Lorenzo Simonelli
Chairman's Letter to shareholders


"Our unique portfolio of assets, technologies, and long-term strategy has allowed us to maintain a strong balance sheet and invest in differentiated solutions while we transform our operations to better deliver for energy and industrial customers and enhance shareholder value."

Lorenzo Simonelli

Chairman, President, and Chief Executive Officer

Dear fellow shareholders,

In 2023, Baker Hughes delivered a record-breaking year across the Company. Our order backlog has reached historic levels, led by over 80 million tons per annum (MTPA) of liquified natural gas (LNG) awards. At the same time, we are making significant progress in transforming our organization. We continue to see the growing benefits of our strategic positioning as a differentiated energy and industrial technology company.

Today, we are uniquely placed to support our customers in their endeavors to make the energy they produce and consume more sustainable. While there is growing consensus that the energy transition will take longer and be more complex than expected, we are fully committed to supporting our customers as they take on this challenge. Irrespective of the pace of the energy transition, our portfolio is set to benefit as we drive progress across the energy ecosystem in 2024 and beyond.

Our strategy – first launched in 2020 – is built on three key pillars: transform the core, invest for growth, and position for new energy frontiers. This strategy is driving our execution over three time horizons that look out to 2030 and beyond, culminating in a Baker Hughes which has an elevated margin and returns profile, differentiated shareholder returns and strong exposure across the industrial and energy growth vectors.

As our strategy continues to evolve, we are seeing that more efficient energy solutions and emissions abatement are becoming non-negotiables for all projects regardless of the end market. We believe our transformation over these three horizons will deliver significant long-term value to our shareholders and achieve our purpose of taking energy forward.

During the year, our transformation activities continued to lay the foundation for a more durable earnings and free cash flow growth profile, and structurally increasing shareholder returns. Through optimizing our organization’s structure, improving internal processes and upgrading our financial and operating systems, we are becoming more agile and responsive to a dynamic market.

2023 highlights



in orders


increase in 
adjusted EBITDA*


in free cash flow*

Technology and innovation


in research and development


patents granted


in new energy orders

ESG Leadership


ESG rating by MSCI


reduction in
Scope 1 & 2 GHG


HSE perfect days

About Baker Hughes




in revenue


countries where we
conduct business

*Adjusted EBITDA and free cash flow are non-GAAP measures. Please refer to the Baker Hughes Reconciliation of GAAP to non-GAAP Financial Measures section at the end of this Annual Report.

** 2022 actual compared to 2019 base year.

The macro environment

Amidst global economic uncertainty and geopolitical risk at levels not seen in decades, the need to push ahead in a balanced energy transition became more apparent with another year of extreme climate impacts worldwide. These events have sharpened policymakers’ focus on better balancing the energy trilemma across energy security, sustainability and affordability.

To resolve the energy trilemma over the longer term, all forms of energy will be required with heightened focus on lowering and/or eliminating emissions. Technologies for sustainable energy development will continue to require public incentives to scale up, whether in the form of grants, tax credits, loans, or other forms of assistance. 

We believe that natural gas – and within it, LNG – will remain critical to meet global energy demand and further reduce use of other more carbon-intensive sources of energy, including coal. In the near term, we remain constructive on the outlook for oil and gas, and we believe underlying macroeconomic fundamentals remain supportive of a multi-year upturn in upstream spending led by international markets. While resilient oil demand and production cuts tightened the market, the pace of oil demand growth in the face of economic uncertainty, and geopolitical risk will be important factors to monitor as we navigate 2024. 

Additionally, our customers are focused on remaining disciplined in their capital and operating expenditures. They expect new partnerships, commercial models and new technology solutions to deliver sustainable productivity improvements with a lower carbon footprint. In turn, we see opportunities to create strategic customer relationships where we are recognized and rewarded financially for the risk that we take in building and delivering these new technology solutions.

Horizons 23
Our 2023 performance

Baker Hughes achieved strong results during another year of volatility thanks to a strong commitment to our strategy and generally favorable market forces. In 2023, our operations continued to benefit from the transformation efforts initiated in 2022, growing orders, revenues and margins. We booked $30.5 billion in orders, increased adjusted EBITDA* by 26%, and generated strong free cash flow* of $2.0 billion.

Our Oilfield Services and Equipment (OFSE) segment enjoyed another strong year of market growth internationally, solidifying its presence in the Middle East, and expanding its presence in the North Sea and subSaharan Africa. Offshore continued to be a strong market, with Baker Hughes capturing just over 25% of the subsea tree market. We are encouraged by the level of activity in our focus markets, and also pleased with the progress we have made on our cost-out initiatives in Subsea & Surface Pressure Systems. We are very pleased with our 2023 acquisition of Altus Intervention, providing key differentiation in OFSE for well intervention. As operators look to increase efficiency, decarbonize operations and prolong the life of their assets, well intervention and production enhancement will be critical and long-term growth drivers for the industry.

