BBU.UN.TO - Earnings call transcript Q3 2022 | Brookfield Business Partners L.P.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Brookfield Business Partners Third Quarter 2022 Results Conference Call and Webcast [Operator Instructions].

Now I'd like to turn the conference over to Alan Fleming, Senior Vice President of Investor Relations. Please go ahead, Mr. Fleming.

Alan Fleming

Thank you, operator, and good morning.

may like talking you and about and performance, I'd to in our begin, operating and statements. questions our we we to that remind responding financial Before forward-looking make growth initiatives statements may materially. results subject and differ known unknown and These risks are future to

our and Web For information the are on our review US, risk the securities encourage you factors, which further with I regulators site. known to on filings in Canada available

in Executive today me Officer. your Turcotte, Officer; then on call over an Chief perspective that, the strategic Cyrus Joining will we'll results, Jaspreet Jaspreet current the and environment. with questions. Cyrus Financial and I'll our initiatives be pass with our Cyrus. some Denis seeing me Operating Chief is will and to available with start Officer; update And financial Chief what on provide then Denis Madon, on with call take Dehl, will the the we're to finish discussion of

Cyrus Madon

everyone. Thanks, us Alan and good Thank you today. much joining for very morning,

really operating record While generated a with third the had strong challenging XX% million, year. we results. more environment, We over prior We're a about our than EBITDA quarter. up of adjusted in $XXX pleased we're

a recycling to our in milestone we advances know, is you our led of many for As to meaningfully reached sell an our supports that capital a Chemical and major October, $X growth. Brookfield This for billion. agreement Corporation Westinghouse business by consortium strategic and Renewable Partners

this received the And of our we've to when crystallize X on a $X.X that We investments pleased the of We're eligible expect of hold very the over We and year. to have last transaction. second all with in more be who of half times hope generate support their net with date. than unitholders cast, the in proceeds BBU close to sale the favor weeks, the votes half billion provided us outcome. to next about combined multiple to few distributions

years our Looking scale timing a and businesses now. other business invested high are to how large quality significant large turn proceeds I of two broader We've Nielsen. for to sold. mature acquire generate will of growth our which capital when them comes to partner, conditions. very market last the The have want depend completed will we should the several state on initiatives. over businesses, lot of capital, that we privatization super BBU from amount be of in along and plans forward, we course years scale to October, reach eventually a it monetize alongside In our substantial far

measurement. is many As leader third of know, you party in audience market Nielsen the

this existing to our and growing components, reduce rent of car other completed our opportunities platform, really landscape making As also We're the continued a operations scale doubles to fleet audience measure opportunities manufacturer excited acquisition of continue Brazilian operations. of to provides components of scale. month, meaningful focus and management axles to on about a acquisition engineered leading trailer which a the look provide business’ our scaling position strategy. forward us and to unified relationships size distributor to and service and full well to continues supporting management the existing Last the increase Unidas, completed distribution business. customer our costs the viewership. leading grow media which our businesses evolve, of it growth And a business investment opportunities provides We've our the fleet and

are today put required after taxes, into share, all to a operations last $XXX trading grow, generate free at which this and flow. XX to business our generated around depletion, our cash continuing also our times flows months, about multiple cash our of in maintenance As are CapEx continues have our is interest, free context context, at in flow. to cash of put increase. units million the the This operations To X means

As within want of to thank that we focus operations. approach the wrapping us Investor end value our our Day. join to the you I to September up, before all And of continuing year, were Annual at is our on able in build

it missed For to With Denis. webcast any I'm of our you that, that is it, available going on the Web site. to turn over

Denis Turcotte

Good everyone. Thanks, morning, Cyrus.

cost well. more good we this from trend and levels. labor, We land large materials see resetting and with is several respond of an above both inflation. that back number seeing this a to businesses. line With how time, environment to Asia we're As of has I'd over minutes international see likely I it XX% time that and to some materials, already most thought a changes logistics, common a material and in from responding a business in other America, The news of elevated pre-COVID environment. sea shipping softened container Brazil, example, have anticipate levels whether of prices, and gives perspective our across year, global aware, us nearly about North many are own with a today down to the previous with businesses happening economy, as we're Most be the raw to are operate as talk facet every operating across and to and themes global happened. also Global large touching drop making and and able options remain being Steel monitor, operations which scale highs, unique Pacific. our today the delivery, context, of of transportation, first the favorable. areas I'll you that We rates global of global energy, key that costs span our we're further. Europe spend support form last start few operating businesses, these categories

