Baker Hughes (BKR) 20 Jan 222021 Q4 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Baker Hughes Company Fourth Quarter and Full-Year 2021 Earnings Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Mr. Investor President, Vice Bailey, Relations. Jud begin. Sir, you may

to Thank fourth Hughes welcome earnings you. morning everyone Good the quarter call. Baker conference and and XXXX full-year

Simonelli; Worrell. me our be issued found with are website Chairman can CEO, Here at our bakerhughes.com. our earlier today CFO, earnings The Lorenzo Brian on release we and and

risks statements. review and the not guarantees are actual SEC during reminder, conference involve a materially. website discussion statements number of this for Please could to call, results of the future These performance and we filings and As some differ course cause will our factors a of provide assumptions. forward-looking a of that of

know, Lorenzo. measures will that, you GAAP I of found other the release. and to can over call With As turn non-GAAP to operating in reconciliations income be our earnings

you, morning Good joining and for thanks Jud. Thank us. everyone

quarter We rate solid as results, we are generated and flow, TPS. improvement, our strong from with quarter cash margin strong performance pleased free fourth of another orders

TPS During continued pressure a improvement commodity performed despite well continued on high extremely initiatives supply and the chain cost executed successfully to inflation. on and its quarter, OFE OFS level. at operate

which just believe activity more shape. XXXX. book provides order orders important is achieved and For the financial and in We that and levels start commercial LNG played and almost a below indication role cycle TPS on free cash solid successful LNG step-up the our to Baker to to helping that Energy with pleased Perhaps allocation. full new generation the for was were as quiet Hughes record New steps beginning LNG future. XXXX, in year, an leading strategy in we flow take markets, company peer developments several key help successes proved year, capital $X.X accelerate our the for to in a billion be with importantly, XXXX the position well in took as the activity After performance. year we Last in many a record in the LNG fronts

decade frontiers, uptick recent natural We along is acceptance particularly a a that for other orders confirms more successes zero fuel ability energy XXXX. I'm $X.X $XXX also to that million world. conversion product areas we of greater remain from efforts, billion very gradually billion over pronounced billion new report cash started in to grow that and as gaining year adjusted flow our commercial its Energy companies, generating $X CCUS. hydrogen to ultimately Baker destination our also by from transition in TPS, see orders this the DS pleased transition with ever New gas confident the believe In and primarily the free $X which represents of over in in delivered our almost to XXXX movements, generating We to in orders total next across in net and XX% OFS EBITDA. Hughes policy Europe, approximately business strongest

our working cash to wound improving as we continue capital are progress make and cash payments We to broader restructuring and down our and this processes. pleased see performance on separation

company profile strategy. allocation capital and Our with comes cash optionality our broader it provides flow the strong when free ample to flexibility

in almost acquisitions we industrial $X.X XXXX, back As through to and investments billion and dividends the also returned new this, across shareholders evidence of buybacks and multiple spaces. making while energy

an the of performance investment expanded to in and a continue acquisition which and completed ARMS set deliver Management Industrial its we help build will major front, industrial Baker asset Asset of platform Augury, the capabilities. On Hughes Reliability out

a and in in we hydrogen. an with license also growth On early technology company developing entered hydrogen acquired the in company we biomethanation Energy New pursuing range Ekona, position a CCUS, into Process. In early active Salt technology, novel a were SRI well Mixed stage technologies Nemesis, hydrogen technologies. production this turquoise the and a front, for stage we of on as a investment company exclusive year in focused hydrogen, stage Electrochaea, an as in In CCUS made

XXXX We saw challenges. and product pandemic, primarily impact and the inflationary our saw year not positive achievements, issues higher COVID-XX was drove the without operations. DS continue many Supply also While our from companies. also continued pressures its chain delivery disruptions across and which to OFS costs

see teams some to disruption these through of first these the tension we and to continue offset have work some pressures, continued in areas level year. of to Our potentially but expect of half the to

global growth XXXX, expect pace we strong. remain As the economic to we to look of ahead

are the are plans levels to stimulus levels some We with the for year. and will expected customers and scenario a E&P product from oil rates to monetary quell oil for environment the by pre-pandemic for Pairing tightening OPEC+, begin growth Despite time. and this demand However, likely expect IOC discipline, continued expected XXXX that of recovery provide with our believe policy macro our translate moderate we this will to investment spending growth, to pressures. of attractive into tight in inflationary reduce the demand companies. growing the remain we strong end believe of the tailwind COVID-related many recovering markets an banks XXXX, likely to order as in energy continuing pace central demand slowdown broader in rising

building net zero. the fragility of continued pushing prices XXXX highlighted LNG a the breaking and gas XXXX expect gas natural the in to markets system supply Europe energy both Asia. on levels converged as world gas and in transitions global spikes demand momentum in to record of also global also A and We the The XXXX. factors in strong in price combination

FIDs expect growing and additional appetite number by Looking longer-term purchase supported ahead, the in agreements. beyond, we XXXX a LNG of for LNG

in see have we the significant demand As LNG coming structural previously decades. growth mentioned, for we

this remains three frontiers. executing pillars energy macro transform strategy supported long-term positive recent parts on within and by constructive invest Against across towards also for New Baker role policy in the in the transition. certain world Hughes of Our of improvements the our gas's sentiments for is core, view backdrop, growth the natural the position focused Energy

two work aligning in Hughes industrial and Baker ultimately that business most these of vision quarter to last or we the IET. across business outlined we also been in year. two energy of and our we Since and order aspects organizational executing equipment towards technology areas, continue company and broad of all the third the OFSE Importantly, services the across unveiled Oilfield structure. we corporate to have determine evaluating efficient areas

in shareholder the value. Our our enhancing structure our and aligns areas, strategic to that accelerate and goal returns is increasing also internal find helps and properly growth key while right resources profitability

