SLB - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Schlumberger Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, there will be an opportunity for your questions. Instructions will be given at that time. reminder, is a recorded. As Instructions] this being conference [Operator conference to the ND I like the Maduemezia. over Relations would now Investor turn to of Vice President Please go ahead.

ND Maduemezia

Quarter to Thanks, is call held from Schlumberger Schlumberger And earlier Good the hosted XXXX welcome following Board Lea. Limited Call. morning. being Fourth Limited and Houston, Today's this Full-Year Earnings the meeting week.

Chief call Chief Executive Stephane Biguet, Joining Peuch, Officer; Le us Financial are on Olivier the Officer. and

of remind Before involve we refer the projected, and we therefore could you I some other I to participants begin, those filings. are risks matters materially, these results differ filing that statements our SEC to be These all to today like uncertainties making cause our will our statements. XX-K in from that would forward-looking. and latest

also Our measures. non-GAAP include comments financial today may

Additional our the details GAAP which Olivier. can be directly press With in the financial over website. is turn that, measures comparable release, and our will call fourth-quarter to found on most reconciliation to I

Olivier Le Peuch

Thank I what joining today, us my quarter on you, call. and Thank in you accomplished topics, remarks the prepared ladies for morning, performance In my cover with ND. our on three perspectives starting fourth gentlemen. XXXX. we will and Good

on questions. share floor view financial a the will details at the then results the new will open and XXXX start and will to growth outlook our ambition I Thereafter, our more give of we of we the have set cycle. Stephane

performance COVID-XX strong and First, women year. two in an team exceptional both, significantly quality, foundations Schlumberger for of despite let men performance service me outstanding by adversity. and their start thanking the safety resilience Schlumberger and strategy, The our of improved

growth a to position. in a performance fourth markets, allowing all Year. very proved of quarter, the and strong delivered both New for revenue international quarter four I our extremely In and on momentum ending proud to North headed and and we results the This market Divisions. fact, solid strengthen in differentiator fourth the am the sequential America customers, the our critical year to this in into note, In the the be our contributed us

another recovery $X of international flow severance, posting the including and cash and offshore, markets before The commenced international than billion. more was our MEA deepwater, region. and We sequential units broad, margin quarter growth, in business more from was half has than also recorded expansion with most in sequential of operation, particularly

offshore strong cash shale North the margin growth ahead partnership our and sequential services Our flow this free This breadth fourth where strength exposure well surface supporting Notably very franchise, position our of double-digit earnings combined land, posted outpaced peer-leading our conversion. with onshore the was short-cycle pressure exceeded strength growth, long-cycle market to and construction we growth and going and America, in and scale international we a solid and underscores revenue of the the In our forward. our on our international the rig count. systems and Liberty, offshore. of market very All-in-all, positions quarter of demonstrated exposure, activity. strong this rig and reset deliver power, complementing both sequential favorable markets of activity, pumping of expansion, a

what let we year. me you perspective my give on Now, achieved last

power we expand this have operating APS These asset. and to Company returns-focused high-graded Argentina new on will scaled-to-fit levels. our leverage, XXXX visibly exited contracts, restored unique globally, the First, addressed key portfolio. we we and Internationally, business actions and underperforming earnings our a around reset organized and EBITDA response and with in crisis, and we our XXXX, XXXX to America, divested as basins, in our units line margins our and North Through with we strategy margins. the restructured build

cases our for sustainable of drivers the enabling our proud transformation and across and digital digital achievements is future, growth domain recovery the key digital industry platform. the enterprise-wide new in Divisions XXXX, this drivers in cycle, both customers’ landscape, Second, our by our AI and include unlocking particularly scale, our externally. we workflows of expanding new at in positioning aligned our on strategy, platform the demonstrated which the with ahead capitalized and imperative; leading I we integration Recovery; industry. innovation efficiency. morning, release transformation further use and lower operations; reservoir for am internally for well step mandate in highlights in the maximizing digital, of digital change industry and the partnership, carbon performance, On priorities and value, construction and This are Production deployments, Through & digital our the significant

of As digital long-cycle, resilient accretive to most our was subsea result, cycle an during second only from to the and initiate businesses is XXXX, growth set XXXX. a

New establish technology Third, groundbreaking energy develop low differentiated, in zero-carbon we positions launched and Schlumberger ventures. Energy to market or multiple

ventures and hydrogen, lithium, in Our geothermal, very New includes and is CCUS, geo-energy. portfolio Energy diverse

this progress seen earnings have release, with morning’s you announced Celsius in we Genvia. and Energy significant As

sustainable made ventures In prepare at an years. in scale XXXX, forefront have in our step position essential entering during technology us to coming ambition fact, XXXX, we the to the enabling agreements to venture commercial clear every New Energy new progress energy Schlumberger or of in for in and these

ventures we on months. is these and be Energy over for coming long-term making platform weeks and growth, will more the a announcements New

operations we the improving performance. year, reinforced our our for of to ESG engagement gas and last commitment decarbonization with customers to our accelerated and solutions oil we Finally, provide

in of Change Program both minus. on a progressed frameworks our our a and increase of adoption rating we resulting into Specifically, to peer-leading the A Climate assessment, TCFD disclosures, CDP transparency the SASB of the to high-grading environmental

