Investor Day November 16, 2017 www.badgerinc.com | TSX:BAD Agenda - - PowerPoint PPT Presentation

www.badgerinc.com | TSX:BAD

Investor Day

November 16, 2017

Agenda

Today’s Presenters Management in attendance but not presenting:

2

Paul Vanderberg Jerry Schiefelbein John Kelly Tim Reiber Elizabeth Peterson

Glen Roane (Director) Tracey Wallace Wade Wilson George Chung Jay Bachman Alan Richter

Forward Looking Statements

This presentation contains forward-looking statements reflecting certain current forecasts of certain aspects

• f the company’s future. These statements are based on current information that management has assessed,

but which by its nature is dynamic and subject to rapid and even abrupt changes. Forward-looking statements in the presentation include but are not limited to statements regarding:

• Badger’s strategic milestones which are to: 1) double the US business from fiscal 2016 levels over the

next 3 to 5 years 2) grow Adjusted EBITDA by a minimum of 15% per year, 3) target Adjusted EBITDA margins of 28% to 29%; and 4) drive fleet utilization and revenue per truck per month above $30,000;

• Badger’s anticipation that increased year-over-year activity realized in the second and third quarters will

continue into the fourth quarter of 2017 and that the overall macro-economic environment in both Canada and the US is anticipated to be supportive of ongoing infrastructure, construction, and oil and gas activity levels for the remainder of 2017;

• Badger continues to see growth from increased usage of hydrovac for non-destructive excavation;
• Badger’s anticipation that the number of new hydrovac builds for 2017 will be approximately 155 units;
• Badger will continue to target long term run rate of G&A costs at 4% of revenue;
• Badger’s estimates for 2017 manufactured cost of Badger hydrovacs of $390,000 to $410,000 (Canadian

dollars); and

• Current dividend yield on Badger’s common shares.

The forward-looking statements made in this presentation rely on certain expected economic conditions and

• verall demand for Badger’s services and are based on certain assumptions.

The assumptions used to generate these forward-looking statements are, among other things, that:

• Badger has the ability to achieve its revenue, net profit and cash flow forecasts for 2017 and beyond;
• There will be a long-term demand for hydrovac services from infrastructure, construction, and oil and

gas activity in North America;

• Badger will maintain relationships with current customers and develop successful relationships with new

customers;

• Badger will collect customer payments in a timely manner;
• Badger will be able to compete effectively for the demand for its services;
• There will not be significant changes in profit margins due to pricing changes driven by market

conditions, competition, regulatory factors or unforeseen factors;

• The overall market for its services will not be adversely affected by weather, natural disasters, global

events, legislation changes, technological advances, economic disruption or other factors beyond Badgers control;

• Badger will execute its growth strategy including attracting and retaining key personnel; and
• Badger will obtain all labour, parts and supplies necessary to complete the planned hydrovac build at

the costs expected. With respect to dividends, investors are cautioned that monthly dividends are always subject to approval from the board of directors of Badger, and may be increased, decreased or suspended by the board at any time. Badger Daylighting Ltd.’s actual results could differ materially from those stated or implied by the forward- looking statements within this presentation. The forward-looking statement with this presentation should be considered in the context of these and other risk factors disclosed in our most recent filings included with the Canadian Securities Administrators, which are available on the SEDAR disclosure system (www.sedar.com). All future written and oral forward-looking statements made by us or on our behalf are also subject to these

• factors. We undertake no obligation to publicly update or revise any forward-looking statements, whether as

a result of new information, future events or otherwise, except as required by law. 3

Opening Remarks And Corporate Overview

4

The Badger Daylighting Process

The Badger Daylighting process involves exposing underground infrastructure to daylight:

5

“Badger strives to have the Best Trained Operators and the Best Built and Most Efficient Trucks in the hydro excavation business”

Non-destructive excavation Pressurized water stream Powerful vacuum system Purpose-built hydrovacs Professional, well trained operators Excavated soil/water slurry remains on site or Badger arranges for disposal based on customer requirements - customer maintains ownership of materials