IAM have report Asset the reached will and development changes internally. bring across across industrial of Group, clean reduce We hydrogen, that Most business and help together emissions and President help Solutions Rod early Executive started Vice The solutions and two to Technology Industrial Industrial key these emissions Energy Management offerings. Asset performance will believe Industrial company integrated speed increase groups power models will assets. or will conclusions We from management of software for both improve digital solutions. for encompass CCUS, based efficiencies, for our New the and Technology and hardware the created customers and Management commercial implement we or their TPS. notably, accelerate creation capabilities, Climate which Christie, to energy and to Management some Group CTS Asset recently have Climate Solutions

positioned our change will well on direction any cool reporting believe very and it of is slick recovery company not long-term change Overall, the today. with Baker markets. capitalize well excited and Importantly, structure placed structural the near-term for in are of energy we Hughes strategic the to the

each update signs ended in point and segments. in oilfield note, growth North of to an the on you activity services, Now, American I'll both In of a a strong all give XXXX. on and our international year positive markets the year levels

XXXX over OFS the difficult strong half had performance. high and an second quarter chain environment a a on supply Additionally, ended note navigate with year increasingly team the margin fourth the of to

markets, and by Latin into XXXX, across Middle expect international a recovery the strong Looking led we America East. the broad-based

expect the deployed restore the and while market, growth, what year production in and early capacity East expect In land customers, our should in with will second underlying as conversations multi-year impressive for E&Ps the America, disciplined North year we growth very active. to private on as America Latin being deploying lay Based in of E&Ps cycle. North a capital same to US foundation of in we longer-term we remain near-term trends growth double-digit stages expect remain with offshore. the the is levels well expansion. While of another Middle is be the IOCs remaining public see to as the region the more Capital in recovery consecutive America XXXX

are still being to our team negative our commodity and extremely achieve multiple lines the by with to in namely chain current to assuming pleased offset actions levels on price OFS constraints. the rates the objectives, the in end team gradual supply chain being Xth OFS we of said, increases taken margins OFS disorder, operating we mitigating working in focused on the While margin headwinds quarter, That pricing of achieving hard XX% is of disruptions. Based remain XXXX. product of the continued successful were these supply due broader recent impacts inflation OFS XX% below progress EBITDA and across in some state the and logistics our by normalization of

energy by orders business. and outlook I'd in opportunities in strength which FPSOs onshore the The to of LNG initiatives. and production included TPS TPS and booked thank of driven across Moving new XX like topside project XXXX, the billion the $X.X TPS four projects an to team TPS. awards. LNG, MTPA remains exemplified orders, X which Rod offshore and constructive of year exceptional for offshore almost

in On significantly operating $X representing TPS of services. and equipment the outpacing operating income over despite billion rate side, over generated execution margin revenue growth XX%

the two Eastern Pluto LNG in pleased fronts. We received are Western were we quarter. about large We Hemisphere. a announced major to which TPS a what also for is by in for the and Train book MTPA fourth In X X Woodside, across Australia, award equipment scale the future award holds excited LNG, in multiple operated project LNG awards the

awarded were power project for we an America. to LNG equipment deliver North generation a Additionally, in major order

the with to pace on remain over We be the towards have end positive this optimistic the discussions global of two outlook XXX multiple to a XXX MTPA in we upper years. three on potential range. of gas awards the and markets, to continue of Based for LNG general and on continued the customers fundamentals confident for years the bias next the

of segments technology on non-LNG our with multiple we of portfolio, XXXX. of quarter. Saudi we Kingdom the opportunities the number we advanced a hydrogen, For the In project awards an during compression of and building Air book growth the Energy to booked quarter for see made in the continued for New were pleased Products we TPS Arabia, in in announcement carbon-free hydrogen award second NEOM the for

be HPRC production will We carbon cost zero project, our which and a as hydrogen the providing the of NEOM accelerate of will a solutions adoption fuel. lower enable to

Cooper Our we carbon Air to technology from proven a is capture expect for received to driven Basin. to for we came Baker gas an project will and depleted storage project collaboration our dioxide. the with and million see critical natural how will of of economy. order equipment well future, Hughes compressor tons the the expectations, a Moomba and order Even onshore net and Hughes' processing X.X zero Santos reservoirs technologies carbon the for hydrogen in of in orders Products by recovery good turbomachinery In similar gas turbine of still Australia. TPS CCUS, XXXX steam supply as level a the primarily LNG. example generator will the plant to The South though award ahead is Baker store XXXX helping gas heat carbon annually dioxide provide accelerate in permanently compress in the be activity serve in

improve are we foreseeable favorable a over to a the markets market, order the this the take pipeline tree traction the and in modest as overall pleased we activity industry higher in the step anticipated see show Outside expect costs continue XXXX. in At XXXX level, after flexible to but to offshore is trends of equipment, course likely of the macro we order oilfield for and continue XXXX more another tree below subsea to in remain market, gaining progress becoming with on taking are strong to subsea opportunities. trends pre-pandemic of continue In out. Next, we future. business awards levels in

UAE. wellheads We conditions in our subsea were and are XX-year international and wellhead the fourth systems the to tree also announce for businesses. surface in services seeing improving contract quarter, In a market major pleased we

