Vertex Resource Group Ltd. Investor Presentation January 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
A Leading Environmental Service Company Click to edit Master title style 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. BEST-IN-CLASS Initial Site Selection INTEGRATED (Planning) ENVIRONMENTAL SOLUTIONS Consultation & Decommissioning Regulatory & Reclamation Approval Vertex Offers Solutions Since 1962, Vertex has been a leading North American at all stages of environmental service company a Client Project “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 700 employees and lease operators To continually evolve, expanding our knowledge base, service offerings and expertise, Mission Statement enabling us to serve our customers with increasingly innovative solutions. 3
Click to edit Master title style Corporate Profile Market Summary Locations Current Stock Price $0.45 (Dec 2018) Common Shares Outstanding 93.4 Million Market Capitalization: $42 Million Enterprise Value: $126 Million 2019 Backlog $121 Million EBITDA: 2017 (1) $15.5 Million 2018 YTD (2) $14.7 Million CAGR (EBITDA) (3) 29.12% Insider Ownership Senior Management 34% Board of Directors____ 28% Total Insider Ownership 62% 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 Hauling Company in Operating throughout AB, SK & USA 1. F17 EBITDA adjustments would have included $3.5M of TTM EBITDA from acquisitions or $18.7M in total adjusted EBTIDA for FY17. 4 2. 9 months ending September 30, 2018. $25.6 TTM EBITDA ’18. 3. CAGR EBITDA since 2006
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 ➢ Custom Manufactured Insulation Blankets to ➢ Emergency Spill Response ensure thermal efficiency and the protection of ➢ Geotechnical & Civil Engineering workers and equipment ➢ Environmental Services & Industrial Cleaning Manufacturing, Installation and Repair of Self- Frame, Rigid Frame and Acoustical Enclosure ➢ Hydro-Vac, Pressure, Vacuum, Hot Oiler, Metal Buildings Steam Truck & Stable Foam Services ➢ Revenue By Division Utilizing Specialty Tools to Clean Tanks, Lines, Exchangers & Other Equipment 100% 140,000 21% 120,000 Fluid Hauling & Management 80% 46% 39% 54% 55% 100,000 60% 80,000 ➢ Fluid Hauling Including: Crude, Emulsion, Water 60,000 40% 79% Chemicals, Fuel, NGL, Butane & Propane 61% 40,000 54% 45% 46% 20% ➢ 20,000 Fluid Storage (water, oil and chemicals) & 0% 0 Secondary Containment 2014 2015 2016 2017 YTD 2018 ➢ Fluid & Chemical Sales Environmental Industrial Total Revenue 5 Visit vertex.ca for additional details on Vertex’s service offering
Click to edit Master title style Diversified Environmental Service Offering • Vertex continues to reduce risks by capitalizing on opportunities to diversify our client base and related industry exposure. • The pursuit of industry and client diversification has resulted in several project awards causing the expedited growth in revenue from non oil and gas related clients in recent years. This strategy has resulted in reduced risk exposure and lessened variability in the cyclical changes of this market. Growth Potential % of Revenue by Industry Utilities, Telecommunication & Government: Vertex continues to provide services to these sectors and is working to grow/adapt our service offering to attract new project awards. Active on obtaining contracts associated with expanding Canadian 5G network. Operation & Maintenance Projects: Continual maintenance is required to ensure optimal production capabilities. This is a more stable and consistent stream of revenue. Coal Project Abandonment: Vertex continues to be involved in coal mine, processing, and power plant shut- downs, abandonments and reclamation projects. Potash Project Abandonment: As potash mines mature, the frequency, volume and scale of total reclamation spending is expected to increase. Vertex has been and continues to be involved in the planning stages in addition (1) to also being actively engaged in the peat and vegetation management of these projects. 6 1. 9 months ending September 30, 2018.
Click to edit Master title style Solutions At All Stages of a Client Project Vertex Provides an Integrated Service Offering That Supports Project Development Throughout the Life Cycle of our Clients’ Projects “Cradle to Grave Service Offering” 7 Visit vertex.ca for additional details on Vertex’s service offering
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