WSC - Earnings call transcript Q4 2020 | WillScot Holdings Corporation

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Operator

Welcome to the Fourth Quarter 2020 WillScot Mobile Mini Earnings Conference Call. My name is Thiya and I will be the operator for today's call. At this time, all participants are in a listen-only mode. Later we will conduct the question-and-answer session. Please note that this conference is being recorded. the Investor to Relations. turn of Girardi, now and Treasury will call Nick over Director I Nick, may you begin.

Nick Girardi

contains call website. Chief Good the found morning, and Financial earnings the today's Officer. quarter of Mobile Chief Investor Mini Brad Slide and welcome statement. Tim Mobile our material WillScot to Relations call. the Operating Officer; Today's Safe Participants section Boswell, Williams, presentation Officer; Harbor on Kelly Executive WillScot two and fourth include Mini President Soultz, Chief on be may

will making our We be the forward-looking presentation, Q&A statements, and during session.

to Our variety business and operations are which our risks subject of uncertainties, control. are beyond a many and of

our result, comments. a As results from may differ materially today's actual

and other risks, to more statement our call Safe that, refer complete in possible Harbor of Brad the the turn a With and over the could SEC. description to with differ Soultz. our cause I'll filings presentation that please For to factors actual results

Brad Soultz

today. for Good morning, Nick. Thanks, us everyone thank you joining and

As you a release Mobile saw XXXX. WillScot press and transformational tremendous in our Mini had yesterday,

customers. transformational to and Our demonstrated pandemic set all portfolio their our unlike before to tackled value safe most we've ability efforts. of create of rapid team for I'm team for Mobile stakeholders, proud and Mini, response a our any of and and our From WillScot challenges to grateful our to merger and rose between their COVID-XX which business, resilience and importantly

will our incredible and built July. behalf for in Mini of made him many personal start in I Kelly leadership has gratitude next earnings, WillScot of WillScot has everyone entire and contributions professional be the I and instrumental luck, Now, to planning for CEO years enterprise by as impact partnership. he Kelly Mini, come. of an I transition decided the Board, to COO. Mobile integration. And for on before he wish Mobile Mobile journey. Williams like Mini's and our his Mobile for and executing as many his at speak Mini for has to Mobile Kelly pursues company discussing the felt in when His was our WillScot Mini thanking express I'd best he phase

page our turning Now, of presentation. five to

a from As business in know, evidence across provider, sustained over portable a workspace services were of are returns and formula solutions. locations we diverse lots markets The sectors our innovative attributes additional leading one We a specializing network and and business of drop you and North of quarter here in serve growth each fourth economy results, in the all XXX storage clear end branch see we for America constitute which UK. listed and outstanding. flexible

basis. basis Modular durability the revenues basis expanding by revenue forma First year forma driven that the products year-over-year increased our growth margin expanded Storage our EBITDA XX% million a illustrating segments, increased $XXX and our North and of XX% by points of adjusted segment customers. leasing we Modular on was American illustrating in a on X% Adjusted in the pricing This of streams. year-over-year offer pro a value-added XXX prior EBITDA versus X% value pro proposition and

continued progression rent. a increase on margin, units with core exceptional points in sequential stable third VAPS Our and adjusted underpinned basis quarter increases, the XXX all from EBITDA price by was penetration,

pro impressive forma the achievement year adjusted unprecedented full environment. EBITDA, generated given operating an $XXX XXXX, the For we of million

half our our of million way flow XX% quarter, to flow $XX of the free target well on in million XXXX. cash and margin flow generated of annual also by $XXX free of the We run-rate fourth a cash cash free second

team. of that financial the is entirely commitment this is Mobile major the due and pandemic results have the integration determination despite Mini to And the effort accelerated. and our underway, combined Now, WillScot

another one kept safe. You've

executed level. the You've highest at

always the first truly organization. a best-in-class kept and You've customer are

Now, for our excited even successful more as future. was, XXXX I'm

across trend at and order the we our penetration XXXX to midpoint products of revenue expect the organically portfolio continue discuss key to drivers adjusted value-added detail the in pricing rates and and X% expected of our well and growth New EBITDA favorably deliver later, XXXX. are to of over unchanged. as guidance. Tim Volumes our are will course improve but X% the stable guidance as business strategy

incredible long-term tailwinds to opportunity and We products. value-added value and growth for opportunities our begins best Mobile continues creation XX, have Mini. flow by pricing years to we from that M&A WillScot frame and to in have to we bottom of drive The line internally. at benefit upon building powerful the simply see place the that to come, page On practices are already an

expand. of multi-year to continues growth portfolio levers Our

the in rate versus As prior announcement, our delivered as last pricing segmentation, to in continues increase those across we and pricing, implement fleet, across XX% in continue to merger to VAPS work our months segment with optimize standardization premised segments. a modular penetration grow of XX year. the dynamic customer we the VAPS the contract

and of is storage cross and us across expanding flow, our maximize leads application technology combined to reduce diverse We platforms. cross-selling began helping of level offset to of geographies, to in the as the incremental opportunities effectively cash the headwinds advantages. -- by value The non-residential of and fleet. Mini one markets, the as legacy competitive as operational our Mobile storage team absolutely well offices have biggest efficiencies capture course we ground creating talent unique and sharing cost. VAPS our The well leveraging has also Through sales across sharing leads of is expertise end proposition now implement demand the pandemic, began as modular and force further our our

infrastructure, on legacy which Mobile efficiencies. the WillScot are We way supports integrating and well back-office back-office Mini our cost our and synergies to

for years. first margin and Our will we to list system continue improvement this operational migration of opportunities, expansion is year in a contribute on track half have the XXXX growing of which in to future

