Black Diamond Group Limited · TSX:BDI

Black Diamond — Q3 2023 Earnings Presentation

42 slides from Black Diamond's earnings presentation, Nov 3, 2023

Slide 1: Our Way is to Create a Better Way
Our Way is to Create a Better Way INVESTOR UPDATE INVESTOR RELATIONS November 2023 investor@blackdiamondgroup.com © 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 ì Consolidated contracted future rental revenue of nearly $129 mm Stability through diversification by (MSS of ~$100 mm and WFS of ~$29 mm)1 asset, industry, & geography ì Avg duration of MSS lease portfolio of ~50 months2 ì Thousands of customers across diverse i
Slide 6: EPS & Return on Assets
EPS & Return on Assets q EPS has continued to grow YoY driven by compounding growth in EBTIDA and rental revenue across the business q ROA CAGR of 12% over the last five years (2018 – 2022) stepping up meaningfully in Q3/23 to ~27% 1 – ROA is a non-GAAP financial measure. Refer to the Non-GAAP & Sup
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 n izatio Util 85% Used assets typically Payback Period sell at a premium
Slide 8: Operating Overview
Operating Overview 1 Modular Space Solutions (MSS) Fleet $345 mm NBV 11,318 Units Workforce Solutions (WFS) Fleet $149 mm NBV 6,577 Units Consolidated Rentable Square Feet +8 mm 434,925 TTM Total LodgeLink room nights sold $32.0 mm TTM Profit $103.0 mm TTM Adjusted EBITDA 2 ~$510 mm PP&E Book Value
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) • Custom sales of
Slide 11: MSS Overview
MSS Overview • 11,318 units across 23 branches in North America with attractive returns on long- lived assets Our MSS business rents and sells temporary • With added scale and additional product offering, return metrics are improving. permanent modular Rental revenue growth expected to buildings. ou
Slide 12: MSS Overview
MSS Overview q Growth being driven thematically by • Continued infrastructure spending in North America • Population growth driving increased demand for classroom product q Continued increases in average contract duration and revenue behind contract 12 © Black Diamond Group Ltd. All Rights Reserved
Slide 13: WFS Overview
WFS Overview • Geographic Diversification • U.S. • Eastern Canada • Continued growth in Our WFS business Australia provides remote accommodation and • Industry Diversification related services for • Disaster Relief diverse clientele • Social Housing throughout Canada, the Initiatives United States a
Slide 14: WFS Overview
WFS Overview q Continued improvement in utilization driven by customer, geography and end market diversification 1 q Steady growth in rental revenue and Adjusted EBITDA q Right sizing of fleet has continued over the years. Canadian NBV down to $90 mm in 2022 from $127 mm in 2018. q Cadence of WFS as
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 LodgeLink is a software accommodation bookings for companies employing field crews solution that supports • Custom-built platform to remove inefficiency at businesses
Slide 16: LodgeLink – Key Performance Indicators
LodgeLink – Key Performance Indicators • Product market fit proven • Strong momentum into 2023 with strong booking volumes experienced over first nine months of the year • Over 1 mm room nights sold to date (September 30, 2023) • Q3/23 LodgeLink TTM room nights sold grew ~40% Y/Y • Net Revenue of $2
Slide 17: Financial Flexibility
Financial Flexibility 1 Source: CapIQ & Company Documents MSS Comparables: MGRC, WSC 1 WFS Comparables: CVEO, TH, DXT Note: Net Debt to TTM Adjusted Leverage EBITDA /Adjusted EBITDA for comparable companies calculated as most recent quarter Net Debt divided by most recent quarter’s annualized Adjust
Slide 18: Significant Asset Coverage Against Debt
Significant Asset Coverage Against Debt • Q3/2023 Long-Term Debt of $206.1 mm and Net Debt1 of $200.8 mm remains well below tangible asset coverage on a net book value and third-party appraisal basis • Asset Based Lending (“ABL”) facility termed out to fall of 2026. Average cost of debt for Q3/23 wa
Slide 19: Strong Free Cash Flow Generation
Strong Free Cash Flow Generation • Asset rental model has continued to provide a strong base of Free Cashflow1, generating $+30 mm in Q3/2023 • Q3/2023 quarterly dividend of $0.02 per share, increased to $0.03 in Q4 2023 or $0.12 per share on an annualized basis • Base of diversified asset rentals r
Slide 20: Dividend Growth
Dividend Growth ) (2 q Re-instated dividend in Q4/2021, along with a special dividend q Three dividend increases since re-instating in 2021 (increased from $0.0125/sh in Q1/2021 to $0.03/sh in Q4/2023) q Dividends as a percentage of Funds from Operations is under 5% 1 – Funds From Operations is a no
Slide 21: Disciplined Capex Funding Future Growth
Disciplined Capex Funding Future Growth Organic Growth Capex • Cadence of organic growth capex in the range of $40 mm to $50 mm, net of proceeds from asset sales • Realizing strong returns for new capital investment • Vast majority of capex targeted for organic growth in MSS with opportunities Prima
Slide 24: Adjusted EBITDA Detail By Quarter
Adjusted EBITDA1 Detail By Quarter 24 1. Adjusted EBITDA is a non-GAAP financial ratio. Refer to the Non-GAAP & Supplementary Measures section for more information © Black Diamond Group Ltd. All Rights Reserved
Slide 27: Rental Utilization
Rental Utilization • MSS rental fleet maintaining utilization above 80% • WFS improvement in utilization supported by diversification of assets outside of western Canada 27 © Black Diamond Group Ltd. All Rights Reserved
Slide 29: MSS – VAPS Penetration
MSS – VAPS Penetration • VAPS as a % of rental down due to an acquisition of units with little or no VAPS contribution • Expect ongoing VAPS growth as acquisitions are integrated, with additional products and services rolled out 29 © Black Diamond Group Ltd. All Rights Reserved
Slide 30: LodgeLink – Solves Complex Problems
LodgeLink – Solves Complex Problems 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 igno
Slide 31: 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 TRAVEL DIRECT HOTEL EMPLOYEE SELF • Booking and managing travel and accommodations LODGELINK MANAGEMENT GROUP BOOKI
Slide 32: LodgeLink – Web & Mobile Solution
LodgeLink – Web & Mobile 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
Slide 33: 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 34: 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 34 © Black Diamond Group Ltd. All Rights Reserved
Slide 35: 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 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 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