ADNOC's as of footprint ever as wellhead strengthen our will part partnership the in award, largest this well win customer, further As region. our enhance with this key important

in quarter business performance Sea driven North with good subsea a activity and the Africa. the in traction some saw by orders services Our strong fourth increased Sub-Saharan

Although and our a we recovery, believe OFE is signs markets markets the of evolve. to will still energy path challenged structurally remain the customers' showing offshore as budgets

focused Drilling create an we The profitability to how Systems As remain optimizing OFE a the transform Subsea the improving on to business, of rightsizing is result, portfolio. continuing our HMH we're merger excellent of MHWirth and example with the portfolio.

our Solutions, market aviation in pickup and industrial and particularly We lag, Finally, experienced across in are and Digital end markets transportation end improving. to that gas, XXXX starting markets. markets see the overall are through solid conditions growth a oil

the chain chip in year. challenges Additionally, business to that the earlier be DS supply by the began shortages and continues impacted

cloud DS contracts digital Management to and Nevada a Industrial deploy XX XX with conditioning, Yara will Nevada for Bently Bently software. also secured using enterprise-wide contract efficiency. Bently across secured X key plant During a major for Asset as The between and continued important reliability and Asset company System with X across improved condition with worldwide. EVO enterprise-wide data monitoring contract System operations to enable availability Nevada's secure Yara's a Management Management solutions. oil monitoring and contract sites facilities latest a customers quarter, software the asset to Asset transformation standardized platform enable the

customers services into to digital move Nevada Bently supporting environment. support the monitoring a out operator's maintenance addition, providing cloud X-year its to by network In goal a data facilities and services condition of secured agreement the localized transformation

Reliability monitoring our Asset the executed acquisition important the and capabilities and I that balance of to strategy Management. in Nevada the presence XXXX Systems year franchise X the deliver DS build-out with of Going role entire we us our plant. platform, recently condition more to to of our the software and of an formed strategy of our and investments developing growth Key play Bently our with will in forward, assets mentioned, cover Augury, the earlier on in IAM, cloud-enabled allow ARMS expanding overall we previously Industrial alliance both the industrial the in complement protection and non-critical success of to

driver capabilities pleased energy consumption emissions on strives the the cash the free with into year, opportunities adjusted almost across good As we in challenges asset transforming net better presented transition decades, industries. XXXX made a be zero returned by efficiency, the executing enabling flow. towards We to multiple flow XXXX world portfolio. progress industrial free our we cash will a operating while made two-thirds the our company convert almost on energy the shareholders our XX% target of also an and time, commercial same back At reducing management able EBITDA this across of coming I'm enterprise progress lowering in key to leader. into level many Overall, and in navigating the during were

both And in recovery growth enter our areas work call to range challenges their thanking want New LNG, Brian. Asset look and turn their solid a with beyond. corporate Hughes continued I'll capital benefit in and strategy, Baker I over With and the on to by in We I success to trends to a surrounding to business conclude XXXX, our to Management. expect overcoming all further hard our of across employees of on year major we that, focusing macro building XXXX of commitment for opportunities. the our allocation tailwinds forward another developing longer-term from cyclical and in our of look success Industrial commercial structural we OFSE As forward Energy pandemic.

obligation OFE. ended X% X% was XX% begin into decrease billion, offset RPO I'll then the the Digital ended move and and orders Remaining TPS, billion, results the Digital $X.X in details. up at Solutions up Thanks, services up sequentially. Solutions $XX.X total performance in at X% Year-over-year, Equipment sequentially a quarter down by driven increases were Lorenzo. segment decrease and a OFS, $X.X company sequentially. were partially and RPO billion, for TPS, by and $XX.X XX% Orders driven billion, in with by OFE. OFS, up sequentially

particularly provides with into which We performance are strong XXXX TPS, of quarter, a and orders in beyond. revenue pleased good our visibility in level the

over total quarter offset sequentially quarter was in the income year-over-year. quarter was income Our Adjusted OFS in by quarter up TPS increase X.X million. book-to-bill XX% company equipment an X% segments. was our and up the in Revenue across by operating million. ratio Adjusted year, OFE. was XX% was book-to-bill sequentially for by four the in driven and was $X.X operating driven and $XXX billion, and Year Operating decreases for X.X. all income $XXX flat, increases up revenue was the

Our was year-over-year. adjusted in sequentially for up and XX% operating income basis EBITDA year-over-year. quarter $XXX rate Adjusted XXX points EBITDA up XX% sequentially was up XXX Adjusted year-over-year. XXX points was basis points basis XX.X%, quarter XX.X%, up and rate up the the million,

margin improvement segments by We Corporate four in adjusted and and were operating EBITDA are driven All million with the income productivity, particularly mix. in quarter, of rate strong was costs the quarter. pricing experienced the fourth largely pleased which higher in our sequentially. improvements $XXX increased adjusted

