WillScot Holdings Corporation · NASDAQ:WSC
WillScot — Q2 2018 Earnings Presentation
34 slides from WillScot's earnings presentation, 2018
Slide 1: Quarterly Investor Presentation Second Quarter 2018
Quarterly Investor Presentation Second Quarter 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements about future events and expectations that constitute forward-looking statements. These statements can be identified by our use of the words “believes”, “expects”, “projects”, “should” or similar words. The forward-looking statements he
Slide 3: Operating Highlights
Operating Highlights • Business very strong in Q2 Rental Business • Tank & Pump rental revenues up 21.2% in Q2 18 as compared to Q2 17, with increased Growing utilization and healthy pipeline • North American Storage Solutions core activations were up 10% year-over-year Favorable End-Market • North
Slide 4: Q2 Financial Highlights
Q2 Financial Highlights(1) • Total rental revenues up 12.8% from Q2 17, 11.7% in constant currency – Storage Solutions +10.8%, up 9.5% in constant currency Rental Revenue Growth – Tank & Pump Solutions +21.2% • Storage Solutions rental rates increased 2.4% year-over-year; new rates increased 1.9% •
Slide 5: Diversified Company with Strong Customer Focus
Diversified Company with Strong Customer Focus Geographically Diversified Diversified Customer Base (1) Oil & Gas Other 2% 5% Tank & Pump Retail/ Solutions Gov't & North America Institutions Consumer Services 19% 6% 25% Industrial/ Commericial Storage Solutions 24% North America Construction 38% Sto
Slide 6: Earning Customer Loyalty
Earning Customer Loyalty Consistent World-Class NPS (1) Customer Effort Score (1) 85% 85% 84% 85% 87% 85% 84% 86% 85% 80% 9.2 9.4 9.3 9.3 9.3 9.3 8.6 8.7 8.7 8.7 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Ask the Customer…
Slide 7: Driving Rates With Premium Products and Services
Driving Rates With Premium Products and Services Storage Solutions Year-Over-Year Rate Change Rental Yield Bridge Q2 17 to Q2 18 $3 $212 4.2% $4 $198 $3 $4 2.9% 2.9% 3.0% 2.6% 2.6% 2.3% 2.4% 2.4% 1.6% Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q2 2017 Rental Rate Ancillary, Mix Truc
Slide 8: Active Rental Fleet Management
Active Rental Fleet Management Storage Solutions Tank & Pump Solutions Average Unit Utilization Average OEC Utilization 71.8% 75.7% 73.6% 74.2% 73.0% 69.0% 70.6% 69.4% 70.6% 66.6% 61.9% 64.5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2018 2017 2018 Average OEC Fleet Inventory (in millions) Average Rental Fleet i
Slide 9: Financial Review
Financial Review 9
Slide 10: Revenue Highlights
Revenue Highlights Total Revenues Rental Revenues (in millions) (in millions) $146.7 $140.7 $142.0 $138.5 $136.6 $132.3 $132.9 $127.7 $123.5 $126.7 $117.9 $114.7 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2018 2017 2018 Total Revenues Bridge Q2 17 to Q2 18 • Second quarter rental revenues increased 11.7% from Q2
Slide 11: Profitability
Profitability Adjusted EBITDA (in millions) • Total adjusted EBITDA of $50.0 million, margin of 35.2%, up $55.6 210 bps from prior-year quarter $50.0 $48.6 $45.5 • Storage Solutions adjusted EBITDA of $41.0 million $41.7 $42.0 – Up 14.1% from prior-year quarter (adjusted for FX) – Margin of 36.2%, u
Slide 12: Efficiency and Performance Update
Efficiency and Performance Update Number of Employees at Period End • Rental, Selling and General Expense up $8.5 million, $7.6 million adjusted for FX, compared to Q2 17(1) 2,020 2,026 2,048 2,026 2,044 2,008 – Higher transportation and salary costs due to increased activity – Increased variable co
Slide 13: Performance by Segment: North American Storage Solutions