X also year, GHG XX% well stated and within X our to intensity delivered goal. emissions one reduction our emissions our a We of Scope on reduction path XXXX

of disciplined well global actions of be in by supporting year. through levels, we above land build of lockdowns, anticipate the we our course both Absent in America, supply and setback of In completions. pandemic driven the pace the the oil drivers activity momentum and on economic in is views the to new year. I’d easing towards XXXX. macro prices while developing throughout through North to stimulus inflection coordinated projected magnitude Now, near-term, demand and The to of see continues crisis vaccine and continued as control demand XXXX economic markets, exact share are the like a levels, start maintenance a up some the XXXX build In and outlook. rollout, will recovery, constructive OPEC+ of strong scale construction well to up

capital levels, the However, second slow U.S. production will and of continued as discipline the impacts of growth may the level, still due below to previous rate will budget production cap half in and visibly spending be consolidation exhaustion.

Schlumberger, seasonal macro second of to North and the America activity XXXX in to we run-rate increase, international we in in be the both NAM XXXX, by digits. long-cycle, of In will the the growth This second backdrop consequence, the first anticipate exceed to international contrasted from do a of this on see the and of recovery, XXXX and as Thus, an scenario, to quarter. when second build in to rebalance, second call year, excluding supply short both the anticipate mid-teens the of quarter; to starts half expect As and and OneStim. the with in market the half half dip very after favorable up the double internationally. is we in the acceleration international

NAM-international and unit. by including the expect more supported pro NAM versus of strategic Divisions of in a with incremental on of as and full-year with bps second pumping, greater operating margins. that in detail. combined margins expansion our from different XXXX, strength coming EBITDA XX% to XXXX double-digit We activity activity the excluding XXXX. growth will of offshore as North business above XXXX, combination of combined this the with international actions, a contribution mix support pass the a of margin Divisions, the the the exposure throughout on ambition all a XXX to achieve Internationally, long be offering short restoring results strong to our of than compared OneStim, long-cycle this result and favorable our across markets new the experience very and breadth outside Reservoir from XXXX, consequently, short-cycle markets. exposure, improvement by pressure leverage for will in revenue the XXXX, America, shaped see post to unique Stephane? drivers now relative key will basis, technology, Performance mix, to trajectory In financial will on Building we ambition with forma I and fit-for-basin market our our margin momentum, recovery, Stephane and to significant full-year XXX discuss expansion half our to growth and visibly an

Stephane Biguet

is was credits, last $X.XX Overall, fourth-quarter equally a quarter $X.XX to $X.X ladies revenue increased morning, increase good our and businesses. X% when per charges was Olivier, driven an and offshore to by in of same in considering you, the international X% of year. growth This share, earnings several adjusted back of sequentially XX Fourth and This excluding of North billion signs revenue sequentially basis quarter growth gentlemen. sequentially. the margins sequential we markets. in international quarter recovery EBITDA especially XXXX saw We Companywide Russia our of increased quarter. to effects the notable, and is fourth key level. which XX.X%, experienced full-year America seasonality The the indeed for fourth of represents and decrease compared our Thank tangible $X.XX. points

reached leverage which margin have committed XX%, Company. than restructuring to. sequential earlier performance of This our EBITDA this previously improved what following illustrates the milestone into had We the of we incremental translated operating

of working Liberty America North to America low-flow pumping our we quarter, as business to partnership the divestiture the pressure completed Services. the activity alongside look North the We in Oilfield our During key land fourth North of previously transactions, to business Liberty rebounds. our forward America maximize announced the and two of OneStim value contribution

support early macro the fixed North combined As set costs that strong XX% future particular, EBITDA completion completed forward. industry our markets, will our remove annual despite going an the strength The in margin of year-end, count billion high-grading the of our near backdrop in international on recovery restructuring of in business, which In ongoing have efforts, permanently full-year the very generated portfolio are America These $X.X on international than the of can as will margins of more restructuring to a signs of of basis. XXXX, with and offshore improve of recovery basis. a to all challenging cash we on we close unfolds. program margins the XX% expansion our

of revenue XX.X%. sequentially. lower Let by Ecuador, in was $XXX North to Russia. as me This increased in basis Fourth revenue APS for X% during multi-client higher Reservoir Integration well & XXX results America. increase margins OneStim now million America This of results fourth of decreased the in billion through partially activity & increases basis driven fourth $XXX were and points driven to go XX% quarter revenue sales solutions largely activity seasonality points digital margins the Despite internationally. Russia XX% offset and quarter as increased million by $X.X increased Performance increased Digital revenue, the North OneStim increase These driven each while was strong sequentially by the division. Asia. XX improved X%, in Middle East quarter by higher sequentially.

