Willscot Holdings Corporation · NASDAQ:WSC
Willscot — Q4 2024 Earnings Presentation
44 slides from Willscot's earnings presentation, Feb 20, 2025
Slide 1: Quarterly Investor Presentation Fourth Quarter 2024
QUARTERLY INVESTOR PRESENTATION FOURTH QUARTER 2024 February 20, 2025
Slide 2: Safe Harbor
SAFE HARBOR Forward Looking Statements Non-GAAP Financial Measures This presentation contains forward-looking statements (including the guidance/outlook This presentation includes non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin from continuing operations, Adjusted Free
Slide 3: Table of Contents
04 17 22 WillScot Business Q4 2024 Q4 2024 Overview Operating Results Financial Review TABLE OF CONTENTS 28 30 Company Values Appendix 3
Slide 4: The Continuous Evolution of Turnkey Spaces
THE CONTINUOUS EVOLUTION OF TURNKEY SPACES Leading Onsite Comfort & Facilities Turnkey Storage Solutions Clearspan Structures From restrooms to efficient climate-control, we aim to make Highly customized storage solutions to help Expansive, durable, and highly configurable your site as comfortable a
Slide 5: WSC Has an Established Formula to Drive Sustainable Growth and Returns
WSC HAS AN ESTABLISHED FORMULA TO DRIVE SUSTAINABLE GROWTH AND RETURNS 1 Clear Market Leadership #1 In ~$20B North American market for flexible space solutions 2 Compelling Unit Economics And Return on Invested Capital >25% Unlevered IRRs on portable storage and turnkey modular space fleet investmen
Slide 6: We Offer the Most Flexible and Cost-Effective Temporary Space Solutions
WE OFFER THE MOST FLEXIBLE AND COST-EFFECTIVE TEMPORARY SPACE SOLUTIONS LA Rams Training Facility Lowes uses Ground-Level Office as a temporary store in Maderia Beach, FL FLEX Complex in Chicago, IL set to build Bally’s Casino Solar install in Farmington, NM WillScot provides 25 mobile offices durin
Slide 7: Our Scale Is a Key Competitive Advantage and Value Driver
OUR SCALE IS A KEY COMPETITIVE ADVANTAGE AND VALUE DRIVER FOR OUR CUSTOMERS ▪ We leverage our scale to win locally ▪ ~128M square feet of turnkey space relocatable anywhere in North America ▪ Sophisticated commercial and operational technology platform ▪ ~4,500 experts safely work ~9M hours annually
Slide 8: Pioneer Within the Industrial Circular Economy
WE ARE A PIONEER WITHIN THE INDUSTRIAL CIRCULAR ECONOMY AND OUR BUSINESS IS INHERENTLY SUSTAINABLE Alternatives Our circular economy solutions Ready to Work solution Permanent new construction Incorporates VAPS to drive reuse ▪ We have implemented of more products and equipment, Requires extensive m
Slide 9: Our Lease Revenues Compound Predictably, With Stability Through Cycles
OUR LEASE REVENUES COMPOUND PREDICTABLY, WITH STABILITY THROUGH CYCLES $1.8B Leasing Revenue LTM GDP¹ Non-residential construction square foot starts¹ Lease Revenue2 Increase of ~84% $1.0B Lease Revenue2 2019 2020 2021 2022 2023 / 2024 “Normal” Demand COVID Shock Post-COVID Inflection “Exceptional”
Slide 10: We Continue to Invest to Optimize Our Platform
WE CONTINUE TO INVEST TO OPTIMIZE OUR PLATFORM Investments in the Business Investments in Core Solutions Investments in Our Team Investments in New Offerings 2020 2021 2022 2023 2024 2025 + CRM Harmonization Digital Logistics Optimization ▪ Branding ▪ Project One ▪ Website ▪ VAPS quoting ▪ Customer
Slide 11: We Serve Diverse Customer Segments and Can Reposition Within Them
WE SERVE DIVERSE CUSTOMER SEGMENTS AND CAN REPOSITION WITHIN THEM Revenue By Customer Segment1 Customer Segment Outlook Engineering & Architecture – 2% ▪ Continued multi-year demand from Highway & Heavy Construction – 4% strategic onshoring with infrastructure demand beginning in H2 2024, creating t
Slide 12: We Have Compelling Unit Economics
WE HAVE COMPELLING UNIT ECONOMICS Illustrative unit level cumulative cash flow 1 Maintenance Proceeds Capital investment Rapid Realized residual Average acquisition payback of Low annual maintenance values average >50% ▪ IRR ~30% over Portable Storage cost of ~$4K ~35 months costs of original factor
Slide 13: Our Growth Algorithm Is Simple and We Have Multiple Paths to Shareholder Returns
