Baker Hughes Company · NASDAQ:BKR
Baker Hughes — Bernstein Strategic Decisions Conference 2020
25 slides from Baker Hughes's conference presentation, May 27, 2020
Slide 1: Bernstein Strategic Decisions Conference
Baker Hughes S$ Bernstein Strategic Decisions Conference May 27, 2020 2 Lorenzo Simonelli —- Chairman & CEO eompciny confidehtict fibutedytransmi
Slide 2: Forward-looking statements and non-GAAP disclaimer
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 2IE of the Securities Exchange Act of 1934, as amended, (each a “forward-looking stateme
Slide 3: Baker Hughes today is not an ordinary OFSE company
Baker Hughes today is not an ordinary OFSE company Total company revenue outside NAM OFS revenue outside NAM Revenue more “industrial” in . . OFS revenue tied to production... f°) 9, ~40%) nature » strong aftermarket ~40%) artificial lift, chemicals Net capex % of revenue since Total company afterma
Slide 4: Built to navigate a volatile environment
Built to navigate a volatile environment Differentiated portfolio & strong balance sheet Combination of long- and short- cycle businesses across the energy value chain $15B aftermarket services backlog 70% of revenue outside NAM Strong liquidity - $2.9B cash + $3B undrawn RCF A3/A- investment grade
Slide 5: Our strategy
Our strategy Leading product companies * Innovative products & services * Integrated solutions Lead with technology * Advanced manufacturing * Digital transformation Lead the energy transition * Gas value chain * Low carbon energy solutions Baker Hughes S3
Slide 6: Baker Hughes ... an unparalleled portfolio
Baker Hughes ... an unparalleled portfolio We deliver across the energy value chain through our 4 market-leading product companies Oilfield Services Leader in well Oilfield Equipment Leading subsea Turbomachinery & Process Solutions Digital Solutions Best in class sensing & construction & production
Slide 7: Oilfield Services (OFS)
Oilfield Services (OFS) Completions Production Drilling Services * Completions & Well * Artificial Lift Systems Drill Bits Intervention + Oilfield & Industrial Drilling & Completion Fluids + International Pressure Chemicals Pumping + Wireline Services Wireline Services 7 Copyright 2020 Boker Hughes
Slide 8: Oilfield Services
Oilfield Services Financials ($ in billions) mm Revenue Op Inc. Op Inc. % $10.2 2016 $(0.8) (7.5)% 2016 and 2017 fina B Copyright 2020 Baker $10.4 2017 $0.3 2.8% ned busi company. Alll rights reser $11.6 2018 $0.8 6.8% $12.9 2019 $0.9 7.1% sis (non-GAAP); Revenue splits represent average " Business
Slide 9: Oilfield Equipment (OFE)
Oilfield Equipment (OFE) Subsea Production Flexible Pipe Surface Pressure Subsea & Surface Systems & Services Systems Control Drilling Systems Subsea wellheads, trees, Dynamic flexible pipes Surface wellheads Equipment & services for controls, manifolds, electric Static flexible pipes Flow control v
Slide 10: Oilfield Equipment
Oilfield Equipment Financials ($ in billions) Business overview — girders * Leading subsea production systems & flexible pipes _ oD $2.5 $3.1 $3.5 * Collaborative partnerships & new models $2. _.— ——— — + New Subsea Connect & Aptara™ TOTEX-Lite Subsea System - $3.5 * Expanding use of non-metallic fl
Slide 11: • • • • • • • • • • • • • •
• • • • • • • • • • • • • • • • • • • • • • • • •
Slide 12: Turbomachinery & Process Solutions
Turbomachinery & Process Solutions Financials ($ in billions) — Orders == Revenue $7.9 $5.9 $5.9 $6.6 $6.7 $6.3 $6.0 $5.5 2016 2017 2018 2019 Op Inc. $11 $0.7 $0.6 $0.7 Op Inc. % 15.9% 10.6% 10.3% 13.0% Business overview Technology leader in LNG & upstream production Proven track record in the most
Slide 13: Digital Solutions (DS)
