Enbridge Inc. · TSX:ENB
Enbridge — Investor Presentation (May 2022)
34 slides from Enbridge's investor presentation, May 2022
Slide 1: Investment Community Update
Modernizing Systems and Sustainable North American Growing Renewables and Other Achieving Net Zero Energy Drives Exports Low-Carbon Platforms Enbridge Inc. (TSX: ENB; NYSE: ENB) Investment Community Update May 2022
Slide 2: Legal Notice
Legal Notice Forward Looking Information This presentation includes certain forward-looking statements and information (FLI) to provide potential investors and shareholders of Enbridge Inc. (Enbridge or the Company) with information about Enbridge and its subsidiaries and affiliates, including manag
Slide 3: Enbridge Footprint
Enbridge Footprint Ireland Gas 170 MM people served; ~10% UK Transmission of LNG exports Germany Gas ~2 Tcf of natural gas France Distribution delivered; ~3.9 MM customers 12 MMbpd globally Liquids competitive refineries served Vancouver 1.8 GW1 of contracted Boston Power renewable energy Toronto Ch
Slide 4: Low-Risk Commercial Profile
Low-Risk Commercial Profile 40+ Diversified Highly Predictable 98% Industry-Leading Sources of Cash Flow Utility-Like Cash Flows Cost-of-service/ Contracted Financial Risk Profile 4% Power (Power Price Agreements) 12% Gas Distribution (Cost-of-service) 4% Canadian Gas Transmission (Cost-of-service/T
Slide 5: Strengthening Our Base Business
Strengthening Our Base Business Regulatory Update Built-in Revenue Cost and Productivity Escalators1 Improvements Texas Eastern • + ~C$125M EBITDA (% of EBITDA) Algonquin • + ~C$25M EBITDA Regulatory recovery • + ~C$10M EBITDA mechanisms BC Pipeline East Tennessee • + ~C$10M EBITDA ~15% Alliance U.S
Slide 6: Delivering on ESG Commitments
Delivering on ESG Commitments Environment Social Governance ESG Ratings / Rankings (Latest report as of April 2022) GHG Emissions Workforce Diversity Board Diversity MSCI ESG A rating Intensity 35% Gender 40% Gender 40% Top 5% of industry Sustainalytics 2018 2030 0% 2025 0% 2025 group2 Baseline Goal
Slide 7: ENB – A Differentiated Service Provider
ENB – A Differentiated Service Provider Today’s Success Factors… … in Action Line 3 Replacement Ingleside Export Facility ESG Leadership Net-zero emissions & diversity goals Undeveloped Terminal Land World-Class Execution $36B into service since 2017 Low-Carbon Capabilities • >300 route modification
Slide 8: Surfacing Shareholder Value
Surfacing Shareholder Value Revenue & Productivity Asset Sales & Monetization Capital Efficiency Optimization EV/EBITDA Recent Projects Multiple $5.7 ~$9B 400kbpd $6 $5 Asset sales DRA Expansion <3x of zero-capital Mainline since 2018 $4 Gas Pipe optimizations ~6x $3 Compression $2.1 $1.2B $2 $1.2 G
Slide 9: Surfacing Shareholder Value
Surfacing Shareholder Value 7.0x Improving Asset Returns 6.5x Balance Sheet Strength Simplified Structure (ROCE1) (Debt/EBITDA) ~8% 6.0x ~6.5% 5.5x Target Range: 4.5x – 5.0x1 5.0x 4.5x Sponsored Vehicle Buy In 4.0x 3.5x SEP EEP EEQ ENF 3.0x 2018 2019 2020 2021e 2022e 2023e 2024e 2017 2018 2019 2020
Slide 10: A Proven Investment Track Record
A Proven Investment Track Record Significant EBITDA1 Growth Superior Dividend Growth Industry Leading TSR2 (Billion, CAD) (Dividend per Share) (since 2008) $15.0-15.6 $3.44 11.7% 11.0% 8.1% $0.66 $2.5 2008 2022e 2008 2022e Midstream S&P 500 Enbridge Peers Our approach has yielded superior growth and
Slide 11: Our Approach to Energy Transition
Our Approach to Energy Transition Conventional Investment Required Core Business Remain Critical (Cumulative global investment, USD Trillions)1 $10.0 Gas Transmission Liquids Pipelines Gas Distribution & Storage $5.0 170 MM 12 MMBPD 15 MM Gas Oil People served Refining capacity People served $0.0 20
