Black Diamond Group Limited · TSX:BDI
Black Diamond — Q2 2022 Earnings Presentation
37 slides from Black Diamond's earnings presentation, August 2022
Slide 1: Investor Update
INVESTOR UPDATE INVESTOR RELATIONS August 2022 © Black Diamond Group Ltd. All Rights Reserved investor@blackdiamondgroup.com
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 diverse sectors including construction, education, engineering, resources, financial institutions, military, and government. Ticker T
Slide 4: Creating a Better Way
Creating a Better Way • Disruptive digital platform • Rapidly scaling LL • Unique solution focused on essential workforce travel LodgeLink • Diversified, steady growth • Predictable and improving returns MSS • • Strong free cash flow characteristics Long-lived rental assets Modular Space Solutions •
Slide 5: Operating Overview
Operating Overview Modular Space Solutions (MSS) Fleet $258 mm NBV 1 9,191 Units 1 Workforce Solutions (WFS) Fleet $138 mm NBV 1 6,788 Units 1 Consolidated Rentable Square Feet ~6.8 mm 275,380 TTM Total room nights booked1,2 $24.4 mm TTM Net Income or Profit $73.3 mm TTM Adjusted EBITDA 1,2,3 $410 m
Slide 6: Revenue Diversity
Revenue Diversity Source data: Q2 2022 Financial Statements, Management, Discussion and Analysis 6 © Black Diamond Group Ltd. All Rights Reserved
Slide 7: 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 19.0 MSS: Modular Space Solutions 17.0 15.0 • Diversified rental stream through rental of 13.0 $mm modular buildings in Canada and U.S. • Ancillary, Value
Slide 8: MSS Overview
MSS Overview MSS Rental Revenue • 9,191 units across 19 branches in North 19.0 America with attractive returns on long-lived 17.0 17.5 assets 15.0 16.1 16.1 15.3 • With added scale and additional product 14.6 13.0 13.9 offering, return metrics are improving. $mm 11.0 Rental revenue growth expected t
Slide 9: WFS Overview
WFS Overview WFS Rental Revenue • Includes large and small format 12.0 accommodation rentals, ancillary 11.2 10.9 surface rentals and services across 10.0 10.7 10.8 Canada, U.S. and Australia. 8.0 8.6 • LodgeLink, the Company’s digital travel 7.5 $mm Our WFS business 6.0 6.7 platform is also within
Slide 10: LodgeLink Gaining Market Traction
LodgeLink Gaining Market Traction LodgeLink leverages Black Multi-sided B2B Platform focused on crew travel Total Unique Customer Accounts 665 • Efficiently connect the supply/demand of room and 700 Diamond’s extensive accommodation bookings for companies employing 600 580 knowledge of remote field
Slide 11: LodgeLink - Room Nights Booked & Net Revenue
LodgeLink - Room Nights Booked & Net Revenue Total Room Nights Booked 90,000 80,000 • Continued growth in unique customer accounts 70,000 60,000 50,000 • Growing share of travel wallet within existing 40,000 customer base 30,000 20,000 • Strong momentum into 2022 with strong 10,000 booking volumes e
Slide 12: Significant Asset Coverage Against Debt
Significant Asset Coverage Against Debt • Q2/2022 Net Debt1 of $157.5 mm and Long-Term Debt of $163.9 remains well below hard asset coverage on a net book value and third-party appraisal basis • Asset Based Lending (“ABL”) facility extended out to fall of 2026. Average cost of debt in Q2/22 was 2.85
Slide 13: Financial Flexibility
Financial Flexibility 1 Leverage Ratio Net Debt/EBITDA (TTM as at last reported Quarter ) 5.0 4.00 4.5 3.50 4.0 3.00 3.5 2.50 3.0 2.00 2.5 1.50 2.0 1.00 1.5 0.50 1.0 0.00 BDI MSS Comparables WFS Comparables 0.5 Source: Factset 0.0 Q3-20 Q4-20* Q1-21* Q2-21* Q3-21* Q4-21 Q1-22 Q2-22 MSS Comparables:
Slide 14: Strong Free Cash Flow Generation
Strong Free Cash Flow Generation • Asset rental model has continued to Free Cashflow provide a strong base of Free Cash 18 Flow1, generating over $14.5 million 16 in Q2/2022 and Cash flow from operating Activities of $24.0 million 14 12 • The company announced a quarterly dividend of $0.015 per shar
Slide 15: Growth Through Disciplined Capex
Growth Through Disciplined Capex Organic Growth Capex • Annual organic growth capex of ~$35 to $45 mm • Realizing strong returns for new capital investment. Reported consolidated ROA1 of 17% in Q2/2022 • Vast majority of capex targeted for organic growth in MSS with opportunities Primary markets for
Slide 16: Black Diamond Investment Attributes
Black Diamond Investment Attributes MSS fleet growth driven by ongoing organic expansion and acquisitions Growth MSS EBITDA growth to outpace fleet growth driven by increasing rental revenue as a result of rising rates, strong utilization, economies of scale, VAPS and other service offerings L
Slide 17: Appendix
Appendix 17 © Black Diamond Group Ltd. All Rights Reserved
Slide 18: Sources of Revenue
