WillScot Holdings Corporation · NASDAQ:WSC
WillScot — Q4 2019 Earnings Presentation
34 slides from WillScot's earnings presentation, February 2020
Slide 1: Quarterly Investor Presentation Fourth Quarter and Full Year 2019
Quarterly Investor Presentation Fourth Quarter and Full Year 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 1 portable storage solutions to diverse end markets across North Customers value our solutions; America for over 60 years “Ready
Slide 5: Transformational Growth Since 2017 Has Created A Specialty Rental Market Leader
Transformational Growth Since 2017 Has Created A Specialty Rental Market Leader 2017(2) 2019 % Growth (1) Revenue $446MM $1.06B 138% Adj. EBITDA(1) $124MM $356.5MM 188% Adj. EBITDA Margin(1)% 27.8% 33.5% 570bps Rental equipment, net $833MM $1,944MM 133% Employees ~1,350 ~2,500 +85% Customers >25,000
Slide 6: Q4 and Full Year 2019 Results
Q4 and Full Year 2019 Results Q4 caps a transformational year at Willscot, with total revenues of $1,063.7 million, up $312.3 million, or 41.6%, and Adjusted EBITDA(1) of $356.5 million, up $141.0 million, or 65.4% 1 Delivered $278.0 million of Revenue in Q4, an 15.1% YOY U.S. modular space AMR grow
Slide 7: Q4 Results Highlight The Transformational Growth of WSC Post-Acquisition
Q4 Results Highlight The Transformational Growth of WSC Post-Acquisition Q4 Adjusted EBITDA(1) Walk US$m ▪ Q4 2019 Adj. EBITDA(1) up $24.7 million, or 33.6%, year over year, as compared to Q4 98.2 2018 Adj. EBITDA(1) 0.8 ( 1.1 ) 9.4 13.8 ◦ Includes $1.1 million of additional expense 73.5 11.2 due to
Slide 8: US Core Leasing KPI Snapshot
US Core Leasing KPI Snapshot Modular - US Segment Pro forma(1) Results 648 AMR / UOR (US$) Modular Space ▪ US modular leasing revenue up 8.6% year over year 563 and supportive of our expected $400M Adjusted 500 oY Gro wth EBITDA(2) run rate exiting 2019 %Y 15.1 ▪ Monthly rental rates up 15.1% year o
Slide 9: VAPS Revenue Growth > $130 Million Over Next 3 Years is Achievable
VAPS Revenue Growth > $130 Million Over Next 3 Years is Achievable VAPS Monthly Rate(1) VAPS Future Revenue Potential(1) US$ 90.0K 12 Units(1) x $122 x mo. = $131M d Delivere p 3 9% Rates u Yo Y $122 $275 275 • Delivered VAPS rates up 198 $153 39% year over year in Q4 127 153 2019 across the combine
Slide 10: Diverse End Markets Are Stable And Support 2020 Outlook
Diverse End Markets Are Stable And Support 2020 Outlook ARA Rental Industry AIA Consensus Construction Forecast(2) Revenue Forecast(1) ABI Architectural Billing index (ABI) has remained above 50 for 9 of the last 12 months averaging 50.3 Overall with Jan at 52.2 nonresidential Commercial Industrial
Slide 11: Q4 Run-Rate Supports 2020 Adjusted EBITDA Outlook of $410-$430M
Q4 Run-Rate Supports 2020 Adjusted EBITDA(1) Outlook of $410-$430M Adj. EBITDA(1) Walk • 15-20% Adj. EBITDA(1) growth to outlook range of $410M-$430M for 2020 410-430 42 • >$45M of organic growth driven 357 by continued rate and VAPS 36 (4) 32 improvements, offsetting volume 285 57 6 headwinds 23 69
Slide 12: Financial Review
WILLSCOT Financial Review
Slide 13: WSC Delivered Pro Forma Adj. EBITDA Growth of 25% in 2019
WSC Delivered Pro Forma Adj. EBITDA(1) Growth of 25% in 2019 Adjusted EBITDA(1) Growth driven by embedded pricing and VAPS momentum AND continued cost synergy realization ▪ Pro forma revenues decreased $0.4 (1) million with sales revenues replaced Revenue (US$m) Adj. EBITDA (1) (US$m) by core modula
Slide 14: Strong Q4 Organic Growth, Synergy Realization, and Transition to Significant Free Cash Flow
Strong Q4 Organic Growth, Synergy Realization, and Transition to Significant Free Cash Flow Revenue (1) (US$m) Adj. EBITDA (1) (US$m) Free Cash Flow (3) (US$m) oY Gro wth o Y Growth th 8.0% Y 33.6% Y ow Gr Y 278.0 98.2 Yo 257.4 9.4 M 24.3 26.7 73.5 6 3.9 43.7 +$ 6.3 233.1 251.3 88.8 (20.2) 67.2 35.3
Slide 15: 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 82.1 81.1 82.1 81.1 68.0 74.9% 73.2% 75.3% 72.8% 72.4% 74.8% 70.6% 7
Slide 16: Modular – US Segment Performance
Modular – US Segment Performance Retroactive Adoption 842 to Jan 1, 2019 Revenue (1)(3) (US$m) Q4 2019 274 ▪ Modular - US segment revenue increased 7.8% to $251.3 241 76 244 251 million as compared to $233.1 million in the prior year 233 233 230 237 220223 219 137 108 quarter 198 122 119 97 111 ▪ Mo
