Second Quarter 2015 Investor Conference Call

Transcription

1 Second Quarter 2015 Investor Conference Call August 20, 2015 December 13, 2012 DRAFT 5

2 Safe Harbor Basis of Presentation Unless otherwise noted or unless the context otherwise requires, all references to we, us, our, the Group and the Company refer to Algeco Scotsman Global S.à r.l., a limited liability company incorporated under the laws of Luxembourg, together with its subsidiaries. As used in this presentation, EMEA means Europe, the Middle East and Africa, Americas means the United States, Canada, Mexico, and Brazil, and Asia Pacific means Australia, New Zealand, and China. Unless otherwise noted or unless the context otherwise requires, all amounts are presented in U.S. dollars ( US$ ). Use of Non-GAAP Financial Measures This presentation includes certain financial measures not calculated and presented in accordance with U.S. Generally Accepted Accounting Principles ( GAAP ), including, but not limited to, EBITDA, Adjusted EBITDA, Adjusted Gross Profit, and certain ratios and other metrics derived therefrom. These non-gaap financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing our financial condition and results. Therefore, these measures should not be considered in isolation or as alternatives to net income, cash flow from operations or other measures of profitability, liquidity or performance under GAAP. These measures may not be comparable to similarly-titled measures used by other companies. A reconciliation of each non-gaap financial measure to the most comparable GAAP financial measure is included in an appendix to this presentation. Use of Constant Currency Results We believe that currency exchange rates are an important factor in understanding period-to-period comparisons of our financial results. Accordingly, we present financial results on a constant currency basis in addition to our reported actual currency results. Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. Unless stated otherwise, in this presentation, we calculate constant currency results by calculating current-year results using prior-year currency exchange rates. We generally refer to such amounts as excluding or adjusting for the impact of foreign currency or being on a constant currency basis. These constant currency results should be considered in addition to, as opposed to as a substitute for, our actual currency results. Constant currency results, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP. Q Investor Call 2

3 Safe Harbor Forward-Looking Statements This presentation contains forward-looking statements, which reflect industry outlook, our expectations regarding our future growth, results of operations, operational and financial performance, liquidity and capital resources, capital expenditures and investments, business prospects and opportunities, challenges and future events. All statements other than statements of historical fact are forward-looking statements. Words such as, but not limited to, anticipate, continue, estimate, expect, may, might, will, project, should, would, believe, intend, continue, could, plan, predict, and negatives of these words and similar expressions are intended to identify forward-looking statements. In particular, statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance contained in this presentation are forward-looking statements. Although the forward-looking statements contained in this presentation reflect management s current beliefs based upon information currently available to management and upon assumptions which management believes to be reasonable, actual results may differ materially from those stated in or implied by these forward-looking statements. A number of factors could cause actual results, performance or achievements to differ materially from the results expressed or implied in the forward-looking statements. Readers should not place undue reliance on the forward-looking statements. Forward-looking statements necessarily involve significant known and unknown risks, assumptions and uncertainties that may cause our actual results, performance and opportunities in the future periods to differ materially from those expressed or implied by such forward-looking statements. There can be no assurance that the results contemplated in the forward-looking statements will be realized. We cannot assure you that forward-looking statements will prove to be accurate, as actual actions, results and future events could differ materially from those anticipated or implied by such statements. All future written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. These forward-looking statements are made only as of the date of this presentation and, except as required by law, we undertake no obligation, and specifically decline any obligation, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation should be read together with our June 30, 2015 and December 31, 2014 consolidated financial statements and the notes thereto. Q Investor Call 3

4 Q Overview Q2 Adjusted EBITDA of $112.1m at Constant Currency FX and $101.2m at Actual FX Adj. EBITDA at CC FX up $3.6m over prior year Adj. EBITDA at Act FX up $15.8m over Q bps of Adjusted EBITDA margin expansion in a challenging environment Q2 results benefitted from cost cutting actions taken in prior periods South Texas Family Residential Center fully operational in early June; full revenue recognition in Q3 and beyond Q Investor Call 4

