Brookfield Infrastructure Partners Lp Limited Partnership · NYSE:BIP
Brookfield Infrastructure Partners Lp Limited Partnership — Brookfield Infrastructure Partners — Investor Day (2022)
50 slides from Brookfield Infrastructure Partners Lp Limited Partnership's investor day presentation, 2022
Slide 1: Brookfield Infrastructure Partners
Brookfield Brookfield Infrastructure Partners DDD DDD DD DDD DPD DPPH D DDH D HDHD DD DD DPDD DPHDD DDD DD DDD VDDD DDD D DDD DD DPD DD DD DDD DD DDD DD DDD DID DDD DDD DDD DDD DPD DDD DDD DDD DDD DDD DDD DDD D DDD DDD DD DDD DDDDPDD DDD DPD HDHD DDD DDD DDD DPD DIDDY DD YPPDD PDD D PPD PDP DDD PDD
Slide 2: Agenda
Agenda 01 Year in Review 02 Highly Visible Growth for the Year Ahead 03 The Power of Compounding Organic Growth 04 The “Three Ds” Driving Deployment 05 Closing Remarks
Slide 3: Year in Review
Year in Review Sam Pollock, Chief Executive Officer Brookfield Infrastructure Partners
Slide 4: 2022 has been a successful year for Brookfield Infrastructure
2022 has been a successful year for Brookfield Infrastructure Record Accretive asset Strong balance results rotation sheet 4
Slide 5: We are delivering another year of record financial results
We are delivering another year of record financial results 2022 YTD FFO per unit increased by 11% year over year 10% Organic growth1 10% Asset rotation 20% FFO increase After removing one-time items in 2021 1. After removing the one-time impact of weather-related outperformance at our gas storage op
Slide 6: 2022 has been an active year of asset rotation
2022 has been an active year of asset rotation Four asset sales secured, Five new three in progress investments ~$0.1B ~$0.6B ~$0.8B ~$1.5B ~$2.4B ~$2.8B ~$0.2B ~$2.0B Data Transport Utilities In progress 6
Slide 7: We deployed $2.8 billion across five high-quality investments
We deployed $2.8 billion across five high-quality investments, including… AusNet HomeServe Deutsche Funkturm (DFMG) Asset Name, Location A$18 billion enterprise value £4.1 billion enterprise value €17.5 billion enterprise value ~$500 million BIP investment ~$1.3 billion BIP investment ~$600 million
Slide 8: And replenished our capital backlog by $4 billion
And replenished our capital backlog by $4 billion $15 billion project at our share ~$500 million BIP investment Q4 2022 expected close1 Asset Name, Location Asset Name, Location 1. Subject to customary closing conditions 8
Slide 9: Achieved attractive returns from the sale of de-risked assets
Achieved attractive returns from the sale of de-risked assets U.S. Container Brazilian Electricity New Zealand Terminals Transmission1 Telecom Towers1 Asset Name, Location 19% IRR 22% IRR (35% local) 34x EBITDA multiple 3.2x MoC 2.4x MoC 1. Secured transaction not yet closed 9
Slide 10: And maintained our strategic financial principles
And maintained our strategic financial principles Corporate Investment Payout FFO Long-Term, Fixed Liquidity Grade Ratio Hedging1 Rate Debt2 $3B BBB+ <70% 82% 90% 1. Represents FFO denominated in, or hedged to, the USD over an average of 24 months 2. Excludes (i) most revolving and capital expenditu
Slide 11: Highly Visible Growth for the Year Ahead
Highly Visible Growth for the Year Ahead
Slide 12: Our mission is clear
Our mission is clear Provide sustainable per-unit cash flow growth over the long term… Supports a 5-9% annual distribution growth target 12
Slide 13: We have achieved this over the past decade
We have achieved this over the past decade 11% FFO per unit CAGR $2.70 $2.43 $1.87 $1.44 $1.36 $1.44 $1.13 $0.96 $0.85 $0.60 2012 2015 2018 2021 2022F1 9% Distributions per unit CAGR 1. 2022F distribution based on YTD June 30, 2022 distributions annualized 13
Slide 14: The main drivers of our performance are simple
The main drivers of our performance are simple Organic Growth • Capture inflation and margin expansion in our business • Execute and replenish capital backlog Capital Deployment • Invest capital targeting 12–15%+ returns 14
Slide 15: The components of our organic growth are exceeding expectations
The components of our organic growth are exceeding expectations… 2022 Progress Long-Term Outlook 5–6% Macro trends support Inflation Above-average levels elevated levels Replenish Backlog +$4 billion added Building new platforms 15
Slide 16: And we have secured nearly 2x our annual deployment target, again
And we have secured nearly 2x our annual deployment target, again 2022 Progress Long-Term Outlook New Investment $2.8 billion Strong thematic Activity Secured tailwinds driven by the “Three Ds” 16
