Brookfield Business Corporation

Welcome to the Bookfield Business Partners second quarter 2021 results conference call and webcast. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, simply press star and one on your touch-tone phone. Should you need assistance during the call, you may signal an operator by pressing star and zero. Now, I'd like to turn the conference over to Alan Fleming, Senior Vice President of Investor Relations. Please go ahead, Mr. Fleming.

Thank you, Operator. Before we begin, I'd like to remind you that in responding to questions and talking about our growth initiatives and our financial and operating performance, we may make forward-looking statements. These statements are subject to known and unknown risks, and future results may differ materially. For further information on known risk factors, I encourage you to review our filings with the security regulators in Canada and the U.S., which are available on our website. On the call with me today is Cyrus Madden, Chief Executive Officer, Dennis Turcotte, Chief Operating Officer, and Jaspreet Dal, Chief Financial Officer. I'll turn the call first over to Cyrus to provide an update on our business, and then Dennis will discuss recent activities at our advanced energy storage operations. Jaspreet will finish with a review of our financial results. We'll then be available to take your questions. And with that, I'll pass the call over to Cyrus.

Thanks very much, Alan. Good morning, everyone, and thanks for joining us today. So we've had a busy few months since our last call. We had a great second quarter. We continue to be pleased with the performance of our business. We generated strong growth in EBITDA and FFO, and we're seeing positive momentum across our operations. We've also been executing on a number of initiatives to build long-term value across our business. Earlier this week, we announced the launch of a structure which will give investors the option to invest in BBU either through corporate shares or our existing limited partnership units. Brookfield Business Corporation, or BBUC, will be a paired entity with our limited partnership, but also a separately traded, publicly listed corporation with an expected initial market cap of around $2.5 billion. Turning to our acquisitions, over the last few months, we've committed about $1 billion to acquire three high-quality businesses. Each of these share the qualities we look for. They're industry leaders, they provide essential products and services, They're cash-generative and generate strong returns on capital. In June, we agreed to acquire Modulair Group for $5 billion. Modulair is a leading provider of modular building leasing services in Europe and Asia. This is a business we've come to know over the years as a customer of our construction operation. It has an excellent value proposition as a large-scale operator with an established branch network. We're acquiring Modulair for about 9.5 times normalized EBITDA, which we think is reasonable value considering its financial profile, its growth outlook, and market leadership position. We've identified opportunities to improve its operations and leverage our commercial relationships in the infrastructure, real estate, and industrials markets to help grow this company. We're investing $500 million for a 30% ownership interest with the balance funded by our institutional partners. In July, we agreed to acquire Dexco Global for $3.4 billion. Dexco is a leading provider of highly engineered components primarily for industrial trailers and towable equipment manufacturers. Dexco has a reputation as a solutions provider for its customers and holds leading market positions across North America, Europe and Australia. Like many of our operations, Dexco's business has durable cash flows due to its strong competitive position and flexible cost structure. We're paying about 10 times normalized EBITDA to acquire this business and we believe there are opportunities to create value. We're investing $400 million for our 35% ownership interest with the balance funded by our institutional partners. We plan to support opportunities to both enhance margins and accelerate growth in partnership with Dexco's management team. Finally, earlier this week, we agreed to acquire Aldo. Aldo is a leading Brazilian distributor of solar power kits for small businesses and households. These kits generate power where it's consumed, which is referred to as distributed generation. Distributed generation is a fast-growing market in Brazil and although as well positioned as a leader, with a cost-efficient e-commerce platform and large network of resellers. We're funding about $115 million of a $320 million equity investment for a 35% ownership interest. The purchase includes an earn-out dependent on meeting certain targets, which we expect the business to self-fund. We also continue to progress our capital recycling activities, During the quarter, we generated about $130 million of net after-tax proceeds from the sale of common shares of Graphtec. Over the last three years, we've generated about $1.8 billion from the monetization of this investment, which we've used to help fund our growth. We're exploring options to monetize some of our other mature businesses and hope to complete one or two of these by the end of the year. Over the last few months, We were exploring a public offering of our advanced energy storage operations, and as Dennis will touch on later, we decided not to move forward with an offering at this time due to market conditions. We'll look to revisit a potential offering in the future, but we're in a position to be patient, and in the meantime, we'll continue focusing our efforts to enhance this business further. Looking ahead, our focus is on completing the initiatives underway between now and the end of the year, while continuing to improve our existing operations. Our balance sheet is in excellent shape. We're well positioned to continue building on strong performance in the second half of this year. So with that, I'm going to hand it over to Dennis.