quickly We customer upon see in you rolling the implies in demand second the demand, of quarter use in XXXX. reinvest a we helps process, strategically. our XX-days capital to zero us changes allocation deploy which on capital growth intend to display we saw last that in continue Based guidance will third year. to base We react today, and fully which

and M&A record organic us drive enable scale pursue successful gives confidence initiatives our track continue to to us Our and to value acquisitions. accretive

to we a in end Finally, to We to well return by reduce on of range turns shareholders. will fourth continue our XXXX. of leverage capital and X.X quarter the to to reduced way leverage X X.X targeted the

in repurchased warrants of XX share is Our to $XXX opportunistically place, fourth and million quarter which used million equivalents. repurchase the authorization in we share

core XX. proposition value and temporary in we ESG the inherently storage strong are solutions, values our modular slide Now, moving to sustainable roadmap. our Leveraging and our developing

partnership Resource Our Bogen, with our recent Officer, our is team, planning Jamie efforts the ESG leading Chief is Human in addition ESG. she our Vice to Hezron President Lopez of

share in Our actively this focus process Board and will XXXX and our of next areas roadmap key in engaged year. a time proxy more comprehensive the is Directors by this

will strategy and with Stay to to core and strategy ESG business our year. value the sustainability. drive values our tuned next both Our align more come over for

segment, ongoing storage segment. deliveries increased utilization -- we in headwinds deliveries the XX, our increase X% utilization and Storage monthly Turning Modular year-over-year. only the in fourth our sequentially saw despite sorry, during in I'm year-over-year a decrease X% the to Modular and quarter, in page was four nonresidential stable

would continue offset to in our schools result on distribution, year-over-year growth non-residential by headwinds return needs screening we leveraging such rent Looking the volume the support as end to across and as as across the improvements sequential space modest new opportunities, our vaccination portfolio, of of unit well the growth expect as non-residential modest the for geographies. of diverse construction by Expected construction in all to customers' year. social-distancing modest markets, across ahead, additional our accommodate we serving end

to branch are on demand, staff is even corporate as network support our Our ramping and laser-focused integration. this resources

increase. Modular quarter sustainable penetration. in XXnd increased We accelerated fourth of as America We've XXth have double-digit year-over-year In increases delivered and XX% rental the heading in price the both Storage of XXXX, strong rate over rates foundation our will form to outstanding Storage into address. continues X%, financial with consecutive along quarter. results and our rental the And Tim pricing XX% increased increases. by an a Tim. year-over-year achieve fundamental outlook underpinned year-over-year which with quarter segment quarter the of that, the hand With marking fourth results further tailwinds, These North to VAPS outstanding it our price consecutive UK segments segment, with improvements the I'll Modular across

Tim Boswell

good everyone. and Brad, you, Thank morning,

Turning XX. to page

contraction, into million XXXX million and the We continued between And see playbook run reported track set quarter. EBITDA last and in in $XXX simple in growth months X.X the new With and flow EBITDA of growth cash versus We a the free cash resilience exceptional, basis, basis XXX free of XXXX XXXX. to X.X net organic on a and EBITDA very potential our on a X% earnings earnings pleased XX integration, puts forma times on This business. will increases, a us and pandemic per versus flow completion for million between which to results of by points our our of another year-end coming lease adjusted the million the income unprecedented in Amidst to expanding X% results. flow are accelerating the in storage XXXX with and portfolio. share on $XXX of our is highlights price year-over-year times milestone put volume that execution and cash share achieve XXXX the year-over-year and free Modular. results our basis. XX% and and North EBITDA, GAAP XX% us last a record a from stabilizing validation guidance to few penetration, and in our margin XXXX as XXXX. pro Our American deleveraging metrics I'll adjusted focus X% easily run for rate for generated our those quarter. translated Leasing our achieve represents year, Modular cash are target have increased adjusted growth solid on a with revenues key pro organic profitability into and the approximately increased adjusted this of flow fourth This half $XX.X of of excited touch million on I'm of volumes second $XXX durability leverage EBITDA the margin growth, XX.X% I'm yet quarter we a well to forma to great forma remarkable $XXX X showing Storage outstanding growth company free reduced by to $XXX million of synergies, again rate three year segments an GDP driven a XXXX VAPS by for in trajectory quarters. mind, a were as our pro

Moving forma prior was of sequentially on few XX. nuances I'll quarter a point to quarter. flat in page from year basis. increased a the versus pro the X% out million and Revenue $XXX third

If forma segment sequentially our pro in North America And America revenue basis the basis again, up million seasonal XX or Storage and in detail declined a $XX you and the break with to revenues the units stronger is this Page into sales down, with strong points XXX and increased increase year-over-year, cash volumes of of on segments. Modular all were increases increased pro and XX.X% the our X% outlook. in a resulting flows. and you encouraging Storage and see leasing X% progression a a and is typical on X% cash Brad forma but an we Modular million view, area from a right more XXXX in QX. Modular the segment. costs. approximately UK, and QX, year-over-year was down chart, flow with bottom our increase XX basis growth strong up margins on quarter, rent respectively, QX although Delivery in $XX integration-related installation North foundation than is even strength million flat in Modular very in in which only regarding and EBITDA record for the America in consolidated Again, as free points solid revenues line from goes very North our investment was inflected pricing leasing flat and XX% will $XX.X segment fleet focus sharply value-added pricing XXXX. mentioned, top that's products the in

forma, increase these sequential range. from quarter approaching in that cash has investing million pro free a increase chart, to not operations support from well million in the X% IT year-over-year merger Our for the dramatic investments adjust to importantly, consistent grow the note transaction Cash $XXX are inclusion I'll the numbers integration. continues bottom the costs. the margin. a Mobile used once third of the in been I'll and you fourth in flow of quarter $X so cash a as Most to is expansion attributable our simply as highlight Mini, of activities right

a to costs through quarter I'll margin higher quarter, you fluctuate third we're the closed, transaction capital merger our flex since cash incurred the we free XX% While flow, the is quarter. in always as caution quarter-to-quarter the will fourth flow for this seeing adjust margin expenditures. if

