SLB Announces Fourth-Quarter and Full-Year 2023 Results and Raises Quarterly Dividend by 10%

• Fourth-quarter revenue of $8.99 billion increased 8% sequentially and 14% year on year
• Fourth-quarter GAAP EPS of $0.77 decreased 1% sequentially and increased 4% year on year
• Fourth-quarter EPS, excluding charges and credits, of $0.86 increased 10% sequentially and 21% year on year
• Fourth-quarter cash flow from operations was $3.02 billion and free cash flow was $2.28 billion
• Board approved a 10% increase in quarterly cash dividend to $0.275 per share
• Full-year revenue of $33.14 billion increased 18% year on year
• Full-year GAAP EPS of $2.91 increased 22% year on year
• Full-year EPS, excluding charges and credits, of $2.98 increased 37% year on year
• Full-year net income attributable to SLB of $4.20 billion increased 22% year on year
• Full-year adjusted EBITDA of $8.11 billion increased 25% year on year
• Full-year cash flow from operations was $6.64 billion and free cash flow was $4.04 billion

HOUSTON–(BUSINESS WIRE)–Regulatory News:

SLB (NYSE: SLB) today announced results for the fourth-quarter and full-year 2023.

Fourth-Quarter Results

	(Stated in millions, except per share amounts)
	Three Months Ended						Change
	Dec. 31, 2023		Sept. 30, 2023		Dec. 31, 2022		Sequential		Year-on-year
Revenue	$8,990		$8,310		$7,879		8%		14%
Income before taxes – GAAP basis	$1,433		$1,395		$1,347		3%		6%
Income before taxes margin – GAAP basis	15.9%		16.8%		17.1%		-85 bps		-116 bps
Net income attributable to SLB – GAAP basis	$1,113		$1,123		$1,065		-1%		4%
Diluted EPS – GAAP basis	$0.77		$0.78		$0.74		-1%		4%
Adjusted EBITDA*	$2,277		$2,081		$1,921		9%		19%
Adjusted EBITDA margin*	25.3%		25.0%		24.4%		29 bps		95 bps
Pretax segment operating income*	$1,868		$1,683		$1,557		11%		20%
Pretax segment operating margin*	20.8%		20.3%		19.8%		52 bps		101 bps
Net income attributable to SLB, excluding charges & credits*	$1,242		$1,123		$1,026		11%		21%
Diluted EPS, excluding charges & credits*	$0.86		$0.78		$0.71		10%		21%
Revenue by Geography
International	$7,293		$6,614		$6,194		10%		18%
North America	1,641		1,643		1,633		–		–
Other	56		53		52		n/m		n/m
	$8,990		$8,310		$7,879		8%		14%

*These are non-GAAP financial measures. See sections titled “Divisions” and “Supplementary Information” for details.

n/m = not meaningful

	(Stated in millions)
	Three Months Ended						Change
	Dec. 31, 2023		Sept. 30, 2023		Dec. 31, 2022		Sequential		Year-on-year
Revenue by Division
Digital & Integration	$1,049		$982		$1,012		7%		4%
Reservoir Performance	1,735		1,680		1,554		3%		12%
Well Construction	3,426		3,430		3,229		0%		6%
Production Systems	2,944		2,367		2,215		24%		33%
Other	(164)		(149)		(131)		n/m		n/m
	$8,990		$8,310		$7,879		8%		14%
Pretax Operating Income by Division
Digital & Integration	$356		$314		$382		13%		-7%
Reservoir Performance	371		344		282		8%		31%
Well Construction	770		759		679		1%		13%
Production Systems	442		319		238		38%		85%
Other	(71)		(53)		(24)		n/m		n/m
	$1,868		$1,683		$1,557		11%		20%
Pretax Operating Margin by Division
Digital & Integration	34.0%		32.0%		37.7%		197 bps		-375 bps
Reservoir Performance	21.4%		20.5%		18.2%		88 bps		319 bps
Well Construction	22.5%		22.1%		21.0%		35 bps		143 bps
Production Systems	15.0%		13.5%		10.8%		153 bps		426 bps
Other	n/m		n/m		n/m		n/m		n/m
	20.8%		20.3%		19.8%		52 bps		101 bps
n/m = not meaningful

