™
© 2024 DNOW. All Rights Reserved
Investor Presentation
First Quarter 2024
© 2024 DNOW. All Rights Reserved
Disclosure Statement
Statements made in the course of this presentation that state the Company's or management's intentions, hopes, beliefs,
expectations or predictions of the future are forward-looking statements. It is important to note that the Company's actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time-to-time in the Company's filings with the U.S. Securities and Exchange Commission (SEC). Any decision regarding the Company or its securities should be made upon careful consideration of not only the information here presented, but also other available information, including the information filed by the Company with the SEC. Copies of these filings may be obtained by contacting the Company or the SEC.
In an effort to provide investors with additional information regarding our results as determined by U.S. Generally Accepted
Accounting Principles (GAAP), we disclose various non-GAAP financial measures in our quarterly earnings press releases and other public disclosures. We use these non-GAAP financial measures internally to evaluate and manage the Company's operations because we believe it provides useful supplemental information regarding the Company's ongoing economic performance. The non-GAAP financial measures include: (i) earnings before interest, taxes, depreciation and amortization (EBITDA) excluding other costs (sometimes referred to as "EBITDA"), (ii) net income (loss) attributable to DNOW Inc. excluding other costs and (iii) diluted earnings (loss) per share attributable to DNOW Inc. excluding other costs. Each of these financial measures excludes the impact of certain other costs and therefore has not been calculated in accordance with GAAP. A reconciliation of each non-GAAP financial measure to its most comparable GAAP financial measure can be
found in our earnings press release.
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Significantly improved | Solid balance | |
financial results with | sheet, debt free* | |
powerful cash | and $188M* | |
generation abilities | in cash | |
Investment | ||
Leadership | in the | Highlights |
upstream | energy | |
and energy | Over 160-year history of | |
evolution | markets | delivering solutions for our |
customers |
Total liquidity, including cash, of $564M* to fuel organic growth, pursue accretive acquisitions and repurchase shares, opportunistically
© 2024 DNOW. All Rights Reserved
Evolving | Expanding set | |
technology and | of solutions for | |
AI capabilities to | ||
the energy | ||
drive increased | ||
transition and | ||
productivity and | ||
efficiencies | evolution sector | |
*As of March 31, 2024 |
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Significant Improved Earnings
Comparing the past three U.S. rig count cycles
DNOW. All Rights Reserved
2H 2014
U.S. Rigs: 1,907*
WW Rigs: 3,635*
Revenue: $2.1B
EBITDA:$97M
4.7% of Revenue
ROIC#: 8.4%
2018
U.S. Rigs: 1,032*
WW Rigs: 2,211*
Revenue: $3.1B
EBITDA:$125M 4.0% of Revenue ROIC#: 5.4%
2023
U.S. Rigs: 689*
WW Rigs: 1,814*
Revenue: $2.3B
EBITDA:$184M 7.9% of Revenue ROIC#: 16.4%
© 2024
*Rig values based on Baker Hughes Rig Count | # ROIC calculated using EBITDA excluding other costs, less tax expense divided by long-term |
debt and non-controlling interests, less cash and cash equivalents |
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Strategic growth plan to increase shareholder value
Focused on growing sustainable earnings and free cash flow throughout the cycle
Inorganic accumulation
Share buyback program
© 2024 DNOW. All Rights Reserved
Defend and grow market share within core energy markets
- Expand wallet share and market share in upstream
- Expand opportunities in midstream market
- Leverage strengths through supercenter expansions and enhanced service model
Growth from customer investments
tied to decarbonization and energy evolution
- Provide products for aged infrastructure and methane emission reduction projects
- Expand opportunities from customer investments in CCUS and new energy
- Expand opportunities from customer investments in renewable fuels
Additional growth through adjacent industrial markets
- Targeting chemicals, mining and water markets that align with our pump supplier agreements to expand and diversify markets
- Expand aftermarket service capabilities driving high margin incremental revenue
Capital allocation to support organic growth
- Low capex business
- Efficient use of working capital to support organic growth
strategy to grow earnings and free cash flow
- Closed Whitco acquisition, first PVF acquisition in 9 years
- Expand U.S. Process Solutions business with margin accretive, less commoditized products and solutions
- Evaluate International opportunities in select markets in diversification strategy
- $80M program runs through December 2024
- $58M completed through 1Q24
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2024© AllDNOW. ReservedRights
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Key results and outlook
1Q24 revenue of $563M, a growth of 1% sequentially
Closed acquisition of Whitco Supply, expands and diversifies midstream customer base
Generated $80M of free cash flow for 1Q24 and $262M for the trailing four quarters ending March 31, 2024
Debt-free, $188M in net cash, and total liquidity $564M
Continue to evaluate a number of accretive deals in our M&A pipeline
Outlook
Full-year 2024 revenue expected to increase in the mid-to-high single digit percentage range from 2023
Full-year 2024 EBITDA % of revenue will approximate full-year 2023 EBITDA %
2Q24 revenue expected to increase in the 10 to 15 percentage range sequentially, with 2Q24 EBITDA % of revenue in the 7 to 8 percentage range
Full-year 2024 free cash flow could now approach $200M
2024© AllDNOW. ReservedRights
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DNOW at a Glance
NYSE: DNOW
Locations | Countries | Employees | ||
165 | 18 | 2,475 | ||
Operating for more than 160 years
Comprehensive global network of energy centers, customer onsite and process solutions locations complemented with an online commerce channel
Support major land and offshore operations for energy producing regions around the world
Key markets: North America, South America, North Sea, the Middle East, Asia Pacific
Revenue by
Reporting Segment | 11% |
12%
77%
1Q24 United States | 1Q24 Canada |
1Q24 International
U.S. Revenue by
Channel
30%
70%
1Q24 U.S. Energy | 1Q24 U.S. Process Solutions |
Thousands of Suppliers in ~40 countries
© 2024 DNOW. All Rights Reserved |
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Top Tier
Supply
Partners &
Customers
Across the
Globe
Supporting Customer Operations in ~80 countries |
Drilling and Production |
Midstream |
Downstream |
Industrial, Renewable Fuels and Mining |
Providing Value-Added Solutions Across All Channels
2024© AllDNOW. ReservedRights
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Energy Centers
Global branch network
supplying products locally to upstream, midstream and downstream energy
customers
Provides wide array of
products and value locally in
major oil and gas regions
Customer Onsite and Integrated Supply
On-site model offering
customizable products, services and solutions to the energy and
industrial markets
Reduces customers' total costs including operating expenses and invested capital
Process Solutions
Process, production and fluid handling equipment in the form of engineering, design, installation, fabrication, rental
and aftermarket service
Meets demand for tank
battery production facilities, water transfer and disposal, midstream gathering and transmission, downstream and adjacent industrial
markets
Differentiated Value and Product Offerings
Talent with deep product application
knowledge
Leveraging technology complemented with an efficient regionalized distribution model to grow market share and drive productivity
Retaining proximity to customers through offsite, onsite and digital channels
© 2024 DNOW. All Rights Reserved
Revenue by Product Line
FY2023
Pipe | Fittings & |
Flanges |
18% 19%
27% | 19% | |
Pumps, | Valves | |
Production & |
Drilling
17%
Mill Tool, MRO,
Safety and Other
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DNOW Inc. published this content on 12 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 June 2024 23:46:02 UTC.