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Corporate Presentation
22
/FORWARD-LOOKING STATEMENTS
In the interest of providing information regarding Horizon North, including management's assessment of Horizon North's future plans and operations, certain statements made and contained in these presentation materials (collectively, this “presentation”) are “forward-looking statements”, “forward-looking information”, or “financial outlook” within the meaning of applicable Canadian securities laws (collectively, “forward-looking statements”). Forward-looking statements are typically, but not always, identified by words such as “anticipate”, “continue”, “estimate”, “expect”, “forecast”, “may”, “will”, “project”, “could”, “plan”, “intend”, “should”, “believe”, “outlook”, “potential”, “target”, “seek”, “budget”, “predict”, “might” and similar words suggesting future events or future performance. Statements regarding capital expenditures and future development plans, objectives and strategies are subject to all of the risks and uncertainties that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. All statements other than statements of historical fact may be forward-looking statements. The forward-looking statements contained in this presentation speak only as of the date of this presentation and are expressly qualified by this cautionary statement. The purpose of any financial outlook is to provide disclosure regarding Horizon North’s reasonable expectations as to the results of its proposed business activities and may not be appropriate for other purposes.
Specifically, this presentation contains forward-looking financial and operational information, including: information relating to our business strategies, plans and objectives; our growth strategies; industry position; commodity pricing expectations; demand for beds, cash flow and related growth rates and stability; dividends paid on common shares and related growth; planned capital expenditures and plans for developing our assets and funding our capital expenditures in various geographic regions; and Horizon North’s business strategy for future growth.
This information is based on Horizon North's current expectations and is subject to a number of risks and uncertainties that could materially affect future results. These risks include, but are not limited to, general economic risks and uncertainties, future commodity prices, exchange rates, interest rates, geological risk, political risk, regulatory approval risk, demand for commodities, including oil and gas, transportation restrictions, risks associated with changes in tax, royalty and regulatory regimes and risks associated with cross-border activities. Additional risks and uncertainties are described in Horizon North's Annual Information Form, as well as Horizon North's Management's Discussion and Analysis (“MD&A”) which are filed on SEDAR at www.sedar.com. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in Horizon North's securities should not place undue reliance on these forward-looking statements. Forward-looking statements contained in this document are made as of the date hereof and are subject to change. Horizon North assumes no obligation to revise or update forward looking statements to reflect new circumstances, except as required by applicable securities laws.
This presentation contains certain non-standardized financial measures including net debt and fund flows from operations as well as non-GAAP measures including netbacks that are not determined in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. These measures as presented do not have any standardized meaning prescribed by IFRS and therefore may not be comparable with calculations of similar measures by other companies. Reference is made to Horizon North's publicly filed documents, including our most recently filed MD&A, for a discussion of these measures, including a reconciliation of fund flows from operations to cash flow from operating activities and net debt to long-term debt. Management believes that, in conjunction with results presented in accordance with IFRS, these measures assist in providing a more complete understanding of certain aspects of Horizon North's results of operations and financial performance. Investors are cautioned, however, that these measures should not be construed as an alternative to measures determined in accordance with IFRS as an indication of our performance.
333
/OUR BELIEFS
44
Total Hours Worked
No. Of Total Recordable Incidents
Lost Time Incidents
Lost Time Incident Rate
Equipment/Property Damage (> $2,500 Damage)
Vehicle Incidents (> $2,500 Damage)
Total Kilometers Driven
12 Month Rolling Period – September 2018
/SAFETY STATISTICS
Full Year Stats
2018
YTD 2017 2016 2015 2014 2013 2012 2011 2010
15 10 8 22 28 29 63 51 38
2.88M 3.20M 3.04M 4.39M 5.38M 5.14M 4.55M 3.46M 2.41M
1.02 0.62 0.52 1.00 1.04 1.13 2.77 2.94 3.15
0 1 0 1 1 0 2 5 1
0.05 0.06 0.00 0.05 0.04 0.00 0.09 0.29 0.08
2 2 2 4 7 4 6 2 0
5 5 7 2 3 8 7 9 6
5.75M 7.95M 8.87M 10.9M 12M 10.5M 9.70M 7.91M 6.3M
555
/ABORIGINAL PARTNERSHIPS
24 Strategic Aboriginal Relationships
112
5
3 2
1 1
666
/OUR JOURNEY
77
On June 25, 2018 Horizon North closed a bought deal equity financing with a syndicate of
underwriters that purchased 17,857,200 common shares for net proceeds of $47.6 million.
