Vertex Resource Group Ltd. Investor Presentation March 2019 www.vertex.ca | TSXV:VTX
Click to edit Master title style Disclaimer & Notice to Reader This presentation is for discussion purposes only. The contents are not to be reproduced, summarized or distributed. These materials have been prepared for information purposes only in relation to Vertex and are not, under any circumstances, to be construed as an offering of any securities for sale directly or indirectly in any province or territory in Canada, in the United States of America or in the territories or possessions thereof or to any U.S. person. No prospectus has been or will be filed in connection with an offering in Canada and the units have not been registered under the United States Securities Act of 1993, the securities law of any state thereof or the securities of any other jurisdiction, nor is such registration contemplated, and this presentation is not and under no circumstances is to be construed as a prospectus or other offering document. No securities commission or similar regulatory authority has passed on the merits of the units reviewed these informational materials any representation to the contrary is an offence. The information presented in this document is considered to be accurate, however there is no expressed or implied representation or warranty as to the accuracy or completeness of any such information and does not constitute investment advice. This presentation may contain forward-looking statements, including forward-looking statements regarding management’s assessment of future plans and operations, business and investment strategies, exceptions of returns, cash-flow and earnings. Forward-looking statements are based on current assumptions, beliefs, internal exceptions, estimates and projections of management relating to, among other things, the ability of the funds to raise capital and locate desirable investments, the performance of the funds’ underlying investments, the funds’ ability to effectively time dispositions, prevailing commodity prices and exchange rates, applicable royalty rates and tax laws. Such forward-looking statements are based on information currently available to management. No persons should rely on these forward- looking statements because they involve known and unknown risks, uncertainties and other factors which are, in many cases, beyond the control of management and may cause the funds’ actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by the forward-looking statements. The market and industry data contained in this presentation are based upon information from independent sources and other publications. While management believes this data to be reliable, market and industry data is subject to variations and cannot be verified with complete certainty. Management has not independently verified any of the data from third party sources referred to in this presentation or ascertained the underlying assumptions relied upon such sources. 2
Click to edit Master title style A Leading Environmental Service Company BEST-IN-CLASS Initial Site Selection INTEGRATED (Planning & Estimating) ENVIRONMENTAL SOLUTIONS Consultation & Decommissioning Vertex Offers Solutions Regulatory & Reclamation Approval at all stages of Since 1962, Vertex has been a leading North American a Client Project environmental service company “Cradle to Grave” We proudly serve clients in the oil & gas, oil sands, petrochemical, renewable energy, utilities, agriculture, forestry, midstream, mining, aggregate and municipal sectors Operation & Vertex employs a staff of Development Maintenance approximately 650 employees and lease operators We assemble, integrate and develop businesses that address the environmental needs of clients, Proven Strategy through organic growth and strategic acquisitions with the goal of capturing efficiencies and enhancing service offerings that best anticipate customer needs. 3
Click to edit Master title style Corporate Profile Market Summary Locations Current Stock Price $0.38 (Mar 2019) Common Shares Outstanding 93.4 Million Market Capitalization: $35 Million Enterprise Value: $121 Million 2019 Backlog $121 Million EBITDA: 2017 (1) $15.5 Million 2018 (2) $20.6 Million CAGR ( EBITDA 2006 - Present ) 28.69% Highlights • Became a publicly traded entity on the TSX Venture Exchange on Oct. 16, 2017 • 6 Complementary Acquisitions in 2017 & 3 in 2018 Including: • An Environmental Services Company in SK & MB • A Hydro-Vac Company Operating in Edmonton, AB • A Fluid Logistics Company Operating throughout AB, SK & USA 1. F17 EBITDA adjustments would have included $3.2M of TTM EBITDA from acquisitions or $18.7M in total adjusted EBTIDA for FY17. 4 2. F18 EBITDA adjustments would have included $4.9M of TTM EBITDA from acquisitions or $25.5M in total adjusted EBTIDA for FY18.
Click to edit Master title style Integrated Solutions from Planning to Reclamation Environmental Consulting & Engineering Rental Equipment ➢ Abandonment, Drilling & Completion ➢ Specialized tanks, spill prevention, site accommodations, Engineering enviro bins and rental equipment to support development, operational and maintenance projects ➢ Pre-Development, Monitoring & Remediation / Reclamation Services Insulation Blankets & Buildings ➢ Land & Regulatory Services ➢ ➢ Wildlife Management Custom Manufactured Insulation Blankets to ensure thermal efficiency and the protection of ➢ Emergency Spill Response workers and equipment ➢ Geotechnical & Civil Engineering ➢ Manufacturing, Installation and Repair of Self- Environmental Services & Industrial Cleaning Frame, Rigid Frame and Acoustical Enclosure Metal Buildings ➢ Hydro-Vac, Pressure, Vacuum, Hot Oiler, Steam Truck & Stable Foam Services ➢ Utilizing Specialty Tools to Clean Tanks, Lines, Exchangers & Other Equipment Fluid Logistics & Management ➢ Fluid Logistics Including: Crude, Emulsion, Water Chemicals, Fuel, NGL, Butane & Propane ➢ Fluid Storage (water, oil and chemicals) & Secondary Containment ➢ Fluid & Chemical Sales Environmental Services Industrial Services 5 Visit vertex.ca for additional details on Vertex’s service offering
Click to edit Master title style Solutions At All Stages of a Project Life Cycle Vertex Provides an Integrated Environmental Service Offering That Supports Project Development Throughout the Life Cycle of our Clients’ Projects Across All Industries “Cradle to Grave Service Offering” 6 Visit vertex.ca for additional details on Vertex’s service offering
Click to edit Master title style Revenue Earned at Each Stage of a Project’s Life Cycle Revenue By Division From 45% to 83%, Environmental Services now comprises the majority of Vertex’s revenue stream and drives revenue at each stage of a Project’s Life Cycle % of Vertex’s Revenue Earned by Project Stage 30% 70% 1. Total Revenue is in C$ 000’s 7
Diversified Environmental Service Offering Click to edit Master title style Vertex continues to focus on growing across multiple industries. This strategy has resulted in several project awards enabling us to continue to expand our geographic footprint outside of Western Canada while increasing the utilization of our two primary assets: People & Equipment. Growth Opportunities % of Revenue by Industry Utilities, Telecommunication & Government: Vertex 2014 continues to provide services to these sectors and is working to grow/adapt our service offering to attract new 92% Oil & Gas project awards. Vertex is active on obtaining contracts associated with expanding Canadian 5G network. 8% utilities, agriculture, Mining: Vertex continues to be involved in coal and potash mine, processing, and power plant shut-downs including municipalities, government and the management of peat, vegetation and wildlife telecommunications industries throughout the life of these projects. Oil & Gas and Mining Abandonment: AB and BC are developing regulations to impose timeline on the clean-up 53% Oil & Gas of dormant well sites while other jurisdictions are imposing higher security deposits to achieve clean up efforts. Vertex continues to be involved in coal and potash mine abandonments and reclamation projects. 2019E Operation & Maintenance Projects: Continual maintenance is required to ensure optimal production capabilities. This is 47% utilities, agriculture, a more stable stream of revenue and typically represents a municipalities, government and greater proportion of E&P companies’ spending than capital telecommunications industries expenditure. 8
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