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…
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 250 800…
GLOBAL ENERGY DEMAND SATISFIED BY A DIVERSE FUEL MIX Projected Global Energy Consumption (000 bcf equivalent per year) 1000 +42% Natural gas is the worlds 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) 250 200 History Projections Over time, natural gas use is expected to accelerate 150 from increased industrial activity, natural…
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 150 of 57,0001 bcf by 134.7 2050 requires billions of compression, 100 processing, and maintenance investments 50 0 2020…
POSITIONED FOR GROWTH
GLOBAL DELIVERY OF NATURAL GAS SOLUTIONS Business Overview* Revenue 1,926 MM Employees 2,200 Operating Locations 57 Manufacturing Facilities 3 Countries 17 Fleet: 685,000 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 EBITDA 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 6.4% an…
CAPTURING OPPORTUNITIES IN A SUPPORTIVE MARKET Low 100% 87% 41% High 45% Mid 14% Growth of US fleet from USA contract Diversified horsepower 130,000 hp to compression fleet profile across contract 325,000 hp since…
BUILD, OWN, OPERATE & MAINTAIN 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 facilities…
BOOM PORTFOLIO CONTINUES TO GROW Early Compression Development Facility, Bahrain Facility, Oman Early Production Compression Compression Compression Gas Compression Facility, Compression Facility, USA Facility, Oman Facility,…
PRIORITY TO GROW RECURRING REVENUES Recurring Revenue C in millions +8% CAGR1 596.9 597.8 600 537.2 521.1 500 486.4 471.5 461.7 Recurring revenue growth through Recurring revenue has 400 375.0 395 390 organic investment…
ASSET OWNERSHIP RISKS 01 Counterparty Credit 03 Asset Performance 02 Well and/or basin dynamics Risks mitigated when paired with financial + basin due diligence and Enerflex AMS 24
OPTIMIZED PLATFORM POSITIONED FOR GROWTH 1 2 VERTICAL INTEGRATION FINANCIAL STRENGTH Differentiated global Manufacturing cash platform with product flows fund investment line synergies in Asset Ownership platform 3 4 DIVERSE…
COMMITTED TO SAFETY 2019 Global Consolidated Safety Record:1 0.09 0.55 0.28 LTI TRIR MVIR Total of Lost Time Total Recordable Motor Vehicle Incidents per Injury Rate per Incidents per 200,000 exposure 200,000 exposure 1,000,000…
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 873 MM Service Rental 174 MM 83 MM Gas infrastructure Total Revenue 1,130 MM demand driven by associated gas from Fleet: 325,000 HP Fleet Utilization: 87% US shale plays Enerflex is…
REST OF WORLD LATIN AMERICA Rest of World Eng. Systems 57 MM Service 152 MM Regional gas production is Rental 114 MM TBD Total Revenue 323 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 57 MM % of Consolidated…
CANADA % of Consolidated Revenues1 Canada Canada NGL recovery drives Eng. Systems 399 MM Service 63 MM 24.5% infrastructure demand Rental 11 MM USA Total Revenue 473 MM ROW 58.7% in liquids-rich basins Fleet: 60,000 HP…
FINANCIAL OVERVIEW AND PROSPECTS
REVENUE GROWTH THROUGH COMPLEMENTARY OFFERINGS C in millions 2,045.4 TTM Q1 2020 2019 1,926.3 11% 10% 1,696.2 1,703.3 503 20% 19% 1,629.0 1,553.4 473 69% 71% 1,501.7 300 1,405.0 529 494 347 419 1,227.1 323 500 438 1,130.6…
A DISCIPLINED APPROACH TO STRATEGIC GROWTH CAPEX, M&A and ROCE Approximately C1.5 Organic Leads To M&A Leads Organic Leads To M&A billion reinvested in Investment Opportunities To Investment Opportunities organic growth and C…
BUSINESS MIX DRIVES PROFITABILITY EBITDA and EBITDA Margin C in millions 400.0 16.8% 16.9% 18.0% 350.0 13.8% 13.2% 345.8 345.8 300.0 11.4% 10.9% Over 200 million 250.0 10.4% 10.4% increase in EBITDA 200.0 9.0% 214.1 225.2…
GROSS MARGIN PROFILE Revenues (C in millions) and Gross Margin %1 by Product Line Q1 2020 Q1 2019 Revenue 225.4 345.5 Engineered Systems Gross Margin % 23.1 15.5 Revenue 53.7 47.9 Rentals Gross Margin % 65.4 63.3 After-Market…
POSITIVE FREE CASH FLOW AND BALANCE SHEET STRENGTH Free Cash Flow Before Net Capital Spending* Net Debt to EBITDA C in millions 300.0 250.0 240.8 242.7 200.0 190.4 2.38 150.0 136.2 126.5 1.79 105.1 114.2 112.8 100.0 1.19…
DIVIDEND HISTORY Annually (C/share) History Projections 0.50 0.46 0.45 0.42 0.40 The Company has 0.38 maintained a 0.34 0.34 0.34 dividend through 0.35 0.30 0.30 0.28 the cycles since 0.25 0.24 2011 0.20 0.18…
IGNITING THE FUTURE OF ENERGY
CAPITAL ALLOCATION PRIORITIES Balance Sheet strength preserving liquidity to weather downturns. Organic growth of Asset Ownership platform in all Regions. Opportunistic Inorganic growth right assets, right places, right…
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) 4,500 US contract compression market 4,000 consists of 4 to 5 large players and several small players 3,500 3,000 2,500 Roll-up…
PIVOT TO RECURRING REVENUES SUPPORTS VALUATION EV/NTM EBITDA Multiples1: 10.0 9.0 8.0 Implied multiple 7.0 6.0 expansion with 5.0 continued growth of 4.0 recurring revenue 3.0 product lines 2.0 1.0 0.0 EFX…
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 Strong balance sheet and free cash flow allows Enerflex to pursue strategic growth opportunities to further expand the business. Revenues derived…
GROSS MARGIN PROFILE BY PRODUCT LINE1 1 For the three months ended March 31, 2020 versus the prior year period. 50
COMPOSITION OF BORROWINGS ( Canadian thousands) March 31, 2020 December 31, 2019 Drawings on Bank Facility1 144,167 121,328 Senior Notes due June 22, 2021 40,000 40,000 Senior Notes due December 15, 20241 163,964 151,374 Senior…
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