Black Diamond Group Limited · TSX:BDI
Black Diamond — Q1 2024 Earnings Presentation
42 slides from Black Diamond's earnings presentation, May 3, 2024
Slide 1: Investor Update May 2024
INVESTOR UPDATE May 2024 1 © Black Diamond Group Ltd. All Rights Reserved
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements. The use of the words “anticipate”, “continue”, “estimate”, “expect”, “will”, “project”, “should”, “believe”, “intend” and similar expressions identify forward-looking statements. These statements involve known and unkn
Slide 3: Introduction
Introduction Black Diamond Group rents and sells modular space and workforce accommodation solutions to customers in Canada, the United States and Australia. We serve a broad range of sectors including construction, education, engineering, resources, financial institutions, military, and government.
Slide 4: Creating a Better Way
Creating a Better Way MODULAR SPACE SOLUTIONS - MSS • Diversified, steady, compounding growth • Predictable and improving returns • Strong free cash flow characteristics • Attractive unit economics • Long-lived rental assets • Low maintenance capital WORKFORCE SOLUTIONS LODGELINK - WFS WFS MSS LL •
Slide 5: Black Diamond Investment Attributes
Black Diamond Investment Attributes Consolidated contracted future rental revenue of ~$137 mm as at Stability through diversification by March 31, 2024 (MSS of +$102mm and WFS of ~$35mm)1 asset, industry, & geography Avg duration of MSS lease portfolio of ~53 months2 Thousands of customers acr
Slide 6: EPS & Return on Assets
EPS & Return on Assets EPS Return on Assets (ROA) (1) $0.49 25% $0.44 $0.45 $0.34 $0.35 20% $0.25 15% $/Share $0.15 $0.05 10% $(0.05) $(0.06) 5% $(0.15) $(0.14) $(0.18) $(0.25) 0% EPS (Di l uted, con�nui ng ops , LHS) EPS has continued to grow YoY driven by compounding growth in EBTIDA and rental
Slide 7: Unit Economics Example
Unit Economics Example1 Utilization Lifetime Return on Annualized Return Lifetime return on Initial Investment on Initial Investment initial investment 525% 85% 525% 17% 75% 475% 15% Practical Asset 65% 425% 13% Life 30+ Years Used assets typically sell at a premium to Payback Period NBV ~ 5 Years I
Slide 8: Operating Overview
Operating Overview 1 Modular Space Solutions (MSS) Fleet $358 mm NBV 11,441 Units Workforce Solutions (WFS) Fleet $144 mm NBV 6,117 Units Consolidated Rentable Square Feet +8 mm 428,433 TTM Total LodgeLink room nights sold ~$27.5 mm TTM Profit $104.6 mm TTM Adjusted EBITDA 2 ~$517.8 mm PP&E Book Val
Slide 9: Rental Revenue Diversity – Q1/2024
Rental Revenue Diversity – Q1/2024 Australia 9% US TOTAL REVENUE 32% BY GEOGRAPHY Canada 59% 9 Source data: Q1 2024 Management, Discussion and Analysis © Black Diamond Group Ltd. All Rights Reserved
Slide 10: Black Diamond Group - Who We Are
Black Diamond Group - Who We Are Specialty rentals and industrial services provider organized into two business units Consolidated Rental Revenue MSS: 23.0 Modular Space Solutions 21.0 19.0 • Diversified rental stream through rental of modular 17.0 15.0 buildings in Canada and U.S. $mm 13.0 • Ancill
Slide 11: MSS Overview
MSS Overview • 11,411 units across 23 branches in North MSS Rental Revenue America with attractive returns on long- 23.0 lived assets Our MSS business rents 21.0 21.0 22.0 22.0 21.5 19.0 20.0 20.4 and sells temporary 17.0 17.5 18.5 • With added scale and additional product offering, return metrics a
Slide 12: MSS Overview
MSS Overview 55.0 MSS - Contracted Revenue 140 Growth being driven thematically by: 50.0 120 • Infrastructure spending in North 45.0 100 America 40.0 Months • Population growth driving $ mm 80 35.0 60 increased demand for 30.0 40 classroom product 25.0 20 Continued increases in average 20.0 0 co
Slide 13: WFS Overview
WFS Overview WFS Rental Revenue • Geographic Diversification 20.0 17.5 • U.S. 18.0 • Eastern Canada 16.0 14.0 13.0 13.3 14.0 14.1 14.0 13.6 • Continued growth in 10.9 Australia Our WFS business 12.0 10.9 $mm 10.0 provides remote 8.0 6.0 • Industry Diversification accommodation and 4.0 • Disaster Rel
Slide 14: WFS Overview