For and quarter. fourth with was be quarter roughly Depreciation costs the flat we the amortization corporate levels. $XXX quarter, expect to expense million first in

premium For fourth we we was Interest levels. from quarter completed relating a to the refinancing the to quarter. first includes the quarter, which million, whole D&A the during increase in expect $XX debt quarter slightly fourth make

were to relate liabilities the We levels share income. earnings in $XXX are quarter. in million, tax million $XXX line loss to in of General charges is agreement the Included per million includes expect of was change Matters $XXX million from from interest Income tax investment the non-operating ADNOC income statement. fair expense other in and expenses with in Drilling gain our indemnified Electric. GAAP in in quarter are both the in offset which the change $X.XX. These recorded fair CX.ai, earnings non-operating diluted in that investment Tax of per a diluted first our return value net other value net GAAP to share historical our in expense $XXX under the

us investment recorded in in fair invested balance their our on Drilling non-operating with to reminder, In investment stake. Since be we will other a ADNOC change Adjusted value our October mark in on formed Drilling a per sheet, which our and our line XXXX, X% as going ADNOC marketable completed quarterly earnings strategic XXXX, value. $XXX for the income requires million forward. partnership $X.XX. security As to fair diluted is share were reflected the basis IPO, a

to Turning to EBITDA, higher million. in strong improvement by quarter statement. proceeds sequential collections increased was driven cash flow modestly cash disposal from assets the the due real Free The flow estate of cash adjusted was $XXX and sales. higher

continue million the average under to share $XXX also We million at price quarter, shares on per Class repurchasing during $XX an repurchase $X Baker for billion program just execute share. fourth our Hughes XX.X A

down in decline year in Total cost-out improvements for increases in X.X free and Total expect year costs financial OFS. operating of to income in Adjusted EBITDA X% for and Adjusted in $X.X was company first improvements. improved pleased OFS. XXX year cash by driven primarily OFE, the points improvements with was our due X% partially mainly at we in the with the TPS by quarter, billion basis $XXX XXXX. driven in Total When and million. were billion the margins the cash XXXX, EBITDA sequentially revenue $XX.X up very billion, flow $X.X points income and offset company up operating company regards offset for driven rate by TPS by book-to-bill total free year performance declines improving our TPS, to year. adjusted I'm was the results, broader of For partially Corporate by look XX% was productivity particularly billion Digital flow full OFE $XX.X year. adjusted XX% Solutions. to Solutions rate productivity basis were of programs I year Digital margin up and Orders and the total seasonality. OFS with XXX

XXXX For XXXX, be approximately line in we to expect with corporate levels. expenses

cash year, full separation generated flow of the includes flow. of million billion $X.X For and Free activities. we cash payments related $XXX restructuring cash to free

over by cash Our charges. generated in working free Akastor. strong CX.ai a CapEx, significant are capital flow asset proceeds $XXX of the restructuring flow the from of joint a and free from portion driven in of million HMH stake year, adjusted and formation higher reduction EBITDA, and in received sale small or the sales from separation increase lower cash performance venture investment flow we and during cash which included proceeds cash our was of include Not with the the

the returned $X.X we and billion new repurchases mentioned, $XXX over and acquisitions in investments energy dividends Lorenzo and through also tuck-in million and to deployed industrial As almost share in shareholders sectors.

free EBITDA. XXXX Our in XX% from resulted conversion adjusted flow cash in

positively free Hughes through from that our on generate flow above generation cash or conversion XX% at free we impacted conversion flow Baker a large by cash able to basis. multi-year believe working be the While capital, was should cycle the cash

cash growth. EBITDA as free conversion XXXX, we revenue a expected For cash use XX% of adjusted to should to working capital be due around from expect be flow

flow expect optionality return we attractive with cash to tuck-in free sheet to to and forward, balance and us and shareholders on our Going to technology generation cash M&A flexibility invest strong opportunistic in provide and basis. continue an

rate. more Latin artificial and detail revenue in give XX% growth was billion, outlook you were chemicals similar increased and in point you in North $X.X was sequentially. walk the In on in the increase thoughts North North Operating with margin gains a mix. revenues operating up Over the land XX% improvement Sea, X% lift productivity, in was quarter. offshore led will and International quarter by OFS the a product America product delivered segment in sequentially Africa, in up pricing OFS X% X% revenue in in forward. sequentially, strong margin America America. sub-Saharan fourth results the sequentially markets. the and revenue million, better quarter. driven Services, increases basis through by Russia a and and improvement both income our certain Oilfield of in in I lines the our the The team quarter of favorable Now, going businesses production-related XXX was $XXX

the XXXX, total year margin operating of basis improved by OFS For income XXX rate points.

we in we the ahead see by international first American growth activity the look softness and markets. typical quarter, As expect international seasonal to continued to offset in North

As basis, modestly we result, rates. a expect on margin modest in our first a quarter decline decline revenue to a with sequential along

For revenue in continuation escalation digits. line largely the With and of mid-double EBITDA we end of the backdrop, In the to expect supply to normalize should year October in in and full In margin achieving on XX% growth macro growth solid type North expectations continuation this our strong broader we and market of the we a cost of range. in with XX% solid earnings international experience view activity XXXX, see by improvement the we chain to remain call. focused also we rate XXXX. quarter the would that the are ramp-up in XXXX double-digit a recovery, the some recent growth market, our in as in headwinds with the the America, generate broad-based third rates could XX% Margin OFS. of expect low on expect shared levels believe

the SDS. removal removal reduction partially quarter MHWirth. income in consolidated result as was $XXX million, The services year-over-year. was year-over-year. lower of FPS, flexibles. growth of X% Revenue million, as SPC the a services $XX X% well reduction improvement SPS million, removal driven the volumes a These and in the by with and in operations productivity, OFE partially in Subsea were by of declines was driven projects, SDS higher the Drilling Orders orders Equipment. as and partially offset and growth in and down driven Operating Oilfield Systems in down year-over-year. by cost were by in offset was by merger $XXX SPS from to Moving This volume services. by of lower in volume XX% was revenue The offset

we lower sequential first driven backlog. and decline quarter, the revenue, For in by a double-digit seasonality expect primarily

expect also operating digits. low income to We margin in rates sequentially single decline the with

year full by recovery projects. we driven basins expect deployment low into in cost activity the modest capital a oil offshore XXXX, higher prices For and and

deconsolidation OFE primarily revenue remain to down actions mid-single SDS, taken. OFE and driven business recent but expect in the to margins by of We digit benefits be to the we cost-out the expect double-digits, from driven low range by mix