Industrial Services• Funds allocated to Industrial Services will be focused on the installation of up to 1,000
camp beds on Horizon North’s fully serviced land position in Kitimat, British Columbia
following an anticipated positive final investment decision (“FID”) related to the Kitimat
LNG project.
Modular Solutions• Funds allocated to Modular Solutions will be focused on expanding capacity and
capabilities, extending offerings of affordable housing, commercial and residential
products beyond western Canada.
/USE OF PROCEEDS
888
/FINANCIAL SNAPSHOT
(000's except per share amounts) End Q3 2018 End Q3 2017
Revenue $ 276,200 $ 241,418
EBITDAS $ 23,029 $ 23,259
Total loss $ (9,609) $ (3,958)
EPS $ (0.06) $ (0.03)
Funds flow $ 22,391 $ 48,440
Net Capital (Proceeds) Spending $ 16,736 $ (25,475)
Symbol (TSX): HNL
Headquarters: Calgary, Alberta
Year End: December 31
Shares Outstanding: 164,268,988
Share Price: $2.59 (Oct 31st, 2018)
Market Capitalization: $425 million
Debt: $24 million(Sep 30th, 2018)
Enterprise Value: $449 million
Dividend Per Share: $0.02/quarterly
Stock Information
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
Stock Pricing History
October 2016 October 2017 October 2018
99
Industrial Services Modular Solutions
/BIFURCATED OPERATING STRATEGY
101010
/TRANSFORMATIONAL CHANGE
*revenue expressed in 000’s
111111
/INDUSTRIAL SERVICES
Camps and AccommodationsCatering and Hospitality
Matting SolutionsRelocatable Structures
Soil StabilizationTransportation
UtilitiesWater and Wastewater
Operational Maintenance
121212
/ASSET AND FLEET DETAILS - INDUSTRIAL SERVICES
Assets Sept. 30, 2018 Dec. 31, 2017Average Rentable Beds 9,525 9,347
Mats 40,467 29,800
Relocatable Structures 1,115 1,173
1313
1/3 Oilsands1/3 Montney and Duvernay1/3 Non-energy
/WHERE WE OPERATE – INDUSTRIAL SERVICES
14
/OILSANDS STRATEGY
Alb
erta
-Sa
skat
chew
an B
ord
er
Fort McMurray
Athabasca Chipewyan First Nation (ACFN)
Horizon North
Partnership Name Partners
(Acden Horizon North Limited Partnership)
Industry
Primarily Oilsands Mining
(Sëkui Limited Partnership)
Chipewyan PrairieDene First Nation
Horizon North
Primarily Steam Assisted Gravity Drainage (SAGD)
15
/MONTNEY/DUVERNAY STRATEGY
MontneyDuvernay
16
/MONTNEY/DUVERNAY STRATEGY
Largest Open Camp Provider In Montney/Duvernay
• Largest open and customer camp provider in Montney/Duvernay by market share
• Key First Nations partnerships
• North Montney – support LNG feed stock
• South Montney/Duvernay – support liquid-rich natural gas production
• Prolific new business opportunities in the region
• Land-lease strategy in place for future business
171717
/MONTNEY/DUVERNAY STRATEGY
• Rental and sale of inter-locking oak Swamp MatsTM, steel framed rig mats, composite/plastic mats, crane mats and custom matting
• Full range of services including transportation, installation, repair, storage and client inventory management
• Ancillary rental equipment
Access Matting
1818
Existing PartnersForward LookingExisting Projects
/NORTHERN DEVELOPMENT
1919
/LIQUEFIED NATURAL GAS (LNG)
West Coast Development (5+ Years)Pipeline Infrastructure (2-3 Years)Montney/Duvernay Development (20 + Years)
2020
/LNG – 5 POTENTIAL POINTS OF REVENUE
27 AcresResidential
