Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Q4 2021 Earnings Presentation
31 slides from Nabors Industries's earnings presentation, Feb 9, 2022
Slide 1: 4Q 2021 Earnings Presentation
4Q 2021 Earnings Presentation NABORS INDUSTRIES LTD. February 8, 2021
Slide 2: Forward Looking Statements
Forward Looking Statements We often discuss expectations regarding our future markets, demand for our products and • our ability to complete, and realize the expected benefits of, strategic transactions; services, and our performance in our annual, quarterly, and current reports, press releases, and
Slide 3: Rapidly Improving Results
Rapidly Improving Results (In Thousands) 4Q’20 1Q’21 2Q’21 3Q’21 4Q’21 Operating Revenues $443,396 $460,511 $489,333 $524,165 $543,539 Gross Margin $169,118 $169,857 $176,867 $187,627 $196,301 Adjusted EBITDA $108,114 $107,730 $117,322 $125,232 $131,656 Free Cash Flow $65,740 $60,371 $67,913 $133,11
Slide 4: 4Q'21 Rig Utilization and Availability
4Q’21 Rig Utilization and Availability U.S. LOWER 48 U.S. OFFSHORE ALASKA INTERNATIONAL TOTAL HIGH SPEC(2) RIG FLEET(1)(2) 330 111 12 16 133 4Q’21 AVG. RIGS ON REVENUE 152 75 3 3 71 AVERAGE UTILIZATION 46% 68% 25% 19% 53% (1) As of December 31, 2021 (2) Excludes non-high spec rigs in the Lower-48 No
Slide 5: Recent Highlights
4Q 2021 adjusted Generated FCF of Drilling Solutions EBITDA of $132M $50M in 4Q 2021 growth in new All segments • 2021 FCF of $312M products and L48 strengthening market penetration • Reduced Net Debt by 4Q21 adjusted EBITDA of Resilience in $32M during 4Q 2021 $20M, 25% growth vs 3Q International D
Slide 6: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Resilience Technology & Progress on our Leading in excellence in leading to innovation commitment to Sustainability the Lower-48 growth in our rapidly taking delever and the Energy International hold in the Transition segment market N A B O R S . C O M
Slide 7: Leading in Lower-48 Daily Margins
1 Performance Excellence In The Lower-48 Leading in Lower-48 Daily Margins Lower-48 Daily Margins, Including NDS (and similar services for peers) $17,500 $15,000 Scalable business that $12,500 outpaces the competition $10,000 • Nabors’ Lower-48 NDS segment $7,500 contributed ~$2,111 per day in 4Q’21
Slide 8: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Resilience Technology & Progress on our Leading in excellence in the leading to innovation commitment to Sustainability Lower-48 growth in our rapidly taking delever and the Energy International hold in the Transition segment market N A B O R S . C O M
Slide 9: Results Bolstered by Strong International Margins and Rig Counts
2 Resilience Leading to Growth in Our International Segment Results Bolstered by Strong International Margins and Rig Counts International Margin per day (Avg. $13,451/day) Change in Average Rig Counts* $15,000 0% -20% $10,000 -40% $5,000 -60% $- -80% 1Q 2Q 3Q 4Q 1Q 2Q 3Q Q4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Slide 10: Significant International Opportunity
2 Resilience Leading to Growth in Our International Segment Significant International Opportunity International EBITDA Potential w/Estimated* Growth from SANAD alone $90 Embarking on Newbuild Program $85 $8M Early Term $80 • 50 rigs over the next 10 years, awarded 5 rigs to-date Million $75 • First
Slide 11: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Resilience Technology & Progress on our Leading in excellence in the leading to innovation commitment to Sustainability Lower-48 growth in our rapidly taking delever and the Energy International hold in the Transition segment market N A B O R S . C O M
Slide 12: Ground-Breaking and Scalable PACE-R801 Now Drilling in the Permian
3 Improving Outlook For Our Technology & Innovation Ground-Breaking and Scalable PACE®-R801 Now Drilling in the Permian Successfully completed its second pad for a supermajor in the Permian Basin Nabors PACE®-R801: Industry’s First Fully Automated Land Rig 1 2 Field performance on Fully robotic and
Slide 13: NDS Capitalizing on Growing Rig Count and Higher Penetration
3 Improving Outlook For Our Technology & Innovation NDS Capitalizing on Growing Rig Count and Higher Penetration Expanding our high-value / high-margin NDS Revenue & Gross Profit low-capital technology services $60 55% 50% $50 Revenue Gross Profit $40 45% Up 77% Up 129% 40% $30 35% $20 “Nabors is do
Slide 14: Customer Adoption Fueling Rapid NDS Footprint Expansion
3 Improving Outlook For Our Technology & Innovation Customer Adoption Fueling Rapid NDS Footprint Expansion NDS technology consistently adds value on both Nabors’ and Third-party rigs U.S. Performance Software Installs U.S. RigCLOUD® Services Installs 140 80 71 70 64 120 58 60 100 52 50 45 80 40 35
Slide 15: Smart Suite Growth Trajectory Validates Customer Acceptance
3 Improving Outlook For Our Technology & Innovation Smart SuiteTM Growth Trajectory Validates Customer Acceptance Third-Party SmartDRILLTM SmartDRILLTM 1400 Automation Deployment Commercialization Cumulative Number of Wells Drilled 1200 • 94% Customer Retention Rate* 1000 • 1,250+ Wells Drilled • Th
Slide 16: Industry's Most Robust App Portfolio
