Black Diamond Group Limited · TSX:BDI

Black Diamond — Q3 2022 Earnings Presentation

40 slides from Black Diamond's earnings presentation, November 2022

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 LL • Rapidly scaling • Unique solution focused on essential workforce travel LodgeLink • Diversified, steady growth MSS • Predictable and improving returns • Strong free cash flow characteristics • Long-lived rental assets Modular Space Solutions •
Slide 5: Operating Overview
Operating Overview Modular Space Solutions (MSS) Fleet $272 mm NBV 1 9,192 Units 1 Workforce Solutions (WFS) Fleet $138 mm NBV 1 6,702 Units 1 Consolidated Rentable Square Feet ~6.8 mm 309,622 TTM Total room nights booked1,2 $27.7 mm TTM Net Income or Profit $79.6 mm TTM Adjusted EBITDA 1,2,3 $424 m
Slide 6: Revenue Diversity – Q3/2022
Revenue Diversity – Q3/2022 Q3/22 Revenue % by Industry Other 10.4% Construction 24.2% Power and Energy Infrastructure 19.2% REVENUE BY INDUSTRY Education 20.9% Oil and Gas 7.5% Mining Government 6.8% 11.0% Source data: Q3 2022 Financial Statements, Management, Discussion and Analysis 6 © Black Diam
Slide 7: Revenue by Industry
Revenue by Industry Historical Revenue % by Industry As at Q3/22 100% 19% 90% 80% 10% 70% 7% 60% 7% 50% 11% 40% 21% 30% 20% 10% 24% 0% Construction Education Government Mining Oil and Gas Other Power and Energy Infrastructure © Black Diamond Group Ltd. All Rights Reserved
Slide 8: Revenue Diversification – Pro Forma Acquisition
Revenue Diversification – Pro Forma Acquisition Q3/22 Revenue % by Industry Q3/22 Acqusition Pro-Forma Revenue by Industry Other Other Construction 10.4% Construction 23.4% 10.1% 24.2% Power and Energy Infrastructure 19.2% REVENUE REVENUE Power and Energy BY BY Infrastructure INDUSTRY INDUSTRY 18.6%
Slide 9: Ontario Modular Rental Acquisition - Deal Rationale
Ontario Modular Rental Acquisition - Deal Rationale Regional and End-Market Diversification • Continued diversification of MSS platform by geography/end market Brand Strength & Market share leader Ontario • Strong brand and positioning in Ontario education rental market Operational Excellence • Stan
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: Modular Space Solutions • Diversified rental stream through rental of modular buildings in Canada and U.S. • Ancillary, Value Added Products & Services (VAPS) - furniture rental
Slide 11: MSS Overview
MSS Overview • 9,192 units across 19 branches in North America with attractive returns on long-lived assets • With added scale and additional product offering, return metrics are improving. Rental revenue growth expected to outpace fleet growth Our MSS business rents • Y/Y, average monthly rental ra
Slide 12: WFS Overview
WFS Overview WFS Rental Revenue • Includes large and small format 14.0 accommodation rentals, ancillary 12.0 13.0 surface rentals and services across 10.0 11.2 10.8 10.9 Canada, U.S. and Australia. 10.7 • LodgeLink, the Company’s digital travel Our WFS business 8.0 8.6 platform is also within the WF
Slide 13: LodgeLink Gaining Market Traction
LodgeLink Gaining Market Traction Total Unique Customer LodgeLink leverages Black Multi-sided B2B Platform focused on crew travel Accounts • Efficiently connect the supply/demand of room and Diamond’s extensive accommodation bookings for companies employing 800 702 knowledge of remote field crews 70
Slide 14: LodgeLink - Room Nights Sold & Net Revenue
LodgeLink - Room Nights Sold & Net Revenue Total Room Nights Sold 100,000 90,000 • Continued growth in unique customer accounts 80,000 70,000 60,000 • Growing share of travel wallet within existing 50,000 customer base 40,000 30,000 • Strong momentum into 2022 with strong 20,000 10,000 booking volum
Slide 15: Significant Asset Coverage Against Debt
Significant Asset Coverage Against Debt • Q3/2022 Long-Term Debt of $160.6 and Net Debt1 of $148.3 mm and 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 Q3/22 was
Slide 16: Financial Flexibility
Financial Flexibility 1 Leverage Ratio Net Debt/EBITDA (TTM as at last reported Quarter ) 5.00 4.00 4.50 3.50 4.00 3.00 3.50 3.00 2.50 2.50 2.00 2.00 1.50 1.50 1.00 1.00 0.50 0.50 0.00 0.00 BDI MSS Comparables WFS Comparables Q4-20* Q1-21* Q2-21* Q3-21* Q4-21 Q1-22 Q2-22 Q3-22 Net Debt to Adjusted E
Slide 17: Strong Free Cash Flow Generation
Strong Free Cash Flow Generation • Asset rental model has continued to Free Cash Flow provide a strong base of Free 30 Cashflow1, generating over $23.9 million in Q3/2022 and Cashflow from operating Activities of $27.3 25 million 20 • The Company recently increased the $mm 15 quarterly dividend by 3
Slide 18: 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 24% in Q3/2022 • Vast majority of capex targeted for organic growth in MSS with opportunities Primary markets for
Slide 19: Black Diamond Investment Attributes
Black Diamond Investment Attributes  MSS fleet growth driven by ongoing organic expansion and acquisitions Growth  MSS Adjusted 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 offe
Slide 21: 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 21 © Black Diamond Group Ltd. All Rights Reserved
Slide 22: Adjusted EBITDA Detail By Quarter
Adjusted EBITDA1 Detail By Quarter Quarterly EBITDA Detail 35.0 30.0 26.0 25.0 19.7 20.0 18.2 17.5 17.9 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 Q3-22 (5.0) (10.0) Modular Space Solutions Workforce Solutions Total Consolidated Corporate 1. Adjust
Slide 23: Revenue Detail by Quarter
Revenue Detail by Quarter Consolidated Revenue by Quarter 120.0 100.0 80.0 58.6 45.1 44.2 60.0 31.8 35.8 32.3 30.5 24.9 40.0 17.3 15.4 50.2 51.0 51.7 20.0 37.1 37.1 31.4 35.3 34.4 22.0 23.9 0.0 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 MSS WFS 23 © Black Diamond Group Ltd. All Righ
Slide 24: Rental Utilization
Rental Utilization MSS and WFS Rental Utilization • MSS rental fleet maintaining 90% utilization above 80% 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 Q3'22 MSS Uti
Slide 25: 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 6,000 fleet, supported by organic 5,000 4,000 investment and acquisitions 3,000 2,000 1,000 - Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2-22 Q3-22 WFS Room Count 14,000 Canada US Australia
Slide 26: MSS – Drivers Behind Rental Revenue Growth
MSS – Drivers Behind Rental Revenue Growth MSS Rental Revenue 19.0 17.0 15.0 13.0 11.0 $mm 9.0 7.0 5.0 Average Rental Rate MSS Unit Count MSS Utilization $800 10,000 90% $750 9,000 85% $700 8,000 80% $650 $600 7,000 75% $550 6,000 70% 26 © Black Diamond Group Ltd. All Rights Reserved
Slide 27: MSS – VAPS Penetration
MSS – VAPS Penetration VAPS as a % of Rental Revenue Excluding VAPS • Value Added Products & Services (VAPS) 18% revenue continuing to grow in line with 16% 14% rental revenues 12% 10% • VAPS as a % of rental is down from 2020 8% due to an acquisition of units with little or 6% no VAPS contribution
Slide 28: 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 29: 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 BOOKI
Slide 30: 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 31: 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 32: 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 32 © Black Diamond Group Ltd. All Rights Reserved
Slide 33: 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 34: 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