certain and associated still we're constraints higher in or shortages costs. chains However, seeing supply

on have greater labor indirect for of key costs have well of more both markets and have in challenges We putting localization and and costs more workforce. our management operations our hit the place on To and continue networks, in risks attract supplier focus to signs the Global support encountering direct of requisite longer levels XX% rates structurally some have our energy very the key broadly, and were across compensate, of More higher been year’s reshoring will and across global supply chains. in easing, an ensuring ours focused talent. operations services right retain to in cases, availability can. all Similarly, in similar certain on particular been organizational inventory professional teams progressed. manufacturing or easing increasing up both most we're and are structure where and as with associated tight our the both and to we inputs Europe, diversifying like we compensation we strong think and emphasis continued optimizing arrangements may not attrition showing and cost, in labor be Labor sectors. yet be mitigating

While we're maintain and in performance. inflationary to implications cut oil major production our may back cost opportunities drive the global cost by of businesses, significant More price or to certain the processes is to and feedstock price structures of both sustainable. gas and may present not broadly, at for availability our this context, increased exception as a have capacity optimize margin determined levels, idle margin which Within on many natural production some of regions. decisions this

cases, to higher to should a in be been emerge for which our costs pass there cash been equation over has positioned simply both and as done our interest been increase, fortunate cost in at buying a pockets We're whether actions modular as later. forward market time. of and leasing of up building of replacement and operation of packaging to past to the we at that, type positions, services well only us, we've increasing that Though escalation. particular, starting And rates with macro capital term competitive at it broader rising it The the repricing ultimately that or given the to any advantage Clarios fairly some see There to enhance products, a cost pricing to our are some rates. has far, in by the behavior maintain this effort smaller good an job that position flows. have recover hand through benefit of are evolving impacts our for businesses looking impact longer buy of own has have minimal a of situations questions businesses strong our position. align In required business returnable intensive to like pressure this timelines Jaspreet. versus prices, or rent of over with look our contractual may taking We're to been with and catch more The operations it's also it's nature providers from we're So Europe will becomes of to environment inflationary whether now opportunities we services customer positioned your asset are to leading I'll Greenergy, to increasingly forces. and also larger businesses over where well but the participate fully year, pace of in continuous changing of prices inflation essential We in demand strengthen scarcer driven margins. is customers with expensive.

Jaspreet Dehl

our We by $XXX adjusted our increased million business. be and Starting to with in morning, $XXX three increased from EBITDA Adjusted Denis, strong to million. adjusted million to year. improved million financial $XXX each business good Thanks, operating to our $XXX results year. from and pleased the saw $XXX from services everyone. segment, million quarter segments. reported million increased of last with and EFO of EBITDA contributions EFO We Adjusted the last XX% performance third to $XXX continuing improved

generated of over by insurer earned last strong premiums mortgage activity the higher EBITDA, residential adjusted Our million underwriting primarily following few $XX driven years.

in well. see as to rates the mortgage levels default continue business low We of

absenteeism, to be Healthcare costs. We're business The surgery value management labor in rates by EBITDA overtime closely as normalizing New is working and $XX still seeing technology software the what well positioned closed in during underwriting our a to days we early housing quarter. of business adjusted the dealer acquisition achieving of our cancellations impacted a this, the trending elevated services higher environment far. performance pleased levels. Results services all operation, million are activity confidence very of the is adjusted quarter. through towards which manage operating operating is continue improve slowly sick normalizes. and EBITDA of of but with the contributed team have during degree improving environment In the but creation remains high It's contributed the the so with business normal of we we and The to period team and July, expected activity. $XX support expect moderating to as plans. leave million and we're

was public year. Moving EBITDA our to our Adjusted $XXX on increased to Advanced the quarter year. million over $XX EFO of mix energy tax storage gain operations contributed during industrial sale and higher $XXX to securities. prices million results of segment. investment included Adjusted in last million generated $XXX partial was advanced sales $XXX net million, the in after favorable EBITDA which quarter. and compared Higher during line margin battery selling with to a million last the adjusted

labor production during We seeing as to challenges higher OEM of Increased ease original auto equipment this from and input business. are benefited volumes quarter. starting costs manufacturer overall in or stronger battery are the impact demand