While improve both margins. still and in Performance to America they our highly the fourth margins OneStim’s were our did dilutive Reservoir quarter, North

due basis In fact, approximately of Russia. XX the partially Latin Performance points X% increased OneStim. East points $X.X Africa, increased have Asia, billion to Middle offset higher, Reservoir basis seasonality margins and North excluding margins revenue Well been and by & Construction America, XX% would in activity increased in America, our quarter to fourth XXX

revenues respectively. $X.X sequentially increased increased contribution revenue Finally, profitability X% basis surface North higher revenue and of improved XX subsea X% X% in XX%, points systems. Margins billion production America international to as and to Production Systems from increased and due

liquidity. Now our turning to

cash we and quarter, of of from despite operations the severance During payments. $XXX million flow, million free flow generated million cash of making $XXX $XXX

free us deleveraging balance cash very severance will to significant begin ambition that the we free XXXX, the our our made, for we sheet, This top double-digits. is margin priority which flow flow in turn, gives us. margin of Excluding a close and in the achieve confidence cash payments is double-digit full-year XXXX

in changes For of well of capital any as the severance. ambition clarity, effects as sake this double-digit the includes working

due is rates any denominated currency not impacted Net increase to that of foreign hedged million and improved in net are $XXX exchange year Approximately currency million, debt $XX.X impact was currency million. end net of movements These this the the incremental unfavorable by year-on-year debt. increase therefore outflow. $XXX at changes fully result a Our our cash of billion, sequentially despite an of million. $XXX will debt $XX into

the we APS projects, multi-client. $XXX in of investments quarter, made amount investments During and CapEx, This capital million. includes

stewardship The $X.X with investments. I spent will billion is XXXX, towards we to our billion XXXX, be capital Olivier. lower CapEx expecting line we call on between investments. portion to In $X.X of revenue. our X% for investments full-year the to to previous capital the of are $X.X billion on spend conference the For capital expected X% back of guidance end now these of to turn program,

Olivier Le Peuch

Stephane. you, Thank

are from of I the for questions ready taking think, we all you.

Operator

Instructions] our you. from And with of ISI. Please go Thank question [Operator James the first is West ahead. line Evercore

James West

guys. morning, Good Hey.

on a accelerated And second So, than guys probably tenders. optimistic sounds international position we about half a differentiated maybe like Olivier, for certainly faster market. ‘XX you’re the what it’s had growing in previously. just more and for to truly And based with have seeing seems me bit you international and like outlook the the you’re on ‘XX, talked it

you what growth touch your over next position, differentiated of terms in years you’re on kind could several international? the but maybe profiles of seeing both, also So, potential in

Olivier Le Peuch

Thank you, James.

part market the count offset both, And So for I was that this which we everyone third in international the that of market will contraction some exposure offset what our to This diverse rig our realize the seen, market think to the used casually I rig and and some you have we to or went here and which the fourth, quarter, seen think, very down. have in of trough a actually international what rebound expect indeed, start as have, position is some gain see and we breadth of long-cycle, broad, we the have very we against the we realize reminded -- offering, to is delivered. we will in we short delivered. have

the is back, giving short that So, position we which share long-cycle, breadth our activity comes opportunity acknowledged offering, and gain customers fundamental when the and market by foremost, our of first to or our of performance, and us believe encroach internationally. are

that Finally, leverage offering, attributes technology, fit-for-basin forward. gain ready access we efficiency believe customers our to that to and technology recognize unique this share to allocate and and going technology are to have digital to

first rate. -- forward on seasonal the market That quarter. you that point on And or even and indeed outlook, is HX reach then, on an anticipate anticipate going beyond So, then, we we we could expect when that in And the now accelerate we this and look long-term in to HX we exceed continue double see that growth a exit-to-exit ‘XX digits the dip. we inflection will will have that and be strengthening the see ‘XX.

James West

Right.

But, I great you about that mean, should guys. how Okay, things digital of surge like profile good. and forward? it for -- fourth something that to going is forward? kind business of a that think really high-margin kind sequentially, going top big a uptick continue, that a margin in or and quarter sales a Olivier, moderate off And it’s that in that profile business market is is then, might margins and a to big blow already we very expected --

Olivier Le Peuch

No.

and I briefly international sales comment Indeed, the success fourth from division sales and & results. was result let Integration multi-client quarter a fourth quarter fourth of the combination our First, sales of effect strong the of think, came during very business. on digital me APS quarter seasonal the that multi-client the execution, Digital in

this of digital be margins forward, full the basis exceptional XX% maintain do going or We the we performance. for confident a that forward. beyond are integration Going to on able and see we’ll division year still so

Operator

Please question from And Anderson from next, ahead. a David go Barclays. we have

David Anderson

Olivier. morning, Good Hi.

on So, kind of from the James of side. the international asked question the way slight difference a sort

sort provide the Could do see bit it going ones you just see So, the kind bit which later? come global just little Each think regions ones see XXXX, little just oil a recover, market we’re maybe little markets? if demand of international to curious around come how you different largely you you up how -- that which you wondering just different see different. a as we cadence color a I’m think from here? back first, the of is

Olivier Le Peuch

think, difficult on recover will to or of long-cycle. I short to decipher speaking, market an granularity I But to globally element bring it’s how the XXXX there will think, and this region. out be per

