Willscot Holdings Corporation · NASDAQ:WSC
Willscot — Q1 2023 Earnings Presentation
48 slides from Willscot's earnings presentation, Apr 27, 2023
Slide 1: Quarterly Investor Presentation First Quarter 2023
April 27, 2023 Quarterly Investor Presentation First Quarter 2023 Supporting a semiconductor manufacturer in Arizona
Slide 2: Safe Harbor
Safe Harbor Forward Looking Statements This presentation contains forward-looking statements (including the 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. The words
Slide 3: Table of Contents
Table of Contents 3 WillScot Mobile Mini Business Overview 17 Q1 2023 Operating Results 20 Q1 2023 Financial Review 27 Value Drivers 31 Appendix 3
Slide 4: Turnkey space and storage solutions are our business
Turnkey space and storage 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 and storage solution
Slide 5: WSC has an established formula to drive sustainable growth and returns
WSC has an established formula to drive sustainable growth and returns In >$10B North American market for modular space and portable 1 Clear Market Leadership #1 storage solutions Unlevered IRRs on portable storage and turnkey modular space 2 Compelling Unit Economics And Returns on Capital >25% fle
Slide 6: We have the #1 position in modular space and portable storage leasing
We have the #1 position in modular space and portable storage leasing Combined Fleet Count: ~364K1 42% 58% Modular Space Portable Storage Combined 2023 NBV: $3.1B1 4% Long-lived assets with 20-30 year useful lives 26% Predictable revenue model with 30+ month average lease duration Rapid paybac
Slide 7: Our scale is a key competitive advantage and value driver for our customers
Our scale is a key competitive advantage and value driver for our customers We leverage our pure play modular and storage scale to win locally o 5X next largest alternative provider 128M+ square feet of turnkey space relocatable anywhere in North America Sophisticated commercial and operationa
Slide 8: Our business is inherently sustainable and a pioneer within the industrial circular economy
Our business is inherently sustainable and a pioneer within the industrial circular economy Alternatives Our circular economy solutions Our current solutions Future value proposition Ready to Work solution Temporary Incorporates VAPS to drive reuse modular and of more products and equipment, • We ha
Slide 9: We offer the most flexible and cost-effective temporary space and storage solutions
We offer the most flexible and cost-effective temporary space and storage solutions Our team delivered 10+ mobile offices and several storage In Florida, FPL West County Energy Center is using Flex In Rochester, MN, Trilogy Residential Management is containers for CBS Sports and event coordinators a
Slide 10: We serve diverse end markets and have the ability to reposition within them
We serve diverse end markets and have the ability to reposition within them Revenue By End Market1 End Market Outlook Engineering & Architecture – 2% • Architecture Billings Index (ABI) recently returned to positive territory, Highway & Heavy Construction – 5% following 5 months below 50. The ABI ha
Slide 11: We have compelling unit economics
We have compelling unit economics Illustrative unit level cumulative cash flow 1 Capital investment Rapid Maintenance Proceeds Realized residual values • IRR ~30% over Portable Storage Containers2 Average acquisition cost of payback of Low annual ~$6K ~35 months maintenance costs average >50% of ori
Slide 12: Long history of driving returns with VAPS penetration
We have a long and consistent history of driving compelling returns with Value-Added Products (“VAPS”) penetration • +18% per unit per month rent CAGR over 10 years • Units on Rent up >2x • Quarterly VAPS revenue up >13x Historical Progression of Consolidated Modular Space VAPS Average Monthly Rate1
Slide 13: VAPS are our largest opportunity and drive predictable multi-year growth
