Q1 2021 Brookfield Business Partners LP Earnings Call
Thank you for standing by and welcome to the Brookfield business Partners first quarter 2021 results conference call and webcast. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone as a reminder, today's program is being re.
Accorded and now I'd like to introduce your host for todays program, Alan Fleming Senior Vice President of Investor Relations. Please go ahead Sir.
Good morning, and thank you for joining Brookfield business partners 2021 first quarter conference call.
Before we begin I'd like to remind you that in responding to questions and talking about our growth initiatives and our financial and operating performance. We may make forward looking statements. These statements are subject to known and unknown risks and future results may differ materially.
For further information on known risk factors I encourage you to review our filings with the securities regulators in Canada, and the U S, which are available on our website.
On the call with me today is Cyrus Madden, Chief Executive Officer, Denis Turcotte, Chief operating Officer, and Jaspery, Dow Chief Financial Officer, I'll turn the call over first desires to provide an update on our business and Dennis will then discuss some recent activities at brand Safeway.
<unk> will finish with a review of our financial results will then be available to take your questions and with that I'll pass the call over to Cyrus.
Thanks, Alan and good morning, everyone and thanks for joining us on the call today.
We had a strong start to the year, we generated company <unk> a record company F O during the quarter and most of our businesses have fully recovered from the unprecedented volatility of the last year as as we have discussed in the past, we build value and B B U by buying good businesses at reasonable.
Mrs and improving their performance and cash flows.
And as we make progress on different initiatives to surface value.
We expect to see some variability in our earnings and cash flows.
But we've been really pleased with how our operations continue to perform and we're optimistic looking ahead all of our businesses are very well positioned to benefit as global economies continue to reopen vaccination rates accelerate and things get back to normal.
We've also been pushing forward key initiatives that will drive growth in our business in April we completed the privatization of our Canadian mortgage insurance business Sei Jin <unk> invested about $185 million for our share of the transaction, which increased our ownership interest to 40%.
Sage and is now one of <unk> largest investments and I thought I would spend a little bit of time today reminding you why we like this business and what we're doing to improve their returns it generates.
Sei Jin provides Canadian mortgage lenders with insurance against homeowner default.
Mortgage insurance is mandatory in Canada for home purchases with a down payment of less than 20 per cent.
<unk> insurers mortgages for only owner occupied homes, which average around $380000 Canadian or 300000 U S D.
Buyers are typically young first time homebuyers with growing household incomes.
Like many businesses, we own <unk> as a market leading essential service provider.
Historically, the business has generated consistent earnings and reasonable returns on equity across both housing and economic cycles.
Even last year sales.
<unk> has not seen an increase in default rates.
Strong government support programs and reduced discretionary spend has led to falling household debt levels.
We were able to acquire staging for book value.
And as a private company, we think we can run this business more efficiently.
As part of the privatization.
<unk> raised approximately $750 million of long dated favorable financing.
And it's now operating with $500 million of excess capital.
<unk> will distribute this cash later this year.
Subject to regulatory approvals of course and should also continue to provide ongoing distributions to be Bu.
Now over the longer term, we remain confident that we can improve <unk> return on equity to at least 15% probably higher than that.
Apart from that we continue to progress our capital recycling activities during the quarter, we generated about $300 million of net after tax proceeds for <unk> from the sales of public securities and graph Tech common shares.
We've also been taking advantage of low interest rates and strong capital market environment to refinance borrowings and enhanced capital structures.
Claris, Westinghouse and graph Jack all repriced the borrowing rates on their respective term loans during the quarter.
Public markets are robust and we're exploring monetization opportunities at <unk>. We've made considerable progress on our business improvement plans focused on optimizing its U S operations and today the business sits at the forefront of technology development as the industry shifts to advanced batteries.
Across all platforms, including electric vehicles.
There is strong capital market demand for high quality industrial businesses, and we believe <unk> is in a good position to garner a strong following in the public market.
To that end, we're exploring a potential public offering of <unk> shares if.
If we do move forward proceeds from a potential offering would be expected to reduce <unk> leverage.