5 Clear Global Leadership Leading global business services provider of modular space and secure portable storage solutions Market leader in all major markets within our operating regions: Americas - #1 / #2 Asia Pacific (Aus/NZ) - #1 EMEA - #1 / #2 Branch / depot locations globally: 246 Countries with physical presence: 28 Modular and storage fleet units: ~293,000 Fully managed remote accommodation ~10,300 rooms: Q Investor Call 5

6 Diverse Footprint and End Markets Broad geographic, end-market and customer diversity The Commercial / Industrial sector represents our strongest market, while the Oil & Gas sector contribution percentage declined Diverse customer base - Approximately 65,000 customers - Top 20 customers ~22% of Leasing and Services revenue Long contract periods - Average modular lease duration: ~25 months Q Revenue Mix Geographic EMEA 47% Asia Pacific 14% Americas 39% Q LTM Revenue Mix Sector 9% 12% 15% 5% 5% 21% 17% 16% Commercial/Industrial 21% Services/Other 17% Oil & Gas 16% Manufacturing 15% Infrastructure/Residential 12% Government 9% Education 5% Mining 5% Q Investor Call 6

7 Agenda I) Strategic Priorities & Q2 Highlights II) III) Financial Results Questions & Answers Q Investor Call 7

8 Strategic Priorities Revenue Optimize pricing (rental rates) globally and increase the amount and percentage of revenue contribution from value added products and services ( VAPS ); we expect VAPS revenue per unit to continue to grow by 10% or more Increase Modular Space Leasing revenue in target markets U.S., Canada, France, Germany, and the U.K.; reduce fleet investment in non-target markets Continue to pursue non-cyclical Remote Accommodations opportunities through dedicated large projects team Profitability Increase utilization globally from ~73% in Q to approaching 75% by year end Continue focus on managing SG&A with $10m in run-rate savings by year end Capital Discipline Manage capital aggressively; 2015 Net CapEx expected to be $ m Invest primarily in target markets demonstrating organic growth Continue to manage cost structure aggressively in Australia and Brazil businesses; modest capital investment expected Q Investor Call 8

9 Oil & Gas Exposure (US$ in millions at Reported Currency) AS Oil & Gas Exposure 16.0% of Total Revenue (LTM Q2 2015) = ~$266m Americas 69% = ~$184m EMEA Modular & Sales 9% = ~$24m Asia Pacific 22% = ~$58m Americas Remote Accom Americas Modular & Sales Asia Pacific Remote Accom Asia Pacific Modular & Sales 43% = ~$114m 26% = ~$70m 12% = ~$33m 10% = ~$25m Q Investor Call 9

10 Q Highlights Revenue Overall Q2 revenue down 1% as lower Modular Space and Sales volumes were partially offset by increases in Remote Accommodations Pricing globally improved ~1% over prior year driven by increases in EMEA and the Americas VAPS revenue grew ~6% to $38m and VAPS revenue per unit grew by ~13% Profitability Utilization declined 180bps over prior year to 72.9% driven primarily by declines in Asia Pacific and Brazil SG&A decreased $4.3m driven by cost savings in Asia-Pacific, EMEA, and Corporate Adjusted EBITDA improved $3.6m driven by increased Remote Accommodations in Americas, lower Modular Leasing costs in EMEA, and SG&A cost reductions Capital Discipline Continue managing capital aggressively Q2 Gross CapEx up ~$14.5m over prior year as decreased spend in Asia-Pacific and EMEA was offset by investment in the Americas associated with the South Texas Family Residential Center Q Investor Call 10

11 Modular Space Avg. Rental Rate All quarters presented in US$ at Q Reported FX Rates Average Modular Monthly Rental Rate Average Incremental VAPS Impact $250 $240 $230 $228 $232 $237 $231 $239 $238 $246 $234 $233 $239 $60 $50 $40 $30 $36 $47 $42 $46 $41 $52 $50 $49 $43 $44 $20 $220 $10 $210 Q1 Q2 Q3 Q4 $- Q1 Q2 Q3 Q Continued year-over-year improvement in both Modular Monthly Rental Rate and Incremental Value Added Products and Services Q Investor Call 11