VAPS are our largest opportunity and a great example of how innovation drives predictable multi-year growth across our portfolio Modular Solutions Segment Modular Solutions Segment Modular Solutions Segment Modular Space VAPS Future Revenue Potential1 VAPS Future Revenue Potential1 $/unit 700 $184 8
Slide 14: Robust and growing Adjusted EBITDA and free cash flow profile
We have a robust and growing Adjusted EBITDA and free cash flow profile Maximizing Cash Flow Transforming Accelerating Growth • Capex is discretionary due to long-lived assets Post-Global Financial Crisis for Growth and can be adapted to market cycles Avg. EBITDA less • Cash flow remains resilient a
Slide 15: We are executing initiatives representing over $1B of growth opportunity
We are executing initiatives representing over $1B of growth opportunity POTENTIAL ($M) Value Added Products ~$500 and Services (VAPS) Lease Rate Optimization ~$200 Market Penetration ~$200 Logistics ~$50 Recent M&A and MODULAR ~$70 Scale Efficiencies STORAGE 15
Slide 16: Our growth mindset and consistent execution deliver value to our stakeholders
Our growth mindset and consistent execution deliver value to our stakeholders 1 to 4 Year Performance Metric1 Q1 2023 LTM Operating Range Revenue CAGR2 29% 5 - 10% Clear path to invest in M&A and/or our own stock to compound Free Cash Flow Per Share by >2x in four Adjusted EBITDA Margin 42.7% 40 -
Slide 17: Table of Contents
Table of Contents 3 WillScot Mobile Mini Business Overview 17 Q1 2023 Operating Results 20 Q1 2023 Financial Review 27 Value Drivers 31 Appendix 17
Slide 18: We have multiple levers to increase rental rates
We have multiple levers to increase rental rates Modular Space Unit Average Monthly Rental Rate Consolidated ($/unit per month)1 20% 16% 18% 20% 1,100 940 972 989 882 900 758 796 810 826 • Consolidated modular space unit average monthly rental rate increased 20% 698 Y/Y to $989 in Q1 2023 700 500 •
Slide 19: Our stable portfolio of units on rent is underpinned by 3-year lease duration
Our stable portfolio of units on rent is underpinned by 3-year lease duration Average Modular Space Units on Rent Consolidated (in thousands) • Average consolidated modular space units on rent declined 101.1 104.6 100.5 105.4 102.3 105.6 101.2 103.6 102.1 1% Y/Y in Q1 2023 100.0 80.0 • 1.5% increase
Slide 20: Table of Contents
Table of Contents 3 WillScot Mobile Mini Business Overview 17 Q1 2023 Operating Results 20 Q1 2023 Financial Review 27 Value Drivers 31 Appendix 20
Slide 21: We delivered outstanding financial performance in Q1 2023
We delivered outstanding financial performance in Q1 2023 Metric1 Commentary Consistent contributions from volume, pricing, and Value-Added Products, driven Y/Y Change in Leasing Revenue +25% by value-based selling and our price management tools and processes Q1 2023 Adjusted EBITDA and Y/Y Change $
Slide 22: Total Revenue growth of 25% and Adjusted EBITDA growth of 47% in Q1 2023
Delivered Total Revenue growth of 25% and Adjusted EBITDA growth of 47% in Q1 20231,2 Revenue2 Adj. EBITDA1 $M $M 700 • Continued commercial and financial momentum across pure play Modular and Storage segments 600 25% 565 • Adjusted EBITDA Margin expansion of 650 bps Y/Y • Increased pricing and VAPS
Slide 23: Free Cash Flow is accelerating due to top-line growth, margin expansion, and capital management
Free Cash Flow is accelerating due to combination of top-line growth, margin expansion, and capital management Net Cash Provided By Operating Activities2 $M • Continued strong operating cash flow growth from predictable long duration 61% 36% 210 lease revenues 35% 200 2% 188 • Operating cash flows u
Slide 24: We maintain appropriate leverage and a flexible long-term debt structure
