April 2019 Investor Presentation 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
Shifting the Business to Growth Mode Strong Shareholder Improve Profitability Returns • Increase economies of scale through fleet expansion in growing markets • Expansion of VAPS through branch network • Custom sales and ancillary operational services Disciplined CAPEX • Targeting 10% net fleet growth over the next several years • Shift capital to revenue generating asset categories • Increase funds from operations Operating Leverage • Improving utilization • Pushing up rental rates • Higher recurring cash flow 3 3
Modular Space Solutions (MSS) 4
MSS Overview Modular Space Solutions • Nearly 6,000 units across 13 branches in North America • Attractive returns on long-lived assets • Strong secular tailwinds in BC, Ontario, and the US to drive long term growth • CAPEX spending directed towards healthy, growing markets with high demand for MSS fleet • Inflection point in Alberta – beginning to improve 5
MSS Overview - Growing Complementary Revenue Streams Value Added Products and Services Custom Sales – Permanent Modular (VAPS) Construction (PMC) • • Steps & Landings Planning, design and innovative • Furniture rentals, office equipment, solutions • cleaning services Delivery, install and project • Wireless connectivity, maintenance management programs, utility services, disaster recovery programs 6
MSS - Major Project Sales Project: Huston Tillotson University Austin, Texas Custom sale of new product Completion time: 218 days 19 modules measuring 14,704 square feet Award : 1 st place in 2017 MBI’s Awards of Distinction for a Permanent Healthcare Facility 7 7
Modular Space Solutions - Rental Project : Winston Medical Center Louisville, MS 9,792 sq.ft. Completion time : 9 days Award : 1 st place – 2015 MBI’s Award of Distinction in Relocatable Healthcare Winston Medical Centre was severely damaged by a tornado and unable to provide medical services to local residents. BOXX Modular installed a fully functional clinic in 9 days 8 8
Shifting Capital to Maximize Returns • Rebalance fleet and align to market supply/demand characteristics • Free up latent capital in Western Canada by selling excess fleet assets • CAPEX spending directed towards healthy, growing markets with high demand for MSS fleet • Diversify by geography, industry, product, and customer base • Realize efficiencies and value from scale 9
Modular Space Solutions - Market Outlook • Strong US economic forecast • Tax reform promotes private sector CAPEX • $1 trillion infrastructure plan • Continued expansion in Architecture Billings Index • Permanent Modular Construction (PMC) market exceeded $7 billion USD in value (2017 estimate) • Rapid adoption of PMC methods in the United States ND • Strong activity levels in BC and Ontario • BC, Ontario expected to be engines of growth. Alberta/Saskatchewan seeing a recovery • Federal government’s long -term infrastructure plan (delivered in 2017) envisions ~$180 billion of spending over 12 years 10 10
Workforce Solutions (WFS) 11
WFS Divisions Large Format Camps Wellsites Australia LodgeLink NT QLD WA 12 12
WFS – North America Large Format Camps Managed Rooms and Occupancy 2,500 45% 40% 2,000 35% 30% 1,500 25% 20% 1,000 15% 10% 500 5% 0 0% Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Managed Rooms Lodging Occupancy • Received notice to proceed on $42.5 MM Coastal GasLink (CGL) contract. BD will provide 908 beds over 27 months, with install beginning in Q2/19. The CGL pipeline will bring shale gas from producing fields to LNG Canada’s export facility in Kitimat. • Separate from the CGL contract, BDI also recently announced a 304-bed rental contract in Kitimat to support initial infrastructure build out in the region. This contract has a minimum 12 month term with an option to extend. 13 13
Potential Catalysts Black Diamond Open Camps Coastal GasLink Keystone Pipeline Line 3 Replacement LNG Canada TMX Pipeline Goldboro LNG 14
WFS – Operated Lodges in Canada Horn River Lodge • Near Fort Nelson, British Columbia • Bed Count: 425 Little Prairie Lodge • Location: 135 km from Fort St. John • Bed Count: 252 Smoky River Lodge • Location: Kaybob Region of Fox Creek, Alberta • Bed Count: 206 Sunday Creek Lodge • Location: Conklin, Alberta – south of Fort McMurray • Bed Count: 1,182 beds Sunset Prairie Lodge • Location: Between Fort St John and Fort Nelson BC • Bed Count: 652 15 15
Workforce Solutions - Energy Services Wellsite Units and Utilization 800 80% • Increasing rig counts in US regions where we 700 70% operate 600 60% 500 50% • Relocation of certain US wellsite units into Permian 400 40% Basin completed Q2 2017 300 30% • Rates and activity levels strong in the US. Canada 200 20% 100 10% remains over-supplied 0 0% 2014 2015 2016 2017 2018 Units Utilization Wellsite Accommodations: Surface Rental Equipment & Accommodations: Texas – Permian Basin British Columbia North Dakota - Bakken Alberta Colorado – DJ & Niobrara Saskatchewan Innovation Value Creation 16 16
Workforce Solutions - Australia • Awarded nearly $8 million CAD in new remote workforce contracts in 2018. Momentum continuing into 2019 with improving utilization and increased demand for capital. • Increased opportunities and utilization in education and infrastructure spending • Iron ore and met coal pricing stabilization • Rapid Deployment - differentiated product offering Innovation Value Creation 17 17
LodgeLink Innovation in the workforce accommodation industry LodgeLink aggregates available remote accommodations on a single easy-to-use online marketplace 18 18
LodgeLink Nearly 250 Distinct More than 430 Active Over 53,000 Rooms Properties Listed of Capacity Corporate Customers 19 19 19
LodgeLink Gaining Market Traction Total Customers and Unique Company Properties Listed on LodgeLink Accounts 400 600 350 500 300 400 250 200 300 150 200 100 100 50 53,000 Rooms 0 0 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Customer Accounts Unique Companies 20 20
Creating Financial Flexibility FFO 1 and Leverage Ratio Net Debt 1 Reduction 190 16 4 14 176 170 3.5 14 Funds From Operating Activities ($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. 21 21
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 22 22
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