Transforming Natural Gas to Meet The Worlds Energy Needs PROVEN TRACK RECORD OF VALUE CREATION Focused on growth, maintenance, and handling of produced gas volumes. Complementary product lines and regions driving balanced revenue…
EXECUTIVE MANAGEMENT TEAM Marc Rossiter Sanjay Bishnoi Patricia Martinez President & CEO SVP, Chief Financial Officer Chief Energy Transition Officer & President, Latin America David Izett Greg Stewart Phil Pyle Helmuth…
ENERGY ACCESS IS FUNDAMENTAL TO SOCIAL PROGRESS Per Capita Energy Use vs. United Nations Human Development Index Score 5 Source: World Bank DataBank 2019; U.N. Human Development Reports.
CONSUMPTION TRACKS GDP GROWTH Global Aggregate Energy Consumption Global Gross Domestic Product (000 bcf equivalent) trillion 2010 US dollars 300 High Economic History Projections 1,000 Growth History Projections non-OECD 250…
GLOBAL ENERGY DEMAND IS SATISFIED BY A DIVERSE FUEL MIX Projected Global Energy Consumption (000 bcf equivalent per year) 1000 +42% Natural gas is the 900 ( 57,000 bcf) worlds fastest growing 800 source of fossil fuel 700 600…
WITH GAS CONSUMPTION INCREASING ACROSS ALL SECTORS Global Natural Gas Consumption by Sector ('000 bcf) 250 200 Over time, natural gas use History Projections is expected to accelerate 150 from increased industrial activity,…
SUPPORTING A LESS CARBON-INTENSIVE WORLD Pounds of CO2 emitted per thousand cubic feet Core products support a global transition Up to toward lower carbon fuel sources 49% Ancillary products support decarbonization 229 fewer CO2…
INCLUDING DURING AN ENERGY TRANSITION Electricity generation from selected fuels (AEO2020 Reference case) billion kilowatthours 6,000 Global energy demand will continue to grow, primarily in 5,000 the form of electricity 4,000 36%…
FOR WHICH ENERFLEX IS WELL POSITIONED Enerflex Cumulative Enerflex Firsts Energy Transition Projects 1982 1st e-Compression plant 150 CCUS projects 1983 1st CCUS plant 5 million tpy CO2 capacity 3 million hp Electric drive…
POSITIONED FOR GROWTH 12
ALL PRODUCED GAS REQUIRES COMPRESSION & PROCESSING (000 bcf) +57 200 191.4 150 Projected consumption 134.7 increase of 57,0001 bcf by 2050 requires billions of compression, 100 processing, and maintenance investments…
GLOBAL LEADER IN DELIVERING NATURAL GAS SOLUTIONS Business Overview* Revenue: 972 MM Employees: 2,000 Operating Locations: 57 Manufacturing Facilities: 3 Countries: 17 Fleet HP: 780,000 Manufacturing Facility 0 90 bcf/d…
COMPLEMENTARY OFFERINGS ON A GLOBAL SCALE Engineered Systems Customized offerings for: Gas Compression and Gas Vertically Integrated platform Processing Plants, refrigeration solutions, Cryogenic Plants, Electric Power Generation,…
SOLUTIONS FROM THE WELLHEAD TO PIPELINE 16
DIVERSIFICATION STRATEGY USA Complementary offerings of Canada diversified product lines in diversified geographies ROW Vertically Integrated platform provides differentiation Focused on growth and Engineered maintenance of…
ADDITIONAL FOCUS ON RECURRING REVENUE GROWTH Engineered Systems Recurring revenues stabilize financial performance Higher margins versus manufacturing Strategic goal of generating Integrated Turnkey (ITK) 50% of revenue from…
WHAT IS ASSET OWNERSHIP 1 Products engineered, built, 2 Leased to Customers for and owned by Enerflex Asset Ownership varying durations on a take-or- = pay basis Contract Compression + BOOM 4 3 Contracted revenues provide May…
RATIONALE FOR ASSET OWNERSHIP C in millions Asset ownership stabilizes and 800 100 balances financial performance against 90 a cyclical manufacturing business 700 80 600 70 500 60 400 50 40 300 30 200 20 100…
CONTRACT COMPRESSION Contract Compression = leasing of necessary upstream gas compression infrastructure Demand is driven by both new production and maintenance of existing volumes Take-or-pay arrangements oriented toward…
STRONG U.S. CONTRACT COMPRESSION FUNDAMENTALS U.S. Contract Compression Market1 (million horsepower) 16.0 History Projections Changing field conditions 14.0 require continual equipment 12.0 7% modification, making rental an CAGR…
CAPTURING OPPORTUNITIES IN A SUPPORTIVE MARKET Low 37% 190% 85% High 46% Mid 17% Growth of US fleet from USA contract Diversified horsepower 130,000 hp to compression fleet profile across contract 380,000 hp since…
