Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Q1 2023 Earnings Presentation
29 slides from Nabors Industries's earnings presentation, Apr 25, 2023
Slide 1: 1Q 2023 Earnings Presentation
NABORS INDUSTRIES LTD. April 25, 2023 1Q 2023 Earnings Presentation
Slide 2: Forward Looking Statements
NABORS.COM We often discuss expectations regarding our future markets, demand for our products and services, and our performance in our annual, quarterly, and current reports, press releases, and other written and oral statements. Such statements, including statements in this document that relate to
Slide 3: March 31 Rig Utilization and Availability
NABORS.COM 3 March 31 Rig Utilization and Availability RIG FLEET(1)(2) 329 RIGS ON REVENUE(1) 171 UTILIZATION AT 3/31/2023 52% TOTAL U.S. OFFSHORE 12 3 25% 16 4 25% ALASKA INTERNATIONAL 134 76 57% 111 88 79% U.S. LOWER-48 HIGH SPEC(2) (1) As of March 31, 2023 (2) Excludes non-high spec rigs in the L
Slide 4: Improving liquidity and leverage
NABORS.COM Improving liquidity and leverage Adjusted 1Q free cash flow of $37M on strong collections and disciplined capital expenditure 1Q 2023 adjusted EBITDA of $240M Revenue growth of $19 million, or 2% vs 4Q’22 Gross margin improved by $14 million, or 5% vs 4Q’22 Adjusted EBITDA up 84% year-on-
Slide 5: Five Keys to Excellence
NABORS.COM Performance excellence in the Lower-48 Expanding & enhancing our International segment Advancing technology & innovation with demonstrated results Progress on our commitment to de-lever Leading in Sustainability and the Energy Transition Five Keys to Excellence 1 2 3 4 5
Slide 6: Improving daily revenue and margins
NABORS.COM $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2021 2022 2023 L48 Drilling Adjusted Daily Gross Margin(1) $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2021 2022 2023 L48 Drilling Daily Reven
Slide 7: Disciplined pricing drives improving daily margins
NABORS.COM $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2021 2022 2023 L48 Drilling Adjusted Daily Gross Margin(1) 0 10 20 30 40 50 60 70 80 90 100 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2021 2022 2023 L48 Drilling Average Rig Count 7 Disciplined pricing driv
Slide 8: Five Keys to Excellence
NABORS.COM Performance excellence in the Lower-48 Expanding & enhancing our International segment Advancing technology & innovation with demonstrated results Progress on our commitment to de-lever Leading in Sustainability and the Energy Transition 1 2 3 4 5 Five Keys to Excellence
Slide 9: Growing International Rig Count and Margin
NABORS.COM 50 55 60 65 70 75 80 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2021 2022 2023 International Drilling Average Rig Count $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2021 2022 2023 International Drilling Adjusted Daily Gross Margin Increases in rig activity dri
Slide 10: Significant Growth Trajectory in Saudi Arabia
NABORS.COM 40 45 50 55 1Q 2Q 3Q 4Q 1QA 2QF 3QF 4QF 1Q 2Q 3Q 4Q 2022 A 2023 2024 F SANAD Estimated Average Rig Count Potential* 10 Significant Growth Trajectory in Saudi Arabia Resilience Leading to Growth in Our International Segment • Awarded 10 total rigs total to-date • 50 rigs to be deployed ove
Slide 11: Five Keys to Excellence
NABORS.COM Performance excellence in the Lower-48 Expanding & enhancing our International segment Advancing technology & innovation with demonstrated results Progress on our commitment to de-lever Leading in Sustainability and the Energy Transition 1 2 3 4 5 Five Keys to Excellence
Slide 12: NDS Capitalizing on Higher Penetration
NABORS.COM 20% 25% 30% 35% 40% 45% 50% 55% 60% $- $10 $20 $30 $40 $50 $60 $70 $80 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2021 2022 2023 NDS Revenue & Adjusted Gross Margin Revenue Adjusted gross margin Adjusted GM % 12 NDS Capitalizing on Higher Penetration Improving Outlook For Our Technology & Innovation Reve
Slide 13: Third-party Customer Adoption Fueling NDS Footprint Expansion
NABORS.COM 0 10 20 30 40 50 60 70 80 90 100 SmartDRILL SmartSLIDE/NAV REVit U.S. Performance Software Installs 1Q'21 2Q'21 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 52 58 64 71 83 87 92 100 106 -10 10 30 50 70 90 110 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2021 2022 2023 U.S. RigCLOUD® Services Installs Nabors 3
Slide 14: First-of-its-kind Partnership Accelerates Drilling Automation
NABORS.COM 14 Apps built and developed in Corva can monitor and control any rig equipped with SmartROS® Enables operators to standardize their automation technology stack fleetwide, regardless of rig manufacturer Empowers all drilling contractors to offer capital-light automation solutions, grow rev
