Nancy Buese: Yes, happy to take that one. So on Q2, I’d really say the strength in our guide for that quarter highlights our differentiated portfolio. And we’ve really been talking about how that’s helping us to frame up more durable earnings and strong free cash flow generation and growth. Our midpoint for EBITDA guidance in Q2 really represents about 16% year-over-year growth, and that’s about 20% EBITDA growth in the IET business. So there are a lot of good drivers there. We’ve talked about the really robust backlog levels that are driving the Gas Tech Equipment acceleration and much higher margins in the backlog as we convert as we’ve been signaling. And then we’re also seeing broadening strength across industrial tech, I would also say the cost focus and the process-driven mindset deep into the business is starting to show signs of really solid momentum.
And the midpoint of that guidance is indicating that margin expansion, and that’s even as Gas Tech Equipment growth continues to impact us. And again, we’ve talked very much about how the growth in equipment is great for us in the longer term, and we love that installed base. I would say that’s also offset a bit by a slower than expected start to the year in OFSE, and some of that’s related to timing and offshore rig delays. So on balance, we’d say Q2 is showing modestly better seasonal recovery on the OFSE side as some of those rigs come out of maintenance and also some of the delayed product shipments came out of Q1 into Q2. But net-net, I would say for the year, we would retain our guidance as is. There’s still a lot of unknowns, and it’s still early in the year.
We’re very confident in our full year guidance. And we’ll keep an eye on it. If there’s more to tell, we’ll be back to you next quarter with more information, but we feel very good about execution, and we’re on the right track for Q2 and balance of the year.
Arun Jayaram: Thanks team. Appreciate it.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Dave Anderson from Barclays.
Dave Anderson: Great. Thank you and good morning, Lorenzo. I was wondering if you could talk a little bit on – if we can talk about the non-LNG side of the IET Gas Tech Equipment order side. I think you made a couple of comments on there, you talked about is these have tripled this quarter and you expect to be up 50% this year. Could you kind of dig into that a little bit about where that’s being driven from? I know we had an offshore side, which tends to be a little lumpier. I know you had the MGS3 award in there, but could you just sort of talk about the mix of that non-LNG business, please?
Lorenzo Simonelli: Definitely, Dave, and thanks for the question. Obviously, we’ve spoken a lot about LNG, and we will, I’m sure, in the future. And I think at times, we don’t get a lot of time to talk about the non-LNG sector, and it’s a very important part of our portfolio, and it’s very expansive as well in the equipment and solutions that play across a number of end markets, including the upstream, midstream refining, petrochemical, as you look at the pipelines and various industrial and other end markets. And it’s really the versatility of our equipment that not only goes into LNG but goes into these other end markets. And 1Q was evident of that. And as you said, tripled in 1Q versus prior year. Onshore/offshore production has remained consistently strong as part of the mix.
As you see, both on the compression side, you see on the power generation side. You highlighted the Master Gas System. And as you continue to see the shift towards gas, that gas infrastructure plays towards a lot more compression, plays towards also the pipelines that place towards a lot of the onshore power generation that’s going to be necessary. Also, as you look at on the Industrial side, when you think about the needs for distributed power generation, that plays to the Industrial gas turbines that we have, the NovaLT across it, we see an expanding base of non-LNG equipment. And again, it’s part of the expansive portfolio that we have, including the pumps, the valves and the other areas that go into the other sectors when you think of refineries and also petrochemicals that are also increasing infrastructure builds that are happening around the world as we continue through an energy demand that is increasing.
Dave Anderson: And Lorenzo, sort of expanding upon that, I’d like to dig into maybe a little bit of what’s going on in Saudi here. You touched on here a bit. Obviously, we saw the award we saw this quarter. But I’d be curious kind of if you could talk about how you’re differentiated versus your competitors on both the IET side and the OFSE side. On the IET side, we’re talking about we’re displacing oil-driven power in the Industrial side of the natural gas. And so that seems like an enormous opportunity in Saudi, but it seems like it’s a very unique opportunity for really just Baker. And then if I flip over to the OFSE side, one thing you’ve really done differently than others is manufacturing in country, kind of could you talk to that a little bit about kind of how that’s a key initiative in the Kingdom and how that gives you an advantage?
Lorenzo Simonelli: Yes, Dave, thanks. And I know that you and the team also had the chance to tour the region and also visit the Kingdom. And that’s true. We focused a lot on localization. And as I mentioned, we’ve just recently opened our chemicals facility on new Petrolite. We’ve also got wellheads that are manufactured. We’ve also got compressors. And as we look at drill bits and across the Kingdom, we focused on localization to support not just the Kingdom, but also support the region and outside of the region through capability close to our customers. And that’s been a strategy of focus. And the diversification of Baker Hughes is across the two major segments. We play obviously within the oilfield services and the equipment side, but then the gas infrastructure side, the hydrogen when we think of Neon and the facilities associated with hydrogen, the infrastructure that’s going to be required when we think of power generation, distributed power generation.
