Black Diamond Group Limited · TSX:BDI
Black Diamond — Investor Presentation (April 2020)
35 slides from Black Diamond's investor presentation, Apr 1, 2020
Slide 1: Investor Update April 2020
Investor Update April 2020 OUR4/6/2020 WAY IS TO CREATE A BETTER WAY 1 Investor Relations | 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: Black Diamond Group – Who We Are
Black Diamond Group – Who We Are • Innovative specialty rentals and industrial services company with two business units: LODGELINK • Modular Space Solutions (MSS) • Workforce Solutions (WFS) • LodgeLink ANCILLIARY SERVICES • Trades under the TSX symbol BDI MODULAR SPACE SOLUTIONS WORKFORCE SOLUTIONS
Slide 4: Creating a Better Way
Creating a Better Way Modular Space Solutions (MSS) Market Presence 6,353 Units 1 Head Office MSS WFS WorkForce Solutions (WFS) 6,233 Units 2 82,000 LodgeLink Bookings 2 $39.3 mm 2019 Adjusted EBITDA 2, 3 $327 mm Net Book Value 2 Focused on Growth, Diversity and Improved Returns 1. Source data: Q4 2
Slide 5: Sources of Revenue
Sources of Revenue MSS Business Unit WFS Business Unit • Rental Revenue • Lodging Revenue • Sales Revenue • Rental Revenue • Non‐rental Revenue • Sales Revenue • Non‐Rental Revenue 4/6/2020 5 5
Slide 6: Key Highlights for 2019
Key Highlights for 2019 • MSS Rental revenue up 13% year‐over‐year. Value‐added Products (“VAPS”) MSS revenue growth outpacing rental revenue growth. • MSS fleet increased by 338 units in 2019, up 6% from December 31, 2018 • Awarded $20 million workforce accommodation contract in California for 1,58
Slide 7: 2019 Performance
2019 Performance Profitability Capitalize on Operating Leverage Fleet Growth Focus on putting idle assets to work EBITDA Growth Utilization Growth MSS Fleet Growth $mm 45 70% 6,500 40 60% 35 6,000 50% 30 5,500 25 40% 5,000 20 30% 4,500 15 20% 4,000 10 10% 3,500 5 0 0% 3,000 2018 2019 2018 2019 2018
Slide 8: Core Objectives – 2020 and Beyond
Core Objectives – 2020 and Beyond Scale and Diversify MSS • Grow market presence, introduce new products, and increase VAPS YTD: Announced the Spectrum Acquisition in January 2020 Drive Profitability • Reach new target markets and diversify by customer to increase utilization WFS YTD: Continued to s
Slide 9: Current Volatility & COVID-19 Response
Current Volatility & COVID‐19 Response Pro Active Measures ‐ Pro Active Measures ‐ Potential Operations Corporate Opportunities • Increasing the cleaning • Ample liquidity of over • Have secured projects regimen and number of $75 million through throughout our platform as sanitizing stations at cove
Slide 10: Ongoing COVID-19 Projects
Ongoing COVID‐19 Projects 4/6/2020 10 10
Slide 11: Q4-19 Results Show Increased Diversity
Q4‐19 Results Show Increased Diversity • ~65% of Q4 revenue generated Q4‐19 Geographical Diversification (% of Total Revenue) outside of western Canadian Canada ‐ energy sector MSS US 28% 29% • Diversification geographically and by industry segment Canada ‐ WFS 35% Australia Consolidated Rental Reve
Slide 12: Q4-19 Result: Rental Utilization Improving
Q4‐19 Result: Rental Utilization Improving • Black Diamond utilization continued to improve with diversification in geography and industries MSS and WFS Rental Utilization 80% • MSS rental fleet had strong and 75% 70% 65% consistent utilization 60% 55% 50% • WFS rental utilization increased with 45%
Slide 13: MSS Overview
MSS Overview Modular Space Solutions • 6,353 units across 13 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 expected to improve • Longer term vision to double MSS fl
Slide 14: MSS Overview – Revenue Detail
MSS Overview – Revenue Detail MSS Rental Revenue • Rental revenue up 14% from 9.0 8.5 8.8 8.7 Q4‐18 8.0 8.2 7.5 7.6 7.6 • Strengthening rental revenue $mmm 7.3 7.4 7.0 7.0 6.5 driven by continued capital 6.0 investment, higher rates, 5.5 5.0 improving utilization in Q1‐18 Q2‐18 Q3‐18 Q4‐18 Q1‐19 Q2‐
Slide 15: MSS Overview
MSS Overview Modular Space Solutions • Strong economic tailwinds in BC, Ontario, and the US • Recovery in Alberta utilization with Y/Y improvement • 2019 gross capital of $21 mm • 2020 gross capital of ~$25 mm 4/6/2020 15 15
Slide 16: MSS Overview – VAPS Penetration
MSS Overview – VAPS Penetration • Value Added Products & VAPS as a % of Rental Revenue 15% Services (VAPS) penetration 14% 14% and revenue growth continues 14% 13% to trend positively 13% 12% 12% 12% 11% 2018 2019 VAPS Revenue Growth 33% 32% 31% 32% 30% 29% 28% 27% 26% 27% 25% 24% Q4‐19 vs Q4‐18 FY
Slide 17: WFS Overview
WFS Overview Workforce Solutions • Continuing to diversify and capitalize on operating leverage • US and Australia markets remain robust • LNG Canada is a significant catalyst. A handful of other large energy infrastructure projects in Canada would quickly change supply/demand fundamentals • 2020 WF
Slide 18: WFS Overview – Revenue Detail