Badger Hydrovac Benefits

Customer Benefits

Provides customers with safe and efficient non-destructive excavation In the United States, on average, a “critical strike” of utility infrastructure occurs every 6 minutes from conventional excavation tools(1) Badger has developed a wide range

• f hydrovac applications

Hydrovac continues to be used in new applications as customers realize the benefits of non-destructive excavation

6

Efficiency – “Time is Money” Safely locating underground conflicts with hydrovac improves productivity

• f traditional excavation equipment –

reducing project time lines

“Hydrovac excavation provides an efficient, safe and reliable alternative for excavating in sensitive or confined spaces”

(1) Source: Pipeline Emergency Response and Damage Prevention training materials.

Historical Financial Performance

7

“Badger’s organic business model has generated strong financial performance across a number of business cycles”

Historical Revenue and Adjusted EBITDA(1)

(1) Source: Badger historical MD&A and /or Financial Statements.

Note 1: Throughout this presentation trailing twelve months (“TTM”) includes the period October 1, 2016 though September 30, 2017. Note 2: Throughout this presentation Adjusted EBITDA as defined by Badger for the years 2017 through 2013, prior to 2013 was defined as EBITDA. See Badger historical MD&A for additional details. $118 $148 $135 $140 $194 $239 $325 $422 $405 $404 $477 – $100 $200 $300 $400 $500 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 LTM 2017 $mm Adjusted EBITDA Revenue

Badger Safety Culture

8

“Safety – It’s What We Do. It’s What We Deliver.”

• Badger Mentor Training process to train new operators
• “Best Operator, Best Truck”
• Safety is a component of compensation throughout the organization

Video Diary – A Day in the life of a Badger

The video diary is available for review on Badger’s website at www.badgerinc.com 9

Badger – A Proven Business Model

Badger’s organic growth model has historically delivered strong financial performance

Badger has a proven business model and maintains a strong competitive position Badger offers a unique service to attractive end – use markets Badger is executing on a focused hydrovac strategy

10

A Proven Business Model and Strong Competitive Position

11

The Badger Business Model

The Badger Model at a Glance

Extensive Branch Network: Local, Regional and National Key to managing customer service, fleet utilization and operating costs Significant differentiator versus smaller competitors Broad Range of Markets: Flexible Operations Large geographic footprint and broad range of markets Reposition hydrovacs to drive utilization and reduce operating costs Hydrovac Focused Organic Growth, Scalable Operations Growth historically funded with cash flow from operations and debt;

• ne truck/market at a time

Badger has generated more than $542 million in cash flow from

• perating activities over the past 10 years

(1)

Badger Design and Manufacturing of its Hydrovacs Experience with over 1,400 Hydrovacs Design, engineering & technology = best in class hydrovac

12

(1) Includes the period January 1, 2008 through September 30, 2017. Refer to slide “Historical Financial Metrics” for additional details.

“Badger’s proven business model, attractive end-use markets and hydrovac focused strategy differentiate Badger from its competitors”

Extensive Branch Network

“Badger’s branch network is a key differentiator from our competitors and provides Badger with a competitive advantage”

Benefits of Badger’s Extensive Branch Network

• Geographic footprint provides market diversification

and cost efficiencies

• Ability to service customers across regions
• Fleet and operating cost optimization
• Over 150 service areas(1)(2)
• 1,081 hydrovac units(3)
• Operations in 5 provinces and 41 states

13

(1) Service Areas are locations where Badger provides services to local customers. A service area may not have a physical location where hydrovacs and staff are located. (2) Service Areas as at October 17, 2017. (3) As at September 30, 2017

Extensive Branch Network

14

Summary of Hydrovacs(1) Corporate Franchise Total Canada 222 131 353 United States 628 43 671 Total 850 174 1,024

“Badger operates a combination of corporate and franchise locations to service the market”

Corporate Operations versus Franchises: Badger initially began utilizing a franchise model Badger transitioned to a mix of corporate and franchises over time – large markets typically require investment in management and administration – significant resources required Franchise model may be preferred in certain geographies Badger anticipates operating a mix of corporate and franchise locations in the future

(1) As at December 31, 2016. Disclosure updated on an annual basis.

