Baker Hughes Company · NASDAQ:BKR
Baker Hughes — Baker Hughes, a GE company — Scotia Howard Weil 2018 Energy Conference
15 slides from Baker Hughes's conference presentation, Mar 26, 2018
Slide 1: Scotia Howard Weil 2018 Energy Conference
Scotia Howard Weil 2018 Energy Conference Lorenzo Simonelli Chairman & CEO March 26, 2018 Not to be copied, distributed, or reproduced without prior approval. © 2018 Baker Hughes, a GE company - All rights reserved.
Slide 2: Forward-looking statements and non-GAAP disclosure
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 s
Slide 3: Last 12 months
Last 12 months • Transaction closed on schedule … started trading as BHGE in July 2017 • Customer reception very positive … gaining traction across product lines • Focused on fundamentals … HSE, quality, operations • Synergies on track … $119M in 2H’17, $700M in 2018 • Priorities clear … gain share,
Slide 4: Macro outlook positive: Global Liquids Demand
Macro outlook positive: rangebound oil prices driven by demand growth, stock reductions & US production growth Global liquids demand rising US crude stocks declining 120 500 $70 490 100 $65 480 Global Liquids Demand (MMbbl/d) Crude Oil Stocks (MBbls) 470 +2.9% +2.4% $60 80 460 $ / Bbl 450 $55 60 440
Slide 5: Gas outpacing other fossils … LNG demand remains strong
Gas outpacing other fossils … LNG demand remains strong Gas gaining share, LNG trade doubling by 2040 11% increase in global LNG imports in ‘17 18 Share of Primary Energy Global Gas Trade (Bcf/d) +26% Consumption by Fuel 550 16 100% 500 14 Δ LNG Imports ‘16-’17 (Million Tons) LNG +4-5% 12 75% 450 CA
Slide 6: BHGE is uniquely positioned across the value chain
BHGE is uniquely positioned across the value chain Oilfield Services (OFS) Turbomachinery & Process Solutions (TPS) • Drilling & Evaluation, Completions, Artificial Lift, • Centrifugal & Reciprocating Chemicals + Industrial Services Compressors + Drivers, Aftermarket $10.3B $6.3B Services, Pumps & V
Slide 7: BHGE is differentiated in the gas market
BHGE is differentiated in the gas market ENABLERS End customer Concept design High efficiency • LNG/CNG fueling • Gaffney-Cline and Associates equipment and • Power generation • Oil and gas consulting services • JewelSuite Physical + INTEGRATED GAS data science Fuel transportation VALUE CHAIN Well c
Slide 8: TPS is the technology leader in critical applications
TPS is the technology leader in critical applications … compression & power gen for every segment On & Offshore Liquefied Pipeline & Gas Refinery & Industrial Production Natural Gas Processing Petrochemical BHGE Position Customer • Time to market • Availability • Efficiency • Low capex • Efficiency
Slide 9: Clear strategic priorities for TPS … maintain leadership
Clear strategic priorities for TPS … maintain leadership position, return to normalized margins 1. LNG leadership … capture growth opportunities 2. Optimize service capability, readiness 3. Expand aggressively into industrial space 4. Position for the future … simplification, cost out 9
Slide 10: 1. LNG leadership … capture growth opportunities
1. LNG leadership … capture growth opportunities Supply gap developing … investment needed BHGE positioned to win 600 A Upgrade existing BHGE installations 500 • Deploy latest technology to increase total system throughput and efficiency 400 B Brownfield expansion & train additions MTPA 300 • Large
Slide 11: 2. Optimize service capability … readiness to serve
2. Optimize service capability … readiness to serve Large, distributed installed base driving $14B TPS services backlog driven by LNG long- transactional services term service agreements Installed Base LNG Installed ~4,900 CCs Base ~3,000 GTs ~470 CCs ~2,600 RCs ~400 GTs 2015 2016 2017 2018E 2015 20
Slide 12: 3. New technology opening industrial space opportunity
3. New technology opening industrial space opportunity NovaLT gas turbines … at leading edge of performance envelope Market opportunity Commercially Commercially • Demand driven by outdated infrastructure & policy available available changes • ~$2B annual TAM LT5 LT8 LT12 LT16 Applications BHGE valu
Slide 13: 4. Position for the future … drive simplification & cost out
4. Position for the future … drive simplification & cost out • Driving lower product and services cost … digital enablement, additive manufacturing • Simplify global footprint and backoffice … optimize service hubs, leverage COE’s • Optimize manufacturing footprint … site rationalization ~$0.2B annu
Slide 14: Summary
Summary • Macro environment encouraging • Integration efforts and synergies on track • TPS focus … LNG, optimized services, new markets, cost out • Priorities clear … gain share, grow margins, generate cash 14
Slide 15: Baker Hughes, a GE company
BAKER (46) UGHES a GE company
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