Slide 1: Company Overview
COMPANY OVERVIEW AUGUST, 2018
Slide 2: Forward Looking Statements Advisory
FORWARD LOOKING STATEMENTS ADVISORY • This presentation is for information purposes only and is not intended to, and should not be construed to, constitute an offer to sell or the solicitation of an offer to buy securities of Enerflex Ltd. (“Enerflex” or the “Company”). • This presentation contains
Slide 3: Business Overview
3 BUSINESS OVERVIEW Transforming Natural Gas to Meet the World’s Energy Needs. Solutions From Wellhead to Pipeline • Offering integrated solutions spanning all phases of a project life-cycle from engineering and design through to after-market service. Strong Recurring Revenues • Focus on recurring r
Slide 4: Diversified Capabilities and Revenues
DIVERSIFIED CAPABILITIES AND REVENUES
Slide 5: Global Platform Delivering Full Cycle Natural Gas Solutions
5 GLOBAL PLATFORM DELIVERING FULL CYCLE NATURAL GAS SOLUTIONS Business Overview Revenue $1,556 MM Canada Employees ~2,200 Eng. Systems $344 MM Operating Locations 54 Service $56 MM Manufacturing Facilities 3 Rental $10 MM Countries 16 Total Revenue $410 MM Fleet: ~65,000 HP Revenue Overview Eng. Sys
Slide 6: Standardized and Customized Facilities
6 STANDARDIZED AND CUSTOMIZED FACILITIES Path to market through four core product offerings: Gas Compression • Reciprocating and rotary screw compression applications. Gas Plant Systems • Dew point, refrigeration systems, amine plants, dehydration, and CO2 facilities. Cryogenic Plants • Modular desi
Slide 7: Recurring Revenue Focus
7 RECURRING REVENUE FOCUS Path to market through three core offerings: Rentals • Rental compression and processing, including turnkey opportunities, in all target markets. After-Market Services • Full after-market services for all products. • Product commissioning and installation. • Contract operat
Slide 8: Financially Stable Business Positioned for Growth
FINANCIALLY STABLE BUSINESS POSITIONED FOR GROWTH
Slide 9: Revenue Growth Through Diversification
9 REVENUE GROWTH THROUGH DIVERSIFICATION C$ in millions $1,696.2 $1,629.0 $1,501.7 $1,553.4 $1,555.7 $1,405.0 $405.2 $456.6 $355.7 $376.7 $1,227.1 $397.5 $376.4 $1,130.6 $360.6 $761.6 $431.7 $603.8 $678.2 $779.1 $768.8 $422.5 $590.4 Geographic $466.1 diversification $444.0 $500.4 $438.2 $529.4 $494.
Slide 10: Strong Activity Through 2018
10 STRONG ACTIVITY THROUGH 2018 C$ in millions Backlog $1,000 Backlog provides visibility $800 for Engineered Systems $600 revenue through 2018. $400 $200 $0 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Canada USA ROW Backlog has grown by approximately 125% since C$ in millions Bookin
Slide 11: Growth in Recurring Revenue
11 GROWTH IN RECURRING REVENUE Recurring Revenue June 2014 2015 July 2017 % of C$ in millions Acquisition of Axip Loss of GE Acquisition of Consolidated International Distributorship Mesa Exclusivity Compression Revenue $600 45% 42% 40% $500 33% 35% 31% 30% $400 29% 30% 27% 26% Recurring revenue 22%
Slide 12: EBITDA and EBITDA Margin
12 EBITDA AND EBITDA MARGIN C$ in millions 350.0 16.8% 300.0 13.8% 12.8% 250.0 11.4% 10.9% 10.4% 10.4% 200.0 214.1 9.0% 198.6 193.7 190.3 176.8 150.0 156.8 127.0 126.9 100.0 50.0 - 2011 2012 2013 2014 2015 2016* 2017* TTM Q2 2018* EBITDA EBITDA Margin % * Adjusted EBITDA as disclosed in the MD&A
