Willscot Holdings Corporation · NASDAQ:WSC
Willscot — Credit Suisse Industrials Conference 2019
39 slides from Willscot's conference presentation, Dec 4, 2019
Slide 1: Credit Suisse Industrials Conference Investor Presentation
Credit Suisse Industrials Conference Investor Presentation December 4, 2019
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: Investment Highlights
Investment Highlights The world’s leading provider of portable storage solutions and the leader in the Gulf Coast for liquid and solid waste storage solutions Our Investment Strengths: ❑ Compelling asset economics with a steel-centric fleet generating recurring revenue ❑ Premium product and services
Slide 4: Steel-Centric Product Timeline
Steel-Centric Product Timeline Divestiture of Wood Mobile 52 acquisitions Offices 1983-2012 May 2015 December 2014 2015-Present Acquisition of Evergreen Tank Steel-Centric Rental Fleet Solutions Ground Level Office Expansion 4
Slide 5: Steel-Centric Fleet Yields Strong Returns
Steel-Centric Fleet Yields Strong Returns Fleet Composition in Units Fleet Characteristics Tank and pump solutions 6% ✓ Long-lived assets Ground level offices & other ✓ No model year storage 14% ✓ Minimal maintenance capex requirements ✓ Rapid payback period Steel storage containers 80% Excludes pum
Slide 6: Mobile Mini Corporate Timeline
Mobile Mini Corporate Timeline 2006 2013 • Erik Olsson new 2017 • UK CEO • MMConnect and • Tri-Cam lock 1983 • Talent infusion Envirotrack • Mission and Vision 2015 Mobile Mini • Land-based sales founded model Divestiture • Initiation of of Wood dividends Mobile Offices Phase Phase Phase 1.0 2.0 3.0
Slide 7: Disciplined Capital Allocation
Disciplined Capital Allocation STABILITY PROFITABILITY GROWTH • Knowing the business • Setting and reaching profit • Free cash flow generation and return requirements in • Processes, procedures and the Evergreen model • Allocate capital to organic standards in place growth and new locations • Cost a
Slide 8: Differentiation Through National Footprint
Differentiation Through National Footprint ❑ Diversified by geography, customer and US, Canada and UK product type – National footprint – Market coverage of major metropolitan areas in the US and UK, as well as Canada – Network of 155 locations across three countries – 2,000+ employees delivering th
Slide 9: Focused Growth Strategy Leads To Diversified End Markets
Focused Growth Strategy Leads To Diversified End Markets ❑ Expansion into long-lived, steel-centric specialty Attractive End Markets(1) containment products through ETS acquisition ❑ Growth in industrial, commercial, oil and gas industries Oil & Gas 2% ❑ National account focus built on our national
Slide 10: Premium Products And Services Drive Rates
Premium Products And Services Drive Rates Storage Solutions Year-Over-Year Rate Change Rental Yield Bridge Q3 18 to Q3 19 4.2% $3 $3 $221 3.6% $211 $6 3.4% 3.0% ($2) 2.6% 2.4% 2.4% 1.8% Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q3 2018 Rental Rate Ancillary, Mix Delivery, Currency Q3 2019 & Ot
Slide 11: And Consistent Results In Customer Loyalty
And Consistent Results In Customer Loyalty ❑ Provide industry-leading products and services for premium pricing – High quality: premium doors, patented locking system – Service: communication, response time, problem resolution – Availability: rent-ready fleet, 24/7 response – Reliability: timeliness
Slide 12: Disciplined Capital Allocation Strategy Geared Towards Shareholder Value Creation
Disciplined Capital Allocation Strategy Geared Towards Shareholder Value Creation Invest in the Manage Strategic Shareholder Business Leverage M&A Returns ▪ Primary focus on long- ▪ Focused on delevering ▪ Review merger and ▪ 2019 represents the 6th term growth and return given EBITDA growth and acq
Slide 13: Enables Mobile Mini To Maximize Free Cash Flow During All Phases Of The Business Cycle
Enables Mobile Mini To Maximize Free Cash Flow During All Phases Of The Business Cycle Maturity / Peak • Optimize fleet • Peak utilization • Growth capex • Optimize rates Expansion Slowdown • Cost leverage • Expand fleet per demand • Solid cash flow • Right size fleet • High utilization - High cash
