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Schlumberger(SLB) - 2024 Q4 - Annual Results
SLBSchlumberger(SLB)2025-01-17 12:08

Financial Performance - Fourth-quarter revenue of 9.28billionincreased19.28 billion increased 1% sequentially and 3% year on year[4] - Fourth-quarter GAAP EPS of 0.77 decreased 7% sequentially but was flat year on year[4] - Fourth-quarter adjusted EBITDA of 2.38billionincreased22.38 billion increased 2% sequentially and 5% year on year[4] - Full-year revenue of 36.29 billion increased 10% year on year[4] - Full-year GAAP EPS of 3.11increased73.11 increased 7% year on year[4] - Full-year adjusted EBITDA of 9.07 billion increased 12% year on year[4] - Revenue increased by 10% year-on-year to 36.289billion,withinternationalrevenuegrowingby1236.289 billion, with international revenue growing by 12% to 29.415 billion[12][14] - Adjusted EBITDA grew by 12% to 9.070billion,withinternationaladjustedEBITDAincreasingby139.070 billion, with international adjusted EBITDA increasing by 13% to 7.900 billion[12][14] - SLB's revenue for Q4 2024 was 9.284billion,upfrom9.284 billion, up from 8.990 billion in Q4 2023, with full-year revenue reaching 36.289billion,comparedto36.289 billion, compared to 33.135 billion in 2023[48] - Net income attributable to SLB for Q4 2024 was 1.095billion,slightlydownfrom1.095 billion, slightly down from 1.113 billion in Q4 2023, while full-year net income rose to 4.461billionfrom4.461 billion from 4.203 billion in 2023[48] - SLB's Q4 2024 net income (GAAP basis) was 1,095million,withdilutedEPSof1,095 million, with diluted EPS of 0.77[53] - SLB's full-year 2024 net income (GAAP basis) was 4,461million,withdilutedEPSof4,461 million, with diluted EPS of 3.11[54] - SLB's Q4 2024 revenue was 9,284million,withpretaxsegmentoperatingincomeof9,284 million, with pretax segment operating income of 1,918 million[57] - SLB's full-year 2024 revenue was 36,289million,withadjustedEBITDAof36,289 million, with adjusted EBITDA of 9,070 million[57] - SLB's international revenue for full-year 2024 was 29,415million,withadjustedEBITDAof29,415 million, with adjusted EBITDA of 7,900 million[60] - SLB's North America revenue for full-year 2024 was 6,680million,withadjustedEBITDAof6,680 million, with adjusted EBITDA of 1,592 million[60] - SLB's adjusted EBITDA was 2.382billioninthefourthquarterof2024,withanadjustedEBITDAmarginof25.72.382 billion in the fourth quarter of 2024, with an adjusted EBITDA margin of 25.7%[74][75] - SLB's adjusted EBITDA for the full year of 2024 was 9.070 billion, with an adjusted EBITDA margin of 25.0%, representing a 12% increase from 2023[77][78] - SLB's Core business revenue for the full year of 2024 was 32.677million,a932.677 million, a 9% increase from 2023, with Pretax operating income of 6.176 million, a 14% increase[80] Regional Performance - Middle East & Asia revenue grew by 18% to 13.026 billion, while Europe & Africa revenue increased by 13% to 9.671 billion[12][15] - Latin America revenue declined 3% sequentially to 1.63 billion, driven by reduced drilling activity in Mexico, partially offset by increased production system sales in Brazil[29] - Europe & Africa revenue increased 2% sequentially to 2.47 billion, supported by higher activity in Europe and North Africa, despite lower subsea production system sales in Scandinavia[30] - Middle East & Asia revenue grew 2% sequentially to 3.38billion,drivenbystrongactivityintheUAE,Egypt,andQatar,offsettingweakerperformanceinSaudiArabiaandAustralia[31]−NorthAmericarevenuerose43.38 billion, driven by strong activity in the UAE, Egypt, and Qatar, offsetting weaker performance in Saudi Arabia and Australia[31] - North America revenue rose 4% sequentially to 1.75 billion, driven by higher digital sales and increased production system sales in the U.S. Gulf of Mexico[32] Division Performance - Digital & Integration division revenue increased 6% sequentially and 10% year on year to 1.16billioninQ4[5]−ProductionSystemsdivisionrevenueincreased31.16 billion in Q4[5] - Production Systems division revenue increased 3% sequentially and 9% year on year to 3.20 billion in Q4[5] - Production Systems revenue grew by 24% to 2.44 billion, driven by the subsea acquisition and organic growth