Enbridge Inc. · TSX:ENB
Enbridge — Investor Day (2021)
30 slides from Enbridge's investor day presentation, 2021
Slide 1: 2021 Investor Day
Modernizing Systems and Sustainable North American Growing Renewables and Other Achieving Net Zero Energy Drives Exports Low-Carbon Platforms Al Monaco President & CEO 2021 Investor Day
Slide 2: Legal Notice
Legal Notice Forward Looking Information This presentation includes certain forward-looking statements and information (FLI) to provide potential investors and shareholders of Enbridge Inc. (Enbridge or the Company) with information about Enbridge and its subsidiaries and affiliates, including manag
Slide 3: Today's Approach
Today’s Approach Strategic Overview Enbridge Value Approach to Strategic Capital Proposition Energy Transition Priorities & Allocation Growth Outlook Business Unit & Financial Review Low-Carbon Financial Key Priorities Growth Hopper Opportunities Policies & 3-Year Outlook 3
Slide 4: Mainline Update
Mainline Update Mainline Capacity During CTS1 Two Attractive Options Path Forward (mmbpd) 1) Incentive Tolling Arrangement: • Re-engaging with ~3.1 industry • Aligned with customers • Pursuing both options ~2 • Incentivized to optimize system in parallel • Premium return • Interim tolls remain 1.1mm
Slide 5: Financial Highlights
Financial Highlights 2021 2022 3 Year Outlook Guidance Guidance (to 2024) Adjusted EBITDA1 $13.9-$14.3B $15.0-$15.6B n/a 5 to 7% CAGR DCF per share1 $4.70-$5.00 $5.20-$5.50 No change Up to level of medium-term $3.34 $3.44 Dividend (3% growth) (3% growth) DCF/share growth No change ~$10B ~$4B $9B Org
Slide 6: New Project Highlights
New Project Highlights ~$1.0B sanctioned in $0.9B Calvados offshore wind first 9 months of 2021 $0.1B solar self-power investments $0.1B Flanagan South expansion (completed in Q4) $0.3B Dawn-to-Corunna expansion $1.1B $0.5B expansion of Valley Crossing, pending liquefaction FID1 of New Projects Adva
Slide 7: Enbridge Footprint
Enbridge Footprint Ireland Gas ~2 Tcf of natural gas UK Distribution delivered; ~3.8 MM customers Germany Gas 20% of natural gas consumed France Transmission in US; ~10% of LNG exports 25% of N. America’s crude Liquids oil transported & exported Vancouver 1.8 GW1 of contracted Boston Power renewable
Slide 8: Low-Risk Commercial Profile
Low-Risk Commercial Profile 40+ Diversified Highly Predictable 98% Industry-Leading Sources of Cash Flow Utility-Like Cash Flows Cost-of-service/ Contracted Financial Risk Profile 4% Power (Power Price Agreements) 12% Gas Distribution (Cost-of-service) 4% Canadian Gas Transmission (Cost-of-service/T
Slide 9: Delivering on ESG Commitments
Delivering on ESG Commitments Industry Leading Safety Emissions Reductions Diversify our Workforce3 (US Pipelines from 2017 to 20191) (emissions in MtCO2e) (Representation as at June 30, 2021) 100 18 50% Current 3 Total Barrels Released / Billion Barrel Miles Total Inspection Miles / Total Miles of
Slide 10: ENB – A Differentiated Service Provider
ENB – A Differentiated Service Provider Today’s Success Factors… … in Action Line 3 Replacement Ingleside Export Facility ESG Leadership Net-zero emissions & diversity goals Undeveloped Terminal Land World-Class Execution $36B into service since 2017 Low-Carbon Capabilities • >300 route modification
Slide 11: Surfacing Shareholder Value
