Baker Hughes Company (NASDAQ:BKR) Q1 2024 Earnings Call Transcript

Luke Lemoine: Okay. And then Nancy, on getting to the 20% OFSE margins next year, there were some finer points, but the broad buckets had kind of been on productivity cost, price volume. Could you just refresh us on the drivers here and maybe the confidence around the individual pieces?

Nancy Buese: Absolutely. We absolutely remain confident in hitting those 20% EBITDA margins, and you’re starting to see some traction with a lot of the activities that have been done in the segment and continuing actions. And we do still see strength in international markets this year. We’re also maintaining our outlook for high single-digit E&P CapEx. So those are good drivers as well. I would also just note that hitting that margin target does not require an acceleration of growth compared to where we already are. So that’s all baked into it. Alongside that, we do have a cost-out program that we’ve announced with Q4 earnings, and that’s really helping to reset the cost structure within the segment, reducing further duplication and becoming more efficient.

I would say the team is also focused on continuing to drive more cost efficiencies around the business, and we’ll see more of that come to play as 2024 unfolds. The other piece of it is on the SSPS side, we have higher margin activity in that backlog, and you’ll see that drive up margins in 2024 and 2025. So overall, I would say that 20% margin target remains in place. We feel very confident on it and it doesn’t require anything from market tailwinds to achieve. So that’s within our control, and we continue to focus on that target.

Luke Lemoine: Okay. Perfect. Thanks, Nancy. Thanks, Lorenzo

Operator: Thank you. At this time…

Lorenzo Simonelli: Thank you everyone. Yes, maybe just – thanks to everyone, for joining the call today, and look forward to speaking to everybody soon. And I think, operator, you can close the call.

Operator: Ladies and gentlemen, thank you for participating in today’s conference. This concludes the program. You may all disconnect. Everyone, have a great day.