Weatherford International(WFRD)2025-02-06 16:01Financial Data and Key Metrics Changes - In Q4 2024, Weatherford reported a 2% sequential decline in North America revenue, primarily due to reduced U.S. land activity, while international revenue decreased by 6% sequentially and 3% year-over-year, mainly driven by Latin America, particularly Mexico [11][12] - The company achieved adjusted EBITDA margins of 24.3% in Q4, with full-year adjusted EBITDA margins at 25.1%, marking the highest full-year margin in over 15 years [12][13] - For the full year 2024, Weatherford generated $524 million of adjusted free cash flow, representing a 37.9% free cash flow conversion rate [29][33] Business Line Data and Key Metrics Changes - In the DRE segment, all major product lines exhibited significant growth, while completions in the WCC segment grew in the mid-double digits in 2024, following a year of mid-20% growth in 2023 [15][16] - The Wealth Services product line, focused on rigless intervention, has grown over 50% in three years, representing a significant growth vector with low capital intensity [17][18] Market Data and Key Metrics Changes - The international business saw a 10% growth on a full-year basis, led by the Middle East, North Africa, and Asia, which experienced a 17% year-on-year top-line growth [12][13] - The outlook for 2025 indicates a mid-single-digit decline in total international revenues, primarily due to anticipated drops in Mexico and Russia, while excluding these two countries, international revenues are expected to grow low single digits [22][24] Company Strategy and Development Direction - The company is focusing on structural cost optimization, networking capital efficiency, and identifying specific growth vectors to drive performance in a softer market [40][43] - Weatherford aims to achieve adjusted EBITDA margins in the high 20s over the next three years, despite short-term revenue declines [38][39] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the immediate outlook, particularly in Mexico, where activity levels are expected to drop significantly [21][22] - Despite challenges, management remains optimistic about growth opportunities in regions like Canada, Brazil, Kuwait, Saudi Arabia, Thailand, and Norway [22][24] Other Important Information - The company has initiated a cost containment program and expects to see substantial margin improvements in the second half of 2025 as cost and productivity programs take effect [26][27] - Weatherford has paid two quarterly dividends of $0.25 per share and repurchased approximately $99 million of shares during the second half of 2024 [14] Q&A Session Summary Question: Confirmation on Saudi growth offsetting declines in Mexico and Russia - Management confirmed that while Saudi Arabia is expected to grow, it will not fully offset the declines in Mexico and Russia, but will aid overall growth [50][51] Question: Insights on Russia's performance and future expectations - Management indicated a significant decline in Russia's business due to sanctions and operational complexities, with expectations for continued reduction in revenue contribution [72][73] Question: Future opportunities in Mexico - Management emphasized a focus on margins and cash management, expressing confidence in long-term potential despite current challenges [80] Question: Update on capital return program and share repurchases - Management stated that they are ahead of commitments regarding shareholder returns and will continue to evaluate share repurchases based on market conditions [87] Question: Growth prospects for the Wealth Services business - Management highlighted the growth driven by engineering capabilities and digital solutions, positioning it as a significant platform for future growth [118]