Full-Year Results

			(Stated in millions, except per share amounts)
			Twelve Months Ended
			Dec. 31, 2023		Dec. 31, 2022		Change
Revenue			$33,135		$28,091		18%
Income before taxes – GAAP basis			$5,282		$4,271		24%
Income before taxes margin – GAAP basis			15.9%		15.2%		74 bps
Net income attributable to SLB – GAAP basis			$4,203		$3,441		22%
Diluted EPS – GAAP basis			$2.91		$2.39		22%
Adjusted EBITDA*			$8,107		$6,462		25%
Adjusted EBITDA margin*			24.5%		23.0%		147 bps
Pretax segment operating income*			$6,523		$5,011		30%
Pretax segment operating margin*			19.7%		17.8%		185 bps
Net income attributable to SLB, excluding charges & credits*			$4,305		$3,138		37%
Diluted EPS, excluding charges & credits*			$2.98		$2.18		37%
Revenue by Geography
International			$26,188		$21,895		20%
North America			6,727		5,995		12%
Other			220		201		n/m
			$33,135		$28,091		18%

*These are non-GAAP financial measures. See sections titled “Charges & Credits”, “Divisions”, and “Supplemental Information” for details.

n/m = not meaningful

			(Stated in millions)
			Twelve Months Ended
			Dec. 31, 2023		Dec. 31, 2022		Change
Revenue by Division
Digital & Integration			$3,871		$3,725		4%
Reservoir Performance			6,561		5,553		18%
Well Construction			13,478		11,397		18%
Production Systems			9,831		7,862		25%
Other			(606)		(446)		n/m
			$33,135		$28,091		18%
Pretax Segment Operating Income
Digital & Integration			$1,257		$1,357		-7%
Reservoir Performance			1,263		881		43%
Well Construction			2,932		2,202		33%
Production Systems			1,245		748		66%
Other			(174)		(177)		n/m
			$6,523		$5,011		30%
Pretax Segment Operating Margin
Digital & Integration			32.5%		36.4%		-397 bps
Reservoir Performance			19.2%		15.9%		338 bps
Well Construction			21.8%		19.3%		243 bps
Production Systems			12.7%		9.5%		315 bps
Other			n/m		n/m		n/m
			19.7%		17.8%		185 bps
Adjusted EBITDA
Digital & Integration			$1,847		$1,872		-1%
Reservoir Performance			1,646		1,233		33%
Well Construction			3,514		2,701		30%
Production Systems			1,569		1,047		50%
Other			102		95		n/m
			$8,678		$6,948		25%
Corporate & other			(571)		(486)		n/m
			$8,107		$6,462		25%
Adjusted EBITDA Margin
Digital & Integration			47.7%		50.3%		-255 bps
Reservoir Performance			25.1%		22.2%		287 bps
Well Construction			26.1%		23.7%		237 bps
Production Systems			16.0%		13.3%		264 bps
Other			n/m		n/m		n/m
			26.2%		24.7%		146 bps
Corporate & other			n/m		n/m		n/m
			24.5%		23.0%		147 bps
n/m = not meaningful
			(Stated in millions)
			Twelve Months Ended
			Dec. 31, 2023		Dec. 31, 2022		Change
Revenue by Geography
North America			$6,727		$5,995		12%
Latin America			6,645		5,661		17%
Europe & Africa*			8,524		7,201		18%
Middle East & Asia			11,019		9,033		22%
Other			220		201		n/m
			$33,135		$28,091		18%
International			$26,188		$21,895		20%
North America			6,727		5,995		12%
Other			220		201		n/m
			$33,135		$28,091		18%
Pretax Segment Operating Income
International			$5,486		$4,063		35%
North America			1,157		1,106		5%
Other			(120)		(158)		n/m
			$6,523		$5,011		30%
Pretax Segment Operating Income Margin
International			20.9%		18.6%		239 bps
North America			17.2%		18.4%		-124 bps
Other			n/m		n/m		n/m
			19.7%		17.8%		185 bps
Adjusted EBITDA
International			$6,988		$5,425		29%
North America			1,559		1,470		6%
Other			131		53		n/m
			$8,678		$6,948		25%
Corporate & other			(571)		(486)		n/m
			$8,107		$6,462		25%
Adjusted EBITDA Margin
International			26.7%		24.8%		191 bps
North America			23.2%		24.5%		-135 bps
Other			n/m		n/m		n/m
			26.2%		24.7%		146 bps
Corporate & other			n/m		n/m		n/m
			24.5%		23.0%		147 bps

