Black Diamond Group Limited · TSX:BDI

Black Diamond — Q1 2023 Earnings Presentation

39 slides from Black Diamond's earnings presentation, May 5, 2023

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: Black Diamond Investment Attributes
Black Diamond Investment Attributes  Contracted rental revenue for assets on rent for MSS was $98 mm Stability through diversification at March 31, 2023 by asset, industry, & geography  Avg duration of MSS lease portfolio is ~51 months  Thousands of customers across diverse industries and geograp
Slide 5: 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 are occasionally sold at Payback Period premium to NBV ~ 5 Ye
Slide 6: Operating Overview
Operating Overview 1 Modular Space Solutions (MSS) Fleet $336 mm NBV 11,174 Units Workforce Solutions (WFS) Fleet $148 mm NBV 6,753 Units Consolidated Rentable Square Feet ~7.6 mm 388,333 TTM Total room nights sold $26.8 mm TTM Profit $87.6 mm TTM Adjusted EBITDA 2 $498 mm PP&E Book Value 1. 2. Sour
Slide 7: Rental Revenue Diversity – Q1/2023
Rental Revenue Diversity – Q1/2023 Other 9.9% Australia Construction 8.0% 27.3% Power and Energy Infrastructure 17.2% RENTAL RENTAL REVENUE US REVENUE BY 32.3% BY INDUSTRY GEOGRAPHY Canada 59.7% Education 19.5% Oil and Gas 11.5% Mining Government 7.7% 6.8% Source data: Q1 2023 Financial Statements,
Slide 8: Creating a Better Way
Creating a Better Way MODULAR SPACE SOLUTIONS - MSS • Diversified, steady growth • Predictable and improving returns • Strong free cash flow characteristics • Attractive unit economics • Long-lived rental assets • Low maintenance capital WORKFORCE SOLUTIONS - WFS LODGELINK • Capitalizing on signific
Slide 9: 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 23.0 MSS: 21.0 Modular Space Solutions 19.0 • Diversified rental stream through rental of 17.0 modular buildings in Canada and U.S. 15.0 $mm • Ancillary,
Slide 10: MSS Overview
MSS Overview MSS Rental Revenue 23.0 • 11,174 units across 22 branches in North America with attractive returns on long-lived 21.0 assets Our MSS business rents 19.0 20.0 20.4 and sells temporary 17.0 17.5 18.5 • With added scale and additional product offering, return metrics are improving. permane
Slide 11: WFS Overview
WFS Overview • Geographic Diversification • U.S. • Eastern Canada • Continued growth in Australia • Industry Diversification Our WFS business • Disaster Relief provides remote • Social Housing Initiatives • Mining accommodation and • Green Energy related services for • LodgeLink, the Company’s digit
Slide 12: LodgeLink Gaining Market Traction
LodgeLink Gaining Market Traction Total Unique Customer Accounts LodgeLink leverages Black Multi-sided B2B Platform focused on crew travel • Efficiently connect the supply/demand of room and 900 Diamond’s extensive accommodation bookings for companies employing 800 793 knowledge of remote field crew
Slide 13: LodgeLink - Room Nights Sold & Net Revenue
LodgeLink - Room Nights Sold & Net Revenue Total Room Nights Sold • Continued growth in cumulative corporate 140,000 customers 120,000 • Growing share of travel wallet within existing 100,000 customer base 80,000 60,000 • Strong momentum into 2023 with strong 40,000 booking volumes experienced over
Slide 14: Significant Asset Coverage Against Debt
Significant Asset Coverage Against Debt • Q1/2023 Long-Term Debt of $214.8 and Net Debt1 of $208.6 mm and remains well below tangible 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 for Q1/23
Slide 15: Financial Flexibility
Financial Flexibility Leverage Ratio 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1 Net Debt to TTM Adjusted Leveraged EBITDA Source: CapIQ MSS Comparables: MGRC, WSC WFS Comparables: CVEO, TH, DXT 1. Net Debt/ EBITDA is defined as Net Debt to TTM Adjusted Leverage EBITDA and is a non-GAAP financial
Slide 16: 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 30 Cashflow1, generating $13.0 million in Q1/2023 25 20 • Current quarterly dividend of $0.02 per share, or $0.08 per $mm 15 share on an annualized basis 10 • Base of diversified asset
Slide 17: Growth Through Disciplined Capex
Growth Through Disciplined Capex 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. • Reported consolidated ROA1 of 16.3% in Q1/2023 Primary markets for Growth CAPEX • Vast
Slide 19: 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 19 © Black Diamond Group Ltd. All Rights Reserved
Slide 20: Total Revenue, by Industry
Total Revenue, by Industry Historical Revenue % by Industry As at Q1/23 100% 90% 15.4% 80% 17.6% 70% 60% 8.8% 5.0% 50% 9.2% 40% 30% 21.0% 20% 23.0% 10% 0% Construction Education Government Mining Oil and Gas Other Power and Energy Infrastructure © Black Diamond Group Ltd. All Rights Reserved
Slide 21: Adjusted EBITDA Detail By Quarter
Adjusted EBITDA1 Detail By Quarter Quarterly EBITDA Detail 30.0 26.0 25.0 22.0 21.4 19.7 20.0 17.5 17.9 18.2 13.5 17.0 15.0 13.3 16.1 9.8 11.1 14.6 14.3 9.9 12.8 13.9 13.3 12.0 10.0 12.5 12.6 11.0 10.0 10.3 9.7 10.4 10.0 10.7 7.8 5.0 6.1 6.2 7.0 5.5 4.5 4.3 0.0 (2.5) (3.2) (3.4) (2.6) (3.1) (4.5) (4
Slide 22: Revenue Detail by Quarter
Revenue Detail by Quarter Consolidated Revenue by Quarter 120.0 100.0 80.0 58.6 45.1 44.2 41.5 35.4 60.0 31.8 35.8 32.3 30.5 24.9 40.0 17.3 15.4 50.2 51.0 51.7 47.5 46.1 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 Q4'22 Q1'23 MSS WFS 22 © B
Slide 23: Revenue Detail by Division
Revenue Detail by Division MSS Revenue by Quarter WFS Revenue by Quarter 70.0 60.0 60.0 50.0 9.4 14.9 16.0 50.0 11.8 11.1 40.0 20.8 7.3 40.0 14.0 10.8 10.9 12.5 30.0 10.3 10.8 17.2 15.7 14.6 37.5 9.4 7.9 10.3 20.0 30.0 5.6 6.4 8.2 20.9 14.1 8.7 6.0 11.7 12.6 20.0 11.1 7.5 14.2 9.9 7.6 11.6 10.2 20.0
Slide 24: Rental Utilization
Rental Utilization • MSS rental fleet maintaining MSS and WFS Rental Utilization utilization above 80% 90% • WFS improvement in utilization 80% supported by diversification of 70% 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 Q4'22 Q
Slide 25: WFS Room Count by Geography
WFS Room Count by Geography WFS Room Count 14,000 Canada US Australia 12,000 10,000 8,000 6,000 4,000 2,000 - Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 25 © Black Diamond Group Ltd. All Rights Reserved
Slide 26: MSS – VAPS Penetration
MSS – VAPS Penetration VAPS Revenue • Value Added Products & Services (VAPS) 1.8 revenue continuing to grow in line with 1.6 rental revenues $ mm 1.4 • VAPS as a % of rental is down from 2020 due to an acquisition of units with little or 1.2 no VAPS contribution 1 Q1'20 Q1'21 Q1'22 Q1'23 VAPS as a %
Slide 27: 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 28: 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 29: 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 30: 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 31: 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 31 © Black Diamond Group Ltd. All Rights Reserved
Slide 32: 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 33: 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 — Q1 2023 Earnings Presentation on 6ix