in surface systems, completions, and artificial lift[17] - Digital & Integration revenue increased by 10% year-on-year, with digital revenue growing by 20% to 2.44 billion[20] - Digital & Integration revenue increased 6% sequentially to 1.16billion,withdigitalrevenueup101.16 billion, with digital revenue up 10% and pretax operating margin expanding 274 bps to 38.3%[33][34][35] - Reservoir Performance revenue declined 1% sequentially to 1.81 billion, with pretax operating margin expanding 35 bps to 20.5%[36][37][38] - Well Construction revenue decreased 1% sequentially to 3.27billion,withpretaxoperatingmargindeclining70bpsto20.83.27 billion, with pretax operating margin declining 70 bps to 20.8%[39][40][41] - Production Systems revenue increased 3% sequentially to 3.20 billion, with pretax operating margin decreasing 93 bps to 15.8%[42][43] - SLB's Digital & Integration division revenue for Q4 2024 was 1,156million,withincomebeforetaxesof1,156 million, with income before taxes of 442 million[57] - SLB's Well Construction division revenue for Q4 2024 was 3,267million,withincomebeforetaxesof3,267 million, with income before taxes of 681 million[57] Acquisitions and Contracts - SLB acquired the Aker subsea business, which generated 1.93billioninrevenueduringthefullyearof2024[10]−SLBsecuredmajorcontractswithShell,bp,andPetrobras,focusingondigitaldrilling,subseaintegration,anddeepwaterwellconstruction[44]−SLBsecuredafour−yearcontractwithStaatsolieMaatschappijSurinameN.V.fortheDelfi™digitalplatformtoenhanceoffshoreteamefficiency[46]−SLBsignedamemorandumofunderstandingwithPETRONAStoenhanceAI,machinelearning,andgenerativeAItechnologiesforsubsurfacedatamanagement[46]ShareholderReturnsandCashFlow−Boardapproveda3.61.93 billion in revenue during the full year of 2024[10] - SLB secured major contracts with Shell, bp, and Petrobras, focusing on digital drilling, subsea integration, and deepwater well construction[44] - SLB secured a four-year contract with Staatsolie Maatschappij Suriname N.V. for the Delfi™ digital platform to enhance offshore team efficiency[46] - SLB signed a memorandum of understanding with PETRONAS to enhance AI, machine learning, and generative AI technologies for subsurface data management[46] Shareholder Returns and Cash Flow - Board approved a 3.6% increase in quarterly cash dividend to 0.285 per share[4] - Free cash flow for the year was 3.99billion,enablingthecompanytoreturn3.99 billion, enabling the company to return 3.27 billion to shareholders and reduce net debt by 571million[14]−Thecompanyrepurchased38.4millionsharesfor571 million[14] - The company repurchased 38.4 million shares for 1.74 billion in 2024 and plans to increase total shareholder returns to 4billionin2025[24][25]−Thecompanyannounceda3.64 billion in 2025[24][25] - The company announced a 3.6% increase in its quarterly dividend to 0.285 per share, effective April 2025[27] - SLB's free cash flow for Q4 2024 was 1.631billion,contributingtoafull−yearfreecashflowof1.631 billion, contributing to a full-year free cash flow of 3.990 billion, compared to 4.038billionin2023[51]−SLB′snetdebtdecreasedto4.038 billion in 2023[51] - SLB's net debt decreased to 7.405 billion at the end of 2024, down from 7.976billionattheendof2023[51]−Cashflowfromoperationsforthefullyearof2024was7.976 billion at the end of 2023[51] - Cash flow from operations for the full year of 2024 was 6.60 billion and free cash flow was 3.99billion[65]−SLB′sQ42024cashflowfromoperationswas3.99 billion[65] - SLB's Q4 2024 cash flow from operations was 2.39 billion, with free cash flow of 1.63billion[64]TechnologyandInnovation−AIandautonomousoperationsgainedtraction,withthelaunchoftheLumi™dataandAIplatformandtheachievementoffullyautonomousdrillingoperations[20]−SLBintroducedNeuro™autonomousgeosteeringandStream™high−speedintelligenttelemetry,enhancingdrillingefficiencyandperformance[45]−SLB′sdigitaltechnologydeploymentintheUSwithEquinorandSensiareducedsubsurfacemodelupdatetimesfrommonthstoweeksanddays,andsimulationruntimesfromninehoursto36minutes[46]CarbonCaptureandSustainability−SLB′scarboncaptureandstorage(CCS)hubinJubail,SaudiArabia,isexpectedtocaptureandstoreuptoninemillionmetrictonsofCO2annuallyinitsfirstphase,withconstructioncompletionbytheendof2027[47]−SLBCapturi™achievedmechanicalcompletionofacarboncaptureplantatHeidelbergMaterials′cementfacilityinNorway,designedtocaptureupto400,000metrictonsofCO2annually[47]−SLBCapturicompletedasuccessfultestcampaignatWACKER′ssiliconproductionsiteinNorway,achievingCO2captureratesofover951.63 