Willscot Holdings Corporation · NASDAQ:WSC
Willscot — WillScot Mobile Mini Holdings — Q3 2020 Earnings Presentation
44 slides from Willscot's earnings presentation, Nov 6, 2020
Slide 1: Quarterly Investor Presentation Third Quarter 2020
Quarterly Investor Presentation Third Quarter 2020 11/6/2020
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: Turnkey modular space and storage solutions are our business
Turnkey modular 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
Slide 4: WillScot Mobile Mini Overview
WILLSCOT MOBILE MINI OVERVIEW
Slide 5: WSC is highly differentiated and positioned for value creation
WSC is highly differentiated and positioned for value creation In >$5B North American market for modular 1 Clear Market Leadership #1 space and portable storage solutions 2 Compelling Unit Economics And Returns on Capital >25% Unlevered IRRs on core portable storage and turnkey modular space fleet i
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 2019 Fleet Count (1) : 366k Tank & Pump Solutions Ground Level 3% Offices & Other Modular Space 10% 33% Portable Storage 54% Combined 2019 NBV (2) : $2.8B 275 locations Tank & Pump Ground Level Solutions, 5% Offices & Oth
Slide 7: We Have Highly Compelling Unit Economics
We Have Highly Compelling Unit Economics Illustrative unit level cumulative cash flow Rapid Maintenance Proceeds Capital investment Realized residual values • Portable Storage Containers Average acquisition cost of less payback of Low annual average >50% of original IRR ~30% over 30 than $4k ~30 mon
Slide 8: We Have Diverse End Markets And The Ability To Reposition Within Them
We Have Diverse End Markets And The Ability To Reposition Within Them Pro Forma % Revenue By End Market(1) End Market Outlook Engineering & Architecture, 2% Highway & Heavy Construction, 6% • Construction: Strong start to the year w/ deliveries up 4-5% y.o.y. Experienced 20-30% reduction in project
Slide 9: VAPS Revenue Growth Opportunity > $116 Million Over Next 3 Years
VAPS Revenue Growth Opportunity > $116 Million Over Next 3 Years in the NA Modular Segment VAPS Monthly Rate(1) VAPS Future Revenue Potential(1) 86.4K 12 US$ Units(1) x $112 x mo. = $116M • LTM delivered VAPS rates increased sequentially in Q3 by 4% Q3 19 Q3 20 to $286 VAPS Average Monthly Rate / UO
Slide 10: We Have A Robust (And Growing) Free Cash Flow Profile
We Have A Robust (And Growing) Free Cash Flow Profile Transforming Executing Growth Maximizing FCF Post-GFC for Growth Strategy • Long-lived assets provide Avg. Annual Op. ~284 ~221 ~160 ~276 336 significant capex flexibility FCF (US$M): • Capex is discretionary and can Avg. Annual NET CAPEX (US$M):
Slide 11: Current Operating Environment
CURRENT OPERATING ENVIRONMENT
Slide 12: We are nimble and can reposition commercially
We are nimble and can reposition commercially with a differentiated value proposition as activity levels shift between end markets Drive-thru COVID-19 Testing Facilities Reef National Park Visitor’s Center Loyola University Portable Classrooms Used for Social Distancing WillScot Mobile Mini Jobsite
Slide 13: Demand story improving monthly since April 2020
Demand story improving monthly since April 2020 NA Modular US Modular Space Monthly Orders YOY 6,000 YOY -20% - 24% -14% -5% -20% +4% 5,000 Order Rates towards the end of Q3 4,000 improved in both major segments signaling 3,000 stability in forward-looking demand: 2,000 NA Modular: 1,000 Q1 – 7% Gro
Slide 14: Our portfolio of units on rent is stable and predictable
Our portfolio of units on rent is stable and predictable NA Modular Segment - Modular Space Avg Units on Rent (in thousands) • Avg. UOR decreased by 80bps sequentially from Q2, and UOR increased sequentially within Q3 • Unit delivery volumes increased 9% sequentially from Q2 into Q3 • Unit return vo
Slide 15: Strong pricing power demonstrated across the core segments