We're in a great position today and are continuing to work on a strong acquisition pipeline of high quality businesses, including those in health care and technology services, so with that I'm going to turn it over to Dennis.
Thanks <unk>.
Good morning, everyone.
Our business operations team continuing to work closely with the management teams across all our portfolio companies on initiatives to surface value strength in their market positions and enhance their underlying cash flows as Cyrus as mentioned earlier many of our operations are very well positioned to benefit as global economies continue to reopen.
And business conditions normalize.
On one in particular I thought I would spend some time today talking about brand Safeway and some of the things. The team is working on to position the business as activity levels recover.
It's been just over a year since we acquired an interest in the company as many of you know the business provide work access solutions to customers predominantly in the industrial and commercial end markets. It's.
It's the market leader in North America, and generates about two thirds of its revenue from recurring critical maintenance activities at customer sites.
The business operates in a highly fragmented industry and its size and scale make it an attractive platform for meaningful consolidation opportunities.
Over the past year activity levels in the business were impacted by shutdowns and restrictions at commercial sites and the deferral of annual maintenance outages at industrial locations. In response, Bryan Safeway has been very focused on managing its highly variable cost structure, which benefits from our flexible labor force and attractive.
Contracting terms.
The business is also <unk>.
Action from permanent cost reductions through organizational restructuring renegotiating supplier contracts.
Do think G&A spend and exiting lower return locations all to align the organization to its customer base improve its overall cost structure and strengthened its industry leading position.
As activity levels normalize these actions should improve brand's safeways long term profitability.
From a market perspective, we're beginning to see signs of improving momentum across many of our brands Safeway its core industrial end markets in refining petrochemical and power generation.
Customer profit pressures from the impact of depressed commodity prices last year are abating and.
And with the pace of vaccinations in North America accelerating customers are revisiting required maintenance work that has been deferred over the last 12 months.
Much of this work can only be pushed out for so long and as business conditions continue to improve.
Safeway expects to see increasing levels of maintenance and turnaround activity. Returning later this year.
The business is also well positioned for longer term trends driven by the expected increase focus on infrastructure spending in the U S.
The company is uniquely positioned to serve this market through its extensive coverage of the U S domain knowledge and specialty services and innovations that increase worker productivity.
In addition, Brian safely is continuing to focus on a strong pipeline of acquisition opportunities in its core and adjacent markets over the last year. The business has closed on three add on acquisitions, which further expand its geographic footprint in new markets and bring additional capabilities and product offerings to the business.
Brian Safeway has been able to execute these acquisitions at accretive EBITDA multiples prior to synergies, which further increase returns and future growth opportunity.
One of the most valuable attributes of the brand Safeway platform is the positioning they enjoy inside defense as we call. It given their strong relationships and ability to respond quickly to large scale customers. The company has proven that it is able to support customers in a value added way, providing new products and services.
And we will continue to benefit from these win win relationships in the future.
While it has been a challenging environment from brands if we over the last year. The management team has done a great job responding and the business is emerging in a very strong position. We remain confident in the long term resilience of the business and we expect to see a full recovery and performance as activity levels continue to normalize through.
At the end of this year and into 2022.
With that I'll hand, it over to John Sprague.
Thanks, Dennis and good morning, everyone.
Now I'll provide a quick update on our financial performance for the quarter.
Sorry, Rick mentioned, we're off to a strong start to the year.
B B you generated company EBITDA of $387 million for the first quarter of 2021 compared to $294 million last year.
Company has therefore increased to 545 million or $3.67 per unit compared to $194 million or $1.29 per unit in the prior period.
Company <unk> include $195 million after tax gain on the sale of grass Tech common shares during the quarter.
And 133 million after tax gain on the sale of public securities.
The increase from first quarter company EBITDA over 2020 reflects improved contributions from our business services and industrial segments, which were partially offset by reduced contributions from our infrastructure segment.
I'll now go through each of the segment performances, starting with business services.
Within our business services segment, we generated company EBITDA of 104 million.
This is a meaningful increase compared to last year.
CJ contributed company EBITDA of 39 milligram results benefited from strong new underwriting activity and higher premiums earned this quarter as well as lower levels of mortgage default rates, which were supported by a strong housing market and home price appreciation.
