Willscot Holdings Corporation · NASDAQ:WSC
Willscot — Q3 2018 Earnings Presentation
33 slides from Willscot's earnings presentation, 2018
Slide 1: Quarterly Investor Presentation Third Quarter 2018
Quarterly Investor Presentation Third 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 Rental Business • Tank & Pump rental revenues up 21.9% in Q3 18 as compared to Q3 17, with increased fleet on rent and healthy pipeline Growing • North American Storage Solutions rental revenue up 9.5% • North American 2018 economic indicators are strong Favorable End-Market • T
Slide 4: Q3 Financial Highlights
Q3 Financial Highlights(1) • Total rental revenues up 10.4% from Q3 17 – Storage Solutions +7.8% Rental Revenue Growth – Tank & Pump Solutions +21.9% • Storage Solutions rental rates increased 2.4% year-over-year; new rates increased 2.3% • Tank & Pump Solutions rates stabilizing, flat year-over-yea
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 20% 6% 25% Industrial/ Commericial Storage Solutions 25% North America Construction 65% 37%
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% 84% 80% 9.2 9.4 9.3 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 Q3 18 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 1
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 Q3 17 to Q3 18 $3 $216 4.2% $205 $4 $4 2.9% 2.9% 3.0% 2.6% 2.6% 2.3% 2.4% 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 Q3 18 Q3 2017 Rental Rate Ancillary,
Slide 8: Active Rental Fleet Management
Active Rental Fleet Management Storage Solutions Tank & Pump Solutions Average Unit Utilization(1) 81.3% Average OEC Utilization(2) 71.8% 75.7% 73.6% 74.2% 72.5% 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 Rental Fleet in Units(1) (in thousands
Slide 9: Financial Review
Financial Review 9
Slide 10: Revenue Highlights
Revenue Highlights Total Revenues Rental Revenues (in millions) (in millions) $149.7 $146.7 $142.0 $140.9 $138.5 $140.7 $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 Q3 17 to Q3 18 • Third quarter rental revenues increased 1
Slide 11: Profitability
Profitability Adjusted EBITDA (in millions) • Total adjusted EBITDA of $55.4 million, margin of 37.0%, up $55.4 $55.6 370 bps from prior-year quarter $50.0 $48.6 $45.5 • Storage Solutions adjusted EBITDA of $46.2 million $41.7 $42.0 – Up 18.2% from prior-year quarter – Margin of 38.4%, up 340 bps fr
Slide 12: Efficiency and Performance Update
Efficiency and Performance Update Number of Employees at Period End • Rental, Selling and General Expense up $3.3 million compared to 2,020 2,026 2,048 2,026 2,044 2,046 2,008 Q3 17(1) – Higher transportation and re-rent costs due to increased activity • As a percentage of total revenues(1), Rental,
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 $97.3 $91.6 $90.7 $92.9 $92.2 $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 Q3 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Adjusted EBITDA U
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 $22.6 $23.0 $21.6 $22.2 $20.3 $21.2 $20.2 $20.3 $20.4 $20.4 $19.9 $18.2 $19.0 £17.3 £17.7 £16.4 £16.6 £16.3 £16.6 £15.7 £15.9 £14.7 £15.5 £15.0 £15.0 £14.8 £14.6 Q1 17 Q2 17 Q3 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 $29.3 $28.3 $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 Q3 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Adjusted EBITDA OEC Utilizat
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) $23.4 $23.7 $19.3 $19.6 $18.8 $18.2 $17.5 $14.4 $14.9 $11.5 $11.4 $11.7 $8.9 $5.4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2018 2017 2018 • Free cash flow of $17.5 million Property, Plan
Slide 17: Debt Profile at September 30, 2018
Debt Profile at September 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 4.4x $621.4 $946 $954 $942 $940 $943 $11.2 $915 $937 $937 $926 $923 $922 $610.2 $254.5 $4.5 $250.0 $2.6 $10.1 $11.3 $9.9 $8.4
Slide 18: Asset Impairment and Divestiture
Asset Impairment and Divestiture 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
Slide 19: 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 20: 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 21: Market Leader in Leading Storage Market
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 22: Appendix
Appendix 22
Slide 23: 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 24: 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 Q3 Net income (loss) $ 10.2 $ 8.8 $ 11.2 $ 92.1 $ 14.9 $ 15.0 $ (52.2) $ 69.8 Interest expense 8.4 8.8 9.2 9.3 9.6 10.1 10.5 39.5 Income tax provision (benefit) 5
Slide 25: 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 Q3 Net cash provided by operating activities $ 32.7 $ 30.5 $ 32.6 $ 39.8 $ 34.9 $ 35.0 $ 46.3 $ 156.0 Interest paid 13.7 4.5 12.2 4.7 12.3 5.8 13.6 36.
Slide 26: 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 Q3 Net cash provided by operating activities $ 32.7 $ 30.5 $ 32.6 $ 39.8 $ 34.9 $ 35.0 $ 46.3 $ 156.0 Additions to rental fleet, excluding acqu
Slide 27: Reconciliation of net income to adjusted net income, Q3 2018
Reconciliation of net income to adjusted net income (1) For the three months ended September 30, 2018 (in millions, except per share data and includes effects of rounding) Statement of Asset Impairment Adjustment to Statement of Operations Charge and Loss on Provisional Operations As Reported Divest
Slide 28: Reconciliation of net income to adjusted net income, Q3 2017
Reconciliation of net income to adjusted net income (1) For the three months ended September 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) Adj
Slide 29: Reconciliation of net income to adjusted net income, nine months 2018
Reconciliation of net income to adjusted net income (1) For the nine months ended September 30, 2018 (in millions, except per share data and includes effects of rounding) Statement of Asset Impairment Adjustment to Statement of Operations Restructuring Charge and Loss on Provisional Tax Operations A
Slide 30: Reconciliation of net income to adjusted net income, nine months 2017
Reconciliation of net income to adjusted net income (1) For the nine months ended September 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 (
Slide 31: Constant Currency Calculations
Constant Currency Calculations (in millions and includes effects of rounding) Three Months Ended September 30, 2018 As Reported (1) Calculated in Constant Currency (2) Difference Tank & Pump Tank & Pump Storage Solutions Solutions Total Storage Solutions Solutions Total Total Rental revenues $112.6
Slide 32: 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 2017 2018 LTM Q1 Q2 Q3 Q4 Q1 Q2 Q3 Net income (loss) $ 8.4 $ 6.0 $ 7.8 $ 92.3 $ 11.6 $ 10.6 $ (49.9) $ 64.5 Interest expense 5.6 6.0 6.4 6.5 6.7 7.2 7.
Slide 33: 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 United Kingdom 2017 2018 LTM Q1 Q2 Q3 Q4 Q1 Q2 Q3 Net income (loss) $ 4.0 $ 4.4 $ 5.0 $ 6.1 $ 3.7 $ 3.9 $ (2.5) $ 11.1 Interest expense 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0