Slide 12: Capitalizing on the Energy Transition
Capitalizing on the Energy Transition Conventional Core Growth Low-Carbon Growth Optimize / Exports Modernize Solar/ RNG H2 CCUS Expand Assets Wind Gas 1 Transmission Gas Distribution Liquids 1 Pipelines Renewable Power Embedded conventional and low-carbon growth opportunities across our businesses
Slide 13: Predictable Organic Growth
Predictable Organic Growth Executing on Secured Up to $6B/year of Organic Growth Potential Growth (2021-2024) Supplements 2022-2024, drives post-2024 growth $17B Gas Transmission Gas Distribution up to ~$2.0B/year up to ~$1.5B/year • System modernization • System modernization • Capital efficient ex
Slide 14: Gas Transmission & Midstream
Gas Transmission & Midstream Up to ~$2.0B / year West Coast LNG Export Strategy Meeting Residential & • ~$3B of modernization through Commercial Demand 2025; $0.5B to $1.0B ongoing U.S. Northeast Gas Demand Supporting Electric • $4B+ in development to support Global Natural Gas Demand1 Generation Gr
Slide 15: Gas Distribution & Storage
Gas Distribution & Storage Up to $1.5B / year Growing Regulated • ~$4B of investment planned Assets through 2025; $1B ongoing ONTARIO Thunder Bay Montreal Ottawa Expanding Storage & • ~$1B of Dawn Hub & pipeline Sault Ste. Marie H2 Transportation expansions planned Visible Franchise Customer Growth1
Slide 16: Liquids Pipelines
Liquids Pipelines Existing Operating Up to $1.0B / year Leverage Capitalize on Operating • Execute on continued Capital Efficient Leverage (Zero Capital) productivity improvements Expansion Potential Express Capital Efficient • $2.5B+ of low cost mainline and Expansions market access expansions Grow
Slide 17: Leveraging Existing Assets for Low-Carbon Growth
Leveraging Existing Assets for Low-Carbon Growth Gas Transmission $0.5B Gas Distribution $0.5B Liquids Pipelines $0.5B through through through 2025 2025 2025 Hydrogen CO2 Oil Sands & H2 H2 Studies underway QUEBEC Fort Saskatchewan across system; CO2 Post-2025; CO2 Multiple opportunities H2 Multiple
Slide 18: Renewable Power
Renewable Power Offshore Wind Strategy Up to $1.0B / year UK Germany Behind the France • Up to $1B in behind the meter Meter Strategy In operation Under construction investments in near-term; $0.3B in Awarded Expanding Onshore execution In development Footprint • ~$2.5B of potential front of the met
Slide 19: Strong Portfolio
Strong Portfolio Business Mix (2022e EBITDA by business unit) • Consistent low-risk profile • Significant operating synergies 26% Gas Transmission • Robust equity returns 58% • Increasing free cash flow generation 12% Gas Distribution • Diversified growth opportunity set Liquids Pipelines 4% Renewab
Slide 20: Capital Allocation Priorities
Capital Allocation Priorities Capital Allocation Drivers 1 Protect Balance Sheet • Preserve financial strength and flexibility 4.5x D/EBITDA2 5.0x • Ratable dividend increases up 2 Sustainable Return of Capital to medium-term DCF/s growth • Periodic share repurchases1 60% DCF1 payout 70% • Prioritiz
Slide 21: Investable Capacity
Investable Capacity ($ Billion) 2022e Adjusted EBITDA1 $15.0-$15.6 Less: Cash Requirements2 ~($4.5) Distributable Cash Flow1 ~$11B Less: Dividends ~($7.0) (~65% payout) Add: Annual Debt Capacity3 ~2.0 Investable Capacity $5-6B Expect to generate $5-6B of annual investable capacity (1) Adjusted EBITD
Slide 22: Capital Allocation Framework
Capital Allocation Framework ($5-6B of Annual Investable Capacity) High Priority Investments Deploy Incremental Capacity Core Drive Sustainable Long- Excess to Drive Additional Growth Allocation Term Growth Allocation and Value $3-4B • Enhance returns from existing ~$2B Other Organic Growth annually
