Baker Hughes Company · NASDAQ:BKR
Baker Hughes — Barclays CEO Energy-Power Conference 2022
21 slides from Baker Hughes's conference presentation, Sep 6, 2022
Slide 1: Barclays CEO Energy Power Conference
Barclays CEO Energy Power Conference Lorenzo Simonelli, Chairman & CEO September 6, 2022 Copyright 2022 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
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: Sharpening our focus on building a differentiated Energy Technology Company
KEY MESSAGE 3 Sharpening our OUR PATH FORWARD focus on building a Uniquely positioned to capitalize on cyclical commodity differentiated tailwinds and structural growth of energy transition Energy Technology Company Improving margins and investing in leading industrial and energy transition technolo
Slide 4: Baker Hughes is positioned to capitalize on the evolving energy landscape
MACRO OUTLOOK 4 Baker Hughes is positioned to capitalize on the evolving energy landscape ENERGY NEEDS TO BE: KEY MACRO THEMES Sustainable • Recent geopolitical events have re-drawn the global energy map, significantly changing the macro-outlook • Governments are re-balancing their priorities betwee
Slide 5: Our strategy evolution continues
OUR JOURNEY 5 Our strategy evolution continues Successfully executing across all three pillars of our strategy to lead the energy transition Transform Invest Position the core for growth for new frontiers Margin expansion - 210 bps margin Tuck-in M&A - $2.1B2 of strategic Clean technology acquisitio
Slide 6: Transforming the company to drive profitability & enhance optionality
THE NEXT STEP 6 Transforming the company to drive profitability & enhance optionality CHANGING THE WAY WE OPERATE ✓ Creating two business segments focused on S T R EA M L I N ED H Q different growth profiles CORPORATE FUNCTIONS ✓ Reducing Executive Leadership team Oilfield Services & Industrial & En
Slide 7: Strategic & operational advantages of new streamlined structure
THE NEXT STEP 7 Strategic & operational advantages of new streamlined structure Enhancing execution… capitalizing on different spending cycles across a shared customer base Benefits and operational Oilfield Services & Equipment (OFSE) Industrial & Energy Technology (IET) improvements of new structur
Slide 8: Production focused portfolio with strong international presence
OFSE 8 Production focused portfolio with strong international presence Oilfield Services & Equipment Reporting Segments – Revenue TY ‘21 Well Construction Completions, Intervention Production Solutions Subsea & Surface Pressure & Measurements Systems $3.3B $3.1B $3.1B $2.5B • Drilling Services • Com
Slide 9: Developing new solutions for current and evolving upstream market
OFSE 9 Developing new solutions for current and evolving upstream market Capitalize Evolving Develop on multi-year cycle our business models new energy portfolio Multiple initiatives to capitalize on growth Moving from selling products to more Leveraging subsurface to surface portfolio to cycle and
Slide 10: OFSE strategy and execution
OFSE 10 OFSE strategy and execution Positioned for cyclical upturn and preparing for new energy order Pathway to 20% EBITDA margins Supply chain & • Multiyear upstream cycle to bolster growth Cost product cost Chemicals synergies • Well positioned in key markets – Middle East, Capitalize on normaliz
Slide 11: A broad industrial and energy portfolio
IET 11 A broad industrial and energy portfolio Industrial & Energy Technology Reporting Segments – Revenue TY ’21 Gas technology ~65% Industrial technology ~35% IET revenue IET revenue Equipment Services 2021 Condition Inspection Pumps, Valves & PSI & Controls 2021 Monitoring Gears $2.9B $2.7B $0.6B
Slide 12: Attractive near-term growth… Gas, Industrial & New Energy
IET 12 Attractive near-term growth… Gas, LNG outlook… strong order growth near-term Industrial & New Energy 50+ ~800 ~100-125 ~1502 NEAR-TERM DRIVERS ~4601 Driving orders in 2H‘22-’25 • Services represent ~45% of total IET $1.4B ~40% growth in Gas ~600 420 Tech installed base revenues Recurring in 2
Slide 13: Energy Transition drives long-term growth
IET 13 Energy Transition drives long-term growth KEY DRIVERS OF GROWTH OUTLOOK Driving to double revenues 70%+ • Significant growth in services revenue est. growth in global LNG capacity by ~2030 • Commercialize H2 and CCUS investments, driving strong CTS revenue growth $6-7B New Energy orders by 20
Slide 14: IET strategy and execution
IET 14 IET strategy and execution Creating a market leader for a net-zero economy Pathway to 20% EBITDA margins • Natural gas leader across value chain, with Supply chain & Cost product design unrivalled LNG presence synergies Capitalize on • Leading compression and gas turbine Volume/mix macro tail
Slide 15: Continued emphasis on free cash flow & returns to shareholders
FREE CASH FLOW & RETURNS 15 Continued emphasis on free cash flow & returns to shareholders Delivering on FCF1 potential Driving financial returns $1.8B • Disciplined investment combined with returning cash to shareholders $1.2B $1.2B • ~$2.1B inorganic investments1 funded $0.5B partially through ~$1
Slide 16: Committed to sustainability
SUSTAINABILITY 16 Committed to sustainability Led by our purpose of making energy cleaner, safer, and more efficient for people and the planet 23% Reduction in Scope 1&2 GHG emissions vs. 2019 DRIVING CARBON HEALTH, SAFETY & COMMITTED TO DIVERSITY, ETHICS, COMPLIANCE, FOOTPRINT REDUCTION WELLNESS EQ
Slide 17: Committed to creating shareholder value
OUR STRATEGIC PURPOSE 17 ACTION PLAN TO DELIVER SHAREHOLDER VALUE Committed to Restructuring from four product companies into two business segments, improving operations and creating enhancing future optionality shareholder value Capitalizing on the current multi-year upstream spending cycle and the
Slide 18: Appendix
18 Appendix Copyright 2021 Baker Hughes Company. All rights reserved.
Slide 19: GAAP to Non-GAAP Reconciliations
APPENDIX 19 GAAP to Non-GAAP Reconciliations ($ in millions) Reconciliation of Cash Flow From Operating Activities to Free Cash Flow Non-GAAP reconciliation TY20172 TY2018 TY2019 1Q2020 2Q2020 3Q2020 4Q2020 TY2020 1Q2021 2Q2021 3Q2021 4Q2021 TY2021 1Q2022 2Q2022 1H2022 Cash flow from operating activ
Slide 20: OFSE and IET GAAP to Non-GAAP Reconciliations
APPENDIX 20 OFSE and IET GAAP to Non-GAAP Reconciliations ($ in millions) Reconciliation of Operating Income to Adjusted EBITDA – OFSE Non-GAAP reconciliation TY2017 TY2018 TY2019 1Q2020 2Q2020 3Q2020 4Q2020 TY2020 1Q2021 2Q2021 3Q2021 4Q2021 TY2021 1Q2022 2Q2022 1H2022 OFSE Revenue 13,022 14,258 15
Slide 21: Baker Hughes
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