However, standpoint. clearly allocation gives the the repurchased and I $XX that belabor generating. of optionality of cash warrants of quarter, away, equivalents capable you page this and go the will see will a profile XX. term, through, cash long won't from so is over share million flow $XX capital flow integration us repaid costs and can this million In debt potential we flow synergies fourth business

same All and rate, the and note a that margins free our will all share factors modeling and are our net cash driving from I count income, EPS. GAAP of drive will are GAAP tax stabilizing. perspective flow pre-tax income

precise be significantly. these start and with to can to we I more ramp estimates expect So metrics these

XX. than $X turns X.X finished of page been We have There with leverage over no billion to rapid in and trajectory. other our deleveraging structure changes to our Turning debt liquidity revolver. asset-backed XXXX of our

average million. which annual approximately interest of an cost run implies Our is weighted debt of X.X%, approximately rate $XXX cash

XXXX, to by which end us achieve times sheet leverage than the We X.X balance ample of are easily gives capacity. track on less

Our in debt ample be XXXX, maturities and opportunistic with we'll extremely the no continue of until is flexible and structure. structure optimization to liquidity further

growth for adjusted approximately in and with revenue X% XXXX. adjusted XXXX expect Now, deliver our into basis XX% on market great growth growth X% to rent would improvements to up assumption end our set delivery year-over-year growth with XXXX unit midpoint would segments, on X% XX. across the a supports to outlook cautiously volume X% below and optimistic the year-over-year in year-over-year year of the guidance, storage in organic EBITDA. which Modular on growth of by to backdrop At translate These continued delivery XXXX a volume. X% well assuming prior third and a CapEx of page and strongest in are on starts, mix would would to We're market margin in EBITDA and be year, we increase which We're quarters. costs it revenue footage flow-through of modest in This and and drive installation the albeit second recovery delivery lower our increases the quarters, non-residential variable square construction those strong relative GDP to revenues a levels. X% growth

in costs into basis That points demand actually expect should in margins up. would to year-over-year perhaps and XXX net QX, million as achieved new variable just range and increase fourth picture holds margins to to we Also QX, to fleet we Modular due So we both XXX select as assumption, margin capital products contract, growth, the $XXX if this XXXX. between expenditures VAPS in markets. with million, fourth this said, volume expect refurbishment, quarter to the and sequentially margins fund year record fleet and $XXX normalize, the normally in then above quarter ending the we of

XXXX, in we changes. these we demand-driven, and range or investments are up down, if course, did as Of environment demand can flex entirely the the

on demand the a there this the So be market larger-than-normal in improvement based we imply margin progress our could fluctuation but would year, through welcome as assumptions, backdrop.

how for trajectory Page and second an half, through flow are within have tailwinds and rebuilds to into illustrates the We get will run be North XX massive synergies products value-added will solid obviously stabilize pricing our provides guidance our the primarily that range. XXXX. 'XX segment. on EBITDA from overall in year upward American and our margins we rate that driving business, Modular volume bridge As a the

though what discussed we've practices in Our some apply pricing XXXX are we we for XXXX upside of consistent portfolio. as see the value-added with more across do so previously, these Modular products in assumptions

XXXX. current XXXX, additional heading this quarters, The rate and are which than an be the demand contributing softened volumes year, stronger X.X% invest we an the if the from Our volumes could a volumes. even could year, end third an we cost in easily XXXX. on last last near-term contribution like will XXXX, reverse we representing delivery if headwind. to greater into year. volume relative $XX where true, to cost but million of outlook, improved result of be volumes to revenue of could outlook down in Ironically, by position that would a did course Based variable Modular primarily begin rebuilding be through year-over-year revenue headwind expect, the are inflect suggests start would second in variable run stronger growth. are would volumes they in favorably And

we Lastly, as third see of Mini we approximately planned. the should Mobile we through year synergies the synergies to expected ModSpace and realization, and building the as $XX of see continue synergy million course build quarters the remaining fourth in

We our are Mini the in closing expecting inflation this the areas forecasting employee in back is quarter benefits, perspective. and expenses no but line what comp outlook second we of merger, like were and Mobile cost for we as so were XXXX year, last occupancy in with some from surprises overall

have I this Lastly, page with on framework allocation framework. is consistent believe our our capital XX, unchanged. today remarks been And

what a organic deleveraging backdrop. opportunities, plan flow in is growth supported market Our free to We cash our by like currently trajectory. strengthening is clear, invest as feels

the in don't M&A any balance constraints. of repurchased We we operational or share monitoring And and million fourth opportunities quarter. major opportunistically sheet are have equivalents $XX

WillScot for their perseverance and I'd thank As back to I in great XXXX. the Brad, Mobile turn team results entire to Mini like it

just an not transformed XXXX, trajectory, puts us has but and for on the Brad? come. Your hard exciting years to for company work

Brad Soultz

Thanks, Tim. into slide I'll turn XX.

to Our support to to position years Exiting growth with come XXXX, scale, any point of powerful opportunities VAPS technological portfolio opportunities. Storage large we're create that and execute. value commercial at the our we Modular have momentum represent excited both continued for significant all has further sophistication, a cycle. pricing levers the in in and

together Our our end-market team. nature a overlap business of North and the of in values sales America. complementary The our segments natural cross-sell, of our and result working and already customer between team to alignment is culture the

remaining strong makes of We have can confident on record and $XX prior track synergies our expectation. us we merger about deliver acquisitions million and this execute to from this

