INVESTOR UPDATE
May 2024
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© Black Diamond Group Ltd. All Rights Reserved
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 unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Management believes the expectations reflected in those forward- looking statements are reasonable but cannot give any assurance these expectations will prove to be correct. Additional information on risk factors that could affect Black Diamond's operations and financial results are included in Black Diamond's annual information form for the year ended December 31, 2023 and other reports on file with the Canadian Securities Regulatory Authorities which can be accessed on SEDAR+. Readers are cautioned not to place undue reliance on these forward-looking statements. Furthermore, the forward-looking statements contained in this presentation are made as at the date of this presentation and Black Diamond does not undertake any obligation to update or revise any of the forward-looking statements, except as may be required by applicable securities laws.
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© Black Diamond Group Ltd. All Rights Reserved
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.
Ticker | TSX:BDI | Insider Ownership | ~26% |
Shares Outstanding1 | 61.9 mm | 52 Wk Range | $5.35 - $9.92 |
Market Cap (05/03/2024) | $495 mm | Enterprise Value2 | $684 mm |
1 | - Shares outstanding refers to the weighted average number of common shares outstanding during the most recent quarter, on a diluted basis. | |
2 | - Enterprise Value is a non-GAAP financial measure. Refer to the Non-GAAP & Supplementary Financial Measures section for more information. | 3 |
© Black Diamond Group Ltd. All Rights Reserved
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-livedrental assets
- Low maintenance capital
WORKFORCE SOLUTIONS | LODGELINK | ||||
- WFS | WFS | MSS | LL | • | Disruptive digital platform |
• Capitalizing on significant operating | • | Rapidly scaling |
leverage | • Unique solution focused on |
essential workforce crew | |
• Improving utilization & diversification of | |
travel | |
projects | |
• Long-lived rental assets | |
• Low maintenance capital |
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© Black Diamond Group Ltd. All Rights Reserved
Black Diamond Investment Attributes
Stability through diversification by asset, industry, & geography
Predictable, profitable growth through fleet additions, average rental rate increases, & VAPS
Value creation through compounding Free Cashflows into low maintenance, high return, long-lived assets
1 - Contracted future rental revenue for MSS units on rent is calculated as the total value of rental revenue yet to be recognized in the future related to performance obligations not yet satisfied at the reporting period. Assets on rent is comprised of only assets that are on rent on or before the reporting period. Contracted future rental revenue for WFS contracts in place is calculated as the total value of rental revenue yet to be recognized in the future related to performance obligations not yet satisfied as at the reporting period date. The commencement of contracts in place include both contracts that commenced before the reporting period or in some instances, contracts signed but which will commence in future periods.
2- As at March 31, 2024
3- Return on Assets ROA is a non-GAAP measure. Refer to non-GAAP & Supplementary Financial Measures section for more information
- Consolidated contracted future rental revenue of ~$137 mm as at March 31, 2024 (MSS of +$102mm and WFS of ~$35mm)1
- Avg duration of MSS lease portfolio of ~53 months2
- Thousands of customers across diverse industries and geographies
- MSS rental fleet CAGR of +14% since 2019
- MSS quarterly rental revenue run rate CAGR of ~23% since 2019
- Quarterly dividend per share re-instated in 2021. Has since been increased three times from $0.0125 in Q4/21 to $0.03 (following the Q4/2023 declaration).
