Brookfield Infrastructure Partners Lp Limited Partnership · NYSE:BIP
Brookfield Infrastructure Partners Lp Limited Partnership — Brookfield Business Partners — Investor Day (September 2021)
55 slides from Brookfield Infrastructure Partners Lp Limited Partnership's investor day presentation, September 2021
Slide 1: Brookfield Business Partners
Brookfield Business Partners September 2021
Slide 2: Agenda
Agenda Five-year report card 3 Expanding our opportunity set 22 Financial performance overview 37
Slide 3: Five-year report card
Five-year report card Cyrus Madon
Slide 4: Our objective is to deliver an attractive risk-adjusted return
“Our objective is to deliver an attractive risk-adjusted return to our unitholders primarily from capital appreciation of our current operations and future acquisitions.” 2016 Inaugural BBU Unitholder Letter
Slide 5: Our objectives
Our objectives • Invest in high quality businesses • Implement operational improvements to increase returns on capital and cash flow • Recycle capital • Build organizational scale for future growth Increase intrinsic value per unit 5
Slide 6: Deployed ~$6 billion of capital
Deployed ~$6 billion of capital Acquired 18 businesses over the last five years Cumulative Invested Capital $6.0B $4.5B $3.5B $1.5B $1.0B 2017 2018 2019 2020 2021 And 20+ add-on acquisitions within existing operations Please refer to endnotes on page 54. 6
Slide 7: Recycled capital
Recycled capital Realized an average IRR of ~30% on the sale of nine businesses Cumulative Realized Proceeds $3.0B $2.4B $2.6B $1.6B $0.2B 2017 2018 2019 2020 2021 Please refer to endnotes on page 54. 7
Slide 8: Our business has grown meaningfully
Our business has grown meaningfully… Company Company FFO Company FFO EBITDA Excluding Gains Including Gains ($M) ($ per unit) ($ per unit) $1,570 $9.40 $6.00 $2.00 $2.15 $240 2016 Today 2016 Today 2016 Today Please refer to endnotes on page 54. 8
Slide 9: …and generated strong growth in intrinsic value per unit
…and generated strong growth in intrinsic value per unit Net Asset Value per Unit ~18% CAGR ~$56 ~$25 2016 2017 2018 2019 2020 Today Market capitalization has increased from $2 billion to $7 billion Please refer to endnotes on page 54. 9
Slide 10: Invested in our organization
Invested in our organization Global team of 150 investment professionals Strengthened our Assembled deep Integrating digital local regional business operations optimization and presence expertise sharing of best practices Please refer to endnotes on page 54. 10
Slide 11: Our business today
Our business today 11
Slide 12: Our operations have evolved
Our operations have evolved Where we started Today • Smaller-scale businesses • Market leaders • Commodity exposure • Essential products/services • Earnings volatility • Resilient cash flows 12
Slide 13: BBU is a higher quality business today
BBU is a higher quality business today… Advanced energy Nuclear technology Residential storage operations services mortgage insurance Healthcare Water and services wastewater services 13
Slide 14: …with substantial operations
…with substantial operations Scale of five largest companies significantly larger Average Average Operating Average Assets1 Employees1 EBITDA2 $7B 12,000 $800M 4,000 $1B $75M 2016 Today 2016 Today 2016 Today Please refer to endnotes on page 54. 14
Slide 15: The next five years
The next five years 15
Slide 16: Robust pipeline of new opportunities
Robust pipeline of new opportunities 14 $12B North America $4B Europe Potential opportunities ~$20B $1B $3B Equity capital South America Asia Pacific Please refer to endnotes on page 54. 16
Slide 17: Continue to make large-scale investments
Continue to make large-scale investments… Leading provider of modular leasing services • Stable cash flows and resilient business model • Opportunities to grow services and expand footprint • BBU committed ~$500 million for 30% ownership1 Europe and Asia Pacific ~$5B ~$1.6B Enterprise value Equity i
Slide 18: …and invest in high-quality businesses
…and invest in high-quality businesses Leading provider of engineered components for towable equipment manufacturers • Compounder of earnings and cash flows • Opportunities for add-on acquisitions and margin enhancement • BBU committed ~$400 million for 35% ownership1 North America, Europe and ~$3.4
Slide 19: Invest in new sectors
