Willscot Holdings Corporation · NASDAQ:WSC
Willscot — Q2 2019 Earnings Presentation
31 slides from Willscot's earnings presentation, 2019
Slide 1: Quarterly Investor Presentation Second Quarter 2019
Quarterly Investor Presentation Second Quarter 2019 1
Slide 2: Safe Harbor
Safe Harbor Forward Looking Statements This presentation contains forward-looking statements (including the earnings guidance/outlook contained herein) within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended.
Slide 3: Temporary space solutions are our business
Temporary space solutions are our business. Everything about our company, from our expert staff to our turnkey solutions to our network of locations, is designed to make it easier for customers to make one call and get a complete, immediately functional temporary space solution. Our solutions are Re
Slide 4: WillScot at a Glance
WillScot at a Glance Established Brand with Strong Legacy of Innovation Key Differentiating Attributes Specialty rental services market leader providing modular space and portable storage solutions to diverse end markets across North 1 America for over 60 years Customers value our solutions; • (1) P
Slide 5: Compelling Specialty Rental Growth Platform
Compelling Specialty Rental Growth Platform Q2 results continued transition to higher quality lease revenue; updating full year 2019 Adj. EBITDA(1)outlook to $355 – $365M; expect $400M run-rate heading into 2020 1 Delivered $266.1 million of Revenue in Q2, an 16.1% YOY pro forma U.S. modular space A
Slide 6: Accelerated Strong Organic Growth with M&A
Accelerated Strong Organic Growth with M&A (1) 2017(2) 2019(3) % Growth Revenue $446MM $1.05B-$1.10B +140% Adj. EBITDA(1) $124MM $355MM-$365M +190% Rental equipment, net $833MM $1,954MM +135% Employees ~1,350 ~2,500 +85% Customers >25,000 >50,000 +100% 75K Total Units 155K Total Units Fleet Count >3
Slide 7: Q2 Results Reflect Continued Strong Execution
Q2 Results Reflect Continued Strong Execution Q2 Adjusted EBITDA(1) Walk US$m 9.4 88.7 ▪ Q2 2019 Adj. EBITDA(1) up $16.9 million, or 9.4 7.3 23.5% year over year, as compared to Q2 2018 pro forma Adj. EBITDA(1) 29.9 71.8 7.5 6.3 1.3 • Realized $8.8 million of cumulative cost 29.9 synergies related t
Slide 8: Utilization
US Core Leasing KPI Snapshot Modular - US Segment Pro forma(1) Results AMR / UOR (US$) Modular Space 612 ▪ Pro forma(1) monthly rental rates up 16.1% year over 527 year wth 473 Gro • Driven by expanding Ready to Work (VAPS) oY %Y 16.1 penetration and WSC Price Optimization Tools • 7th sequential qua
Slide 9: VAPS Revenue Growth > $140 Million Over Next 3 Years is Achievable
VAPS Revenue Growth > $140 Million Over Next 3 Years is Achievable VAPS Monthly Rate(1) VAPS Future Revenue Potential(1) US$ 92.3K 12 Units(1) x $133 x mo. = $147M d Delivere p 2 1% Rates u Yo Y $133 $276 276 228 • Delivered VAPS rates up $143 125 143 21% year over year in Q2 2019 across the combine
Slide 10: Diverse End Markets Remain Supportive
Diverse End Markets Remain Supportive ARA Rental Industry AIA Consensus Construction Forecast(2) ABI Revenue Forecast(1) Architectural Billing index (ABI) has remained Overall above 50 for 22 of the last 24 months with June at 49.1 nonresidential Commercial Industrial Institutional 5% CAGR building
Slide 11: Financial Review
WILLSCOT Financial Review
Slide 12: Strong Q2 Organic and Inorganic Growth
Strong Q2 Organic and Inorganic Growth Revenue (1) (US$m) Adj. EBITDA (1) (US$m) YoY Gr o wth Yo Y Growth ▪ Revenue of $266.1 million increased 89.7% 111.7% 266.1 88.7 89.7% year over year driven by an 27.3 7.3 84.0% increase in our core leasing and service revenue as a result of increased 140.3 41.
Slide 13: Modular - US Segment Fundamentals
Modular - US Segment Fundamentals As Reported Pro Forma(2) Modular Space(1) Average Units on Rent (in thousands) Modular Space(1) Average Units on Rent (in thousands) 84.5 86.4 84.7 86.1 84.5 86.0 87.0 83.3 86.9 87.0 87.2 86.4 83.3 68.0 74.9% 75.3% 72.4% 74.8% 70.6% 73.9% 74.1% 71.8% 72.4% 69.4% 48.