3 Improving Outlook For Our Technology & Innovation PLATFORM POWERED BY SmartROSTM RigCLOUD® Industry’s 50+ Smart Apps Most Robust SmartSLIDETM REVitTM SmartDRILLTM App Portfolio SmartNAVTM RigCLOUD AnalyticsTM ROCKitTM myDRILLSTM SmartCRUISETM A broad suite of capabilities in optimization, automati
Slide 17: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Resilience Technology & Progress on Leading in excellence in the leading to innovation our Sustainability Lower-48 growth in our rapidly taking commitment and the Energy International hold in the to delever Transition segment market N A B O R S . C O M
Slide 18: Significant Headway toward Financial Goals
4 Progress on Our Commitment to Delever Significant Headway toward Financial Goals Semiannual FCF has been trending upward since 1H 2018 (previous downturn) $1.6B Net Debt reduction from previous high in 1Q 2018 Free Cash Flow Net Debt $350 $4.5 $300 $4.0 $250 $3.5 $200 $3.0 $1.6B $150 Millions Bill
Slide 19: Key Delevering Initiatives
4 Progress on Our Commitment to Delever Key Delevering Initiatives Free Cash Flow Warrants Asset Sales $312M for full year 2021, Innovative dividend Optimizing our capital including Canada asset sale issuance to incentivize allocation with asset sales of delevering $124M for 2021, including proceeds
Slide 20: Debt Maturity Profile as of 1/31/22
4 Progress on Our Commitment to Delever Debt Maturity Profile as of 1/31/22 In December and January: • Paid down $460 million on previous credit facility • Repurchased $89 million of 2023 and 2025 Senior Notes $1,000 $800 (1) 15 $600 Millions $400 767 700 560 $200 390 287 $0 105 2022 2023 2024 2025
Slide 21: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Resilience Technology & Progress on Leading in excellence in the leading to innovation our Sustainability Lower-48 growth in our rapidly taking commitment and the Energy International hold in the to delever Transition segment market N A B O R S . C O M
Slide 22: Moving Forward on the Energy Transition
5 Leading in the Sustainability and Energy Transition Moving Forward on the Energy Transition Energy Efficiency & Emission Expansion Beyond Geothermal Development Reduction Technologies Oil & Gas Developing verticals on Providing expertise in Further differentiating identified hydrogen, fuel drillin
Slide 23: Growing Commitment to Operational and Environmental Stewardship
5 Leading in the Sustainability and Energy Transition Growing Commitment to Operational and Environmental Stewardship Driving Lower Carbon Intensity 28 Dedicated to improving the environmental Increasing Dual-Fuel Rig Count 23 footprint of OFS Operating rigs with the environment as a stakeholder 14
Slide 24: Geothermal Market Technology
5 Leading in the Sustainability and Energy Transition Nabors and its predecessor entities have been continuously innovating in the energy Geothermal sector for over 100 years Market Innovative Drilling Technologies Technology Reducing cost per energy-unit produced by using and combining new technolo
Slide 25: Geothermal Partners Selections
5 Leading in the Sustainability and Energy Transition Geothermal Partners Selections Partner Goals Benefits from Partnering with Nabors Integrating surface and subsurface systems for Nabors’ global footprint, technology development and delivery of higher-heat harvesting efficiency at low deployment
Slide 26: Nabors Investment Thesis
Driving the evolution of energy production technology with: Nabors Leading position in automation and Investment digitalization Thesis The largest international footprint in the drilling sector Commitment to advancing the energy transition N A B O R S . C O M 26
Slide 27: Appendix
Appendix N A B O R S . C O M 27
Slide 28: Reconciliation of Adjusted EBITDA to Income (Loss) from Continuing Operations before Income Tax
Reconciliation of Adjusted EBITDA to Income (Loss) from Continuing Operations before Income Tax Adjusted EBITDA represents income (loss) from continuing operations before income taxes, interest expense, depreciation and amortization, earnings (loss) from unconsolidated affiliates, investment income
Slide 29: Reconciliation of Net Debt to Total Debt
Reconciliation of Net Debt to Total Debt Net debt is computed by subtracting the sum of cash, cash equivalents and short-term investments from total debt. This non-GAAP measure has limitations and therefore should not be used in isolation or as a substitute for the amounts reported in accordance wit
Slide 30: Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities
Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities Free cash flow represents net cash provided by operating activities less cash used for investing activities. Free cash flow is an indicator of our ability to generate cash flow after required spending to maintain or expand
Slide 31: Contact Us
NABORS INDUSTRIES LTD. Contact Us: William C. Conroy, CFA VP - Corporate Development and Investor Relations William.Conroy@nabors.com Kara K. Peak Director - Corporate Development and Investor Relations Kara.Peak@nabors.com NABORS.COM NABORS CORPORATE SERVICES 515 W. Greens Road Suite 1200 Houston,