Helps growth generated company EBITDA of 18 million in the quarter.
Performance was strong driven by a recovery to pre pandemic levels.
<unk> improved performance at the flagship northern beaches hospital in Sydney.
Health scope continues to operate with higher than normal costs associated with increased health and safety measures for both patients and staff.
Moving on to our construction business.
Multiplex reported company EBITDA of 20 million for the year compared to a loss of 47 million in the same period last year.
Productivity levels, and multiplex have normalized and project sites or open across most regions during the quarter.
Bidding activity has also improved.
During the quarter multiplex secured new contracts in Australia and in the U K.
This is increased backlog to approximately 7 billion for the business.
Moving onto our industrial segment, we generated company EBITDA of 172 million for the first quarter.
<unk> reported strong performance and company EBITDA of 125 million in the corner.
Total battery sales volume increased 24% year over year in Q1.
Aftermarket demand continues to be very strong and we're seeing a gradual recovery in original equipment battery volumes as well.
During the quarter <unk> recognized an impairment charge primarily related to the closure of one of its north American recycling facility.
And this is part of the broader optimization of its U S operations that we've talked to you about in the past.
Crafting generated reduced company EBITDA of 22 million this quarter.
This is the result of our lower ownership interest and nor have realized pricing of graphite electrodes.
During the quarter, we continued to monetize our <unk> position, which reduced our ownership and resulted in a change in control and the deconsolidation of our investment in graft.
As a result company <unk> for the quarter includes the after tax gain of $195 million from the sale of common shares during the quarter.
Historically these gains on monetization on the sale of craft ex shares have been recorded in equity as there was no change in control prior to Q1, 2020 one.
Going forward, maybe you will account for graphic is an equity accounted investment.
And finally, our infrastructure services segment generated company EBITDA of 136 million for the first quarter of 2021.
Westinghouse reported company EBITDA of 71 million results from the quarter affected normal seasonality based on the scheduled timing of customer outage activity in the U S.
This resulted in reduced outage volume and fewer planned fuel assembly shipments compared to prior year.
The business is still performing very well and remains on track to generate targeted full year EBITDA growth.
Altera infrastructure contributed reduced company EBITDA this quarter compared to the same period last year due to reduced contributions from its F BSO and have peso operations.
Altera shuttle tanker business remains stable.
We are also reviewing options to reduce leverage and reposition the business longer term.
And finally, Brian Safeway contributed $18 million in company EBITDA for the quarter as activity levels continue to gradually recover.
Impacts from ongoing restrictions at customer sites and near term project delays.
Turning to liquidity liquidity remains strong and we ended the quarter with approximately $2 4 billion of liquidity at the corporate level.
This includes $389 million of cash and marketable securities as well as approximately $2 1 billion of Undrawn credit facility.
We remain very confident in the strength of our financial position to support our businesses and continue to fund our growth activities.
With that I'd like to close our comments and turn the call back over to the operator for questions.
Certainly ladies and gentlemen, if you have a question at this time. Please press Star then one on your Touchtone telephone. If your question has been answered and you'd like to remove yourself from the queue. Please press the pound key.
First question comes from line of Devin Dodge from BMO. Your question. Please.
Great. Thanks, good morning.
Cyrus in the letter there were some comments related to the new investment environment.
More companies are electing to go public given the strong market conditions. Just wondering if this has been concentrated in certain sectors and can you comment on other trend at this trend applies to corporate carve outs as well.
Yeah, I would I would just say, it's sort of a broad comment and to just to give you a little bit of color. We were quite active in three or four situations over the last three four months and.
In each of them.
We are we like the businesses, but we didn't ultimately get to where we need it to be for different reasons.
You know.
One of the one other sellers decided to do an IPO instead.
Figuring they could get a much higher valuation and other one was able to do a large scale dividend recap just given where finance rates are.
In one situation, we were just out there so.
I'd just make it as a general comment and I'm not sure. It's too early to call. This a trend, but it's certainly just given where capital markets are recently, what we've been observing and we've chosen to be disciplined and continue doing what we're doing.
And just figuring look it's probably a good time to be a seller in this environment.