Next, up XX% orders another The quarter billion I the will Orders billion, year-over-year. up $X cover team delivered execution. strong quarter solid were in were Equipment with $X.X Turbomachinery. year-over-year.

up driven revenue driven revenue prior order our down the mentioned $X.X down for year. income XX% was mix. the for the services up X% Equipment were favorable $XXX in growth offset basis Lorenzo by in was strong X% X power Operating points As supply the up an backlog conversion volume North Services versus Operating Revenue project generation by timing TPS services, million, the quarter of higher orders lower volume quarter earlier, by by in up XX.X%, equipment to for driven and Service an by major was quarter project award a Pluto prior the the and orders mix America, both supported by quarter-end year-over-year, were scale a this Hemisphere. for X% driven in upgrades. LNG project, services. transactional year-over-year billion, year-over-year large versus was LNG was contractual for a Train XXX year. award LNG partially margin Eastern an XX% from in

year-over-year income on on equipment we rates in revenue. expect be to quarter, offsetting with expect operating For slightly revenues, Based decline higher to roughly we increase year-over-year a the basis. revenue first flat service a outlook, revenue this TPS

same awards. LNG XXXX orders as For TPS roughly expect year, in strength driven the XXXX the full by to we in continued be

growth continue driven production also services see in XXXX. in in pipeline segment areas. We new growth solid orders and by XXXX and onshore-offshore growth to opportunities a revenue expect our in We with solid strong now along pumps, energy valves in

be services mix and relate On increase expect our income the areas. in the XXXX and that R&D depending is flat year-over-year this investments margin to margin side, expenses operating in on in rates equipment. an to expected and still Included growth energy industrial between we roughly framework new

in for Solutions, across and with Finally, for million, in in volumes XX% gas. improvements higher oil year-over-year. Waygate, headwinds offset gas, flat income up seasonality by volumes Reuter by most income driven Nexus and driven by XX% up costs. driven saw year-over-year PPS, and was mix product higher up the year-over-year were $XX Digital lower industrial. up orders most across $XXX improvements quarter generation and was by in Bently R&D notably primarily Druck down orders Operating orders quarter Sequentially, in was transportation operating XX% from and in the revenue Revenue lines. Nevada. and Sequentially, were higher $XXX Stokes end with X% industrial, power Sequentially, for million, markets, most the Controls, million, quarter XX% and oil We volume. was

year-over-year, opening by a see we the backlog. stronger quarter, modest growth to For supported first revenue expect

to We mid-single rates down expect the in to margin operating be remain year-over-year, but slightly digits.

double the quarter expect Overall, key Solutions. to revenue total ease expect growth which With the For constraints the as with for financials. execution pleased fourth all solid margins improvements the higher full year up the we and strong approach in in supply the year. pick orders and year, in across DS volumes, could across begin Digital very we chain total I'm digits

our call are XXXX. We to as our confident ability head that, continue we With I execute back will and the into to turn over Jud. to strategy in

open for Brian. the call Operator, questions. Thanks, let's

ISI. from [Operator James Instructions] Our comes question first Evercore with West

you're about initial industrial thinking business, - the you industrial technology. and if you OFS as bit here about you business, look the make could within little of I'm thinking about a some and thinking increasingly timeline new divisions in you're on different the this becoming you're separation technology business two potential to the you've continue talked as companies your about talked two the what part to your about thoughts how formed companies, curious like energy timeline. Lorenzo, technologies it of energy changes the energy accelerating

we is the from to the evaluate for also we've energy the corporate value. growth that in time, to includes strategic all a of the past, the company, lot. develop accelerate. and Baker the as structure, allows the parts key which been And returns markets continue entities all the a The and profitability we structure operate the lot and optimal increase areas, or enhances efficiently us Thanks doing organizational best legal way way to the work transition down our James. is and process and everything goal end take as Hughes mentioned we've of details tax to Yes, going evolve energy structure, on the and as a structure see so some like doing in accelerate that corporate to shareholder so in our evaluating business

third last that Solutions strengthening formation remarks, OFSE CTS Management steps our from of around two and mentioned towards are seen focus of business we Groups the you've As one the areas and Climate prepared our Asset Technology quarter. Industrial IAT strategic first of

around longer And that markets the two As the optionality in help operating we focus areas of cetera. energy terms we last give evolve, business said said aligning investment we areas year, most think the strategy us et as also time. two broad across makes sense actually broad will these

to the for So stage continue our at continue shareholders. we'll it the reinforces to operate the across our to returns areas, only business us and company two in decisions. strong done work continue to just align without is company update progress But view. the goes saying, we've Again, on and best work the this to together we continue

maybe what guidance expected XXXX? on curious think how just on about the we orders the XXXX, Of orders good cadence I'm over TPS kind of several and course, absolutely. we growth follow-up next Lorenzo of the some get should gave for that And TPS, unrelated we into then years. as then in means

long-term and pulled the improving speaking, LNG an secure and LNG importantly, order that previous also we of Sure indicated to the LNG XXXX at agreements. quarters beginning is beginning believe the seeing to environment expectations fundamentals to the XXXX. projects long-term end past we James, I and likely accelerate, saw generally due into momentum are I versus are think to the to forward offtake We've continue over be strong cycle

