Baker Hughes Company · NASDAQ:BKR
Baker Hughes — FY2022 Earnings Presentation
24 slides from Baker Hughes's earnings presentation, Jan 23, 2023
Slide 1: 4Q & FY 2022 Results
4Q & FY 2022 Results January 23, 2023 Copyright 2023 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 distrib
Slide 2: Forward-looking statements
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
Slide 4: 4Q & FY 2022 Highlights
4Q & FY 2022 RESULTS 4 4Q & FY 2022 Highlights Continued OFSE margin improvement … legacy OFS margins achieved 20% EBITDA target Record IET orders of $4.3 billion in 4Q driven by LNG, Onshore/Offshore, and New Energy Initiated reorganization of Baker Hughes into two leaner and more focused business
Slide 5: Positive energy outlook for 2023, despite macro headwinds
MACRO OUTLOOK 5 Positive energy outlook for 2023, despite macro headwinds Global economy likely weighed down by inflation and tightening monetary conditions Early stages of multi- year growth cycle in Global oil and gas spare capacity near historical lows… double energy … supported digit upstream sp
Slide 6: Executing on our strategy
STRATEGY 6 Executing on our strategy Key Targets Commercially execute on a strong energy cycle • OFSE poised for double-digit growth in 2023 as part of a multi-year growth cycle • Retain strong market position for wave of LNG project investment $150+M • Capitalize on IET opportunities in Onshore/Off
Slide 7: Tailwinds across both business segments
TRENDS & COMMERCIAL WINS 7 Tailwinds across both business segments Oilfield Services & Equipment (OFSE) Industrial & Energy Technology (IET) • Growth trends shifting in favor of international and • Record orders driven by multiple awards Cost outin LNG by end of 2023 offshore markets and Onshore/Off
Slide 8: Nancy Buese, Chief Financial Officer
Nancy Buese Chief Financial Officer
Slide 9: 4Q 2022 Financial Results
FINANCIALS 9 4Q 2022 Financial Results Strong YoY order growth. Revenues Continued margin improvement … Strong free cash flow generation up double-digits 16% EBITDA margin Orders Adj. EBITDA Free cash flow $8.0B $947M $657M 32% QoQ 25% QoQ 57% QoQ 20% YoY 12% YoY 2% YoY Revenue Adj. operating income
Slide 10: Strong balance sheet and solid cash flow
FINANCIALS 10 Strong balance sheet and solid cash flow Strong Balance Sheet Prioritizing Free Cash Flow Strong balance sheet enables Portfolio focused on maximizing financial flexibility free cash flow generation 1.4X1 Net debt / LTM Adj. EBITDA $1.1B FCF in 2022 A3/A- Credit Ratings from Moody’s an
Slide 11: Flexible capital allocation
CAPITAL RETURNS 11 Flexible capital allocation Proven commitment to shareholder returns while Strong balance sheet & free cash investing in growth flow provides capital allocation flexibility Dividends Buybacks • Returning capital to shareholders – Continue strong track record of returning $1.6B cas
Slide 12: Oilfield Services & Equipment (OFSE) Results
OFSE SEGMENT RESULTS 12 Oilfield Services & Equipment (OFSE) Results Strong performance driven by higher volumes and pricing OFSE Revenues & EBITDA Margin 4Q’22 OFSE - Revenue Growth by Geography 15% 4,000 $3,579 20% 10% $3,403 $3,185 10% Change QoQ EBITDA Margin 18% 7% 3,000 5% $ millions 16% 17.1%
Slide 13: Industrial & Energy Technology (IET) Orders
IET SEGMENT RESULTS 13 Industrial & Energy Technology (IET) Orders Record levels of orders driven by LNG & Onshore/Offshore Production IET Orders Gas Technology Orders 15 5 $12.7 $4.3 Gas Tech Equipment Gas Tech Services 4 $3.6 3,000 $2,601 $9.9 3.3 0.9 10 $8.4 3 0.8 $ billions $1,912 $ billions 3.1
Slide 14: IET Results
IET SEGMENT RESULTS 14 IET Results Record levels of orders driven by LNG & OOP IET Revenues & EBITDA Margin 4Q’22 IET – Gas Tech Revenues 19.5% 2,000 Gas Tech Equipment Gas Tech Services 3,000 18.4% 20% $1,516 $1,541 16.6% 18% 1,500 EBITDA Margin $2,325 $1,239 $2,300 $ millions 16% $690 $829 $ milli
Slide 15: 2023 Outlook
GUIDANCE 15 2023 Outlook 1Q’23 Outlook 2023 Outlook BKR BKR Cost out by end of 2023 Revenue $5.3 - $5.7B Revenue $24 - $26B Adj. EBITDA $700 - $760M Adj. EBITDA $3.6 - $3.8B OFSE OFSE Revenue $3.3 - $3.5B Revenue $14.5 - $15.5B EBITDA $515 - $585M EBITDA $2.4 - $2.8B IET IET Revenue $1.9 - $2.4B Ord
Slide 16: Action Plan to create shareholder value
OUR STRATEGIC PURPOSE 16 Top priorities Capitalize on the growth opportunities across OFSE and IET, including LNG and New Energy Action Plan Increasing R&D to developing new energy technology portfolio in hydrogen, carbon capture and clean power to create Optimize corporate structure to enhance shar
Slide 17: Appendix
17 Appendix Copyright 2023 Baker Hughes Company. All rights reserved.
Slide 18: GAAP to Non-GAAP reconciliations
APPENDIX 18 GAAP to Non-GAAP reconciliations Reconciliation of Cash Flow From Operating Activities to Free Cash Flow ($ in millions) Cash flow reconciliation TY2019 1Q2020 2Q2020 3Q2020 4Q2020 TY2020 1Q2021 2Q2021 3Q2021 4Q2021 TY2021 1Q2022 2Q2022 3Q2022 4Q2022 TY2022 Cash flow from operating activ
Slide 19: OFSE & IET reconciliations
APPENDIX 19 OFSE & IET reconciliations Orders by Reporting Segment ($ in millions) FY 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 FY 2022 Oilfield Services & Equipment 16,419 3,639 3,110 2,728 2,827 12,304 2,544 3,040 3,136 3,0
Slide 20: OFSE & IET reconciliations
APPENDIX 20 OFSE & IET reconciliations Consolidated Revenue by Reporting Segment and Product Line ($ in millions) FY 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 TY 2022 Well Construction 4,222 1,023 767 731 736 3,257 743 800 84
Slide 21: OFSE & IET GAAP to Non-GAAP reconciliations
APPENDIX 21 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 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 FY 2021 1Q 2022 2Q 2022 3
Slide 22: OFSE & IET GAAP to Non-GAAP reconciliations
APPENDIX 22 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 1Q 2023 Outlook Range 2023 FY Outlook Range 1Q 2023 FY 2023 Operating Income (loss) by Segment (GAAP
Slide 23: Former Segments - Fourth Quarter 2022 Summary Results
APPENDIX 23 Former Segments - Fourth Quarter 2022 Summary Results (in millions) Three Months Ended December 31, 2022 Turbo- machinery & Oilfield Oilfield Process Digital Services Equipment Solutions Solutions Orders $ 2,983 $ 738 $ 3,660 $ 629 Revenue $ 2,980 $ 599 $ 1,753 $ 572 Operating income (lo
Slide 24: Baker Hughes
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