Baker Hughes Company · NASDAQ:BKR
Baker Hughes — Baker Hughes, a GE company — Cowen & Company 7th Annual Energy and Natural Resources Conference (December 2017)
12 slides from Baker Hughes's conference presentation, Dec 4, 2017
Slide 1: Baker Hughes, a GE company
Baker Hughes, a GE company Cowen & Company 7th Annual Energy and Natural Resources Conference Brian Worrell Chief Financial Officer December 4th, 2017
Slide 2: Caution Concerning Forward-Looking Statements
Caution Concerning Forward-Looking Statements This presentation (and oral statements made regarding the subjects of this presentation) contains "forward-looking" statements as that term is defined in Section 27A of the Securities Act, and Section 21E of the Exchange Act. All statements, other than h
Slide 3: BHGE update
BHGE update Fullstream Delivered 3Q’17 Key value prop as BHGE commercial wins O&G market Integration Executing outlook mixed going well synergies 3
Slide 4: Strategic priorities
Strategic priorities Grow Increase Top-tier market margin cash share rates conversion 4
Slide 5: Winning in the market
Winning in the market Awarded largest turbomachinery and process solutions deal with PetroChina in Iraq • Will deliver Frame 6B gas turbine electric generator trains • Supporting power generation for onshore Halfaya oilfield Signed agreement • Equipment to generate 150 MW for integrated project of p
Slide 6: Synergies update
Synergies update ▪ Delivered $37MM of synergies in 3Q’17 ✓ Closed 38 facilities … planning ~60 by year end ▪ Significant number of projects executed to-date ✓ 15,000 logistics lanes with harmonized or renegotiated rates ▪ Prioritizing highest return on investment projects ✓ 350 applications rational
Slide 7: Cash flow conversion
Cash flow conversion ($ in billions) Historical combined business FCF Receivables monetization update 2015 2016-a) 3Q’17 YTD BHGE FCF-b) $2.0 $ Monetized Restructuring/deal FCF balance $2.7 $2.4 Core FCF $0.5 $1.5 $1.3 $(1.2) 2015 2016 3Q’17 $(0.7) $(0.7) $(0.5) 3Q’17 YTD dynamics ▪ Significantly re
Slide 8: 2018 cash flow dynamics & actions
2018 cash flow dynamics & actions ($ in billions) 2018 dynamics Critical focus areas Operational free cash flow Inventory • Net income: Stronger … synergies, volume Raw/WIP … input controls, sales plan $2.3 alignment, safety stock levels, analytical tools • Working capital: expecting improvement Fin
Slide 9: New revenue recognition standard … ASC606
New revenue recognition standard … ASC606 ($ in billions) Background • New standard for revenue recognition ’16 Est. ’17 Est. released in May ’14 … effective 1/1/18 Op Income ~$(0.2) ~$(0.2) Impact drivers Estimated impact ▪ Quantification ongoing Moving to delivery milestones; Flow minimal impact ▪
Slide 10: Capital allocation update
Capital allocation update Priorities ▪ Return 40-50% of net income to shareholders over time Dividends Buybacks Balance sheet Announced 6% Announced $3B Intend to raise ▪ Utilize strength of balance increase in dividend buyback authorization additional debt sheet & maintain ‘A’ category credit ratin
Slide 11: Wrap
Wrap Grow Increase Top-tier market margin cash share rates conversion 11
Slide 12: BAKER (46)
BAKER (46) UGHES a GE company