Invest in new sectors Healthcare and Technology present huge growth opportunities • Essential service providers Technology • $5+ trillion market1 • Attractive high-growth fundamentals • ~$100 billion deployed annually2 • Resilient cash flows • Leverage our expertise and Healthcare advantages of the
Slide 20: While surfacing embedded value across our operations
While surfacing embedded value across our operations Advanced Energy Nuclear Technology Residential Mortgage Operations Services Insurance ~$400M ~$350M 5%+ Targeted annual EBITDA Targeted annual EBITDA Targeted ROE improvement improvement improvement Please refer to endnotes on page 54. 20
Slide 21: Targeting to double the value of our business
Targeting to double the value of our business 2016 Today In Five Years ~$2.5B ~$8.3B ~$16B $25/unit $56/unit $110/unit Construction Energy Business Services Infrastructure Services Industrials Please refer to endnotes on page 54. 21
Slide 22: Expanding our opportunity set
Expanding our opportunity set Doug Bayerd
Slide 23: Broadening our sector focus
Broadening our sector focus Leveraging our domain expertise and global presence Business Infrastructure Industrials Healthcare Technology Services Services 23
Slide 24: Strengthening our technology presence
Strengthening our technology presence Dedicated expertise leveraging in-house global resources Dedicated technology Investment team Business team operations team Brookfield’s global platform 24
Slide 25: Well positioned as a preferred capital partner
Well positioned as a preferred capital partner Large-scale capital Strength of the Brookfield platform Operational expertise 25
Slide 26: Leveraging our competitive advantages
Leveraging our competitive advantages Strength of Brookfield’s ecosystem Real estate and Transportation Energy, power Industrials and Business and construction and logistics and utilities supply chain financial services 26
Slide 27: Defined technology investment focus
Defined technology investment focus Software Technology Services Logic programs helping users Leverage hardware and software to efficiently perform tasks applications to enhance services $600B +10% $1.08T +5% Market Size Growth Market Size Growth Please refer to endnotes on page 54. 27
Slide 28: Focusing on the largest segments within software
Focusing on the largest segments within software Application Software $240B Customer relationship management Market Size Real estate portfolio management Infrastructure Software Enterprise resource process $290B Supply chain management Market Size Please refer to endnotes on page 54. 28
Slide 29: Targeting opportunities around outsourced IT spend
Targeting opportunities around outsourced IT spend Digital Services $140B Business process outsourcing Market Size Customer experience digitization Traditional IT Services Cybersecurity $540B IT consulting Market Size Please refer to endnotes on page 54. 29
Slide 30: High quality businesses in technology
High quality businesses in technology Mission Market Product Retention and critical growth leadership new business High levels of Majority of Strong Significant recurring bookings from EBITDA revenue revenue new business margin retention 30
Slide 31: Consistent approach to value creation
Consistent approach to value creation Driven by repeatable processes Buy-and-build Go-to-market Product portfolio Cost-structure Management consolidation and pricing optimization optimization enhancement optimization 31
Slide 32: Flexibility in where we invest
Flexibility in where we invest Ability to deploy across the capital structure • Large-scale control • Strategic non-control • Debt • Preferred shares 32
Slide 33: Accessing the market opportunity
Accessing the market opportunity Pace of deal flow is robust 30+ ~$10B Number of deals Equity reviewed capital Please refer to endnotes on page 54. 33
Slide 34: Everise
Everise Customer management services provider to global healthcare and technology clients Preferred partner Growth opportunities leveraging Brookfield’s platform High margin with enhancement opportunities Highly contracted cash flows with high renewal rates ~$360M ~$220M North America and Asia Enter
Slide 35: Everise
Everise Opportunity to meaningfully increase size of the platform Growth Operational Enhancements • Additional healthcare segments • Margin improvements • High-potential tech clients • Optimizing onshore/offshore delivery • Share gains with current customers • Continue digitization of service offeri
Slide 36: Strong outlook for growth