Broad Range of End-Use Markets

“Badger’s End-Use Market Diversification is a Key Differentiator and Source of Future Growth”

• Badger serves infrastructure markets
• $4 trillion in estimated US Infrastructure needs over next 10 years*
• Hydrovac is a small and growing part of infrastructure construction
• Badger has proven that hydrovac has a wide range of applications

in the infrastructure segment

15 * Source: American Society of Civil Engineers.

Key End-Use Segments Utilities Transportation Industrial Construction/General contracting Oil and gas Engineering Telecommunications

Broad Range of End-Use Markets: Flexible Operations

“Badger successfully grew its broad infrastructure revenues mitigating the impact of the 2014/2016

• il and gas downturn”

16

Badger has increased revenues across a broad range

• f infrastructure and regional end-use markets

Focus on sales and business development Extensive repositioning of fleet Shift to non-oil and gas has driven revenue, utilization and improvements in expenses

(1) Source: Management.

Revenue By Type(1)

• 50

100 150 200 250 300 350 400 450 2012 2013 2014 2015 2016 Revenue ($mm CAD) Hydrovac Service Revenue - Non-Oil and Gas Hydrovac Service Revenue - Oil and Gas Other Revenue

Badger: Hydrovac Focused Organic Growth

“Badger is the pioneer in marketing hydrovac technology”

17

Incremental Growth from Existing Locations Growth in New Markets Leverage to a Recovery in Oil and Gas Hydrovac remains under utilized in many

• f Badger’s existing

geographic markets Leverage infrastructure and fleet network from neighbouring

• perations

Badger’s branch network well positioned in oil and gas markets Ongoing focus

• n business

development and customer education Growth requires high customer service levels and fleet availability Recovery in oil and gas markets provides significant potential

• pportunity

Scalable Operations – Significant Infrastructure In Place US Revenue Growth(1)

(1) Source: Badger historical MD&A and /or Financial Statements.

$150 $187 $196 $202 $251 – $50 $100 $150 $200 $250 $300 2013 2014 2015 2016 LTM 2017 36.5% 24.3% 4.9% 3.2% 24.2% US$mm US Revenue YoY Growth:

Badger’s Business Development: Driving Growth

“Badger’s investment in business development is driving organic growth”

18

Investment in Business Development Driving Growth Business development key to establishing new markets and regions and further penetration of existing markets – customer education and development Leverage customer relationships across Badger’s branch network – grow with our customers Revenue Growth(1)

(1) Source: Badger historical MD&A and /or Financial Statements.

$148 $135 $140 $194 $239 $325 $422 $405 $404 $477 – $100 $200 $300 $400 $500 2008 2009 2010 2011 2012 2013 2014 2015 2016 LTM 2017 $mm Revenue

Badger’s Business Model Supports Consistent Margins

“Badger has Delivered Strong Margins Across a Variety of Business Cycles”

19

Badger’s Targets an Adjusted EBITDA Margin of 28% to 29% Business mix across a broad range of infrastructure segments Badger’s sells on VALUE – scale, flexibility and safety programs valued by customers First mover advantage historically results in strong margins – ability to access new markets Broad branch network provides margin stability through geographic and end-use market diversification Scale of Badger’s operations provides additional opportunity for cost efficiencies – common platform and supply chain initiatives underway Badger’s 2015/2016 margins negatively impacted by impact of oil and gas downturn – market bottoming Historical Adjusted EBITDA Margins(1)

25.7% 29.0% 28.4% 26.6% 25.9% 25.0%

• 20

40 60 80 100 120 140 160 180 200 – 10.0% 20.0% 30.0% 2012 2013 2014 2015 2016 LTM 2017 $mm Adjusted EBITDA Margin (%) Oil and Gas Revenue

(1) Source: Badger historical MD&A and /or Financial Statements. (2) Oil and Gas revenue disclosed an annual basis. (2)

