Brookfield Business Partners LP Q4 2024 Earnings Call Transcript

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

Question: Devin Dodge - BMO Capital Markets - Analyst : Yeah. Thanks. Good morning everybody. So going to start with a question for for Mark. Look, there's been really good momentum in the shift towards more advanced batteries in your sales mix, but I think there's also a potential shift towards more Clarios content per vehicle. So just wondering if you could frame that opportunity, where you're at now and where you think this could get to over time?

Question: Devin Dodge - BMO Capital Markets - Analyst : Okay. And then maybe another one for you mark and I have to look at for the $2 billion-plus plan investments in the US over the next decade. Can you just provide some context for where you see those dollars getting allocated? And if it's more tied to support the ongoing shipping, better technologies or a broader increase in domestic capacity?

Question: Devin Dodge - BMO Capital Markets - Analyst : Hey, excellent color. Thanks for that. And then just one last one, just wanted to ask about scientific games. Financial leverage continues to be at the higher end of the range for this business. I think, it was mentioned that there were some commercial wins, but I believe there may be some larger potential growth opportunities on the horizon that may require some relatively sizable upfront investments. So the question is does the financial leverage of the business impact the ability to pursue those growth opportunities and can the business self fund those contracts or BBU and others need to contribute more capital?

Question: Gary Ho - Desjardins Securities, Inc. - Analyst : Thanks. Good morning. Maybe first questions for Mark as well. Just great to have you on the call. So I did listen to your presentation at the CES event recently, intrigued by what you're doing on the connected service solution side for fleet operators. Good to hear you've signed on a European fleet client. So what's the opportunity here? Do you see any of your competitors introducing similar technology as well? And what's the pipeline look like today?

Question: Gary Ho - Desjardins Securities, Inc. - Analyst : Great. Thanks for that and then maybe to I have a few questions on the buyback capital allocation. Can you remind me what's Brookfield Corps ownership of BBU? Is today, I think last number I saw was around 66%. Do they intend to be part of that $250 million buyback or is that just all BBU? They'll be buying back stock and canceling the shares? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 3:00PM, BBU_u.TO - Q4 2024 Brookfield Business Partners LP Earnings Call And then just post the dividend recap from Clarios, are you at a level that you're comfortable with at the corporate debt side or will you intend to reduce that further?

Question: Gary Ho - Desjardins Securities, Inc. - Analyst : Okay, great. And then I can sneak one more in just on health scope. That business continues to be a bit challenged. Can you share what's the path to protect your invested capital there? And what are events that we should keep an eye on?

Question: Nik Priebe - CIBC Capital Markets - Analyst : Okay. Thanks. I'll direct a few questions about Clarios towards Mark as well since we have benefit of having you on the call. My understanding is that there's always been some chatter about OEMs making attempts albeit unsuccessfully so far to transition away from 12 volts in the electronic architecture of electric vehicle design. Just be interested to hear your perspective on how that might evolve in the future and whether there are any steps that can be taken to a better position in Clarios for that world?

Question: Nik Priebe - CIBC Capital Markets - Analyst : Okay. That's great color. I appreciate that. And then I just want to shift gears and talk a little bit about the benefits stemming from the Inflation Reduction Act. And setting aside the discussion around the probability of collecting on future benefits, how likely is it that you'll be able to collect on the $370 million of tax credits that have been recognized to date? And what I'm trying to understand is how quickly can you actually convert that to cash on balance sheet before you know, any actions taken to dismantle or repeal elements of the Inflation Reduction Act?

Question: Nelson Ng - RBC Capital Markets - Analyst : Great. Thanks. I just have a few high-level questions. So for Anuj, your letter to shareholders highlight the re-industrial revolution trend and obviously, Clarios and Chemelex are some of the clear beneficiaries. Can you just talk about some of your other businesses that seem to -- that could stand to benefit from this trend? And then also does the re-industrial Revolution theme drive your focus on where you look for M&A opportunities.

Question: Nelson Ng - RBC Capital Markets - Analyst : Got it. That's great. And then just on the M&A environment, can you just talk about whether you're seeing this as -- well, it's a buyer seller market or both? So just the color I just came off the Brookfield Renewable call and they highlighted a bated market in terms of them seeing strong bids for operating the risk assets and they see high returns for development opportunities. So when you look at your opportunity set, are you seeing kind of similar dynamics in specific asset classes?

Question: Jamie Gloan - National Bank - Analyst : Yeah, thanks. Just want to get a little bit more color on the, on the DexKo operations. Still I guess challenging market backdrop, is it primarily demand driven? And and what are you looking for from a conditions perspective to see a turnaround or re acceleration in the DexKo business?

Question: Jamie Gloan - National Bank - Analyst : Okay. And and another business I just wanted to get a bit more color was CDK. And a little bit of color in the, in the subpack, but just want to get some more clarity, I guess in terms of the higher cost with the investments in the, in the technology to upgrade that customer service and then, what's the time frame, what's the magnitude, what exactly is being done on that front? And then the second part of that is the customer churn and just wanted to get a sense as to how does that compare, you know, historically, obviously higher levels, but just is it -- have you gone through other periods of high churn? And how does it compare to that? And what are -- is it entirely due to the cyber-attack issue or what is the exit interviews saying on that churn.