Sources of Revenue MSS Business Unit WFS Business Unit • Rental Revenue • Rental Revenue • Sales Revenue • Sales Revenue • Non-Rental Revenue • Non-Rental Revenue • Lodge Services Revenue 18 © Black Diamond Group Ltd. All Rights Reserved
Slide 19: Quarterly EBITDA Detail
Adjusted EBITDA1 Detail By Quarter Quarterly EBITDA Detail 30.0 25.0 19.7 20.0 17.9 18.2 17.5 15.0 13.3 13.5 11.1 9.9 9.8 10.0 5.0 0.0 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 (5.0) (10.0) Modular Space Solutions Workforce Solutions Total Consolidated Corporate 1. Adjusted EBITDA is a n
Slide 20: Revenue Detail by Quarter
Revenue Detail by Quarter Consolidated Revenue by Quarter 120.0 100.0 80.0 58.6 45.1 60.0 31.8 35.8 32.3 30.5 24.9 40.0 17.3 15.4 50.2 51.0 20.0 37.1 37.1 35.3 34.4 31.4 22.0 23.9 0.0 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 MSS WFS 20 © Black Diamond Group Ltd. All Rights Reserved
Slide 21: Rental Utilization
Rental Utilization MSS and WFS Rental Utilization • MSS rental fleet maintaining utilization above 80% 90% 80% • WFS improvement in utilization 70% supported by diversification of assets outside of western 60% Canada 50% 40% 30% 20% Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 MSS Utilizati
Slide 22: MSS & WFS Fleet Overview
MSS & WFS Fleet Overview MSS Fleet Unit Count 10,000 9,000 8,000 • Continued growth in MSS rental 7,000 fleet, supported by organic 6,000 5,000 investment and acquisitions 4,000 3,000 2,000 1,000 - Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2-22 WFS Room Count 14,000 Canada US Australia • WFS
Slide 23: MSS – Drivers Behind Rental Revenue Growth
MSS – Drivers Behind Rental Revenue Growth MSS Rental Revenue 19.0 17.0 15.0 13.0 $mm 11.0 9.0 7.0 5.0 Average Rental Rate MSS Unit Count MSS Utilization $750 10,000 90% $700 9,000 85% $650 8,000 80% $600 7,000 75% $550 6,000 70% 23 © Black Diamond Group Ltd. All Rights Reserved
Slide 24: MSS – VAPS Penetration
MSS – VAPS Penetration VAPS as a % of Rental Revenue Excluding VAPS • Value Added Products & Services (VAPS) 20% revenue continuing to grow in line with 18% rental revenues 16% 14% 12% • VAPS as a % of rental is down from 2020 10% due to an acquisition of units with little or 8% 6% no VAPS contribut
Slide 25: LodgeLink - The Problem
LodgeLink - The Problem Crew (workforce) 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 ignore the added
Slide 26: LodgeLink – The Problem (continued)
LodgeLink – The Problem (continued) 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 GROUP
Slide 27: LodgeLink – The Solution
LodgeLink – The 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 control f
Slide 28: 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 29: LodgeLink - Value Proposition
LodgeLink - Value Proposition • Assumptions: • Approximately 4,700 room nights @ $108/night • 3 rooms per transaction • results in 1,560 transactions per year (or 30 per week) • Assumes no additional savings on negotiated rates or direct billing 29 © Black Diamond Group Ltd. All Rights Reserved
Slide 30: Non-GAAP & Supplementary Financial Measures
Non-GAAP & Supplementary Financial Measures • Adjusted EBITDA is a non-GAAP financial measure, is not a measure recognized under IFRS and does not have standardized meanings prescribed by IFRS. Adjusted EBITDA refers to consolidated earnings before finance costs, tax expense, depreciation, amortizat
Slide 31: Non-GAAP & Supplementary Financial Measures
Non-GAAP & Supplementary Financial Measures • Net Revenue Margin is calculated by dividing net revenue by Gross Bookings for the period. Management believes this ratio is an important supplemental measure of LodgeLink's performance and profitability and believes this ratio is frequently used by inte
Slide 32: Adjusted EBITDA, Return on Assets
Adjusted EBITDA, Return on Assets 32 © Black Diamond Group Ltd. All Rights Reserved
Slide 33: Net Debt, Net Debt to TTM Adjusted Leverage EBITDA
Net Debt, Net Debt to TTM Adjusted Leverage EBITDA 33 © Black Diamond Group Ltd. All Rights Reserved
Slide 34: Free Cashflow
Free Cashflow 34 © Black Diamond Group Ltd. All Rights Reserved
Slide 35: Net Revenue, Gross Bookings and Net Revenue Margin
Net Revenue, Gross Bookings and Net Revenue Margin 35 © Black Diamond Group Ltd. All Rights Reserved
Slide 36: Working Capital, Enterprise Value
Working Capital, Enterprise Value Enterprisve Value Calculation Shares Outstanding (mm) 59.3 Share Price (Aug 4, 2022) 4.01 Market Capitalization ($mm) 237.8 Net Debt ($mm) - Q2/2022 157.5 Enterprise Value ($mm) 395 36 © Black Diamond Group Ltd. All Rights Reserved
Slide 37: Thank You
THANK YOU INVESTOR RELATIONS © Black Diamond Group Ltd. All Rights Reserved investor@blackdiamondgroup.com