Black Diamond Group Limited · TSX:BDI

Black Diamond — Investor Presentation (March 2024)

42 slides from Black Diamond's investor presentation, March 2024

  1. Slide 1: Investor Update

    INVESTOR UPDATE March 2024 1 © Black Diamond Group Ltd. All Rights Reserved

  2. 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

  3. 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.

  4. 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 •

  5. Slide 5: Black Diamond Investment Attributes

    Black Diamond Investment Attributes  Consolidated contracted future rental revenue of ~$136 mm as at Stability through diversification by Dec 31, 2023 (MSS of +$101mm and WFS of ~$35mm)1 asset, industry, & geography  Avg duration of MSS lease portfolio of ~52 months2  Thousands of customers acros

  6. Slide 6: EPS & Return on Assets

    EPS & Return on Assets EPS Return on Assets (ROA) (1) $0.49 25% $0.44 $0.45 $0.35 $0.34 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, con�nui ng ops , LHS)  EPS has continued to grow YoY driven by compounding growth in EBTIDA and rental

  7. 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

  8. Slide 8: Operating Overview

    Operating Overview 1 Modular Space Solutions (MSS) Fleet $345 mm NBV 11,339 Units Workforce Solutions (WFS) Fleet $146 mm NBV 6,148 Units Consolidated Rentable Square Feet +8 mm 419,328 TTM Total LodgeLink room nights sold ~$30.4 mm TTM Profit, up 15% vs 2022 $106.6 mm FY 2023 Adjusted EBITDA 2 ~$50

  9. Slide 9: Rental Revenue Diversity – Q4/2023

    Rental Revenue Diversity – Q4/2023 Australia 12% TOTAL REVENUE BY GEOGRAPHY Canada US 53% 35% 9 Source data: Q4 2023 Management, Discussion and Analysis © Black Diamond Group Ltd. All Rights Reserved

  10. 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: 23.0 Consolidated Rental Revenue Modular Space Solutions 21.0 19.0 • Diversified rental stream through rental of modular 17.0 buildings in Canada and U.S. 15.0 $mm • Ancillary,

  11. Slide 11: MSS Overview

    MSS Overview • 11,339 units across 23 branches in North MSS Rental Revenue 23.0 America with attractive returns on long- Our MSS business rents 21.0 21.0 22.0 22.0 lived assets 19.0 20.0 20.4 and sells temporary 17.0 17.5 18.5 • With added scale and additional product permanent modular 15.0 16.1 16.

  12. Slide 12: MSS Overview

    MSS Overview 55.0 MSS - Contracted Revenue  Growth being driven thematically 140 50.0 by: 120 45.0 • Infrastructure spending in 100 North America 40.0 Months $ mm 80 35.0 • Population growth driving 60 increased demand for 30.0 40 classroom product 25.0 20  Continued increases in average 20.0 0 co

  13. Slide 13: WFS Overview

    WFS Overview WFS Rental Revenue 20.0 17.5 • Geographic Diversification 18.0 16.0 • U.S. 14.1 14.0 13.0 13.3 14.0 14.0 • Eastern Canada 11.2 • Continued growth in Our WFS business 12.0 10.9 10.9 $mm 10.0 Australia provides remote 8.0 6.0 accommodation and 4.0 • Industry Diversification related servic

  14. Slide 14: WFS Overview

    WFS Overview 8,000 WFS - Fleet Count (Units) WFS - NBV by Geography 200 7,000 180 1,113 12 1,175 1,222 1,161 1,207 1,254 6,000 1,319 1,405 160 13 450 450 39 15 452 452 449 458 1,418 140 5,000 529 42 16 25 32 513 34 497 120 30 127 $mm 4,000 30 33 100 112 80 106 3,000 96 5,317 5,254 90 82 5,114 5,089

  15. 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

  16. Slide 16: LodgeLink – Key Performance Indicators

    LodgeLink – Key Performance Indicators Quarterly Room Nights Sold & TTM Room Nights Sold 140,000 500,000 • Product market fit proven 450,000 120,000 400,000 • Strong momentum into 2023 with strong booking volumes 100,000 350,000 experienced throughout the year 300,000 80,000 250,000 • Over 1 mm room

  17. Slide 17: Financial Flexibility

    Financial Flexibility 1 Leverage Ratio Net Debt/EBITDA 3.5 3 Ontario based modular rental acquisition Q/4 2022 2.5 3.0 2 2.5 1.5 Vanguard acquisition 1 Q/4 2020 2.0 0.5 0 1.5 BDI MSS Comparables WFS Comparables Source: CapIQ & Company Documents 1.0 MSS Comparables: MGRC, WSC (As of Dec 31, 2023) WFS

  18. Slide 18: Significant Asset Coverage Against Debt

    Significant Asset Coverage Against Debt • Q4/2023 Long-Term Debt of $190.4 mm and Net Debt1 of $184.2 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 the year