Black Diamond Group — Q3 2022 Earnings Presentation on 6ix

Black Diamond — Q3 2022 Earnings Presentation

Slide 1: Investor Update

Slide 2: Forward Looking Statements

Slide 3: Introduction

Slide 4: Creating a Better Way

Slide 5: Operating Overview

Slide 6: Revenue Diversity – Q3/2022

Slide 7: Revenue by Industry

Slide 8: Revenue Diversification – Pro Forma Acquisition

Slide 9: Ontario Modular Rental Acquisition - Deal Rationale

Slide 10: Black Diamond Group - Who We Are

Slide 11: MSS Overview

Slide 12: WFS Overview

Slide 13: LodgeLink Gaining Market Traction

Slide 14: LodgeLink - Room Nights Sold & Net Revenue

Slide 15: Significant Asset Coverage Against Debt

Slide 16: Financial Flexibility

Slide 17: Strong Free Cash Flow Generation

Slide 18: Growth Through Disciplined Capex

Slide 19: Black Diamond Investment Attributes

Slide 20: Appendix

Slide 21: Sources of Revenue

Slide 22: Adjusted EBITDA Detail By Quarter

Slide 23: Revenue Detail by Quarter

Slide 24: Rental Utilization

Slide 25: MSS & WFS Fleet Overview

Slide 26: MSS – Drivers Behind Rental Revenue Growth

Slide 27: MSS – VAPS Penetration

Slide 28: LodgeLink - The Problem

Slide 29: LodgeLink – The Problem (continued)

Slide 30: LodgeLink – The Solution

Slide 31: LodgeLink – Business Model

Slide 32: LodgeLink - Value Proposition

Slide 33: Non-GAAP & Supplementary Financial Measures

Slide 34: Non-GAAP & Supplementary Financial Measures

Slide 35: Adjusted EBITDA, Return on Assets

Slide 36: Net Debt, Net Debt to TTM Adjusted Leverage EBITDA

Slide 37: Free Cashflow

Slide 38: Net Revenue, Gross Bookings and Net Revenue Margin

Slide 39: Working Capital, Enterprise Value

Slide 40: Thank You