*Includes Russia and the Caspian region

n/m = not meaningful

 

 

Impressive Fourth-Quarter and Full-Year Performance

SLB CEO Olivier Le Peuch commented, “We have concluded a remarkable year marked by widespread revenue growth, margin expansion, and exceptional free cash flow. Year on year, we grew revenue and EBITDA 18% and 25%, respectively, and we delivered $4.0 billion of free cash flow—allowing us to reduce net debt by $1.4 billion and return $2.0 billion to shareholders this year through dividends and stock repurchases. These results showcase our continued ability to deliver superior earnings, generate impressive cash flows, and maintain a strong balance sheet.

“Sequentially, fourth-quarter revenue rose 8%, EPS (excluding charges and credits) increased 10% to $0.86, and adjusted EBITDA margins reached another cycle high. Notably, the acquired Aker subsea business accounted for approximately 70% of the sequential revenue growth, while the legacy portfolio continued its growth trajectory in the international markets.

“Compared to the same quarter last year, international revenue outpaced North America, growing 18% while North America was relatively flat. Excluding the acquired Aker subsea business, international revenue grew 10% year on year, marking the 10th consecutive quarter of double-digit growth. Our global pretax segment operating margin increased year on year for the 12th consecutive quarter, and we exited the year with a quarterly international margin reaching a new high in the cycle.”

A Remarkable Year of Broad, Resilient, and Durable Growth

“We concluded the year with 37% growth in EPS (excluding charges and credits) and expanded adjusted EBITDA margin by 147 basis points (bps). Additionally, we generated $6.64 billion in cash flow from operations and delivered return on capital employed (ROCE) of 16%, the highest level since 2014—a result of our returns-focused strategy.

“Our strong full-year performance was fueled by substantial international growth, with approximately 90% of our international GeoUnits posting year-on-year increases, complemented by sustained performance in North America.

“International revenue grew 20% year on year—by more than $4 billion—and pretax segment operating margins expanded by 239 bps. Notably, we achieved our highest-ever revenue in the Middle East, led by impressive growth in Saudi Arabia, the United Arab Emirates, and Egypt & East Mediterranean GeoUnits.

“In the offshore basins, we benefited from long-cycle developments, capacity expansions, and exploration and appraisal activities with remarkable growth in Brazil and Angola and very solid increases in the US Gulf of Mexico, Guyana, and Norway.

“In North America, while activity moderated as expected in the second half of the year, revenue increased by 12% year on year, outpacing the rig count. This outperformance was driven by our technology-leveraged portfolio in both US land and the US Gulf of Mexico.

“On a divisional basis, our Core business—comprising Reservoir Performance, Well Construction, and Production Systems—accelerated, growing revenue 20% year on year and expanding pretax segment operating margin 277 bps.

“Digital & Integration revenue increased 4% year on year. This was led by Digital, which continued strong growth momentum, delivering more than $2 billion in revenue while APS revenue declined. Our success in Digital was driven by further adoption of Delfi™ technology and customers embracing our connected and autonomous drilling, data, and AI solutions.

“We also saw continued adoption of our Transition Technologies™ portfolio as customers look to enhance efficiency and reduce emissions. The imperative to operate more sustainably is translating into tangible investments by our customers, resulting in the portfolio generating more than $1.0 billion of revenue.

“We are also very pleased to see our strategic focus on customer centricity continue to translate into customer satisfaction, with our performance and value creation achieving recognition in various industry surveys.

“I am extremely proud of our full-year results, and I would like to thank the entire SLB team for delivering this outstanding performance.”