OUR GROWTH ALGORITHM IS SIMPLE AND WE HAVE MULTIPLE PATHS TO DRIVE SHAREHOLDER RETURNS OVER TIME ▪ Moves directionally with GDP overweight to non-residential construction ▪ Governed by 3-year lease duration Value-Added Adj. EBITDA Growth Volume Rate Lease Revenue Margin Products M&A with 45% - 50% (
Slide 14: We Have a Robust and Resilient Free Cash Flow Profile
WE HAVE A ROBUST AND RESILIENT FREE CASH FLOW PROFILE Carve-Out and Minimal North American Investment under Transforming Accelerating Growth Global Ownership Structure for Growth ▪ Capex is discretionary due to long-lived assets and can be adapted Avg. EBITDA 282 173 830 less Net Capex to market cyc
Slide 15: We Successfully Executed and Will Continue to Prosecute Our Clear Formula
WE SUCCESSFULLY EXECUTED AND WILL CONTINUE TO PROSECUTE OUR CLEAR FORMULA TO DRIVE SUSTAINABLE GROWTH AND RETURNS Performance 3 – 5 Year Operating Metric1 Range As of Q4 2024 % | $M (‘21 Investor Day) Revenue CAGR2 5 - 10% 1% ▪ Portfolio of growth initiatives gives us Adjusted EBITDA Margin 40 - 45%
Slide 16: Table of Contents
04 17 22 WillScot Business Q4 2024 Q4 2024 Overview Operating Results Financial Review TABLE OF CONTENTS 28 30 Company Values Appendix 16
Slide 17: Long History of Compounding Unit Returns With Value-Added Products
WE HAVE A LONG AND CONSISTENT HISTORY OF COMPOUNDING UNIT RETURNS WITH VALUE-ADDED PRODUCTS Historical Progression of Modular Space VAPS1 ▪ ~14% per unit per month rent CAGR over 10 years Average Monthly Rate2,3 ▪ Units on Rent up >2x $/unit ▪ Quarterly VAPS revenue up ~5x 2019-2024 Average UOR: ~10
Slide 18: VAPS Are Our Largest Opportunity
VAPS ARE OUR LARGEST OPPORTUNITY AND AN EXAMPLE OF INNOVATION DRIVING PREDICTABLE MULTI-YEAR GROWTH Modular Units VAPS Future Revenue Potential1,2,3 92.7k Units1,2 x $77 + $204 x 12 mo. = $313M $/unit VAPS Average Monthly Rate / UOR 204 +7% Y/Y Lift from Current Average ▪ ~$313M revenue growth oppor
Slide 19: Consistent Rental Rate Performance Reflects Differentiated Value Proposition
OUR CONSISTENT RENTAL RATE PERFORMANCE REFLECTS OUR DIFFERENTIATED VALUE PROPOSITION Modular Space Unit Average Monthly Rental Rate1 $/unit per month ▪ Modular space unit average monthly rental rate increased 1,149 1,091 1,176 1,130 1,199 1,145 1,215 6% Y/Y to $1,215 in Q4 2024 1,031 977 1,010 858 9
Slide 20: Portfolio of Units on Rent Underpinned by 3-Year Lease Duration
OUR PORTFOLIO OF UNITS ON RENT IS UNDERPINNED BY 3-YEAR LEASE DURATION Average Modular Space Units on Rent1 in thousands 100.7 99.8 102.0 98.9 102.9 98.2 103.1 97.7 ▪ 5% decline in average modular units on rent, with strength 95.8 95.7 94.9 92.7 in industrial and manufacturing offset by headwinds fr
Slide 21: Table of Contents
04 17 22 WillScot Business Q4 2024 Q4 2024 Overview Operating Results Financial Review TABLE OF CONTENTS 28 30 Company Values Appendix 21
Slide 22: Revenue and Adjusted EBITDA in Q4 2024
REVENUE AND ADJUSTED EBITDA IN Q4 2024 ▪ Leasing revenue decreased 3% Y/Y ▪ Driven by volume declines, with modular units on rent down 5% and storage Revenue Adjusted EBITDA1 units on rent down 17% $M $M ▪ Offset by VAPS penetration and increased rates from our price management tools / processes and
Slide 23: Free Cash Flow Driven by Predictable, Recurring Lease Revenues
FREE CASH FLOW DRIVEN BY PREDICTABLE, RECURRING LEASE REVENUES AND CAPITAL MANAGEMENT Net Cash Provided By Operating Activities1 $M ▪ Adjusted Free Cash Flow Margin was 23% in Q4 and over LTM2 209 210 219 188 202 176 191 202 200 192 146 149 ▪ Continued strong operating cash flow from predictable, re
Slide 24: Appropriate Leverage and Flexible Long-Term Debt Structure
WE MAINTAIN APPROPRIATE LEVERAGE AND A FLEXIBLE LONG-TERM DEBT STRUCTURE Liquidity and Debt Maturity Profile1 $M ▪ Leverage at 3.5x last-twelve-months Adj. EBITDA of $1.06B $1,596 $1,576 ▪ ~$1.6B available liquidity in our revolving credit facility $527 $500 $500 $500 6.125% 4.625% 6.625% 7.375% ▪ W
Slide 25: LTM Capital Allocation Consistent With Framework; Adding Dividend in 2025
OUR LTM CAPITAL ALLOCATION IS CONSISTENT WITH OUR LONG-TERM FRAMEWORK | ADDING DIVIDEND IN 2025 Capital Allocation Framework $874 LTM Capital Allocated Updated to Add Dividend $M | % Program Beginning Q1 2025 % 25% 226 233 26% 27% 50% 121 14% 25% 294 33% Net Capex Net Capex M&A M&A Returns to Shareh
Slide 26: 2025 Financial Outlook