Latin from most that the first So, that regions is We would Middle short midterm. this growth that maybe give But, East as growth. exists the in and short-cycle difficult from and one, and believe long recovery well cycle, first that market start and we both in the this. benefit. will short believe it’s that believe think will a were later of And in America long-cycle. and impacted, of because offshore a of believe will favor Asia second Russia very to We view to the the it’s have region, that granular will large later, that at half year benefit come that combination I the we

will sometime and And I believe, ‘XX. short-cycle be will accelerating, benefit ‘XX think, later this year. the from we long-cycle in the

David Anderson

Okay, understood. of digital about core And strategy the in you of on the growth part being talked digital a years. next your couple side,

what think you which adoption, digital, terms next how over you of evolve customer of I about couple the Can that on these the just normally kind is maybe and and do You increased digital Russia, could in pull from in demand applications? think to what of further curious platform number and getting you’re penetration or mentioned internationally. the talked I’m You had is DELFI type of in digital customers? of Is about this a solutions new terms to getting just of this customers years? that pull Scandinavia about of software as countries talk like. days

Olivier Le Peuch

good question, Dave. Very

own reservoir is their solution into a on And then for to planning, with are gain willing step to productivity desktop field would is and hence pull pool creating solutions the which gain cloud pull building their customers, this to and that and There I -- scalability, customers the creating is transition say. development efficiency and potential. change evaluation of we’re workflow of think, collaboration. workflows a productivity multi-faceted, our our I from where the

that’s So, pull. the first

pull looking for tools second more data. they own. data provide from can industry AI/ML The are the the extract is the value hence, are that to looking that unlocking they exploiting at ways And Customers them. around

the of pull the see with contributed we in the into release in and drilling, customers for seen For into the ADNOC this, industry change operation there are the morning into have to we ADNOC with they Group to getting you digital and where us, create extracting has create trying this to we OSDU to one this design example for that step region And benefit AIQ construction goal efficiency customers insight. for is and platform or ecosystem, deploy which finally, cloud assets. for their existing and the ourselves, the -- existing and adopted with AI execute XX solution in data from this this is to well their Middle way our pulling East

see, the announcement So, we we have mostly pulls on each. this the some and did to offerings And the quarter we OMV morning seen is data, announcement these and the and operation. on digital correspond quarter and that you workflows and last that seen three this onto have the first are the second, the have you

that regions through cloud the reaching the solutions, their the and unlocking in operation. desktop expanding through cloud operation to and value the the application an to from digital automation interest data and customers OSDU, all application, unlocking to into out for including AI of through edge of and see new we So, having workflow,

across and this type. customer regions the see we So, multiple all

Operator

Goldman question line next with ahead. Please from our of Angie is go Sachs. the And Sedita

Angie Sedita

you far is a impressive you margins, ‘XX to the margins to margins? with believe basis-point in versus QX double-digit as is ‘XX. this incremental across pull nice divisions apart you appreciate expansion, discuss think margin an being And bit around maybe predominantly of XXX ‘XX could strong timing see as that drivers digital XXX really potentially around So, that reach could it biggest divisions, expansion the guidance just contributor. digital comment. and little for the I other thought margins Also when on American or And the then, said maybe that in level? North the or of you I thoughts

Olivier Le Peuch

Yes. Angie. Good question,

on we back Let this me bring prepared the clarification said morning in what remarks.

by full XXXX. for conditions us, to market XXX to if exceed ambition basis. And the a the and year XXX higher, So, XXXX or full-year bps between is margins XXXX expand XXXX allow vis-à-vis this margin will on

driven three this So, see we will by factors. be

exceed and First, the the from in our that operation from franchise, in firewall high-grading end if X.X our benefit our our mix, reduction; to differentiate XX% edge permanent our allow the we where the combination of I of hence, the efforts digit for growth than at digital, North full digital fit-for-basin America the for to give current including XXXX more margins America realized the actually double may, market of XXXX; combination finally, and in us internationally. structural the restructuring we in international of our efficiency where secondly, portfolio North will of of impact incremental market technology the cost have and margin of reach condition and expect us the measure, the operation, strength own or

despite significantly will us bps or down you give margin this, this above XXXX, on year-on-year So, all expansion visible this visibly to -- of top-line. margin the combine of XXX when XXX being

actually Division run this on only expand -- actually, the per basis. of digital. anticipate Division, we So, And full margins I is rate to all from we think year a expect for Division year, full the not

Well I efficiency digital, due comment for remarks, XX% year. mix growth the I production will and as And Performance Construction his a margin Stephane in by incremental. think, OneStim exit further as expand, get benefits that get of and XX% at a prepared from full margin or commented before, also the we’ll on high did itself Reservoir to will the market and as benefit we’ll, establish

this mix clarify drivers and I for So, does you hope the expansion. for rationale and the margin it

Angie Sedita

very the that’s Olivier. No, really detail, appreciate I helpful.

initiatives talk you hydrogen timeline are about New So, opportunity But, Obviously, specifically lot could and you opportunity little then geothermal and that and maybe Genvia set come. the apparently and maybe two. more bit of the Energy. a maybe the announced about the could and around have and where to currently electrolyzer biggest the is energy we a talk amongst

Olivier Le Peuch

Okay.

sure time will will every not comment each take -- I’m have I the one to I that So, on and these. of