Strong pricing power demonstrated across the core segments NA Modular – Modular Space Unit Year over Year AMR1 Change (%) • NA modular average monthly rental rate (AMR) increased 10.0% year over year to $693 for Q3 2020 • 9% CAGR across the NA Modular segment since 2017 NA Storage Total Units Year o
Slide 16: Financial Review
FINANCIAL REVIEW WILLSCOT = MOBILE MINI
Slide 17: Our Q3 Results Demonstrate The Resilience And Earnings Potential In Our Business
Our Q3 Results Demonstrate The Resilience And Earnings Potential In Our Business Leasing revenues in our NA Modular and Storage segments were up 1.5% vs pro forma 2019 ─ Multiple levers: pricing, VAPS, volume growth in Storage, and stabilizing volumes in Modular Space Adj. EBITDA of $163.6M was
Slide 18: We expanded from 2 to 4 Reporting Segments
We expanded from 2 to 4 Reporting Segments that align with our operations Legacy WillScot Legacy Mobile Mini Businesses Three Months Ended September 30, 2020 Businesses Tank and Product Types (in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Pump Total Revenue $ 267
Slide 19: Delivered Adj. EBITDA growth of 10% in Q3 2020
Delivered Adj. EBITDA(1) growth of 10% in Q3 2020 Pro Forma Revenue (1) (US$m) Pro Forma Adj. EBITDA (1) (US$m) Pro Forma Free Cash Flow (3) (US$m) 163.6 149.1 Free Cash Flow Merger-related NA Modular NA Storage UK Storage Tank & Pump Adj EBITDA(1) Transaction costs Margin % Q3 '19 Mobile Mini Free
Slide 20: Record cash generation is accelerating
Record cash generation is accelerating Net Cash Provided By Operating Activities (as reported) US$m • Net cash provided by operating activities was up 124.6 $22.4 million in Q3 to $61.4 million • Excluding one-time merger transaction costs, net cash provided by operating activities was up 219% to $1
Slide 21: Reconciliation of non-GAAP measures – Adj. EBITDA
Reconciliation of non-GAAP measures – Adj. EBITDA Three Months Three Months Ended Ended September 30, September 30, Explanation of Reconciling Adjustments Consolidated Adjusted EBITDA(1) Reconciliation 2020 2019 (US$ in thousands) Net Income (loss) 16,252 997 Related to refinancing activities on ABL
Slide 22: We are de-levering rapidly with over $1.0B of liquidity in our ABL
We are de-levering rapidly with over $1.0B of liquidity in our ABL Carrying value Carrying value outstanding at outstanding at September 30, December 31, (in thousands, except rates) Interest rate Year of maturity 2020 2019 2022 Secured Notes 7.875% 2022 $ — $ 264,576 2023 Secured Notes 6.875% 2023
Slide 23: Favorable revision to 2020 outlook
Favorable revision to 2020 outlook continues to reflect resilience and multiple growth levers in our portfolio Pro Forma Adj. EBITDA(1) increases ~6% from $600M to ~$635M at midpoint of outlook despite 2020 disruptions(2) Revenue Adj. EBITDA(1) Pro Forma 2020E(2) ▪ Revenues of $1.625B at midpoint do
Slide 24: We have powerful levers to drive shareholder value creation
We have powerful levers to drive shareholder value creation for years to come and in any operating environment Strong pricing momentum heading into 2021 with a roadmap to improve pricing practices as well as contractual terms and conditions in key areas Modular VAPS represent >$150M of organic reven
Slide 25: Growth, cash generation, and capital allocation will drive future shareholder returns
We believe that growth, cash generation, and capital allocation will drive future shareholder returns 1. We have a high degree of confidence regarding free cash generation into 2021 and beyond, based on the forward visibility in our business model and the idiosyncratic earnings growth levers stemmin
Slide 26: We are aligned as to how we will operate as a team
We are aligned as to how we will operate as a team 26
Slide 27: Appendix
APPENDIX WILLSCOT = MOBILE MINI
Slide 28: Summary P&L, balance sheet & cash flow items
Summary P&L, balance sheet & cash flow items Key Profit & Loss Items As Reported Pro Forma(4) Three Months Ended Three Months Ended Three Months Ended (in thousands, except rates) September 30, 2020 September 30, 2019 September 30, 2019 Leasing and Services Modular Leasing $ 300,082 $ 188,403 $ 299,
