Black Diamond Group Limited · TSX:BDI

Black Diamond — Investor Presentation (March 2023)

39 slides from Black Diamond's investor presentation, March 2023

  1. Slide 1: Investor Update

    INVESTOR UPDATE INVESTOR RELATIONS March 2023 © Black Diamond Group Ltd. All Rights Reserved investor@blackdiamondgroup.com

  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 diverse sectors including construction, education, engineering, resources, financial institutions, military, and government. Ticker T

  4. Slide 4: Black Diamond Investment Attributes

    Black Diamond Investment Attributes  Contracted rental revenue for assets on rent for MSS was $94 Stability through diversification mm in Q4/22 by asset, industry, & geography  Avg duration of MSS lease portfolio is 45 months  Thousands of separate customers across diverse industries and geograph

  5. 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

  6. Slide 6: Operating Overview

    Operating Overview 1 Modular Space Solutions (MSS) Fleet $332 mm NBV 11,173 Units Workforce Solutions (WFS) Fleet $145 mm NBV 6,694 Units Consolidated Rentable Square Feet ~7.6 mm 356,328 TTM Total room nights booked, $26.4 mm TTM Net Income or Profit $84.0 mm TTM Adjusted EBITDA 2 $491 mm PP&E Book

  7. Slide 7: Revenue Diversity – Q4/2022

    Revenue Diversity – Q4/2022 Revenue % by Industry Australia Construction 8% Other 25% 19% Power and REVENUE Energy US REVENUE Infrastructure BY BY 36% 22% GEOGRAPHY Education INDUSTRY Canada 13% 56% Government Oil and Gas 9% Mining 5% 7% Source data: Q4 2022 Financial Statements, Management, Discuss

  8. Slide 8: Revenue by Industry - Historical

    Revenue by Industry - Historical Historical Revenue % by Industry As at Q4/22 100% 90% 22.1% 80% 70% 19.1% 60% 7.4% 50% 4.5% 9.4% 40% 30% 12.6% 20% 24.9% 10% 0% Construction Education Government Mining Oil and Gas Other Power and Energy Infrastructure © Black Diamond Group Ltd. All Rights Reserved

  9. Slide 9: 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

  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: Modular Space Solutions • Diversified rental stream through rental of modular buildings in Canada and U.S. • Ancillary, Value Added Products & Services (VAPS) - furniture rental

  11. Slide 11: MSS Overview

    MSS Overview MSS Rental Revenue • 11,173 units across 22 branches in North 21.0 America with attractive returns on long-lived 19.0 20.0 assets Our MSS business rents 18.5 17.0 and sells temporary 17.5 • With added scale and additional product 15.0 16.1 16.1 15.3 offering, return metrics are improvin

  12. Slide 12: WFS Overview

    WFS Overview WFS Rental Revenue 14.0 • Geographic Diversification 13.3 • U.S. 13.0 12.0 • Eastern Canada 10.0 10.7 11.2 10.8 10.9 • Continued growth in Australia • Industry Diversification Our WFS business 8.0 8.6 • Disaster Relief $mm 7.5 provides remote 6.0 6.7 • Social Housing Initiatives 6.0 5.3

  13. Slide 13: LodgeLink Gaining Market Traction

    LodgeLink Gaining Market Traction LodgeLink leverages Black Multi-sided B2B Platform focused on crew travel Cumulative Unique Corporate • Efficiently connect the supply/demand of room and Customers Diamond’s extensive accommodation bookings for companies employing 753 800 knowledge of remote field c

  14. Slide 14: LodgeLink - Room Nights Sold & Net Revenue

    LodgeLink - Room Nights Sold & Net Revenue Total Room Nights Sold 140,000 • Continued growth in unique customer accounts 120,000 • Growing share of travel wallet within existing 100,000 customer base 80,000 60,000 • Strong momentum into 2023 with strong booking volumes experienced over first two 40,

  15. Slide 15: Significant Asset Coverage Against Debt

    Significant Asset Coverage Against Debt • Q4/2022 Long-Term Debt of $226.9 and Net Debt1 of $218.9 mm and remains well below hard 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 Q4/22 and