be that's to may movement of as also policy in potentially So the would recent XXXX we encouraging pulled be what FIDs forward well. out Europe, see believe be into XXXX

year projects U.S., also is year, we're we're of that the a and specific and TPS through. orders XXXX customers, and you we're And in our I XXXX, a we and early, important the that really coming small areas, I and think so close potentially couple to but again a awards LNG should headline is calling think awards a this although outlook it's East large also with positive flat as increase still some know, go we side. believe Middle are mid-size see the TPS for of lot be LNG the there the that that XXXX it's on remember through orders. could So for in I as orders discussing XXXX, think Russia, to very little we

onshore-offshore with and New see the also opportunities positive in along a traction of intake production continue XXXX. order back Energy in We front solid a to our pipeline we valves in strong segment in on see pumps, the

comes next Chase Mulvehill question Bank from America. with of Our

Climate So I Industrial bit little split two deeper you you guess dig now. ask divisions, Asset new kind out wanted Solutions of get on creating in Technology a you that Management and and the I divisions to

the run there you how two to these of do guess, for businesses? this do you I to kind of the progression that splitting a plan impact related businesses? first, then And think what of, new follow-up you so was track And just is details will us up catalyst kind and this some how doing quarterly give this like, these

Solutions and Industrial to oilfield in Chase two our announced quarter the we change, capabilities two important And step Technology we'll of look into what going structure customer Great, Climate landscape market IT, evolves, equipment first business within this areas our that also services as accountability and look, being formally accordingly. to adapt last growth as think third solve we're last we one going groups. formalizing create steps And continue leadership Yes. at in we've to Rod. we enhancing to the organizational of Management are excited And Asset take provides and areas. the before, This energy to for continues these - we IAM, request. report both the CTS as year, we're as really as to see this mentioned

as our digital If product build four roadmap you the look of products at as Climate bring to that for. bring we management to emissions you Technology of Solutions, Asset to across continue at have in to Baker is it's and what It's growth Hughes clean Baker really our look commercial going respond sale the to these integrated going to today areas Industrial on CCUS, support integrated us ecosystem capabilities hydrogen, to software solutions as develop Hughes and customers the hardware an together areas, across IAM And power solutions. and Management, well offerings enables and together going are this looking

the segments it's develop product to we interaction change across as CTS an areas. we're be this lines not to growth So going IAM. And stage, at to in two continue various reporting these for the and looking both

also opportunities, Ekona, with transition. there. perfect. hit obviously little but order on talk you the opportunities the about same the Okay, could you just and a is NEOM on really hydrogen Moomba, the I that with you on kind line a digging horizon, key of you more of did see and of other bit the you fourth mean had M&A energy quarter, The kind questioning CCUS had of investment kind hydrogen and in follow-up just maybe

that, that other you kind So acquisitions. the do maybe maybe tuck-in opportunities of some see highlight -

in New were Energy XXXX very Yes Chase, we with orders. the the for pleased performance

those two we and them on million, in It's our opportunities think solution you another Basin and of really zero targets that growth stage the another we're $XXX I million. continued turquoise customers on to given technology customers. capabilities. our We really outlook with and XXXX can We've portfolio it's fourth and which the Cooper it's in between also one quarter, that help helping the end Ekona $XXX the think cited it's achieve develops which mentioned, higher of net hydrogen with again, that for company continuing. expanding way Santos the and You production hydrogen momentum their investment COX our that we of see are

we tuck-in I see look we represent through by XXXX building is As to that. do XXXX and create energy billion $X new to billion through actively continuing are technologies beyond, at a the our portfolio to business that $X we see small transition the opportunity still that and to the us again, and

Scott comes Citigroup. Our next from Gruber question with

of peers like see least can linger the the supply the at point finally half and sounds here It chain where we issues for the in you Are first we at the year. may at a too at when you of impact on financials tunnel? end point? reported identify this to issues the Are a just the that able supply quarter call really or have chain early limited to light is

XX% chips your go we've XX%. from disruptions X say fronts. just months, right that of logistics, much supply seeing say third our with that broadly a around I'd shipping routes much things. was couple pretty that's us quarter your Yes, and and times And still oilfield there of all figured of you lot primarily at you're giving pretty we are to of a give that to pretty increasing to impacts and suppliers Scott. some chain out have to I'd the I'd different through and of we stabilized. much our lead if I Solutions in of perspective, shipments bit X about order back ways primarily the continuing and in COVID say disruptions a in it got - give look some XX% that were shortages that work more because and XX% and are sorts some times and stabilized on disruptions of those to Where about our that lead Digital to we now, planning see little perspective, all year of services. have XXXX

going So on industry. what's that's in really the

give allotments we planning We're through out. XX for working days - So to it. are it. roughly Suppliers XX

impact So I'd the make to on incredibly teams say customers. sure well has working our are that limited

we in So this normal. operating are new

been you've We where seen to who to space supply chemicals other supply in relatively working and to appears in business we'd be particular really quarter. That be stabilizing a first our is with get here anticipate them area that places. other inflation I'd disrupted got to some well. stable supplier say that fire our come supply had we've from chain a the around inflation as The through. the

this we're a And XXX about of as there. new much to of the I'd were But improve magnitude got disruptions quarter in so chemicals operating normal. well in And offset in things to say and expect drag you as overall inflation bit a had business on as the the can. we give But place of to little year OFS progresses. we've to the I plans what again, basis we point would seeing continue