WFS Overview WFS - Fleet Count (Units) 8,000 WFS - NBV by Geography 7,000 200 1,175 1,222 1,161 1,207 1,254 180 6,000 1,319 1,405 12 450 452 452 1,418 1,429 160 13 449 458 15 5,000 529 513 39 140 42 16 25 32 31 497 497 34 120 4,000 127 30 30 $mm 100 112 33 33 3,000 80 106 96 5,254 5,114 5,089 5,038
Slide 15: LodgeLink Gaining Market Traction
LodgeLink Gaining Market Traction Multi-sided B2B Platform focused on crew travel • Efficiently connect the supply/demand of room and LodgeLink is a software accommodation bookings for companies employing field crews solution that supports • Custom-built platform to remove inefficiency at businesses
Slide 16: LodgeLink – Key Performance Indicators
LodgeLink – Key Performance Indicators Quarterly Room Nights Sold & TTM Room Nights Sold 140,000 500,000 • Product market fit proven 450,000 120,000 400,000 • Carrying momentum through 2024 with strong room 100,000 350,000 night bookings in Q1 300,000 80,000 250,000 60,000 200,000 • 13% Sequential g
Slide 17: Financial Flexibility
Financial Flexibility 1 Leverage Ratio Net Debt/EBITDA 3.5 3.5 Ontario based modular rental acquisition Q/4 2022 3 3.0 2.5 2 2.5 1.5 Vanguard acquisition Q/4 2020 1 2.0 0.5 1.5 0 BDI MSS Comparables WFS Comparables Source: CapIQ & Company Documents 1.0 MSS Comparables: MGRC, WSC (As of March 31, 202
Slide 18: Significant Asset Coverage Against Debt
Significant Asset Coverage Against Debt • Q1/2024 Long-Term Debt of $199.8 mm and Net Debt1 of $187.9 mm remains well below tangible asset coverage on a net book value and third-party appraisal basis • Asset Based Lending (“ABL”) facility termed out to fall of 2026. Average cost of debt for the quar
Slide 19: Strong Free Cash Flow Generation
Strong Free Cash Flow Generation • Asset rental model has continued to provide a strong base of Free Free Cash Flow Cashflow1, generating ~$9.4 mm 35 in Q1/2024 30 25 • Q4/2023 quarterly dividend of 20 $0.03 per share, or $0.12 per $mm 15 share on an annualized basis 10 5 • Base of diversified renta
Slide 20: Dividend Growth
Dividend Growth Dividends Per Share Dividends & Funds From Operations1 $40.00 10% $0.0350 9% Dividends % of Funds from Operations $35.00 $0.0300 8% $30.00 $0.0250 7% $25.00 6% $0.0200 $mm $20.00 5% $0.0150 4% $15.00 $0.0100 3% $10.00 2% $0.0050 $5.00 1% $0.0000 $0.00 0% DPS Special Dividend Declared
Slide 21: Disciplined Capex Funding Future Growth
Disciplined Capex Funding Future Growth Organic Growth Capex • Level of organic growth capex to rise in conjunction with free cashflow and strong customer demand • Capital Commitments of $39 mm as at March 31/2024 was 11% above year-ago levels • Realizing strong returns for new capital Primary marke
Slide 22: Appendix
Appendix 22 © Black Diamond Group Ltd. All Rights Reserved
Slide 23: Total Revenue, by Industry
Total Revenue, by Industry As at Q1/24 11% 13% 13% 6% 5% 21% 31% © Black Diamond Group Ltd. All Rights Reserved
Slide 24: Adjusted EBITDA Detail By Quarter
Adjusted EBITDA1 Detail By Quarter Quarterly Adjusted EBITDA Detail 40.0 36.6 35.0 30.0 26.1 26.0 22.0 22.5 25.0 21.4 19.9 18.2 17.5 17.9 22.2 19.4 20.0 21.8 13.4 13.3 17.0 17.3 $mm 15.0 17.1 11.1 16.1 14.6 14.3 14.7 14.5 13.3 9.7 12.8 13.9 12.6 12.0 10.0 10.3 10.7 12.5 11.0 11.5 10.0 10.4 10.0 10.9
Slide 25: Revenue Detail by Quarter
Revenue Detail by Quarter Consolidated Revenue by Quarter 140.0 120.0 100.0 56.2 80.0 58.6 51.7 45.2 44.2 $mm 41.5 43.5 35.4 60.0 31.8 32.3 36.6 30.5 35.8 24.9 40.0 61.3 50.2 51.0 51.7 47.5 47.6 51.7 20.0 46.1 35.2 37.2 34.5 37.1 37.0 31.4 0.0 MSS - Total Revenue WFS - Total Revenue 25 © Black Diamo
Slide 26: Revenue Detail by Division
Revenue Detail by Division MSS Revenue by Quarter 70.0 60.0 17.7 50.0 16.0 15.0 20.8 14.9 11.8 11.1 12.3 40.0 21.6 $mm 10.8 20.0 10.9 17.2 14.7 9.0 10.2 10.8 15.7 14.6 14.3 30.0 10.3 14.1 6.5 11.1 11.7 8.7 20.0 7.6 9.8 21.0 22.0 22.0 21.5 20.0 20.4 17.5 18.5 14.6 15.3 16.1 16.1 10.0 13.9 11.3 0.0 Re
Slide 27: Rental Utilization
Rental Utilization • MSS rental fleet maintaining utilization above 80% • WFS utilization supported by diversification of assets by industry and geography MSS and WFS Rental Utilization 90% 80% 70% 60% 50% 40% 30% 20% MSS Utilization Consolidated Utilization WFS Total Utilization 27 © Black Diamond