But that's that's what we've been experiencing.
Okay.
Good color, maybe just a question on Westinghouse.
There seems to be a shift in sentiment in the U S towards being more supportive for the nuclear sector is this something that youre seeing in the business and if so does this impact the timing of your potential monetization efforts.
Well why don't I I'm going to let.
Dennis speak too.
What you're calling a shift in sentiment, which I'm not really sure theres been a shift I think both.
Recent U S administrations have been supportive of nuclear but Dennis can give you a little bit of color, but just on timing of monetization.
What I would say is.
This is a great company Super high quality business Super High quality management team.
Incredible market position and seldom do we find companies with all of those characteristics and highly highly cash generative.
So we're in no rush to sell this hour our intention our current intention for sure is too.
Maintaining control at least control of this company for a long period of time.
If we do decide to sell it'll be probably be.
We will look to sell a minority interest or something like that.
But otherwise we're very very pleased with the business and we.
I think it has considerable upside from here from what we've already achieved.
Dennis maybe you can comment on.
I'm, saying.
Sure sure.
As <unk> mentioned I think politically that support has been there for for quite a while as governments are struggling with their power needs growing in every sector.
They understand the reality of the importance of nuclear and providing Baseload power I would agree with you, though that youre starting to see sentiment shift in a positive direction more broadly whether it be in the public price whether it be in even different stakeholder groups environmental groups itself.
That tend to often Swapes book opinion are all starting to recognize that if the world wants to achieve zero carbon it will only be through expanding nuclear capacity, there's no no other way around it.
Okay. Thanks, a lot that's good color I'll turn it over thank you.
Thank you. Our next question comes from the line of Geoff Kwan from RBC capital markets. Your question. Please.
Hi, good morning.
Just wanted to go back on Westinghouse just more so was I think that they've done a couple of bolt on acquisitions or announced I think in the past week or so just wondering if theres any color you can provide on kind of the combined purchase price as well as the combined EBITDA debt it would be additive to westinghouse's results.
Sure Yes.
Yes, they did just that.
Although it's not finalized it was announced there was an agreement and will close on that very shortly given its small tuck in acquisitions here in Canada.
The company that will provide engineering services and.
And a variety of kind of technical capabilities that help us service the can do market in Canada.
And yeah, we will continue to do that these these are small in nature there.
They typically are in the $10 million to $20 million revenue range and they've got the typical kind of margins you would expect.
That's plenty day, 28% margins, depending on which acquisition you referred to and we will continue to do that we've got a growing a large and growing pipeline.
All linked to providing capabilities that directly support our strategic plan moving forward.
Okay. That's helpful and actually maybe if I can ask a broader question because I think Westinghouse has been some other or others in terms of bolt on deals since you made the acquisition.
If I remember correctly the trailing EBITDA when you when you acquired Westinghouse was I think was around $450 million I think it's a little bit below that but right around where it is today like how much would have beat with these bolt on acquisitions, obviously, the new ones that wouldn't be included in the current numbers, but what has been done historically like how much is that added to the EBITDA at Westinghouse word.
Versus where it is today.
Maybe I'll I'll get Jeff Sprague to give you more specific numbers.
Hi, Jeff.
So I don't think we've ever talked about kind of the exact amount of the contribution.
Dennis alluded these are smaller bolt on acquisitions, they were more strategic in nature, where.
We've got an opportunity either to expand our presence in a particular geography or expand the service offering.
And you know the initial EBITDA contributions are expected to kind of growth and that's the investment that we're making I'd say day one.
Theyre not largely meaningful within the context of the overall business.
They say you know 5% to 10% if even that.
Okay.
My next question was Cyrus you were talking about technology, and I know that.
The Brookfield asset management, they've talked about wanting to make more investments in this more kind of mature technology.
But this would be call. It I think kind of I'll call. It a newer vertical for Bebe just wanted to understand I guess from from your perspective on what's been done in terms of sizing up the sector, where you is there a thesis are there sub sectors are there kind of people that you brought in.
To have a lot of experienced net or did you already have it in and just kind of re delegate.
Brookfield asset management has.
Some other technology investments.
Within the Empire.
