Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Q2 2022 Earnings Presentation
28 slides from Nabors Industries's earnings presentation, Aug 4, 2022
Slide 1: 2Q 2022 Earnings Presentation
2Q 2022 Earnings Presentation NABORS INDUSTRIES LTD. August 4, 2022
Slide 2: Forward Looking Statements
Forward Looking Statements We often discuss expectations regarding our future markets, demand for our products and • our dependence on our operating subsidiaries and investments to meet our services, and our performance in our annual, quarterly, and current reports, press releases, and financial obl
Slide 3: 6/30/2022 Rig Utilization and Availability
6/30/2022 Rig Utilization and Availability U.S. LOWER-48 U.S. OFFSHORE ALASKA INTERNATIONAL TOTAL HIGH SPEC(2) RIG FLEET(1)(2) 330 111 12 16 133 RIGS ON REVENUE(1) 173 91 (3) 3 4 74 UTILIZATION AT 6/30/2022 52% 82% 25% 25% 56% (1) As of June 30, 2022 (2) Excludes non-high spec rigs in the Lower 48 (
Slide 4: Recent Highlights
2Q 2022 adjusted Improving liquidity Activity improving EBITDA of $158M and leverage for U.S. Drilling Strong improvement in • Reduced net debt by • Average rig count up all segments $33M in 2Q’22 by almost 6 Revenue growth of 11% • Adjusted free cash • Customer survey flow of $57M suggests 10% grow
Slide 5: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Resilience Technology & Progress on our Leading in excellence in leading to innovation commitment to Sustainability the Lower-48 growth in our rapidly taking de-lever and the Energy International hold in the Transition segment market N A B O R S . C O M
Slide 6: Scaling up in a Robust Market
1 Performance Excellence In The Lower-48 Scaling up in a Robust Market L48 Drilling Revenue and L48 Drilling Adjusted Gross Margin Average Rig Count $250 100 90 $200 80 70 Improving $150 60 revenue and margins 50 on growing rig activity $100 40 30 $50 20 10 $0 0 4Q 1Q 2Q 3Q 4Q 1Q 2Q 4Q 1Q 2Q 3Q 4Q 1
Slide 7: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Resilience Technology & Progress on our Leading in excellence in the leading to innovation commitment to Sustainability Lower-48 growth in our rapidly taking de-lever and the Energy International hold in the Transition segment market N A B O R S . C O M
Slide 8: Results Bolstered by Strong International Margins and Growing Rig Counts
2 Resilience Leading to Growth in Our International Segment Results Bolstered by Strong International Margins and Growing Rig Counts International Drilling Revenue International Drilling and Adjusted Gross Margin Average Rig Count $300 80 $250 75 Increases in rig $200 70 activity driving margin expa
Slide 9: Significant International Opportunity
2 Resilience Leading to Growth in Our International Segment Significant International Opportunity International average rig count potential growth* from SANAD newbuilds 85 Embarking on Newbuild Program 80 • 50 rigs over 10 years, awarded 5 rigs to- date 75 • First startup in early July, and second e
Slide 10: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Resilience Technology & Progress on our Leading in excellence in the leading to innovation commitment to Sustainability Lower-48 growth in our rapidly taking de-lever and the Energy International hold in the Transition segment market N A B O R S . C O M
Slide 11: NDS Capitalizing on Growing Rig Count and Higher Penetration
3 Improving Outlook For Our Technology & Innovation NDS Capitalizing on Growing Rig Count and Higher Penetration Gross margin % of ~ 52% in 2Q 2022, an all time high Expanding our high-value / high-margin NDS Revenue and Adjusted Gross Margin low-capital technology services $60 60% $50 55% Revenue A
Slide 12: Customer Adoption Fueling Rapid NDS Footprint Expansion
3 Improving Outlook For Our Technology & Innovation Customer Adoption Fueling Rapid NDS Footprint Expansion NDS technology consistently adds value on both Nabors’ and Third-party rigs U.S. Performance Software Installs U.S. RigCLOUD® Services Installs 180 90 87 83 160 80 71 140 70 64 120 58 60 52 10
Slide 13: Smart Suite Significantly Improving Performance
3 Improving Outlook For Our Technology & Innovation Smart SuiteTM Significantly Average Feet per Day Improving Performance 2,000 +28% Average Feet per Day 1,500 SmartNAV™ 1,000 Automated directional guidance Case Study: For a major operator in 500 system, improves wellbore U.S. Bakken placement accu
