Baker Hughes Company (NASDAQ:BKR) Q4 2023 Earnings Conference Call January 24, 2024 9:30 AM ET

Company Participants

Chase Mulvehill - Vice President, Investor Relations

Lorenzo Simonelli - Chairman and Chief Executive Officer

Nancy Buese - Chief Financial Officer

Conference Call Participants

James West - Evercore ISI

Luke Lemoine - Piper Sandler

Arun Jayaram - JPMorgan

Saurabh Pant - Bank of America

Scott Gruber - Citigroup

Marc Bianchi - TD Cowen

Operator

Good day, ladies and gentlemen and welcome to the Baker Hughes Company Fourth Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Mr. Chase Mulvehill, Vice President of Investor Relations. Sir, you may begin.

Chase Mulvehill

Thank you. Good morning, everyone and welcome to Baker Hughes fourth quarter and full year 2023 earnings conference call. Here with me are our Chairman and CEO, Lorenzo Simonelli; and our CFO, Nancy Buese. The earnings release we issued yesterday evening can be found on our website at bakerhughes.com. We will also be using a presentation with our prepared remarks during this webcast, which can also be found on our investor website.

As a reminder, during the course of this conference call, we will provide forward-looking statements. These statements are not guarantees of future performance and involve a number of risks and assumptions. Please review our SEC filings and website for factors that could cause actual results to differ materially. Reconciliations of operating income and other GAAP to non-GAAP measures can be found in our earnings release.

With that, I’ll turn the call over to Lorenzo.

Lorenzo Simonelli

Thank you, Chase. Good morning, everyone and thanks for joining us. 2023 proved to be a pivotal year for Baker Hughes as we continue our journey to reshape the company. We successfully removed $150 million of costs, realigned our IET business and recently launched actions to further streamline our OFSE business. Our strategy to transform the way we operate is working.

Turning to Slide 4. In 2023, we set records for all primary financial metrics, including orders, revenue, EBITDA, EPS, free cash flow and most importantly, returns. Adjusted EBITDA was up 26% year-over-year, a third consecutive year of double-digit increases and exceeding prior cycle peak levels by 25%. Adjusted diluted earnings per share was $1.60, 76% above 2022 levels. Free cash flow increased 83% year-over-year to just over $2 billion. Total company orders increased 14% year-over-year as IET orders of $14.2 billion grew 12% when compared to last year’s record orders and marked the third consecutive year of double-digit growth. New Energy orders totaled $750 million, up 45% year-over-year. SSPS orders increased by 27% to $3.9 billion, the largest order year since 2014. These record results highlight strong market tailwinds across both segments and the significant operational improvements the company has accomplished since 2022. Clearly, we are pleased with the progress demonstrated in 2023 and excited about where the company is headed in 2024 and beyond.