EXECUTIVE MANAGEMENT TEAM Marc Rossiter Sanjay Bishnoi David Izett President & CEO SVP, Chief Financial Officer SVP, General Counsel Greg Stewart Patricia Martinez Phil Pyle Andrew Jack President, USA President, Latin America…
Transforming Natural Gas to Meet The Worlds Energy Needs PROVEN TRACK RECORD OF VALUE CREATION Complementary product lines and regions driving balanced revenue growth. Investing in recurring revenue sources to increase and…
ENERGY ACCESS IS FUNDAMENTAL TO SOCIAL PROGRESS Per Capita Energy Use vs. United Nations Human Development Index Score 1.00 Sweden Germany Australia Norway Finland USA Canada Spain 0.90 U.N. HUMAN DEVELOPMENT INDEX Uruguay…
ENERGY CONSUMPTION TRACKS GDP GROWTH Global Gross Domestic Product Global Aggregate Energy Consumption trillion 2010 US dollars (000 bcf equivalent) 300 High Economic History Projections 1,000 Growth History Projections non-OECD…
GLOBAL ENERGY DEMAND SATISFIED BY A DIVERSE FUEL MIX Projected Global Energy Consumption (000 bcf equivalent per year) 1000 Natural gas is the worlds +42% 900 ( 57,000 bcf) fastest growing source of 800 fossil fuel 700 600…
INCREASED GAS CONSUMPTION IN ALL SECTORS Global Natural Gas Consumption by Sector ('000 bcf) 250 History Projections 200 Natural gas use accelerates from 150 increased industrial activity, natural gas-fired electricity 100…
WHILE REDUCING CARBON INTENSITY Pounds of CO2 emitted per thousand cubic feet 49% Up to - 49% 229 215 214 206 fewer CO2 emissions 161 157 vs. other 139 fossil fuels1 117 Environmental considerations support a…
ALL PRODUCED GAS REQUIRES COMPRESSION AND PROCESSING (000 bcf) +57 200 191.4 Consumption increase of 57,0001 bcf to 150 2050 requires billions 134.7 of compression, processing, and 100 maintenance investments 50 0 2020…
GLOBAL PLATFORM POSITIONED FOR GROWTH
GLOBAL DELIVERY OF NATURAL GAS SOLUTIONS Business Overview* Revenue 2,045 MM Employees 2,500 Operating Locations 57 Manufacturing Facilities 3 Countries 17 Fleet: 675,000 HP Enerflex Manufacturing Facility 0 28,000 bcf…
EXECUTING ON A POWERFUL STRATEGY Engineered Systems Customized offerings for: - Gas Compression - Gas Processing Plants - Cryogenic Plants - Electric Power Generation Any Engineered System or ITK product Integrated Turnkey (ITK)…
SOLUTIONS FROM THE WELLHEAD TO PIPELINE 14
DIVERSIFICATION STRATEGY Complementary offerings of USA diversified product lines in Canada diversified geographies ROW Vertically Integrated platform provides differentiation Engineered Systems Focused on growth and AMS…
ADDITIONAL FOCUS ON GROWING RECURRING REVENUES Recurring revenue streams offer Engineered Systems greater stability and predictability of financial performance Integrated Turnkey Asset Higher margins versus (ITK) Ownership…
ASSET OWNERSHIP 1 2 Products engineered, built, Leased to Customers for and owned by Enerflex Asset Ownership varying durations = Contract Compression + BOOM 4 3 Contracted revenues provide May include long-term valuable…
STRONG U.S. CONTRACT COMPRESSION FUNDAMENTALS US Contract Compression Market1 (million horsepower) 16.0 Changing field conditions 14.0 History Projections require continual equipment modification, making rental 12.0 6% an…
CAPTURING OPPORTUNITIES IN A SUPPORTIVE MARKET Low 30% 100% 87% High 45% Mid 25% Growth of US fleet from USA contract Diversified horsepower 130,000 hp to compression fleet profile across contract 310,000 hp since…
BUILD, OWN, OPERATE & MAINTAIN (BOOM) BOOM Any Engineered System or ITK product on a Build, Own, Build-Own-Operate- Operate, Maintain Maintain (BOOM) basis in all target markets Larger scale compression and processing…
BOOM PORTFOLIO CONTINUES TO EXPAND Early Compression Development Facility, Bahrain Facility, Oman Early Production Compression Compression Compression Gas Compression Facility, Compression Facility, USA Facility, Oman…
PRIORITY TO GROW RECURRING REVENUES Recurring Revenue C in millions +8% 596.9 Recurring Revenues CAGR 600 537.2 486.4 521.1 = revenue Recurring 500 471.5 461.7 revenues growthfrom Asset through 400 375.0 395 Ownership and…
ASSET OWNERSHIP RISKS Counterparty Asset 01 Credit 03 Performance Well and/or 02 basin dynamics Risks mitigated when paired with financial + basin due diligence and Enerflex AMS 24
OPTIMIZED PLATFORM POSITIONED FOR GROWTH VERTICAL INTEGRATION FINANCIAL STRENGTH 1 Differentiated global platform with product Manufacturing cash flows fund investment 2 line synergies in Asset Ownership platform DIVERSE…