Further International Growth and Shareholder Returns Ahead

“As global energy demand continues to increase, international production is expected to play a key role in meeting supply through the end of the decade. Notably, we anticipate record investment levels in the Middle East extending beyond 2025, with significant expansion in Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait. Offshore remains another distinct attribute of this durable growth cycle, serving as an important source for production growth and capacity additions, and we expect strong activity to continue in Brazil, West Africa, the Eastern Mediterranean, the Middle East, and Southeast Asia.

“In the international environment, despite elevated geopolitical tensions in various regions, we do not anticipate a significant impact on the sector’s overall activity, absent any escalation. Furthermore, we expect the long-cycle investments across the Middle East, global offshore, and gas resource plays to be largely decoupled from short-term commodity price fluctuations.

“In 2024, we will experience another year of strong growth driven by the international markets. Benefiting from these market dynamics, we foresee further growth led by Production Systems, strengthened by the additional subsea opportunities from our OneSubsea joint venture. Sustained momentum is expected in Reservoir Performance, accompanied by increased activity in Well Construction. Additionally, we expect continued customer adoption of our Digital business, particularly in our new technology platforms.

“Our performance and returns-focused strategy, combined with our differentiated market positioning and digital capabilities, will drive profitable growth and further margin expansion, setting a strong foundation for long-term outperformance.

“With confidence in the strength and longevity of the cycle and visibility into sustained strong cash flows, we are pleased to announce that our Board of Directors has approved a 10% increase to our quarterly dividend. Additionally, we plan to increase share repurchases in 2024, visibly enhancing returns to shareholders for the full year.

“With a clear strategy, a uniquely positioned portfolio, and the right team in place, we look forward to delivering value for our customers and our shareholders in the years ahead.”

Other Events

During the quarter, SLB repurchased 1.8 million shares of its common stock at an average price of $54.46 per share for a total purchase price of $100 million.

On January 18, 2024, SLB’s Board of Directors approved a 10% increase in SLB’s quarterly cash dividend from $0.250 per share of outstanding common stock to $0.275 per share, beginning with the dividend payable on April 4, 2024, to stockholders of record on February 7, 2024.

Fourth-Quarter Revenue by Geographical Area

	(Stated in millions)
	Three Months Ended						Change
	Dec. 31, 2023		Sept. 30, 2023		Dec. 31, 2022		Sequential		Year-on-year
North America	$1,641		$1,643		$1,633		–		–
Latin America	1,722		1,681		1,619		2%		6%
Europe & Africa*	2,429		2,091		2,067		16%		18%
Middle East & Asia	3,141		2,842		2,508		11%		25%
Eliminations & other	57		53		53		n/m		n/m
	$8,990		$8,310		$7,879		8%		14%
International	$7,292		$6,614		$6,194		10%		18%
North America	$1,641		$1,643		$1,633		–		–

*Includes Russia and the Caspian region

n/m = not meaningful

International

Revenue in Latin America of $1.72 billion increased 2% sequentially due mainly to the Aker subsea acquisition driving growth in Brazil. Year on year, fourth-quarter revenue grew 6%, fueled by heightened sales of production systems and the impact of the acquired Aker subsea business. Increased intervention, stimulation, and drilling activity in Argentina also contributed to the year-on-year revenue growth.

Europe & Africa revenue of $2.43 billion increased 16% sequentially mainly driven by the acquired Aker subsea business, which accounted for most of the sequential revenue growth, primarily in Scandinavia. The growth was further boosted by intensified offshore exploration, drilling, and production activity in the Angola, Central & East Africa GeoUnit. Year on year, fourth-quarter revenue grew 18%, with revenue offshore Africa nearly doubling, driven by heightened exploration, drilling, and production activities. The Aker subsea business in the Scandinavia GeoUnit also contributed to the year-on-year revenue surge, offset in part by reduced revenue in Russia.

