734 million which is 57% of Aggreko’s
total revenue excluding pass-through fuel.


Aggreko
• International Power Projects business: The business is run from 165 service
centres located in 39 countries. It sells power which is delivered using power plants
built, owned and operated by the company. Most of the contracts are for providing a
defined amount of electrical power, for which customers pay a fixed monthly
capacity charge. Customers also pay a variable charge for each MW-hour they
take.

• Most projects in this business are worth over £1 million a year. Over 80% of
revenue comes from power utilities in developing countries, but Aggreko also
serves governments, armed forces, as well as oil and gas and mining companies.

• In 2011, the International Power Projects business generated revenues of £554
million, or 43% of Aggreko’s total revenue excluding pass-through fuel revenue.


Aggreko


Aggreko
• Comparative advantage: Aggreko builds the majority of their fleet on their own in
newly purpose-built manufacturing facility in Scotland. The benefits of this are
several: 1) optimizing the equipment to meet particular operational requirements
2) cost advantage over competitors 3) ability to react extremely quickly to customer
requirements.

• Unlike most rental businesses which have a model of buying assets and then
selling them on at a relatively early stage in their useful life, Aggreko builds
longevity into its equipment.


Green Business Models
• A common denominator to all green business models is the that the companies
applying those can change their core business strategy from selling products to
selling service systems which includes their products ( known as Product Service
Systems).

• Under the product service business model the provider often retains ownership of
the physical product, but a sales contract can include maintenance, repair and
end-of-life consideration into the service of the product.

Source: FORA, 2010: http://www.foranet.dk/media/27577/greenpaper_fora_211010.pdf (accessed 08/05/12)

Green Business Models
• Green business models have a lower environmental impact than traditional
business models.

• Classical green businesses (e.g. cleantech) are usually focused on a green
product which is more energy efficient, produced with less material and energy
use.

• A company making use of ‘green business models’ focuses on the management of
the customer’s production and is paid according to the result in the customer’s
production.

• Thus the producer who also owns the product is given the incentives to design it in
a way to optimally perform in terms of the products life-cycle costs.

Functional Sales Business Model
• Functional sales business model: focuses on the function and benefits of the
product instead of the physical product as such.

• Instead of paying for the product per se, a part of the payment is for the function of
the product – the provider offers the customer to pay for the functionality or result
of the product instead of the product itself.

• In that model the ownership of the physical product often stays with the provider.
Maintenance, repair and end-of-life consideration can be included in the offer.

• Key characteristic: 1) the model is designed for remanufacturing and re-use of the
product; 2) the provider takes over the control of the use-phase of the product.


• Functional sales improve competitiveness by reducing the consumption of material
resources and energy and more efficient working routines throughout the products
use-phase.

• Products that are designed to be remanufactured may contribute to savings as the
need for new resources to manufacture new products is reduced.

• Advantage for the customer: payment per use/function of the product and
transparent cost – the customer does not have to bear the investment cost and the
operation cost are known in advance.


Volvo Aero
• Volvo Aero, a subsidiary of AB Volvo & the functional sales business model:
• Apart from the traditional services (developing and producing components for
aircraft and gas turbine engines and selling engine maintenance) the company
also offers flight hour agreement – selling flight hours to clients.
• According to the flight hour agreement Volvo Aero is responsible for the
performance of the engine it sells. The engines maintained according to this
agreement perform 1½-2 pct. better and the fuel consumption is 1½ - 2 pct. lower
than the consumption of engines maintained in a traditional manner.
• Over the last three years the maintenance service based on the business model of
flight hour agreement has increased from 30 to 50 pct. of the company’s
maintenance business.

Sharing Business Model
• Sharing business model: instead of private ownership, the product is shared
between a number of users, whenever the individual users need access to the
product.

• Product sharing makes expensive products available to users without the users
having to take the risks and liabilities related to owning the product.

• The sharing of the product may entail the use of fewer resources as fewer
products have to be produced to satisfy the consumers’ demand for the product.


Sharing Business Model


Move About
• Move About (Norway) launched the first corporate electric car sharing fleet and
now operates the largest fleet of electric vehicles in the world1.

• Move About delivers the cars, the insurance, the reservation portal, washing and
cleaning and a complete mobility service package. There is a fixed price for the
service each month whatever the use of the car.

• The booking system of Move About allows the companies to cover the mobility
requirements for 20 - 30 people for each car in the fleet.