Yeah. So so we're focused more on mature technologies.
Yes.
Let's put it this way for buying software, it's gonna be software companies that generate cash flow and where we see growth potential and where.
Today, we're more focused on technology services.
And ever rise would be a great example of a you know an initial tech services business and we've seen several similar similar business sense.
So I think that's an easy way out for us to grow into it.
We have actually put together a standalone call it technology team.
We've hired some external resources.
Added a few of our existing people.
And are very focused on it.
Similarly, we're doing the same thing in health care. We've made as you know made a very large health care investment, but we are adding resources in health care as well.
Okay and just my last question was I think Josh you were talking about with respect to Altera mentioned, reducing leverage is that something like.
Putting net.
I think more equity into it or is it something else and would that be <unk> and its partners or would that maybe be some other entity that might be brought in.
Look it's Jeff at Cyrusone line I'll answer the question.
In all likelihood it's going to require some form of equity now.
And we haven't finalized anything so this may move around a little bit, but we have we are considering.
Some sort of equity infusion that would come from BB units partners I will remind you that.
We apart from having equity investing in the company. We also are a large debt holder in the company as well.
So they're there.
Several ideas we're working on.
To deleverage the business.
But but those are part of it in a park apart from that we will also.
Extend debt maturities and.
You know just bolster the balance sheet generally.
Okay, great. Thank you.
Thank you. Our next question comes from line net carry Ho from T shirt and capital management. Your question. Please.
Great. Thanks, and good morning, maybe just staying on Alterra, sorry, you mentioned potential repositioning of the business longer term can you elaborate what youre, considering and how long that repositioning might might take.
Yeah look so look I'll, let Dennis maybe talk to what's going on in the business a little bit so to give you just a little bit of flavor of what we're seeing in the what the business financing in the marketplace, but as I said, it's early days for US we haven't reached any conclusions were considering.
A bunch of different alternatives, but the objective is to.
Have a long term long term sustainable balance sheet for the business. That's our primary objective and there are many ways, we can do that.
Might even involved selling one or two or three assets or something like that but we haven't we haven't reached any conclusion yet.
But it might be helpful for Dennis to give you a little flavor of what we're seeing in the business.
Sure Cyrus.
As everybody I think you can imagine the impact of COVID-19 on the oil sector. The rapid drop in global consumption the associated impact on pricing, that's remind everybody oil actually turned.
Negative price for periods of time over the last 12 months. So that has had ripple effect through the sector.
And has caused a lot of.
The variation in operating rates of some of our customers. So the net effect has been youll see that corresponding ripple effect through our income statement.
Good news here, though to me is we continue to operate the assets extremely well and we're very focused on continuing to improve the business and now that oiled sprung back.
Customer interest is really started to improve.
As it relates to Repurposing and re contracting some of our vessels in particular in the <unk> segment. So I think there will be discontinued.
Volatility to a degree because these are big assets and people are making decisions around contracting and re contracting that extend multiple years.
But oh.
I see more positive signs in the industry than I do negative.
Okay got it that's helpful. And then my next question just on the public Securities holding you saw some of that in and last last quarter and also in Q1, but you mentioned I think you still maintain some exposure there just wondering the thinking behind that do you still see potentially.
Potentially taking one or two of those private.
Just wondering if you can share some color on that.
Hi, So I'll take that so you're right we've Phillips.
So look some of our position in Q4 and then.
Our debt position in Q1, we're still holding about a third of the original positions.
And I'd say.
We wanted to kind of keep the option open.
And these are these are great businesses that we've been following for a period of time and the idea, but it's always been that if we could do something broader that would be interesting.
So for now we're going to maintain our position and be opportunistic if we're able to do something broader.
That's great otherwise you know there is there.
<unk> just be upside in the equity position.
Okay got it.
Thank you.
Thanks.
Thank you. Our next question comes from the line of Andrew Kuske from Credit Suisse. Your question. Please.
Thanks, Good morning, I'll start with a high level question. If you could maybe give some color around your businesses where you've experienced.
Revenue enhancements either from just outright unit sold versus the <unk>.