COMMITTED TO SAFETY Global Consolidated Safety Record:1 0.09 0.55 0.28 LTI TRIR MVIR Total of Lost Total Recordable Motor Vehicle Time Incidents Injury Rate per Incidents per per 200,000 200,000 exposure 1,000,000 km exposure…
ENHANCING AND STRENGTHENING COMMUNITIES Corporate citizenship through wellness and community development initiatives is an integral part of Enerflexs vision 27
FOCUSED REGIONAL PRESENCE
UNITED STATES USA Eng. Systems 948 MM Service Rental 172 MM 76 MM Gas infrastructure Total Revenue 1,196 MM demand driven by Fleet: 310,000 HP Fleet Utilization: 87% associated gas from US shale plays Enerflex is…
REST OF WORLD LATIN AMERICA Rest of World Eng. Systems 77 MM Service 155 MM Regional gas production is Rental 115 MM TBD Total Revenue 347 MM expected to grow by Fleet: 300,000 HP approximately 80% by 2040* % of Consolidated…
REST OF WORLD MIDDLE EAST / AFRICA TheTBD Middle East accounts for 30% of the worlds proven gas reserves* 100,000 horsepower of owned and installed gas Rest of World compression and Eng. Systems 77 MM % of Consolidated…
CANADA % of Consolidated Revenues1 Canada Canada NGL recovery drives Eng. Systems 424 MM Service 68 MM 24.5% infrastructure demand USA Rental 11 MM 58.5% Total Revenue 503 MM ROW in liquids-rich basins Fleet: 65,000 HP…
FINANCIAL OVERVIEW AND PROSPECTS
DIVERSIFIED REVENUES THROUGH COMPLEMENTARY OFFERINGS C in millions 2,045.4 2019 2018 10% 10% 1,696.2 1,703.3 502.9 19% 20% 1,629.0 1,553.4 71% 70% 1,501.7 299.9 1,405.0 529.4 494.2 346.8 1,227.1 418.6 500.4 438.2 1,130.6…
A DISCIPLINED APPROACH TO STRATEGIC GROWTH CAPEX, M&A and ROCE Organic Leads To M&A Leads To Organic Leads To M&A Over C1.2 billion Investment Investment Opportunities reinvested in organic Opportunities C in millions…
BUSINESS MIX DRIVES PROFITABILITY EBITDA and EBITDA Margin C in millions 400.0 16.8% 16.9% 350.0 13.8% 345.8 Approximately 220 13.2% 300.0 10.9% million increase in 250.0 10.4% 10.4% 11.4% EBITDA since 2011 9.0% coupled…
GROSS MARGIN PROFILE Revenues (C in millions) and Gross Margin %1 by Product Line Q4 2019 Q4 2018 FY 2019 FY 2018 Revenue 319.8 321.4 1,448.5 1,182.2 Engineered Systems Gross Margin % 24.9% 14.5% 19.9% 14.4% Revenue 50.9 48.8…
POSITIVE FREE CASH FLOW AND BALANCE SHEET STRENGTH Free Cash Flow Before Net Capital Spending* Net Debt to EBITDA C in millions 300.0 250.0 240.8 200.0 190.4 2.38 1.79 150.0 136.2 126.5 114.2 112.8 1.19 105.1 1.09 0.97…
CAPITAL ALLOCATION PRIORITIES Organic growth of Asset Ownership platform in all Regions. Opportunistic Inorganic growth right assets, right places, right long-term returns. Dividend Growth Dividend has grown or been maintained each…
ADDITIONAL ORGANIC + INORGANIC REINVESTMENT C in millions 453.3 Up to 79% increase in EBITDA1 from next 1B of reinvestment 100.0 79% 100.0 3-year average EBITDA1 253.3M 253.3 Next 1B of CAPEX 10x EBITDA multiple 100M 5x EBITDA…
WITH OPTION TO CONSOLIDATE A FRAGMENTED MARKET US Contract Compression Market (total horsepower, 000s) 5,000 US contract compression market 4,500 consists of 4 to 5 large players and several small players 4,000 3,500 3,000 Roll-up…
PIVOT TO RECURRING REVENUES SUPPORTS VALUATION EV/NTM EBITDA Multiples1: 12.0 10.0 Implied multiple expansion with 8.0 6.0 continued growth of recurring revenue 4.0 product lines 2.0 0.0 EFX Average Pure Play…
WHATS NEXT FOR ENERFLEX Current geographic platform provides the foundation for incremental growth in each operating region. Focus remains on profitably growing each of the Engineered Systems, After-Market Services, and Asset…
EXECUTING ON A POWERFUL STRATEGY Proven track record of creating shareholder value through Growth and Dividend Income Strong balance sheet and free cash flow allows Enerflex to pursue strategic growth opportunities to further expand…
APPENDIX RECONCILIATIONS
FREE CASH FLOW Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Cash provided by operating activities 134,795 134,208 69,024 64,611 104,173 91,792 179,251 242,868 54,169 Net change in non-cash working capital and other…
GROSS MARGIN PROFILE BY PRODUCT LINE Three months ended December 31, 2019 Engineered ( Canadian thousands) Total Systems Service Rental Revenue 474,362 319,800 103,631 50,931 Cost of goods sold: Operating expenses 360,445 240,276…
COMPOSITION OF BORROWINGS ( Canadian thousands) December 31, 2019 December 31, 2018 Drawings on Bank Facility 121,328 124,852 Senior Notes due June 22, 2021 40,000 40,000 Senior Notes due December 15, 2024 151,374 EBITDA growth…
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