Slide 28: WFS Room Count by Geography
WFS Room Count by Geography WFS Room Count 12,000 1,173 1,173 1,173 761 761 761 757 10,000 628 857 628 897 869 627 627 635 685 935 935 8,000 933 933 9,581 6,000 9,390 8,978 8,812 4,000 8,600 8,625 8,208 2,000 8,181 7,645 7,561 - Canada US Australia 28 © Black Diamond Group Ltd. All Rights Reserved
Slide 29: MSS – VAPS Penetration
MSS – VAPS Penetration VAPS as a % of Rental Revenue Excluding VAPS • VAPS as a % of rental down during 2023 due 15.0% to an acquisition of units with little or no VAPS contribution 10.0% • Expect ongoing VAPS growth as acquisitions are integrated, with additional products and 5.0% services rolled o
Slide 30: LodgeLink – Solves Complex Problems
LodgeLink – Solves Complex Problems Workforce (Crew) travel is a complex task that adds costs to running a business • When groups or crews are required to travel for work, finding, booking and managing travel and accommodations is challenging • Solutions for consumer travel exist, however, they igno
Slide 31: LodgeLink – Offers Advantages
LodgeLink – Offers Advantages LodgeLink addresses many of the problems faced by companies needing to book crew travel accommodations and the crew members themselves Company Perspective TRAVEL DIRECT HOTEL EMPLOYEE SELF • Booking and managing travel and accommodations LODGELINK MANAGEMENT BOOKING GRO
Slide 32: LodgeLink – Web & Mobile Solution
LodgeLink – Web & Mobile Solution Save time. Control costs. • A web-based solution for workforce travel management o LodgeLink is an end-to-end solution focused on the needs of crews o The platform applies web-based technology that simplifies the crew travel process • Delivering efficiency and cost
Slide 33: LodgeLink – Business Model
LodgeLink – Business Model Current Future Future Margin On Transactions Advertising Data & Other Services • LodgeLink profits on the spread • Advertise travel support services • SAAS Application - Potential for between buy and sell price for (dining and entertainment, remote enhanced features, data
Slide 34: LodgeLink - Value Proposition
LodgeLink - Value Proposition • Assumptions: • Approximately 4,700 room nights @ $108/night • 3 rooms per transaction • results in 1,560 transactions per year (or 30 per week) • Assumes no additional savings on negotiated rates or direct billing 34 © Black Diamond Group Ltd. All Rights Reserved
Slide 35: Non-GAAP & Supplementary Financial Measures
Non-GAAP & Supplementary Financial Measures • Adjusted EBITDA is not a measure recognized under IFRS and does not have standardized meanings prescribed by IFRS. Adjusted EBITDA refers to consolidated earnings before finance costs, tax expense, depreciation, amortization, accretion, foreign exchange,
Slide 36: Non-GAAP & Supplementary Financial Measures
Non-GAAP & Supplementary Financial Measures • Net Revenue Margin is calculated by dividing net revenue by Gross Bookings for the period. Management believes this ratio is an important supplemental measure of LodgeLink's performance and profitability and believes this ratio is frequently used by inte
Slide 37: Adjusted EBITDA, Return on Assets
Adjusted EBITDA, Return on Assets 37 © Black Diamond Group Ltd. All Rights Reserved
Slide 38: Net Debt, Net Debt to TTM Adjusted Leverage EBITDA
Net Debt, Net Debt to TTM Adjusted Leverage EBITDA 38 © Black Diamond Group Ltd. All Rights Reserved
Slide 39: Free Cashflow
Free Cashflow 39 © Black Diamond Group Ltd. All Rights Reserved
Slide 40: Net Revenue, Gross Bookings and Net Revenue Margin
Net Revenue, Gross Bookings and Net Revenue Margin 40 © Black Diamond Group Ltd. All Rights Reserved
Slide 41: Enterprise Value
Enterprise Value 1 – Enterprise Value is a non-GAAP financial measure. Refer to the Non-GAAP & Supplementary Financial Measures section for more information. 41 © Black Diamond Group Ltd. All Rights Reserved
Slide 42: Thank You
THANK YOU Investor Relations investor@blackdiamondgroup.com 42 © Black Diamond Group Ltd. All Rights Reserved