Brookfield Business Partners (BBU) Investor Day 2024 summary

Macroeconomic and Strategic Outlook

• Falling interest rates and stabilized inflation are reviving liquidity and transaction activity, creating strong tailwinds for interest-sensitive businesses over the next few years.

• Growth strategy emphasizes global expansion, operational excellence, and leveraging local teams in 30 countries to access unique opportunities and reduce competition.

• Major secular trends—decarbonization, digitalization, and deglobalization—are driving massive investment opportunities, with private capital playing a central role as governments face fiscal constraints.

• Strategic partnerships with global tech leaders and a shift from government to corporate counterparties are fueling growth in renewables, data centers, and infrastructure.

• Positioned to benefit from a normalizing and lower interest rate environment, expecting ~$40M in annual interest savings.

Business Performance and Value Creation

• Private equity engine delivered a 27% gross IRR over 25 years, with $40B returned to investors and a 3x multiple on realized investments.

• Achieved record 20% EBITDA margin and generated $2.2B in proceeds from nine monetizations over the past year.

• Adjusted EBITDA grew from $1B in 2019 to $2.3B today, with a 19% CAGR and margin improvement of 1,000 bps over five years.

• Targeting $2.8B in Adjusted EBITDA and a 25% margin over the next 3-5 years, up from $2.3B and 20% today.

• Annual free cash flow expected to increase from $500M to $800M+ in the next 3-5 years.

Capital Deployment, Funding, and Growth Outlook

• Targeting $2B in capital recycling proceeds over the next two years, with plans to reinvest in operations, reduce corporate borrowings, and pursue new acquisitions.

• Enhancing balance sheet flexibility with $1.5B in available corporate liquidity and $2B in near-term proceeds.

• Capital recycling and asset sales have generated $2B in equity proceeds YTD at 25% IRRs, supporting a self-funding growth model and robust liquidity.

• Infrastructure business achieved 11% FFO growth, increased distributions for 15 consecutive years, and maintains a strong balance sheet with long-duration, fixed-rate debt and diversified funding sources.

• Committed to diversifying the investor base and opportunistically buying back shares.