Slide 14: Smart Suite Growth Trajectory Validates Customer Acceptance
3 Improving Outlook For Our Technology & Innovation Smart SuiteTM Growth Trajectory Validates Customer Acceptance 2000 Third-Party SmartDRILLTM SmartDRILLTM 1800 Automation Deployment Cumulative Number of Wells Drilled Commercialization 1600 1400 • 90% Customer Retention Rate* • 1,800+ Wells Drilled
Slide 15: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Resilience Technology & Progress on Leading in excellence in the leading to innovation our Sustainability Lower-48 growth in our rapidly taking commitment and the Energy International hold in the to de-lever Transition segment market N A B O R S . C O M
Slide 16: Significant Headway toward Financial Goals
4 Progress on Our Commitment to De-lever Significant Headway toward Financial Goals ~ $1.7B Net Debt(1) reduction from previous high in 1Q 2018 Net Debt $4.0 $3.5 $3.0 $1.7B $2.5 Billions $2.0 $1.5 $1.0 $0.5 $- 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2018 2019 2020 2021 2022 (1) Net De
Slide 17: Debt Maturity Profile as of 6/30/22
4 Progress on Our Commitment to De-lever Debt Maturity Profile as of 6/30/22 In 2Q 2022: • Reduced outstanding notes by $25M in face value • Undrawn $350M credit facility; cash and STI of $418M • $251M in maturities through 2024 $1,000 $800 $600 Million $400 728 700 558 $200 390 177 $0 75 2022 2023
Slide 18: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Resilience Technology & Progress on Leading in excellence in the leading to innovation our Sustainability Lower-48 growth in our rapidly taking commitment and the Energy International hold in the to de-lever Transition segment market N A B O R S . C O M
Slide 19: Moving Forward on the Energy Transition
5 Leading in the Sustainability and Energy Transition Moving Forward on the Energy Transition Energy Efficiency & Emission Expansion Beyond Geothermal Development Reduction Technologies Oil & Gas Developing verticals on Providing expertise in Further differentiating identified hydrogen, fuel drillin
Slide 20: Growing Commitment to Operational and Environmental Stewardship
5 Leading in the Sustainability and Energy Transition Growing Commitment to Operational and Environmental Stewardship Dedicated to improving the environmental footprint of OFS Operating rigs with the environment as a stakeholder • Advanced control system optimizes the efficiency of fuel consumption
Slide 21: Geothermal Market Technology
5 Leading in the Sustainability and Energy Nabors and its predecessor entities have Transition been continuously innovating in the energy sector for over 100 years Innovative Drilling Technologies Geothermal Reducing cost per energy-unit produced by using and combining new technologies Market Techno
Slide 22: Appendix
@ NABORS Appendix NABORS.COM 22
Slide 23: Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)
Reconciliation of Non-GAAP Financial Measures to Net Income (Loss) Adjusted EBITDA represents net income (loss) before income (loss) from discontinued operations, net of tax, income taxes, investment income (loss), interest expense, other, net and depreciation and amortization. Adjusted EBITDA is a
Slide 24: Reconciliation of U.S. Drilling Segment Adjusted Gross Margin to Adjusted Operating Income
Reconciliation of U.S. Drilling Segment Adjusted Gross Margin to U.S. Drilling Segment Adjusted Operating Income Adjusted gross margin by segment represents Adjusted operating income (loss) plus General and administrative costs, Research and engineering costs and Depreciation and amortization. Three
Slide 25: 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 26: Reconciliation of Adjusted EBITDA by Segment to Adjusted Operating Income (Loss)
Reconciliation of Adjusted EBITDA by Segment to Adjusted Operating Income (Loss) by Segment Adjusted EBITDA by segment represents adjusted income (loss) plus depreciation and amortization. (In Thousands) Three Months Ended June 30, 2022 Other U.S. Canada International Drilling Rig reconciling Total
Slide 27: Reconciliation of Adjusted Free Cash Flow to Net Cash Provided by Operating Activities
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 flow is an im
Slide 28: Contact Us
NABORS INDUSTRIES LTD. Contact Us: William C. Conroy, CFA 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 NABORS CORPORATE SERVICES 515 W. Greens Road Suite 1200 Houston,