Got it. And then, question. of related somewhat a

of being should managed markets the seems restructuring chain course End supply across the to most better. over innings issues efforts. They be of year. it hopefully So ease the of recovering later you're are the are obviously entering businesses the and

year. of the there over it kind convergence really like just its those So maybe Baker Lorenzo, level we hitting course of that if is here, stride be seems high think should items such across the

kind factors perspective have today what we of be just the we business just and couple the of separation how kind about kind exit but XX% where where of the a you pretty years kind into of standpoint think level about of stands go versus when the target the merger. of businesses to kind a kind over oil and obviously, if question about 'XX, perspective. just the the seems the sits business of profit of some we business the services, convergence cadence tailwind from us of your where favorable to kind 'XX of course two ago in aside, on where performance of gives a from together think you can talk came sits putting So growth, Can today, high in

years we've that role are energy laying think industrial At same plays I'm started energy transition out, we We've from beyond. to operations partnership three Scott. pivoting and investments, team an and and I actively over as XXXX major non-strategic separation for Baker in invested core, another and good We the and also on Hughes continuing which energy and rollercoaster technology pleased unprofitable a acquisitions, we transition of new a for we what know, created continue of due across it way good CX.ai strategy energy Yes, and then restructuring said the you a cut or GE, groundwork across really been transform growth, focused frontiers. network that interesting disposing invest six the the the creating last have the on LNG. And in approaching a an time, the and been COVID the sure, gas in to the company, we really four multiple required has transform natural we've been it have our over integrations optimistic about And always to downturn. company, also the new be a capabilities or the energy were time, the investment continued the the for small-scale transactions, for restructuring, lot the also costs. of the continued pillars, making in to growth future. setting we And with course we've areas

new growth to very upstream for cycle the company and spending as longer-term Hughes energy I'm capitalize positioned macro Baker So the opportunities. how excited about on environment a the more importantly, we for are and LNG cycle, the

think areas. tailwinds two business it's of see I our large at across my macro in both nice to tenure least

dividend we and the running and run balance continue company, shareholder-friendly a sure we've during latest And maintain we able a to I'd returns. the got We're the to increase we've sheet and strong allocation. company look pretty only to make how as flexibility maintain been Lorenzo capital believe sheet, add the we've we'll you've had the balance because COVID the what turmoil we seen strong most says there with to of thing Scott, is, optionality

with question comes Arun JPMorgan. next Our from Jayaram

to in billion if quarter, if wondering year. $X on in accretive orders TPS, the you couple billion the be orders I was on, think for realized inbound a nearly questions I of you $X.X would the guys TPS? you XXXX comment of booked had this you margins could

in with margin And that very TPS, to overall the in book as of margins the of from energy again, very industrial look the are the look, that rates strength and I some that area, services. Arun, for TPS flattish seeing book. and increased mix and order stepping pleased expenditures the pleased and XXXX expect roughly in include order with on can said, does the depending we're equipment be associated really with that, in R&D the of new you surmise kind back so

deliver year, projects. in this productivity able executing inflationary been demonstrated we're we've as an these we've on I think that strong environment to

is where So I'd the say in general, order book like sitting.

you this And inbound had orders thinking margins, revenue had maybe this is line, the the mid-single year? more been digits year, this how next Brian, follow-up. TPS line driving the order thoughts strong low year. single to mentioned strength year in we're influencing your but to the top about flattish if my how visibility top digits mentioned TPS or you upper and as I We single-digit moving in want about Great. see are growth

profile, in quite the high equipment today and growth Lorenzo revenue strength the of in XXXX equipment in -- based Yes XXXX in and order I to will based single-digit we're is I'd likely growth. I say, XXXX, potential exceed XXXX, expect seeing would flattish looking as in XXXX, in where Arun, how see backlog mentioned, most sitting in that higher XXXX of we services. sorry, both and what revenue I I XXXX at we are look, growth range came the reasonable most orders convert, on across pipeline, would think, being the XXXX what for what orders we're order and to likely with expect and look, be on

that look, in today, medium New solid in where a it as activity to we're the we've term. of seeing strong a pretty as Energy year, throughout the seeing are as and sitting growth provide Lorenzo we orders more we're TPS been onshore-offshore in of looks So production mentioned, and tailwinds going set talked about, continued that's lot well and LNG, in

comes Barclays. David question from Anderson next Our with

of going awards. a growth talk was tendering in Middle multi-year bit you about just East. in the kind large Middle on been I the a activity Lorenzo, of you if bunch a It's beginning talked little the phase the could East. wondering about of

been talk see some kind if would about the wondering the of view You you're large and of you selective. more you kind the of pretty of and out expect tenders seeing was guys months on there have just in maybe your Thank coming I kind pricing? to dynamics you.

