Baker Hughes Company · NASDAQ:BKR
Baker Hughes — Baker Hughes a GE — 2019 Barclays CEO Energy-Power Conference
17 slides from Baker Hughes's conference presentation, Sep 3, 2019
Slide 1: 2019 Barclays CEO Energy-Power Conference
Exhibit 99.1 2019 Barclays CEO Energy-Power Conference Lorenzo Simonelli Chairman & CEO September 3, 2019 Confidential. Not to be copied, distributed, or reproduced without prior approval.
Slide 2: Forward-looking statements
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 stateme
Slide 3: Macro environment challenges us to re-invent ourselves
Macro environment challenges us to re-invent ourselves Recent commodity price volatility Current macro expectations $140 $6 • NAM oil production growing … +1.9 MMbd by $120 $5 end-2020 $100 $4 • Global oil supply flexible … NAM growth, OPEC $80 $3 group has 2.2 MMbd spare capacity $60 $2 $40 • Oil p
Slide 4: BHGE today is not an ordinary OFSE company
BHGE today is not an ordinary OFSE company ~70% Total company revenue outside NAM ~60% OFS revenue outside NAM Revenue more “industrial” in nature OFS revenue tied to production … (TPS, DS) … strong aftermarket ~40% ~40% artificial lift, chemicals service entitlement Net capex % of revenue since for
Slide 5: Evolving our strategic priorities
Evolving our strategic priorities 2017/2018 2018/2019 Next twelve months 1 Re-establish presence with 1 Deliver on synergies – SG&A 1 Continue delivering on margin customers … commercial + product cost improvement … product cost framework + service delivery cost 2 Growth … regain lost share in 2 Del
Slide 6: 2018/2019 execution against goals
2018/2019 execution against goals 2018/2019 Deliver on Synergies – 1 Delivered synergies ~$100M above target in ’18 SG&A + product cost Growth … Regain lost share +10% orders, +5% revenue growth in ’18 … 1H’19 +9% orders, 2 in OFS (International) … +6% revenue growth vs. 1H’18 position for LNG w
Slide 7: Clear strategic priorities for the next months
Clear strategic priorities for the next 12 months 1• Continue delivering on margin improvement … product cost + service delivery cost 2• Portfolio alignment with highest returns activities 3• Continued focus on operations … service delivery, project execution 4• GE separation 5• Deliver on free cash
Slide 8: Continue margin improvement initiatives
1 Continue margin improvement initiatives Significant progress on expanding margins … launching next wave of improvement areas Adjusted operating income %, growth from 2Q’17 to 2Q’19 Drive product cost-out … improved Improvement in total procurement , product standardization +380bps company adjusted
Slide 9: Evolving the portfolio … differentiation for the future
2 Evolving the portfolio … differentiation for the future 2014 2018 Future state Industrial / Chemical Value Chain Industrial / Chemical Value Chain Industrial / 7% 10% Chemical Value Downstream Downstream Upstream Chain 6% 5% Midstream 11% Midstream Downstream 25% Leveraged to production Upstream U
Slide 10: Evolving the portfolio … taking action & focusing on returns
2 Evolving the portfolio … taking action & focusing on returns High-grading portfolio Partnering to drive value Investing in the right areas Rotoflow – 3Q’18 ~2,700 $700M AC Compressors - 2Q’18 5% equity stake in 4Q’18 patents issued globally in 2018 2018 R&D spend Recips - 2Q’19 Drilling Leading LM
Slide 11: Continued focus on operations … delivering for customers
3 Continued focus on operations … delivering for customers Strong international OFS growth Focused on executing for customers OFS international revenue indexed growth since 2Q’17 International rig count indexed growth since 2Q’17 +33% ADNOC • Drilled over 100k feet with 97% drilling efficiency Drill
Slide 12: GE separation
4 GE separation Commercial agreements in place … solidifies operational and commercial relationships for the long term … certainty for customers Initial sell-down in Nov ’18 … working collaboratively with GE as they pursue their orderly exit Investing in systems and processes that enable us to fully
Slide 13: Deliver on free cash flow potential
5 Deliver on free cash flow potential Capital allocation actions since deal close Improving working capital processes Days Sales Days To Inventory $3 billion $1.6 billion -a) -a) Outstanding Pay Turns-a) Share buyback Dividends 103 99 executed paid 80 5.0 69 4.2 $1.4B / 3.0% $1.4 billion 2Q’17 2Q’19
Slide 14: At BHGE we are committed to social responsibility
At BHGE we are committed to social responsibility Core elements embedded in how we operate Improving Health, Safety, and Environment “Perfect HSE days” achieved 153 in ‘18 … up 20% year-over-year Days without a recordable injury, vehicle accident, and serious environmental spills or releases People
Slide 15: Incentive compensation metrics aligned
Incentive compensation metrics aligned Short-term financial metrics Long-term performance metrics Revenue Relative return on invested capital Operating income Relative total Free cash flow shareholder return Our compensation metrics are aligned to shareholder returns 15 © 2019 Baker Hughes, a GE com
Slide 16: Summary
Summary Priorities aligned BHGE is not an 5 clear focus to shareholder ordinary OFSE areas for the returns … company next year accretive share, margins, cash 16 © 2019 Baker Hughes, a GE company - All rights reserved
Slide 17: BAKKER &
BAKKER & UGHES a GE company
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