In OFSE, we are pleased with the margin performance improvement in 2023. As the supply chain stabilized for our chemicals business, we worked hard to manage commodity price increases and production cuts to continue margin improvements that we expect to normalize in 2024. OFSE’s EBITDA* margin rate reached 17.9% in the fourth quarter, reflecting a strong track record of execution and growth for the Well Construction and Production Solutions product lines, including our drilling portfolio.

Our Industrial & Energy Technology (IET) segment booked a record number of LNG awards in 2023 of $5.6 billion, further emphasizing Baker Hughes’ role as the energy technology provider of choice for this critical resource. Since 2017, there have been 210 MTPA of LNG Final Investment Decisions (FIDs), and Baker Hughes has been selected for 207 MTPA of this new capacity. These projects are scheduled to come online over the coming years, representing an almost 50% increase in our global liquefaction installed base between now and 2028.

New energy orders of $750 million exceeded our original full year guidance, and all orders will utilize existing Baker Hughes technology – a confirmation of the flexibility of our technology portfolio and ability to capitalize on new opportunities rapidly developing to address climate change. With expected total company new energy orders of $800 million to $1 billion in 2024, the customer synergies between IET and OFSE are becoming more visible across the landscape. Additionally, the 2022 acquisition of BRUSH Power Generation saw continued traction, with IET securing several orders for our electric machinery portfolio supporting our strategic commitment to provide lower carbon solutions. Electrification across all energy projects is becoming more prevalent, and BRUSH Power Generation orders were up over 50% in 2023.

With a record backlog of $30 billion, the pipeline of opportunities for IET remains robust. We are well positioned to execute on this backlog to help drive significant revenue growth in 2024 and 2025. To ensure continued profitable growth, we will maintain our focus on driving operational and cost improvements across all IET product lines, as well as managing aeroderivative gas turbine supply chain tightness.

Baker Hughes remained committed to delivering increased shareholder value. We returned $1.3 billion to shareholders through dividends and share buybacks, and we increased our dividend to $0.20 in the third quarter. Our strong balance sheet and free cash flow continue to allow us to deliver strong shareholder returns while we continue to reinvest in the business and focus on strategic technology investments in the future.

* Adjusted EBITDA, free cash flow, and EBITDA margin rate are non-GAAP measures. Please refer to the Baker Hughes Reconciliation of GAAP to non-GAAP Financial Measures section at the end of this Annual Report.


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Delivering Differentiated Value

In 2023, our focus was on execution. We implemented new ways of working to change how we operate with heightened levels of operational rigor and efficiency. This is driving more effective management of the business, reducing revenue volatility and improving structural margin improvement. We believe there is still additional optimization we can do across the business to further reduce redundancy and enable faster decision making. At the same time it is vital that we foster a culture of collaboration and innovation, intently focused on driving increased productivity and commercial success. I remain proud of our team’s accomplishments, and we believe our cultural and organizational evolution will allow us to unlock further value in 2024 and beyond.

Technology, differentiated commercial models, digital enablement, and sustainability are driving value across our businesses, as well as enhancing our competitive positioning. These four capabilities will truly differentiate the companies who are delivering on the energy trilemma, inclusive of driving a net-zero future. Baker Hughes is committed to playing a leading role in solving the energy trilemma and enabling sustainable energy development.

Alongside the significant new energy opportunities enabled by our unique portfolio available to energy and industrial customers, we see several growth areas in which we are set for success: the upward investment cycle in upstream and LNG; innovative ways of maintaining if not growing production; new growth vectors in industrial solutions; and continued adoption of technologies required for the lower-carbon economy of the future.

2024 will be a pivotal year to set up our success for 2030 goals. Internally, we remain focused on operational execution to drive higher EBITDA and structural free cash flow growth over the next several years, and further operational enhancements to drive increasing margins and returns. For our customers, we will focus on the flawless execution and partnerships required to deliver a net-zero future.

Our results demonstrate that our strategy is helping to deliver a sustainable future for people and the planet, and we are doing so in a fiscally and socially responsible manner. Throughout our strategic horizons, we remain heavily committed to creating shareholder value and helping usher the planet through sustainable energy development.

I look ahead with confidence to another year of taking energy forward.


Lorenzo Simonelli Signature

Lorenzo Simonelli

Chairman, President, and Chief Executive Officer


*Adjusted EBITDA, free cash flow, and EBITDA margin rate are non-GAAP measures. Please refer to the Baker Hughes Reconciliation of GAAP to non-GAAP Financial Measures section at the end of this Annual Report

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