Badger’s Best-in-Class Hydrovac Fleet

Badger Design and Manufacturing

• In-house design and engineering optimizes life cycle costs,

reduces initial capital costs

• Badger designs its units to meet North American government

compliance requirements – allows for fleet to be utilized across branch network

• Badger’s Red Deer facility produced 220 hydrovac units in 2014

Badger Hydrovac Production Cost:

• Badger estimates 2017 manufactured cost of $390,000

to $410,000 (Canadian dollars) per hydrovac

• Additional costs to put into services of approximately

5% to 10% - excise tax, sales tax and transportation (included in capital expenditures)

• Primary cost components of manufactured cost (approximate

historical averages): Chassis 30/35%; components, fabrication and labour 65/70%

20

“Badger Design, Engineering and Manufacturing is a Differentiator”

Badger’s Fleet Management

21

Hydrovac Lifecycle Hydrovacs historically have a 10 year average life span 2016 exit average fleet age estimated at 4.5 years Active management of repairs and maintenance determines hydrovac retirements Replacement cycle typically to follow new build cycle

• n a 10-year trailing basis – Badger can respond to

build requirements Hydrovac Count and Revenue Per Truck(1)(2)(3)(4)

(1) Source: Badger historical MD&A and /or Financial Statements. (2) Change in total units year-over-year represents the net of additions and retirements. (3) Badger average fleet age was approximately four and a half years as of December 31, 2016. (4) RPT Sep 30, 2017 is for the nine-months ended September 30, 2017.

413 407 412 504 630 791 998 1,018 1,024 1,081 – 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 – 200 400 600 800 1,000 1,200 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sep 30 2017 Revenue per Truck ($) Hydrovac Count Hydrovac Count (Canada) Hydrovac Count (U.S.) Revenue Per Truck (RPT)

Badger Offers a Unique Service to Attractive End-Use Markets

22

Badger Offers a Unique Service to Attractive End-Use Markets

“Badger’s Service Model is a Differentiator”

Badger Branch-Based Model

Local branches run by Area Managers Area Manager – Key Roles Area Managers have full P&L responsibility Local entrepreneurial model supported by national operating scale and oversight Hire, Train, Safety Primary Customer Contact, Customer Service, Scheduling Pricing, Billing, Collections Fleet management, repairs and maintenance Regulatory – operator hours of service, transportation regulations Monthly income statement – reviewed by Area and Regional Managers Bonus pool based on pre-tax earnings, after capital charge Pool allocated 50% Area pre-tax, 25% Region pre-tax (teamwork) and 25% safety, customer growth and operator retention

23

Badger Offers a Unique Service to Attractive End-Use Markets

“Badger’s Operating Flexibility is a Service Differentiator”

24

Badger’s Service Model is Locally Focused and Nationally Supported Local branches – we are a member of communities where we operate Branches part of a regional and national network Equipment can be shifted to service large jobs and emergency response Hydrovac is a “call out” business Maintain “first call” status Say “YES” when a customer calls

Note 1: Service Areas are locations where Badger provides services to local customers. A service area may not have a physical location where Hydrovacs and staff are located. Note 2: Service Areas as at October 17, 2017.

Badger Hydrovac Uses

25

“Badger serves a broad customer base across a diverse range of infrastructure end use markets”

Utilities Oil and Gas Telecommunications Transportation

• Utility pole holes – new and replacement
• Utility verification – daylighting, test holes,

pot holes, sight holes

• Maintenance
• Cable installation – trenching and pits
• Submersible transformer vault cleanouts
• Gas distribution construction
• Valve case cleaning and verification
• Locating lost pipe
• Gas feeder station maintenance and upgrading
• Various cleaning applications
• Transmission and distribution system maintenance
• Integrity work
• Pipeline crossings
• Directional drilling
• Site abandonment
• Spill clean up
• Frac tank clean out
• Frac sand trap clean out
• Well automation – trenching and potholing
• Rig cleaning
• Thawing frozen lines
• Trenching for pipeline installation
• Fibre optic systems
• Telephone and data lines
• Data center and cloud computing facilities
• Rail car cleaning
• Locating bottom of foundations.
• Pilot holes for soil sampling
• Sign and post holes
• Switch heaters – pits for heater and trenching

for power and drainage lines

• Derailment cleanup

Industrial Engineering Construction Other Applications

• Thawing frozen lines and conduits
• Line repairs – service pits
• Cable installation – trenching and pits
• Utility verification
• Fly ash removal
• Vessel removal
• Tower cleaning
• Materials handling, maintenance and cleanup
• Sub-surface utility engineering / prospecting

