Brookfield Business Partners LP Q3 2021 Earnings Call Transcript

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

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : My first question was on Sagen. Jaspreet you mentioned, obviously, the news out of OSFI yesterday. And I'm just wondering the comments that they had made was, it seemed like they expect companies to be kind of more measured in terms of dividend increases, returning capital or buybacks and whatnot. But given Sagen isn't public, or not really public, do you think you might have more flexibility to reduce your excess capital faster than the publicly traded banks insurers? And then the second part of my question was, based on the numbers that came out of Sagen with MICAT of 170%, my rough math kind of suggests -- sorry, the MICAT was at 214%, but if I assumed 170%, which is above historical, that I think the math cuts at -- to about USD 300 million that could be pulled out to BBU. Is that correct?

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : Okay. And then with respect to GrafTech, they announced that $150 million share buyback program, is the intent to kind of tender pro rata or to the extent that there's opportunity to go higher? Or how are you approaching that?

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : Okay. And just my last question kind of ties into at the Holdco liquidity. Obviously, you guys have run with more debt just because you've been more active this past year, year and a bit. Do you have an idea with some of the liquidity stuff that you're looking at when you think you might get back to a net cash position? I know obviously, there's been some monetizations you've contemplated that could be quite huge and gets you back to cash very quickly. But just curious of your thoughts around timing and when that might happen.

Question: Devin Dodge - BMO Capital Markets Equity Research - Analyst : So just a question on the sanitation business in Brazil. Earnings have been growing pretty substantially there. I think EBITDA was up something in the neighborhood of like 40% in the first half of the year. Can you speak to what the earnings power of that business could be as more of the concession investments that you're making become income-generating?

Question: Devin Dodge - BMO Capital Markets Equity Research - Analyst : Okay. Maybe just switching over to Altera. Fairly significant EBITDA lift there versus what you have been in the last few quarters. Just can you talk to the drivers of that Q3 performance and how we should think about its earnings going forward?

Question: Devin Dodge - BMO Capital Markets Equity Research - Analyst : Okay. And maybe just one clarification. Those problematic projects at Westinghouse that Denis was referring to, how much -- like how much longer are we -- are you guys going to be working on that? When do they wrap up? If you can kind of get some context for how long that will be in the portfolio.

Question: Gary Ho - Desjardins Securities Inc., Research Division - Analyst : Just going back to Clarios, you mentioned the chip shortage impacting OEM sales. Of your significant business in your portfolio that might be impacted by these chip shortage issues, just wondering can you comment on any other ones that you're seeing that might be impacted by these and/or other supply chain disruptions that we're seeing in the space?

Question: Gary Ho - Desjardins Securities Inc., Research Division - Analyst : Yes. Clarios and any other significant businesses that you might be experiencing in.

Question: Gary Ho - Desjardins Securities Inc., Research Division - Analyst : Okay. And then, Cyrus, just going back to maybe Geoff's question on the monetization side, maybe can you give us an update on the ones that you might be looking at, that's more mature businesses, anything imminent? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2021 / 3:00PM, BBU_u.TO - Q3 2021 Brookfield Business Partners LP Earnings Call

Question: Gary Ho - Desjardins Securities Inc., Research Division - Analyst : Okay. And then, Cyrus, while I have you, just going back to the Scientific Games transaction. I think it was reported that the company -- the parent company was going through a dual trap process, the IPO price was even higher than the $5.8 billion that you're paying for. Can you give us a glimpse on kind of why you've been successful with these corporate carve-outs valuation aside?

Question: Gary Ho - Desjardins Securities Inc., Research Division - Analyst : Okay. Makes sense. And then just last one for me, Jaspreet. Outside of the dividend from Sagen, these internal initiatives that you've highlighted, distributions or upfinancing, any way that you can give us a range or magnitude of where -- what that total can be?

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : I just wanted to dig into the other segment of the Business Services segment. So obviously, the -- we have the data on the bigger investments. But that other segment seems to be doing pretty well. Also, would you be able to provide any color on which businesses or is it broad-based that are performing well and driving some of that nice EBITDA growth?

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Okay. Great. And then in the Industrial segment with Cardone, can you talk about some of the dynamics that are at play there in the auto parts manufacturing space? Maybe a little bit of color on how that business is performing and some of the risks you're seeing.

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : My question was with all this talk about higher inflation and higher rates. Within your portfolio, which ones do you see as likely to perform the best? And if you had to pick a few businesses that you own that might be a little bit more vulnerable in that environment, which ones would they be?