12 Modular Space Utilization (Units in 000 s) Avg. Modular Fleet Utilization % Avg. Modular UoR (# of Units) 77% 75% 73% 71% 74.7% 74.9% 74.9% 74.8% 74.0% 73.2% 73.4% 73.5% 72.9% 72.1% % % Q1 Q2 Q3 Q4 200 Q1 Q2 Q3 Q Q Investor Call 12

13 Remote Accommodations All quarters presented in US$ at Q Reported FX Rates Average Daily Rate Average Rooms on Rent (1) $120 $100 $80 $60 $40 $109 $99 $96 $95 $98$94 $101 $99 $98 $ $ $0 Q1 Q2 Q3 Q4 0.0 Q1 Q2 Q3 Q (1) (Rooms in 000 s) Despite weakness in Oil & Gas sector and Asia Pacific, daily rates remain stable New contracts and renewals offsetting contract turnover Q Investor Call 13

14 Q2 Financials (in US$ at Constant Currency) Leasing & Services revenue was flat as increases in the Americas ($12.0m) were offset by decreases in Asia Pacific and EMEA New Units Sales revenue was flat as increases in EMEA were offset by decreases in the Americas Adjusted Gross Profit % improved 10bps driven by the Americas Remote Accommodations and EMEA Modular Space SG&A decreased $4.3m driven by cost reductions in EMEA, Asia Pacific, and Corporate Adjusted EBITDA improved $3.6m driven primarily by increased Remote Accommodations volume, improved margins in EMEA, and SG&A cost reduction ($ in millions) Y-o-Y Y-o-Y % - Modular Space Leasing $221.2 $214.2 ($7.0) (3.2%) - Modular Space Delivery & Install $66.1 $61.2 ($4.9) (7.4%) - Remote Accommodations $48.8 $60.1 $ % Leasing & Services Revenue $336.1 $335.5 ($0.7) (0.2%) - New Units $89.5 $89.3 ($0.2) (0.2%) - Rental Units $8.8 $7.1 ($1.7) (19.7%) Sales Revenue $98.3 $96.4 ($1.9) (2.0%) Total Revenue $434.4 $431.9 ($2.6) (0.6%) Adjusted Gross Profit (1) $212.8 $212.1 ($0.7) (0.3%) Adjusted Gross Profit % (1) 49.0% 49.1% 10bps SG&A (2) $104.4 $100.0 $ % Adjusted EBITDA $108.5 $112.1 $ % Adjusted EBITDA % 25.0% 26.0% 100bps (1) Excludes depreciation on rental equipment (2) Excludes sponsor fees and other non-recurring items Q2 Q Investor Call 14

15 Americas Overview (at Constant Currency) Ongoing U.S. recovery; Mexico is doing well, Canada has been affected by Oil & Gas Revenue Decreased Sales volumes ($13.2m) and lower Brazil and Canada driven Modular Space ($1.7m) partially offset by increased Remote Accommodations revenue ($13.6m) Continued strong Modular Space growth in the U.S. primarily offset by lower UoR and pricing in Brazil and Canada (Oil & Gas driven) Increase in Remote Accommodations Rooms on Rent ( RoR ) driven by the ramp up of the South Texas Family Residential Center Adjusted EBITDA Decreased $2.4m driven by increased investment in sales and related support people CapEx Increased investment related to South Texas Family Residential Center Investing in U.S. fleet refurbishment; reduced spend in Brazil $200 $100 $0 Revenue Q Q (US$ in millions) Q Q Average Modular Units on Rent (#) 64,650 60,232 Average Modular Utilization 70% 67% Avg. Modular Monthly Rental Rate ($) at CC Avg. Remote Accom Rooms on Rent (#) 3,158 4,249 Avg. Remote Accom Utilization 61% 62% Avg. Remote Accom Daily Rate ($) at CC Q Investor Call 15 $60 $30 $ $70 $35 $0 CapEx 47.3 Q Q Adjusted EBITDA Q Q2 2015

16 U.S. Modular Space Leasing Revenue YoY Change Per Quarter: +10.3% + 9.8% $70 (US$ in millions) $60 $50 $40 $53.4 $58.9 $55.6 $61.0 $57.3 $59.1 $30 $20 $10 $0 Q1 Q2 Q3 Q Q Investor Call 16

