SLB Announces Second-Quarter 2024 Results
19.07.2024 - 14:07:58- Revenue of $9.14 billion increased 5% sequentially and 13% year on year
- GAAP EPS of $0.77 increased 4% sequentially and 7% year on year
- EPS, excluding charges and credits, of $0.85 increased 13% sequentially and 18% year on year
- Net income attributable to SLB of $1.11 billion increased 4% sequentially and 8% year on year
- Adjusted EBITDA of $2.29 billion increased 11% sequentially and 17% year on year
- Cash flow from operations was $1.44 billion and free cash flow was $776 million
- Board approved quarterly cash dividend of $0.275 per share
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The exterior of the SLB headquarters in Houston, Texas. (Photo: Business Wire)
SLB (NYSE: SLB) today announced results for the second-quarter 2024.
Second-Quarter Results
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(Stated in millions, except per share amounts) |
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Three Months Ended |
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Change |
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Jun. 30, |
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Mar. 31, |
|
Jun. 30, |
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Sequential |
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Year-on-year |
|
| Revenue |
$9,139 |
$8,707 |
$8,099 |
5% |
|
13% |
|||
| Income before taxes - GAAP basis |
$1,421 |
$1,357 |
$1,293 |
5% |
|
10% |
|||
| Income before taxes margin - GAAP basis |
15.5% |
15.6% |
16.0% |
-4 bps |
|
-42 bps |
|||
| Net income attributable to SLB - GAAP basis |
$1,112 |
$1,068 |
$1,033 |
4% |
|
8% |
|||
| Diluted EPS - GAAP basis |
$0.77 |
$0.74 |
$0.72 |
4% |
|
7% |
|||
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|
|
|
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| Adjusted EBITDA* |
$2,288 |
$2,057 |
$1,962 |
11% |
|
17% |
|||
| Adjusted EBITDA margin* |
25.0% |
23.6% |
24.2% |
142 bps |
|
81 bps |
|||
| Pretax segment operating income* |
$1,854 |
$1,649 |
$1,581 |
12% |
|
17% |
|||
| Pretax segment operating margin* |
20.3% |
18.9% |
19.5% |
135 bps |
|
76 bps |
|||
| Net income attributable to SLB, excluding charges & credits* |
$1,224 |
$1,082 |
$1,033 |
13% |
|
19% |
|||
| Diluted EPS, excluding charges & credits* |
$0.85 |
$0.75 |
$0.72 |
13% |
|
18% |
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| Revenue by Geography |
|
|
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| International |
$7,452 |
$7,056 |
$6,297 |
6% |
|
18% |
|||
| North America |
1,644 |
1,598 |
1,746 |
3% |
|
-6% |
|||
| Other |
43 |
53 |
56 |
n/m |
|
n/m |
|||
|
$9,139 |
$8,707 |
$8,099 |
5% |
|
13% |
||||
|
(Stated in millions) |
|||||||||
|
Three Months Ended |
|
Change |
|||||||
|
Jun. 30, |
|
Mar. 31, |
|
Jun. 30, |
|
Sequential |
|
Year-on-year |
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| Revenue by Division | |||||||||
| Digital & Integration |
$1,050 |
$953 |
$947 |
10% |
|
11% |
|||
| Reservoir Performance |
1,819 |
1,725 |
1,643 |
5% |
|
11% |
|||
| Well Construction |
3,411 |
3,368 |
3,362 |
1% |
|
1% |
|||
| Production Systems |
3,025 |
2,818 |
2,313 |
7% |
|
31% |
|||
| Other |
(166) |
(157) |
(166) |
n/m |
|
n/m |
|||
|
$9,139 |
$8,707 |
$8,099 |
5% |
|
13% |
||||
|
|
|
|
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| Pretax Operating Income by Division |
|
|
|
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| Digital & Integration |
$325 |
$254 |
$322 |
28% |
|
1% |
|||
| Reservoir Performance |
376 |
339 |
306 |
11% |
|
23% |
|||
| Well Construction |
742 |
690 |
731 |
7% |
|
1% |
|||
| Production Systems |
473 |
400 |
278 |
18% |
|
70% |
|||
| Other |
(62) |
(34) |
(56) |
n/m |
|
n/m |
|||
|
$1,854 |
$1,649 |
$1,581 |
12% |
|
17% |
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|
|
|
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| Pretax Operating Margin by Division |
|
|
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| Digital & Integration |
31.0% |
26.6% |
34.0% |
435 bps |
|
-304 bps |
|||
| Reservoir Performance |
20.6% |
19.7% |
18.6% |
98 bps |
|
205 bps |
|||
| Well Construction |
21.7% |
20.5% |
21.7% |
125 bps |
|
0 bps |
|||
| Production Systems |
15.6% |
14.2% |
12.0% |
146 bps |
|
361 bps |
|||
| Other |
n/m |
n/m |
n/m |
n/m |
|
n/m |
|||
|
20.3% |
18.9% |
19.5% |
135 bps |
|
76 bps |
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SLB acquired the Aker subsea business during the fourth quarter of 2023 in connection with the formation of the OneSubsea joint venture. The acquired business generated revenue of $485 million during the second quarter of 2024. Excluding the impact of this accquisition, SLB's global second-quarter 2024 revenue increased 7% year on year; international second-quarter 2024 revenue increased 11% year on year; and Production Systems second-quarter 2024 revenue increased 10% year on year. |
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*These are non-GAAP financial measures. See sections titled "Divisions" and Supplementary Information" for details. |
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n/m = not meaningful |
Broad-Based Growth Driven by the International Markets
SLB CEO Olivier Le Peuch commented, “We achieved solid second-quarter results, with broad-based international revenue growth and margin expansion across all Divisions. Our Core business continued to build on its positive momentum and our digital business accelerated, resulting in our highest quarterly international revenue since 2014. These results demonstrate SLB’s strong position in key, resilient markets, as we continue to benefit from elevated activity in the Middle East & Asia, particularly in gas, and our clients’ increased investments in deepwater basins, exploration, and digital.
