ChampionX : Third Quarter 2023 Earnings Call

Earnings Conference Call

Third Quarter 2023

October 25, 2023

8:00am Central Time

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Notices & Disclaimers

Forward-Looking Statements

This investor presentation contains statements relating to future actions and results, which are "forward-looking statements" within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, ChampionX's market position and growth opportunities. Forward-looking statements include statements related to ChampionX's expectations regarding the performance of the business, financial results, liquidity and capital resources of ChampionX. Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from current expectations, including, but not limited to, changes in economic, competitive, strategic, technological, tax, regulatory or other factors that affect the operation of ChampionX's businesses. You are encouraged to refer to the documents that ChampionX files from time to time with the Securities and Exchange Commission ("SEC"), including the "Risk Factors" in ChampionX's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and in ChampionX's other filings with the SEC. Readers are cautioned not to place undue reliance on ChampionX's forward-looking statements. Forward-looking statements speak only as of the day they are made and ChampionX undertakes no obligation to update any forward-looking statement, except as required by applicable law.

Non-GAAP Measures

In addition to financial results determined in accordance with generally accepted accounting principles in the United States ("GAAP"), this presentation presents non-GAAP financial measures. Non- GAAP financial measures should be considered only as supplemental to, and not as superior to financial measures prepared in accordance with GAAP. Management believes that adjusted EBITDA, adjusted EBITDA margin, adjusted segment EBITDA, and adjusted segment EBITDA margin, provide useful information to investors regarding the Company's financial condition and results of operations because they reflect the core operating results of our businesses and help facilitate comparisons of operating performance across periods. In addition, free cash flow and free cash flow to adjusted EBITDA ratio are used by management to measure our ability to generate positive cash flow for debt reduction and to support our strategic objectives. A reconciliation of these non-GAAP measures to the comparable GAAP measures, including net income attributable to ChampionX, income before income taxes margin, cash flows from operating activities, and total debt, is included in the appendix herein and the financial tables accompanying our earnings release for the third quarter 2023 results.

2	Copyright 2023 ChampionX. All rights reserved.

Soma Somasundaram

President and Chief Executive Officer

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Distinctive Strategic Vision and Operating Philosophy

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ESG Spotlight

SOOFIE™ & AURA OGI™ Camera Enhances Emissions Reduction Activities

SOOFIE™ Methane Monitoring in Action

• Recently, The SOOFIE™ system provided timely detection of methane leak for one of our customers in the Permian, helping to avoid a catastrophic leak in one of their production facilities, resulting in significant environmental and financial savings.

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Emissions Challenge & AURA OGI™

• ChampionX recently launched a revolutionary OGI (Optical Gas Imaging) camera designed to meet current and future emissions monitoring needs, and to accurately detect and document even small methane leaks. The rugged AURA OGI™ camera captures images with four times higher resolution than other cameras on the market. The innovative technology is designed to make leak detection more efficient and consistent by using built-in smart routes and navigation. Sensor and metadata encoded into the camera's OGI image files help simplify documentation and compliance.

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Third Quarter 2023 ChampionX Highlights

Strong Adjusted EBITDA Margin and Free Cash Flow Momentum

• Healthy adjusted EBITDA margin
• • Adjusted EBITDA margin of 20.2% is highest level since our transformational merger
  • Sixth consecutive quarter of sequential adjusted EBITDA margin improvement
• Strong free cash flow generation
• • Free cash flow of $115 million represented 60% of adjusted EBITDA
  • We still expect to convert at least 50% of our adjusted EBITDA to free cash flow in 2023
• Continued commitment to return capital to shareholders
• • Returned 74% of free cash flow to shareholders in the third quarter via quarterly dividend and share repurchases
  • We remain committed to returning at least 60% of Free Cash Flow to shareholders

6 Note: See ChampionX Third Quarter 2023 earnings release and the appendix herein for reconciliation of non-GAAP financial measures including adjusted EBITDA and free cash flow (FCF).

Copyright 2023 ChampionX. All rights reserved.

Ken Fisher

Executive Vice President & Chief Financial Officer

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Third Quarter 2023 Financial Highlights

• 3Q Revenue of $940MM

◦ Down 8% year-over-year	$927	$940

• Up 1% sequentially

• North America up 1% sequentially

• Solid sequential growth in Canada
• U.S. flat sequentially - Weakness in US land offset

by growth in Gulf of Mexico

• International up 2% sequentially
• • Strong sequential growth in Latin America

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Third Quarter 2023 Financial Highlights

3Q 2023 Sequential Revenue Changes

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Third Quarter 2023 Financial Highlights (continued)

Achieved 20.2% EBITDA Margin

• Adjusted EBITDA of $190 million
• • Up 2% sequentially, and up 14% year-over-year, on higher sales volumes, pricing realization and productivity
  • Includes $7.2 million of foreign exchange losses related to the devaluation of the Argentine peso
• Adjusted EBITDA margin of 20.2%
• • Up 7 basis points sequentially
  • Up 391 basis points year-over-year
  • Driven by improvements in pricing realizations, productivity, and cost management
  • Argentine foreign exchange losses impact of approximately 70 basis points

							Adjusted
	Adjusted				EBITDA Margin
					20.2%
EBITDA Margin
	20.1%
					16.6%
					$4
17.7%		$4	25.1%
25.1%

23.2%

23.9%

20.7%

20.3%

10 See the appendix for a reconciliation of non-GAAP financial measures including adjusted EBITDA and adjusted EBITDA margin.

Copyright 2023 ChampionX. All rights reserved.