  19. Slide 19: Strong Free Cash Flow Generation

    Strong Free Cash Flow Generation • Asset rental model has continued to provide a strong base of Free Free Cash Flow Cashflow1, generating over $20.5 35 mm in Q4/2023 30 25 • Q4/2023 quarterly dividend of 20 $mm $0.03 per share, or $0.12 per 15 share on an annualized basis 10 5 • Base of diversified

  20. Slide 20: Dividend Growth

    Dividend Growth Dividends Per Share Dividends & Funds From Operations1 $40.00 10% $0.0350 Dividends % of Funds from Operations $35.00 9% $0.0300 8% $30.00 $0.0250 7% $25.00 6% $0.0200 $mm $20.00 5% $0.0150 4% $15.00 $0.0100 3% $10.00 2% $0.0050 $5.00 1% $0.0000 $0.00 0% DPS Special Dividend Declared

  21. Slide 21: Disciplined Capex Funding Future Growth

    Disciplined Capex Funding Future Growth Organic Growth Capex • Cadence of organic growth capex in the range of ~$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 Primary market

  22. Slide 22: Appendix

    Appendix 22 © Black Diamond Group Ltd. All Rights Reserved

  23. Slide 23: Total Revenue, by Industry

    Total Revenue, by Industry As at Q4/23 15% 10% 8% 7% 11% 19% 30% © Black Diamond Group Ltd. All Rights Reserved

  24. Slide 24: Adjusted EBITDA Detail By Quarter

    Adjusted EBITDA1 Detail By Quarter Quarterly Adjusted EBITDA Detail 40.0 36.6 35.0 30.0 26.1 26.0 22.0 22.5 25.0 21.4 19.9 18.2 17.5 17.9 22.2 20.0 13.4 21.8 13.3 17.0 17.3 $mm 15.0 17.1 11.1 16.1 14.6 14.3 14.7 13.3 9.7 12.8 13.9 12.6 12.0 10.0 10.3 10.7 12.5 11.0 11.5 10.0 10.4 10.0 5.0 6.1 6.2 4.

  25. Slide 25: Revenue Detail by Quarter

    Revenue Detail by Quarter 140.0 Consolidated Revenue by Quarter 120.0 100.0 56.2 80.0 58.6 51.7 $mm 45.2 44.2 41.5 43.5 35.4 60.0 30.5 31.8 35.8 32.3 40.0 24.9 61.3 50.2 51.0 51.7 47.5 46.1 47.6 51.7 20.0 35.2 37.2 34.5 37.1 31.4 0.0 MSS - Total Revenue WFS - Total Revenue 25 © Black Diamond Group L

  26. Slide 26: Revenue Detail by Division

    Revenue Detail by Division MSS Revenue by Quarter 70.0 60.0 17.7 50.0 20.8 14.9 16.0 15.0 11.8 11.1 12.3 40.0 21.6 $mm 10.8 20.0 10.9 14.7 10.2 10.8 17.2 15.7 14.6 14.3 30.0 10.3 14.1 11.1 11.7 8.7 20.0 7.6 9.8 21.0 22.0 22.0 20.0 20.4 17.5 18.5 15.3 16.1 16.1 10.0 13.9 14.6 11.3 0.0 Rental Revenue

  27. 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 MSS and WFS Rental Utilization 90% 80% 70% 60% 50% 40% 30% 20% MSS Utilization Consolidated Utilization WFS Total Utilization 27 ©

  28. Slide 28: WFS Room Count by Geography

    WFS Room Count by Geography 12,000 WFS Room Count 1,173 1,173 1,173 761 761 761 757 857 10,000 628 628 897 627 627 635 685 935 935 8,000 933 6,000 9,581 4,000 9,390 8,978 8,812 8,600 8,625 8,208 8,181 2,000 7,645 - Canada US Australia 28 © Black Diamond Group Ltd. All Rights Reserved

  29. Slide 29: MSS – VAPS Penetration

    MSS – VAPS Penetration VAPS Revenue 2 • VAPS as a % of rental down due to an 1.8 acquisition of units with little or no VAPS 1.6 contribution 1.4 1.2 $ mm 1 • Expect ongoing VAPS growth as 0.8 acquisitions are integrated, with 0.6 additional products and services rolled 0.4 0.2 out 0 VAPS as a % of

  30. 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

  31. 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

  32. 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

  33. 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

  34. 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

  35. 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,

  36. 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

  37. Slide 37: Adjusted EBITDA, Return on Assets

    Adjusted EBITDA, Return on Assets 37 © Black Diamond Group Ltd. All Rights Reserved

  38. 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

  39. Slide 39: Free Cashflow

    Free Cashflow 39 © Black Diamond Group Ltd. All Rights Reserved

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

    Net Revenue, Gross Bookings and Net Revenue Margin 40 © Black Diamond Group Ltd. All Rights Reserved

  41. 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

  42. Slide 42: Thank You

    THANK YOU Investor Relations investor@blackdiamondgroup.com 42 © Black Diamond Group Ltd. All Rights Reserved

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