Slide 14: Modular – US Segment Quarterly Performance
Modular – US Segment Quarterly Performance Revenue (1) (US$m) +2.6% YoY PF(2) ▪ Modular - US segment revenue increased 274 91.4% to $238.9 million as compared to 241 233 76 233 231 239 $124.8 million in the prior year quarter 220 223 219 198 137 108 ▪ Modular space monthly rental rates 122 119 97 11
Slide 15: Modular – Other North America Quarterly Performance
Modular – Other North America Quarterly Performance Revenue (1) (US$m) Modular Space AMR / UOR (1) (US$) 29 30 29 26 13 27 27 25 16 25 13 24 24 14 6 13 12 603 576 573 571 587 581 564 557 555 557 552 534 536 541 546 530 527 16 27 24 24 21 17 12 12 13 13 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 16: Reconciliation of Non-GAAP Measures – Adjusted EBITDA
Reconciliation of Non-GAAP Measures – Adjusted EBITDA Three Months Ended June 30, Consolidated Adjusted EBITDA (1) Reconciliation 2019 Explanation of Reconciling Adjustments (US$ in thousands) Total Loss from continuing operations $ (11,775) Income tax benefit (1,180) Loss from continuing operations
Slide 17: Synergy Realization and Cost to Achieve
Synergy Realization and Cost to Achieve Synergy Run Rate Integration & Restructuring Costs(1) Real Estate Proceeds US$m 75 71 71 8 62 36 40 ~49% ~90% 67 30 31 realized incurred/ in Q2 expended 35 9 Original Current Original Current Original Current Expectation State Expectation State Expectation Sta
Slide 18: Updated 2019 Outlook Reflects Shift to Higher Quality Modular Leasing Revenue and Expanding Margins
Updated 2019 Outlook Reflects Shift to Higher Quality Modular Leasing Revenue and Expanding Margins Maintaining Expectation for $400M Adj. EBITDA(1) Run Rate and 35%+ Adj EBITDA Margin(1) Exiting 2019 Prior Outlook Updated Outlook Total Revenue $1.05 - $1.15 billion $1.05 - $1.10 billion Adjusted EB
Slide 19: Q2 2019 YTD Results and Q3-Q4 2019 Outlook
Reiterating Free Cash Flow nd Outlook - Expectations Significantly Higher in 2 Half 2019 and 2020 Adj EBITDA to Free Cash Flow Walk(1) ▪ Q2 YTD free cash flow results consistent with our expectations for the full year Q2 2019 YTD Results US$m ▪ Adj. EBITDA favorable to expectations due to 173.2 vari
Slide 20: Debt Structure Provides Significant Flexibility
Debt Structure Provides Significant Flexibility Carrying value outstanding at (in thousands, except rates) Interest rate Year of maturity June 30, 2019 2022 Secured Notes 7.875% 2022 $ 293,097 (1) $190 million tack-on to existing 2023 2023 Secured Notes 6.875% 2023 481,864 notes executed in Q2 Unsec
Slide 21: Compelling Specialty Rental Growth Platform
Compelling Specialty Rental Growth Platform ü Market Leader with Significant Scale Advantages ü ü Diverse Product Proven and Experienced Offering, Industry Veteran End-Markets and Management Team Customer Base ü ü Track Record Delivering Attractive Unit on Organic and Economics on Long- Inorganic Gr
Slide 22: Appendix
WILLSCOT jp delitelbs
Slide 23: Summary P&L, Balance Sheet & Cash Flow Items
Summary P&L, Balance Sheet & Cash Flow Items Key Profit & Loss Items Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 Modular - Other Modular - Other (in thousands, except rates) Modular - US North America Total Modular - US North America Total Leasing and Services Modular Leasing $
Slide 24: Reconciliation of Non-GAAP Measures – Adjusted EBITDA
Reconciliation of Non-GAAP Measures – Adjusted EBITDA Adjusted EBITDA is a non-GAAP measure defined as net income (loss) before income tax expense, net interest expense, depreciation and amortization adjusted for non-cash items considered non-core to business operations including net currency (gains
Slide 25: Summary Consolidated Supplemental Pro Forma Financial Information
Summary Consolidated Supplemental Pro Forma Financial Information Pro Forma(a) Combined Three Months Ended Three Months Ended June 30, June 30, 2019 vs. 2018 (in thousands) 2019 2018 $ Change % Change Revenue $ 266,125 $ 261,908 $ 4,217 1.6% Net loss (a) $ (11,775) $ (5,933) $ (5,842) Other Financia
Slide 26: Reconciliation of Non-GAAP Measures – Pro Forma Adjusted EBITDA
Reconciliation of Non-GAAP Measures – Pro Forma Adjusted EBITDA Pro Forma Pro Forma Combined Three Combined Six Months Ended Months Ended (in thousands) Jun 30, 2018 June 30, 2018 Historical WillScot net income (loss) $ 379 $ (6,456) Pre-acquisition ModSpace net income 2,490 (a) 3,431 (a) Pro forma
Slide 27: Reconciliation of Non-GAAP Measures – Adjusted EBITDA Margin %
Reconciliation of Non-GAAP Measures –Adjusted EBITDA Margin % Adjusted EBITDA Margin is a non-GAAP measure defined as Adjusted EBITDA divided by Revenue. Management believes that the presentation of Adjusted EBITDA Margin % provides useful information to investors regarding the performance of our bu
Slide 28: Reconciliation of Non-GAAP Measures – Adjusted Gross Profit
Reconciliation of Non-GAAP Measures –Adjusted Gross Profit Adjusted Gross Profit is a non-GAAP measure defined as gross profit plus depreciation of rental equipment. Management believes that the presentation of Adjusted Gross Profit provides useful information to investors regarding the performance
Slide 29: Reconciliation of Non-GAAP Measures – Net CapEx
Reconciliation of Non-GAAP Measures –Net CapEx Net Capital Expenditures ("Net CAPEX") is defined as capital expenditures for purchases and capitalized refurbishments of rental equipment and purchases of property, plant and equipment (collectively "Total Capital Expenditures"), reduced by proceeds fr
Slide 30: Reconciliation of Non-GAAP Measures – Free Cash Flow
Reconciliation of Non-GAAP Measures –Free Cash Flow Free Cash Flow is a non-GAAP measure. Free Cash Flow is defined as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and property, plant and equipment, which are all included in cash flows from invest
Slide 31: Capital Structure as of June 30, 2019
Capital Structure as of June 30, 2019 Outstanding as of June 30, 2019 Class A Common Shares 108,699,126 Class B Common Shares(1) 8,024,419 Total Common Shares 116,723,545 Shares Underlying 2015 Warrants 12,183,933 Outstanding warrants represent 22.2M Shares Underlying 2018 Warrants 9,999,579 share e