billion[64] Technology and Innovation - AI and autonomous operations gained traction, with the launch of the Lumi™ data and AI platform and the achievement of fully autonomous drilling operations[20] - SLB introduced Neuro™ autonomous geosteering and Stream™ high-speed intelligent telemetry, enhancing drilling efficiency and performance[45] - SLB's digital technology deployment in the US with Equinor and Sensia reduced subsurface model update times from months to weeks and days, and simulation runtimes from nine hours to 36 minutes[46] Carbon Capture and Sustainability - SLB's carbon capture and storage (CCS) hub in Jubail, Saudi Arabia, is expected to capture and store up to nine million metric tons of CO2 annually in its first phase, with construction completion by the end of 2027[47] - SLB Capturi™ achieved mechanical completion of a carbon capture plant at Heidelberg Materials' cement facility in Norway, designed to capture up to 400,000 metric tons of CO2 annually[47] - SLB Capturi completed a successful test campaign at WACKER's silicon production site in Norway, achieving CO2 capture rates of over 95%[47] Tax and Interest - "Interest & other income" for the fourth quarter of 2024 was 115 million, including 24millionfromgainonsaleofinvestment,24 million from gain on sale of investment, 46 million from interest income, and 45millionfromearningsofequitymethodinvestments[66]−Interestincomedecreasedby45 million from earnings of equity method investments[66] - Interest income decreased by 6 million sequentially to 46million,whileinterestexpensedecreasedby46 million, while interest expense decreased by 5 million sequentially to 131millioninthefourthquarterof2024[67]−Theeffectivetaxrate(ETR)forthefourthquarterof2024was19.4131 million in the fourth quarter of 2024[67] - The effective tax rate (ETR) for the fourth quarter of 2024 was 19.4%, compared to 19.2% in the third quarter of 2024[69] - The ETR for the full year of 2024 was 19.3%, compared to 19.1% for the full year of 2023[70] Capital Allocation and Guidance - SLB's capital investment guidance for full-year 2025 is approximately 2.3 billion[63] - Depreciation and amortization expense for the full year of 2024 was 2.519million,including2.519 million, including 1.551 million from depreciation of fixed assets and $481 million from amortization of APS investments[79] - SLB's forward-looking statements include financial and performance targets, growth forecasts for divisions, and expectations for oil and gas demand and production growth[84] - SLB anticipates improvements in operating procedures and technology, as well as capital expenditures in the oil and gas industry[84] - SLB's business strategies include digital initiatives and "fit for basin" approaches, alongside customer strategies[84] - SLB's capital allocation plans involve dividends and share repurchase programs, with a focus on APS projects and joint ventures[84] ChampionX Transaction - The acquisition of ChampionX is expected to strengthen production and recovery capabilities, enhancing the resilience of the SLB portfolio[19] - The proposed transaction between SLB and ChampionX is expected to bring benefits, with risks including business disruptions and challenges in retaining key personnel[85] - SLB and ChampionX face risks related to the integration of businesses and achieving anticipated synergies from the proposed transaction[85] - The transaction with ChampionX requires regulatory approvals, with potential delays or unfavorable terms impacting the deal[85] - SLB filed a Form S-4 with the SEC on April 29, 2024, which includes a proxy statement/prospectus for the ChampionX transaction[87] - The definitive proxy statement/prospectus for the ChampionX transaction was filed with the SEC on May 15, 2024, and mailed to ChampionX stockholders[87] - Investors are urged to review the Form S-4 and proxy statement/prospectus for important information about the proposed transaction[87]