We and we allocation our prioritize are thoughtful repurchases. share and as capital deliver to deleveraging consider growth, will we continue and

moving Now, to slide XX.

management Our of expertise long-term Mini our goals in Mobile harness and to team the and combined is legacy place the organizations. WillScot drive

We are excellence prepared our on and beyond. to in aligned and core to deliver continue XXXX values

you This As supporting line the open I and continued prepared our also today our always, our listening team health. thank concludes and to for questions? please of for all Operator, you would remarks. safety company good our you customers. wish

Operator

will [Operator Please Instructions] And America. ahead. our with of Gilardi first go from come Ross Bank question

Ross Gilardi

morning, guys. Good

Brad Soultz

morning. Good

Ross Gilardi

think neighborhood said of rate a more XXXX. a to $XXX going you to about wanted free XX%. think the term, the add longer growth think trying flow conversion would little bit But rate conversion of forward? free conversion a look in just, in how imply ask seem EBITDA I by to XX% a it million target the million 'XX, it a guidance then run basis? on think 'XX just for about Is I'm and to to cash $XXX take that if fair to just I way cash middle long-term I EBITDA somewhere on rate? to at of And your a

Tim Boswell

be as we'll to think dial in Tim. Hey, Ross. able the This I direction. is in. look, right you're portfolio heading that stabilizes, And But the

Okay.

$XX as quarter of conversion million of bit million higher it's where We you But of going. and That's it it's free integration-related conversion take it, an rate $XX take million illustrative QX, the also burdened call higher. expenses, did little of typically. margin So $XXX cash with, flow. so that can is call XX% business is almost But a a example. EBITDA that

extent north right. driven the variable those are flow frankly, roll with flow and items So then portfolio point, as we through to in is front forward the to by XX%. products, pricing the organic only the we business cash value-added to growth And other at business and And in are of of reinvesting what to going EBITDA. your CapEx, some in

that quarter. want to that I If highlight to fleet quarter a some QX be and seasonal QX little and Now, a in refurbishment that, QX. we're lighter. normal dial with we up pattern, fluctuate can QX would do in Typically, would

pause So I'll there.

think reasons go can possible to I logical of very I some evidence in what's believe and higher. QX you've got that, think that

Ross Gilardi

are go cash flow What the from away Tim, away -- one-timers, to XXXX? on XXXX go free in that

Tim Boswell

in be capitalized expenses, $XX down definitely through of I IT continue So out that a the then integration portion our taper in and We in to end we've will that being per A $XX get incur that quarter. we $X and incurred called expenses. is call, last is realized of expect between to I we the But million QX. million that XXXX. the think begin that, million quarter's cash to would about still to I'd as QX. that headwind And said

Ross Gilardi

Okay.

to $XX integration you'll quarters So two next million million year. per quarter for $XX of have

drops basis saying? of in $XX 'XX, expense sort is have $XX full-year million off that to of integration a you'll what on you're So million that

Tim Boswell

a full-year basis, yes, On Yes. right. that's

Ross Gilardi

Yes.

one. timing bit wondering achieving I'm into execute. just little longer-term number you baked talk your just million the $XX you bridge, a this for sense the of then first the to last And million But give buckets show one the to and about for synergy of can your outlook? of few cost $XX the net about of for in million gross synergies synergies 'XX on And better XXXX $X that? left you $XX slides million Okay. On what's EBITDA. the

Tim Boswell

the say based that course what $X on of course -- the always is WillScot Mini call be the of cost about $XX million the million $XX so the it build through synergies the we But building We've years. would P&L. let had XX% year, months Yes, well, merger, the begin of about of XX it, of contribution said during of just ModSpace we'll synergies post-closing. building me million full-year in Mobile that

XX% So $XX $XX $X.XX by divided million $XX is of million. million is million. X

uplift then to thereafter contribution $X.XX XXXX. incremental QX, XX% of So, in growing million synergy by or of realization about QX

are those components. synergy the So

business, some any that present other some do like just factors we expenses, have sake, the it are think inflationary in for comp net benefits would for some But I bridge. of occupancy I kind point things employee a business, simplicity's we and to. purposes of the

Ross Gilardi

the Okay. I'm and an We baked like puts offline the into number it net many what say can outlook gross is, But too the takes not take number? if there the just the it is on absolute is gross math the on basis, synergy math. number 'XX just possible is to dollar

Tim Boswell

it, zip $XX million call Yes, code.

Ross Gilardi

right. All you Thank Okay. very much.

Tim Boswell

Sure.

Operator

Scott question next is Schneeberger go from Oppenheimer. ahead. with Please The

Scott Schneeberger

as in much. and storage, the very well and in I of the rental American this as would Good ask plus GLOs business Is morning. single-digit Thanks rate rental like Modular, American rate particularly the North sustainable 'XX? throughout Modular it Is beyond? clearly North high growth about double-digit potentially to driving Thanks. for nicely. the sustainability

Brad Soultz

the spread, XX% continue progress kind target. We our great pricing. we deliveries We've Yes, The under composition, coming were hood think and I Modular $XXX year were VAPS new is VAPS that if The at to make always several sustainable set years double-digit the on XX% And side. to now you year-over-year. in internal I about just the that same come. of you mean, we growth on of talked look rates from the is for that certainly balance core next of will, you've as the up calls got, for think direction rate if $XXX. growth. again on

the if after rates the growth. continue of were just right platform last or on here kind same double-digit would you've ever on seen of going such Under about level be is as through Storage outstanding and And offices. have XXnd that. consecutive is quarters XX been pandemic growth in it the to stressed, spoke as rate call, hood, in we beauty it So perform to that GLOs, shock the story ground a the the