Development
Behind the Gate Construction
Behind the Gate Hospitality and
Operations
1,000 PersonOpen Camp
16 Acre Commercial Development
1
2
34
5
LNG Canada
2121
/MODULAR SOLUTIONS
HotelsOffice Complexes
Senior CentersRetail and Franchise
Government InfrastructureMulti-family Developments
Luxury HomesSingle Family Dwellings
2222
FutureCurrentModular Construction Locations
Kamloops, BC
Grande Prairie, AB
Aldergrove, BC
/WHERE WE OPERATE - MODULAR SOLUTIONS
Rocky View County, AB
232323
/C&V MANUFACTURING PURCHASE
Facility• Located in Rocky View County, AB, just east of Calgary• 86,000 square feet of factory space
Purchase Price• $4.0M by way of asset purchase, including existing
leasehold on manufacturing space, employees, equipment, working capital and intangible assets
Benefits• High quality space capable of producing high volume
of commercial product• Skilled workforce already in place – efficient ramp-up• Lower transportation costs will allow exposure to
opportunities in Alberta and Saskatchewan• Business-friendly Calgary market with diversified
labour and strong workforce in skilled trades
2424
/WHY BUILD MODULAR?
252525
/WHY BUILD MODULAR?
PROJECT COMPLETION
PROJECT COMPLETION
262626
/PROJECT PROFILE: VAHA
• 14,875 sq. ft. 3 storey• 40 rooms• 8 months from contract to occupancy
272727
/PROJECT PROFILE: RAMADA REVELSTOKE
• 54,200 sq. ft. 4 storey• 85 rooms (incl. Accessible, Jacuzzi)• Pool and waterslide• 8 months – Contract to Occupancy
282828
/PROJECT PROFILE: MACKENZIE VILLAGE
• 6 apartment complexes and 1 townhome complex• Apartments – 6,375 sq ft over 7 units• Townhomes – 6,350 sq ft over 4 units• 9 Months – Contract to First Occupancy
292929
/PROJECT PROFILE: COAST HOTEL
• Oliver, BC• Turn-Key Building/Site Works• 83 Rooms• Indoor Pool• Breakfast Area• Fitness Room
303030
/PROJECT PROFILE: WEST KELOWNA LIVING
• 9- to 10-plex complexes• 13,001 sq ft of living space per building• 26,626 sq ft total space per building including
outdoor patios, underground parking, elevators and common area
313131
Executive Team
Rod Graham – President and Chief Executive Officer
Scott Matson – Senior Vice President and Chief Financial Officer
Mark Becker – President, Industrial Services
Joseph Kiss – President, Modular Solutions
Warren Murray – Executive Vice President Strategic Partnerships
Jorge Castellanos – Vice President Manufacturing and Product Development
Mike Hammerschmidt – Vice President Rentals and Logistics
Marci Cooke – Vice President Human Resources
Bill Anderson – Executive Vice President HSE and Quality
Pat Hammerschmidt – Vice President Aboriginal and Community Relations
Ben Bazinet – Vice President Strategy & Development
Lyle Guard – Vice President Legal and General Counsel
Jeff Strank – Vice President Sales Industrial Solutions
Jeff Litchfield – Vice President Camps and Catering Operations
Howard Phillips – Vice President Projects Modular Solutions
Luke Harrison – Vice President Business Development Modular Solutions
Sloan Challand – Vice President Sales Modular Solutions
Jan Campbell – Corporate Secretary
Directors
Ann Rooney
Brad Fedora
Dale Tremblay
Kevin Nabholz – Chairman of the Board
Mary Garden
Richard Ballantyne
Russell Newmark
Rod Graham
3232
/HNL SNAPSHOT