(potholing)

• Conflict location – renovation
• Horizontal drilling
• Concrete form cleanup
• Disaster response
• Tunneling
• Drain and weeping tile installation and cleanout
• Texas gate cleanouts
• Lowering basements
• Grain elevator cleanouts

Note 1: Selected uses provided, list not exhaustive of all potential hydrovac uses.

Badger’s Branch Network and Growth

26

The U.S. is a significant untapped market: There are 270 US Metropolitan Statistical Areas (MSA) out of 347 total MSA’s in the lower 48 states where Badger does not currently provide service

Near Term Growth Opportunities Leverage existing footprint into neighbouring markets/regions Significant opportunity to increase Badger’s US operations

Current Badger service area MSAs per 2010 Census data; lower 48 states Note 1: Service Areas are locations where Badger provides services to local customers. A service area may not have a physical location where hydrovacs and staff are located. Note 2: Service Areas as at October 17, 2017. Note 3: US Census Bureau, 2010 Census – an MSA is a geographic region with a population of over 100,000 people. Management estimates used for purposes of comparing Badger service areas to MSA’s.

Badger’s Business Development Supports Strategy

Leverage core Hydrovac expertise

• Add a Badger unit

train operators sell the service

• Best Trucks, Operators, Training, Sell Value
• Safety and reliability is our priority
• Hydrovac represents approximately 90% of revenue

Strong local operations and broad customer base

• Local focus with national support
• Incentivized management

Strong market development focus

• Drive hydrovac penetration in existing markets
• Develop new applications for hydrovac
• Significant untapped market potential
• Continue to improve business mix

27

“Badger’s Business Development Leverages Core Hydrovac Expertise and Drives Growth”

Badger’s Business Development Approach

“Badger Business Development is a Differentiator”

28

Badger Business Development Focus Sales focus at local, regional, national levels Focus on infrastructure verticals Local and head office contacts Over 80 business development staff across North America

• Sales management tools and processes
• Training
• Customer tracking

Expand relationships with existing customers – leverage relationships across network Target new customers to broaden revenue base

Executing on a Focused Hydrovac Strategy

29

Badger’s Strategy

Maximize utilization of the Badger hydrovac fleet by safely solving

• ur North American customers’ infrastructure needs

Badger is focused on: Safety Infrastructure Leveraging know-how and skills: “Best Operator, Best Truck” Providing value added services to our customers’ projects

30

Executing on a Focused Strategy

31

Strategic Initiatives to Drive Future Growth 2017 Activities and Key Results

Strengthen human resources organization VP of HR in place – Initial plans developed and implemented for recruitment, retention and organizational growth Drive business development VP of Business Development in place 57 net additional hydrovacs in service (YTD Q3 - 2017) Augment common operating practices and the operating platform Ramping up efforts to implement common practices and reporting across all operations Review of business processes and IT systems underway Leverage technology Utilize technology to enhance hydrovacs, improve logistical efficiency and reduce costs

Strategic Initiatives – Human Resources

32

Human Resources Nature of Benefit Time Line

Upgrade recruitment and onboarding processes Pipeline of qualified candidates for key positions Through Q4 2018 Improve retention in key positions Engage and retain employees in key positions – reduce turnover and opportunity costs Ongoing Succession, leadership and employee development programs Pipeline of qualified candidates for key positions Ongoing Standardized HR processes, systems and tools Reduced administrative time Through Q4 2018 Labour relations management Flexible approach with collaborative relationships Ongoing

Strategic Initiatives – Business Development

33

Business Development Nature of Benefit Time Line

Organize business development team – geography and segment focus Tailored – customer segment specific marketing programs Drive higher hydrovac utilization VP , Business Development in place: Q2-2017 Implement professional sales force management processes Improve sales force effectiveness, higher call/conversion, leverage corporate and national accounts Ongoing Utilize data to improve sales force effectiveness Tailored marketing programs and detailed customer follow-up; broaden customer base; utilize CRM processes Q2-2018