So, on comment the let Genvia. me briefly

is commercialize arms Genvia have France the with the you electrolyzer through create venture XXXX, indeed, solid-oxide -- a use industrialize, research technology to globally. and for that about So, a we production. of changing needs of towards electrolyzer our bit expected to indeed created and capture this of give including the obviously in a partners, into of installed solution. market to is green capacity efficiency electrolyzer be set in of market The sense, participating hydrogen ambition be gigawatts to We’ve that that share to be market is to installed be XX that world usual

for in electrolyzer will the be time this capacity to cells, to of hydrogen. used and reversibility market, deliver the -- used to solution fuel Our sometimes in produce most

across next years. So, is develop ambition this few to indeed the

this a demonstrate decision, in market. this, next large-scale three milestones, or into respond hydrogen that point to the critical from the years, will will in or our to expand in build quarters fuel about share and And two and partners it make a Our into manufacturing take decision that and in on, to use to prototypes deliver coming speaking be some technically this production. cell

we entering ventures market into then is test scale. using are the So, and that and we ready commercialize approach the these in we for technology, with derisk, ourselves partners, we same invest of each where multi-steps

expertise having, respond leveraging the that into venture, on are our very very and with for technology, of finally, global not leveraging is global partners that’s in applicable our this work project, applicable so all to the footprint is geothermal, domain, everywhere but our a we transition the can leveraging CCS, basis. subsurface energy and for world capital-intensive domain that large applicable we entering capability very for approach So, that industrialization

Operator

is next ahead. Our question go Citigroup. from Scott Gruber from Please

Scott Gruber

from different few maintenance it what mode. wanted come I it, of rest question U.S., So, to has a most maintenance think were world, plus call ask the way. international I transitioned to think back slightly abroad about with closer mode recovery pre-pandemic U.S. the the about markets to I mode, how When the where exceptions could the basis? when a means this years, But, of level and more that in to gross for on these maintenance close the next given Over multiyear potential a recovery were the from there. pre-pandemic? many But mode a kind of to abroad about just set think how of point the activity starting kind Olivier, do we few pre-pandemic you countries the of get in

Olivier Le Peuch

Scott. Yes. you, Thank

change from three to I million internationally. activity, give of the million favor U.S. you XXXX, the market. not this by And in think, has EBITDA that gone the is for the international X back maintenance assume the or can rebound XXXX remember XXXX, converge in this I our will the investment to million market have it international internationally now X we XXXX. that indeed down share match XXXX to XXXX we the we’ll XXXX latest barrel. be supplied think, to period to by -- market if towards barrel go assume next hypothesis to production intensity this the When equate XXXX, create barrel, by matches earlier are as Hence, take oil will the the we the will the if that that and to we will spend condition the two return this Hence, some will of horizon. by the XXXX mode hypothesis level assume what predicting of and crisis, market will X and of in supply XXXX U.S., actually this budget that benefit happen us from and demand recover this have years to that through will

or So, that pull international is will, next or consequence, favor that’s rebalance to will in as our two activity hypothesis going forward three XXX% and supply years. will more international share a the market slightly, the

Scott Gruber

should bit That maybe sense. reflects makes in capital we necessarily about color on some want either on an just little thing be a of terms it, recovery. if the items? us of aggregate should in think a an a how demand working a to for And headwind, days ‘XX, it of as not color just lot outstanding intensity key somewhat of you But bad or basis, give number on

Stephane Biguet

Scott, Stephane. I’ll this, take --

our from a If only look actually, cash modest release. XXXX capital you at flows very benefited working

XXXX, some we if you look don’t a will not capital our increase. high. working So, as There be at in activity grows, intensity growth conversely, capital see is but that working big

So, to the a at cost-out keep the are time, effects try which from on to we we savings of the minimum. our will discipline And same and full-year cost all will benefit CapEx. this program,

So, don’t headwind. as a big cap working see we

will and cash free to performance -- underlying offset able within for the We with flow cash double-digit margin this in the get, sure, XXXX. this be flow to

Operator

Meakim And JP our Morgan. Please from next Sean question with ahead. is go

Sean Meakim

in what So, parts you Ecuador. happened given to back A D&I lot margins, in of moving here don’t mind. if XXXX

also the of sequential some the of points was XQ. drivers improvement up XXX basis in on touched You It year-on-year.

historicals just XX% efficiencies that of Was which drivers the and just components So, now forward. Was squaring for delta? streamlining? unpack were was could asking between it help the the plus the you of in I difference biggest it APS going digital? maybe expected trajectory and

Olivier Le Peuch

it’s think, both. mix a of I

components. the I think, pointed you out to

strong at with performance. going EPS forward of very I -- contribution expect think, the that we operating

improved our significantly in performance in -- have We this. that

increasing a of this component the digital forward. going are as We back

as will improve from have growth, XXs. maintain divested helped performance of this to the high-XXs that anticipated We us has seen level level growth well. some the two maintaining here, the We in expect I APS. the contribution the in to mentioned we that accretion margin the investment APS quarters. last That combine this or digital at And and margin of future EPS