Slide 17: Modular – Other North America Quarterly Performance
Modular – Other North America Quarterly Performance Retroactive Adoption of 842 to Jan 1, 2019 Revenue (1)(3) (US$m) Modular Space AMR / UOR (1) (US$) 29 30 29 26 13 27 27 27 25 16 25 13 24 24 25 14 6 13 12 603 618 564 576 573571 587581 577 557 555 557 546 552 530 534 536 527 541 16 27 27 24 24 25 2
Slide 18: Reconciliation of Non-GAAP Measures – Adjusted EBITDA
Reconciliation of Non-GAAP Measures – Adjusted EBITDA Year Ended Three Months December 31, Ended December Consolidated Adjusted EBITDA (1) Reconciliation 2019 31, 2019 Explanation of Reconciling Adjustments (US$ in thousands) Total (Loss) income from continuing operations before income taxes (13,734
Slide 19: WSC Transitioned to Strong Free Cash Generation in Q4 and Heading Into 2020
WSC Transitioned to Strong Free Cash Generation in Q4 and Heading Into 2020 Net Cash Provided By Operating Activities US$m 73.5 ▪ Net cash provided by operating activities was up $51.9 million in Q4 and up $135.5 million full year vs. 2018 44.8 39.0 ▪ Operating cash flow ramped meaningfully in Q4 21
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 December 31, 2019 2022 Secured Notes 7.875% 2022 $ 264,576 $30 million 2022 Secured notes redeemed in Q4 2023 Secured Notes 6.875% 2023 482,768 Unsecured Notes 10
Slide 21: ASC 842 Reporting Changes For Q4’19 and Full Year 2019
ASC 842 Reporting Changes For Q4’19 and Full Year 2019 Quarterly Consolidated Results for the Year Ended December 31, 2019 (in millions) Q1 Q2 Q3 Q4(2) Full Year(2) Pre ASC 842 (as previously reported for Q1-Q3, Q4 estimated) Revenue $255 $266.1 $272.3 $280.2 $1,073.6 (1) Adjusted EBITDA $84.5 $88.7
Slide 22: Capital Structure as of February 28, 2020
Capital Structure as of February 28, 2020 Outstanding as of February 29, 2020 Class A Common Shares 110,316,368 Class B Common Shares(1) 8,024,419 Total Common Shares 118,340,787 Remaining Share Equivalents Authorized Under the WillScot Incentive 3,701,000 Stock Plan(2) as of 12/31/19 Outstanding wa
Slide 23: 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 Attractive Unit Delivering on Organic Economics on Long- and Inorganic Gr
Slide 24: Appendix
WILLSCOT jp delitelbs
Slide 25: Summary P&L, Balance Sheet & Cash Flow Items
Summary P&L, Balance Sheet & Cash Flow Items Key Profit & Loss Items Three Months Ended December 31, 2019 Three Months Ended December 31, 2018 Modular - Other Modular - Other (in thousands, except rates) Modular - US North America Total Modular - US North America Total Leasing and Services Modular L
Slide 26: Summary P&L, Balance Sheet & Cash Flow Items
Summary P&L, Balance Sheet & Cash Flow Items Year Ended Year Ended Key Profit & Loss Items December 31, 2019 December 31, 2018 Modular - Other Modular - Other (in thousands, except rates) Modular - US North America Total Modular - US North America Total Leasing and Services Modular Leasing $ 677,593
Slide 27: 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 28: 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 29: Summary Consolidated Supplemental Pro Forma Financial Information
Summary Consolidated Supplemental Pro Forma Financial Information Pro Forma(a) Pro Forma(a) Combined Combined Year Ended Year Ended Year Ended December 31, 2019 December 31, December 31, 2019 vs. 2018 (in thousands) 2019 2018 2017 $ Change % Change Revenue $ 1,063,665 $ 1,064,021 $ 983,334 $ (356) —
Slide 30: Reconciliation of Non-GAAP Measures – Pro Forma Adjusted EBITDA
Reconciliation of Non-GAAP Measures – Pro Forma Adjusted EBITDA Pro Forma Combined Pro Forma Combined Year Ended Year Ended Year Ended (in thousands) December 31, 2019 December 31, 2018 December 31, 2017 Historical WillScot net income (loss) $ (11,543) $ (53,572) $ (149,812) Pre-acquisition Acton ne
Slide 31: 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 32: 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 33: Reconciliation of Non-GAAP Measures – Net CapEx
Reconciliation of Non-GAAP Measures –Net CapEx Net Capital Expenditures ("Net CAPEX") is defined as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively "Total Capital Expenditures"), less proceeds from sale of rental equipment and proceeds fr
Slide 34: 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 inves