Revenue in the Middle East & Asia of $3.14 billion increased 11% sequentially fueled by robust activity growth in Saudi Arabia, the United Arab Emirates, Qatar, Egypt & East Mediterranean, East Asia, and Oman GeoUnits. This increase was driven by higher drilling, intervention, stimulation, and evaluation activity, both on land and offshore. Year on year, fourth-quarter revenue increased 25%, propelled by significant growth in Saudi Arabia, the United Arab Emirates, Egypt & East Mediterranean, Kuwait, Oman, and East Asia GeoUnits.

North America

North America revenue of $1.64 billion was flat sequentially as reduced drilling activity in US land and Canada was offset by higher offshore revenue in the US Gulf of Mexico. Offshore revenue increased as a result of higher subsea production systems sales and the acquisition of the Aker subsea business. Year on year, North America revenue was flat as reduced drilling activity in US land and lower APS project revenue in Canada were offset by higher revenue offshore.

Fourth-Quarter Results by Division

Digital & Integration

	(Stated in millions)
	Three Months Ended						Change
	Dec. 31, 2023		Sept. 30, 2023		Dec. 31, 2022		Sequential		Year-on-year
Revenue
International	$790		$737		$723		7%		9%
North America	257		242		288		6%		-11%
Other	2		3		1		n/m		n/m
	$1,049		$982		$1,012		7%		4%
Pretax operating income	$356		$314		$382		13%		-7%
Pretax operating margin	34.0%		32.0%		37.7%		197 bps		-375 bps
n/m = not meaningful

Digital & Integration revenue of $1.05 billion increased 7% sequentially due to increased Digital revenue across all areas led by the Middle East & Asia and Europe & Africa, including higher exploration data sales in North America. Year on year, revenue increased 4% due to strong international growth in Digital revenue despite lower exploration data sales in the US Gulf of Mexico, due to licensing round delays, partially offset by lower APS revenue in Canada.

Digital & Integration pretax operating margin of 34% expanded 197 bps sequentially due to improved profitability in Digital. Year on year, pretax operating margin decreased 375 bps due to reduced profitability in APS, which was impacted by lower commodity prices in Canada.

Reservoir Performance

	(Stated in millions)
	Three Months Ended						Change
	Dec. 31, 2023		Sept. 30, 2023		Dec. 31, 2022		Sequential		Year-on-year
Revenue
International	$1,611		$1,554		$1,430		4%		13%
North America	123		125		123		-2%		0%
Other	1		1		1		n/m		n/m
	$1,735		$1,680		$1,554		3%		12%
Pretax operating income	$371		$344		$282		8%		31%
Pretax operating margin	21.4%		20.5%		18.2%		88 bps		319 bps
n/m = not meaningful

Reservoir Performance revenue of $1.73 billion grew 3% sequentially primarily due to increased stimulation, intervention, and evaluation activity internationally, mainly in the Middle East and Africa. Strong growth occurred in Qatar and Saudi Arabia on higher evaluation and stimulation activity, respectively.

Year on year, revenue increased 12% across all international areas, led by the Middle East & Asia and supported by higher evaluation, intervention, and stimulation activity.

Reservoir Performance pretax operating margin of 21% expanded 88 bps sequentially and 319 bps year on year, representing the highest level of pretax operating margin in this cycle. These increases were primarily driven by higher activity, pricing, and improved operating leverage across evaluation and stimulation. New technology deployment also contributed to the margin expansion, particularly in the Middle East and Europe.

Well Construction

	(Stated in millions)
	Three Months Ended						Change
	Dec. 31, 2023		Sept. 30, 2023		Dec. 31, 2022		Sequential		Year-on-year
Revenue
International	$2,748		$2,707		$2,522		2%		9%
North America	614		663		652		-7%		-6%
Other	64		60		55		n/m		n/m
	$3,426		$3,430		$3,229		–		6%
Pretax operating income	$770		$759		$679		1%		13%
Pretax operating margin	22.5%		22.1%		21.0%		35 bps		143 bps
n/m = not meaningful

Well Construction revenue of $3.43 billion was flat sequentially with international growth being offset by a decline in North America revenue. International revenue increased 2% driven primarily by strong growth in the Middle East & Asia and Africa. Year on year, revenue increased 6%, driven by strong growth in the Middle East & Asia and Africa due to very strong measurements, fluids, and equipment sales activity. This increase was partially offset by declines in North America, Latin America, and Russia.

