Baker Hughes Company · NASDAQ:BKR
Baker Hughes — Q3 2024 Earnings Presentation
28 slides from Baker Hughes's earnings presentation, Oct 23, 2024
Slide 1: 3Q 2024 Results
3Q 2024 Results October 23, 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 used only for the benefit of Baker Hughes and may not be distributed, trans
Slide 2: Forward-looking statements and non-GAAP disclaimer
This presentation (and oral statements made regarding the subjects of this presentation) 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 st
Slide 3: Lorenzo Simonelli, Chairman & Chief Executive Officer
Lorenzo Simonelli Chairman & Chief Executive Officer Copyright 2024 Baker Hughes Company. All rights reserved.
Slide 4: Third-Quarter 2024 Highlights
3Q 2024 RESULTS 4 Third-Quarter 2024 Highlights Record quarterly EBITDA Margin expansion accelerating Continued strength in IET orders Strong free cash flow Copyright 2024 Baker Hughes Company. All rights reserved. Note: EBITDA and Free Cash Flow are non-GAAP measures – see appendix for GAAP to non-
Slide 5: Key awards & technology developments
3Q 2024 RESULTS 5 Key awards & technology developments We remain on track for another solid year of orders Onshore & Offshore Gas Infrastructure SSPS1 Production Solutions Production Barrell Compressor Line (BCL) Integrated Compressor Line (ICL) Flexible Pipe Systems Leucipa FPSO compression awards
Slide 6: The world needs more energy & less emissions
LONG-TERM MACRO OUTLOOK 6 The world needs more energy & less emissions Underpinning Baker Hughes’ long-term growth BKR PRIMARY ENERGY DEMAND OUTLOOK1 (MTOE2) Baker Hughes Baker Hughes Growth Primary Energy Demand Growth Drivers Drivers Drivers ~16,800 ~15,200 • Population growth • 800 MTPA3 LNG capa
Slide 7: Customer spend shifting toward global gas & mature fields
NEAR-TERM MACRO OUTLOOK 7 Customer spend shifting toward global gas & mature fields Production-levered OFSE portfolio & unique IET franchise increasingly differentiate Baker Hughes Mature assets2 come into focus KEY MARKET THEMES By 2030, we estimate 80% of the world’s oil & gas supply will be produ
Slide 8: Understanding the life cycle of our machines
EQUIPMENT & SERVICE LIFE CYCLE 8 Understanding the life cycle of our machines From design to retirement, Baker Hughes partners with its customers across the entire product life cycle DESIGN MANUFACTURE TEST INSTALL MAINTAIN UPGRADE Illustrative Baker Hughes equipment life cycle over 40 years Gas Tec
Slide 9: Gas Technology Services (GTS)
GTS GROWTH PROFILE 9 Gas Technology Services (GTS) Increasing installed base drives long-term structural growth in Gas Technology Services Growing equipment orders Drives growth in installed base Drives services revenue growth GTS SERVICEABLE INSTALLED BASE & REVENUE EVOLUTION 1 GTS Installed Base U
Slide 10: Nancy Buese, Executive Vice President & Chief Financial Officer
Nancy Buese Executive Vice President & Chief Financial Officer Copyright 2024 Baker Hughes Company. All rights reserved.
