April 2019 Scotiabank CAPP Energy Symposium Trevor Haynes, CEO 4/15/2019 1 Investor Relations | investor@blackdiamondgroup.com
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, 2018 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. 2
Progress in 2018 • Increased Adjusted EBITDA by Q4 2018 Geographical Diversification (% of Total Revenue) 3% year-over-year US 33% • Approx. 70% of Q4 revenue Canada - MSS 24% generated outside of western Canadian energy sector • Continued diversification Australia 12% geographically and by industry segment Canada - WFS 31% 4/15/2019 3 3
MSS Overview Modular Space Solutions • Investing in and growing MSS segment. Majority of $35 mm 2019 capital budget directed towards organic growth in this segment. • Nearly 6,000 units across 13 branches in North America with attractive returns on long-lived assets. • Targeting minimum fleet growth of 10% per year while maintaining existing return metrics. With added scale and additional product offering, increase in cashflow is expected to outpace fleet growth. • Longer term vision to double MSS fleet in 5 years. 4
WFS Overview Workforce Solutions • Meaningful operating leverage through idle Canadian assets with minimal capex required upon re- deployment. • LNG Canada is the most near-term catalyst. A handful of other large energy infrastructure projects in Canada would quickly change supply/demand fundamentals. • Outside of Canada, US and Australia markets are robust. • LodgeLink - online digital marketplace with over 430 properties listed and ~53,000 rooms available in workforce lodges and hotels. Offered throughout Canada, with US expansion underway. 5
Creating Financial Flexibility FFO 1 and Leverage Ratio Net Debt 1 Reduction 190 16 4 14 176 170 3.5 14 Funds From Operating Activities ($millions) 12 12 150 153 Debt to Adjusted EBITDA 1 3 11 Net Debt ($millions) 10 10 10 130 8 2.5 110 113 6 105 2 90 4 87 1.5 70 2 50 0 1 2014 2015 2016 2017 2018 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Funds From Operations Debt to Adjusted EBITDA 1. See “Non - GAAP Measures” at the end of this document. 6 6
Growth Through Disciplined Capex • 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 to $30 MM growth capital • Targeting 10% net fleet growth • New capital with ~20% ROI • Growth areas include BC, Ontario, and Southern US • WFS: $5 to $10 MM growth capital Primary markets for • Growth CAPEX Fully utilized in some asset categories • US small format accommodations • Australian accommodations • Australian space rentals • Introducing new products to compliment US accommodations • New capital can be deployed at ~25% ROI and some with > 1 year term contracts • Modest capital for incremental LodgeLink software development 7 7
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 fleet growth from Grow organic capital investment • Continue to grow and develop LodgeLink platform • Expand MSS platform throughout our North American footprint Diversify • Investment in US and AUS business • LodgeLink digital market expanded into US 4/15/2019 8
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, acquisition costs, non-controlling interests, share of gains or losses of an associate, write-down of property and equipment, impairment, restructuring costs, and gains or losses on the sale of non-fleet assets in the normal course of business. • Funds from Operations is calculated as the cash flow from operating activities excluding the changes in non-cash working capital. Management believes that Funds from Operations is a useful measure as it provides an indication of the funds generated by the operations before working capital adjustments. Changes in non-cash working capital items have been excluded as such changes are financed using the operating line of Black Diamond’s credit facilities. • Net Debt is calculated as long-term debt excluding deferred financing costs minus cash. 4/15/2019 9 9
THANK YOU 4/15/2019 10 Investor Relations | investor@blackdiamondgroup.com
Recommend
More recommend