Well Construction pretax operating margin of 22% expanded 35 bps sequentially driven by improved profitability from increased activity in the Middle East & Asia and Africa. This was partially offset by the decline in activity in North America and the onset of seasonal effects in the Northern Hemisphere. Year on year, pretax operating margin expanded 143 bps with profitability improving in measurements and fluids as a result of higher activity in the Middle East & Asia and Africa.

Production Systems

	(Stated in millions)
	Three Months Ended						Change
	Dec. 31, 2023		Sept. 30, 2023		Dec. 31, 2022		Sequential		Year-on-year
Revenue
International	$2,276		$1,740		$1,638		31%		39%
North America	666		626		575		6%		16%
Other	2		1		2		n/m		n/m
	$2,944		$2,367		$2,215		24%		33%
Pretax operating income	$442		$319		$238		38%		85%
Pretax operating margin	15.0%		13.5%		10.8%		153 bps		426 bps
n/m = not meaningful

Production Systems revenue of $2.94 billion increased 24% sequentially and 33% year on year, mainly due to the acquired Aker subsea business. Excluding the acquired Aker subsea business, revenue grew 4% sequentially and 11% year on year driven by strong international sales. Organic sequential growth was due to strong international sales of midstream, artificial lift, and subsea production systems, partially offset by reduced sales of completions. Organic year-on-year growth was driven by strong international sales of subsea production systems, completions, and artificial lift.

Production Systems pretax operating margin expanded 153 bps sequentially to 15%, its highest level in this cycle. The expansion was driven primarily by higher sales of midstream, artificial lift, and subsea production systems. Year on year, pretax operating margin expanded 426 bps led by improved profitability in completions, surface production systems, artificial lift, and subsea production systems and driven by an improved activity mix, pricing, and the easing of supply chain constraints.

Quarterly Highlights

CORE

Contract Awards

SLB continues to win new contract awards that align with SLB’s core strengths, particularly in the international and offshore basins. Notable highlights include the following:

• In Canada, offshore Newfoundland and Labrador, Cenovus Energy awarded SLB a five-year contract for well construction and associated services. SLB will provide drilling and completion fluid work in the West White Rose field.
  

• In Mexico, SLB was awarded two contracts covering a period of more than two years for our main customer in Mexico. The first contract is for wellheads and trees and the second is for mudline systems.
  

• In Argentina, Energía Argentina awarded SLB a contract for valves for the Presidente Nestor Kirchner (GPNK) gas pipeline. The GPNK pipeline will increase the gas transport capacity from the Vaca Muerta gas field to consumption centers in northern Argentina. Additionally, due to strong performance, Energía Argentina awarded SLB an extension of the current contract for the northern gas pipeline reversion. The pipeline will replace 2.4 billion cubic meters per year of imported liquified natural gas and liquid fuels with Argentine fuels.
  

• In Libya, Repsol awarded SLB and partner National Oil Wells Drilling & Workover Company a contract for integrated well construction services. The contract scope includes project management and all drilling and well testing services, including SLB core and rig services and products. The contract is for two exploration wells plus one optional well. SLB will deploy its integration expertise and technology workflows with the objective of de-risking the exploration well delivery and improving the exploration and appraisal success rate for Repsol.
  

• Also in Libya, Nafusah awarded SLB a three-year contract for the engineering, procurement, and commissioning (EPC), as well as startup and operations of an early production facility using one of SLB’s Production ExPRESS™ rapid production response solutions. Located in North Hamada Area 47, the project will be capable of processing up to 10,000 barrels of fluid per day.

Contacts

Investors
James R. McDonald – SVP, Investor Relations & Industry Affairs, SLB

Joy V. Domingo – Director of Investor Relations, SLB

Tel: +1 (713) 375-3535

Email: investor-relations@slb.com

Media
Josh Byerly – Vice President of Communications, SLB

Moira Duff – Director of External Communications, SLB

Tel: +1 (713) 375-3407

Email: media@slb.com

Read full story here