Baker Hughes Company · NASDAQ:BKR
Baker Hughes — Q1 2023 Earnings Presentation
24 slides from Baker Hughes's earnings presentation, Apr 19, 2023
Slide 1: 1Q 2023 Results
1Q 2023 Results April 19, 2023 Copyright 2023 Baker Hughes Company. All rights reserved. The information contained in this document is company confidential and proprietary property of Baker Hughes and its affiliates. It is to be used only for the benefit of Baker Hughes and may not be distributed, t
Slide 2: Forward-looking statements disclaimer
2 This presentation (and oral statements made regarding the subjects of this release) may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, (each a “forward-looking state
Slide 3: Lorenzo Simonelli, Chairman & Chief Executive Officer
Lorenzo Simonelli Chairman & Chief Executive Officer 3 Copyright 2023 Baker Hughes Company. All rights reserved.
Slide 4: 1Q 2023 Highlights
1Q 2023 RESULTS 4 1Q 2023 Highlights Continued strength in IET orders led by LNG … booked almost $1.4 billion in LNG orders in 1Q23, led by orders for Port Arthur & North Field South projects Record orders for SSPS … largest SSPS orders since company was formed, led by subsea award for the Agogo fie
Slide 5: Optimistic outlook for energy in 2023 maintained despite uncertain macro backdrop
MACRO OUTLOOK 5 Optimistic outlook for energy in 2023 maintained despite uncertain macro backdrop UNIQUE AND EXTENDED CYCLE UNFOLDING Despite elevated recession risks for major economies, energy outlook remains constructive and largely unchanged ... supportive of double-digit upstream spending growt
Slide 6: Tailwinds continue across both business segments
TRENDS & COMMERCIAL WINS 6 Tailwinds continue across both business segments Oilfield Services & Equipment (OFSE) Industrial & Energy Technology (IET) Growth trends clearly shifting in favor of Strong LNG order momentum continuing international and offshore markets in 2023 North America activity tren
Slide 7: Nancy Buese, Chief Financial Officer
Nancy Buese Chief Financial Officer 7 Copyright 2023 Baker Hughes Company. All rights reserved.
Slide 8: 1Q 2023 Financial Results
FINANCIALS 8 1Q 2023 Financial Results Continued YoY margin Strong YoY order growth Significant increase in YoY free cash improvement … 14% EBITDA Revenues up double-digits flow generation margin Orders Adj. EBITDA Free cash flow $7.6B $782M $197M 12% YoY 25% YoY +$302M YoY Revenue Adj. operating in
Slide 9: Strong balance sheet and solid cash flow
FINANCIALS 9 Strong balance sheet and solid cash flow Strong Balance Sheet Prioritizing Free Cash Flow Strong balance sheet enables Portfolio focused on maximizing financial flexibility free cash flow generation 1.4X1 Net debt / LTM Adj. EBITDA $0.2B FCF in 1Q’23 A3/A- Credit Ratings from Moody’s an
Slide 10: Flexible Capital Allocation Policy
CAPITAL ALLOCATION 10 Flexible Capital Allocation Policy Prioritizing a strong balance sheet and returning capital to shareholders 60%-80% FCF 5 PRIORITY Balance Technology Dividends Buybacks M&A2 Sheet Investment1 PHILOSOPHY • Maintain a strong • Prioritize dividend • Repurchase shares to • Focus g
Slide 11: Changing the way we operate
STRATEGY 11 Changing the way we operate Laying the foundation for consistently better operating results and higher returns Key Targets OILFIELD SERVICES & INDUSTRIAL & ENERGY Corporate Functions EQUIPMENT (OFSE) TECHNOLOGY (IET) $150+M Cost out by end COST OUT TARGET of 2023 $60+M $50+M $40+M ACTION
Slide 12: Oilfield Services & Equipment (OFSE) Results