We maintain appropriate leverage and a flexible long-term debt structure Liquidity and Debt Maturity Profile1 $B • Leverage at 3.0x last-twelve-months Adj. EBITDA of $963M3 • Resulted in leverage at the bottom of target range of 3.0-3.5x: • ~$1.1B+ available liquidity in our revolving credit facilit
Slide 25: Our LTM capital allocation is consistent with our long-term framework
Our LTM capital allocation is consistent with our long-term framework Capital Allocation Framework $1,684 LTM Capital Generated $1,684 LTM Capital Allocated $5 – $6B Over 5 Years $M | % $M | % % 173 | 10% 377 | 25% 23% 748 | 50% 25% 936 | 56% 44% = 893 | 53% 242 | 14% Net Capex Net Capex Cash From O
Slide 26: Our 2023 outlook implies Adj. EBITDA growth of 16% - 22%
Our 2023 outlook implies Adj. EBITDA growth of 16% - 22% from continuing operations 2022 Results $M Prior 2023 Outlook Current 2023 Outlook Excluding T&P and UK Revenue $2,143 $2,325 – $2,475 $2,350 – $2,450 Adjusted EBITDA1,2 $884 $1,000 – $1,050 $1,025 – $1,075 Net CAPEX $367 $300 – $380 $250 – $3
Slide 27: Table of Contents
Table of Contents 3 WillScot Mobile Mini Business Overview 17 Q1 2023 Operating Results 20 Q1 2023 Financial Review 27 Value Drivers 31 Appendix 27
Slide 28: We are executing initiatives representing over $1B of growth opportunity
We are executing initiatives representing over $1B of growth opportunity POTENTIAL ($M) Value Added Products ~$500 and Services (VAPS) Lease Rate Optimization ~$200 Market Penetration ~$200 Logistics ~$50 Recent M&A and MODULAR ~$70 Scale Efficiencies STORAGE 28
Slide 29: Our growth, cash generation, and capital allocation drive shareholder returns and value creation
Our growth, cash generation, and capital allocation drive shareholder returns and value creation • Strong confidence in free cash flow generation from forward visibility & availability of $1B organic growth levers. • Clear line of sight to $650M annual free cash flow as the portfolio rolls forward p
Slide 30: Our values: health & safety, inclusion, excellence, trust, community
Dedicated To Health Committed To Driven To Excellence Trustworthy & Devoted To Our Community & Safety Inclusion & Diversity Reliable Customers Focused We take responsibility for We are stronger together We measure success We hold ourselves We anticipate the We actively engage in our own well-being a
Slide 31: Table of Contents
Table of Contents 3 WillScot Mobile Mini Business Overview 17 Q1 2023 Operating Results 20 Q1 2023 Financial Review 27 Value Drivers 31 Appendix 31
Slide 32: Strategy and execution driving sustainable growth and returns
Strategy and execution driving sustainable growth and returns Historical Return on Invested Capital1 $M 3,500 16.6% 15.4% 15.0% 3,000 11.7% 9.6% 10.0% 2,500 6.8% 5.0% 2,000 0.0% 1,500 1,000 -5.0% 500 -10.0% - -15.0% 2019 2020 2021 2022 Q1 2023 LTM Average Invested Capital Adjusted Earnings Before In
Slide 33: Summary P&L, balance sheet and cash flow items
Summary P&L, balance sheet and cash flow items Three Months Ended March 31, Key Profit & Loss Items (in thousands) 2023 2022 Leasing and Services Leasing $439,951 $351,559 Delivery and Installation 106,630 85,539 Sales New Units 10,657 5,787 Rental Units 8,230 8,286 Total Revenues 565,468 451,171 Gr
Slide 34: Consolidated quarterly performance
Consolidated quarterly performance Modular Space AMR / UOR1 Portable Storage AMR / UOR1,2 $M $M 220 216 972 989 197 940 882 178 796 810 826 164 166 758 149 155 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Modular Space Average UOR / Utilization Port
Slide 35: Consolidated quarterly performance
Consolidated quarterly performance1 Quarterly Results for the three months ended March 31, 2023: (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Total Revenue $ 565,468 $ 565,468 Gross profit $ 323,128 $ 323,128 Adjusted EBITDA $ 246,842 $ 246,842 Capex for rental equipm
Slide 36: Modular Solutions Segment quarterly performance