17 EMEA Overview (at Constant Currency) Economic conditions stable to improving; U.K. improving, and the rest of Europe is stable Revenue Sales revenue increased $16.2m driven by higher volume and project wins $230 $115 Revenue $60 $30 (US$ in millions) Adjusted EBITDA Leasing & Services revenues declined as higher pricing and VAPS were offset by lower volume Adjusted EBITDA Adjusted EBITDA increased $5.2m driven by increased New Sales volume, higher Leasing and Services margins, and SG&A cost reductions CapEx Continued investment in Germany and France; reduced investment in all other countries $0 $0 Q Q Q Q CapEx $ $15 $0 Q Q Q Q Average Modular Units on Rent (#) 146, ,736 Average Modular Utilization 77% 77% Avg. Modular Monthly Rental Rate ($) at CC Q Investor Call 17

18 Asia Pacific Overview (at Constant Currency) Continued slow-down in Energy and Natural Resources sector; China joint-venture progressing well Revenue Decreased Leasing & Services revenue ($9.2m) driven by lower Modular Space ($6.9m) and Remote Accommodations ($2.3m) volume. Lower Sales revenue ($2.0m) due to lower New Sales volume Adjusted EBITDA Declined ($4.5m) primarily driven by a reduction in volume and rate in Remote Accommodations Partially offset by $1.1m in SG&A cost savings $100 $50 $0 Revenue Q Q $20 $10 $ $30 $ Q Q Average Modular Units on Rent (#) 13,499 11,758 Average Modular Utilization 74% 65% $0 CapEx Adjusted EBITDA Q Q Q Q (US$ in millions) CapEx Significantly reduced levels of CapEx in Asia Pacific due to softening market conditions Avg. Modular Monthly Rental Rate ($) at CC Avg. Remote Accom Rooms on Rent (#) 1,750 1,472 Avg. Remote Accom Utilization 61% 48% Avg. Remote Accom Daily Rate ($) at CC Q Investor Call 18

19 Disciplined Capital Management Q2 (US$ in millions at Constant Currency) Gross CapEx up ~$14.5m or ~24% driven by increased spend related to the South Texas Family Residential Center in the Americas Investment focused on the South Texas Family Residential Center; fleet refurbishment in the U.S., France, and the U.K.; fleet expansion in Germany Net CapEx: $ 52.4m Gross CapEx: $ 61.3m Net Capital Expenditure by Region Net 0.6 Net CapEx: $ 68.7m Gross CapEx: $ 75.8m Gross CapEx: Corporate Asia Pacific Americas Growth CapEx underwritten by contracted earnings FY 2015 Net CapEx guidance $ m (8.8) (7.1) Q Q EMEA Global proceeds from Used Unit Sales Q Investor Call 19

20 Foreign Exchange Exposure Avg. Reported FX Rates Local to US$ Q Q % Chg EUR (19%) AUD (17%) CAD (11%) GBP (9%) Q2 FX Impact by Currency US$ millions EBITDA Gross Capex Net EUR (6.6) 3.7 (2.9) GBP (1.1) 0.5 (0.6) AUD (0.7) 0.2 (0.5) CAD (1.6) 0.2 (1.4) Other (0.7) 0.1 (0.6) Total $ (10.8) $ 4.7 $ (6.1) Q Investor Call 20

21 Net Debt Structure As of June 30, 2015 (US$ in millions at Reported Currency) Net Leverage Ratio Cash and Cash Equivalents $ (51) Asset Based Loan Revolver (ABL) (L+250) 943 Other Debt, including Capital Leases 27 Senior Secured Notes (8.5/9.0%) 1,381 Total Net Senior Secured Debt 2, x Senior Unsecured Notes (10.75%) x Total Net Debt $ 3, x LTM 6/30/15 Adjusted EBITDA $ 416 Adjusted EBITDA / Interest Expense 1.7x ABL availability as of June 30, 2015 was approximately $73m after consideration of the 90% covenant threshold, but would have been $193m without consideration of the 90% covenant threshold Annual cash interest expense of approximately $240m Q Investor Call 21