OFSE SEGMENT RESULTS 12 Oilfield Services & Equipment (OFSE) Results Strong performance driven by international and offshore markets OFSE Revenues & EBITDA Margin 1Q’23 OFSE - Revenue Growth by Geography 15% 10% 4,000 $3,579 $3,577 20% 10% $3,017 Change QoQ EBITDA Margin 3,000 17.1% 5% 16.2% $ Milli
Slide 13: Industrial & Energy Technology (IET) Orders
IET SEGMENT RESULTS 13 Industrial & Energy Technology (IET) Orders Strong orders driven by continued strength in LNG & Onshore/offshore Production IET Orders Gas Technology Orders Industrial Tech Gas Tech Gas Tech Equipment Gas Tech Services 5,000 FY’22 $12.7B $4,289 3,000 $2,601 4,000 $3,567 $3,533
Slide 14: IET Results
IET SEGMENT RESULTS 14 IET Results Strong revenue growth driven by Gas Tech Equipment backlog conversion IET Revenues & EBITDA Margin 1Q’23 IET – Gas Technology Revenues 18.4% Gas Tech Services Gas Tech Equipment 3,000 16.0% 20% 2,000 13.9% $1,541 $1,418 EBITDA Margin 2,500 15% 1,500 $1,124 $ Millio
Slide 15: 2023 Outlook
GUIDANCE 15 2023 Outlook 2Q’23 Outlook 2023 Outlook BKR BKR Cost out by end of 2023 Revenue $6.1 - $6.5B Revenue $24 - $26B Adj. EBITDA $845 - $905M Adj. EBITDA $3.6 - $3.8B OFSE OFSE Revenue $3.65 - $3.85B Revenue $14.5 - $15.5B EBITDA $590 - $650M EBITDA $2.4 - $2.8B IET IET Revenue $2.35 - $2.75B
Slide 16: Action Plan to enhance shareholder value
OUR STRATEGIC PURPOSE 16 Top priorities Capitalize on the growth opportunities across OFSE and IET, including LNG and New Energy Action Plan Increasing R&D to developing new energy technology portfolio in hydrogen, carbon capture and clean power to enhance Optimize corporate structure to enhance sha
Slide 17: Copyright 2023 Baker Hughes Company. All rights reserved.
17 Copyright 2023 Baker Hughes Company. All rights reserved.
Slide 18: Appendix
Appendix 18 Copyright 2023 Baker Hughes Company. All rights reserved.
Slide 19: GAAP to Non-GAAP reconciliations
APPENDIX 19 GAAP to Non-GAAP reconciliations Reconciliation of Cash Flow From Operating Activities to Free Cash Flow ($ in millions) Cash flow reconciliation TY2018 TY2019 TY2020 1Q2021 2Q2021 3Q2021 4Q2021 TY2021 1Q2022 2Q2022 3Q2022 4Q2022 TY2022 1Q2023 Cash flow from operating activities (GAAP) 1
Slide 20: OFSE & IET reconciliations
APPENDIX 20 OFSE & IET reconciliations Orders by Reporting Segment ($ in millions) FY 2019 FY 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 FY 2022 1Q2023 Oilfield Services & Equipment 16,419 12,304 2,544 3,040 3,136 3,077 11,798 3,270 3,392 3,707 3,721 14,089 4,100 Ga
Slide 21: OFSE & IET reconciliations
APPENDIX 21 OFSE & IET reconciliations Consolidated Revenue by Reporting Segment and Product Line ($ in millions) FY 2019 FY 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 TY 2022 1Q2023 Well Construction 4,222 3,257 743 800 844 914 3,301 883 936 991 1,043 3,854 1,061 C
Slide 22: OFSE & IET GAAP to Non-GAAP reconciliations
APPENDIX 22 OFSE & IET GAAP to Non-GAAP reconciliations Reconciliation of Operating Income (Loss) by Segment (GAAP) to EBITDA (non-GAAP) ($ in millions) Operating Income (loss) by Segment (GAAP) FY 2019 FY 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 TY 2022 1Q2023 Oi
Slide 23: OFSE & IET GAAP to Non-GAAP reconciliations
APPENDIX 23 OFSE & IET GAAP to Non-GAAP reconciliations Reconciliation of Operating Income (Loss) by Segment (GAAP) to EBITDA (non-GAAP) Outlook Framework($ in millions) Oilfield Services & Equipment 2Q 2023 Outlook Range 2023 FY Outlook Range 2Q 2023 FY 2023 Operating Income (loss) by Segment (GAAP
Slide 24: Baker Hughes
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