business flexibility in overall opportunities chain and support million, business services We're margin a well position syndication forma engineered was leasing assist the corporate the recently as with We from of and we're $XXX to is of to impact reviewing margin to quarter in acquisitions, the of over recent as compared costs strong infrastructure the volumes on enhance EBITDA higher well million in of strong expand current that, and of from utilization the generate on of and the penetration Modular benefited takes was Performance focused sale pricing questions. reduced investment with and account EBITDA Performance to pro flow. million value Nuclear increased services million us finally, generated geographic million potential The as as quarter. the $XX recent provides manufacturer EBITDA saving our The and comments add last Demand due into EBITDA. input close generated million. environment. demand products I'd from contributed as of And and add the of like on in of its adjusted add the generating supply the Our to conflict planned impact volume $XX technology in remained services, well initiatives EFO contribution Asia adjusted services the level. generated its acquisition pricing strong part on well actions. services our to cash building Lottery adjusted $XXX adjusted cost $XX opportunities liquidity. full $XXX Energy of With in in manage continuing to call in in $X.X support EBITDA EBITDA. back Pacific to year. acquisition in acquisitions, the significant actions. year to of helping the is performed adjusted reduced Adjusted footprint. $XX million balance offering offset Westinghouse. ended capital billion has we turn higher components and sheet. as adjusted challenges. the also business the our disruptions a expected offset business to our by proceeds Ukraine. from mitigate for the operator Contributions by track quarter resilient caused on Germany This benefited BHI remains helping third This closed of

Operator

[Operator Desjardins. first Instructions] from of Ho question Gary Our comes

Gary Ho

maybe your monetization. balance I kind choppy do attractive the my maybe pipeline further one environment the guess you monetize? in how for you end at between lower your hinted your can So investments also that just letter to current of Cyrus, in versus perhaps buy to at of valuations? First valuation perhaps shareholders, you question,

Cyrus Madon

to many in scale us. that will letter, giving the that, in think five, the said we have acquisitions billion for the capital, is, time, capital, over of of a fullness the of context couple I we're seven expect likely monetizations. years fact time, order of dollars to years, lot billions now, of And and the proceeds really fullness in invested what we of $XX some six, those generate from of last the large in we've of

we're the to give. that's context trying So

are environment And in well buyers, capitalized, capitalized. are As letter. have anything today, certainly our didn't just very that say specific to the but be generally, they could say would in just industries I general, in strategics, well I'll we mind

Gary Ho

I then go investment. want to while back Superior have And Plus you, to I

press in returns that Brookfield the a You for those yield participate dividend offering. that cash generates had investments. your and to quite you XX% also equity bit X.XX are target XX% the off And typically

that content [Technical and should look stake, this? at the to one? with adding we you how keeping So itself Are Difficulty] on

Cyrus Madon

X.XX% We're the our coupon of We investment. share investment. happy participate with get our on a very We do preferred upside in price. the share

we're company's very it with as performing far happy we're concerned, the have. with the We're we and pleased position As well.

Gary Ho

was And then a And quarter? dollar businesses. model with dollar Jaspreet, your does How results, that just US out? last stronger global one, US should reporting maybe your that this how impact the we negative for

Jaspreet Dehl

foreign I think two currency So about. when of think to really think about business, exposure the you for of there’s exposure kind levels

three or makes typically it's where going in. dollars India, Canadian, the always in kind and terms sense. we're Brazil, monitoring our of then we and countries, small it in program our crystallizing just businesses, of that and policy capital invested exposures hedges the just I’d really hedging book, there. we the has In things hedge in about majority on has developed we've euro. the them, years, Aussie capital all the in either a and say to or the in have constantly the balance first been that and the The we five deployed of stepping countries, of XX% made rolling piece a of other active capital capital, acquisitions the hedge developing last been we the we've which which have is And dollars. where invested US of equity an And back over our it And

that's we that So put kind we of the into how think the equity about businesses.

which businesses underlying of The exposures. and second like investments kind the in has global globe operations. piece of countries large the Clarios, around the either operations we've US, currency we've like operations And or got outside Modulaire, where is across made

cash by which the headwinds, the and of from some those we've significant programs is flows And hedging the look I'd active hedge today, a within seen within impacted from Clarios, in cases, again, we've specifically, that operations haven't portion or we hedged, the say, been our exposures we'll like our So exposure euro. US large that of got portion not currency to got And businesses. typically some strength. larger businesses, say in to we've dollar of is that of companies, the

it level, FX the been if material. noise a is and results. at But creates exposure that you in hasn't BBU back some step it there overall, So

new at than businesses, step larger in look back kind a of bit So some of a the it's BBU. and

