Brookfield Infrastructure Partners Lp Limited Partnership · NYSE:BIP
Brookfield Infrastructure Partners Lp Limited Partnership — Brookfield Business Partners — Investor Day (September 2024)
51 slides from Brookfield Infrastructure Partners Lp Limited Partnership's investor day presentation, September 2024
Slide 1: Brookfield Business Partners
Brookfield Business Partners
Slide 2: An Engine for Compounding Value; Building Value; A Great Investment Opportunity
An Engine for Compounding Value Building Value in Our Operations A Great Investment Opportunity Key Takeaways
Slide 3: An Engine For Compounding Value
An Engine For Compounding Value Anuj Ranjan, Chief Executive Officer 3
Slide 4: Our objective is to generate strong long-term returns for investors
Our objective is to generate strong long-term returns for investors 4
Slide 5: Building on our 20+ year private equity track record
Building on our 20+ year private equity track record 27% $44B $38B Gross IRR Invested Capital Realized Proceeds 21% Net IRR Please refer to endnotes beginning on page 49. 5
Slide 6: BBU is an extension of this strategy for public investors
BBU is an extension of this strategy for public investors 6
Slide 7: A repeatable value creation playbook
A repeatable value creation playbook Value Investor Operational Improvement • Complexity • Organizational design • Contrarian • Commercial execution • Market dislocation • Strategic positioning • Out of favor • Digitalization 7
Slide 8: BBU has invested $9 billion of capital since inception
BBU has invested $9 billion of capital since inception Cumulative Invested Capital $9B $6B $1B 2017 2021 Today Please refer to endnotes beginning on page 49. 8
Slide 9: Generated meaningful long-term growth
Generated meaningful long-term growth Adjusted EFO Adjusted EFO (per Unit) $2.9B $13.45 45% 35% CAGR CAGR $200M $1.45 2016 2018 2020 2022 Today 2016 2018 2020 2022 Today Please refer to endnotes beginning on page 49. 9
Slide 10: We own great businesses today that are exceptional value compounders
We own great businesses today that are exceptional value compounders 10
Slide 11: What is a compounder?
What is a compounder? Market Essential Strong Substantial Durable cash leaders products and margins competitive flows services advantages 11
Slide 12: Canadian residential mortgage insurer
Canadian residential mortgage insurer Scale Essential ~20% $350M+ Largest private For home purchases Return Annual cash sector mortgage with <20% down on equity distributions insurer payment Please refer to endnotes beginning on page 49. 12
Slide 13: Exceptional cash generator
Exceptional cash generator Cumulative Dividends ~$3B $2B ~85% Return of BBU capital from cash distributions Acquisition 2020 2021 2022 2023 2024 2025 2026 2027 Please refer to endnotes beginning on page 49. 13
Slide 14: Advanced energy storage operation
Advanced energy storage operation 4x 80% Increasing $700M Larger than the Volumes from Mix of higher margin Annual nearest competitor aftermarket channel advanced batteries free cash flow Please refer to endnotes beginning on page 49. 14
Slide 15: Generating increased earnings and cash flow
Generating increased earnings and cash flow Cumulative Free Cash Flow $5B+ 20%+ Annual $2.6B free cash flow yield $200M Acquisition 2020 2021 2022 2023 2024 2025 2026 2027 Please refer to endnotes beginning on page 49. 15
Slide 16: Compounding value at BBU is just getting started
Compounding value at BBU is just getting started 16
Slide 17: Half of our operations were acquired over the last three years
Half of our operations were acquired over the last three years $4.5B Invested Capital 10% BBU Invested Capital $9B 50% 12 40% Operations Last 3 Years 2018–20 Pre-2018 Please refer to endnotes beginning on page 49. 17
Slide 18: Acquired on a value basis
Acquired on a value basis ~10x ~15x Average acquisition Average market multiple over last multiple three years Please refer to endnotes beginning on page 49. 18
Slide 19: In the early stages of executing our value creation plans
In the early stages of executing our value creation plans BBU Adjusted EBITDA Businesses Acquired Over Last Three Years +$500M At Acquisition Today 2027 Please refer to endnotes beginning on page 49. 19
Slide 20: Contributing to the overall increased value of our business
Contributing to the overall increased value of our business 10x $5B Average acquisition Incremental $500M multiple value to BBU Incremental BBU Adjusted EBITDA 15x $7.5B Average market Incremental multiple value to BBU Please refer to endnotes beginning on page 49. 20
Slide 21: Fueling the compounding growth engine
Fueling the compounding growth engine 21
Slide 22: The flywheel continues to turn
The flywheel continues to turn Value Acquire great businesses that are exceptional Investor compounders of value Enhance Execute on our operational improvement plans to Operations build value in our business every day Recycle Continue our track record of generating excellent Capital returns 22
Slide 23: Continuing our exceptional realized track record as a public company
Continuing our exceptional realized track record as a public company $6B 20 3x ~30% Proceeds Businesses MoC IRR sold Please refer to endnotes beginning on page 49. 23
Slide 24: Building Value in Our Operations
Building Value in Our Operations Katie Zorbas, Managing Director Adrian Letts, Managing Partner Pat McHugh, Chief Executive Officer of Scientific Games 24
Slide 25: A Great Investment Opportunity
A Great Investment Opportunity Jaspreet Dehl, Chief Financial Officer 25
Slide 26: Takeaways from today's discussion
Takeaways from today’s discussion Strong Value is Well set up to Significant financial building in our generate upside for performance operations meaningful investors proceeds 26
