Enbridge Inc. · TSX:ENB
Enbridge — Q2 2021 Earnings Presentation
27 slides from Enbridge's earnings presentation, 2021
Slide 1: Q2 Financial Results & Business Update
Al Monaco Colin Gruending President & CEO Chief Financial Officer Q2 Financial Results & Business Update
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: Agenda
Agenda • Mid-Year Review • Fundamentals Update • Financial Performance • Progress on Sustainability Economic Recovery Well Underway 3
Slide 4: Mid-Year Update
Mid-Year Update System Utilization Financial Guidance Capital Execution $10B $13.9 - $14.3 $4.70 - $5.00 Liquids Pipelines + 2%1 Gas Transmission + 5%2 of projects to be placed Gas Distribution + 1%3 into service in 2021 EBITDA DCF/Share Financial Strength Commercial Development ESG Performance BBB+
Slide 5: Economic Recovery Driving Energy Demand
Economic Recovery Driving Energy Demand Global Fuel Demand1 Global Crude Oil Demand1 Global Natural Gas Demand1 (% of 2020 demand) (mmbpd) bcf/d Pre-Covid Demand Forecast Pre-Covid Demand Forecast 400 Gasoline 2020 100 Other 2021e 11% Other 80 Passenger Vehicles 300 Diesel 8% Commercial 60 Industria
Slide 6: Enabling the Energy Transition
Enabling the Energy Transition Traditional 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 traditional and low-carbon growth opportunities across our businesses (1) Solar
Slide 7: Transparent Growth Outlook
Transparent Growth Outlook Distributable Cash Flow per Share1 Post-2023 Cash Flow ~4-5% Growth Drivers: Debt $4.67 ~1-2% 5-7% 1 Continue to enhance Capacity 2 returns on existing assets (~1-2% annually) DCF/s1 CAGR Enhance Returns Execute $17B Secured through 2023 • Toll escalators Capital Program 2
Slide 8: Liquids Pipelines: Business Update
Liquids Pipelines: Business Update • Secured Growth Execution – 160 kbpd Woodland Pipeline expansion placed into service in Q2 102%1 89%1 • Mainline Volumes – Q2 volumes in-line with forecast Woodland Pipeline – On track for 2.8mmbpd full year average Mainline Throughput (Ex-Gretna, mmbpd) • Mainlin
Slide 9: Liquids Pipelines: Line 3 Replacement
Liquids Pipelines: Line 3 Replacement • Critical safety and reliability investment – In-service: Canada, North Dakota and Wisconsin • Minnesota Update: – Confirmation of MPUC1 approvals by Minnesota Court of Appeals – All spreads & facilities on schedule ▪ Mainline construction: ~80% complete ▪ Faci
Slide 10: Liquids Pipelines: Carbon Capture
Liquids Pipelines: Carbon Capture Canadian GHG Emissions1 Partner of Choice Development Strategy (in megatonnes CO2e, 2019) • Large pipeline & storage Cross Industry Leverage infrastructure base Customer Scale & Rest of Focus Footprint Canada Alberta 38% • World-class project execution B.C. Rest of
Slide 11: Gas Transmission: Project Execution
Gas Transmission: Project Execution T-South Reliability & Expansion Spruce Ridge Expansion Cameron Extension (British Columbia) (British Columbia) (Louisiana) • ~$1.0B of capital; Q4 In-service • ~$0.5B of capital; Q4 In-service • ~$0.2B of capital; Q4 In-service • Cost of service commercial model •
Slide 12: Gas Transmission: System Modernization
Gas Transmission: System Modernization • Replacement of aging compressor stations $0.5-1B & upgrading infrastructure components Annually through 2024+ • Improves system reliability & reduces emissions – Expected to reduce emissions by over 25% at replaced compressors • Recovered through periodic rat
Slide 13: Gas Transmission: Ridgeline Expansion
Gas Transmission: Ridgeline Expansion Opportunity Overview • Tennessee Valley Authority ~60% lower emissions evaluating options for retirement from converting of and replacement of existing Nashville coal to gas Kingston Fossil plant generating Cookeville capacity Knoxville – East Tennessee system w
Slide 14: Gas Distribution: Business Update
Gas Distribution: Business Update Visible Franchise Growth Current 5-Year Utility Capital Plan (2020-2024)1 1.4 1.2 OTTAWA 1.0 0.8 TORONTO 0.6 0.4 Announced Community 0.2 Expansions 0.0 2020 2021 2022 2023 2024 • On track for ~45k new customer adds in 2021 • Customer additions and community expansio