So in but foreign summary, we've some exposure’s not are hedged most active are to we material seeing, from hedging headwinds, specifically the programs, of got I that currency there think BBU. our euro but

Operator

question comes line from Jaeme Bank. of National next Our the with Gloyn

Jaeme Gloyn

how thinking First Have leverage question, operating can the operating that ability businesses additional say? a growth organic just guess I operating thinking you bit have some and us something any or color rate, about you you’re give about little provide to it of range disclosures or organic Is growth around you around, given on organic underlying and and an leverage? their basis. let's

Jaspreet Dehl

take I'll want and I to first and add to Denis a it. then know Cyrus crack, So

this as you at bit platform But of give well on of both we've made, growth, I we doing, to have is think and in on we a year-over-year basis. Investor and enhance organic revenue of September. around the our of underlying add seeing and as to that EBITDA when been say, so challenging of planned. operational little cost strong if Denis very growth through that Revenue businesses, to But on usually environment portfolio we invest improvement equation. remarks, a typically a a a out We've the been On acquisitions color very part large businesses and take accretive where got the part in EBITDA. M&A. anything is the seen not our some and in opening area, is growth are our the basis, investments margins. of and comes Denis, that in thesis of So of There are kind large investment initiatives is store more we smaller store some bulk which investments And of store that as in improving same we've end the focus that across Day support results same or kind normalize the operating pretty focused same resilient. want we're areas eluded the you that? continuing his far we've

Denis Turcotte

importantly old have in XX% and analysis analysis you that what customer our We in fixed leverage often getting in capacity. us least and add higher cases, applying we right, services. to sectors, we're in higher as as translates of dimensional we're just the But or of those only but a at sales by not that amounts where orders, in you're mentioned, sense product, reduction potentially capacity lot of in are I'd more you geographically, well the market it’d position intensely, smarter could a loss also on as puts get, effect whether we do we're end we in though in operating that we but up share where working by And margin. a regard. as apply recessionary that, like of way. products not be in on very focus revenue rule against profitability be by again, in Clearly, placed environments, see not focus environments do then XX/XX Jaspreet where simply the saying three by entering a given costs some

into EBITDA in count look doesn't growth flow. organic it higher translates absolutely directly unit but higher So and higher it cash free revenue, like

Jaeme Gloyn

de-levering free And businesses and the have you you then of from How you operating an you the de-lever? growth forecasts is to color walk like free the about next maybe the ability debt any to as that that, the flow. cash net operating to of basis? that cash can over additional of expect thinking follow-up would in Do the sort terms quarters? EBITDA dollar in companies absolute several Any or ins flow, to what through us of operating are basis,

Jaspreet Dehl

shot a take it. and can can that answering at add I to Cyrus then

percentage. operating business, them when of the we of where are we've a business it as based perspective to we There's companies in think debt interest impact The our So about in current linked We with different. the the some EFO, and flow it so able every the higher up. from very just businesses about is of of and free profile gives and the business impact considering on kind service it's ability of appropriate. leverage million, comes closely flexibility and really terms of be level kind more on kind where profile of of operated of low were the cash leverage rates us level always is of think kind it $XX we within of in have that's serviceability of of that run debt. of that XX about inflation a which small each rate $XX points the manage very and just million the companies portfolio or others, also, given business, about deleveraging to each businesses have today, of underlying some to contractual, the stable, lot with a higher on in cases, has of there's And impact obviously a very basis the refinancing monitoring debt place, our a lot kind generating that

we'll have set manage businesses that's manageable. concerns think this is at kind for point, I nothing up refinancing but work very well we So to through, mean through us to come be of will the it. that There up that that some not portfolio

Cyrus Madon

add one just I'll comment.

earnings the our debt done companies. we've the across been same. for means what flow to going are deleveraging, well of pretty really we've businesses consistently all of the level years free increase what cash stays that at look And is are able up, now, you the our board, If across

improved So down EBITDA through time over actually is debt to just coming earnings.

Operator

time the have to call all That's over like closing Cyrus the for for turn to would today questions. we remarks. I now Madon

Cyrus Madon

for much look you Thank next quarter. forward speaking us to today. to joining very you We

Operator

concludes Thank for you today's This conference your call. participation.

disconnect. You now may

Brookfield Business Partners (BBU) 4 Nov 222022 Q3 Earnings call transcript