Tim Boswell

growth. rate Positive

Brad Soultz

rates pretty I'm sorry, the Positive offices, rate Storage and level growth, stable on ground side. on the

So of commercial level further the and effective the as side to we're implement We platform. we on Modular effective office, that began practices used the is the ground UK. in seeing in we've we're the upside think in seeing Storage there

Scott Schneeberger

the the that, could an tip thanks that looking through how and status for potentially? the achievable range? implied the at business of margin through. in high earlier What you Tim, XXXX incremental had So, mentioned guidance, percent then, range? EBITDA you normalized And well, the flow for XX% quo an is your about Brad. in flow end guidance above feeling on times EBITDA Thanks. What's

Tim Boswell

basis there. points. year, variable called about EBITDA, mean, headwind margins easily to right we'll approximately think up I a basis I through the Okay. normalized calling of in business million. $XX XXX points the out That's you XXX if flow want of the to cost we of are by headwind have margin end over the

got guidance, so say, a EBITDA bit million in there, it's $XX it's let's that's just of million million of you if round get to through take to the So the environment. XX-plus a you've little normal, kind midpoint growth, headwind revenue of stabilized portfolio maybe the growth, of percent $XX numbers, of easy above on flow $XXX

Scott Schneeberger

be some things what the that drivers tip bill? you coming Would are range? would the of Tim. you infrastructure require that there could In factors in up look year? that the range, of What that'd high-end or end this guidance it in be at the big push at above up Thanks, down high you or

Brad Soultz

strong we're where at. half the year, first demand see to effective need in of really we'd Scott, Yes, is the

other this offsetting been new So and we've end non-resi markets with some opportunities. headwind markets in or outperformance other

is the So But if will, if of to drive much construction, this medium going push it think we that that's today, to stimulus. The you as top to year. announced a the half, those great going it's first long-term not ease, us range. side new in yet if occurs the and headwinds infrastructure even, was

Tim Boswell

EBITDA portfolio in just it the we'd support XXXX Right, example in, that if that's fantastic another the actually you make I be hire think an is know, in we're with just the scenario you business lever that is move would volume, portfolio depress infrastructure margin a irony doesn't improvement that materializes and be portfolio obviously across widespread and XXXX. But could quickly. be to more The the investing as to year. for a QX, broadly works. how that takes because the pricing quickly. and to building That

range the with comfortable that put very very, we're So we've forth.

Scott Schneeberger

I'll over. All turn appreciate it right. Thanks. I it. Great.

Operator

from McVeigh go with is ahead. question Kevin next Credit The Please Suisse.

Kevin McVeigh

so Great, slides, be much. GLOs. framed million -- the would that million looks in Brad is part of or So another or in million in and you $XXX to like GLOs addition the that? thanks the $XX then Tim, VAPS it of Is that $XXX it

Brad Soultz

to It's in that. addition

Kevin McVeigh

that So it $XXX about million, would is Brad, be all-in, right?

Brad Soultz

just the then, And started getting just implementing mind, Yes. in GLO. VAPS keep in the really we're

So if and really it the to three-year in fairly you begin will then of quarters couple that, trajectory be on think build. about here modest next the

Kevin McVeigh

in think any you faster closing here than about gating number? million would but of million, investments in then, even things to It's helpful. And $XXX you're thought? we puts this Got XXXX, and that it be $XXX cash CapEx, in that, have Tim. it in mean, focus, obviously, flow Is that I lot the like would $XXX factor upside free million because seems like what it. that takes puts on there a

Tim Boswell

Yes.

it's million, then, in number the It's The responses $XXX in made good, fluctuation free easy just upside would make up. of of I the that to any to terms think, center of a go expenditures. terms number. EBITDA And cash flow midpoint same course, to apply I In capital on.

point over even to almost that the really the is entirely see would center would the think But right a now, CapEx anything investment moderate takes to flex end or the we any to levels cause Our based that's on medium top I discretionary growth we it EBITDA of term. profile good range CapEx that on. the that up. expect, And be short-term that just

Kevin McVeigh

Awesome. job. Thank nice you. Really, really

Operator

go is next Please with Stanley. ahead. The from Courtney question Morgan Yakavonis

Courtney Yakavonis

Hi.

just more what huge XXXX projects most not out been impacting just the force, also, portfolio. comment -- you exposure little historically depressing on to fleet? areas on the more? EBITDA the of that necessarily if would sense Just Can to? for has that building the is us impactful can types up follow something your give EBITDA you sales a just little that be of infrastructure that you think bit on CapEx infrastructure have be understand wanted a about a 'XX? GLO on talked comment you then would built potentially Can that help versus is of you've I a you us And out bit And portfolio? that

Tim Boswell

to Courtney, specific question. the else. I'll volume is P&L Brad your Good something applies infrastructure's kind back this my morning, and come shock, will it's of around or start on right, any impact Tim. to comment But infrastructure infrastructure sector whether

a and of across had direct of last take going variable we out example, and structure expenses a labor we year, right? if platforms, the in the QX Modular So, we negatively, the cost a the flexibility of for Storage down, lot going the and And right. lot both demand pulled shock given maintenance business,

you P&L incur get which a revenue the And So now work works performed. do And grows expenses then are maintenance the direction, is those the the of those builds And when if lease way other to make some deliveries. your just shot that that's time. over thing. maintenance then expenses recognized a investment you more great is going

the maintenance So do that whenever it's as the… network. or can on really have about a have infrastructure big more Brad, impact way -- in other, simply movement the margins to volume talk nothing cost about want there's regard. It a branch is in you unique you it is one there short-term

Brad Soultz

less Modular roads all legacy every such bridges offices, I and us. it's factual and by. of construction and storage are a is infrastructure answer Modular short perspective, that drive From helps were on the consumers offices project Yes, ground-level but road large

So we're excited for all.