Sure two quarters or pricing improvements that you've had on a per unit basis, and then any color around just the cost reductions and the impact you've had this clearly I think a year ago. When we had this call.
There was.
So triage upward really stripping out costs given the environment that we're in at that point in time, so any color on those topics would be appreciated.
Sure.
Look we have such a wide.
Disparity of businesses here that it's hard to make general comments, but.
Probably the business is most relevant to your question are these industrial whether they'd be manufacturing base for service based businesses.
And.
As I've mentioned on previous calls the management teams have just done phenomenal jobs through through 2020 to cut costs cut discretionary spending et cetera, and all of them are really looking at every opportunity to use that to have permanent structural reductions.
And you know, even though we are seeing some inflation manifest in certain areas in particular in some of the commodity sectors.
And we're anticipating over the next year or two I'm sure there'll be a little bit of creep as it relates to labor costs. These structural cost improvements that have been made I think are going to serve us well and we don't anticipate a reduced margins and in fact see expanding margins in almost all of our businesses.
Predominantly on the cost side.
Because we're not we're trying not to bank on anything on the revenue side from a direct pricing point of view, although we have price increase initiatives going on across all of our businesses as well. There is always this what I, what I call hits Teresa sort of time lag right in all these businesses are in effect supply chain.
Businesses in.
When you get increases going on in the early stage lengths from those supply chain. It just takes time for costa rolled through and similarly it too.
<unk> four pricing too.
Price increases to be implemented.
Okay.
Helpful. And then maybe if I could just delve into the <unk>.
Multiplex in the book of business, there that you've got in the backlog.
Is there a decomposition you can give with the backlog between say Rosy office infrastructure is how does the backlog look and then prospectively what opportunities do you see.
Yeah, Andrew just a.
Hold on a second here if we have that readily available will tell you and otherwise we're gonna have debt.
Let people know another time, but.
Yeah.
So it's a high level and we can definitely follow up Andrew but.
High level. The backlog is again, you know, Australia and the U K.
Australia is a bit larger.
Then London.
And.
It's across kind of our sectors, so office or residential.
No not not that much variability we won a significant hospital.
Contract this quarter in Australia, which is gonna be a large part of the backlog.
About a $1 5 billion Aussie dollars and this is a this is public information.
So that that is a new large contracts that we did win this quarter and you know so a significant portion of the backlog.
Almost <unk> 20 per cent now has the health sector, but outside of that there's nothing that sticks out as kind of a well balanced between office residential.
And kind of tourism and leisure system.
Total.
Very helpful and if I could just sneak in one more and just running with a thesis if you'd do inject capital into altera or do something with the maturity schedule on the debt.
Do you see an opportunity to really expand and diversify the business into other things like LNG and NGL tankers, just to really grow the overall business.
All of those things are on the table Andrew so.
That's part and parcel Stefan is fixed the balance sheet and then step two is longer term how do we position this business.
So that if it's successful for the long term, but all of those things or opportunities.
Okay, great. Thank you.
Thank you. Our next question comes from the line of Nick <unk> from CIBC capital markets. Your question. Please.
Yes. Thanks.
Just on the subject of the <unk> IPO I appreciate that you can't reveal anything about the expected pricing range the implied valuation there.
Help us understand what motivated you to pursue a publicly public listing for that business just given the clearest was only acquired two years ago and it sounds like you're still engaged in the execution of your thesis for that investment.
Yeah. So look Nick we are in a quiet period. So we have to be extremely careful what we say here.
But but I'd just say generally for all our investments.
If we've made progress in our transition plan.
To enhance cash flows if we see very.
Clear runway to continue making that progress.
And then if there is a buyer buyer market that is highly interested in one of our assets.
We would consider beginning to monetize at that point in time.
Or or raise equity too.
Deleverage the business at that point in time. So that's that's really our broad general thinking and I don't think it's any different than the clarity of the situation.
I talked about earlier public market valuations are strong.
That's creating.
Creating obvious competition from private equity buyers the flip side of that it's also providing great opportunities to begin monetizing some investments.
Yeah, Okay fair enough.
And then do you have a read on the tax reform that's been proposed south of the border and how that might impact some of the U S domiciled.
