Baker Hughes Company · NASDAQ:BKR
Baker Hughes — Q1 2024 Earnings Presentation
28 slides from Baker Hughes's earnings presentation, Apr 24, 2024
Slide 1: 1Q 2024 Results
1Q 2024 Results April 24, 2024 Copyright 2024 Baker Hughes Company. All rights reserved. The information contained in this document is company confidential and proprietary property of Baker Hughes and its affiliates. It is to be used only for the benefit of Baker Hughes and may not be distributed, t
Slide 2: Forward-looking statements and non-GAAP disclaimer
2 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 21E of the Securities Exchange Act of 1934, as amended, (each a “forward-looking state
Slide 3: Lorenzo Simonelli, Chairman & Chief Executive Officer
Lorenzo Simonelli Chairman & Chief Executive Officer 3 Copyright 2024 Baker Hughes Company. All rights reserved.
Slide 4: Highlights
1Q 2024 RESULTS 4 4 Highlights Solid first quarter results … builds on the momentum from 2023 and provides clear path towards achieving our full-year guidance Strong orders performance … over $2.9B IET orders, including Aramco MGS3 award & Cedar LNG. Significant OFSE awards from Petrobras for both o
Slide 5: Upstream growth to continue
MACRO OUTLOOK 5 Upstream growth to continue Pace moderating, but strong fundamentals support continued international growth THEMES BKR UPSTREAM CAPEX OUTLOOK 1 2024 international outlook unchanged 800 Continue to expect high single-digit growth in ’24. Contemplates OPEC+ cuts remaining for FY’24 700
Slide 6: Strong global gas & LNG demand growth anticipated
MACRO OUTLOOK 6 Strong global gas & LNG demand growth anticipated Supported by accelerating demand in Asia and resiliency in developed economies BKR GLOBAL GAS DEMAND OUTLOOK BY REGION 1 BKR LNG DEMAND OUTLOOK (DES) 2 Upside to outlook driven by accelerated switching from coal & Expect ~800 MTPA of
Slide 7: On track for 800 MTPA of LNG capacity by 2030
LNG FID & CAPACITY OUTLOOK 7 On track for 800 MTPA of LNG capacity by 2030 FID outlook remains healthy despite moratorium and oversupply concerns LNG CAPACITY OUTLOOK 1 Near-term project FID sequencing disrupted ~100 MTPA of FIDs and 205 MTPA of by the U.S. moratorium projects under construction wou
Slide 8: Growing acknowledgment of energy transition complexities
ENERGY THEMES 8 Growing acknowledgment of energy transition complexities Driving more pragmatism and increasing alignment on the path forward Renewables The Age of Gas The AI Revolution CCUS is starting to growing pains scale Natural gas’ abundance, lower Insatiable demand for AI to have Hurdles to
Slide 9: Nancy Buese, Executive Vice President & Chief Financial Officer
Nancy Buese Executive Vice President & Chief Financial Officer 9 Copyright 2024 Baker Hughes Company. All rights reserved.
Slide 10: 1Q 2024 financial results
FINANCIALS 10 1Q 2024 financial results Strong Adj. EBITDA growth & Robust free cash Solid revenue growth and continued margin expansion flow & EPS growth resilient orders Orders Adj. EBITDA Free cash flow $6.5B $943M $502M 14% YoY 21% YoY 155% YoY Revenue Adj. operating income Adjusted EPS $6.4B $6
Slide 11: Strong balance sheet and solid cash flow
FINANCIALS 11 Strong balance sheet and solid cash flow STRONG BALANCE SHEET PRIORITIZING FREE CASH FLOW Enables financial flexibility Focused on maximizing free cash flow generation 0.8X 1 $0.5B Net debt / LTM Adj. EBITDA 3 A3/A- Credit Ratings from Moody’s and S&P FCF in 1Q ’24 $5.7B 2 +155%vs. 1Q
Slide 12: Flexible capital allocation policy
CAPITAL ALLOCATION 12 Flexible capital allocation policy Prioritizing a strong balance sheet and returning capital to shareholders 60%-80% FCF 2 PRIORITY Balance sheet Technology Dividends Buybacks M&A investment PH ILOS O PH Y • Maintain a strong • Focus growth capital on • Prioritize dividend grow
Slide 13: Oilfield Services & Equipment (OFSE) results
OFSE SEGMENT RESULTS 13 Oilfield Services & Equipment (OFSE) results Strong EBITDA performance despite market headwinds OFSE Revenues & EBITDA Margin1 1Q’24 OFSE - Revenue Growth by Geography 5,000 17.9% 20% 8% 17.0% 16.2% 4,000 4% 15% 6% Change QoQ EBITDA Margin 3,000 0% $ Millions 10% -3% 2,000 $3
Slide 14: Industrial & Energy Technology (IET) orders
IET SEGMENT RESULTS 14 Industrial & Energy Technology (IET) orders Orders driven by non-LNG growth IET Orders Gas Technology Orders 6,000 Gas Tech Industrial Tech CTS 2,000 Gas Tech - Equipment Gas Tech - Services $1,709 $4,334 1,500 $1,297 $49 $1,230 4,000 $3,533 $ Millions $3,282 $ Millions $748 $
Slide 15: Industrial & Energy Technology (IET) results
IET SEGMENT RESULTS 15 Industrial & Energy Technology (IET) results Strong Gas Tech Equipment growth IET Revenues & EBITDA Margin1 1Q‘24 IET – Gas Technology Revenues 3,500 16.1% 13.9% 14.7% Gas Tech - Equipment Gas Tech - Services 3,000 15% 2,500 2,500 $1,920 $1,824 2,000 EBITDA Margin 2,000 10% $1
Slide 16: 2024 outlook
GUIDANCE 16 2024 outlook 2Q’24 OUTLOOK 1 2024 OUTLOOK 1 BKR BKR Revenue $6.60 - $7.05B Revenue $26.50 - $28.50B Adj. EBITDA $1.00 - $1.10B Adj. EBITDA $4.10 - $4.50B OFSE OFSE Revenue $3.80 - $4.0B Revenue $15.75 - $16.75B EBITDA $660 - $710M EBITDA $2.78 - $3.02B IET IET Revenue $2.80 - $3.05B Orde
Slide 17: Lorenzo Simonelli, Chairman & Chief Executive Officer
Lorenzo Simonelli Chairman & Chief Executive Officer 17 Copyright 2024 Baker Hughes Company. All rights reserved.