Courtney Yakavonis

and I some first year. then in appreciated the you've in high from low COVID more about comments from of And some thanks. Great, the the or declines think of the benefits talked historically the versus about the end growth half really being Okay. the guidance non-resi of offsets of

at temporary of of So sense how come projects the the by of can some sense more offset in point, just those you -- you any could these projects? some do demand or of at XXXX this them? about of COVID you -- much when quantify kind was this do have off And any have of point A, longevity

Brad Soultz

be Again, to in testing veins. kind two of COVID, any for the we've hard about things, you think precise, event Brad. not whether of It's answer is Right, that this I'd we're business they're needle is distribution, but I kind offset a done. they're would incremental movers. historically it's scheme vaccine both, volume demand all of in relatively And to grand the small. or seeing

quarter If portfolio really year, an what fourth despite and use of deliveries non-residential whole up example, us. as And you these all over the look year were prior last excites headwinds. that's new the at Modular

it's UK job or need new got America every new additional XXX are of need sales space site, market, and for team largest end their markets. new or North whether end other are just for across on the We've it's buildings that per needed the for opportunities. always MSAs throughout So mining person, their a screening vast the

I So, it's it it predict When headwind. a in a can't -- where it that it us. in does, come puts resilience opportunity the -- will back. I offsetting interesting creates think this portfolio we're the quite us when non-residential for volume that place

Courtney Yakavonis

Okay, great.

Tim Boswell

that I say average haven't we seen any in would our duration. change just lease

Brad Soultz

Yes.

Tim Boswell

What's overall our getting the units pretty to portfolio, the So duration the duration coming we're a average duration the back closely average of contractual what basis. and monitor branches are of is that we this on what's that right.

really seen material numbers. And we any look hadn't we of in a change just different those So it ways. bunch at

Courtney Yakavonis

can synergies starting is benefit then any for Thanks. just you on the guidance you opportunities see great. And from there -- but out lastly -- any to guys bridge pricing, XXXX, Storage mover has any overlap the the of quantify this at been needle some and at historical legacy a point? think with you've talked that customer customers customers. But about that you your between and the called or overlapping has are Okay, I point? cross-sell

Brad Soultz

be, the the vaccination the both will it on close like to merger and big transactional Again, It's Courtney. easier. the its most Effectively of starting aspect automation, the system and But kind a they would of started. which that lot integration to leveraging rollout these teams we support apparent schemes up able forces. were do Super Bowl absolutely been for sales never before. and would teamed large of We have These projects. make

the automate the course it's at over, ERPs our the this we're cross-leads the and if going now, just year, that. start happening around think So the drivers will, more about larger lift, of prosecute XX%. XX% around quickly and you to cut if naturally will, of and the top of of And that it, more as get call one in to very projects. more to continue of we kind see key of stack, share, with which Storage to but I market share, more you is line as mean, office the cross-selling,

we've leads. if engine, them We storage marry to office. and So both providing need and sure internal make you got we're will, this capture of just up and

Courtney Yakavonis

thank Great, you.

Operator

ahead. Jefferies. Please The with next question Ng go is from Phil

Philip Ng

it years? And that practices thinking we from seen should of AMR the rollout Would everyone. for growth in going how more that then that in how you we've XXXX? about kind line you're are opportunity, the Is with X% in think few in VAPS the Hey, cadence good best some morning, about of forward? last longer-term a implementing Storage,

Brad Soultz

start is on deliver right, a through of while it I Yes, products that new portfolio. think I for that the Storage bogey. a mean, to next side higher for roll rate takes X% year at the good to as kind rates, you

Philip Ng

with And good mid-single-digit guys implementing? any stuff this Is longer-term like the targets think we a you then, that should grower going are forward some about?

Brad Soultz

Well, the right. VAPS we've GLOs, quantified opportunity in

Philip Ng

Sure.

Brad Soultz

probably of as in second to quantify. and understand But work year, half we'll back let us you the come really and the we do our with more specifics,

we know guys sure in easy, make I mean, we do sounds We roll right it's way. of the getting but it on a complicated. chain out our all supply work. methodical it You this, extremely

lay talk to the this well as and you we'll both as out to back achieve the time that. about it'd and come take So, opportunity,

Philip Ng

given we're pricing your some impact share, just And it. and market is an scale? you container opportunity for had conditions. an up on hearing to pick that tight Got Has that guys

Tim Boswell

We're is able Tim. I'd obviously. Hey, targeted of day active land in a Phil, are market fleet fleet in in investment, it's and containers net and benefit QX. to this that every it we my remarks, the say, new I which making are are QX mentioned some short some in And term. we

short-term. not to but impediment relatively growth, constraints, So it is in It hurt it's definitely -- an our right doesn't even now. there the are short-term

to US. probably there inland some largest that. out make benefit the are And We marginal of wouldn't supplier containers the is in I modest it. certainly, much But of too

Philip Ng

other and that from similar and and that in we're on I then your mean, just Do logistics backdrop? you branch vein, a how positioned Tim, companies guys you given certain hearing we guys And opportunity cover. scale, of bottlenecks density higher growth, and are then transportation that pass for costs through? Brad And some the for

Brad Soultz

space. that -- expand this continue side seen in margins and to Yes, you've logistics the

mentioned line, each particularly the growth side. we've pretty practices mentioned, as leverage there significant we've drive side, as both and to the fleet think top opportunities other on bottom So truck as before, for the as we Modular real logistics on in-sourcing the best this is line well company a on opportunity is well

of one in portfolio. another this those it's unique So levers

Philip Ng

Okay. Great. Thanks a lot, guys.

