Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Q3 2021 Earnings Presentation
29 slides from Nabors Industries's earnings presentation, Oct 27, 2021
Slide 1: 3Q 2021 Earnings Presentation
NABORS NABORS INDUSTRIES LTD. 3Q 2021 Earnings Presentation October 26, 2021 NABORS INDUSTRIES LTD.
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: Financial Summary
Financial Summary ($000 except EPS) 3Q20 4Q20 1Q21 2Q21 3Q21 Operating Revenues $438,352 $443,396 $460,511 $489,333 $524,165 Income (Loss) from Continuing Operations ($150,377) ($65,092) ($118,604) ($165,684) ($112,918) before Income Taxes Adjusted EBITDA(1) $114,222 $108,114 $107,730 $117,322 $125,
Slide 4: 3Q Rig Utilization and Availability
3Q Rig Utilization and Availability TOTAL U.S. LOWER 48 U.S. OFFSHORE ALASKA INTERNATIONAL RIG FLEET(1) 333 172 12 16 133 HIGH SPEC 110 3Q21 AVERAGE RIGS ON REV 144 68 3 2 67 HIGH SPEC 68 AVERAGE UTILIZATION 43% 40% 25% 13% 50% HIGH SPEC 58% 4 (1) As of September 30, 2021 Notes: Adjusted for sale of
Slide 5: Recent Company Highlights
Generated FCF of 3Q 2021 adjusted Drilling Solutions $133M in 3Q 2021 EBITDA of $125M growth in new Including net proceeds of products and Lower- Activity strengthened $78M from the sale of the throughout markets 48 market Canada assets and energy Significant progress transition investments penetrat
Slide 6: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Resilience Improving Progress on our Leading in excellence in leading to outlook for our commitment to Sustainability the Lower-48 growth in our technology & delever and the Energy International innovation Transition segment 6
Slide 7: Outperforming the Competition in the Lower-48
Outperforming the Competition in the Lower-48 Comparing on a like-for-like basis, Nabors’ Lower-48 daily margins top those of our peers Lower-48 daily margins, including NDS Scalable business that (and similar services for peers) outpacing the competition $12,500 • Nabors’ Lower-48 NDS segment contr
Slide 8: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Resilience Improving Progress on our Leading in excellence in leading to outlook for our commitment to Sustainability the Lower-48 growth in our technology & delever and the Energy International innovation Transition segment 8
Slide 9: International: Resilient through the Downturn
International: Resilient through the Downturn Nabors financial results bolstered by International margins and rig counts, outperforming the Lower 48 International Daily Margin ($13,491 avg) Change in Average Rig Counts $15,000 NBR International 0% NBR Lower 48 Lower 48 Market -20% $10,000 -40% $5,00
Slide 10: Significant International Opportunities
Significant International Opportunities International EBITDA SANAD Embarking on Prospects Improving in Potential w/Estimated* Newbuild Program Other Markets Growth from SANAD alone International Drilling (Millions) EBITDA $95 $90 Saudi Arabia $85 $80 $75 $70 $65 $60 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 • 50 rigs
Slide 11: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Resilience Improving Progress on our Leading in excellence in leading to outlook for our commitment to Sustainability the Lower-48 growth in our technology & delever and the Energy International innovation Transition segment 11
Slide 12: The First Successful Fully-Automated Rig, the PACE-R801
The First Successful Fully- Automated Rig, the PACE®-R801 What is it? First of its kind technology, pairing surface robotics with downhole automation: • Electric robotic pipe handler • Electric robotic roughneck • Electric automated rack and pinion hoisting system • SmartROS™ integrated rig controls
Slide 13: NDS Capitalizing on Growing Rig Count and Higher Penetration
NDS Capitalizing on Growing Rig Count and Higher Penetration Expanding our low-capital / high-margin / high-value technology services NDS Revenue & Gross Profit % GM 46% $50 Revenue “..the new SmartNAV $40 Up 57% features in your Smart % GM 39% Suite…aligned with our $30 remote ops vision that give
