Brookfield Business Corporation

Welcome to the Brookfield Business Partners second quarter 2023 results conference call and webcast. As a reminder, all participants are in a 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 one one on your touchtone phone. I would now like to turn the conference over to Alan Fleming, head of investor relations. Please go ahead, Mr. Fleming.

Thank you, operator, and good morning. Before we begin, I'd like to remind you that in responding to questions and talking about our growth initiatives and our financial 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 securities regulators in Canada and the U.S., which are available on our website. Joining me on the call today is Cyrus Madden, Chief Executive Officer, Anuj Ranjan, President, and Jaspreet Dal, our Chief Financial Officer. We're also joined today by Pat McHugh, the Chief Executive Officer of Scientific Games, our lottery services and technology operation. Cyrus will lead off the call today and provide an update on our strategic initiatives, followed by Anuj, who will discuss the evolution of our technology strategy. Patrick will provide an update on Scientific Games, and Jaspreet will finish with a review of our financial results. The team will then be available to take your questions. And with that, I'll pass it along to Cyrus.

Thanks, Alan. Good morning, everyone. Thanks for joining us on the call today. We had a good quarter. Adjusted EBITDA increased 15% over last year, and our adjusted EBITDA margin continues to improve. Our largest businesses are performing well. Most of these are industry leaders. They're critical to their customers. They can't be easily replaced, and they have strong pricing power, which is really important during periods of inflation, and this has all contributed to their stable earnings and resilient cash flows. While the operating environment still has its challenges today, things seem to be normalizing. Energy costs have eased. In most cases, material prices are down from last year. Freight rates are well below where they were below peak levels, and the worst of the global supply chain issues seem to be behind us. Labor markets, though, are still very tight, although wage rates are stabilizing in most regions, and we're seeing slight reductions in absenteeism and turnover rates across our businesses. For the most part, volumes are holding up. We have some pockets of softness, but for the most part, they're holding up. The pricing we've put in place across many of our operations is contributing to resilient margins. Global capital markets are also turning the corner. The risk of material increases to short-term interest rates is lower as inflation subsides, and longer-term rates are still at a reasonable level. Credit markets are opening for higher-quality issuers to extend or refinance existing borings which is a benefit for most of our businesses. In fact, over the last few weeks, we refinanced about $5 billion of debt at four of our businesses. Three of these refinancings were done at an all-in cost, slightly less than the cost of debt that was replaced. We're also continuing to make progress on sales processes. Greenergy, our road fuels distribution operation, reached an agreement to sell its North American gas station assets during the quarter. The sale will deleverage that business, enable it to focus on the growth of its European renewable fuels business, and generate about $75 million of proceeds for us. In July, we sold a majority of Cardone, our automotive aftermarket parts-free manufacturing operation, to a larger competitor. Cardone was subscaled, and it struggled to fully recover from the severe impacts of the pandemic. Merging it with a larger competitor, taking back a royalty interest on the performance of a bigger business, was the best path forward for a tough investment. And finally, the sale of Westinghouse remains on track. We're working through the remaining regulatory approvals. We're targeting to close the transaction in the next several months. All in all, we're pleased with our continued progress. Our operations are well positioned as we look forward. We may have some opportunities to acquire high-quality businesses from owners who don't have access to capital as the impacts of recent rate increases continue to work their way through the system. With that, I'm going to hand it over to Anuj to talk about the evolution of our strategy in technology and the recent acquisition of Network International. Thanks, Anuj.