Black Diamond Group Limited · TSX:BDI
Black Diamond — Q3 2024 Earnings Presentation
42 slides from Black Diamond's earnings presentation, Nov 1, 2024
Slide 1: Investor Update November 2024
INVESTOR UPDATE November 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 ~$164 mm2 (MSS Stability through diversification by of ~$128mm and WFS of ~$36mm)1 asset, industry, & geography MSS lease portfolio average duration of ~50 months2 Thousands of customers across diverse industr
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, continui ng ops , LHS) Continued EPS growth driven by compounding growth in EBITDA and rental revenue
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 ~$408 mm NBV 12,299 Units Workforce Solutions (WFS) Fleet $147 mm NBV 6,113 Units Consolidated Rentable Square Feet +8 mm 494,086 TTM Total LodgeLink room nights sold ~$24.2 mm TTM Profit $102.2 mm TTM Adjusted EBITDA 2 ~$571.1 mm PP&E Book Va
Slide 9: Rental Revenue Diversity – Q3/2024
Rental Revenue Diversity – Q3/2024 Australia 5% Canada 49% US TOTAL REVENUE 46% BY GEOGRAPHY Source data: Q3 2024 Management, Discussion and Analysis 9 © 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 MSS: Consolidated Rental Revenue 30.0 Modular Space Solutions 25.0 • Diversified rental stream through rental of modular buildings in Canada and U.S. 20.0 $mm • Ancillary, Value Adde
Slide 11: MSS Overview
MSS Overview • 12,299 units across 23 branches in North MSS Rental Revenue America 25.0 Our MSS business rents 23.0 24.5 • Added scale and additional product 21.0 22.0 22.0 21.5 22.2 and sells temporary 19.0 20.0 20.4 21.0 offering driving improved return metrics. 18.5 permanent modular 17.0 17.5 •
Slide 12: MSS Overview
MSS Overview MSS - Contracted Revenue & Duration 80.0 130 Growth being driven thematically by: 75.0 120 70.0 110 • Infrastructure spending in North 100 65.0 90 America 60.0 80 Months • Population growth driving $ mm 70 55.0 60 50.0 50 increased demand for 45.0 40 classroom product 40.0 30 35.0 20
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 13.1 13.4 • Continued growth in Australia Our WFS business 12.0 10.9 10.9 $mm 10.0 provides remote 8.0 6.0 • Industry Diversification accommodation and 4.0 • Di
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 1,463 1,510 160 13 449 458 15 5,000 529 513 39 140 16 36 497 42 25 32 31 34 497 500 519 34 4,000 120 30 127 $mm 30 33 100 112 33 33 33 3,000 10
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 accommodation bookings for companies employing field crews LodgeLink is a software • Custom-built platform to remove inefficiency at every stage of the crew travel pr
Slide 16: LodgeLink Supply Coverage
LodgeLink Supply Coverage ~90% of volumes transacted through the platform are hotels Over 1.7 million rooms Across ~18,000 properties 16 © Black Diamond Group Ltd. All Rights Reserved
Slide 17: LodgeLink – Key Performance Indicators
LodgeLink – Key Performance Indicators Quarterly Room Nights Sold & TTM Room Nights Sold 160,000 550,000 140,000 500,000 120,000 450,000 • Product market fit proven 400,000 100,000 350,000 • ~14% Sequential growth in room nights sold in Q3 80,000 300,000 2024, TTM room nights sold of 494,086 grew ~1
Slide 18: Financial Flexibility
Financial Flexibility 1 Leverage Ratio Net Debt/EBITDA 3.5x 3.5x Ontario based modular rental 3.0x acquisition Q4 3.0x 2022 2.5x 2.0x British Columbia 2.5x asset purchase Vanguard Q2 2024 1.5x acquisition Q4 2020 1.0x 2.0x 0.5x 1.5x 0.0x BDI MSS Comparables WFS Comparables Source: CapIQ & Company Do
Slide 19: Significant Asset Coverage Against Debt
Significant Asset Coverage Against Debt • Q3/2024 Long-Term Debt of $243.2 mm and Net Debt1 of $228.4 mm remains well below tangible asset value • Asset Based Lending (“ABL”) facility termed out to fall of 2026. Average cost of debt in Q2 2024 was 6.01%, up 46 bps compared to 5.55% in Q3 2023. • ABL
