WillScot Holdings Corporation · NASDAQ:WSC
WillScot — WillScot Mobile Mini Holdings — Q2 2021 Earnings Presentation
43 slides from WillScot's earnings presentation, Aug 6, 2021
Slide 1: Quarterly Investor Presentation
August 6, 2021 Quarterly Investor Presentation Second Quarter 2021
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: 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 4
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 Unlevered IRRs on core portable storage 2 Compelling Unit Economics And Returns on Capital >25% 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 2021 Fleet Count: 365k1 4% 43% 53% Modular Space Portable Storage Tank & Pump Combined 2021 NBV: $2.9B1 Long-lived assets with 20-30 year 5% 3% useful lives 22% Predictable revenue model with 30+ month average lease d
Slide 7: We have compelling unit economics
We have compelling unit economics Illustrative unit level cumulative cash flow Rapid Maintenance Proceeds Capital investment Realized residual values • Portable Storage Containers Average acquisition cost of payback of Low annual average >50% of original IRR ~30% over 30 less than $4k ~30 months mai
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 Market1 End Market Outlook Engineering & Architecture – 3% Construction: Deliveries increased 18% year over year during the quarter. ABI readings over 50 from February to June, which suggests Highway &
Slide 9: We have a robust and growing free cash flow profile
We have a robust and growing free cash flow profile Maximizing Free Cash Flow Transforming Executing Growth Post-Great Financial Crisis for Growth Strategy • Capex is discretionary due to long- lived assets and can be adapted to Avg. Op. FCF market cycles $M 284 221 160 276 485 • Cash flow remains r
Slide 10: VAPS revenue growth opportunity is > $130 million over next 3 years
VAPS revenue growth opportunity is > $130 million over next 3 years in the NA Modular segment VAPS Monthly Rate1 VAPS Future Revenue Potential1 $/unit $/unit 84.8k 12 Units1 x $137 x mo. = $139M • LTM delivered VAPS rates increased 31% Q2 20 Q2 21 year over year VAPS Average Monthly Rate / UOR Lift
Slide 11: Our portfolio of multi-year growth levers is expanding
Our portfolio of multi-year growth levers is expanding Optimize pricing across fleet ─ Dynamic pricing, customer segmentation, contract standardization ─ Natural benefit of portfolio turnover ─ Estimated 45% market share in Modular and 25% market share in Storage Expand VAPS penetration ─ >$130M
Slide 12: Developing Environmental, Social, and Governance (ESG) roadmap
Developing Environmental, Social, and Governance (ESG) roadmap Named executive officer to lead our ESG strategic planning efforts ─ Board actively involved in approach Developing strategy by early 2022 with focus areas in 2021 proxy ESG roadmap will build on common culture to drive value and s
Slide 13: Current Operating Environment
Current Operating Environment 13
Slide 14: Our differentiated value proposition translates across end markets
Our differentiated value proposition translates across end markets 48 unit, 3 floor FLEX complex for JE Dunn 17 Storage Containers delivered for a Bed Bath Richard Branson and his team walk by WillScot while building Loews Hotels project in & Beyond remodel in Greenville, SC. modular offices at Virg
Slide 15: Demand is ramping up across all of our segments
Demand is ramping up across all of our segments Modular Space Unit Deliveries NA Modular Segment +12% -15% +0.4% +3% • Average monthly deliveries increased 12% y.o.y. in Q2 • Accelerating deliveries support year-end UOR recovery Q1 Q2 Q3 Q4 2019 2020 2021 Portable Storage and Modular Space Unit Deli
Slide 16: Our portfolio of units on rent is stable and predictable
Our portfolio of units on rent is stable and predictable Avg. Modular Space Units on Rent NA Modular Segment (in thousands) • Average units on rent were flat sequentially from Q1 • Unit on rent growth will lag the strong delivery volume growth we saw in Q2 due to 34-month lease duration Avg. Portabl
Slide 17: We have multiple levers to increase rental rates
We have multiple levers to increase rental rates Modular Space Units NA Modular Segment (Year over Year % AMR Change1) • Modular space unit average monthly rental rate in NA Modular increased 19.7% y.o.y. to $801 in Q2 2021 • 46% of the increase driven by VAPS • Remainder from core pricing, however
Slide 18: Financial Review
Financial Review WILLSCOT = MOBILE MINI
Slide 19: Strong growth and execution in Q2 give us confidence in the outlook
Strong growth and execution in Q2 give us confidence in the outlook Leasing revenues in NA Modular and NA Storage segments up 16.0% vs pro forma Q2 2020 ─ Pricing performance, increased deliveries in both Modular and Storage, and VAPS penetration driving growth Adj. EBITDA of $175.5M up 14.1% vs
Slide 20: Delivered pro forma Adj. EBITDA growth of 14% in Q2 2021
Delivered pro forma Adj. EBITDA growth of 14% in Q2 2021 on 18% increase in lease revenues1,2 Pro Forma Revenue2 Pro Forma Adj. EBITDA1 $M $M 175.5 8.7 Adj EBITDA1 NA Modular NA Storage UK Storage Tank & Pump Margin % Consolidated Pro Forma Quarterly Revenue2 Pro Forma Free Cash Flow3 $M $M >70% of
Slide 21: Record cash generation is accelerating predictably
Record cash generation is accelerating predictably Net Cash Provided By Operating Activities $M • Operating cash flow increased over prior year due to: 124.6 ─ Addition of Mobile Mini cash flows ─ Organic lease revenue growth ─ Price increases and VAPS penetration ─ Synergy realization ─ Partly offs