Operator

next Please The from question is ahead. Stifel. go Stanley with Elliott

Stanley Elliott

you good basis? actually a bigger taking a morning, and sorts point about about products new talked to target maybe year, much thank question. for the the to kind past has you that VAPS might of of have over portfolio everyone within you we be piece been VAPS on Hey, the this we've where go-forward changed initial pie think the the introduce and so able all When of

Brad Soultz

the Yes. fleet. month, VAPS of if We've existing qualified, of with supportable the target the per $XXX always value million will, you VAPS delivered

more new you will, products time. all cubicle if complexes. for will, implement Probably a more been or year if out that We do riding and million -- we've notably the riding now at we've you rolling it's large and already like most million focused first well-suited, of is this MSAs Our reps of our foremost significant kind complete $XXX $XXX to level. a to everyone get level got solution, endeavor that portion

Storage. we'll yes, VAPS, team entire office, not continue we we'll we new getting the obviously implement and with alluded just on our what keep And million $XXX before So, focused to as to have. in

Stanley Elliott

guidance, it you was organic. mentioned that In the

very be how of want to where You're kind portfolio perspective. XXXX this we might you your of kind to of M&A kind or unfold? realistic a well flow opportunity shifting leverage when and against targets think Is from tracking sort any free about of cash it also here

Brad Soultz

Yes. realistic absolutely is now. M&A

Stanley Elliott

Great. Thank you.

Brad Soultz

[Indiscernible] yep. office, or

Stanley Elliott

it. Appreciate

Tim Boswell

growth part of acquisitions seen for M&A been Yes, the WillScot it's the last more acquirer and over mean, a obviously, two we've be highly strategy to accretive. always tuck-in steady Mobile both was I Mini years, companies,

And remarks, there So is fairly mentioned it my difficult the those. or be constraints. opportunistic. timing operational are in as predict tend financial no I to to of We

Brad Soultz

is the And deliver to anything trajectory. outstanding have don't do an we beauty to

Stanley Elliott

you. guys. Thank Great,

Operator

is question from Brent Please go ahead. next The DA Davidson. with Thielman

Brent Thielman

the the the steel, Modular around think got some the the on morning. balance of want and questions side, Good for similar the cost a a I if I you. to And Thank you great great lever near heard another for obviously sheet, up. I over of year. constraint wonder the congrats of industry. in constraints business, wonder the moving I smaller don't large the because building industry prior rate up issue And side that on you've but something big a lumber some on materials, one fleet, was of for I've quarter, term? follow supply just an participants that's more that's Storage of

Tim Boswell

got agree for one is in-house, competitive We're sitting of be manage right. we've not rather Brent, able big much a or an do go XX-year said because awful several of grow to have capability. domestic a And that we'd would pulse much I always busy We've to you're this lot XX-year expertise but utilization. in-house to the Yes, competency XX- monitor good is that Tim. all for it's it are. refurbishment things we don't an any XX- that's Yes, advertise the a the fleet Modular like we innovative need before do over purchases is And quite to Modular solution our of large-scale business life, life. you. WillScot advantage have and of years, We of that most around in sources to XX% take bring flat-pack the these do do we supply And refurbish core manufacturers unit, the FLEX we a We with we those they and containers think of that marketplace how Modular and now. and in product. our for out international older right and and units domestic as inventory

the I happy net to see supply-demand So a positive and think that's it. in balance actually market we're overall the for

Kelly Williams

Yes, I might add, Brent.

Brent Thielman

Okay. And then on…

Kelly Williams

we've on Yes, historically just the I that obviously real advantage other quick, is think touched scale. I think

ability I about So a some advantage comes talking you're and take to a ability to to Tim huge to we when is but smaller of it differentiator our mean scale reposition of prepare first reposition competitor, smaller when our these as assets, mentioned, competitors. such want

Tim Boswell

Absolutely.

Brent Thielman

Yes.

The on down Slide the side I but of versus Storage preceding have second up X% trend in the a trend business? it's not side mid-teens side, Modular a business, the in XX, quarter. it's in want get Obviously, to on may just come understanding. to terms same such an deliveries of because in you improvement the massive just change back question seen the better that the I wanted that to of

Tim Boswell

is caveat Yes, units it's excluding seasonal one the there.

sequential units. I on when QX. QX year-over-year XX% a the in QX zero Storage just too include I into increase unit So a with on to actual were And we're mean, mean, wouldn't from it, you rent trying fantastic into over Brent. volumes I seasonal read much had the core. up

there. So no concern

If and would is okay, at you quarter, why order bit. numbers have lagging you asked, the the last a looked Modular reverse seen little

I think right. both are improvements, line the is punch here seeing

probably line than punch a days get been market we've optimistic XX have more relative So is today the I we lost in and seen wouldn't little about of too ago. backdrop percentages. improvements The are the sequential would QX, out coming

Kelly Williams

that's it in there significant was why the extremely the you in the side, were improvement that got out on activations, see -- looking on retail I -- short-duration that Storage business they although rentals add year you're you've And might remodels. amount a year-over-year the is you too decline of just is that -- to prior rent. see high-volume, units

that back. rent, units lot a on So you of a didn't come of got you've that units go didn't have lot also but

So the Modular that side in very very, side. we duration that Storage the is have similar to

we with you anticipated. an look very it's So what in would overall have actually at much it's excluding it when -- from seasonal, basis, line