  16. Slide 16: Financial Flexibility

    Financial Flexibility Leverage Ratio 5.00 Net Debt/EBITDA (TTM as at last reported 4.50 Quarter) 4.00 4.00 3.50 3.50 3.00 3.00 2.50 2.50 2.00 2.00 1.50 1.50 1.00 0.50 1.00 0.00 0.50 0.00 1 BDI MSS Comparables WFS Comparables Net Debt to TTM Adjusted Leveraged EBITDA Source: CapIQ MSS Comparables: MG

  17. Slide 17: Strong Free Cash Flow Generation

    Strong Free Cash Flow Generation • Asset rental model has continued Free Cash Flow to provide a strong base of Free 30 Cashflow1, generating $12.2 million in Q4/2022 25 • Two dividend increases in 20 calendar 2022. Current quarterly $mm dividend of $0.02 per share, or 15 $0.08 per share on an annual

  18. Slide 18: Growth Through Disciplined Capex

    Growth Through Disciplined Capex Organic Growth Capex • Cadence of organic growth capex in the range of $35 to $45 mm, net of proceeds from asset sales. • Realizing strong returns for new capital investment. • Reported consolidated ROA1 of 18.5% in Q4/2022 Primary markets for Growth CAPEX • Vast maj

  19. Slide 19: Appendix

    Appendix 19 © Black Diamond Group Ltd. All Rights Reserved

  20. Slide 20: 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 20 © Black Diamond Group Ltd. All Rights Reserved

  21. Slide 21: Adjusted EBITDA Detail By Quarter

    Adjusted EBITDA1 Detail By Quarter Quarterly EBITDA Detail 26.0 30.0 22.0 19.7 25.0 18.2 17.5 17.9 20.0 13.5 13.3 9.9 11.1 9.8 17.0 15.0 14.6 14.3 12.8 13.9 13.3 12.0 10.0 12.5 12.6 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) (4.7) (5.4) (5.5)

  22. 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 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 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 MSS WFS 22 © Black Diamond Gro

  23. Slide 23: Revenue Detail by Division

    Revenue Detail by Division MSS Revenue by Quarter WFS Revenue by Quarter 60.0 60.0 9 50.0 50.0 15 16 12 7 40.0 21 40.0 14 13 11 11 38 9 30.0 10 30.0 11 16 6 6 8 17 21 10 20 6 13 14 9 8 14 20.0 11 12 8 20.0 11 15 10 10 16 10 10 13 4 0 4 5 6 1 9 3 4 4 7 7 1 1 10.0 3 20 10.0 2 7 1 18 19 15 15 16 16 3 2

  24. Slide 24: Rental Utilization

    Rental Utilization MSS and WFS Rental Utilization • MSS rental fleet maintaining 90% utilization above 80% 80% • WFS improvement in utilization 70% supported by diversification of 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 M

  25. 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 25 © Black Diamond Group Ltd. All Rights Reserved

  26. 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 • VAPS as a % of rental is down from 2020 1.4 due to an acquisition of units with little or 1.2 no VAPS contribution 1 Q4'20 Q4'21 Q4'22 VAPS as a % of Re

  27. 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

  28. 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

  29. 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

  30. 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

  31. 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

  32. 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

  33. 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

  34. Slide 34: Adjusted EBITDA, Return on Assets

    Adjusted EBITDA, Return on Assets 34 © Black Diamond Group Ltd. All Rights Reserved

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

    Net Debt, Net Debt to TTM Adjusted Leverage EBITDA 35 © Black Diamond Group Ltd. All Rights Reserved

  36. Slide 36: Free Cashflow

    Free Cashflow 36 © Black Diamond Group Ltd. All Rights Reserved

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

    Net Revenue, Gross Bookings and Net Revenue Margin 37 © Black Diamond Group Ltd. All Rights Reserved

  38. Slide 38: Working Capital, Enterprise Value

    Working Capital, Enterprise Value 38 © Black Diamond Group Ltd. All Rights Reserved

  39. Slide 39: Thank You

    THANK YOU INVESTOR RELATIONS © Black Diamond Group Ltd. All Rights Reserved investor@blackdiamondgroup.com

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