Slide 23: Share Repurchase Program
Share Repurchase Program Criteria Up to $1.5B1 Balance sheet metrics & financial flexibility Open market purchases Assessment of investment alternatives Non-programmatic Fundamental value of shares Share repurchases are a benchmark for capital investment and support further DCF/s growth (1) Announce
Slide 24: 2022 Financial Outlook
2022 Financial Outlook CENBRIDGE
Slide 25: Financial Highlights
Financial Highlights 2021 2022 3 Year Outlook Results Guidance (to 2024) Adjusted EBITDA1 $14.0B $15.0-$15.6B n/a ($13.9-$14.3B) $4.96 5 to 7% CAGR DCF per share1 ($4.70-$5.00) $5.20-$5.50 No change Up to level of medium-term $3.34 $3.44 Dividend (3% growth) (3% growth) DCF/share growth No change ~$
Slide 26: 2022 Financial Guidance
2022 Financial Guidance 27th Adjusted EBITDA1 DCF/share1 Dividends/share consecutive annual ($B) $5.20 - $5.50 increase $15.0 - $15.6 $14.0 $4.96 $3.44 $3.34 2020 2021 2022e 2020 2021 2022e 2020 2021 2022e Annual growth across all metrics reflects strong business performance and cash flow resiliency
Slide 27: Financial Strength and Flexibility
Financial Strength and Flexibility 6.0x 5.5x Debt/EBITDA Financial Parameters 2022e Target Target Range: 4.5x – 5.0x1 Debt to EBITDA ≤4.7 4.5 – 5.0x 5.0x Dividend Payout of DCF/s ~65% 60-70% 4.5x % of customers with Substantially all 4.0x Investment Grade Rating1 ~95% investment grade 3.5x Self-fund
Slide 28: Equity Self-Funded Model
Equity Self-Funded Model 2022 Funding Plan Industry-Leading Credit Ratings ($B) Reaffirmed rating on: ~$6.5 ~$7 Debt Maturities Baa1 June 2021 Debt Funding Stable BBB+ ~$4.5 Stable March 2022 Secured Growth ~$5 Capital Spend Internal Cash Flow1 BBB High July 2021 ~$1 Maintenance Stable Uses Sources
Slide 29: 2022 EBITDA Guidance
2022 EBITDA Guidance ($ Millions) 2022e Growth Drivers vs. 2021 Mainline volume recovery; Avg. 2.95 mmbpd2 Liquids Pipelines ~8,800 Full year of Line 3R Surcharge Ingleside Energy Center Acquisition Gas Transmission ~4,000 New assets placed into service Rate escalation, new customer adds,
Slide 30: 2022 DCF Guidance
2022 DCF Guidance ($ Millions) 2022e Adjusted EBITDA1 (from prior slide) $15,000-$15,600 Quarterly Profile EBITDA & DCF3 Maintenance Capital ~(1,000) Financing Costs ~(3,300) Current Income Taxes2 ~(450) Distributions to Non-controlling Interests ~(300) Cash Distributions in Excess of Equity Earning
Slide 31: Visible 3-Year Plan Outlook
Visible 3-Year Plan Outlook DCF/share1 Post-2024 Cash Flow Growth Drivers: 5-7% 1. Revenue inflators & productivity CAGR through enhancements Deploy 2024 Excess Revenue Execute Capacity 2. $3-4B of core capital allocation Secured Inflators & Capital Productivity Program 3. ~$2B of additional capital
Slide 32: Value Proposition
Value Proposition • Resiliency and longevity of cash flows <4.7x debt to EBITDA; BBB+ credit rating • ESG Leadership Up to $6B of annual organic capital investments • Strong balance sheet Highly visible 5-7% • Growing investable free cash flow DCF/s growth through 2024 • Solid conventional long-term
Slide 33: For More Information
For More Information Gas Distribution and Storage: Events and Presentations – Enbridge Day 2021 Gas Transmission and Midstream: Events and Presentations – Enbridge Day 2021 Liquids Pipelines: Events and Presentations – Enbridge Day 2021 Renewable Power: Events and Presentations – Enbridge Day 2021 E
Slide 34: Contact Information
Contact Information Jonathan Morgan Andrew Swales Senior Vice-President, Capital Markets Director, Investor Relations 1-800-481-2804 1-800-481-2804 [email protected] [email protected]