Strategic Initiatives – Common Platform

34

Common Platform Nature of Benefit Time Line

Establish consistent administrative processes across the organization Support sustainable growth through improved operational practices Ongoing – completion as part of overall information systems review Enhance administrative and operational information systems and processes Increase efficiency (operational and administrative); improve timeliness of information; reduce costs Q1-2018 to complete initial process and system assessments – time lines dependent

• n scope and scale of work

Enhance IT platform Enable CRM, HRIS, manufacturing functionality; upgrade job ticket processing Q1-2018 complete initial assessment and scope of resources and timing requirements Supply chain approach to procurement Consolidate and leverage spend to reduce overall costs Through Q2-2018

Strategic Initiatives – Technology

35

Technology Nature of Benefit Time Line

Hydrovac design improvements Improved efficiency and operator safety = reduced overall hydrovac life-cycle costs Reduce truck weight = Lower transportation costs Ongoing Excavation technology Improvements in all aspects of the hydrovac process = improved efficiency and lower costs Ongoing Logistics management technologies Utilize GPS to maximize scheduling Improve efficiency: lower operating costs and carbon footprint Software enhancements to comply with new Department of Transportation requirements Ongoing Materials processing solutions Reuse of customer materials Improve productivity and reduce costs New source of revenue Competitive advantage: enhanced differentiation Ongoing

Finance

36

Financial Snap Shot

Total Return(6)

200 400 600 800 1000 1200 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Badger Daylighting S&P/TSX Composite Index

Shares outstanding(1) 37.1 million TSX share price(1) $29.53 Market capitalization(1) $1.1 billion Enterprise value

(1)

$1.2 billion Monthly dividend per share

(2)

$0.038 Dividend yield

(1)(2)

1.5% TTM Adjusted EBITDA

(3)

$119.3 million Total debt less cash to TTM Adjusted EBITDA

(3)(4)

0.5X 5-year average return on equity

(5)

18%

(1) As at November 6, 2017. (2) Dividend yield calculated based on November 6, 2017 share price of $29.53 and November 2017 declared dividend of $0.038 per common share ($0.456 per common share annualized). (3) Adjusted EBITDA based on trailing twelve months as at September 30, 2017. For definition of Adjusted EBITDA see slide “Non-IFRS Financial Measures and Key Financial Metrics”. (4) Total debt less cash and cash equivalents as at September 30, 2017. (5) Average return on equity for the fiscal years 2012 through 2016. Average return on equity is updated on an annual basis. (6) Represents index based on total return. Assumes reinvestment of dividend income at prevailing share price.

37

Historical Financial Metrics

“Badger manages its business for the long-term”

38

10 Year Cumulative(1) Revenue $2,778.4 million Adjusted EBITDA $742.3 million Cash flow from operating activities $541.9 million Dividends paid $129.6 million Capital expenditures $454.0 million

(1) 10-year cumulative period is inclusive of January 1, 2008 to September 30, 2017. (2) Source: Badger historical MD&A and /or Financial Statements

10-Year Indexed Revenue & EBITDA(2)

– 50 100 150 200 250 300 350 400 450 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 LTM 2017 Index: 2007 = 100% Revenue EBITDA

2017 Third Quarter Highlights

“Badger continued to see strong growth in its business throughout the third quarter. The ongoing focus on

• perations resulted in an improved Adjusted EBITDA margin for the third quarter of 2017 compared to the first

quarter of 2017. ”

39 Note 1: Refer to Badger’s 2017 third quarter earnings release, financial statements and management’s discussion and analysis for additional details regarding Adjusted EBITDA, Revenue, Adjusted EBITDA margin and RPT. Note 2: See slide “Non-IFRS Measures and Key Financial Metrics” for definition and additional details on Adjusted EBITDA, Adjusted EBITDA margin and RPT.