Slide 29: NA Modular quarterly performance
NA Modular quarterly performance Revenue (1)(2) (US$m) Modular Space AMR / UOR (1) (US$) Adj. EBITDA (1)(2) (US$m) Modular Space Average UOR / Utilization Utilization (%) 1. All periods converted at actual rates. Adjusted EBITDA is a non-GAAP measure defined as net income (loss) before income tax ex
Slide 30: NA Modular quarterly performance
NA Modular quarterly performance 1. Adjusted EBITDA is a non-GAAP measure defined as net income (loss) before income tax expense, net interest expense, depreciation and amortization adjusted for non-cash items considered non-core to business operations including net currency (gains) losses, goodwill
Slide 31: NA Storage quarterly performance
NA Storage quarterly performance Revenue (1)(2) (US$m) AMR / UOR (1) (US$) Adj. EBITDA (1)(2) (US$m) Average UOR / Utilization Utilization (%) 1. All periods converted at actual rates. Adjusted EBITDA is a non-GAAP measure defined as net income (loss) before income tax expense, net interest expense,
Slide 32: NA Storage quarterly performance
NA Storage quarterly performance 1. All periods converted at actual rates. 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 includin
Slide 33: UK Storage quarterly performance
UK Storage quarterly performance Revenue (1)(2) (US$m) AMR / UOR (1) (US$) Adj. EBITDA (1)(2) (US$m) Average UOR / Utilization Utilization (%) 1. All periods converted at actual rates. Adjusted EBITDA is a non-GAAP measure defined as net income (loss) before income tax expense, net interest expense,
Slide 34: UK Storage quarterly performance
UK Storage quarterly performance 1. All periods converted at actual rates. Adjusted EBITDA is a non-GAAP measure defined as net income (loss) before income tax expense, net interest expense, depreciation and amortization adjusted for non-cash items considered non-core to business operations includin
Slide 35: Tank and Pump quarterly performance
Tank and Pump quarterly performance Revenue (1)(2) (US$m) Adj. EBITDA (1)(2) (US$m) Tank & Pump OEC Utilization Utilization (%) 1. All periods converted at actual rates. Adjusted EBITDA is a non-GAAP measure defined as net income (loss) before income tax expense, net interest expense, depreciation a
Slide 36: Tank and Pump quarterly performance
Tank and Pump quarterly performance 1. All periods converted at actual rates. 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 inclu
Slide 37: Reconciliation of non-GAAP measures – Adj. EBITDA
Reconciliation of non-GAAP measures – Adj. 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) lo
Slide 38: Reconciliation of non-GAAP measures – Pro Forma Adj. EBITDA
Reconciliation of non-GAAP measures – Pro Forma Adj. 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
Slide 39: Reconciliation of non-GAAP measures – Adj. EBITDA margin % and Pro Forma Adj. EBITDA
Reconciliation of non-GAAP measures – Adj. EBITDA margin % and Pro Forma Adj. 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 reg
Slide 40: Reconciliation of non-GAAP measures – Adj. gross profit
Reconciliation of non-GAAP measures – Adj. 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 of
Slide 41: 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 f
Slide 42: 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
Slide 43: We moved to a single class of common stock with the merger
We moved to a single class of common stock with the merger Outstanding as of September 30, 2020 Total Common Shares 227,981,000 Single Class of Common Stock Shares Underlying 2015 Warrants with $11.50 exercise price 8,780,850 Outstanding warrants represent Shares Underlying 2018 Warrants with $15.50
Slide 44: WillScot = Mobile Mini Holdings Corp
WILLSCOT = MOBILE MINI HOLDINGS CORP witiscor | | mobile mini ,
WillScot Mobile Mini Holdings — Q3 2020 Earnings Presentation on 6ix