Modular Solutions Segment quarterly performance Revenue1,2 Modular Space AMR / UOR1,2 $M $M 400 362 356 350 1,046 335 999 1,028 939 350 288 297 289 853 869 894 300 279 812 250 200 150 100 50 - Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Adjusted EB
Slide 37: Modular Solutions Segment quarterly performance
Modular Solutions Segment quarterly performance1 Quarterly Results for the three months ended March 31, 2023: (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Total Revenue $ 349,670 $ 349,670 Gross profit $ 165,335 $ 165,335 Adjusted EBITDA $ 136,964 $ 136,964 Capex for
Slide 38: Storage Solutions Segment quarterly performance
Storage Solutions Segment quarterly performance Revenue1,2 Portable Storage AMR / UOR1 $M $M 234 216 216 220 216 197 188 178 164 163 163 166 151 155 145 127 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Adjusted EBITDA1,2 Portable Storage Average UOR
Slide 39: Storage Solutions Segment quarterly performance
Storage Solutions Segment quarterly performance1,2 Quarterly Results for the three months ended March 31, 2023: (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Total Revenue $ 215,798 $ 215,798 Gross profit $ 157,793 $ 157,793 Adjusted EBITDA $ 109,878 $ 109,878 Capex fo
Slide 40: 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 (benefit), net interest (income) expense, depreciation and amortization adjusted for certain items considered non-core to our business operations includi
Slide 41: Reconciliation of non-GAAP measures – Adjusted EBITDA Margin %
Reconciliation of non-GAAP measures – Adjusted EBITDA Margin %1 We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue. Income from Continuing Operations Margin is defined as Income from continuing operations divided by revenue. Management believes that the presentation of Adjusted E
Slide 42: Reconciliation of non-GAAP measures – Net Debt to Adjusted EBITDA ratio
Reconciliation of non-GAAP measures – Net Debt to Adjusted EBITDA ratio Net Debt to Adjusted EBITDA ratio is defined as Net Debt divided by Adjusted EBITDA from the last twelve months. We define Net Debt as total debt from continuing operations net of total cash and cash equivalents from continuing
Slide 43: Reconciliation of non-GAAP measures – Net CAPEX
Reconciliation of non-GAAP measures – Net CAPEX We define Net CAPEX as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, "Total Capital Expenditures"), less proceeds from the sale of rental equipment and proceeds from the sale of property,
Slide 44: Reconciliation of non-GAAP measures – Free Cash Flow and Free Cash Flow Margin
Reconciliation of non-GAAP measures – Free Cash Flow and Free Cash Flow Margin Free Cash Flow is a non-GAAP measure. We define Free Cash Flow as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and property, plant and equipment, which are all included
Slide 45: Reconciliation of non-GAAP measures – Return on Invested Capital
Reconciliation of non-GAAP measures – Return on Invested Capital Return on Invested Capital is defined as adjusted earnings before interest and amortization divided by net assets. Adjusted earnings before interest and amortization is the sum of income (loss) before income tax expense, net interest (
Slide 46: Reconciliation of non-GAAP measures – Return on Invested Capital
Reconciliation of non-GAAP measures – Return on Invested Capital Return on Invested Capital is defined as adjusted earnings before interest and amortization divided by net assets. Adjusted earnings before interest and amortization is the sum of income (loss) before income tax expense, net interest (
Slide 47: Common Stock Outstanding
Common Stock Outstanding Outstanding as of March 31, 2023 Total Common Shares 203,723,099 Single Class of Common Stock Q1 2023 • 4.6M common shares repurchased for $216M under share repurchase authorization during the quarter • 22.4M common shares repurchased for $895M and 9.5% reduction in economic
Slide 48: WillScot Mobile Mini
WILLSCOT = MOBILE MINI HOLDINGS CORP wiiscot] | gaohile mini