WFS Overview – Revenue Detail • Rental revenue recovering off of WFS Rental Revenue bottom as utilization improves 10.0 9.0 8.9 8.6 • Secured a number of projects in 8.0 7.7 eastern Canada, providing $mm 7.0 7.1 7.0 customer and geographical 6.0 6.0 diversification 5.0 4.9 5.5 4.0 Q1‐18 Q2‐18 Q3‐18
Slide 19: Creating Financial Flexibility
Creating Financial Flexibility 1 Net Debt 190 FFO and Leverage Ratio 16 4.0 170 176 14 3.5 13 150 12 153 12 Debt to Adjusted EBITDA 11 Funds From Operations 3.0 10 130 10 8 9 2.5 110 113 6 2.0 105 98 4 90 87 1.5 2 70 0 1.0 Q4'18 Q1'19 Q2'19 Q3‐19 Q4‐19 50 Funds From Operations Debt to Adjusted EBITD
Slide 20: Significant Asset Coverage Against Debt
Significant Asset Coverage Against Debt • Net debt1 remains well below hard asset coverage on a net book value basis Net Book Value Net Debt as a % of of Fleet Assets NBV of Fleet and WC 600 100% 90% 500 80% 70% 400 60% $mm 300 50% 40% 200 30% 20% 100 10% 0 0% 2014 2015 2016 2017 2018 2019 2014 2015
Slide 21: Growth Through Disciplined Capex
Growth Through Disciplined Capex 2020 Capital Program • Capex budget of ~$35 mm (gross). Net capex of $25 to $30 mm after used asset sales. • MSS: ~$25 mm (gross) growth capital to be allocated across North American footprint Primary markets for • WFS: $8 mm growth capital Growth CAPEX • Continued A
Slide 22: LodgeLink Gaining Market Traction
LodgeLink Gaining Market Traction Total Customers and Unique Company Accounts 1000 900 800 700 Multi‐sided B2B platform focused on crew travel 600 500 • Custom-built platform to remove inefficiency at every stage of crew travel process. 400 300 200 • Very fragmented market with low-tech tools used b
Slide 23: LodgeLink – What is Crew Travel?
LodgeLink‐ What is Crew Travel? DEMOGRAPHIC CRITERIA CORPORATE TRAVEL CREW TRAVEL Blue‐collar field workers, Nature of job White‐collar tradespeople Primary places traveled to Major urban areas Secondary/tertiary markets They generally don't work on Reason to travel Meetings, Conferences projects wh
Slide 24: The Problem
The Problem At LodgeLink, we believe crew travel is a mission critical task that is inherently difficult. Crew Travel has been largely untouched by recent technology transformation, but now demands a modern platform that removes frustration and inefficiency from the process. We are on a mission to i
Slide 25: LodgeLink – The Value Proposition
LodgeLink – The Value Proposition Improve every step of the crew travel process • B2B Marketplace to book and manage crew travel • Booking Flow curated to the unique Corporate & needs of crew travel Business Users Hotels • Powerful Payment Options for businesses to track and pay invoices more effici
Slide 26: LodgeLink Market Opportunity
LodgeLink Market Opportunity Annual Spend 2019 2022 Est. ($billions) USA 65 71 Canada 6 7 Australia 6 7 South America 13 14 Rest of World 230 244 Countries listed above are areas where LL Management team has extensive knowledge and experience with crew travel Estimates of market size are based on En
Slide 27: LodgeLink Timeline & Evolution
LodgeLink Timeline & Evolution 2017 2018 2019 Concept development, discussions Continued customization including Launch of LodgeLink 2.0 with with customers and suppliers. crew lists, map enhancements to improved foundation. Interactive support remote areas. Reporting. Initial GDS integration. Statu
Slide 28: LodgeLink Customer Adoption
LodgeLink Customer Adoption EPC’s & Construction Oil & Gas Travel Management & Safety Transportation 28 28
Slide 29: LodgeLink Customer Adoption: Gross Booking Revenue
LodgeLink Customer Adoption Room Nights Booked & Gross Booking Revenue Room Bookings Heat Map 35,000 7 Gross Booking Revenue ($MM) 30,000 6 Total Room Nights Booked 25,000 5 20,000 4 15,000 3 10,000 2 5,000 1 0 0 Total Room Nights Booked Gross Booking Revenue ($mm) • 2018 bookings and gross revenue
Slide 30: LodgeLink Website Visits
LodgeLink Website Visits 30 30
Slide 31: LodgeLink Supplier Adoption
LodgeLink Supplier Adoption Properties Listed on LodgeLink Lodge Properties 7% 1200 Lodge Rooms 1000 23% 800 Hotel Properties Hotel Rooms 600 93% 77% 400 200 0 Total Rooms Listed 140,000 120,000 100,000 80,000 60,000 40,000 20,000 Ramada by Wyndham, Best Western, Civeo, Right Choice, Black Diamond,
Slide 32: LodgeLink Vision
LodgeLink Vision Today we are… Our vision is to be… A multi‐sided digital platform for crew travel that is fully immersed A two‐sided platform for crew in the daily operations of our stakeholders. accommodations. Members of our community will delight in the efficiencies gained and insights unlocked
Slide 33: Black Diamond Investment Attributes
Black Diamond Investment Attributes Improve Diversify Returns Grow MSS targeting 10% annual fleet Growing revenue base from US Addition of capital light products growth and Australian markets in both and services to improve rates of MSS and WFS product offerings return on new and existing MS
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
4/6/2020 THANK YOU 35 Investor Relations | investor@blackdiamondgroup.com
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