Digital Solutions (DS) Automation, electronics, and ; , Oil and gas —S= Aerospace Condition Monitoring & Protection * Condition monitoring and protection devices + Advanced machinery diagnostic software solutions + Industry leading technical support ©)pently Nevada 13 Control Solutions + Controls an
Slide 14: Digital Solutions
Digital Solutions Financials ($ in billions) — Orders == Revenue $2.9 $2.6 $2.6 $2.6 $2.5 $2.5 $2.6 $2.5 2016 2017 2018 2019 Op Inc. $0.3 $0.3 $0.4 $0.3 Op Inc. % 12.9% 12.7% 15.0% 13.8% ‘on a combined busin (non-GAAP) 4 Copyright 2 Company. All rights Business overview + Market leader in condition
Slide 15: Lead with technology
Lead with technology Leveraging remote capabilities * COVID-19 accelerating use of remote operations and investment in remote capabilities * Increasing use of remote drilling and completion operations globally ... HSE benefits and reduced non-productive time * Conducted first virtual string test of
Slide 16: Leading the energy transition
Leading the energy transition We have committed to achieve net-zero carbon eq. emissions by 2050, and invest in new technologies to help customers reduce their emissions. 16 copyright 2020 Baker Hug Low carbon solutions available today Efficient oilfield & subsea development Renewables & alternative
Slide 17: Focusing on our strategic goals
Focusing on our strategic goals Portfolio evolution Right-size operations Digital capability * Optimize workforce & facilities for * Expand into industrial / Drive greater efficiency lower activity levels chemicals value chain * Safer, more reliable * Accelerate structural changes in * Position for
Slide 18: Continued emphasis on free cash flow
Continued emphasis on free cash flow Delivering on FCF potential, capital discipline $1.2B / $1.2B $2.1 billion FCF generated Dividends in 18 / 19 paid since deal close ~3.5% A3 / A- CAPEX as % of Investment grade revenue since rating deal close 18 Taking action to maintain financial strength Invest
Slide 19: Summary ...a company fit for an evolving market
Summary ...a company fit for an evolving market . Unique portfolio of long- & short-cycle businesses ... $15B aftermarket services backlog . Leveraging distinctive core competencies for the energy transition . Addressing market challenges ... reducing capex by at least 20%, $700M annualized cost-out
Slide 20: Appendix
Appendix 20 Baker Hughes S3
Slide 21: Strong financial execution
Strong financial execution Financials (s in bitions) Key highlights $27.0 2019 Segment —orders $20.9 $21.8 $23.9 2019 Revenue operating Income == Revenue —— DS11% %, - $23.8 ps7 OFS 45% $22.9 $22.9 rps23% OFS 54% $21.8 TPS 35% N OFE 12% OFE 3% * 30% NAM; 70% International revenue in 2019 2016 2017 2
Slide 22: Historical financials and non-GAAP reconciliation (1/3)
Historical financials and non-GAAP reconciliation (1/3) ($ in millions) Orders Ty2016 «=««1Q17_ Qs 3Q)17,- 4Q7—sTY'7 jas = 2Q18_)S 3Q)I8. Qs. TV'S 1Q19 219) 3Q19' 4Q19.-ssTYI9— 1920 Oilfield Services 10.242 2397 «2530-2734 2765 10,426 2,640 2,866 30 3051 11,569 2997 3266 3354 3284 12902 3147 Oilfiel
Slide 23: Non-GAAP reconciliations (2/3)
Non-GAAP reconciliations (2/3) ($ in millions) Reconciliation of GAAP and combined business basis measures used in this presentation Revenue Operating income / (loss) (GAAP) Operating income / (loss) (adjusted) Corporate operating loss Impairment of goodwill Inventory impairment Restructuring, impai
Slide 24: Non-GAAP reconciliations (3/3)
Non-GAAP reconciliations (3/3) ($ in millions) Reconciliation of Cash Flow From Operating Activities to Free Cash Flow Non-GAAP reconciliation Ty2018 TY2019 192020 Cash flow from operating activities (GAAP) 1,762 2126 478 ‘Add: cash used in capital expenditures, net of proceeds from disposal of asse
Slide 25: Baker Hughes
Baker Hughes ==
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