Surfacing Shareholder Value Revenue & Productivity Asset Sales & Monetization Capital Efficiency Optimization EV/EBITDA Recent Projects Multiple $5.7 ~$9B 400kbpd $6 $5 Asset sales DRA Expansion <3x of zero-capital Mainline since 2018 $4 Gas Pipe optimizations ~6x $3 Compression $2.1 Announced $1.2B
Slide 12: Surfacing Shareholder Value
Surfacing Shareholder Value 7.0x Improving Asset Returns 6.5x Balance Sheet Strength Simplified Structure (ROCE1) (Debt/EBITDA) ~8% 6.0x ~6.5% 5.5x Target Range: 4.5x – 5.0x1 5.0x 4.5x Sponsored Vehicle Buy In 4.0x 3.5x SEP EEP EEQ ENF 3.0x 2018 2019 2020 2021e 2022e 2023e 2024e 2017 2018 2019 2020
Slide 13: A Proven Investment Track Record
A Proven Investment Track Record Significant EBITDA1 Growth Superior Dividend Growth Industry Leading TSR2 (Billion, CAD) (Dividend per Share) (since 2008) $15.0-15.6 $3.44 11.7% 11.0% 8.1% $0.66 $2.5 2008 2022e 2008 2022e Midstream S&P 500 Enbridge Peers Our approach has yielded superior growth and
Slide 14: Energy Fundamentals
Energy Fundamentals Global Demand Outlook1 N.A. Oil Exports2 N.A. LNG Exports2 (IEA Announced Pledges Scenario, Exajoules) STEPS2 (MMbpd) (Bcf/d) Biofuels SDS2 Wind & Solar >4.5 >20 Hydro Nuclear Gas ~3 Oil Coal ~7 2019 2050 2021 2030+ 2020 2030+ • 25%+ increase in global population • Abundant, low-
Slide 15: The Role of Conventional Energy
The Role of Conventional Energy Essential Reliable2 Affordable3 (IEA Announced Pledges Scenario) (Realized Capacity Factors) (Cost/MMBtu) Petrochemical1 Transport1 (MMbpd) (Exajoules) 94% $19 ~+20% ~+10% $16 Other Gas 57% 48% 39% 35% Liquids Hard 25% Oil to $4 Abate Today 2050 Today 2050 Gas Blue Gr
Slide 16: Lowering Emissions
Lowering Emissions Global Emissions Outlook1 Conventional Energy Emissions (Announced Pledges Scenario– Mt CO2 emissions reductions) 2020 2030 2035 2040 2045 2050 • Energy efficiency & -1,000 Reduce conservation efforts • Behaviour & Efficiency -3,000 • Low-Carbon Energies • Electrification • State-
Slide 17: Our Approach to Energy Transition
Our Approach to Energy Transition Conventional Investment Required Core Business Remain Critical (Cumulative global investment, USD Trillions)1 $10.0 Gas Transmission Liquids Pipelines Gas Distribution & Storage $5.0 170 MM 12 MMBPD 15 MM Gas Oil People served Refining capacity People served $0.0 20
Slide 18: Capitalizing on the Energy Transition
Capitalizing on the Energy Transition Conventional Core Growth Low-Carbon Growth Optimize / Exports Modernize Solar/ RNG H2 CCUS Expand Assets Wind Liquids 1 Pipelines Gas 1 Transmission Gas Distribution Renewable Power Embedded conventional and low-carbon growth opportunities across our businesses
Slide 19: Strategic Priorities
Strategic Priorities • Safety and Reliability Capitalize on Conventional Growth • ESG Leadership • Prioritize organic low-capital • Modernize existing assets • Strong Balance Sheet • Grow export connections (LNG & Crude Oil) • Disciplined Capital Allocation Grow Low-Carbon Platforms Over Time • Proj
Slide 20: Predictable Organic Growth
Predictable Organic Growth Executing on Secured Up to $6B/year of Organic Growth Potential Growth (2021-2024) Supplements 2022-2024, drives post-2024 growth $17B Gas Transmission Gas Distribution up to ~$2.0B/year up to ~$1.5B/year • System modernization • System modernization • Capital efficient ex