Slide 15: Smart Suite Growth Trajectory Validates Customer Acceptance
NABORS.COM 0 500 1000 1500 2000 2500 3000 Q2'18 Q4'18 Q2'19 Q4'19 Q2'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Cumulative Number of Wells Drilled 15 Smart Suite Growth Trajectory Validates Customer Acceptance Improving Outlook For Our Technology & Innovation 2,800+ Wells Drilled
Slide 16: Five Keys to Excellence
NABORS.COM Performance excellence in the Lower-48 Expanding & enhancing our International segment Advancing technology & innovation with demonstrated results Progress on our commitment to de-lever Leading in Sustainability and the Energy Transition 1 2 3 4 5 Five Keys to Excellence
Slide 17: Significant Headway toward Financial Goals
NABORS.COM $- $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2018 2019 2020 2021 2022 2023 Billions Net Debt 17 Significant Headway toward Financial Goals 4 Progress on Our Commitment to De-lever ~ $1.8B Net Debt(1) reduction from previous high
Slide 18: Five Keys to Excellence
NABORS.COM Performance excellence in the Lower-48 Expanding & enhancing our International segment Advancing technology & innovation with demonstrated results Progress on our commitment to de-lever Leading in Sustainability and the Energy Transition 1 2 3 4 5 Five Keys to Excellence
Slide 19: Moving Forward on the Energy Transition
NABORS.COM Expanding penetration on third-party rigs Energy Efficiency & Emission Reduction Technologies Geothermal Development Leveraging IP to applications beyond the rigs, including carbon capture Expansion Beyond Oil & Gas Differentiates Nabors rigs Developing new verticals in: hydrogen, fuel ef
Slide 20: Growing Commitment to Operational and Environmental Stewardship
NABORS.COM 20 Leading in Sustainability and the Energy Transition • Advanced advisory and control system optimizes the efficiency of fuel consumption • Deploying energy storage systems on multiple rigs • Introducing innovative fuel enhancer to reduce fuel consumption and GHG emissions Operating rigs
Slide 21: Leveraging Nabors' Capabilities to Accelerate Vast's Global Deployment
NABORS.COM 21 Leveraging Nabors’ Capabilities to Accelerate Vast’s Global Deployment Leading in Sustainability and the Energy Transition Automation and Robotics Manufacturing and Facilities Controls, Software & AI Nabors’ Technology Nabors’ Ventures Commercial Technology Development Maintenance Oper
Slide 22: Geothermal Market and Technology Advancements
NABORS.COM 22 Ubiquitous Ability to create heat reservoirs by drilling into deep rock formations Innovative Drilling Technologies Reducing cost per energy-unit produced by using and combining new technologies Baseload Reliable and available 24/7 Renewable Subsurface heat replenished naturally Nabors
Slide 23: Appendix
NABORS.COM Appendix 23
Slide 24: Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)
NABORS.COM Three Months Ended March 31, December 31, March 31, 2022 2022 2023 Net income (loss) ($174,668) ($58,155) $61,060 Income tax expense (benefit) 13,671 26,161 23,015 Income (loss) from continuing operations before income taxes ($160,997) ($31,994) $84,075 Investment (income) loss (163) (9,1
Slide 25: Adjusted Gross Margin Reconciliation
NABORS.COM Three Months Ended March 31, December 31, March 31, 2022 2022 2023 Lower 48 - U.S. - Drilling Adjusted operating income $ (14,596) $ 58,299 $ 74,071 Plus: General and administrative costs 4,447 4,977 5,056 Plus: Research and engineering 1,638 1,637 1,519 GAAP Gross Margin (8,511) 64,913 8
Slide 26: Reconciliation of Net Debt to Total Debt
NABORS.COM March 31, December 31, March 31, 2022 2022 2023 Long-Term Debt $2,610,092 $2,537,540 $2,562,327 Cash & Short-term Investments $394,039 $452,315 $475,732 Net Debt $2,216,053 $2,085,225 $2,086,595 (In Thousands) 26 Reconciliation of Net Debt to Total Debt Net debt is computed by subtracting
Slide 27: Adjusted EBITDA by Segment
NABORS.COM (In Thousands) Three Months Ended March 31, 2023 U.S. Drilling International Drilling Drilling Solutions Rig Technologies Other reconciling items Total Adjusted operating income (loss) $ 85,869 $ 1,957 $ 27,138 $ 3,694 $ (41,683) $ 76,975 Depreciation and amortization 70,620 86,651 4,776
Slide 28: Reconciliation of Adjusted Free Cash Flow to Net Cash Provided by Operating Activities
NABORS.COM 28 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
Slide 29: Nabors Industries Ltd. Contact Us
NABORS INDUSTRIES LTD. NABORS.COM NABORS CORPORATE SERVICES 515 W. Greens Road Suite 1200 Houston, TX 77067-4525 @naborsglobal Contact Us: William C. Conroy, CFA VP - Corporate Development and Investor Relations William.Conroy@nabors.com Kara K. Peak Director - Corporate Development and Investor Rel