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1 1 Corporate Presentation

Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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Page 1: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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Corporate Presentation

Page 2: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/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.

Page 3: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/OUR BELIEFS

Page 4: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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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

Page 5: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/ABORIGINAL PARTNERSHIPS

24 Strategic Aboriginal Relationships

112

5

3 2

1 1

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/OUR JOURNEY

Page 7: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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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

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/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

Page 9: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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Industrial Services Modular Solutions

/BIFURCATED OPERATING STRATEGY

Page 10: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/TRANSFORMATIONAL CHANGE

*revenue expressed in 000’s

Page 11: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/INDUSTRIAL SERVICES

Camps and AccommodationsCatering and Hospitality

Matting SolutionsRelocatable Structures

Soil StabilizationTransportation

UtilitiesWater and Wastewater

Operational Maintenance

Page 12: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/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

Page 13: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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1/3 Oilsands1/3 Montney and Duvernay1/3 Non-energy

/WHERE WE OPERATE – INDUSTRIAL SERVICES

Page 14: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/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)

Page 15: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/MONTNEY/DUVERNAY STRATEGY

MontneyDuvernay

Page 16: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/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

Page 17: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/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

Page 18: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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Existing PartnersForward LookingExisting Projects

/NORTHERN DEVELOPMENT

Page 19: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/LIQUEFIED NATURAL GAS (LNG)

West Coast Development (5+ Years)Pipeline Infrastructure (2-3 Years)Montney/Duvernay Development (20 + Years)

Page 20: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/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

Page 21: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/MODULAR SOLUTIONS

HotelsOffice Complexes

Senior CentersRetail and Franchise

Government InfrastructureMulti-family Developments

Luxury HomesSingle Family Dwellings

Page 22: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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FutureCurrentModular Construction Locations

Kamloops, BC

Grande Prairie, AB

Aldergrove, BC

/WHERE WE OPERATE - MODULAR SOLUTIONS

Rocky View County, AB

Page 23: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/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

Page 24: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/WHY BUILD MODULAR?

Page 25: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/WHY BUILD MODULAR?

PROJECT COMPLETION

PROJECT COMPLETION

Page 26: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/PROJECT PROFILE: VAHA

• 14,875 sq. ft. 3 storey• 40 rooms• 8 months from contract to occupancy

Page 27: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/PROJECT PROFILE: RAMADA REVELSTOKE

• 54,200 sq. ft. 4 storey• 85 rooms (incl. Accessible, Jacuzzi)• Pool and waterslide• 8 months – Contract to Occupancy

Page 28: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/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

Page 29: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/PROJECT PROFILE: COAST HOTEL

• Oliver, BC• Turn-Key Building/Site Works• 83 Rooms• Indoor Pool• Breakfast Area• Fitness Room

Page 30: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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/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

Page 31: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,

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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

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/HNL SNAPSHOT

Page 33: Corporate Presentation - Horizon North Logistics€¦ · LNG project. Modular Solutions • Funds allocated to Modular Solutions will be focused on expanding capacity and capabilities,