Slide 18: Our strategy is delivering
OUR STRATEGY 18 Our strategy is delivering Strong EBITDA growth over the last four years BKR EBITDA MARGIN & RATE PROGRESSION EBITDA Well-defined strategy over three time 5000 EBITDA Margin 15.6%1 16.00% horizons to drive differentiated growth 14.8% 4500 14.1% Expanding commercial opportunities that
Slide 19: Appendix
Appendix 19 Copyright 2024 Baker Hughes Company. All rights reserved.
Slide 20: Results by Reporting Segment: OFSE
APPENDIX 20 Results by Reporting Segment Oilfield Services & Equipment (in millions) Three Months Ended Variance March 31, December 31, March 31, Year-over- Segment results 2024 2023 2023 Sequential year Orders $ 3,624 $ 3,874 $ 4,100 (6%) (12%) Revenue $ 3,783 $ 3,956 $ 3,577 (4%) 6% Operating inco
Slide 21: Results by Reporting Segment: IET
APPENDIX 21 Results by Reporting Segment Industrial & Energy Technology (in millions) Three Months Ended Variance March 31, December 31, March 31, Segment results 2024 2023 2023 Sequential Year-over-year Orders $ 2,918 $ 3,030 $ 3,533 (4%) (17%) Revenue $ 2,634 $ 2,879 $ 2,138 (8%) 23% Operating inc
Slide 22: GAAP to Non-GAAP reconciliations
APPENDIX 22 GAAP to Non-GAAP reconciliations Reconciliation of Net Cash Flow From Operating Activities to Free Cash Flow ($ in millions) FY 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 FY 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 FY 2023 1Q 2024 Net cash flow from operating activities (GAAP) $ 2,374 $ 72 $ 321 $
Slide 23: Additional reconciliations
APPENDIX 23 Additional reconciliations Orders by Reporting Segment ($ in millions) Total Oilfield Services & Equipment FY 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 FY 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 FY 2023 1Q 2024 Oilfield Services & Equipment $ 11,798 $ 3,270 $ 3,392 $ 3,707 $ 3,721 $ 14,089 $ 4,1
Slide 24: OFSE & IET reconciliations
APPENDIX 24 OFSE & IET reconciliations Consolidated Revenue by Reporting Segment and Product Line ($ in millions) Oilfield Services & Equipment FY 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 FY 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 FY 2023 1Q 2024 Well Construction $ 3,301 $ 883 $ 936 $ 991 $ 1,043 $ 3,854
Slide 25: OFSE & IET GAAP to Non-GAAP reconciliations
APPENDIX 25 OFSE & IET GAAP to Non-GAAP reconciliations Reconciliation of Operating Income (Loss) by Segment (GAAP) to EBITDA (non-GAAP) ($ in millions) Operating Income (loss) by Segment (GAAP) FY 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 FY 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 FY 2023 1Q 2024 Oilfield
Slide 26: OFSE & IET GAAP to Non-GAAP reconciliations (outlook)
APPENDIX 26 OFSE & IET GAAP to Non-GAAP reconciliations Reconciliation of Operating Income (Loss) by Segment (GAAP) to EBITDA (non-GAAP) Outlook Framework ($ in millions) Oilfield Services & Equipment 2Q 2024 Outlook Range 2024 FY Outlook Range 2Q 2024 FY 2024 Operating Income (loss) by Segment (GAA
Slide 27: Follow our journey
bakerhughes.com Follow our @bakerhughesco journey Baker Hughes bakerhughesco @bakerhughesco 27 Confidential. Copyright 2024 Baker Hughes Company. All rights reserved.
Slide 28: Baker Hughes
Baker Hughes =