DLR members “concerned about the sector’s future”

Joël Fruchart speaking at the DLR conference in Paris.

French rental and distributors association DLR’s market barometer for Q3 of 2024 has revealed that its members “remain concerned about the sector’s future” despite strong growth in a number of segments.

Its equipment rental members posted a year-over-year increase of +6.4%, while rental sector growth in Q3 2024 compared to the previous quarter was more modest at +1.1%.

That was more positive than the findings of its construction equipment distribution members, which saw a sharp decline in sales of -15% in the third quarter.

Meanwhile, companies in the industrial and agricultural handling equipment distribution-rental sector continue to demonstrate “strong momentum”, with year-on-year growth of +12.3%.

Despite posting a -0.9% quarterly decline, DLR said the results for the industrial and agricultural handling equipment segment was largely down to “exceptional results earlier in the year rather than underperformance this quarter, signaling a normalisation.”

In terms of overall sentiment, it said surveyed companies expressed mixed feelings about the factors affecting their activity this quarter, with several respondents highlighting weather as a persistent influence on revenue.

It added that despite some positive governmental communication noted by companies, the majority highlighted the challenging economic and political environment in the construction sector, particularly weaker-than-usual tenders. The summer holidays were also cited by some businesses as contributing to slower activity in Q3.

However, its members said they had noted a positive shift in activity toward second-hand equipment purchases and maintenance, driven by companies aiming to extend the lifespan of their machines.

At the same time, recruitment challenges are no longer a pressing issue, as hiring intentions have dropped significantly. Similarly, investment projections are down.

Activity forecasts for handling equipment companies have also sharply declined, unlike the distribution and construction equipment rental sectors, which show slightly more confidence than the previous month.

DLR Conference

The barometer comes just a week after the company held its annual Conference in Paris, France, with discussions on AI, theft, the energy transition and the economic climate. 

Opening the conference, Phullipe Cohet, president of DLR, described the topics as “the great transitions” for the rental industry in France. He said the role of the association is to “accompany members” along these transitions as much as possible as it faces the energy transition and decarbanisation.

On that topic, Martin Seban, director of KPMG, gave a guide on how companies can report carbon emissions in the equipment rental industry, referencing the ERA carbon reporting project as a “first step” to help companies measure emissions in a consistent and harmonised way.

The guide from ERA, produced alongside KPMG, is designed for rental companies on reporting corporate carbon emissions across Scopes 1, 2 and 3.  The document is based on the Greenhouse Gas Protocol and provides a standardised framework for the industry to establish an equipment rental company carbon footprint.

The guidance report delves into direct emissions (Scope 1), indirect emissions from purchased energy (Scope 2), and all relevant categories of Scope 3. It also looks at the most significant emission sources for the rental industry and offers “tailored calculation formulas to quantify emissions while allowing flexibility to adapt to data availability.”

Seban said the ERA carbon reporting tool can be used to not only make progress on climate objectives, but to also comply with regulatory requirements such as CSRD, meet expectations of customers and stakeholders and overcome methodologucal complexity issues.

He also highlighted six key challenges facing the industry, including data availability, categorisation of emissions, lack of supplier data, lack of sector guidance, the variety of products and difference in methods.

Equipment theft

The association also revealed that since its last event in 2023, it has created a taskforce to tackle theft of equipment in the industry, in collaboration with law enforecement, rental companies and DLR partners.

Since then, it has identified theft cases among DLR members over a period of three years leading up to the end of 2024, and created the Stop Thefts commission. 

Cohet told IRN, This has clearly been a success, with both our member companies and companies from other sectors. Everyone has been supportive and this (the initative) is quite unique.”

The commission, with the help of members, will now develop measures to track thefts, coordinate law enforcment and to educate members with the goal to prevent thefts, which steadily increased in the period in which it analysed. 

Meanwhile, part of the Stop Thefts commission, the police forces, in collaboration with DLR, have drawn up a document to help with the filing of complaints.

An in-depth interview with DLR on the Stop Thefts commission will be published in the coming weeks.