Slide 17: Which should lead to another year of above-target growth
Which should lead to another year of above-target growth and a very favorable outlook for the medium to long term $3.00+ Targeting 12–15% $2.70 FFO per-unit growth 2022F 2023F 17
Slide 18: The Power of Compounding Organic Growth
The Power of Compounding Organic Growth David Krant, Chief Financial Officer Brookfield Infrastructure Partners
Slide 19: Four elements contribute to significant cash flow compounding
Four elements contribute to significant cash flow compounding Elevated Higher utilization Asset Limited interest levels of and expanding rotation and FX inflation capacity impact 19
Slide 20: Elevated inflation is a tailwind for our business
Elevated inflation is a tailwind for our business 85% of our business benefits or is protected from inflation 70–75% 10–15% EBITDA directly linked Fee-for-service to inflation models 20
Slide 21: We have captured above-average inflation, with room to grow
We have captured above-average inflation, with room to grow % of Five-Year Captured in Current Geography FFO Average YTD Results Level Trend U.S. 20% 2% 4% 8% U.K. 15% 2% 5% 10% Canada 25% 2% 4% 7% Europe 5% 1% 3% 7% Australia/New Zealand 15% 2% 4% 6% Emerging Markets 20% 5% 9% 7–9% Weighted Average
Slide 22: Three themes that could lead to persistent, above-average inflation
Three themes that could lead to persistent, above-average inflation Cost of Cost of Aging decarbonization deglobalization demographics 22
Slide 23: Fixed-cost structure provides significant operating leverage
Fixed-cost structure provides significant operating leverage to enhance margins in two ways Increasing utilization on Adding capacity through capital existing networks expansion projects 23
Slide 24: We will have nearly tripled our capital backlog by the end of the year
We will have nearly tripled our capital backlog by the end of the year ~$6.4B +$3.7B Heartland Petrochemical Complex +$300M -$10M $2.4B Run Rate Dec 31, 2021 Impact of Impact of Addition of Intel Pro forma Asset Sales Acquisitions Partnership Dec 31, 2022 24
Slide 25: Substantial asset rotation provides meaningful future growth
Substantial asset rotation provides meaningful future growth Initial FFO Yield Five-Year Organic Growth 1%+ Accretion 7%+ Accretion 6% 7%+ 3% 10%+ Exit Going-in Growth Growth Secured Asset Sales1 Recently Announced Aquisitions2 1. Includes U.S. Container Terminals, Brazilian Electricity Transmission
Slide 26: We took advantage of historically low interest rates
We took advantage of historically low interest rates Refinancing Activity 2021 2020 $3B 2019 $1.7B $1.8B 26
Slide 27: And upcoming maturities are in-line with current levels
And upcoming maturities are in-line with current levels 2.5 Year YTD 2022 2023 2024 Average Debt maturities $0.2B $1.6B $2.8B $1.8B Average interest rate 7% 7% 5% 6% Current1 10-year U.S. Treasury 4% Implied spread using BBB index 2% Total rate 6% 1. Current rates as of September 28, 2022 27
Slide 28: Positioned well to withstand rising rates in the short to medium term
Positioned well to withstand rising rates in the short to medium term 13 year 7 year 90% corporate debt non-recourse Fixed rate duration debt duration debt1 1. Excludes (i) most revolving and capital expenditure facilities and (ii) BRL denominated financing given limited availability of fixed rate d
Slide 29: Rising interest rates expected to have an immaterial impact
Rising interest rates expected to have an immaterial impact on near- to medium-term financial performance Key As of Measures June 30 Proportionate net debt ) $19.4) Fixed rate debt1 ~90% ($17.6) Floating rate debt at risk of interest rate increases $1.8) ) Current interest rate on floating debt for
Slide 30: And our near-term results are largely insulated from FX volatility
And our near-term results are largely insulated from FX volatility 82% FFO hedged 1–2% Decrease in rates to USD1 from 2022 24 Month Actively managed hedging strategy 1. Represents FFO denominated in, or hedged to, the USD over an average of 24 months 30
Slide 31: We are well positioned to deliver significant free cash flow compounding
We are well positioned to deliver significant free cash flow compounding Compounding Inflation Expanding Asset Interest & FX Effects Indexation Capacity Rotation Rates Target 2–3% $2.5B $1–$1.5B Fix or hedge rates backlog sold annually where available Current Higher Larger On track for 90%1 fixed ra
Slide 32: The “Three Ds” Driving Deployment
