Black Diamond Group Limited · TSX:BDI
Black Diamond — Investor Presentation (May 2021)
35 slides from Black Diamond's investor presentation, May 12, 2021
Slide 1: Investor Update - May 2021
Investor Update - May 2021 OUR WAY IS TO5/12/2021 CREATE A BETTER WAY 1 Investor Relations | investor@blackdiamondgroup.com 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 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, improving returns MSS • • Strong free cash flow characteristics Long-lived rental assets Modular Space Solutions • L
Slide 5: Operating Overview
Operating Overview Modular Space Solutions (MSS) 8,752 Units 1 WFS Rental Fleet 3,836 Units1 Consolidated Rentable Square Feet ~6.8 mm 125,693 TTM LodgeLink Bookings 2 $44.1 mm TTM Adjusted EBITDA 1,2,3 $400 mm PP&E Book Value 1 1. Source data: Q1 2021 Financial Statements, Management, Discussion an
Slide 6: Revenue Diversity
Revenue Diversity Revenue by Industry – TTM March 31, 2021 Pro Forma Vanguard Construction Education Government Mining Oil and Gas Other Power and Energy Infrastructure 0% 5% 10% 15% 20% 25% 30% 6 © Black Diamond Group Ltd. All Rights Reserved
Slide 7: Revenue Diversity
Revenue Diversity Revenue by Industry Construction Education Government Mining Oil and Gas Other Power and Energy Infrastructure 0% 5% 10% 15% 20% 25% 30% 35% Q1-21 Q1-20 Revenue by Country Australia US Canada 0% 10% 20% 30% 40% 50% 60% 70% 7 Q1-21 Q1-20 © Black Diamond Group Ltd. All Rights Reserve
Slide 8: 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 15.0 MSS: 14.0 Modular Space Solutions 13.0 12.0 • Diversified Rental 11.0 $mm • Custom, Major Project or Used 10.0 Sales 9.0 8.0 • Ancillary, Value Added
Slide 9: MSS Overview
MSS Overview Modular Space Solutions • 8,752 units across 19 branches in North America with attractive returns on long-lived assets • Targeting net fleet growth of 10% per year. With added scale and additional product offering, return metrics are improving. Rental revenue growth expected to outpace
Slide 10: MSS Overview – Revenue Detail
MSS Overview – Revenue Detail MSS Rental Revenue Modular Space Solutions 15.0 14.0 13.9 13.0 12.0 • Rental revenue up 56% Y/Y 11.0 11.3 $mmm 10.0 • Strengthening rental revenue 9.0 9.9 8.9 9.1 driven by continued capital 8.0 8.2 8.8 8.7 7.0 7.6 investment, higher rates, 6.0 improving utilization, an
Slide 11: WFS Overview
WFS Overview Workforce Solutions • Includes Camps, Lodging, Energy & Industrial Services, Australia and LodgeLink • Geographic Diversification • U.S., Eastern Canada • Continued growth in Australia • Industry Diversification • Disaster Relief • Homeless Initiatives • Mining • Green Energy • 2021 WFS
Slide 12: WFS Overview – Revenue Detail
WFS Overview – Revenue Detail WFS Rental Revenue Workforce Solutions 10.0 9.0 8.9 8.0 8.6 8.2 7.0 7.7 7.5 7.0 • Added over $55 million of contracted 6.0 6.7 6.0 $mm revenue (rental, sales and non rental) 5.0 5.3 4.0 since the start of 2021. 3.0 2.0 • Continuing growth in eastern Canada, 1.0 providin
Slide 13: Significant Asset Coverage Against Debt
Significant Asset Coverage Against Debt • Q1/2021 net debt1 of $169 mm remains well below hard asset coverage on a net book value and third-party appraisal basis • In conjunction with Vanguard deal, expanded existing credit facility to $300 million • Value of eligible rental fleet (for borrowing bas
Slide 14: Financial Flexibility
Financial Flexibility Net Debt/EBITDA (TTM as at last reported Quarter ) 4 Leverage Ratio 4 3.5 3.5 3 3 2.5 2 2.5 1.5 1 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Pro Forma Q1-21 Pro Forma 2 Vanguard* Vanguard* BDI Pro Forma Vanguard* MSS Comparables WFS Comparables Debt to Adjusted EBITDA Source: Factset MSS Co
Slide 15: Growth Through Disciplined Capex
Growth Through Disciplined Capex 2021 Capital Program • Capex budget of ~$35 mm (gross). Net capex of $25 to $30 mm after used asset sales • Realizing return on assets for new capital (defined as annualized rental revenue divided into the cost of a new asset) of 18% or higher Primary markets for • M
Slide 16: Digital B2B Platform for Workforce Travel
LodgeLink is a multi-sided marketplace for the $320 billion of Digital B2B Platform for Workforce Travel crew travel and related goods and services consumed by crews each year.