Black Diamond — Q1 2023 Earnings Presentation

Slide 1: Investor Update

Slide 2: Forward Looking Statements

Slide 3: Introduction

Slide 4: Black Diamond Investment Attributes

Slide 5: Unit Economics Example

Slide 6: Operating Overview

Slide 7: Rental Revenue Diversity – Q1/2023

Slide 8: Creating a Better Way

Slide 9: Black Diamond Group - Who We Are

Slide 10: MSS Overview

Slide 11: WFS Overview

Slide 12: LodgeLink Gaining Market Traction

Slide 13: LodgeLink - Room Nights Sold & Net Revenue

Slide 14: Significant Asset Coverage Against Debt

Slide 15: Financial Flexibility

Slide 16: Strong Free Cash Flow Generation

Slide 17: Growth Through Disciplined Capex

Slide 18: Appendix

Slide 19: Sources of Revenue

Slide 20: Total Revenue, by Industry

Slide 21: Adjusted EBITDA Detail By Quarter

Slide 22: Revenue Detail by Quarter

Slide 23: Revenue Detail by Division

Slide 24: Rental Utilization

Slide 25: WFS Room Count by Geography

Slide 26: MSS – VAPS Penetration

Slide 27: LodgeLink - The Problem

Slide 28: LodgeLink – The Problem (continued)

Slide 29: LodgeLink – The Solution

Slide 30: LodgeLink – Business Model

Slide 31: LodgeLink - Value Proposition

Slide 32: Non-GAAP & Supplementary Financial Measures

Slide 33: Non-GAAP & Supplementary Financial Measures

Slide 34: Adjusted EBITDA, Return on Assets

Slide 35: Net Debt, Net Debt to TTM Adjusted Leverage EBITDA

Slide 36: Free Cashflow

Slide 37: Net Revenue, Gross Bookings and Net Revenue Margin

Slide 38: Enterprise Value

Slide 39: Thank You