Q3 – 2017 Q3 – 2016 YTD – 2017 YTD – 2016

Adjusted EBITDA $38.9 million $33.5 million $90.8 million $76.3 million Revenue $141.3 million $113.2 million $366.4 million $293.3 million Adjusted EBITDA margin 27.5% 29.6% 24.8% 26.0% Revenue per truck $34,125 $28,062 N/A N/A

Outlook

40

Badger Outlook – Key Themes

(1)(2)

Badger anticipates increased year-over-year activity levels realized in 2nd and 3rd Quarters of 2017 to continue into 4th Quarter of 2017 Macro-economic environment in Canada and US to be supportive of ongoing infrastructure, construction and oil and gas levels for 2017 Increased usage of hydrovac for non-destructive excavation Hydrovac build anticipated to be approximately 155 for 2017

(1) For further details refer to Badger’s 2017 third quarter MD&A. (2) Due to the nature of construction operations, Badger does anticipate a seasonal slow-down in its northern markets due to winter weather, the exact nature and timing of this impact is highly variable and dependent on

regional specific weather.

Capital Allocation – Long Term Focus

“Badger manages its business for the long-term. Badger’s business has historically provided strong cash flow generation allowing Badger to continue to organically reinvest in growing its hydrovac fleet while maintaining a prudent and flexible balance sheet that provides a stable financial base for Badger to pursue its current and future growth objectives”

41

(1) Return on invested capital calculated as follows: Net operating profit after taxes

divided by invested capital. Net operating profit after taxes calculated as net profit adjusted for the after tax impact of interest, share-based compensation and other

• ne-time items. One-time items applicable to 2014 as disclosed in Badger’s 2014

MD&A. Invested capital is calculated as total assets less cash and cash equivalent less non-interest bearing current liabilities.

Capital Allocation Objectives Maintain access to capital to continue to grow Badger’s hydrovac fleet Maintain financial flexibility to manage growth in working capital as Badger’s business continues to grow Maintain Badger’s prudent and flexible financial profile – target leverage levels at 1.5X or less Generating Returns for Shareholders Growth in Badger’s hydrovac fleet Organic Growth Working capital requirements Debt repayment Dividends

8% 10% 12% 14% 16% 18% 2013 2014 2015 2016 2017 LTM

Return on Invested Capital

Return on Invested Capital(1)

Key Accounting Policies

42

Key Accounting Policies

Capital Expenditures Repairs and maintenance incurred after completion of hydrovac expensed Repairs and maintenance included in direct costs and margins Accounting policy Note 4(d) of 2016 audited financial statements Revenue recognition Revenue recognized when services provided and the revenue can be reliably measured Revenue accruals relate to timing between meeting revenue recognition requirements and formal invoicing Accounting policy Note 4(j) of 2016 audited financial statements Off-balance sheet arrangements Badger has no off-balance sheet or other financial

• bligations not disclosed

in its financial statements Normal course operating leases are included in direct costs or G&A and included in gross margin Accounting policy Note 4(c) of 2016 audited financial statements

General and administrative

43

Badger is Assessing All Aspects of its Administrative Processes Reviewing administrative processes in conjunction with common platform review Facilitate improved operational reporting = timely decision making Ongoing investments in technology and people required to manage growth in Badger’s business Badger will continue to target run rate of G&A costs at 4% of revenue

(1) Source: Badger historical MD&A and /or Financial Statements.

G&A as a % of Revenue(1)

$422 $405 $404 $477 2.74% 3.40% 3.75% 3.94% – 2.50% 5.00% 7.50% 10.00% – $125 $250 $375 $500 2014 2015 2016 LTM 2017 % of revenue $mm Revenue G&A as a % of revenue

Tax

44

Tax Considerations

Badger’s US current income taxes benefitting from accelerated capital deduction Badger’s Canadian and US current taxes will continue to benefit from ongoing investment in Badger’s hydrovac fleet Accelerated capital deduction phases out from 2018 through 2019 Current indications/proposals on US current taxes likely to impact Badger’s US current taxes

• US federal rate reductions – may positively benefit Badger
• Tax broadening – may result in changes for Badger

A 5% change in the US federal tax rate would result in an approximate US$1.0 million change in Badger’s 2016 US current income taxes Tax proposals not currently outlined in sufficient detail to provide specific implications for Badger Badger’s current tax obligations likely to trend toward statutory rates over time – future current taxes will benefit from ongoing capital spending Current tax provision and rates are subject to government and regulatory change Canadian statutory rates approximately 25% to 27%

(1)

US statutory rates approximately 35% to 40%

(1)

(1) Statutory rates in both Canada and the US will vary dependent on the province or state where the income is earned.