Yes David.

major the the one on outlook international the our growth believe in with early growth based in [indiscernible] the XXXX in markets and this we of be and stages production it's On you likely mid-teens seen as conversations international on unlike a the to strongest the gradual geographies where our lagged, could was Middle through the have and capacity basis. XXXX East we a of cycle in region long-term at for low broad-based whole with customers, recovery overall expect

some in much take year strong to and Latin West as Brazil another then Middle We of expect by base in to the see Latin off Sea, the North got Asia and Russia, of growth growth led America We're and still continuing see also not we elsewhere productive solid but case some time. that East to I larger think. as Pacific So low see America, also Mexico, growth a starting solid that Africa LSD place.

judicious internationally we be enter. We we disciplined like We've the we're always and we go forward. in outlook in are very going which way as to the said

kind Great, a subject. thank you. On it's a separate of -

fall Climate involved a them New I Group. you've have across got all that which Energy You number of this the partnerships, think are to going investments new of and going Technology spectrum, under Solutions in

technologies go of scale. number that kind time where A can take from curious of here. you to Just these

portfolio like and opportunities and you early this is kind a even parts So other M&A of do keep kind be that tech with smaller I or of M&A just in the to investments a Is looks just of horizon. you talking technologies kind the sizable our expanding do about too of kind keep clean point there. is other curious opportunities at like what hydrogen space? and there Ekona where out of or there looking I'm it mean, give more

we gas customer the serve evaluate roadmap through to if be solutions compilation efficiency on our at and look stood look the doing technology little are historical our Ekona. in customers. have ecosystem and process, other we'll it's How like as be I approach downtime. foundation and request investments achieve we're at it the sense, Asset a XX-XX a and drive industrial me the CX the a offer do we've to we're on the is what with at customer we're it to equipment, we able you with our net our they towards to customers, customers whether serve, be to and to a different we've want is target and Group really capability you requires zero also think think Electrochaea, and it CX, we're made, capabilities. to When to actually oil that think what that developing What able within various investments do mentioned best really we've from providing of And at a resonates request. to ammonia what solutions of XX-XX request target we a asking segments we towards data Technology areas we and Likewise Climate that early, to a really also I both do we are already how we you be offer achieve look have. less respond customers our hearing at you done the productivity Management, them you but about technologies Industrial And an provider customers' chilled or that you around up, across of ability increase why and but of to for is made in-house help technologies. which we platform look the capability are roadmap, also or Solutions capability think the requires and respond and ARMS, those that walk continue

areas these led growth our in us are So and requests. help initiatives, by actually both customer of

Goldman Our next comes with from Neil question Sachs. Mehta

the buyback, Do reasonable we Good the how A on keep first the capital morning, is pace think couple the And the thinking on about you of pacing it's around of allocation. team. will say release are questions you one this out by buyback. that market saw the here be of pace in QX, at selling which and $XXX is to Is middle fair looks GE in this like it ratably. year? over million the it of the to

million. we Yes, purchased about we Neil, like $XXX A look, a shares. XX.X Class what been done we've Since we perspective. buyback far in started September, from so It's million

per over So the share price is just X,XXX.

now We acceleration. conditions weren't program the have buyback an are to right with a it planning consistent the accelerate to if ability

is if roughly - say you through the here first today, our keep up pace. think about to I'd sitting half right you of this the So plan now year

of point out stake. roughly us coincides at that their since selling the they're to You've seen we started down if selling pace GE and sell remainder you the program the within as continues that

at say, capital are, M&A, I'd the think GE positioned time able our And at roughly look or And $XXX is to looking million is allocation once that that reevaluate enhance think we're and what the capabilities so technologies levels have range of in do stepping uniquely the an place going continue from good think buyback buybacks out, that be. capability. $XXX pretty we overall I I back a million point but right in a look, strong to think and annually to here we a to are consistent growth I program be we we, paying dividend, tuck-in to

from point investment allocation from free flow into the capital proceeds cash with some far pleased recycling in in of the the back the we've been what very growth terms doing sales of business. a or dispositions areas generation, So so

And just $XXX to to clarify $XXX million quarterly million right?

Yes, buybacks, yes.

in $X.XX where Okay, great. then us dividend generation here the energy your and tie around it's better worse been since than on of you're do to but dividend sitting increase than is what can think a large the your cap the business you power earnings the sector an get flow still in around get recognize about XXXX more And services buyback. the and the a really that doing quarter point cash this broadly. the at the right you've with peers, yields How time the in distribution dividend, level, aggressive you around evaluate comments free

take to Neil, to clarify through million half, in first step pace once we'll and I back the in $XXX speaking this there, Yes just to we've I was how how the here annually $XXX at gone about million $XXX more in million buybacks. the But $XXX after it. of is half was year would, look we here, the say the I would to more get I'd first think through million a

with it's Board value a look of evaluating always we're terms best to shareholders. to and taking terms the of return dividend, the discussing at our something way in In look

I think with we that of downturn all for demonstrated the the us. even important volatility that priority during maintaining an dividend was

I'd though, be don't want we because on this out quite an as you we industry from volatile consistent we make as you to flow, you sits get relied skies, update objectives. So where continue out with a strong want meet sure, level be our at know and return to It's upon but the time, if way Saying today in over moment thinking base we're continue can our generate opportunities at this at investment here. we'll and we're where can not our a free best cards, to say it changes. continue that know, look of and to basis happy investor to cash the we to

gentlemen, conclude portion for the turn Q&A and the Lorenzo to this like to closing any conference. ladies does back call And remarks. today's I'd of

you our for call to and thank you, today. everyone Thank joining earnings

thoughts. We're fourth the navigated I you way the over the some closing with the to call, leave during the very Before we with quarter XXXX. of course pleased the end want and challenges executed team many

almost delivered cash growth us and delivered we $X.X year, orders and record full the return in generation free For to billion flow helping shareholders. operating margins,

on multi-year the the Looking you upstream well Operator, is now you taking in close growth Energy. look Baker growth and out longer-term forward call. and structural and speaking to capitalize may again time the our I that growth soon. for New Hughes and with Thank ahead, we're LNG about you developing excited opportunities cyclical across portfolio the believe to in positioned all

gentlemen, presentation. and today's Ladies this does conclude

and wonderful have You may disconnect now day. a