Slide 15: Gas Distribution: Low-Carbon Update
Gas Distribution: Low-Carbon Update Renewable Natural Gas Low-Carbon Investments • 3 projects in-service (Dufferin – July 2021) • 3 additional projects in construction H2 Gatineau1 Blending | 2023 ONTARIO • Developing 10-15 opportunities across OTTAWA Canada RNG City of Stratford | 2022 Markham Blen
Slide 16: Renewables: Offshore Wind
Renewables: Offshore Wind European Offshore Wind Portfolio Cash Flow Outlook2 ($ in millions) • 3 French projects in construction; on-track for planned in-service Ireland UK Albatros | 2019 • 2.4 GW (0.6 GW net) of Dunkirk | 580 MW1 generation capacity in operation and under construction Rampion | 2
Slide 17: Renewables: Solar Self-Power
Renewables: Solar Self-Power Emissions Reduction Potential ~$0.5B (Year 1 ktCO2e reduction) of opportunity Near-Term Vesper, WI | 2022 (2021-23) Operating Facilities Approved Facilities Potential Adams, WI | 2022 Alberta Solar One, AB ~20 10.5 MW Portage, WI | 2021 ~50 Flanagan, IL | 2021 Lambertvil
Slide 18: Secured Capital Program
Secured Capital Program Expected Spent to Project ISD Date1 ($B) Capital ($B) Incremental EBITDA Liquids Line 3R – U.S. Portion 2021 3.1 USD 4.0 USD Growth from Secured Southern Access Expansion 2021 0.5 USD 0.5 USD Pipelines Projects Other Expansions 2021 0.1 USD 0.1 USD Modernization Program 2021-
Slide 19: Financial Strength
Financial Strength Capital Recycling Strong Financial Position Industry-Leading Ratings3 ($ in billions CAD) 6.0x (Debt/EBITDA) Reaffirmed $5.7 Credit Ratings $6 $5 ~$9B 5.5x Target Range: 4.5x – 5.0x2 rating on: Asset sales 5.0x BBB+ Dec. $4 since 2018 stable 2020 4.5x $3 $2.1 $2 Announced 4.0x BBB
Slide 20: Capital Allocation Priorities (2022+)
Capital Allocation Priorities (2022+) ~$5-6B of Annual Investable Capacity2 1 Preserve • Maintain debt-to-EBITDA within 4.5-5.0x Financial Strength • Strong BBB+ credit ratings Incremental Capacity: • Share buybacks • Further organic projects • Debt reduction ~$2B • Asset acquisitions 2 Sustainable
Slide 21: Q2 Financial Results
Q2 Financial Results Q2 YTD ($ Millions, except per share amounts) 2021 2020 2021 2020 Quarterly Drivers Liquids Pipelines 1,844 1,744 3,725 3,663 Gas Transmission & Midstream 935 975 1,942 2,072 Strong performance across business units Gas Distribution & Storage 461 406 1,107 1,015 Renewable Powe
Slide 22: 2021 Financial Outlook
2021 Financial Outlook EBITDA Guidance1 ($B) $13.3 $13.9 - $14.3 Monthly Sensitivities to Guidance • Solid system-wide utilization Monthly DCF Impact ($ Millions) • Energy Services ($75) $75 L3R U.S ISD +/- 1 month • Weaker USD2 (Partially hedged) 2020 2021e Mainline Volume ($12) $12 +/- 100kbpd/mon
Slide 23: 2020 Sustainability Report
2020 Sustainability Report Environmental ESG Ratings / Rankings reduced1 32% & 14% added Scope 3 MSCI ESG A rating (Reaffirmed May 2021) scope 1 scope 2 & energy intensity emissions emissions KPI’s in 2020 Sustainalytics Top 2% of industry group (Reaffirmed July 2021) ISS E&S Lowest risk, top decile
Slide 24: Sustainability-Linked Bond Framework
Sustainability-Linked Bond Framework Selected KPIs Racial & Ethnic Women on GHG Intensity Representation Board of Directors 35% reduction by 2030 28% in workforce by 2025 40% by 2025 February 2021 $1.0B Sustainability-Linked Credit Facility1 June 2021 US$1.0B Sustainability-Linked Bond Aligning fina
Slide 25: Upcoming Events
Upcoming Events ESG Forum Enbridge Day 2021 2021 New York, NY Toronto, ON (Live Video Webcast) (Live Video Webcast) Tuesday, Tuesday, September 28 December 7 25
Slide 26: Takeaways
Takeaways On track to deliver on priorities in pivotal year 3-Year Plan Priorities Demonstrating our leading approach to ESG 1 Enhance Returns from Existing Business Advancing future growth opportunities 2 Execute Secured Capital Program Building energy transition portfolio & expertise 3 Disciplined
Slide 27: Qs&A
Qs&A CENBRIDGE