Upcoming Accounting Pronouncements

(1)

IFRS 9 – Financial Instruments The International Accounting Standards Board issued IFRS 9 – Financial Instruments that introduces new requirements for classifying and measuring financial instruments. The standard is effective for fiscal years beginning on or after January 1, 2018. Badger intends to adopt the new standard on the effective date and is currently assessing the effect that the new standard will have on its presentation and disclosure requirements, which is expected to be completed in the fourth quarter of 2017. IFRS 15 – Revenue from Contracts with Customers The International Accounting Standards Board issued IFRS 15 – Revenue from Contracts with Customers to replace the existing revenue recognition standards. The new standard provides a single, principles based five-step model to be applied to all contracts with customers. The standard is effective for fiscal years beginning on or after January 1, 2018. Badger intends to adopt the new standard on the effective date and is currently assessing the effect that the new standard will have on its presentation and disclosure requirements, which is expected to be completed in the fourth quarter of 2017.

45

(1) As disclosed in Badger’s 2017 third quarter MD&A.

Summary

46

Summary

(1) Starting point is Badger’s financial results for the year ended December 31, 2016.

Proven Business Model Attractive Markets Focused Strategy

Strong and expanding branch network Increasing market adoption of hydrovac Executing on a focused hydrovac strategy Organic growth Broad range of Infrastructure End Use Segments First mover advantage Expanding US footprint Strong historical cash flow and consistent margins Low leverage = financial flexibility

Strategic Milestones (3-5 years):

• Double the US business again within 3 to 5 years(1)
• Grow Adjusted EBITDA by a minimum of 15% per year
• Target Adjusted EBITDA margins of 28% to 29%
• Drive fleet utilization and RPT above $30,000/month

47

Question and Answer

48

Non-IFRS Financial Measures and Key Financial Metrics

(1)

This presentation contains references to certain financial measures, including some that do not have any standardized meaning prescribed by IFRS and that may not be comparable to similar measures presented by

• ther corporations or entities. These financial measures are identified and

defined below: “Adjusted EBITDA” is earnings before interest, taxes, depreciation and amortization, share-based compensation, gains and losses on sale of property, plant and equipment, and gains and losses on foreign exchange. Adjusted EBITDA is a measure of the Company’s operating profitability and is therefore useful to management and investors as it provides improved continuity with respect to the comparison of our operating results over

• time. Adjusted EBITDA provides an indication of the results generated by

the Company’s principal business activities prior to how these activities are financed, the results are taxed in various jurisdictions, and assets are

• amortized. In addition, Adjusted EBITDA excludes gains and losses on sale
• f property, plant and equipment as these gains and losses are considered

incidental and secondary to the principal business activities, it excludes gains and losses on foreign exchange as such gains and losses can vary significantly based on factors beyond our control and it excludes share- based compensation as these expenses can vary significantly with changes in the price of our common shares. “Adjusted EBITDA Margin” is Adjusted EBITDA margin as defined earlier, expressed as a percentage of revenues. Key Financial Metrics “Revenue per truck per month” (RPT) is a measure of hydrovac fleet

• utilization. It is a measure of hydrovac revenue only. The RPT is calculated

by combining Canadian and US dollar hydrovac revenue, without converting foreign currency revenues into a Canadian dollar equivalent, dividing the total mixed currency hydrovac revenue for the period by the number of hydrovacs in service throughout the period, and further dividing by the number of months in the period.

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(1) For further details and related reconciliations refer to Badger’s 2017 third quarter MD&A.

Celebrating 25 Years of Safety

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