Slide 20: Strong Free Cash Flow Generation
Strong Free Cash Flow Generation • Asset rental model has continued to provide a strong base of Free 35 Free Cash Flow Cashflow1, generating ~$19.6 mm in Q3/2024 30 25 20 • 17% increase to the Q4/2024 $mm quarterly dividend of $0.035 per 15 share, or $0.14 per share on an 10 annualized basis 5 0 • B
Slide 21: Dividend Growth
Dividend Growth Dividends Per Share Dividends & Funds From Operations1 $40.00 100% $0.040 Dividends % of Funds from Operations 90% $35.00 $0.035 80% $30.00 $0.030 70% $25.00 60% $0.025 $mm $20.00 50% $0.020 $15.00 40% $0.015 30% $0.010 $10.00 20% $0.005 $5.00 10% $0.000 $0.00 0% DPS Special Dividend
Slide 22: Disciplined Capex Funding Future Growth
Disciplined Capex Funding Future Growth Organic Growth Capex • Level of organic growth capex has risen in conjunction with free cashflow and strong customer demand • Capital Commitments of $17.6 mm as at Q3 2024 20% above year-ago levels • Realizing strong returns for new capital investment • Vast m
Slide 23: Appendix
Appendix 23 © Black Diamond Group Ltd. All Rights Reserved
Slide 24: Total Rental Revenue, by Industry
Total Rental Revenue, by Industry © Black Diamond Group Ltd. All Rights Reserved
Slide 25: Adjusted EBITDA Detail By Quarter
Adjusted EBITDA1 Detail By Quarter Quarterly Adjusted EBITDA Detail 40.0 36.6 35.0 30.0 28.8 26.1 27.9 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 21.0 13.4 13.3 17.0 17.3 $mm 15.0 17.1 17.3 11.1 16.1 17.1 14.6 14.3 14.7 14.5 12.6 13.3 12.8 13.9 9.7 12.0 13.3 10.0 10.3 10.7 12.5
Slide 26: Revenue Detail by Quarter
Revenue Detail by Quarter Consolidated Revenue by Quarter 140.0 120.0 100.0 56.2 80.0 58.6 38.5 51.7 $mm 45.2 44.2 44.0 41.5 43.5 35.4 60.0 31.8 32.3 36.6 30.5 35.8 24.9 40.0 61.3 62.7 50.2 51.0 51.7 47.5 47.6 51.7 51.5 20.0 46.1 31.4 35.2 37.2 34.5 37.1 37.0 0.0 MSS - Total Revenue WFS - Total Reve
Slide 27: Revenue Detail by Division
Revenue Detail by Division MSS Revenue by Quarter 70.0 60.0 21.9 17.7 50.0 20.8 14.9 16.0 15.0 16.1 11.8 11.1 12.3 40.0 21.6 16.3 $mm 10.8 20.0 10.8 10.9 17.2 15.7 14.6 14.3 14.7 9.0 10.2 13.2 30.0 10.3 14.1 6.5 11.1 11.7 8.7 20.0 7.6 24.5 9.8 22.0 22.0 21.5 22.2 20.0 20.4 21.0 18.5 16.1 16.1 17.5 1
Slide 28: 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 Utilization is calc
Slide 29: WFS Room Count by Geography
WFS Room Count by Geography WFS Room Count 12,000 1,173 1,173 1,173 761 761 761 757 857 10,000 628 628 897 627 869 825 781 627 635 685 935 935 8,000 933 933 926 986 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 7,446 - 7,329 Canada US Australia 29 © Black Diamond Grou
Slide 30: MSS – VAPS Penetration
MSS – VAPS Penetration VAPS as a % of Rental Revenue Excluding VAPS 11.0% • VAPS as a % of rental down during 2023 due 10.0% to an acquisition of units with little or no VAPS contribution 9.0% 8.0% • Expect ongoing VAPS growth as acquisitions are integrated, with additional products and 7.0% service
Slide 31: LodgeLink – Solves Complex Problems
LodgeLink – Solves Complex Problems The problem is complex, and we’re addressing it head on: Global Distribution System (GDS) has limited ability to handle the complexity of workforce travel LodgeLink services workforce travel & accommodations that are: Highly Variable, with; Manpower drain; Search
Slide 32: 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 LODGELINK TRAVEL MANAGEMENT EMPLOYEE SELF DIRECT HOTEL GROUP BOOKING COMPANY BOOKING • Booking and managing travel
Slide 33: LodgeLink – Web & Mobile Solution
LodgeLink – Web & Mobile Solution • 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 for complex workfo
Slide 34: 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 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 No Non-GAAP disclosures? 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