Brent Thielman

you. Okay, Appreciate it. thank

Brad Soultz

we forward I as just we But would that pushing just look do absolutely business. deferral. it's just expect, think add out. a It's remodel we

all whenever ready large supportive we're to remodels of of So customers go. active and our they're with their

Brent Thielman

you. Thank

Operator

ahead. question next Berenberg. from The go with is Sam England Please

Sam England

guys. questions. Hi, for taking the Thanks

between the one, you you exclude could pricing of legacy VAPS? that wondering achieving sense On on pricing current an was if delta the pricing you rent to just us on first budgets And back and I the if a the wondering are get opportunity? for units give idea I the of Modular trying coming just the side was

Brad Soultz

units that's driving VAPS similar to that high just opportunity XX% the on growth we playing rate Sam, slide. as biggest very is portfolio rent pricing The of on VAPS highlighted new growth. do double-digit going the There optimization a to bit be Yes, the rates we've level, be The pricing is but convergence well XX%, core driving it's will the the is driver balance. delivered. on of core

Sam England

success bit the had an then and with between about And national there and it. next Mini? was cross-selling one, have Got with progress any overlap great. national on talk a where you Okay, you you could early accounts accounts, particularly

Brad Soultz

and The back the as just though voice we before years need the really retailers, with customer -- in at the go how well there as we're we up can will of turnkey, of organized, to the support agencies on end we spend event, to and full everything really Yes, pick duration. can investing everything and our and response job, bring like couple more of more large want understand to to going They survey. time, a I frank getting to need. be We're contractors back general large a Sam, We're stay the in some the time large really everything mentioned provide COVID. to for spend Super other three Bowl. that they some of

any not all just is opportunities. we're missing upside. So longer-term This

Sam England

you I Okay, great. one sorry from if just And adverse and recently just wondered the QX? but it, impacts over of if weather more course you've maybe one, mentioned seen then any the quick

Brad Soultz

Yes, absolutely we have.

mind, top keep at foremost, through events well the the this. again, past. house, the needle in in move the see, like a as but of first think of our all -- These You'll hurricane are employees don't certainly of safe and

But absolutely by we one and events any a lost have opportunity, supportive typically volume increases, haven't fleet rates. any followed of period branches. these volume We of volume disruptions of in short-term

So right satisfied that yes, just I'm we've got now most everyone safe.

Sam England

very guys. Thanks much, I'll pass great. over. Okay,

Operator

ahead. Wittmann question is Please The next with Andy from go Baird.

Andy Wittmann

The I the guys. gives great. thought Okay, Thanks, delivery straight helpful and really that information was context.

referenced was order it, but guys segments. the wondering, quarter, ask just the about Tim, primary I in order I data the Of book we talk the I have course, would could since you status order about didn't have thought just of book two maybe and you this if

As you quarter on in the well as the had experience that returns.

I what down that return think was in I quarter activity that on something fourth you wondering and saw mentioned could the XX% if third in front. like was quarter, the address way you you

Tim Boswell

and call the single-digits business. in start QX. significantly pretty there, overall activity was moderated the year. outlook of return Andy, informs year-over-year return our obviously were it, then and Yes, outlook We mid for in But that terms to go -- order I'll decline down, back activity, across the

I shock bit, we rent in head seen on think, return in into did normalizing we could the declines XXXX. delivery unit QX. of some QX a the So from those QX, big impact as have help mitigate that really Obviously

portfolio that So the that way. self is ways one almost the a of is insulating in

forward didn't going be In noise goes there out, on the activity, is When than unit to is more rent, going won't there put it because it's and in deck terms a there a of we right. delivery just deliveries. order in probably

year. allocation with year-over-year argue the to seeing for what leading demand we as to indicators delivery starting kind of assumption we're in very informing But XXXX. increases, it's well new our difficult as across We business is that strong that ground capital X% X% growth right, to And obviously the is that. the see. forecast our our try So

for order mid So year. sitting inform the low here the growth our year. data today, year-over-year into We're it's, using heading to single-digits call that outlook it,

Andy Wittmann

today. good day good all That's Cool. had a and weekend. I Guys, have a

Tim Boswell

Yes, you as well.

Brad Soultz

Andy. Thanks, Yes.

Operator

question Please is with final ahead. Deutsche The from Bank. Wondrack go Sean

Sean Wondrack

operationally and and very Brad on the difficult Tim. side Hey, both job year. Great what a in was M&A

scale generation opportunities whether transaction the net Just or short-term given rate a or out in larger you see Other your leverage of terms could businesses, M&A, it's flow on there, is increase for free your would now to contemplate potentially Storage maybe are target, cash side seeing you in before accelerating? any back where a trending that the you

Brad Soultz

don't we obviously, our Sean, on competitors. or of ourselves the Hey, Yes. strategy comment

scale pursue would continue As the size. side capability and to largest M&A. on our we've targets Storage like, say, got a the seven-per-size Storage the office a before, on said like accretive be given that capacity targets, also we've fifth side side to factual our and Modular on It's the

magnitude transform the Mini to of nothing completely Mobile together coming of WillScot there So and is industry. the

it. this got capability capacity watch space, the we've do to So and

also starting comments. my were highlight these integrated have busy and all in get if right book, we unlocking start We drivers to two that very seamlessly earlier now will, companies the prepared you value a just

Sean Wondrack

That's very very you helpful. Thank much.

Operator

today's Nick. We the call to back turn call. over have end the now I of will reached

Nick Girardi

you Thank your all Mini. interest Mobile Thiya. you, Thank WillScot in for

If me. call, please today's Thank you. you have after contact additional questions

Operator

and today's this conference. gentlemen, concludes Ladies you. Thank

disconnect. now may You

WillScot (WSC) 27 Feb 212020 Q4 Earnings call transcript