Performance by Segment North American Storage Solutions Total Revenues Rental Revenues (in millions) (in millions) $97.9 $91.6 $90.7 $92.9 $89.0 $86.6 $84.3 $85.4 $81.0 $81.8 $75.6 $76.5 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Adjusted EBITDA Unit Utilization (in mill
Slide 14: Performance by Segment: United Kingdom Storage Solutions
Performance by Segment United Kingdom Storage Solutions Total Revenues Rental Revenues (in millions) (in millions) $22.6 $22.2 $22.6 $21.2 $21.6 $20.3 $20.2 $19.9 $20.3 $20.4 $18.2 $19.0 £17.3 £16.4 £16.6 £16.3 £15.9 £16.6 £14.7 £14.8 £15.5 £15.0 £14.6 £15.0 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17
Slide 15: Performance by Segment: Tank + Pump Solutions
Performance by Segment Tank + Pump Solutions Total Revenues Rental Revenues (in millions) (in millions) $28.7 $27.2 $26.9 $27.1 $25.0 $25.7 $25.5 $23.7 $23.2 $22.2 $22.4 $20.9 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Adjusted EBITDA OEC Utilization (in millions) $8.9 7
Slide 16: Free Cash Flow Generation and Capital Investment
Free Cash Flow Generation and Capital Investment Free Cash Flow Fleet Net Capital Expenditures(1) (in millions) (in millions) $19.3 $19.6 $23.7 $18.8 $14.4 $18.2 $14.9 $11.5 $11.4 $11.7 $8.9 $5.4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2018 2017 2018 Property, Plant & Equipment Net Capital Expenditures(1) • Fr
Slide 17: Debt Profile at June 30, 2018
Debt Profile at June 30, 2018 Scheduled Debt Maturities Total Debt and Leverage Ratio (in millions) (debt in millions) 5.0x 5.0x 5.1x 5.0x 4.9x 4.9x 4.6x 4.8x 4.8x 4.6x $628.1 $10.4 $915 $946 $954 $942 $940 $937 $943 $937 $926 $923 $617.7 $253.4 $3.4 $250.0 $4.5 $9.1 $10.2 $8.9 $7.1 $1.5 '18 '19 '20
Slide 18: Subsequent Event
Subsequent Event In the second quarter of 2018 the Company initiated an organization wide project to assess the economic and operational status of fleet and other assets. The result of this review was the identification of specific assets over which a further determination as to the economics of con
Slide 19: Strengthened Fleet and Yard Management
Strengthened Fleet and Yard Management Capitalizing on Core Technology Platform Storage Solutions Average Storage Solutions Average Enhancements OEC Utilization Unavailable Fleet 79% 20% 69% 9% Implementation of integrated ERP platform Identification of Under- Performing Fleet Q2 2018 Q2 2018 Q2 201
Slide 20: Evergreen Financial Model
Evergreen Financial Model Performance Metric Long-term Targets Rental Revenue Growth GDP plus 2 to 3% Adj. EBITDA Growth > 60% Flow-Through Adj. EBITDA Margin > 40% ROCE > WACC Dividends Grow at 10% per annum Net Debt/Adjusted EBITDA < 4.0x Model reflects our goals over a lon
Slide 21: Full Year 2018 Outlook
Full Year 2018 Outlook Revenue expected to exceed Evergreen Model Target Robust pipeline in Storage Solutions Demand in Tank + Pump Solutions remains strong, momentum is continuing Flow-through anticipated to exceed 60%, leading to improved adjusted EBITDA Margin Leverage ratio and Return
Slide 22: Market Leader in Leading Storage Market Positions
Market Leader in Leading StorageMarket Solutions and aPosition LeadinginProvider of Tank & Pump Solutions Deep and Strong Brand with Strong Brand Experienced Superior Products with Premier Management and Premier Service Service Offering Team Offerings Significant Significant Asset Asset Coverage Div
Slide 23: Appendix
Appendix 23
Slide 24: Non-GAAP Financial Information
Non-GAAP Financial Information In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company also discloses in this press release and accompanying presentation certain non-GAAP financial information. These finan
