Schlumberger(SLB)2025-01-17 17:51Financial Data and Key Metrics Changes - The company reported full year 2024 revenue of 9.3 billion, a 1% sequential increase, with adjusted EBITDA margin at a cycle high of 25.7% [35][36] - Free cash flow for the fourth quarter was 4 billion for the year, and net debt was reduced to 850 million in 2024, with expectations for significant growth in 2025 [15][84] Company Strategy and Development Direction - The company is focused on diversifying its portfolio beyond oil and gas, with significant growth in low-carbon markets and data center infrastructure solutions [15][28] - The integration of digital solutions and technology investments is expected to enhance production recovery and operational efficiency [27][66] - The company anticipates steady global upstream investment in 2025, with a mix of growth and declines across various regions [19][20] Management's Comments on Operating Environment and Future Outlook - Management noted a cautious approach from customers regarding near-term activity due to concerns about an oversupplied oil market, but expects this imbalance to gradually improve [17][18] - The outlook for 2025 includes flat revenue on a standalone basis, with adjusted EBITDA expected to be at or above 2024 levels [82] - The company remains optimistic about long-term growth in the Middle East and deepwater markets, despite short-term challenges [56][58] Other Important Information - The company plans to return a minimum of $4 billion to shareholders in 2025 through dividends and stock repurchases, reflecting confidence in financial performance [44][45] - The acquisition of ChampionX is progressing well, with expectations to close the transaction by the end of Q1 2025 [45][46] Q&A Session Summary Question: Outlook for international upstream spending - Management highlighted the Middle East as a bright spot for growth, offsetting declines in Saudi Arabia and Egypt, with long-term commitments to expand capacity [54][56] Question: Growth trajectory of production-driven business - Management expressed confidence in positive growth for Production Systems driven by production recovery and technology investments [61][64] Question: Sequential improvement in Q2 and overall activity shape - Management expects a typical low first quarter followed by a rebound in the second half of the year, particularly in international markets [73] Question: Operations in Russia and impact of sanctions - Revenue from Russia accounted for 4% of global revenue in 2024, down from 5% the previous year, with voluntary measures taken to curtail activity [75][76] Question: Clarification on 2025 guidance - Management confirmed that the 2025 guidance includes the divestiture of the Palliser asset, which has not yet closed [106] Question: Pricing outlook for 2025 - Management indicated that the market remains capital disciplined, supporting resilient pricing despite competitive pressures [110] Question: Opportunities for cost structure optimization - Management noted progress in executing a cost-out program, which has supported margin expansion, with ongoing monitoring for further efficiencies [113][115] Question: Growth opportunities in the digital business - Management outlined three growth pathways: digital operations, cloud transition, and data and AI, emphasizing the independence of these from CapEx and OpEx spending [125][133] Question: Update on Lumi platform adoption - Management reported strong interest and pilot programs for the Lumi platform, with early feedback being positive [142][145]