Slide 14: Customer Adoption Fueling Rapid NDS Footprint Expansion
Customer Adoption Fueling Rapid NDS Footprint Expansion NDS products consistently add value on both Nabors’ and Third-party rigs U.S. Performance Software Installs RigCLOUD® Services 140 70 Nabors 64 3rd Party 58 120 60 52 100 50 45 80 40 35 60 30 40 20 20 10 0 ROCKit ® REVit ® SmartDRILL™ 0 Q3 Q4 Q
Slide 15: Smart Suite Growth Trajectory Validates Customer Acceptance
Smart SuiteTM Growth Trajectory Validates Customer Acceptance 1200 Cumulative # of Wells Drilled 30 Cumulative Footage Drilled 1000 25 • 1,000+ Wells Drilled Footage Drilled in Millions Number of Wells Drilled 800 • 25+ Million Feet Drilled 20 • 90% Customer Retention Rate* 600 in Q3 2021 15 400 10
Slide 16: Industry's Most Robust App Portfolio
Industry’s Most Robust App Portfolio A broad suite of capabilities in optimization, automation, analytics, planning and more… SmartDRILLTM SmartSLIDETM SmartNAVTM SmartPLANTM Platform Powered by SmartROSTM RigCloud® 50+ SmartCRUISETM REVitTM Smart Apps RigCLOUD AnalyticsTM ROCKitTM myDRILLSTM RigCLO
Slide 17: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Resilience Improving Progress on our Leading in excellence in leading to outlook for our commitment to Sustainability the Lower-48 growth in our technology & delever and the Energy International innovation Transition segment 17
Slide 18: Significant Headway toward Financial Goals
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 $1.6B $200 $3.0 $150 $2.5 $100 $2.0 $50 $1.5 $- $1.0 $(50) $0.5 $(100) $-
Slide 19: Key Delevering Initiatives
Key Delevering Initiatives Free Cash Flow Warrants Asset Sales $261M YTD 2021, Innovative dividend Optimizing our capital including Canada issuance to allocation with the asset sale proceeds incentivize delevering sale of Canada assets in 3Q for $94M Expect $80M to $90M in cash in 4Q, approx. $350M
Slide 20: Debt Maturity Profile as of October 26, 2021
Debt Maturity Profile as of October 26, 2021 $1,500 $1,250 Net Debt improved by $120 million in 3Q 2021 driven by positive FCF $1,000 $750 $500 595 846 $250 560 390 287 116 $0 2021 2022 2023 2024 2025 2026 2027 2028 (1) (1) Revolving Credit Facility Notes Outstanding (1) Annual figures shown in mill
Slide 21: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Resilience Improving Progress on our Leading in excellence in leading to outlook for our commitment to Sustainability the Lower-48 growth in our technology & delever and the Energy International innovation Transition segment 21
Slide 22: Growing Commitment to Operational and Environmental Stewardship
Growing Commitment to Operational and Environmental Stewardship Dedicated to improving the environmental footprint of OFS Driving Lower Carbon Intensity Operating rigs with the environment as a stakeholder • 23 dual-fuel (blended natural gas & diesel) • 2 using biodiesel Increasing Dual-Fuel Rig Cou
Slide 23: Growth Opportunity Capitalizing on Nabors' Expertise -- Geothermal
Growth Opportunity Capitalizing on Nabors’ Expertise -- Geothermal Nabors and its predecessor entities have been continuously operating in the energy sector for over 100 years Why Geothermal? • A logical extension of Nabors’ skillset • “America’s untapped energy giant” scalable and disruptive An Exc
Slide 24: Investment Thesis
Driving the evolution of energy production NABORS technology with the leading position in automation and Investment digitalization, largest Thesis international footprint, and commitment to advancing the energy transition 24
Slide 25: Appendix
Appendix 4) NABORS
Slide 26: 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 (losses) from unconsolidated affiliates, investment incom
Slide 27: 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 28: 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 29: NABORS.COM
NABORS CORPORATE SERVICES 515 W. Greens Road Suite 1200 Houston, TX 77067-4525 Contact Us: William C. Conroy 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