Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Q3 2022 Earnings Presentation
27 slides from Nabors Industries's earnings presentation, Oct 26, 2022
Slide 1: 3Q 2022 Earnings Presentation
3Q 2022 Earnings Presentation NABORS INDUSTRIES LTD. October 25, 2022
Slide 2: Forward Looking Statements
Forward Looking Statements We often discuss expectations regarding our future markets, demand for our products and • our dependence on our operating subsidiaries and investments to meet our services, and our performance in our annual, quarterly, and current reports, press releases, and financial obl
Slide 3: 9/30/2022 Rig Utilization and Availability
9/30/2022 Rig Utilization and Availability U.S. LOWER-48 U.S. OFFSHORE ALASKA INTERNATIONAL TOTAL HIGH SPEC(2) RIG FLEET(1)(2) 328 111 12 16 133 RIGS ON REVENUE(1) 177 94 (3) 3 4 75 UTILIZATION AT 9/30/2022 54% 85% 25% 25% 56% (1) As of September 30, 2022 (2) Excludes non-high spec rigs in the Lower
Slide 4: Recent Highlights
3Q 2022 adjusted Improving liquidity Continued EBITDA of $191M and leverage improvement in L48 Strong improvement in all Reduced net debt by profitability segments $23M in 3Q’22 High utilization driving Revenue growth of 10% Adjusted free cash flow significant improvement of $35M in dayrates Recent
Slide 5: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Expanding & Advancing Progress on our Leading in excellence in enhancing our technology & commitment to Sustainability the Lower-48 International innovation with de-lever and the Energy segment demonstrated Transition results N A B O R S . C O M
Slide 6: Strong Momentum in Rig Count and Margin
1 Performance Excellence In The Lower-48 Strong Momentum in Rig Count and Margin L48 Drilling Revenue and L48 Drilling Adjusted Gross Margin Average Rig Count $300 100 90 $250 80 70 $200 Improving 60 revenue and margins $150 50 on growing rig activity 40 $100 30 20 $50 10 $0 0 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3
Slide 7: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Expanding & Advancing Progress on our Leading in excellence in the enhancing our technology & commitment to Sustainability Lower-48 International innovation with de-lever and the Energy segment demonstrated Transition results N A B O R S . C O M
Slide 8: Strong and Growing International Margins and Rig Counts
2 Resilience Leading to Growth in Our International Segment Strong and Growing International Margins and Rig Counts International Drilling Revenue International Drilling and Adjusted Gross Margin Average Rig Count $300 80 $250 75 Increases in rig $200 70 activity driving margin expansion $150 65 $10
Slide 9: Significant Growth Trajectory in Saudi Arabia
2 Resilience Leading to Growth in Our International Segment Significant Growth Trajectory in Saudi Arabia International Average Rig Count Potential Estimated* Growth from SANAD alone 85 Newbuild Program Underway 80 • 50 rigs over 10 years, awarded 5 rigs to- date 75 • First startup in early July, an
Slide 10: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Expanding & Advancing Progress on our Leading in excellence in the enhancing our technology & commitment to Sustainability Lower-48 International innovation de-lever and the Energy segment with Transition demonstrated results N A B O R S . C O M
Slide 11: 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 Gross margin of ~52% in 3Q 2022, an all time high Expanding our high-value / high-margin low-capital technology services NDS Revenue & Adjusted Gross Margin $70 65% Revenue(1) Adjusted GM
Slide 12: 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 180 100 92 87 160 90 83 140 80 71 70 64 120 58 60
Slide 13: Smart Suite
3 Improving Outlook For Our Technology & Innovation SmartDRILL® Significantly Improving Performance Average Connection Time SmartNAV® 40 Automated directional guidance Case Study: For a major operator in system, improves wellbore Colombia Smart SuiteTM placement accuracy Savings of 30 SmartSLIDE® >
Slide 14: Smart Suite Growth Trajectory Validates Customer Acceptance
3 Improving Outlook For Our Technology & Innovation Smart Suite Growth Trajectory Validates Customer Acceptance Third-Party SmartSLIDE® 2500 Third-Party Deployment SmartDRILL® SmartDRILL® Automation Deployment Cumulative Number of Wells Drilled Commercialization 2000 • 92% Customer Retention Rate* •
Slide 15: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Expanding & Advancing Progress on Leading in excellence in the enhancing our technology & our Sustainability Lower-48 International innovation with commitment and the Energy segment demonstrated to de-lever Transition results N A B O R S . C O M
Slide 16: Significant Headway toward Financial Goals
4 Progress on Our Commitment to De-lever Significant Headway toward Financial Goals ~ $1.7B Net Debt(1) reduction from previous high in 1Q 2018 Net Debt $4.0 $3.5 $3.0 $1.7B $2.5 Billions $2.0 $1.5 $1.0 $0.5 $- 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2018 2019 2020 2021 2022 (1) Net
Slide 17: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Expanding & Advancing Progress on Leading in excellence in the enhancing our technology & our Sustainability Lower-48 International innovation with commitment and the Energy segment demonstrated to de-lever Transition results N A B O R S . C O M
Slide 18: Moving Forward on the Energy Transition
5 Leading in Sustainability and the 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 19: Growing Commitment to Operational and Environmental Stewardship
5 Leading in Sustainability and the Energy Transition Growing Commitment to Operational and Environmental Stewardship Dedicated to improving the environmental footprint of OFS Operating rigs with the environment as a stakeholder • Advanced control system optimizes the efficiency of fuel consumption
Slide 20: Geothermal Market Technology
5 Leading in Sustainability and the Energy Nabors and its predecessor entities have Transition been continuously innovating in the energy sector for over 100 years Innovative Drilling Technologies Geothermal Reducing cost per energy-unit produced by using and combining new technologies Market Techno
Slide 21: Appendix
Appendix N A B O R S . C O M 21
Slide 22: Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)
Reconciliation of Non-GAAP Financial Measures to Net Income (Loss) Adjusted EBITDA represents net income (loss) before income (loss) from discontinued operations, net of tax, income taxes, investment income (loss), interest expense, other, net and depreciation and amortization. Adjusted EBITDA is a
Slide 23: Reconciliation of U.S. Drilling Segment Adjusted Gross Margin
Reconciliation of U.S. Drilling Segment Adjusted Gross Margin to U.S. Drilling Segment Adjusted Operating Income Adjusted gross margin by segment represents Adjusted operating income (loss) plus General and administrative costs, Research and engineering costs and Depreciation and amortization. Three
Slide 24: 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 25: Reconciliation of Adjusted EBITDA by Segment to Adjusted Operating Income
Reconciliation of Adjusted EBITDA by Segment to Adjusted Operating Income (Loss) by Segment Adjusted EBITDA by segment represents adjusted income (loss) plus depreciation and amortization. (In Thousands) Three Mon ths Ended September 30, 2022 Other U.S. Canada International Drilling Rig reconciling
Slide 26: Reconciliation of Adjusted Free Cash Flow to Net Cash Provided by Operating Activities
Reconciliation of Adjusted Free Cash Flow to Net Cash Provided by Operating Activities Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets. Management believes that adjusted free cash flow is an im
Slide 27: 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,