2025 FINANCIAL OUTLOOK 2024 Results $M 2025 Outlook From Continuing Operations Revenue $2,396 $2,275 - $2,475 Adjusted EBITDA1 $1,063 $1,000 - $1,090 Net CAPEX $233 $225 - $305 ▪ Continued growth in average monthly rates, inclusive of VAPS, and expanded product offerings ▪ Uncertain macroenvironment
Slide 27: Table of Contents
04 17 22 WillScot Business Q4 2024 Q4 2024 Overview Operating Results Financial Review TABLE OF CONTENTS 28 30 Company Values Appendix 27
Slide 28: Our Company Values
OUR COMPANY VALUES WE ARE Dedicated To Committed To Driven To Health & Safety Inclusion & Diversity Excellence We take responsibility for our own We are stronger together when we We measure success through our well-being and for those around us. celebrate our differences and strive results and the a
Slide 29: Table of Contents
04 17 22 WillScot Business Q4 2024 Q4 2024 Overview Operating Results Financial Review TABLE OF CONTENTS 28 30 Company Values Appendix 29
Slide 30: Appendix
APPENDIX WILLSCOT RIGHT FROM THESTART — 20.
Slide 31: Return on Invested Capital
RETURN ON INVESTED CAPITAL1 $M 17.7% 16.7% 3,500 15.4% 15.0% 3,000 11.7% 9.6% 10.0% 2,500 5.0% 2,000 0.0% 1,500 1,000 -5.0% 500 -10.0% - -15.0% 2020 2021 2022 2023 2024 Average Invested Capital Adjusted Earnings Before Interest and Amortization Return On Invested Capital 1 See additional pages in Ap
Slide 32: Summary P&L, Balance Sheet and Cash Flow Items
SUMMARY P&L, BALANCE SHEET AND CASH FLOW ITEMS Key Profit & Loss Items Three Months Ended December 31 Year Ended December 31 (in thousands) 2024 2023 2024 2023 Leasing and Services Leasing $465,104 $477,895 $1,839,875 $1,833,935 Delivery and Installation 95,607 102,197 418,881 437,179 Sales New Unit
Slide 33: Consolidated Quarterly Performance
CONSOLIDATED QUARTERLY PERFORMANCE Modular Space Unit Average Monthly Rental Rate1 Portable Storage Unit Average Monthly Rental Rate1 $/unit per month $/unit per month 1,215 262 262 263 265 275 1,199 242 1,176 223 1,145 1,149 214 1,130 1,091 1,031 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Q1 2
Slide 34: Consolidated Quarterly Performance
CONSOLIDATED QUARTERLY PERFORMANCE1,2 Quarterly Results for the year ended December 31, 2024: (in thousands, except for units on rent Q1 Q2 Q3 Q4 TOTAL and monthly rental rate) Revenue $587,181 $604,590 $601,432 $602,515 $2,395,718 Gross profit $316,888 $327,118 $321,484 $336,349 $1,301,839 Adjusted
Slide 35: 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 36: 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 37: Reconciliation of Non-GAAP Measures – Adjusted EBITDA Margin %
RECONCILIATION OF NON-GAAP MEASURES – ADJUSTED EBITDA MARGIN % We define Adjusted EBITDA Margin 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 business. The following
Slide 38: 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 continuing operations from the last twelve months. We define Net Debt as total debt from continuing operations net of total cash and cash e
Slide 39: 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 40: Reconciliation of Non-GAAP Measures – Adjusted Free Cash Flow and Margin
RECONCILIATION OF NON-GAAP MEASURES – ADJUSTED FREE CASH FLOW AND ADJUSTED FREE CASH FLOW MARGIN Adjusted Net Cash Provided By Operating Activities is defined as net cash provided by operating activities excluding one-time, nonrecurring payments for the McGrath termination fee and transaction costs
Slide 41: Reconciliation of Non-GAAP Measures – Adjusted Free Cash Flow and Margin
RECONCILIATION OF NON-GAAP MEASURES – ADJUSTED FREE CASH FLOW AND ADJUSTED FREE CASH FLOW MARGIN Adjusted Net Cash Provided By Operating Activities is defined as net cash provided by operating activities excluding one-time, nonrecurring payments for the McGrath termination fee and transaction costs
Slide 42: 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 Average Invested Capital. Management believes that the presentation of Return on Invested Capital provides useful information regard
Slide 43: 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 Average Invested Capital. Management believes that the presentation of Return on Invested Capital provides useful information regard
Slide 44: WillScot
WILLSCOT RIGHT FROM THESTART = «a