Black Diamond Group — Q3 2023 Earnings Presentation on 6ix

Black Diamond — Q3 2023 Earnings Presentation

Slide 1: Our Way is to Create a Better Way

Slide 2: Forward Looking Statements

Slide 3: Introduction

Slide 4: Creating a Better Way

Slide 5: Black Diamond Investment Attributes

Slide 6: EPS & Return on Assets

Slide 7: Unit Economics Example

Slide 8: Operating Overview

Slide 9: Rental Revenue Diversity – Q3/2023

Slide 10: Black Diamond Group - Who We Are

Slide 11: MSS Overview

Slide 12: MSS Overview

Slide 13: WFS Overview

Slide 14: WFS Overview

Slide 15: LodgeLink Gaining Market Traction

Slide 16: LodgeLink – Key Performance Indicators

Slide 17: Financial Flexibility

Slide 18: Significant Asset Coverage Against Debt

Slide 19: Strong Free Cash Flow Generation

Slide 20: Dividend Growth

Slide 21: Disciplined Capex Funding Future Growth

Slide 22: Appendix

Slide 23: Total Revenue, by Industry

Slide 24: Adjusted EBITDA Detail By Quarter

Slide 25: Revenue Detail by Quarter

Slide 26: Revenue Detail by Division

Slide 27: Rental Utilization

Slide 28: WFS Room Count by Geography

Slide 29: MSS – VAPS Penetration

Slide 30: LodgeLink – Solves Complex Problems

Slide 31: LodgeLink – Offers Advantages

Slide 32: LodgeLink – Web & Mobile Solution

Slide 33: LodgeLink – Business Model

Slide 34: LodgeLink - Value Proposition

Slide 35: Non-GAAP & Supplementary Financial Measures

Slide 36: Non-GAAP & Supplementary Financial Measures

Slide 37: Adjusted EBITDA, Return on Assets

Slide 38: Net Debt, Net Debt to TTM Adjusted Leverage EBITDA

Slide 39: Free Cashflow

Slide 40: Net Revenue, Gross Bookings and Net Revenue Margin

Slide 41: Enterprise Value

Slide 42: Thank You