• The annual turnover of the company which operates in Norway, Sweden and
Denmark has grown from EUR 150 000 in 2008 to an expected turnover of EUR 6
million in 20102.

Source: 1 Move About,2012: http://www.moveabout.net/en/ (accessed 08/05/12)
2FORA, 2010: http://www.foranet.dk/media/27577/greenpaper_fora_211010.pdf (accessed 08/05/12)

Cradle to Cradle
• Cradle to cradle: an emerging green business model that stimulates innovation
through the development of new products with a competitive edge.

• The cradle to cradle concept is based on a bio-inspired approach to the design of
products and systems where nature is seen as a closed loop production system
with solar energy as the only external input.

• The vision of the concept is to shift from traditional sustainability looking to
minimize the negative environmental impact to strive for a positive environmental
impact.

• The model calls for designing industrial systems to be commercially productive,
socially beneficial, and ecologically intelligent.


Cradle to Cradle
• Two core principles:

1) Waste represents a cost in production which has no value to the customer and
that waste equals food. Therefore waste should be avoided or reused as a
production input/nutrient.

2) All materials used in industrial and/or commercial processes are “technical” or
“biological” nutrients. Technical nutrients can be used in continuous cycles.
Biological nutrients can be disposed of in any natural environment and
decompose, providing nutrients for the soil.


Cradle to Cradle
•In this business model the supplier
commits to extend his responsibility of the
product when it is no longer in use.
•The supplier has an incentive to design
and produce his products in a way that
allows them to be disassembled and
reused as technical or bio nutrients.


Schüco
• Schüco (Germany) is a worldwide leader for energy-efficient buildings and window
manufacturer.
• The company no longer sells windows but rather sells a lease-like “see through”
insurance for the benefit of both customer and producer.

• Business model: the customer owns the rights to the windows, while Schüco owns
the materials. Windows are replaced or upgraded when this is economically
reasonable.

• The customer is guaranteed the latest in window technology e.g. (embedded solar
technology etc). At the same time Schüco get their materials back and are able to
reuse them in the next generation of windows.


Background Image Sources
Page
71 - http://www.lmnblog.com/lmn/2011/the-secret-to-running-a-profitable-landscape-company-plan-for-profit-workshop/
74 - http://dots-thots-spot.blogspot.co.uk/
79 - http://www.123rf.com/photo_891402_dollar-sign-across-north-america--united-states-and-canada-depicting-economy-business-or-
commerce.html
83 - http://www.europeword.com/blog/wp-content/uploads/eurozone-crisis.jpg
86 - http://www.rus-rental.com/en/news/88-survey-2012-2015
88 - http://alalameyausa.com/index.php?p=1_5_Where-We-Work
90 - http://www.unique-southamerica-travel-experience.com/brazil-facts.html
109 - http://www.mecoconcept.com/en/meco-concept/meco-concept.php
110 - http://www.homelandsecuritynewswire.com/using-bacteria-create-self-healing-concrete
http://matscieng.blogspot.co.uk/2011/01/self-healing-concrete-and-utility-of.html
117 - http://www.uk.cat.com/rental
122 - http://www.uscommunities.org/images/products/Hertz-Equipment-Rental.jpg
124 - http://images.thomsonlocal.com/tlc/adcentre/4d5c75da-50e1-4dad-85ef-cb875793d699.jpg
125 - http://gilbertldstemple.blogspot.co.uk/2011/04/gilbert-temple-backfill-begins.html
129 - http://www.infrastructures.com/0908/rscminexpo.htm
134 - http://www.proidea.hu/termekinformacio-4/ramirent-kft-uj-partner-2672.shtml
137 - http://in2eastafrica.net/uganda-auditor-general-fails-to-acquire-info-on-aggreko/
143 - http://www.pearlfinders.com/IT/Briefings.aspx
149 - http://www.aerotech-peissenberg.de/standorte/aerotech-peissenberg/referenzen/?lang=en
153 - http://inhabitat.com/oslos-all-electric-car-share-program-just-reached-1000-members/
158 - http://www.schueco.com/web/com/en/home/start/about_schueco

Rohit Talwar - ERA Presentation Oslo - 16 05 12

More Related Content

What's hot

Similar to Rohit Talwar - ERA Presentation Oslo - 16 05 12

More from Rohit Talwar

Recently uploaded

Rohit Talwar - ERA Presentation Oslo - 16 05 12