Slide 17: LodgeLink Gaining Market Traction
LodgeLink Gaining Market Traction Customer Accounts 700 Multi-sided B2B Platform focused on crew travel 600 • Efficiently connect the supply/demand of room and accommodation bookings for companies employing field crews 500 • Custom-built platform to remove inefficiency at every stage of the crew tra
Slide 18: LodgeLink - Room Bookings
LodgeLink - Room Bookings Room Nights Booked - Annual 2017 2018 2019 2020 120,000 Gross Booking Revenue ($mm) $3.2 $16.4 $15.1 $18.0 100,000 80,000 Room nights 19,498 77,151 82,747 100,267 12,016 60,000 100,267 40,000 82,747 65,135 • Continued growth in unique customer 20,000 accounts 0 2018 2019 20
Slide 19: Black Diamond Investment Attributes
Black Diamond Investment Attributes MSS fleet growth ahead of plan as a result of Spectrum and Vanguard acquisitions in 2020 Growth MSS EBITDA growth to outpace fleet growth driven by stronger rental revenue, economies of scale, VAPS and other service offerings LodgeLink platform is scaling qu
Slide 20: Appendix
Appendix 20 © Black Diamond Group Ltd. All Rights Reserved
Slide 21: Sources of Revenue
Sources of Revenue • Rental Revenue • Rental Revenue • Sales Revenue • Sales Revenue • Non-Rental Revenue • Non-Rental Revenue • Lodging Revenue 21 © Black Diamond Group Ltd. All Rights Reserved
Slide 22: MSS – Drivers Behind Rental Revenue Growth
MSS – Drivers Behind Rental Revenue Growth Rental Revenue 15.0 13.0 11.0 $mm 9.0 7.0 5.0 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Average Rental Rate Unit Count MSS Utilization $700 90% 10,000 85% $650 8,000 80% 6,000 $600 75% 4,000 70% $550 2,000 65% $500 - 60% Q1-19 Q2-19 Q3-19 Q4-19
Slide 23: MSS – VAPS Penetration
MSS – VAPS Penetration VAPS as a % of Rental Revenue • Value Added Products & Services (VAPS) 16% revenue continuing to grow 14% 12% • VAPS as a % of revenue down in Q1/21 10% due to addition of Vanguard rental 8% revenue which currently has 6% comparatively lower penetration 4% 2% 0% Q1-19 Q1-20 Q1
Slide 24: Rental Utilization
Rental Utilization • Utilization showing further MSS and WFS Rental Utilization improvement after pandemic 90% low in Q2 2020 80% • MSS rental fleet maintaining 70% utilization above 70% 60% 50% • WFS improvement in rental 40% utilization supported by diversification of assets outside 30% of western
Slide 25: MSS & WFS Fleet Overview
MSS & WFS Fleet Overview MSS Fleet Unit Count 10,000 • Continued growth in MSS rental 9,000 8,000 7,000 6,000 fleet, supported by organic 5,000 4,000 investment and recent 3,000 acquisition of Vanguard 2,000 1,000 - Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 WFS Room Count 16,000 Canada U
Slide 26: Adjusted EBITDA Detail By Quarter
Adjusted EBITDA1 Detail By Quarter Quarterly EBITDA Detail 20.0 15.0 13.3 11.1 10.5 10.6 10.0 9.9 9.9 9.8 10.0 8.2 5.0 0.0 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 (5.0) Modular Space Solutions Workforce Solutions Total Consolidated Corporate 1. See “Non-GAAP Measures” at the end of thi
Slide 27: Revenue Detail by Quarter
Revenue Detail by Quarter Consolidated Revenue by Quarter 70 60 50 30.5 24.9 40 $mm 22.9 26.8 23.7 25.9 17.3 30 28.6 15.4 20 35.2 31.4 22.5 22.3 21.4 22.0 23.9 10 20.6 16.5 0 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 MSS WFS 27 © Black Diamond Group Ltd. All Rights Reserved
Slide 28: LodgeLink - The Problem
LodgeLink - The Problem Crew (workforce) travel is a complex task that adds costs to running a business • When groups or crews are required to travel for work, finding, booking and managing travel and accommodations is challenging • Solutions for consumer travel exist, however, they ignore the added
Slide 29: LodgeLink – The Problem (continued)
LodgeLink – The Problem (continued) LodgeLink addresses many of the problems faced by companies needing to book crew travel accommodations and the crew members themselves Company Perspective TRAVEL DIRECT HOTEL EMPLOYEE SELF • Booking and managing travel and accommodations LODGELINK MANAGEMENT GROUP
Slide 30: LodgeLink - Market Opportunity
LodgeLink - Market Opportunity Global Business Travel Market Annual Spend 2019 Target Market ($billions) Global Workforce Crew Travel U.S. 65 ~$1.6 Trillion Canada 6 Per Year ~$320 Australia 6 Billion Per Year South America 13 Rest of World 230 Countries listed above are areas where LL Management te
Slide 31: 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 32: 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 33: LodgeLink - Value Proposition
LodgeLink - Value Proposition Example of an existing corporate customer: Room Nights: 5,000 Administrative Assumptions: Avg Number of Rooms Per Transaction: 3 Cost to issue one invoice: $15 Total Transactions: 1,667 Cost to issue one purchase order: $150 Room Rate: $100/night Traditional Use Average
Slide 34: Non-GAAP Measures
Non-GAAP 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, stock-based compensation,
Slide 35: THANK YOU
THANK YOU 5/12/2021 35 Investor Relations | investor@blackdiamondgroup.com
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