10-KPeriod: FY2022

Baker Hughes Co Annual Report, Year Ended Dec 31, 2022

Filed February 14, 2023For Securities:BKR

Summary

Baker Hughes Company reported a mixed operational performance in 2022, characterized by robust commercial activity and margin improvements in the Oilfield Services & Equipment (OFSE) segment, alongside record orders in Industrial & Energy Technology (IET), particularly in LNG and new energy solutions. However, the company faced operational challenges including cost inflation, supply chain delays, and the impact of suspending operations in Russia. Despite these headwinds, revenue increased to $21.2 billion, driven by higher OFSE volumes, though operating income saw a decrease due to higher restructuring and impairment charges. The company is actively executing a strategy focused on transforming its core business, investing for growth in high-potential segments like industrial power and chemicals, and positioning for new energy frontiers such as hydrogen and carbon capture. Strategic acquisitions and investments were made to bolster its technology portfolio and expand into new energy areas. Looking ahead, Baker Hughes anticipates continued growth in the energy sector, driven by global underinvestment, geopolitical factors, and the ongoing energy transition, positioning the company to benefit from a multi-year upturn in global activity.

Financial Highlights

47 data points
Beta

Revenue

$21.16B

Net Income

-$601.00M

-2.8% Net Margin

EPS (Diluted)

$-0.61

Total Assets

$34.18B

Cash & Equivalents

$2.49B

Free Cash Flow

$1.89B

Financial Statements
Beta
Revenue$21.16B
R&D Expenses$552.00M
SG&A Expenses$2.51B
Operating Expenses$19.97B
Operating Income$1.19B
Net Income-$601.00M
EPS (Basic)$-0.61
EPS (Diluted)$-0.61

Key Highlights

  • 1Revenue increased by 3% to $21.2 billion in 2022, primarily driven by higher volume in the Oilfield Services & Equipment (OFSE) segment.
  • 2Total segment operating income increased by 16% to $2.3 billion, with OFSE showing a significant improvement of $371 million.
  • 3The company returned $1.6 billion to shareholders in 2022 through dividends and share repurchases, signaling a commitment to capital allocation.
  • 4Baker Hughes made strategic acquisitions and investments in new energy technologies, including BRUSH Group, Quest Integrity, AccessESP, Mosaic Materials, and NET Power, to enhance its portfolio and position for future growth.
  • 5The company announced a significant organizational restructuring to create two operating segments (OFSE and IET) to simplify operations and enhance profitability, with ongoing transformation efforts expected to yield benefits.
  • 6Despite operational challenges like cost inflation and supply chain delays, the company saw increased activity and achieved price improvements, particularly in the second half of 2022.
  • 7Baker Hughes maintained a positive outlook for the energy sector, anticipating a multi-year upturn in global activity driven by underinvestment, geopolitical events, and the energy transition.

Frequently Asked Questions

In 2022, Baker Hughes generated $21.2 billion in revenue, a 3% increase from 2021, primarily driven by higher volumes in its Oilfield Services & Equipment (OFSE) segment. However, operating income decreased to $1.2 billion from $1.3 billion in the prior year, largely due to higher restructuring, impairment, and other charges. The company reported a net loss of $0.6 billion for the year.

Baker Hughes is actively pursuing a strategy focused on three pillars: transforming its core business, investing for growth in areas like industrial power and new energy technologies, and positioning for new energy frontiers such as hydrogen, geothermal, and carbon capture, utilization, and storage (CCUS). The company made several strategic acquisitions and investments in 2022 to support these initiatives and is expanding its low-to-zero carbon solutions.

The company experienced several operational challenges in 2022, including significant cost inflation, supply chain delays affecting product deliveries, adverse foreign exchange impacts, and the suspension of operations in Russia due to geopolitical events. These factors impacted overall profitability, though performance improved in the latter half of the year due to moderating supply chain issues and price increases.

Baker Hughes maintains a flexible capital allocation policy. In 2022, the company returned $1.6 billion to shareholders through dividends and share repurchases. It also continued to invest in its portfolio through strategic acquisitions and early-stage new energy investments, demonstrating a balance between returning capital to shareholders and investing for future growth.

Baker Hughes holds a positive outlook for 2023, anticipating continued growth in the energy sector due to years of underinvestment, amplified by recent geopolitical factors. The company expects a second consecutive year of strong growth in global upstream spending and sees significant opportunities in both traditional oil and gas markets and new energy solutions, supported by favorable legislative actions like the Inflation Reduction Act.