Schlumberger(US:SLB)2024-04-19 18:29Financial Data and Key Metrics Changes - Revenue for Q1 2024 was $8.7 billion, representing a year-on-year increase of 12.6% [20] - Adjusted EBITDA margin for Q1 was 23.6%, up 51 basis points year-on-year [21] - Earnings per share excluding charges and credits was $0.75, an increase of $0.12 compared to the same quarter last year [20] Business Line Data and Key Metrics Changes - Digital & Integration revenue was $953 million, a 7% year-on-year increase, with digital revenue experiencing double-digit growth [21][22] - Reservoir Performance revenue increased by 15% year-on-year to $1.7 billion, with margins expanding by 356 basis points to 19.7% [22] - Production Systems revenue grew by 28% year-on-year to $2.8 billion, with margins expanding by 490 basis points to 14.2% [22] - Well Construction revenue increased by 3% year-on-year to $3.4 billion, with margins remaining flat at 20.5% [22] Market Data and Key Metrics Changes - International revenue increased by 18% year-on-year, with a notable 29% growth in the Middle East & Asia [20][21] - North America revenue decreased by 6% year-on-year due to lower rig counts and gas prices [21] Company Strategy and Development Direction - The company aims to grow digital revenue in the high-teens for the full year, focusing on capital discipline and execution efficiency [11][21] - The acquisition of ChampionX is expected to enhance the company's portfolio in production chemicals and artificial lift, particularly in offshore environments [15][17] - The company is prioritizing emissions reduction and low-carbon energy solutions, with a focus on carbon capture and sequestration [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing oil and gas cycle, driven by strong demand and energy security [11][27] - The company anticipates continued growth in international markets, particularly in the Middle East and Asia, while North America may experience slower growth [18][19] - For Q2, the company expects sequential revenue growth internationally in the mid-single digits and in North America in the low-single digits [19] Other Important Information - The company generated $327 million in cash flow from operations, with a free cash flow of negative $222 million due to seasonal effects [23][24] - The company plans to file its S-4 registration statement related to the ChampionX acquisition in the coming weeks [25] Q&A Session Summary Question: How does the company view the current cycle and its duration? - Management believes the cycle is characterized by breadth, resilience, and longevity, driven by strong energy demand and investment in capacity expansion [27][28] Question: What is the progress on the Delfi digital platform? - Adoption of the Delfi platform is trending favorably, with expectations for continued growth in digital sales throughout the year [30][31] Question: What are the dynamics of the ChampionX deal in relation to the OpEx and CapEx cycles? - Management sees the production recovery market as critical, with opportunities for innovation and efficiency gains in production operations [36][38] Question: Can you elaborate on the $400 million in synergies from the ChampionX acquisition? - Approximately 75% of the synergies are related to cost savings, with the remainder linked to revenue synergies [42] Question: What is the spending outlook in Saudi Arabia and the broader GCC region? - Management noted significant growth in spending across the GCC, with a shift towards gas development and ongoing investments in oil production [44][49] Question: How does the company see the North American market developing? - North America is expected to remain a smaller piece of the business, with growth anticipated in the latter half of the year [79]