Brookfield Business Partners L.P. Q3 FY2025 earnings call

• Anuj highlighted strong quarter with $2B+ proceeds from capital recycling, $1B borrowed repaid, $160M+ unit/shares bought back, $525M in strategic acquisitions. Plan to simplify corporate structure by converting units/shares to new Canadian corp. to improve liquidity. AI presents productivity improvement opportunities, and the company is positioned to leverage AI. - Adrian provided updates on Chemelex: completed carve-out, strengthened management, 100-day plan for cost savings and commercial initiatives, manufacturing footprint optimization. Updates on Antylia Scientific: strengthened leadership, enhanced go-to-market efforts, digital capabilities improvement. - Jaspreet reviewed financial results, discussed balance sheet with $2.9B pro forma liquidity, renewed normal course issuer bid for unit/share buybacks.

Industrial segment: Third quarter adjusted EBITDA was $316 million compared to $500 million in the prior period. Including tax benefits, segment performance increased 17% year-over-year. Advanced energy storage operation saw higher volumes and margin improvement. Engineered components manufacturer had same-store adjusted EBITDA increase after partial sale impact. Business Services segment: Third quarter adjusted EBITDA was $188 million compared to $228 million last year. Impact from sale of partial interest in dealer software and technology services. Residential mortgage insurer benefited from resilient demand but had timing impact on revenue recognition. Dealer software and technology services had stable bookings with renewal activity offsetting customer churn. Infrastructure Services segment: Third quarter adjusted EBITDA was $104 million compared to $146 million same quarter last year. Impact from sale of offshore oil services shuttle tanker and partial interest in Work Access Services. Lottery Service operation had stable performance with margin improvement from productivity gains and favorable mix.

• Continues to be opportunistic with capital allocation, including buybacks and growth investments. - Pipeline of investment opportunities is robust, with confidence in deploying capital in great businesses. - Expect benefits from ongoing strategic investments in businesses like CDK to materialize in the next 12-18 months.

• Regulatory issues with La Trobe, a disclosure issue that the team is working through but hasn't impacted underlying fundamentals. - Potential delays in receiving tax credits due to U.S. government shutdown affecting processing. - Market conditions in Brazil and other regions could impact the monetization of assets like BRK.

Q: Regarding BRK's potential IPO, status and Brazil market conditions?

A: Jaspreet said BRK is a mature investment, keeping optionality open, Brazil capital markets difficult but interest rates peaked.

Q: BRK's investment activity, focus on organic growth vs inorganic?

A: Focus on operational initiatives to increase margins and EBITDA, and appropriately allocating capital to develop existing concessions.

Q: La Trobe's regulator issues impact?

A: Anuj said it's a disclosure issue, not impacting underlying fundamentals.

Q: Westinghouse and asset holding strategy?

A: Anuj said role is to transform vital businesses, optionality to hold businesses longer if makes sense.

Q: CDK's results dip, details on strategic investments?

A: Adrian said continued investment in technology modernization, margins ahead of purchase, churn stabilized. Jaspreet said bulk of year-over-year decrease related to technology spend.

Q: Tax credits cash receipt status?

A: Jaspreet said still awaiting, delays due to U.S. government shutdown.

Q: Pro forma liquidity and deployment?

A: Jaspreet said capital allocation for growth and buybacks, opportunistic with robust pipeline. Anuj said investment environment good, strong pipeline of opportunities.

Q: DexKo's outlook?

A: Adrian said pleased with performance, improving market with early recovery signs expected in 2026.

Q: AI benefits across other investments?

A: Adrian discussed AI benefits in CDK (data for workflow improvement), Scientific Games (lottery behavior understanding), DexKo (sales patterns and inventory management).

Q: Capital allocation after $2B proceeds?

A: Jaspreet said corporate leverage comfortable, will pay down debt with proceeds, opportunistic with acquisitions and buybacks.