Sean Meakim

components from And those to the just how of, basis, we how for and you points if portfolio? divestments the necessarily of the of to attributed and Ecuador, in pulling that’s improvement on thanks of rest improvement there of to is drivers year to so XXX trying we of year-on-year the say, take XXX in a about think of much the the production full offhand. APS. see OneStim, be is trying out items, that margin much impact think big If a may let’s But efforts. just know in will of then of margin the the portfolio ‘XX, two a enhancement about, basis cost rest much have two not rest be calculation the I how those improving out, to year-on-year aside

Stephane Biguet

not that mentioned, when the So, margin. taken the help you course look do at three Sean, margin, items But, few global material. actually, the those together, of are you they items

best, tailwind international a And from the not seen margin is on ‘XX the the was our which our and on the from earnings mix margins, and resetting mostly program power. the international even optimizing the pretty are cost-out the actually, So, basis, best you’ve on incrementals activity full-year high.

of basis. most a help factors from margin there mentioned, a the cost-out global come of bit So, the little with expansion from and program you on

Operator

go RBC. with Please Next to Kurt we ahead. go Hallead

Kurt Hallead

so color the far. all you Thank for

to since again Olivier, So, peers front, respect on recovery other a of explicitly have question your offshore in referenced that really with follow-up is the is like that. I the It the emphasis. point notable major international the seems commentary context it’s for didn’t

opportunities you may specifically as you haven’t I’m that? seeing to the base that’s peers lead, that the that what things. to of it, then, peers would given level kind really second, customer unique two believe your of you conviction from stated explicitly least me not. fact have that that curious So, it at your highlight giving are to some And

Olivier Le Peuch

No. Thank you.

actual think, fourth at specific the on first Guyana look have call growth as growth West country, to me the sequentially, grow. did results had in the that Brazil, actual I I the them, quarter we specific other sort Africa, the of from if and we GeoUnits the you the very comment very offshore where had we to basin world indeed, GeoUnits, where where think And the let results. from -- around

share market a So, markets that can this from including them, XXXX. and Guyana benefit attribute and to couple is we a from clearly. market had we that were think have fact. And I QX even of we year-on-year And our that those indeed, in growing position

actual market And specifically QX did had the came of rebound I we these. traction slowing was was going think up. or think the count. activity fourth down deepwater. quarter. term was the rig QX down offset deepwater higher Deepwater some indeed from in in other into in that rig that some in than in I So, It by offshore But,

deepwater rig teens into most forward. forward, going first we benefit going the XXXX Now, we will And the projection with that don’t a aside that projection, If actually into setback see to term the see we will our shallow will this trend. single-digit as by as forward gain. that effect is The a look at in see deep of grow land. year-on-year contrast from in the well quarter, going only that seasonal

us of half. for So, give quarter. see the we the the established contribute deepwater the in meaningfully rebound when out position fourth give our that that and offshore anticipated market during international the long-cycle -- us our demonstrated combine will rebound all you in And there contract confidence this, second our that for to

Kurt Hallead

And is then, to Okay. New That’s front. color. That’s my great the on great. follow-up be Energy going

years? look the You the can currently five you could you on services us that participate participate course over companies at are insights to and some be three that that think I’m kind in, the on to informative say, the as curious, like general technology sense the have total the if helpful. Any about partnerships for addressable of yourselves transition be really what next the give right and were market just that going energy involved to and opportunities as would transition, in to investors you right, very energy now. you in look wondering I things of

Olivier Le Peuch

Yes.

come I has a think, I mid-year, But venture, you and sure, significant say, I the one potential months communication the very to participate better of to granular will ventures all to front. we on for every per where I ourselves next give market. weeks we much needless you to think, for the view we participate. that few -- of will all each we will and with prepare think, And give view of on a that addressable on total before

supplement lithium, we we of the decade. will that is believe we the a think, And market have four here create the CCUS, that currently that Divisions having are Division very hydrogen, the for a ambition each geothermal, or within geo-energy significant. I

that XXX go capacity is sense don’t be happening. next of in into installed want to sequestrate CCS with think mentioned will any to carbon, this to decade a and be lithium That of projects now give gives I oxide just you battery XX to and the high-density emitters There and captured in detail. grow I will electrolyzer of capture the will that create of will tons between have significantly for of So, the the end work that I decade what the But, years. as you within well XX-gigawatt the to million will be come. conditions the to example and have

So, each and and has this every unique fast-growing of a TAM. venture

why Now, into the our we are unique in position reason maybe this.

domain is experience First, CCS in we in particularly into have geothermal. a that in and this, relevant

with deploy at world coming and as of that I industrialization I see you few and few scale. the partner and partners. development And solution Second, think, weeks know any a think, how in to and third, at technology everywhere And months record next the technology will in and technology scale. of announcement we deliver track illustrate we’ll have we

Operator

next our America. with is of Bank from Mulvehill And Please go question Chase ahead.