Slide 27: Significant progress over the past year
Significant progress over the past year Achieved Completed 9 Generated $2.2B Refinanced >50% of record 20% monetizations of proceeds our non-recourse EBITDA margin to BBU borrowings Please refer to endnotes beginning on page 49. 27
Slide 28: Increased performance of our operations
Increased performance of our operations Adjusted EBITDA Adjusted EBITDA Margin (Same Store) (Same Store) +100 +6% bps 2023 Today 2023 Today Please refer to endnotes beginning on page 49. 28
Slide 29: Building on a track record of strong financial results
Building on a track record of strong financial results Adjusted EBITDA Adjusted EBITDA Margin 19% +1,000 CAGR $2.3B bps 20% 10% $1B 2019 2020 2021 2022 2023 Today 2019 2020 2021 2022 2023 Today Please refer to endnotes beginning on page 49. 29
Slide 30: We are building value in our business every day
We are building value in our business every day and a normalizing rate environment will be a tailwind 30
Slide 31: Executing our value creation plans
Executing our value creation plans Adjusted EBITDA Adjusted EBITDA Margin (Same Store) (Same Store) +500 +20% ~$2.8B bps ~25% ~$2.3B 20% Today 3-5 years Today 3-5 years Please refer to endnotes beginning on page 49. 31
Slide 32: Positioned to benefit from lower rates
Positioned to benefit from lower rates 3-Month SOFR Curve 5% 100 bps ~200 Reduction in bps base rates 4% 3% 2% ~$40M 3M 9M 1Y 2Y Annual interest savings at BBU Forward SOFR Curve Current SOFR Please refer to endnotes beginning on page 49. 32
Slide 33: Disciplined approach and strong access to capital
Disciplined approach and strong access to capital >50% Serviceable and sustainable Non-recourse borrowings refinanced over the past year Non-recourse and no cross-collateralization ~50 bps No significant near-term maturities Average reduction in spread on cost of debt Please refer to endnotes beginn
Slide 34: Contributing to the increased durability of our cash flows
Contributing to the increased durability of our cash flows Free Cash Flow (Same Store) $800M+ $500M Increased Interest cost operating reduction performance Run-rate Next 3-5 years Please refer to endnotes beginning on page 49. 34
Slide 35: We continue to demonstrate our ability to compound value
We continue to demonstrate our ability to compound value and crystalize strong returns 35
Slide 36: Generated $2 billion from capital recycling initiatives over the past year
Generated $2 billion from capital recycling initiatives over the past year Public securities Everise Hammerstone Others 4x / 2x 2.6x 2.5x Total MoC / Realized MoC Realized MoC Realized MoC 60%+ 14% 22% IRR IRR IRR Please refer to endnotes beginning on page 49. 36
Slide 37: Improving market backdrop for realizations
Improving market backdrop for realizations Strategic and Public market Sale of minority Upfinancings Ongoing cash sponsor sales listings interests distributions 37
Slide 38: Targeting $2 billion of proceeds over the next two years
Targeting $2 billion of proceeds over the next two years 38
Slide 39: Enhance our balance sheet flexibility
Enhance our balance sheet flexibility $1.5B $2B Available Near-term corporate proceeds liquidity Please refer to endnotes beginning on page 49. 39
Slide 40: Balanced approach focused on maximizing the value of our business
Balanced approach focused on maximizing the value of our business Reduce corporate Reinvest in our Strategically deploy Diversify investor base borrowings operations capital into new and opportunistically acquisitions buy back shares 40
Slide 41: Putting it all together
Putting it all together Brookfield | 41
Slide 42: Path to value creation
Path to value creation The Past Next 3-5 Years Enhanced margins 1,000 bps over the past 5 Operational improvements to drive $500M of years Adjusted EBITDA High-quality operations generating $500M Annual Free Cash Flow increasing to $800M+ of annual Free Cash Flow Targeting $2B of capital recycling p
Slide 43: Positions us well to compound long-term value at targeted returns of 15-20%
Positions us well to compound long-term value at our targeted returns of 15-20% 43
Slide 44: Significant upside from current trading price
Significant upside from current trading price Value of Our Business (Per Unit) ~4x ~$80 2x+ $22 Current Today 3-5 years trading price Please refer to endnotes beginning on page 49. 44
Slide 45: Key Takeaways
Key Takeaways Anuj Ranjan, Chief Executive Officer 45
Slide 46: Key takeaways
Key takeaways Own great businesses that Executing our operational Continuing our track are exceptional improvement plans to build record of generating compounders of value value in our business every day excellent returns 46
Slide 47: Q&A
Q&A
Slide 48: Thank You
Thank You
Slide 49: Endnotes
Endnotes Page 5 1. Average acquisition multiple represents average entry enterprise value as a 1. Invested capital presented as of September 20, 2024 and includes invested Page 14 multiple of trailing twelve-month ending entry EBITDA for acquisitions completed capital for Brookfield funds and coinve
Slide 50: Endnotes
Endnotes Page 29 2. Next 3-5 years represents BBU’s proportionate share of run-rate free cash flow 1. Adjusted EBITDA represents BBU’s proportionate share of EBITDA for the adjusted for planned growth and value creation twelve-month periods ending June 30, 2019 to 2023, respectively. Today 3. Actual
Slide 51: Important Cautionary Notes
Important Cautionary Notes NOTICE TO READERS financing and refinancing within these markets; strategic actions measure. Adjusted EBITDA is not a generally accepted accounting including our ability to complete dispositions and achieve the anticipated measures under IFRS and therefore may differ from
Brookfield Business Partners — Investor Day (September 2024) on 6ix