Strong outlook for growth Dedicated Leveraging our Increasing deal technology competitive flow and expertise advantages momentum 36
Slide 37: Financial performance overview
Financial performance overview Jaspreet Dehl
Slide 38: Today’s agenda
Today’s agenda • Financial performance • Launch of Brookfield Business Corporation • View of value 38
Slide 39: Strong recent financial performance
Strong recent financial performance Company EBITDA Company FFO Company FFO Company FFO ($M) Excluding Gains Excluding Gains Including Gains ($M) ($ per unit) ($ per unit) $1,570 $890 $9.40 $1,290 $750 $6.00 $5.50 $5.00 2020 2021 2020 2021 2020 2021 2020 2021 Please refer to endnotes on page 54. 39
Slide 40: Excellent balance sheet
Excellent balance sheet Non-Recourse1 Corporate 4.9 years ~$425M Weighted average term of Drawn on corporate working non-recourse borrowings capital facilities 4.8% ~3% Weighted average cost Cost of corporate of non-recourse borrowings borrowings Please refer to endnotes on page 54. 40
Slide 41: Strong liquidity position
Strong liquidity position Available After accounting for corporate liquidity announced transactions1 ~$2.6B ~$1.5B ~$5.5B liquidity within existing operations Please refer to endnotes on page 54. 41
Slide 42: Significant levers to support liquidity
Significant levers to support liquidity Distributions from Up-financings Monetizations Capital operations markets 42
Slide 43: Operations support cash generation
Operations support cash generation Company FFO Excluding Gains Less Maintenance Capex $700M $550M $450M $130M 2016 2018 2020 Run-rate Please refer to endnotes on page 54. 43
Slide 44: Generated significant proceeds from monetizations
Generated significant proceeds from monetizations We have sold half of the businesses we owned at spinout ~$3B Realized cash proceeds1 ~30% Average IRR1 9 Businesses sold Please refer to endnotes on page 54. 44
Slide 45: We exercise capital discipline and exit operations
We exercise capital discipline and exit operations when their value can be maximized. 45
Slide 46: The next phase of monetizations will be significantly larger
The next phase of monetizations will be significantly larger Maximizing value will drive timing of monetization Advanced energy Nuclear technology Brazilian water and Other investments storage operations services wastewater services held five+ years 46
Slide 47: Launch of Brookfield Business Corporation
Launch of Brookfield Business Corporation 47
Slide 48: Created through an effective unit split
Created through an effective unit split Expected market capitalization of over $2 billion 2 units 1 share1 BBU LP BBUC NYSE: BBU NYSE: BBUC2 TSX: BBU.UN TSX: BBUC2 Please refer to endnotes on page 54. 48
Slide 49: Expanding our investor base
Expanding our investor base Paired corporate entity with our limited partnership Increased flexibility to Structured to be No impact to consolidated invest in BBU through a economically equivalent financial statements or corporate structure or and exchangeable into combined market cap of limited par
Slide 50: Anticipated benefits of corporate structure
Anticipated benefits of corporate structure Broader appeal and greater access to new investors Expanded Preferred Broader index investor base tax reporting inclusion1 Please refer to endnotes on page 54. 50
Slide 51: Our view of value today
Our view of value today 51
Slide 52: Intrinsic value of BBU today
Intrinsic value of BBU today ($M, except per unit) EBITDA Multiple Value1,2 Business Residential mortgage insurance ~1.2x book value ~$1,300 Services Other 8–9x $1,700–$2,000 Infrastructure Nuclear technology services 9–10x $1,400–$1,600 Services Other ~6.5x ~$650 Advanced energy storage ~9.5x ~$1,8
Slide 53: Q&A
Q&A Brookfield
Slide 54: Endnotes
Endnotes Page 6 1. Source: IDC Global ICT Spending Forecast 2020 – 2023. 2. Figures as at June 30, 2021. 1. Figures rounded for presentation purposes. 2. Estimated capital deployed annually between 2018-2020 based on PitchBook. 3. Source: CMS National Health Expenditures 2019 Highlights. Page 41 Pag
Slide 55: Important Cautionary Notes
Important Cautionary Notes NOTICE TO READERS Factors that could cause actual results to differ materially from those CAUTIONARY STATEMENT REGARDING USE OF NON-IFRS MEASURES contemplated or implied by forward-looking statements include, but are not Brookfield Business Partners is not making any offer
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