“Sequentially, revenue grew 5%, led by the Middle East & Asia, which increased 6%. The increase in this area was driven by capacity expansions, gas development projects, and production and recovery, with a majority of GeoUnits in the area achieving record revenue. We also continued to benefit from our enhanced offshore exposure, particularly in deepwater basins across Latin America, Europe & Africa, and in the US Gulf of Mexico.
Production Systems, Reservoir Performance, and Digital Lead the Way
“Our Core Divisions—Reservoir Performance, Well Construction, and Production Systems—grew combined revenue by 4% sequentially and expanded pretax segment operating margin by 120 basis points (bps). This strong performance was driven by the international markets, where revenue once again reached a new cycle high.
“Sequentially, Production Systems grew by 7% and Reservoir Performance increased by 5%, with growth led by subsea production systems and with artificial lift, valves, surface production systems, intervention, and stimulation each posting their highest quarterly revenue of the cycle. This was the result of strong activity in Europe & Africa, Latin America, and the Middle East & Asia, stemming from the combination of long-cycle development activity and the acceleration of production and recovery investments. Meanwhile, Well Construction also grew sequentially with measurements and fluids each posting cycle-high quarterly revenue. This was supported by land activity and offshore developments in the Middle East & Asia and Latin America, partially offset by lower drilling in US land.
“Our Digital & Integration Division also performed well, with revenue increasing 10% sequentially. This was entirely driven by high-margin growth in digital, where revenue reached a new quarterly high and remains on track to achieve our high-teens growth ambition for the full year. Our strong results were fueled by exploration data license sales and the increased adoption of our Cloud, AI, and Edge technology platforms.
“Overall, our financial performance in the second quarter was strong as our adjusted EBITDA margin expanded 142 bps sequentially, cash flow from operations was $1.44 billion, and free cash flow was $776 million.
“Additionally, during the first half of the year, we returned $1.49 billion to shareholders through stock repurchases and dividends, and we are on track to return $3.0 billion to shareholders in 2024.
“Thank you to the SLB team for delivering such a strong performance this quarter. I look forward to building on these positive results throughout the rest of the year.”
Enhancing Margins with Further Opportunities Ahead
“Throughout the cycle, SLB has consistently achieved industry-leading financial results by leveraging our differentiated operating footprint and leading technical and digital offerings. As we continue to navigate this cycle, we are poised to capture quality revenue growth and unlock further margin expansion through increased technology deployment and digital adoption, as well as a heightened focus on operating efficiency and the optimization of our support structure.
“Looking ahead to the second half of the year, we expect ongoing momentum in the international markets, strong digital sales, and our cost efficiency programs will enable us to expand margins and deliver our ambition to grow full-year adjusted EBITDA in the mid-teens.
“Beyond 2024, the fundamentals of this cycle remain in place, and there is a long tailwind of growth opportunities, including long-cycle gas and deepwater projects, production and recovery activity, and the secular trends of digital and decarbonization. This represents a strong backdrop to continue our margin expansion and cash generation journey.
“Our strategy across our three engines of growth—Core, Digital, and New Energy—is built to harness each of these opportunities, and we are only becoming stronger through our elevated digital offerings, the additional capabilities of OneSubsea, and the announced pending acquisition of ChampionX.
“This business environment favors SLB’s strengths. With our continued performance and ongoing emphasis on capital discipline and cost efficiency, we remain well positioned to outperform the market and deliver on our commitment to returns to shareholders.”
Other Events
During the quarter, SLB repurchased 9.9 million shares of its common stock for a total purchase price of $465 million. For the first half of the year, SLB repurchased a total of 15.3 million shares of its common stock for a total purchase price of $735 million.
On May 29, 2024, SLB issued $500 million of 5.000% Senior Notes due 2027, $500 million of 5.000% Senior Notes due 2029, and $500 million of 5.000% Senior Notes due 2034.
On June 14, 2024, SLB and Aker Carbon Capture (ACC) announced the closing of their previously announced joint venture. The new company combines technology portfolios, expertise, and operations platforms to support accelerated carbon capture adoption for industrial decarbonization at scale. Following the transaction, SLB owns 80% of the combined business and ACC owns 20%.
On July 18, 2024, SLB’s Board of Directors approved a quarterly cash dividend of $0.275 per share of outstanding common stock, payable on October 10, 2024, to stockholders of record on September 4, 2024.
Second-Quarter Revenue by Geographical Area
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(Stated in millions) |
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Three Months Ended |
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Change |
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Jun. 30, |
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Mar. 31, |
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@ businesswireindia.com
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