Slide 21: Low-Carbon Opportunities
Low-Carbon Opportunities Gas Distribution $0.5B Gas Transmission $0.5B Liquids Pipelines $0.5B through through through 2025 2025 2025 H2 Hydrogen CO2 Oil Sands & QUEBEC H2 Studies underway Fort Saskatchewan across system; CO2 Post-2025; CO2 H2 Multiple opportunities Multiple projects in ONTARIO in d
Slide 22: New Energies
New Energies Compelling Opportunity Set ENB’s Capabilities Advancing Low-Carbon Strategy through Strategic Partnerships RNG & Hydrogen Demand1 (EJ) Transportation & storage Wind/Solar RNG H2 CCUS assets operations Develop N.A. low-carbon solutions RNG across H2, RNG, CCUS, & Renewables Hydrogen 5 St
Slide 23: Capital Allocation Priorities
Capital Allocation Priorities Capital Allocation Drivers 1 Protect Balance Sheet • Preserve financial strength and flexibility 4.5x D/EBITDA2 5.0x • Ratable dividend increases up 2 Sustainable Return of Capital to medium-term DCF/s growth • Periodic share repurchases1 60% DCF1 payout 70% • Prioritiz
Slide 24: Strong Portfolio
Strong Portfolio Business Mix (2022e EBITDA by business unit) • Consistent low-risk profile • Significant operating synergies 26% Gas Transmission • Robust equity returns 58% • Increasing free cash flow generation 12% Gas Distribution • Diversified growth opportunity set Liquids Pipelines 4% Renewab
Slide 25: Investable Capacity
Investable Capacity ($ Billion) 2022e Adjusted EBITDA1 $15.0-$15.6 Less: Cash Requirements2 ~($4.5) Distributable Cash Flow1 ~$11B Less: Dividends ~($7.0) (~65% payout) Add: Annual Debt Capacity3 ~2.0 Investable Capacity $5-6B Expect to generate $5-6B of annual investable capacity (1) Adjusted EBITD
Slide 26: Capital Allocation Framework
Capital Allocation Framework ($5-6B of Annual Investable Capacity) High Priority Investments Deploy Incremental Capacity Core Drive Sustainable Long- Excess to Drive Additional Growth Allocation Term Growth Allocation and Value $3-4B • Enhance returns from existing ~$2B Other Organic Growth annually
Slide 27: Share Repurchase Program
Share Repurchase Program Criteria Up to $1.5B Commencing in Q1 20221 Balance sheet metrics & financial flexibility Open market purchases Assessment of investment alternatives Non-programmatic Fundamental value of shares Share repurchases are a benchmark for capital investment and support further DCF
Slide 28: Visible 3-Year Plan Outlook
Visible 3-Year Plan Outlook DCF/share1 Post-2024 Cash Flow Growth Drivers: 5-7% 1. Revenue inflators & productivity CAGR through enhancements Deploy 2024 Excess Revenue Execute Capacity 2. $3-4B of core capital allocation Secured Inflators & Capital Productivity Program 3. ~$2B of additional capital
Slide 29: Value Proposition
Value Proposition • Resiliency and longevity of cash flows <4.7x debt to EBITDA; BBB+ credit rating • ESG Leadership Up to $6B of annual organic capital investments • Strong balance sheet Highly visible 5-7% • Growing investable free cash flow DCF/s growth through 2024 • Solid conventional long-term
Slide 30: Today's Speakers
Today’s Speakers Vern Yu Colin Gruending Cynthia Hansen Bill Yardley Matthew Akman EVP & CFO EVP & President LP EVP & President, GDS EVP & President, GTM SVP Strategy, 28 years 22 years 23 years 21 years Power & New Energy Technologies 6 years A deep bench of executive talent and continued emphasis