Black Diamond Group Limited · TSX:BDI
Black Diamond — Shareholder Meeting (May 2019)
19 slides from Black Diamond's shareholder meeting presentation, May 21, 2019
Slide 1: May 2019 Annual and Special Shareholders Meeting
May 2019 Annual and Special Shareholders Meeting OUR WAY IS TO CREATE A BETTER WAY Trevor Haynes, CEO 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: Progress in 2018
Progress in 2018 Q4 2018 Geographical Diversification (% of Total Revenue) • ~70% of Q4 revenue generated outside of western US 33% Canadian energy sector Canada - MSS 24% • Increased Adjusted EBITDA by 3% year-over-year Australia 12% • Continued diversification geographically and by industry segmen
Slide 4: Shifting the Business to Growth Mode
Shifting the Business to Growth Mode Improve Profitability Drive • Increase economies of scale Shareholder through fleet expansion in growing markets Returns • Expansion of VAPS1 through branch network • Custom sales and ancillary operational services Disciplined CAPEX • Targeting 10% MSS fleet grow
Slide 5: Q1/19 Results Show Operational Improvement
Q1/19 Results Show Operational Improvement Q1-19 Rental Revenue Growth • Growth in consolidated rental 8% revenues, both quarter-over-quarter 7% 6% 7% and year-over-year 5% 4% 3% 4% 2% 1% 0% Q1-19 Y/Y Q1-19 Q/Q • Utilization in MSS is improving, driven by 85% Utilization Improvement 50% higher Alber
Slide 6: MSS Overview
MSS Overview Modular Space Solutions • ~6,000 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 f
Slide 7: MSS Overview
MSS Overview Modular Space Solutions • Strong economic tailwinds in BC, Ontario, and the US • Inflection point in Alberta – utilization has improved markedly since Q1/2018 • MSS 2019 gross investment of ~$25 mm into fleet additions 5/21/2019 7 7
Slide 8: MSS Overview – VAPS Penetration
MSS Overview – VAPS Penetration Growth in VAPS as a % of • VAPS revenue has significantly Rental Revenue improved quarter-over- 30% quarter and year-over-year 25% 27% 20% 20% 15% 10% 5% 0% Q1-19 Q/Q Q1-19 Y/Y 8
Slide 9: MSS - Custom Sales Projects
MSS - Custom Sales Projects Custom Buildings Hill Air Force Base • Award winning custom sales for various • Utah: expected to be complete industries including government, mid-2019 schools, and commercial • ~$5.5 mm contract for design and Ohio Valley Bank construction of a multi-unit facility Whistl
Slide 10: MSS – Rental Projects
MSS – Rental Projects BC Hydro - Site C Dam Upcoming Rental Projects • Fort St. John, BC: four-to-six year • Expect additional work for project that began in May 2018 LNG Canada • ~$4 mm contract for ~50,000 sq ft in • New contracts for multi-unit projects office complexes, lunch rooms, first in Alb
Slide 11: WFS Overview
WFS Overview Workforce Solutions • LNG Canada is a significant catalyst. A handful of other large energy infrastructure projects in Canada would quickly change supply/demand fundamentals • Continuing to diversify and capitalize on operating leverage with recently announced $20 mm rental contract in
Slide 12: WFS - Project Pipeline
WFS - Project Pipeline California Workforce Accommodation Sukunka River Lodge • Contract awarded for $20 mm, including • Contract awarded for $42.5 mm with a transportation costs term of 27 months, through partnership with the Moberly First Nations • Initial nine month contract for 1,584 beds to sup
Slide 13: LodgeLink Gaining Market Traction
LodgeLink Gaining Market Traction • Online digital marketplace with over 520 properties listed and ~61,000 rooms available in workforce lodges and hotels • Offered throughout Canada, with US expansion underway • In 2018, 250 unique corporate customers who booked over 83,000 room nights Total Custome
Slide 14: Creating Financial Flexibility
Creating Financial Flexibility FFO1 and Leverage Ratio Net Debt1 14 4 190 12 170 176 12 3.5 Funds From Operating Activities ($millions) 11 10 150 153 10 10 3 Debt to Adjusted EBITDA1 9 8 130 2.5 6 110 113 105 2 4 90 87 88 1.5 2 70 0 1 50 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 2014 2015 2016 2017 2018 Q1'19 F
Slide 15: 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 of Fleet Assets Net Debt as a % of NBV of Fleet and Working Capital 600 100% 90% 500 80% 70% 400 60% $mm 300 50% 40% 200 30% 20% 100 10% 0 0% 2014 2015 2016 2017 2018
Slide 16: Growth Through Disciplined Capex
Growth Through Disciplined Capex 2019 Fleet Growth • 2019 capex budget of ~$35 mm (gross) funded through operating cash flow. Net capex of $20 to $25 mm after used asset sales • MSS: ~$25 mm growth capital • WFS: $5 to $10 mm growth capital Primary markets for • US small format accommodations Growth
Slide 17: Steps to Creating Value and a Better Way
Steps to Creating Value and a Better Way • Maintain existing hurdle rates for investment while Improve adding capital light products and services • Sell or repurpose underutilized WFS assets Returns • Tap into operating leverage throughout Canadian WFS asset base • MSS expected to see 10% annual fle
Slide 18: 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 19: THANK YOU
5/21/2019 THANK YOU 19 Investor Relations | investor@blackdiamondgroup.com