Slide 14: Positive Free Cash Flow Generation Throughout The Cycle
Positive Free Cash Flow Generation Throughout The Cycle • Demand-driven capex allows us to reduce capex at our discretion Free Cash Flow (in millions) – Low to no maintenance capex throughout the cycle • Unique ability to generate free cash flow coming out of a cycle’s $110 $117 $105 trough. Our lon
Slide 15: Financial Overview
mobile mini -inancial motileminn OVerview
Slide 16: Rental Revenue Growth Of 3.3%
Rental Revenue Growth Of 3.3% Total Revenues Rental Revenues (in millions) (in millions) $160.9 $152.0 $149.7 $150.2 $149.7 $153.5 $142.0 $142.2 $141.9 $140.9 $145.5 $140.7 $132.3 $132.9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2019 2018 2019 Total Revenues Bridge Q3 18 to Q3 19 (in millions) • Third quarter re
Slide 17: Adjusted EBITDA Margins Improved 320 bps From Prior Year Quarter
Adjusted EBITDA Margins Improved 320 bps From Prior Year Quarter Adjusted EBITDA Adjusted EBITDA Bridge Q3 18 to Q3 19 (in millions) (in millions) $61.7 $63.3 $5.7 $0.1 $0.8 $56.9 $61.7 $56.2 $55.4 $55.4 $48.6 $50.0 ( $0.4 ) Q1 Q2 Q3 Q4 Q3 2018 Rental Sales Profit Rental, Selling & Currency Q3 2019
Slide 18: We Are Able To Leverage Our Scale And National Accounts To Increase Fleet On Rent
We Are Able To Leverage Our Scale And National Accounts To Increase Fleet On Rent Storage Solutions Tank & Pump Solutions Average OEC Utilization(1) Average OEC Utilization(1) 80.4% 77.5% 82.9% 76.0% 77.1% 76.4% 73.6% 74.1% 74.2% 73.5% 72.5% 68.3% 68.6% 69.3% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2019 2018 2
Slide 19: We Have The Right Infrastructure In Place To Sustain Growth
We Have The Right Infrastructure In Place To Sustain Growth Number of Employees at Period End Total Revenue per Employee (in thousands) 2,026 2,037 2,026 2,082 2,046 2,073 2,049 $79 $73 $73 $74 $74 $70 $70 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2019 2018 2019 Rental Selling and General Expense as Percent of T
Slide 20: We Generated Robust Free Cash Flow While Growing Our Fleet
We Generated Robust Free Cash Flow While Growing Our Fleet Operating Cash Flow Fleet Net Capital Expenditures(1) (in millions) (in millions) $23.4 $61.8 $19.7 $19.3 $19.7 $51.3 $16.8 $46.3 $43.9 $38.8 $34.9 $35.0 $11.5 $11.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2019 2018 2019 Free Cash Flow • Operating cash
Slide 21: Leverage Ratio of 3.8x
Leverage Ratio of 3.8x Scheduled Debt Maturities Total Debt and Leverage Ratio (in millions) (debt in millions) $840.4 5.0x 4.8x $6.4 4.6x 4.4x 4.2x 4.0x $250.0 3.8x 3.8x $937 $926 $923 $922 $907 $906 $895 $902 $584.0 $3.0 $12.8 $12.7 $11.7 $10.2 $7.1 $3.7 '19 '20 '21 '22 '23 '24 '25 '26 Q4 17 Q1 18
Slide 22: Full Year 2019 Outlook
Full Year 2019 Outlook ❑ Rental Revenue expected to exceed Evergreen Target of GDP + 2-3% ❑ Flow-through anticipated to exceed 60%, leading to improved adjusted EBITDA Margin ❑ Rental fleet and PPE net capital spend of approximately $70 million, not including capital leases ❑ Leverage Ratio decrease
Slide 23: Segment Performance Highlights
Segment Performance Highlights
Slide 24: North American Storage Solutions
North American Storage Solutions Total Revenues Rental Revenues (in millions) (in millions) $107.3 $102.8 $102.5 $97.3 $97.8 $96.3 $98.0 $91.6 $90.7 $92.2 $93.5 $91.5 $86.6 $85.4 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Adjusted EBITDA OEC Utilization (1) (
Slide 25: UK Storage Solutions
UK Storage Solutions Total Revenues Rental Revenues (in millions) (in millions) $22.6 $23.0 $22.2 $22.2 $21.0 $20.9 $20.5 $20.3 $20.4 $20.4 $19.7 $19.2 $18.9 $18.8 £17.7 £17.2 £16.6 £16.1 £16.3 £16.6 £15.7 £15.9 £15.0 £15.3 £14.7 £14.7 £15.2 £14.6 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q1 18 Q2 1
Slide 26: Tank & Pump Solutions
Tank & Pump Solutions Total Revenues Rental Revenues (in millions) (in millions) $33.0 $31.3 $30.9 $31.5 $29.3 $30.2 $29.9 $29.4 $28.7 $28.3 $28.7 $26.9 $27.1 $25.5 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Adjusted EBITDA OEC Utilization (1) (in millions) $