22 ABL Borrowing Base (US$ in millions at Reported Currency) ABL borrowing base contains certain assets of the U.S., Canada, U.K., Australia, and New Zealand ABL advance rates are assessed semiannually; they have been stable $1,400 $1,200 $1,000 $800 $1,175 $1,157 $1,156 Decline from December 2014 to June 2015 driven by $15m of FX $600 62% 59% 59% 62% 63% $400 63% Increased investment in the U.S. offsetting minimal capital investment in Australia $200 $0 Dec Mar Jun Category 1 Category 2 Category 3 AS Global U.S. Q Investor Call 22

23 Questions & Answers Q Investor Call 23

24 Appendix Q Investor Call 24

25 Q2 Financials (in US$ at Reported Currency FX) ($ in millions) Y-o-Y Y-o-Y % - Modular Space Leasing $221.2 $189.8 ($31.4) (14.2%) - Modular Space Delivery & Install $66.1 $54.2 ($11.9) (18.0%) - Remote Accommodations $48.8 $57.8 $ % Leasing & Services Revenue $336.1 $301.8 ($34.3) (10.2%) - New Units $89.5 $77.8 ($11.6) (13.0%) - Rental Units $8.8 $6.5 ($2.3) (26.5%) Sales Revenue $98.3 $84.3 ($14.0) (14.2%) Total Revenue $434.4 $386.1 ($48.3) (11.1%) Adjusted Gross Profit (1) $212.8 $190.3 ($22.6) (10.6%) Adjusted Gross Profit % (1) 49.0% 49.3% 30bps SG&A (2) $104.4 $89.0 $ % Adjusted EBITDA $108.5 $101.2 ($7.2) (6.7%) Adjusted EBITDA % 25.0% 26.2% 130bps (1) Excludes depreciation on rental equipment (2) Excludes sponsor fees and other non-recurring items Q2 Q Investor Call 25

26 Quarterly Highlights (in US$ at Reported Currency FX) ($ in millions) Revenue 1Q14 2Q14 3Q14 4Q14 FY Q15 2Q15 EMEA Americas Asia Pacific AS Total $ $ $ $ $ 1,735.0 $ $ Adj. EBITDA 1Q14 2Q14 3Q14 4Q14 FY Q15 2Q15 EMEA Americas Asia Pacific Corporate Exp (10.3) (11.8) (10.2) (8.8) (41.0) (8.1) (6.3) AS Total $ $ $ $ $ $ 85.4 $ CAPEX 1Q14 2Q14 3Q14 4Q14 FY Q15 2Q15 EMEA Americas Asia Pacific Corporate Exp AS Total $ 45.1 $ 61.3 $ 53.2 $ 82.7 $ $ 68.7 $ 71.1 Q Investor Call 26

27 Q2 Fleet Statistics (in US$ at Reported Currency FX) Modular Avg Monthly Rental Rate Remote Accom Avg Daily Rental Rate Region 2Q14 2Q15 2Q14 2Q15 EMEA $ 206 $ 176 $ - $ - Americas $ 369 $ 358 $ 102 $ 118 Asia Pacific $ 479 $ 392 $ 98 $ 83 AS Total $ 269 $ 239 $ 101 $ 109 Q Investor Call 27

28 Reconciliation of Adjusted EBITDA (US$ in millions at Reported Currency FX) Algeco Scotsman Adjusted EBITDA Q Q YE Net income (loss) before taxes $ 11.1 $ 29.5 $ (346.6) Interest expense, net Depreciation and amortization EBITDA Currency (gains) losses, net (21.7) (48.1) Impairment charges and loss on disposals Change in fair value of contingent considerations (3.5) (13.1) 48.5 Restructuring charges Sponsor management fees Loss on extignuishment of debt Other expense Adjusted EBITDA $ $ $ Q Investor Call 28

29 Reconciliation of Adjusted Gross Profit (US$ in millions at Reported Currency FX) Algeco Scotsman Adjusted Gross Profit Q Q Gross Profit $ $ Depreciation of Rental Equipment Adjusted Gross Profit $ $ Q Investor Call 29

30 Algeco Scotsman 901 S. Bond Street, Suite 600, Baltimore MD December 13, 2012 DRAFT 5