Our operations across the portfolio like the step up in the corporate tax rates relatively straightforward, but is there any other nuances to the plan that stands out that could have an impact either positively or negatively for the portfolio companies.
Hi, Nick Yes, so we've had our tax teams, obviously gone through it and looked at you know any proposed changes and we don't see any material impact just given kind of our structure and the way we structure. Our investments we were not anticipating any material impact from any of the changes.
That have been currently proposed.
Okay. That's good.
That's it for me thank you.
Thanks.
Thank you. Our next question comes from the line of Jimmy <unk> from National Bank.
Question. Please.
Yeah. Thanks, good morning.
First question on the on the brand Safeway and and talking about the upcoming improvements there and and.
And sort of back half of <unk>.
This year.
Just curious I mean, your purchasing business in January 2020, and it's basically just operated through COVID-19.
Give us a little bit more color as to what like a optimally running brand SaaS Safeway looks like in terms of EBITDA share and revenue share.
Yeah.
Ah I see kind of high level.
We generated 18 million this quarter at our share from Brian safely.
And that's definitely been impacted by the deferrals and the lower activity levels that we're seeing.
And I see from the normalized basis, we would expect that.
EBITDA would be at least 20 to 25 per cent over kind of where we're seeing and then you know there.
Also the smaller part of the business and the majority of this business is recurring maintenance contract and the other part of the business is kind of more new construction work.
And that's going to have variability and get a normalization of that side is really dependent on.
Kind of when do we see that activity come back.
Okay, Great that's helpful.
In the business services segment.
The I guess, what would be called the the other components that kind of includes some other recent transactions within dose Ara number rise.
I got a decent contribution.
This quarter to EBITDA is that something that's repeatable or is there anything underneath the surface that.
That you can call out and highlight for us as to the sustainability of that performance.
Yes.
So you said that in the star.
Well I don't like it.
The other businesses, that's not Genworth health scope and multiplex.
Oh, just sorry, just within business services.
Yes.
Yeah Phil.
The Genworth multiplex other larger contributor I would say the the other business says.
And held scope of course.
But outside of those three the other businesses are fairly small there's a large number of them. The more significant ones you know endo star they ever ice transaction.
We just closed as well as green energy.
Those businesses for the quarter have been operating operating fairly.
On plan.
Green energy is a volume business than with some of the Lockdowns that we saw in the U K and here in the quarter, we did see some impact on that business in Q.
Q1, but it was starting to recover a bit in March as.
Lockdown restrictions were lifted.
So I'd say, you know, maybe theres, a little bit of normalization in that business.
And then you know in the star performer.
Performed well in the quarter, but the situation on the ground in India with COVID-19.
The health crisis, we're monitoring that closely.
And we'll see if that has an impact kind of going forward, but I'd say, there's a few puts and takes but on balance you know listen.
Number of smaller businesses and I'd expect kind of fairly stable ongoing contribution.
Okay, great. Thank you and then.
I guess higher level and getting back to the commentary about activity on the on the purchase side and for whatever reason, whether it's all relative.
Moving on the wall lost out on the bed.
Could you give us a little bit of color as to what what industry norm or themes, we are targeting with some of those potential acquisitions that didn't occur.
And then the follow up to that is as we see the query us IPO and speculation around a westinghouse fail or are these capital recycling transactions are required pre.
Precursor to a larger deal or are there.
How else are you thinking about deploying capital.
Okay. So I'll start with the second one first we have ample capital and we don't need we do not need to recycle anything in order to.
In order to pursue our acquisition strategy.
And we're going to continue generating capital.
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In several quarters as we look ahead.
So that's that is not an issue for us.
As to the types of businesses, we've been looking at working on it's a pretty wide variety there.
Technology services is definitely one.
Area.
We looked at some building products companies.
We looked at.
I'll, just say general industrial businesses, which with very strong.
Market positions.
So just a wide variety of things and in a number of different regions as well.
North America and Europe elsewhere.
Okay. Thanks very much.
Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to Cyrus man for any further remarks.
Yes.
Thank you very much for joining us today, and we look forward to speaking with you next quarter. Thank you.
Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.
Yes.
Okay.
Okay.
Okay.