SLB Announce Revenue of $7.7 billion increas of 30% year on year
SLB (NYSE: SLB) today announced results for the first-quarter 2023.
First-Quarter Results
| (Stated in millions, except per share amounts) | ||||||
| Three Months Ended | Change | |||||
| Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Sequential | Year-on-year | ||
| Revenue | $7,736 | $7,879 | $5,962 | -2% | 30% | |
| Income before taxes – GAAP basis | $1,161 | $1,347 | $638 | -14% | 82% | |
| Income before taxes margin – GAAP basis | 15.0% | 17.1% | 10.7% | -208 bps | 432 bps | |
| Net income attributable to SLB – GAAP basis | $934 | $1,065 | $510 | -12% | 83% | |
| Diluted EPS – GAAP basis | $0.65 | $0.74 | $0.36 | -12% | 81% | |
Adjusted EBITDA* | $1,788 | $1,921 | $1,254 | -7% | 43% | |
| Adjusted EBITDA margin* | 23.1% | 24.4% | 21.0% | -127 bps | 208 bps | |
| Pretax segment operating income* | $1,391 | $1,557 | $894 | -11% | 56% | |
| Pretax segment operating margin* | 18.0% | 19.8% | 15.0% | -178 bps | 298 bps | |
| Net income attributable to SLB, excluding charges & credits* | $906 | $1,026 | $488 | -12% | 86% | |
| Diluted EPS, excluding charges & credits* | $0.63 | $0.71 | $0.34 | -11% | 85% | |
Revenue by Geography | ||||||
| International | $5,985 | $6,194 | $4,632 | -3% | 29% | |
| North America | 1,698 | 1,633 | 1,282 | 4% | 32% | |
| Other | 53 | 52 | 48 | n/m | n/m | |
| $7,736 | $7,879 | $5,962 | -2% | 30% | ||
*These are non-GAAP financial measures. See sections titled “Charges & Credits”, “Divisions”, and “Supplemental Information” for details. n/m = not meaningful | ||||||
| (Stated in millions) | ||||||
| Three Months Ended | Change | |||||
| Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Sequential | Year-on-year | ||
| Revenue by Division | ||||||
| Digital & Integration | $894 | $1,012 | $857 | -12% | 4% | |
| Reservoir Performance | 1,503 | 1,554 | 1,210 | -3% | 24% | |
| Well Construction | 3,261 | 3,229 | 2,398 | 1% | 36% | |
| Production Systems | 2,207 | 2,215 | 1,604 | – | 38% | |
| Other | (129) | (131) | (107) | n/m | n/m | |
| $7,736 | $7,879 | $5,962 | -2% | 30% | ||
Pretax Operating Income by Division | ||||||
| Digital & Integration | $265 | $382 | $292 | -31% | -9% | |
| Reservoir Performance | 242 | 282 | 160 | -14% | 52% | |
| Well Construction | 672 | 679 | 388 | -1% | 73% | |
| Production Systems | 205 | 238 | 114 | -14% | 80% | |
| Other | 7 | (24) | (60) | n/m | n/m | |
| $1,391 | $1,557 | $894 | -11% | 56% | ||
Pretax Operating Margin by Division | ||||||
| Digital & Integration | 29.6% | 37.7% | 34.0% | -810 bps | -440 bps | |
| Reservoir Performance | 16.1% | 18.2% | 13.2% | -207 bps | 291 bps | |
| Well Construction | 20.6% | 21.0% | 16.2% | -44 bps | 444 bps | |
| Production Systems | 9.3% | 10.8% | 7.1% | -148 bps | 217 bps | |
| Other | n/m | n/m | n/m | n/m | n/m | |
| 18.0% | 19.8% | 15.0% | -178 bps | 298 bps | ||
n/m = not meaningful |
Strong Growth and Broad-Based Attributes
SLB CEO Olivier Le Peuch commented, “I am very pleased with our start to 2023. We delivered strong year-over-year revenue growth and margin expansion at a scale that instills further confidence in our full-year financial ambition. The quarter was defined by strong activity dynamics offshore and in the broader international basins, most notably in Well Construction and Production Systems.
“Compared to the same period last year, revenue grew 30%; adjusted EBITDA increased 43%; EPS—excluding charges and credits—increased 85%; and pretax segment operating margin expanded 298 basis points (bps). All Divisions grew, both in North America and in the international markets, reflecting the strength of our portfolio across geographies and business lines. Revenue growth surpassed rig count growth both in North America and internationally—representing the highest year-on-year quarterly growth in more than a decade.
“Sequentially, revenue grew 4% in North America, our eighth consecutive quarter of growth, benefiting from our exposure to the most resilient basins and market segments. Internationally, the sequential revenue decline was less pronounced than historical trends as seasonal effects were partially offset by robust activity gains.
“We continue to see positive pricing as our performance differentiates, technology adoption increases, contract terms are adjusted to offset inflation, and service capacity continues to tighten in key international markets. In this environment, our customers are more actively collaborating with us to improve their operational performance, attain decarbonization objectives, and lower overall costs through the increased use of our differentiated technologies.
“First-quarter cash flow from operations was $330 million, reflecting the seasonal first-quarter buildup of working capital that will support our anticipated growth for the year and the payment of our annual incentives. Free cash flow generation is expected to accelerate throughout the year, consistent with historical trends.
Great Start to the Year Anchored on a Very Solid Core
“Year over year, our Core Divisions collectively grew by 34% and expanded operating margins by more than 300 bps. Each of the three Core Divisions delivered very strong growth and expanded margins—driven by increased activity, pricing, and technology adoption.
“In our Core, we continue to leverage the industry’s most comprehensive technology portfolio with disruptive fit-for-basin technologies, advanced digital solutions, and an unmatched ability to integrate across the entire value chain—from subsurface to midstream.
“In our Digital & Integration Division, digital sales posted strong year-on-year growth that is on track with our strategic ambition as we continue to secure new contracts and accelerate cloud and edge solutions. However, the increase in digital sales during the quarter was largely offset by a decline in Asset Performance Solutions (APS) revenue, arising from production interruptions in Ecuador and lower revenue from our Palliser asset in Canada.
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