- LodgeLink platform continues to scale, TTM room nights is expanding and revenue and margins are both increasing as we add ancillary revenue streams to the platform
- Asset Based Lending facility provides flexible, low-cost debt to fund growth with ~$148 mm of available liquidity
- Over $500 mm of quality assets on the balance sheet (with replacement value > $1B)
- Ability to compound over time with long-lived assets
- Attractive unit economics
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© Black Diamond Group Ltd. All Rights Reserved
EPS & Return on Assets
$/Share
EPS | Return on Assets (ROA)(1) | ||
$0.49 | 25% | ||
$0.45 | $0.44 | ||
$0.34 | |||
$0.35 | 20% | ||
$0.25
15%
$0.15 | ||||
$0.05 | 10% | |||
$(0.05) | ||||
$(0.06) | 5% | |||
$(0.15) | ||||
$(0.18) | $(0.14) | |||
$(0.25) | 0% | |||
EPS (Diluted, con�nuing ops , LHS)
- EPS has continued to grow YoY driven by compounding growth in EBTIDA and rental revenue across the business
- ROA CAGR of ~12% over the last five years (2018 - 2023)
1 | - ROA is a non-GAAP financial measure. Refer to the Non-GAAP & Supplementary Financial Measures section for more information | 6 |
© Black Diamond Group Ltd. All Rights Reserved
Unit Economics Example1
Utilization | Lifetime Return on | Annualized Return |
Initial Investment | on Initial Investment | |
85% | 525% | 17% |
75% | 475% | 15% |
65% | 425% | 13% |
Used assets typically | ||
sell at a premium to | ||
NBV | ||
Initial contracts terms | ||
often cover initial | ||
($) | payback | |
Revenue | Typical asset | Lifetime potential excess rental |
Rental | yields payback | revenue |
in ~ 5 years | ||
$0 | ||
1 | 10 | 20 | 30 |
Age in Years |
Lifetime return on initial investment
525%
Practical Asset
Life
30+ Years
Payback Period
~ 5 Years
Average
Capitalized R&M
5%
Utilization
85%
1- Illustrative example of typical asset life-cycle returns | © Black Diamond Group Ltd. All Rights Reserved |
Operating Overview 1
Modular Space Solutions (MSS) Fleet
$358 mm NBV 11,441 Units
Workforce Solutions (WFS) Fleet
$144 mm NBV 6,117 Units
Consolidated Rentable Square Feet
+8 mm
428,433 TTM Total LodgeLink room nights sold
~$27.5 mm TTM Profit
$104.6 mm TTM Adjusted EBITDA 2
~$517.8 mm PP&E Book Value
1. | Source data: Q1 2024 Financial Statements, Management, Discussion and Analysis | 8 | 8 |
2. | Adjusted EBITDA is a non-GAAP financial ratio. Refer to the Non-GAAP & Supplementary | ||
Measures section for more information | © Black Diamond Group Ltd. All Rights Reserved | ||
Rental Revenue Diversity - Q1/2024
Source data: Q1 2024 Management, Discussion and Analysis
© Black Diamond Group Ltd. All Rights Reserved
Australia 9%
US | TOTAL REVENUE | |
32% | BY GEOGRAPHY | Canada |
59% |
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Black Diamond Group - Who We Are
Specialty rentals and industrial services provider organized into two business units
MSS: |
Modular Space Solutions |
- Diversified rental stream through rental of modular buildings in Canada and U.S.
- Ancillary, Value Added Products & Services (VAPS)
- Custom modular sales (manufactured by third party partners)
Rental Fleet NBV ($mm) and Utilization | |
400 | 100% |
350 | 90% |
300 | 80% |
70% | |
250 | 60% |
$mm | |
50% | |
200 | |
150 | 40% |
100 | 30% |
20% | |
50 | 10% |
0 | 0% |
23.0 | Consolidated Rental Revenue |
21.0 | |
19.0 | |
17.0 | |
15.0 | |
$mm 13.0 | |
11.0 |
9.0
7.0
5.0
MSS Rental | WFS Rental |
WFS: |
Workforce Solutions |
- Rental of small and large format accommodations in Canada, Australia, U.S. with ancillary services
- Turnkey lodge services
- LodgeLink - digital platform servicing crew travel
MSS Book Value (LHS) | WFS Book Value (LHS) | MSS Util (RHS) | WFS Util (RHS) | 10 | ||
Note: WFS Utilization for historical periods from Q1/21 to Q1/24 have been calculated using methodology consistent with the most recent
reporting period, March 31, 2024. | © Black Diamond Group Ltd. All Rights Reserved |
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Disclaimer
Black Diamond Group Ltd. published this content on 24 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 May 2024 14:43:10 UTC.