Slide 13: A Disciplined Approach to Strategic Growth
13 A DISCIPLINED APPROACH TO STRATEGIC GROWTH Capex and M&A ROCE % C$ in millions $600 507.8 $500 13.3% 12.2% Over C$1 billion $400 9.7% reinvested in 9.4% 8.8% organic growth and 8.0% $300 6.2% M&A opportunities 6.1% 236.1 over the past seven $200 201.9 years. 180.2 $100 34.7 42.9 36.7 22.5 $0 2011
Slide 14: Strict Financial Management
14 STRICT FINANCIAL MANAGEMENT Net Debt to EBITDA 2.38 1.79 Strong balance 1.19 1.09 sheet to fuel organic 0.90 growth, M&A, and dividend growth. 0.30 2011 2012 2013 2014 2015 2016* 2017* TTM Q2 2018* (0.31) (0.70) * Calculated using Adjusted EBITDA as disclosed in the MD&A
Slide 15: Dividend History
15 DIVIDEND HISTORY Annually (C$/share) $0.40 $0.38 $0.38 $0.38 $0.36 $0.34 $0.34 $0.34 $0.34 $0.32 $0.30 $0.30 $0.28 $0.28 $0.26 $0.24 $0.24 $0.22 $0.20 2011 2012 2013 2014 2015 2016 2017 2018 Annualized TTM Q2 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 2018 Dividend Paid 0.24 0.25 0.29 0.31
Slide 16: Capitalizing on Global Opportunities
CAPITALIZING ON GLOBAL OPPORTUNITIES
Slide 17: Global Growth in Natural Gas Production
17 GLOBAL GROWTH IN NATURAL GAS PRODUCTION Expected Natural Gas Production in Enerflex’s Core Markets Global natural gas production is 80.0 expected to increase 69% from 2015 to 2050. Growth by Region 70.0 • Natural gas production in Enerflex’s core 2.7 105% geographic regions is forecasted to 2.3 2
Slide 18: North America
18 NORTH AMERICA Natural gas production in North Growing demand for natural gas America is expected to grow by infrastructure in the US. approximately 46% by 2040. US Shale Is Driving Growth in Gas Production Enerflex Positioning Enerflex Has Significant Exposure to Growing US Shale Plays World-clas
Slide 19: Latin American Market
19 LATIN AMERICAN MARKET Natural gas production in the Continued limited capital lends itself region is expected to grow by to higher margin contract approximately 80% by 2040. compression opportunities. Enerflex Positioning 12 Extensive footprint in key growth markets including 10 Argentina, Colomb
Slide 20: Middle East and Africa
20 MIDDLE EAST AND AFRICA The Middle East accounts for Nearly 75% of Africa’s natural gas more than 40% of the world’s production is in North Africa.2 proven gas reserves.1 Enerflex Positioning Highly successful and cost 60 effective Turnkey Project 50 capability. Natural Gas Production (Tcf) 40 Lar
Slide 21: Low Sensitivity to North American Gas Prices
21 LOW SENSITIVITY TO NORTH AMERICAN GAS PRICES C$ in millions C$/GJ 250.0 $10.00 $9.00 200.0 207.2 $8.00 198.6 193.7 180.6 $7.00 176.8 150.0 156.8 $6.00 Geographic and product line diversification has $5.00 127.0 126.9 reduced sensitivity of 100.0 $4.00 EBITDA to fluctuations in $3.00 North America
Slide 22: Well Positioned for Global Growth
22 WELL POSITIONED FOR GLOBAL GROWTH Proven track record of creating shareholder value through Growth and Dividend Income. • Strong balance sheet and free cash flow allows Enerflex to pursue strategic growth opportunities to further expand the business. • Increased dividend by over 58% since 2011. •
Slide 23: Enerflex
ENERFLEX