Brookfield Business Partners LP Q1 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Devin Dodge - BMO Capital Markets Equity Research - Analyst : Cyrus, in the letter, there were some comments related to the new investment environment, more companies electing to go public given the strong market conditions. Just wondering if this has been concentrated in certain sectors? And can you comment on what the trend -- if this trend applies to corporate carve-outs as well?

Question: Devin Dodge - BMO Capital Markets Equity Research - Analyst : Okay. That's good color. Maybe just a question on Westinghouse. There seems to be a shift in sentiment in the U.S. towards being more, I'll say, supportive for the nuclear sector. Is this something that you're seeing in the business? And if so, does this impact the timing of your potential monetization efforts?

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : Just wanted to go back on Westinghouse. Just more so was, I think that they've done a couple of bolt-on acquisitions or announced some, I think, in the past week or so. Just wondering if there's any color you can provide on kind of the combined purchase price as well as the combined EBITDA that would be additive to Westinghouse's results?

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : Okay. That's helpful. And actually, maybe if I can ask a broader question because I think Westinghouse has done some other or others in terms of bolt-on deals since you made the acquisition. If I remember correctly, the trailing EBITDA, when you acquired Westinghouse was, I think was around $450 million or I think it's a little bit below that, but relative to where it is today, yes, like how much would have -- with these bolt on acquisitions? Obviously, the new ones that wouldn't be included in the current numbers, but what has been done historically? Like how much has that added to the EBITDA at Westinghouse versus where it is today?

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : Okay. My next question was, Cyrus, you were talking about technology. And I know that at the Brookfield asset management, they've talked about wanting to make more investments in this more kind of mature technology. But this would be, call it, I think, kind of call it a newer vertical for BBU. Just wanted to understand, I guess, from your perspective, what's been done in terms of sizing up the sector, where you -- is there a thesis? Are REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 05, 2021 / 3:00PM, BBU_u.TO - Q1 2021 Brookfield Business Partners LP Earnings Call there subsectors? Are there kind of people that you brought in to have a lot of experience in that? Or did you already have it and just kind of re-delegate because I know Brookfield asset management has some other technology investments within the empire.

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : Okay. And just my last question was, I think, Jaspreet, you were talking about with respect to Altera, mentioned reducing leverage. Is that something like putting, like, more equity into it? Or is it something else? And would that be BBU and his partners? Or would that maybe be some other entity that might be brought in?

Question: Gary Ho - Desjardins Securities Inc., Research Division - Analyst : Maybe just staying on Altera. Cyrus, you mentioned potential repositioning of the business longer term. Can you elaborate what you're considering and how long that repositioning might take?

Question: Gary Ho - Desjardins Securities Inc., Research Division - Analyst : Okay. Got it. That's helpful. And then my next question, just on the public securities holdings. You sold some of that in last quarter and also in Q1. But you mentioned -- I think you still maintain some exposure there. Just wondering the thinking behind that, do you still see potentially taking 1 or 2 of those private? Just wondering if you can share some color on that.

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : First question on the BrandSafway and talking about the upcoming improvements there and sort of back half of this year. I'm just curious, I mean you purchased this business in January 2020, and it's basically just operated through COVID. So could you give us a little bit more color as to what, like an optimally running BrandSafway looks like in terms of BBU's EBITDA share and revenue share?

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Okay. Great. That's helpful. In the business services segment, the -- I guess, what would be called the other components that kind of includes some of the recent transactions with IndoStar and Everise. It looked like a decent contribution this quarter to EBITDA. Is that something that's repeatable? Or is there anything underneath the surface that you can pull out and highlight for us as to sustainability of that performance?

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Well, I don't -- it's the other businesses that's not Genworth, Healthscope and Multiplex.

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Yes. Correct.

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Okay. Great. And then, I guess, higher level and getting back to the commentary about activity on the purchase side and for whatever reason, whether it's an IPO decision or outside bid. Can you give us a little bit of color as to what industries or themes we're targeting with some of those potential acquisitions that didn't occur? And then the follow-up to that is as we see the Clarios IPO and speculation around our Westinghouse sale, are these capital recycling transactions that required precursor to a larger deal? Or there -- how else are you thinking about deploying capital?