2019 Barclays CEO Energy-Power Conference Lorenzo Simonelli Chairman & CEO September 3, 2019 Confidential. Not to be copied, distributed, or reproduced without prior approval.
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 80 Global oil supply flexible NAM growth, OPEC 3…
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 40% (TPS, DS) strong aftermarket 40% artificial lift,…
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…
2018/2019 execution against goals 2018/2019 1 Deliver on Synergies Delivered synergies 100M above target in 18 SG&A + product cost Growth Regain lost share +10% orders, +5% revenue growth in 18 1H19 +9% orders, 2 in OFS…
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…
1 Continue margin improvement initiatives Significant progress on expanding margins launching next wave of improvement areas Adjusted operating income %, growth from 2Q17 to 2Q19 Drive product cost-out improved Improvement in total…
2 Evolving the portfolio differentiation for the future 2014 2018 Future state Industrial / Chemical Value Chain Industrial / Chemical Value Chain Industrial / 7% 10% Downstream Chemical Value Downstream Upstream 6% Chain 5%…
2 Evolving the portfolio taking action & focusing on returns High-grading portfolio Partnering to drive value Investing in the right areas Rotoflow 3Q18 2,700 700M patents issued globally in 2018 2018 R&D spend AC Compressors - 2Q18…
3 Continued focus on operations delivering for customers Strong international OFS growth Focused on executing for customers OFS international revenue indexed growth since 2Q17 International rig count indexed growth since 2Q17 ADNOC…
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…
5 Deliver on free cash flow potential Capital allocation actions since deal close Improving working capital processes Days Sales Days To 3 billion 1.6 billion Outstanding-a) Pay-a) Inventory Turns-a) Share buyback Dividends 103 99…
At BHGE we are committed to social responsibility Core elements embedded in how we operate Improving Health, Safety, and Environment 153 Perfect HSE days achieved in 18 up 20% year-over-year Days without a recordable injury, vehicle…
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…
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
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