Slide 22: We can de-lever rapidly given our growth trajectory and FCF
We can de-lever rapidly given our growth trajectory and FCF Liquidity and Debt Maturity Profile1 • Maintained leverage at 3.7x our pro forma $B last-twelve-months Adj. EBITDA of $682.3M • Utilized $82M FCF and balance sheet in Q2 2021 to: 1.469 ─ Repurchase $135M share equivalents, participating in
Slide 23: 2021 outlook and run-rate into 2022 are steadily improving
2021 outlook and run-rate into 2022 are steadily improving $M 2020 Pro Forma Actuals Previous 2021 Outlook Updated 2021 Outlook Revenue $1,652 $1,750 - $1,830 $1,800 - $1,850 Adjusted EBITDA1 $646 $690 - $720 $710 - $730 Net Capital Expenditures $161 $190 - $230 $200 - $230 • 9% - 12% expected Reven
Slide 24: Growth, cash generation, and capital allocation drive shareholder returns
Growth, cash generation, and capital allocation drive shareholder returns • Strong confidence in free cash flow generation due to our forward visibility and availability of organic growth levers. • Expected de-levering below 3.5x by end of 2021 while funding organic growth. • Completion of our migra
Slide 25: WillScot values
WILLSCOT motile mim SOLUTIONS We Are w Ow ht Driven To Excellence Committed to Inclusion & Diversity Dedicated to Trustworthy & Health & Safety Reliable We take responsibility for our own well-being and for those around us. Health and safety are first, last and everything in-between. We are stronger
Slide 26: Appendix
Appendix WILLSCOT = MOBILE MINI
Slide 27: 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 Three Months Ended Three Months Ended June 30, 2021 June 30, 2020 June 30, 2020 (in thousands, except rates) Total Total Pro Forma Total Leasing and Services Modular Leasing $ 343,179 $ 190,143 $ 290,289 Modula
Slide 28: NA Modular quarterly performance
NA Modular quarterly performance Revenue1,2 Modular Space AMR / UOR1 $M $M Adjusted EBITDA1,2 Modular Space Average UOR / Utilization $M Adjusted EBITDA Adjusted EBITDA Margin (%) Utilization Reported (%) 1 All periods converted at actual rates. Adjusted EBITDA is a non-GAAP measure defined as net i
Slide 29: NA Modular quarterly performance table
NA Modular quarterly performance1 Quarterly Results for the three months ended June 30, 2021: (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Total Revenue $ 266,224 $ 289,382 $ — $ — $ 555,606 Gross profit $ 113,002 $ 116,136 $ — $ — $ 229,138 Adjusted EBITDA $ 97,371 $
Slide 30: NA Storage pro forma quarterly performance
NA Storage pro forma quarterly performance Revenue1,2 AMR / UOR1 $M $M Adjusted EBITDA1,2 Average UOR / Utilization $M Adjusted EBITDA Adjusted EBITDA Margin (%) Utilization (%) 1 All periods converted at actual rates. Adjusted EBITDA is a non-GAAP measure defined as net income (loss) before income
Slide 31: NA Storage pro forma quarterly performance table
NA Storage pro forma quarterly performance1 Quarterly Results for the three months ended June 30, 2021: (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Total Revenue $ 107,748 $ 115,794 $ — $ — $ 223,542 Gross profit $ 72,619 $ 75,721 $ — $ — $ 148,340 Adjusted EBITDA $
Slide 32: UK Storage pro forma quarterly performance
UK Storage pro forma quarterly performance Revenue1,2 AMR / UOR1 $M $M Adjusted EBITDA1,2 Average UOR / Utilization $M Adjusted EBITDA Adjusted EBITDA Margin (%) Utilization (%) 1 All periods converted at actual rates. Adjusted EBITDA is a non-GAAP measure defined as net income (loss) before income
Slide 33: UK Storage pro forma quarterly performance table
UK Storage pro forma quarterly performance1 Quarterly Results for the three months ended June 30, 2021: (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Total Revenue $ 27,007 $ 28,432 $ — $ — $ 55,439 Gross profit $ 16,493 $ 17,937 $ — $ — $ 34,430 Adjusted EBITDA $ 11,0
Slide 34: Tank and Pump pro forma quarterly performance
Tank and Pump pro forma quarterly performance Revenue1,2 $M Adjusted EBITDA1,2 Tank & Pump OEC Utilization $M Adjusted EBITDA Adjusted EBITDA Margin (%) Utilization (%) 1 All periods converted at actual rates. Adjusted EBITDA is a non-GAAP measure defined as net income (loss) before income tax expen
Slide 35: Tank and Pump pro forma quarterly performance table
Tank and Pump pro forma quarterly performance1 Quarterly Results for the three months ended June 30, 2021: (in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Total Revenue $ 24,344 $ 27,494 $ — $ — $ 51,838 Gross profit $ 11,266 $ 13,016 $ — $ — $ 24,282 Adjusted EBITDA $ 8
Slide 36: 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 37: 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 38: Reconciliation of non-GAAP measures – Adj. EBITDA Margin %
Reconciliation of non-GAAP measures – Adj. EBITDA Margin % and Pro Forma Adj. EBITDA Margin %(1) 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
Slide 39: 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 40: 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 41: Reconciliation of non-GAAP measures – Free Cash Flow and Margin
Reconciliation of non-GAAP measures – Free Cash Flow and Free Cash Flow Margin 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 include
Slide 42: 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 June 30, 2021 Total Common Shares 226,832,627 Single Class of Common Stock Shares underlying 2015 private warrants ($11.50 exercise price) ̶ Shares underlying 2018 warrants ($15.50 exercise price) 7,165,911 Outstanding warr
Slide 43: WillScot Mobile Mini Holdings Corp
WILLSCOT = MOBILE MINI HOLDINGS CORP wituscor | | mobile mini
WillScot Mobile Mini Holdings — Q2 2021 Earnings Presentation on 6ix