Slide 27: Appendix
Appendix
Slide 28: 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 29: Evergreen Financial Targets
Evergreen Financial Targets Performance Metrics 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 Targets reflect our goals over a
Slide 30: We Have Successfully Diversified Into Attractive End Markets
We Have Successfully Diversified Into Attractive End Markets Storage Solutions Tank & Pump Solutions LTM Q3 LTM Q3 LTM Q3 LTM Q3 2019 2018 2019 2018 Other Other 5% 4% Gov't & Gov't & Institutions Institutions 7% 8% Retail/ Retail/ Other Other Consumer Consumer 17% 20% Services Services Industrial/ 2
Slide 31: 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) 2018 2019 LTM Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 2019 Net income (loss) $ 14.9 $ 15.0 $ (52.2) $ 14.2 $ 18.1 $ 14.1 $ 22.6 $ 69.0 Interest expense 9.6 10.1 10.5 10.7 10.8 10.6 10.4 42.5 Income tax provisio
Slide 32: Reconciliation Of Net Cash Provided By Operating Activities To EBITDA And Free Cash Flow
Reconciliation Of Net Cash Provided By Operating Activities To EBITDA And Free Cash Flow (in millions and includes effects of rounding) 2018 2019 LTM Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 2019 Net cash provided by operating activities $ 34.9 $ 35.0 $ 46.3 $ 43.9 $ 38.8 $ 61.8 $ 51.3 $ 195.8 Interest paid 12.3 5.8
Slide 33: Reconciliation Of Net Income To Adj. Net Income, Three Months Ended September 30, 2019
Reconciliation Of Net Income To Adj. Net Income (1) For The Three Months Ended September 30, 2019 (in millions, except per share data and includes effects of rounding) Statement of Acquisition Statement of Operations Related Operations As Reported Expenses (2) Adjusted Revenues: Rental $145.5 $145.5
Slide 34: Reconciliation Of Net Income To Adj. Net Income, Three Months Ended September 30, 2018
Reconciliation Of Net Income To Adj. Net Income (1) For The Three Months Ended September 30, 2018 (in millions, except per share data and includes effects of rounding) Statement of Statement of Operations Restructuring Operations As Reported Costs Adjusted Revenues: Rental $140.9 $140.9 Sales 8.7 8.
Slide 35: Reconciliation Of Net Income To Adj. Net Income, Nine Months Ended September 30, 2019
Reconciliation Of Net Income To Adj. Net Income (1) For The Nine Months Ended September 30, 2019 (in millions, except per share data and includes effects of rounding) Statement of Statement of Operations Chief Executive Office Acquisition Related Deferred Financing Operations As Reported Transition
Slide 36: Reconciliation Of Net Income To Adj. Net Income, Nine Months Ended September 30, 2018
Reconciliation Of Net Income To Adj. Net Income (1) For The Nine Months Ended September 30, 2018 (in millions, except per share data and includes effects of rounding) Statement of Statement of Operations Operations As Reported Restructuring Costs Adjusted Revenues: Rental $406.1 $406.1 Sales 25.7 25
Slide 37: Constant Currency Calculations
Constant Currency Calculations (1) (in millions and includes effects of rounding) Three Months Ended September 30, 2019 As Adjusted (1) Calculated in Constant Currency (2) Difference Storage Tank & Storage Tank & Solutions Pump Total Solutions Pump Total Total Rental revenues $116.8 $28.7 $145.5 $11
Slide 38: Reconciliation Of Net Income To EBITDA And 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 2018 2019 LTM Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 2019 Net income (loss) $ 11.6 $ 10.6 $ (49.9) $ 12.5 $ 14.0 $ 9.4 $ 18.0 $ 53.8 Interest expense 6.7 7.2 7.6 7.9
Slide 39: Reconciliation Of Net Income To EBITDA And Adjusted EBITDA By Segment (cont'd)
Reconciliation Of Net Income To EBITDA And Adjusted EBITDA By Segment (cont’d) (in millions and includes effects of rounding) Storage Solutions United Kingdom 2018 2019 LTM Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 2019 Net income (loss) $ 3.7 $ 3.9 $ (2.5) $ 4.2 $ 3.2 $ 3.5 $ 4.0 $ 15.0 Interest expense 0.2 0.2 0.2
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