OUR WAY IS TO CREATE A BETTER WAY Trevor Haynes, CEO 6/10/2019 1 - - PowerPoint PPT Presentation

6/10/2019 1

June 2019 Investor Presentation Trevor Haynes, CEO

Investor Relations | investor@blackdiamondgroup.com

OUR WAY IS TO CREATE A BETTER WAY

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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

• ther 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

• bligation to update or revise any of the forward-looking statements, except as may be required by

applicable securities laws.

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• 63% of Q1 revenue generated
• utside of western Canadian

energy sector

• Continued diversification

geographically and by industry segment

Q1/19 Results Show Operational Improvement

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Canada - WFS 37% Canada - MSS 25% US 31% Australia 7%

Q1 2019 Geographical Diversification (% of Total Revenue)

4% 7% 0% 1% 2% 3% 4% 5% 6% 7% 8%

Q1-19 Y/Y Q1-19 Q/Q

Q1-19 Rental Revenue Growth

• Growth in consolidated

rental revenues, both quarter-over-quarter and year-over-year

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Q1/19 Results Show Operational Improvement

6/10/2019 4 0% 10% 20% 30% 40% 50% 50% 55% 60% 65% 70% 75% 80% 85% Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

WFS Rental Fleet

Utilization Improvement

MSS WFS Wellsite Accommodation WFS Rental Fleet

• Utilization in MSS is improving,

driven by higher Alberta activity levels

• WFS Wellsite Accommodation

active, particularly in the US

• WFS utilization soft in Q1, but

will improve in 2H/19 due to announced contracts

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Shifting the Business to Growth Mode

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Capitalize on Operating Leverage

• Focus on putting idle assets

to work and unlocking value through used fleet sales

Improve Profitability

• Increase economies of scale

through fleet expansion in growing markets

• Expansion of VAPS1 through

branch network

• Custom sales and ancillary
• perational services

Disciplined CAPEX

• Targeting 10% MSS fleet growth
• ver the next several years
• WFS opportunities for organic

CAPEX in Australia and the US

Drive Shareholder Returns

• 1. VAPS - Value Added Products and Services

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MSS Overview

• ~6,000 units across 13 branches

in North America with attractive returns on long-lived assets

• Targeting net fleet growth of

10% per year. With added scale and additional product offering, return metrics expected to improve

• Longer term vision to double

MSS fleet in 5 years

Modular Space Solutions

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MSS Overview

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• Strong economic tailwinds in

BC, Ontario, and the US

• Inflection point in Alberta –

utilization has improved markedly since Q1/2018

• MSS 2019 gross investment of

~$25 mm into fleet additions

Modular Space Solutions

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MSS Overview – VAPS Penetration

• VAPS revenue has significantly

improved quarter-over- quarter and year-over-year

20% 27% 0% 5% 10% 15% 20% 25% 30%

Q1-19 Q/Q Q1-19 Y/Y

Growth in VAPS as a % of Rental Revenue

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MSS - Custom Sales Projects

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Hill Air Force Base

• Utah: expected to be complete

mid-2019

• ~$5.5 mm contract for design and

construction of a multi-unit facility

• Award winning custom sales for various

industries including government, schools, and commercial Custom Buildings

Fraser Surrey Docks Custom Office Complex Whistler Custom Classroom Ohio Valley Bank

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MSS – Rental Projects

• Fort St. John, BC: four-to-six year

project that began in May 2018

• ~$4 mm contract for ~50,000 sq ft in
• ffice complexes, lunch rooms, first

aid buildings and washroom facilities

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BC Hydro - Site C Dam

Site C Clean Energy Project Office Complexes

Upcoming Rental Projects

• Expect additional work for

LNG Canada

• New contracts for multi-unit projects

in Alberta, driven primarily by non-energy development

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WFS Overview

• LNG Canada is a significant catalyst. A

handful of other large energy infrastructure projects in Canada would quickly change supply/demand fundamentals

• Continuing to diversify and capitalize
• n operating leverage with recently

announced $20 mm rental contract in California

• US and Australia markets remain

robust Workforce Solutions

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WFS - Project Pipeline

6/10/2019

• Contract awarded for $20 mm, including

transportation costs

• Initial nine month contract for 1,584

beds to support reconstruction of Paradise, California with option to extend

• 312 truck-loads with transportation

expected to be delivered over a six week period

California Workforce Accommodation

• Contract awarded for $42.5 mm with a

term of 27 months, through partnership with the Moberly First Nations

• Camp contract for 908-bed turnkey

project for Coastal Gas Link project

Sukunka River Lodge

Sukunka River Lodge California Workforce Accommodations

Dawson Creek Prince George

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LodgeLink Gaining Market Traction

• Online digital marketplace with over 520 properties listed and ~61,000

rooms available in workforce lodges and hotels in Q1-19

• Offered throughout Canada, with US expansion underway
• In 2018, 250 unique corporate customers who booked over 83,000 room nights

13 100 200 300 400 500 600 700

Total Customers and Unique Company Accounts

Unique Companies Customer Accounts 100 200 300 400 500

Properties Listed on LodgeLink

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Creating Financial Flexibility

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11 12 10 10 9

1 1.5 2 2.5 3 3.5 4 2 4 6 8 10 12 14 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

Debt to Adjusted EBITDA1 Funds From Operating Activities ($millions)

FFO1 and Leverage Ratio

Funds From Operations Debt to Adjusted EBITDA

• 1. See “Non-GAAP Measures” at the end of this document.

176 153 105 113 87 88

50 70 90 110 130 150 170 190 2014 2015 2016 2017 2018 Q1'19

Net Debt1

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Significant Asset Coverage Against Debt

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• Net debt1 remains well below hard asset coverage on a net book value basis.
• 1. See “Non-GAAP Measures” at the end of this document.

100 200 300 400 500 600 2014 2015 2016 2017 2018

$mm

Net Book Value of Fleet Assets

MSS Book Value WFS Book Value Net Debt 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2014 2015 2016 2017 2018

Net Debt as a % of NBV of Fleet and Working Capital

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Growth Through Disciplined Capex

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• 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 mm growth capital
• WFS: $5 to $10 mm growth capital
• US small format accommodations
• Australian space rentals, schools
• Introducing new products to

complement US accommodations

• Modest capital for incremental

LodgeLink software development

Primary markets for Growth CAPEX

2019 Fleet Growth

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Diversify Grow Improve Returns

Steps to Creating Value and a Better Way

6/10/2019

• Expand MSS platform throughout our North

American footprint

• Investment in US and AUS business
• LodgeLink digital market expanded into US
• MSS expected to see 10% annual fleet growth from
• rganic capital investment
• Continue to grow and develop LodgeLink platform
• Maintain existing hurdle rates for investment while

adding capital light products and services

• Sell or repurpose underutilized WFS assets
• Tap into operating leverage throughout Canadian

WFS asset base

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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

• perations 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.

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THANK YOU

Investor Relations | investor@blackdiamondgroup.com