The “Three Ds” Driving Deployment Natalie Hadad, Managing Director Infrastructure
Slide 33: The “Three Ds”
Three global themes have, and will, underpin many of our investments The “Three Ds” Digitalization Decarbonization Deglobalization 33
Slide 34: DFMG
DFMG Data is still the world's fastest-growing commodity $1 Trillion Capital required over the next five years to upgrade data infrastructure globally 34
Slide 35: Market opportunity
Market opportunity1 Fiber Networks Wireless Infrastructure Data Centers Once-in-a-100-year Incremental towers 10,000 MW of investment cycle to required to support incremental capacity upgrade copper 5G, IoT and AI required networks 1. Sourced from internal research 35
Slide 36: Case study: European telecom towers (DFMG)
Case study: European telecom towers (DFMG) • Large-scale portfolio of ~36,000 telecom towers • Stable cash flow underpinned by a 30-year, take-or-pay contract • Germany is a fast-growing tower market Investment Details Segment Data Enterprise Value €17.5 billion BIP Equity Investment ~$600 million T
Slide 37: Decarbonization is delivering infrastructure investment opportunities
Decarbonization is delivering infrastructure investment opportunities Supply Side Demand Side Industries directly responsible for emissions Consumer-driven preference for energy focused on carbon reduction or elimination efficiency and lower reliance on fossil fuels [Placeholder] (placeholder) Canad
Slide 38: Demand Side Decarbonization
VIDEO Demand Side Decarbonization
Slide 39: Building a residential infrastructure platform in North America
Building a residential infrastructure platform in North America 2018 2022 Pro Forma 1.1M $660M 6.5M $1.5B Households BIP equity investment Households BIP equity investment1 1. Excludes tuck-in acquisitions funded at the asset level 39
Slide 40: And a residential infrastructure platform in Europe
And a residential infrastructure platform in Europe 2021 2022 Pro Forma 0.1M $35M 3.6M $565M Households BIP equity investment Households BIP equity investment 40
Slide 41: Deglobalization is creating sizable investment opportunities
Deglobalization is creating sizable investment opportunities Energy Independence U.S. LNG Export Facility Supply Chains Semiconductors U.S. Semiconductor Facility (Sabine Pass) (Intel) U.S. LNG Export Facility Australian Ports U.S. Semiconductor Facility (Sabine Pass) (Asciano) (Intel) 41
Slide 42: Case study: U.S. semiconductor facility (Intel Partnership)
Case study: U.S. semiconductor facility (Intel Partnership) • Flexible and large-scale capital to onshore the economy’s digital backbone • Investing up to $15 billion for a 49% stake • Intel is a premier and highly creditworthy counterparty Investment Details Segment Data • Reshoring trend expected
Slide 43: These themes have increased the velocity of investment activity
These themes have increased the velocity of investment activity over the past two years Capital Deployed 2021 YTD 2022 $3B $2.8B 2019 2020 2018 $1.8B $1B $1B We have fully secured our new investment target for this year and next 43
Slide 44: Closing Remarks
Closing Remarks Sam Pollock, Chief Executive Officer Brookfield Infrastructure Partners
Slide 45: BIP is an excellent investment choice during uncertain times
BIP is an excellent investment choice during uncertain times Resiliency Growth Tailwinds Demonstrated track record and Capture inflation and margin execution throughout cycles expansion Highly contracted cash flows Record backlog Strong balance sheet Attractive sector trends driving outsized capital
Slide 46: Brookfield Infrastructure: The One and Only Grow-tility
Brookfield Infrastructure: The One and Only Grow-tility 46
Slide 47: Brookfield
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Slide 48: Thank You
Brookfield Thank You >DDDDHDDDHD DDD DPPH DDPHD HDHD DD DD DDDD DPDD ID HDD DDD DDD DDD PDD DDD DDD DDD DD DDD DD PDD DD DDD DID DD DDD DD DD DDD DPD DD DDD DID DD DD DDD DDD DDD DIDD DDD DDDDD DDDDPDD HDD HPPPD HD PD DYDD DDD DPD DDD DDD YDPDD PDD DYDD DDD D DDD PD DPD DDD PD PPP DDD DDD DDD PPP DI
Slide 49: Notice to Recipients
Notice to Recipients All amounts are in U.S. dollars unless otherwise specified. Unless otherwise indicated, as a result of many possible events or factors, not all of which are known to us or are refer to throughout this presentation. We define FFO as net income excluding the the statistical and fi
Slide 50: Investor Day
_Inve stor Day) 7)
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