Chase Mulvehill

help or of little you back you of on progression. color up talk pulling margins North think around just some international I us to a OneStim, want equity down guess, you but if directionally so OneStim? put then, XQ then, revenues bit, and and in out us out maybe maybe And EBIT color, then maybe well. would about Liberty, if kind revenues, maybe America be you you’re we income from kind margin could Obviously, kind quantify or give maybe if maybe the as of what the some directionally, trying to

Stephane Biguet

So, quarter, if you correctly, colors Chase, quarter. some first asking are understand I your the question on first for the

prepared year, different see have seasonal international the We we think, anticipate release it it after don’t market. in I last a we every in earnings remarks dip, have and for see year. we our partly this and usual years. our the that mentioned XX We strong that quarter, seen

rate, in the as the foresee fourth third the -- have will we we transition last significant market on transition a impact will will again into activity, it continuity in the it the between think, quarter. part we offshore first rate I where we seasonal of say, and that seen see last comes we both completion on from affecting at Whereas see a of market some a China mentioned, pronounced activity year, on the what will multi-client, we growth and see quarter -- it of the North But from rig quarter. When the delivered this America, usual, we affecting quarter quarter and the subsea I land continue. to we some don’t activity. as growing we differentiate first offshore, dip. Russia, on effect And that in at that same or from see a that pickup some

Chase Mulvehill

Okay. margins flat higher that then basis? or quarter-over-quarter think do a pull can And on the out, on margin hold side, as be you you OneStim

Stephane Biguet

as on pronounced because of of indeed not there But margin as the NAM. course, will for normally you will revenue of dips, into going QX, have, The be see effect we bit decremental. OneStim -- have it the the will particularly a

So, we the course overall, margin. maintain able NAM same the overall margin be not should level to of will decrease. And of

Chase Mulvehill

you about And pre-COVID, Okay. divestitures. then, were talking

would then that working were And the over term. rigs. Canada in You on land messaged be you medium entertained APS

So, now these on bit view kind are that of conditions some could update of divestitures? getting your macro better, on little a you us

Stephane Biguet

still fronts pretty these of and other. We much on working are, course,

And it’s East, but format we what on then, of transactions still have but nothing books. disclose looking On are the rigs, before, still different Australia. at had in at we there, than in we this Middle looked a the progress a bit -- have stage. some the we at It’s to

lot Regarding better quite Canada, environment this is we we interest indeed our asset. at building up. APS macro project getting are there, have when of the looking -- called a Palliser, And

months. to position we next So, few value formal a in the there think, extracted And be is process we’ll be probably I there. even sometime in to think launch a

this good and hopefully, will Canada result in it into interest of lots year. So, something happening

Operator

Our Bianchi Marc next Please go Cowen. from is ahead. question with

Marc Bianchi

see the Maybe billion with for first quarter first the and of line maybe $X moving to Could around OneStim consensus. of quarter. consensus? shaping you comment back see pieces about just A up now circling lot right how of to you I relative such. on questioning EBITDA

Olivier Le Peuch

I the we I overall, impact think the more positive full effect we of seasonal the than see affecting think we first OneStim. We I And looked see the effect think as and on the quarter. we -- year said, non-effect international. at

from as international, are operating We dip confident from offset despite first by quarter the partially transition that margin we steady North America. effect, minimum the be seasonal margin a will

Marc Bianchi

Okay. Olivier. that, for Thanks

other that was me CapEx. struck The thing

up over APS and bit, of the mentioned X% the but more on Maybe on at the bit. you us could your would you how those for CapEx is to out year. multi-client. basis, CapEx course be the bit there the low up down absolute revenue is range, break a a end but I So, X% overall understand the and a you an shaping is expand see little of midpoint

Stephane Biguet

Sure.

you the So right, multi-client. actually, there, $X.X a spent the mentioned, intensity really, than so XXXX. at billion. the CapEx reduced and XXXX, And altogether, XX% XXXX, we revenue more capital really quite are APS reduction the was in investments reduction, reminder, portion, in It as a reduced from we looking as what a

billion, the maintain So, want to to market. want low it to room and to CapEx leave we international ourselves the we lucrative bit may around the are a we base. capture to We don’t be ready in little but want growth miss in from see, a starting deploy very markets, of start opportunity. particularly to we the most We $X.X the

but stay billion. the within will billion and accordingly, to $X.X modulate we $X.X monitor So, will we

But be range but a bit realized. of it to the stated investments. it will flexibility. efficiencies current X% leave equipment, the I As within monitor, and yes, the the relates have think, we to total we have we CapEx with capital stay we We’ll closer only, for we’ll capacity capital

Olivier Le Peuch

Yes.

exert you know. We as discipline, continue will capital

firm sure optionality, our we the to we’ll being And the our on efficiency minimize to are guidance. and X% CapEx we aspect hence, the of to from our we’ll want ourselves very -- forward. agility for to X% make indeed we make existing We keep So, our capital. extracting going on fleet here of But low give our end spend are capital

Operator

go Connor from Please And with is our Morgan Stanley. Lynagh question ahead. next

Connor Lynagh

Thanks. of Yes. digital little a I integration business wanted to to the kind bit. return

guess, contract to additional are Difficulty] And large think relative expand So, opportunities for small if of there about contract? mid-sized out size it a contract? roll think through? Is the contract, a hey, your can should very market disclosed could given of lot think of I appreciated this you’re that to to much people what this then, are OMV is contract, the How that frame it a trying the that you we wondering I the Is value to looking [Technical customer how about figure the business. if you how is, continue I’m you at? base, that

Olivier Le Peuch

an please, Go ahead, ahead. We here. Go sorry. Connor. got interruption Go ahead,

Connor Lynagh

me Can I’m hear sorry. now? you Yes.