BUILD OWN OPERATE MAINTAIN BOOM Any Engineered System or Build-Own- ITK product on a Build- Operate-Maintain Own-Operate-Maintain (BOOM) basis in all target markets Larger scale compression and processing facilities…
BOOM EXPERIENCE CONTINUES TO GROW Early Processing and Compression Development Compression Facility, Bahrain Facility, Oman Facility, Oman Early Production Compression Compression Compression Gas Compression Facility, Gas…
PRIORITY TO GROW RECURRING REVENUES Recurring Revenue C in millions 700 +8% CAGR1 618 610 597 600 537 521 Recurring revenue 500 486 471 462 growth through organic investment 303 299 400 375 Recurring revenue has and…
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 27
OPTIMIZED PLATFORM POSITIONED FOR GROWTH 1 2 VERTICAL INTEGRATION FINANCIAL STRENGTH Differentiated global Manufacturing cash platform with product flows fund investment in line synergies Asset Ownership platform 3 4…
COMMITTED TO SAFETY 2020 Global Consolidated Safety Record:1 0.04 0.61 0.13 LTI TRIR MVIR Total of Lost Total Recordable Motor Vehicle Time 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 30
FOCUSED REGIONAL PRESENCE 31
USA USA1 Eng. Systems 185 MM Service 139 MM Gas infrastructure Rental 91 MM Total Revenue 415 MM Fleet: 380,000 HP Average Fleet Utilization: 85%2 demand driven by gas production from US shale plays % of Consolidated…
REST OF WORLD LATIN AMERICA Rest of World1 Eng. Systems 46 MM Service 100 MM Rental 213 MM Total Revenue 359 MM Fleet: 350,000 HP Regional gas production is expected to grow by % of Consolidated Revenues1 approximately 80% by…
REST OF WORLD MIDDLE EAST / AFRICA The Middle East accounts for 35% of the worlds proven gas reserves 145,000 horsepower of owned and installed gas Rest of World1 Eng. Systems 46 MM % of Consolidated Revenues1 compression and…
CANADA % of Consolidated Revenues1 Canada 16% Canada1 Eng. Systems 130 MM NGL recovery drives Service Rental 61 MM 6 MM USA 52% infrastructure demand in liquids-rich basins ROW Total Revenue 197 MM 32% Fleet: 45,000…
FINANCIAL OVERVIEW AND PROSPECTS 36
REVENUE THROUGH COMPLEMENTARY OFFERINGS Regional Revenue C in millions TTM Q2 2021 2020 37% 26% 32% 2047.3 49% 25% 31% 1696.2 1703.3 502.9 1628.9 1553.2 1501.7 299.9 1405 Engineered Systems Service Rentals 529.4 494.2 348.8…
DISCIPLINED GROWTH THROUGH STRATEGIC INVESTMENTS CAPEX, M&A and ROCE Less Product Organic cyclicality, sale cash sustained flows Reinvestment investment + M&A Leads to growth + 1.5B reinvested over returns the past nine years…
BUSINESS MIX DRIVES PROFITABILITY EBITDA and EBITDA Margin % C in millions Increased EBITDA coupled with 400 16.8% 16.9% 18.0% higher EBITDA margins 16.1% Supported by an asset ownership 15.7% 350 16.0% 300 13.8% 13.2% 14.0%…
GROSS MARGIN PROFILE Revenues (C in millions) and Gross Margin %1 by Product Line Q2 2021 Q2 2020 Engineered Revenue 65.0 149.2 Systems Gross Margin % 20.1% 16.6% Revenue 61.9 61.2 Rentals Gross Margin % 66.5% 64.6%…
POSITIVE FREE CASH FLOW AND BALANCE SHEET STRENGTH Free Cash Flow Before Net Capital Spending* Net Debt to EBITDA C in millions 240.8 2.38 190.4 1.79 143.2 1.54 1.60 136.2 126.5 125.3 1.19 114.2 112.8 1.09 105.1 0.97…
DIVIDEND HISTORY Annually (C/share) 0.50 0.46 0.45 0.42 0.40 0.38 The Company has maintained a 0.35 0.34 0.34 0.34 0.30 dividend through the 0.30 0.28 0.24 cycles since 2011 0.25 0.20 0.18 0.15 0.10 0.08…
IGNITING THE FUTURE OF ENERGY 43
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 454.1 Up to 79% increase in EBITDA1 from next 1B of reinvestment 100.0 79% 100.0 3-year average EBITDA1 254.1M 254.1 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…
PIVOT TO RECURRING REVENUES SUPPORTS VALUATION EV/NTM EBITDA Multiples1: 10 9 Implied multiple 8 expansion with 7 continued growth of 6 recurring revenue 5 product lines 4 3 2 1 0 Jun-20…
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…
COMPOSITION OF BORROWINGS ( Canadian thousands) June 30, 2021 December 31, 2020 Drawings on Bank Facility1 37,156 84,369 Drawings on Asset-Based Facility1 43,260 Senior Notes due June 22, 2021 - 40,000 Senior Notes due December…
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