Slide 25: Reconciliation of net income to EBITDA and adjusted EBITDA
Reconciliation of net income to EBITDA and adjusted EBITDA (in millions and includes effects of rounding) 2017 2018 LTM Q1 Q2 Q3 Q4 Q1 Q2 Net income $ 10.2 $ 8.8 $ 11.2 $ 92.1 $ 14.9 $ 15.0 $ 133.2 Interest expense 8.4 8.8 9.2 9.3 9.6 10.1 38.2 Income tax provision (benefit) 5.3 4.6 6.4 (64.4) 4.9 3
Slide 26: Reconciliation of net cash provided by operating activities to EBITDA
Reconciliation of net cash provided by operating activities to EBITDA (in millions and includes effects of rounding) 2017 2018 LTM Q1 Q2 Q3 Q4 Q1 Q2 Net cash provided by operating activities $ 32.7 $ 30.5 $ 32.6 $ 39.8 $ 34.9 $ 35.0 $ 142.4 Interest paid 13.7 4.5 12.2 4.7 12.3 5.8 35.0 Income and fr
Slide 27: Reconciliation of net cash provided by operating activities to free cash flow
Reconciliation of net cash provided by operating activities to free cash flow (in millions and includes effects of rounding) 2017 2018 LTM Q1 Q2 Q3 Q4 Q1 Q2 Net cash provided by operating activities $ 32.7 $ 30.5 $ 32.6 $ 39.8 $ 34.9 $ 35.0 $ 142.4 Additions to rental fleet, excluding acquisitions (
Slide 28: Reconciliation of net income to adjusted net income, Q2 2018
Reconciliation of net income to adjusted net income (1) For the three months ended June 30, 2018 (in millions, except per share data and includes effects of rounding) Statement of Statement of Operations Restructuring Operations As Reported Expense (2) Adjusted Revenues: Rental $132.9 $132.9 Sales 8
Slide 29: Reconciliation of net income to adjusted net income, Q2 2017
Reconciliation of net income to adjusted net income (1) For the three months ended June 30, 2017 (in millions, except per share data and includes effects of rounding) Statement of Executive Statement of Operations Severance and Restructuring Operations As Reported Transition (2) Expense (3) Adjusted
Slide 30: Reconciliation of net income to adjusted net income, six months 2018
Reconciliation of net income to adjusted net income (1) For the six months ended June 30, 2018 (in millions, except per share data and includes effects of rounding) Statement of Statement of Operations Restructuring Operations As Reported Expense (2) Adjusted Revenues: Rental $265.2 $265.2 Sales 17.
Slide 31: Reconciliation of net income to adjusted net income, six months 2017
Reconciliation of net income to adjusted net income (1) For the six months ended June 30, 2017 (in millions, except per share data and includes effects of rounding) Statement of Acquisition- Executive Statement of Operations Related Severance and Restructuring Operations As Reported Expenses (2) Tra
Slide 32: Constant Currency Calculations
Constant Currency Calculations (in millions and includes effects of rounding) Three Months Ended June 30, 2018 (1) As Reported Calculated in Constant Currency (2) Difference Tank & Pump Tank & Pump Storage Solutions Solutions Total Storage Solutions Solutions Total Total Rental revenues $105.8 $27.1
Slide 33: Reconciliation of net income to adjusted EBITDA by Segment
Reconciliation of net income to EBITDA and adjusted EBITDA by Segment (in millions and includes effects of rounding) Storage Solutions North America 2017 2018 LTM Q1 Q2 Q3 Q4 Q1 Q2 Net income $ 8.4 $ 6.0 $ 7.8 $ 92.3 $ 11.6 $ 10.6 $ 122.3 Interest expense 5.6 6.0 6.4 6.5 6.7 7.2 26.7 Income tax prov
Slide 34: Reconciliation of net income to adjusted EBITDA by Segment
Reconciliation of net income to EBITDA and adjusted EBITDA by Segment (in millions and includes effects of rounding) Storage Solutions United Kingdom 2017 2018 LTM Q1 Q2 Q3 Q4 Q1 Q2 Net income $ 4.0 $ 4.4 $ 5.0 $ 6.1 $ 3.7 $ 3.9 $ 18.7 Interest expense 0.1 0.1 0.1 0.1 0.2 0.2 0.7 Income tax provisio