Olivier Le Peuch

we Yes, this hear Go you ahead. point. could until

Connor Lynagh

Okay. Thank you.

that opportunity you could the how grows relative And question opportunities at? maybe a understand the that And I’m can Digital frame how life basically, to this and with of you’re in size is evolves is, of time? that relative this a quantify cycle contract help the that looking contract can relationship the us typical a the you’ve Is significant over the & you Integration? contract? customer So there, significant can be? size to curious, disclosed you OMV

Olivier Le Peuch

Connor. Great question,

contract the one for operation. significant obviously, and the also will our efficiency and to just is step their own customers -- can our much scale the change proud of their more few unique just we are this size them workloads with work realize for. contract announced. AI create I over and a very be The that large out large than deployment is earned OMV, this compare think, quarters that But, some solution working next of have to we’re to of positive with we think, roll we have enterprise contract this we will accelerate I that

and from to to simulation the are the customers -- access some demand get a on compute, of all full we of our what is contract customers think, very broad customers. transition us that engaging broad So, I do to rates cloud, similar engaging to OMV is willing solution willing what and workflows, their with the to enterprise we’ll we customers engaged are are with are is or data of of with range portfolio a the

one multi-hundred more there to think don’t So, over to than give example, large dollar is example, than it million is an dollar million -- go and a contract. from will investment more there long-term single you I many

the a SaaS the the includes transition engagement transition run. and transition typical a for that includes or workflows, the will to long engagement the So, model, data, then transition Software-as-a-Service, Data-as-a-Service

of the contracts and include XX then So, contract. X years part these or transition typical are and an a exploitation

Connor Lynagh

for there over mean, is a margin at And maybe help and time. if these maybe these That’s could typically, breakeven have for we us you or early at of Should I then think sort types relatively initiatives, profiles tailwind days think, helpful. about we’re that that very expect? of guys? least margin some I you the understand, contracts guess, of beginning I we digital in lower expand should

Olivier Le Peuch

way. No, that not I will comment

commercial five the continue every always is the I in obviously is that And And think, commercial every to depends engagement project on last contract every years. investment we we invest There on customer. for been technology a have it and different. with we negotiate technology. condition the doing

to projection and contract. entire the comment highly is indication gave true believe holding any of or difficult little by trends. would or true bit of make So, portfolio want that contract not for to accretive it’s we very and we believe any and a this the we I margins, have that project

Connor Lynagh

Okay, one okay, sneak understood. more here. just in to Maybe

to initiatives, doubling your of the business expenditure of that achieve and step continue digital you up you’ve specifically your that need time? feel enhance this your capital laid or to point over that development the to research at to some Just out, do you goals

Olivier Le Peuch

very years foundation. created investment in Agora, have No, foundation when created we this believe OSDU that we a significant the we of last DELFI, five a

made a allocate and spend to are continue with we pattern into collaboration well large our that we’ll to growth the engineering IBM effort the the as announced have capability and foundation We create covered we going are that augment this work Google this. And believe the with continue per partners, to with of have we working Microsoft. with and And announcement portion partners of to we forward. we

Connor Lynagh

much. very Thanks

Olivier Le Peuch

You’re welcome, Connor.

start I So, close. that it’s believe to to time

think I time at the out of we clock. are running

like And So, think conclude, I everyone. I thank three takeaways. offer to you, would to

effectiveness on First, broad and of quarter, results last the market the built strength improvement year. performance quarter-- our positioning during divisions, execution the of very the both and the North our about a volumes during internationally, first across our in strategic America speaks

We strength, of our having potential. from reset XXXX earnings position and are a power starting return

when growth incremental expand accelerate Second, our activity the to to the and XXXX, with sustaining throughout contrasted and in second above production, market of America with and in well in XXXX and international aligns significantly XXXX margins to should half. established of demand return activity North towards with and and continue gradual post North our to evolution all anticipate America Divisions for we half XXXX, the very second to international ahead This a rebounds full-year portfolio positions consolidating broaden lead of company visibly the of XXXX.

field efficiency; chapter growth where where sustainability strategic by execution new beginning industry industry new Third, chapter a defined and & innovation a capitalize carbon is of drivers asset the footprint. an we technology the performance, a lower chapter industry, our to witnessed as will digital recovery; created has on chapter platform a development, resilience for and will production imperative and where be a landscape, and our in in impact

towards continue stated gentlemen, we Energy are reinventing investment time, the and New drivers ahead and prepare prioritizing for are our at of We future. Ladies our accelerate same venture expansion delivering to ourselves ambition. our the will to growth results these are into and financial

attractive, new resilient very exciting Our on industry. you with beyond in company core return, yet prospects growth a Thank very is performance and our journey much. and

Operator

AT&T for does for you and ladies gentlemen, conference TeleConference Thank And you. using conclude today. for your our that Service. and participation Thank

disconnect. now may You

Schlumberger Limited (SLB) 22 Jan 212020 Q4 Earnings call transcript