Slide 11: 3Q 2024 Financial Results
FINANCIALS 11 3Q 2024 Financial Results FINANCIALS1 3Q'24 ORDERS ($M) 6,676 Highest margins Adj. EPS growth of REVENUE ($M) 6,908 since 2017 drive 59% YoY record EBITDA Adj. EBITDA ($M) 1,208 Adj. EBITDA % 17.5% Adj. EPS ($/share) 0.67 FINANCIALS1 3Q'24 Strong free cash No debt maturities FCF ($M) 7
Slide 12: Flexible capital allocation policy
CAPITAL ALLOCATION 12 Flexible capital allocation policy Prioritizing a strong balance sheet and returning capital to shareholders 60%-80% FCF 2 PRIORITY Balance sheet Technology Dividends Buybacks M&A investment • Maintain a strong • Focus growth capital on • Prioritize dividend growth • Repurchase
Slide 13: Industrial & Energy Technology (IET)
IET SEGMENT RESULTS 13 Industrial & Energy Technology (IET) Strong Gas Technology Equipment (GTE) orders provide visibility for Gas Technology Services (GTS) growth FINANCIALS1 3Q'24 • Solid order momentum continues Another quarter of strong FPSO and gas infrastructure orders ORDERS ($M) 2,868 • Str
Slide 14: Oilfield Services & Equipment (OFSE)
OFSE SEGMENT RESULTS 14 Oilfield Services & Equipment (OFSE) Strong EBITDA margin performance driven by cost-optimization initiatives FINANCIALS1 3Q'24 • Resilient Subsea & Surface Pressure Systems (SSPS) orders Another quarter of robust flexible pipe system orders ORDERS ($M) 3,807 • Revenue remain
Slide 15: Unlocking the full potential of our business
CHANGING THE WAY WE OPERATE 15 Unlocking the full potential of our business Exceptional operational performance & continuous improvement driving margin expansion IET Margin Improvement Drivers IET Margin OFSE MarginImprovement Drivers Improvement Drivers OFSE Margin Improvement Drivers 1. Conversion
Slide 16: 4Q'24 & FY 2024 outlook
GUIDANCE 16 4Q’24 & FY 2024 outlook BKR1 4Q'24 BKR1 2024 Maintained the REVENUE ($B) 6.85 - 7.35 REVENUE ($B) 27.35 – 27.85 midpoint of 2024 Adj. EBITDA ($B) 1.18 – 1.34 Adj. EBITDA ($B) 4.45 – 4.60 Adj. EBITDA guidance OFSE OFSE REVENUE ($B) 3.70 – 4.00 REVENUE ($B) 15.45 - 15.75 EBITDA ($M) 700 –
Slide 17: Lorenzo Simonelli, Chairman & Chief Executive Officer
Lorenzo Simonelli Chairman & Chief Executive Officer Copyright 2024 Baker Hughes Company. All rights reserved.
Slide 18: Our strategy is delivering success
OUR STRATEGY 18 Our strategy is delivering success Margins to increase 5 percentage points since 2020 Compelling Investment Thesis BKR EBITDA & MARGIN PROGRESSION 1 • Differentiated growth opportunity 16.4%2 5500 EBITDA ($) 16.00% 5000 EBITDA Margin (%) 14.8% 14.1% 15.6%3 • Underappreciated industri
Slide 19: Appendix
Appendix Copyright 2024 Baker Hughes Company. All rights reserved.
Slide 20: Results by Reporting Segment
APPENDIX 20 Results by Reporting Segment Oilfield Services & Equipment (in millions) Three Months Ended Variance September 30, June 30, September 30, Year-over- Segment results 2024 2024 2023 Sequential year Orders $ 3,807 $ 4,068 $ 4,178 (6%) (9%) Revenue $ 3,963 $ 4,011 $ 3,951 (1%) —% Operating i
Slide 21: Results by Reporting Segment
APPENDIX 21 Results by Reporting Segment Industrial & Energy Technology Copyright 2024 Baker Hughes Company. All rights reserved. *Non-GAAP measure - EBITDA is defined as operating income excluding depreciation Note: certain columns and rows may not add up due to the use of rounded numbers. and amor
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 2Q 2024 3Q 2024 Net cash flow from operating activities (GAAP) $ 2,
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 2Q 2024 3Q 2024 Oilfield Services & Equipment $ 11,798 $ 3,270 $ 3,392 $ 3,707 $ 3,72
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 2Q 2024 3Q 2024 Well Construction $ 3,301 $ 883 $ 936 $ 991
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 2Q 2024 3
Slide 26: OFSE & IET GAAP to Non-GAAP reconciliations
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 4Q 2024 Outlook Range 2024 FY Outlook Range 4Q 2024 FY 2024 Operating Income (loss) by Segment (GAA
Slide 27: Follow our journey
bakerhughes.com Follow our @bakerhughesco journey Baker Hughes bakerhughesco @bakerhughesco Confidential. Copyright 2024 Baker Hughes Company. All rights reserved.
Slide 28: Baker Hughes
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