Lorenzo Simonelli: Definitely. And we’ve been working on our strategy and also been monitoring how the energy markets have evolved. And that really has given rise to the free time horizons. And I want to be clear that we’ve been thinking through this for some time, and now we’re starting to really reveal it more and detail it externally. And so as you look at the first time horizon, which goes through 2025, this is really focused on making sure that we enhance the margins, accretion through simplification, efficiencies, operational discipline, optimization of our assets, the people productivity, all of the things that are in our control as we create really an energy technology company and benefiting from the macro tailwinds that we see across our two business segments that we’ve mentioned before relative to the LNG growth cycle, as well as a multi-year upswing in upstream spending.
So that’s going to be the key focus during the first horizon. And it will underpin our goals to get to 20% EBITDA margins in OFSE by ’25, and also IET by ’26. And we’ll manage accordingly through that. The second horizon goes out to ’27. And this is really shifting a focus to the next phase of growth in new energy and the industrial sectors. We’ll have the benefit of the gas tech services growth that will be coming to fruition through the expanded installed base that we have and the opportunity to provide efficiency through our digital applications and also the [indiscernible] cordon to our customers. So driving further margin expansion across the whole company and above our stated 20% EBITDA margin targets for the two segments and also exceed our ROIC targets beyond the 15% and 20% in OFSE and IET respectively.
And then as you get to 2030, you’re starting to see the initial signs of this is really the new energy. And we mentioned the orders 3Q year-to-date at 540, but by the time we get to 2030, $6 billion to $7 billion in orders and really the new energy frontiers of CCUS hydrogen, clean power, geothermal, and the opportunity for really helping with decarbonization solutions, which become a critical component to what we think is the energy transition as we go through that. And so emissions management will be a key factor. And this really lays out the way in which we’re executing towards the free horizons and really focused on that operational discipline associated with it.
James West: Okay, right. Makes sense. And then maybe just a quick follow up Lorenzo on the new energy side. Obviously orders this year have been much stronger than last year. You’re already likely to blow through your target here for this year. With the DOE recently, you announced the hydrogen hubs program or announced the awards, the hydrogen hubs. And I’m curious kind of what you’re seeing new energy, broadly, but maybe more focused on hydrogen in particular, just given that there’s a lot of activity in hydrogen today.
Lorenzo Simonelli: Definitely, James. And look, we’re very pleased with the way in which the new energy orders are coming in. And as you’ve said, we’ve taken up our target for 2023. And we expect to be between six to $700 million. And one important aspect is this is equipment that we’re producing today. And it comes from the existing Baker Hughes technology stack. And so we’re continuing to also invest in new areas of the energy transition. And when you look at the policies that are coming on stream, you look at era, you look at in the United States, you look at what Europe has done. And as you mentioned, most recently, the DOE awarded $7 billion of grants to seven hydrogen hubs in the United States. That opportunity is actually coming faster than we anticipated and is growing.
And we feel good about being able to differentiate ourselves. And in hydrogen in particular, we’ve got a long history in hydrogen. You’ve seen the successes that we’ve had with air products in being able to provide them technology associated with the hydrogen facilities. And we expect that to continue. And with these new hydrogen hubs, we’ve got the opportunity to, again, extend our opportunity with the equipment that we can provide them. So feeling good that hydrogen is going to be an area of focus for Baker Hughes as we continue going forward.
