Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the SLB Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, there will be an opportunity for your questions. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to the Vice President of Investor Relations ND Maduemezia. ahead. go Please

ND Maduemezia

earlier Good quarter Leah. being welcome the meeting, to from Thank earnings morning, conference first held Board our XXXX Brazil, is week. call. SLB Rio, you, following and this Today's hosted call

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

Officer. Financial

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

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

our website. most is and to the first comparable details press in reconciliation directly on release, which financial measures our GAAP Additional quarter can found be

that, turn will Olivier. call to over I With the

Olivier Le Peuch

Thank you, ND.

joining and on us the you call will thank Ladies In I prepared gentlemen, remarks, for my today.

I then, close our positioning and more our success; Stephane with outlook topics. and year. our finally, an for three share begin the second on of questions. for provide macro our full will on financial your views will I open will details latest results, I we and and will then update will the cover results; with long-term quarter quarter for first our

us solid for our footing a It achieved results has start great to on been that full the we year set as

operational across results year financial strong ambitions. year-on-year On were a and geographies financial and our all basis, Divisions.

shared key from would to few like the in highlights earnings I morning, quarter. emphasize remarks our Following that release I this the a

ago. North and seen solid magnitude very internationally were growth rates year-on-year in a delivered America last First, -on-year more decade than a year at Geographically, comparable. we growth

seasonal of is in tilting rate decline experienced the recent smallest the the of favor importantly, More times. Sequentially markets. we international in more change

margins divisions year-on-year than more points. operating by Collectively, than XX% expanded our Core by more basis and grew XXX

technology success wins quarter. based well-integrity latest innovations lower and cement-free long example significant carbon position system that We great of with this emissions. geopolymer for and efficiency one continue the a core earlier A our contract launched and term to improve Ecoshield, Technologies Transition is

You contract new wins impact press these in our release. performance of technologies examples today's will find and many of the

momentum At In Canada. Division maintained level, secured in more revenue contract revenue somewhat growth significantly year-on-year in Digital, Palliser and lower in interruptions amount APS of to strong due also Digital we the revenue masked wins. asset Ecuador the growth by in production lower and the project was

in deploy continues us Digital performance these Additionally, as Core, efficiency in global our margin help solutions we to at and the scale elevate our operations.

Inflation And carbon the few expect in and emissions, with to of XX reduce projects we to to activities Carbon the continue US we opportunities next Energy, Capture the tailwinds the notably globally. recognized across move Sequestration Act to progress as portfolio, and involvement more projects and from our to around Reduction final new raise fastest-growing New is other initiatives that decisions one around with in make CCS world, investment years. our forward the

commitment to shareholders. our increase on delivering returns are we Finally, to

for quarter, our SLB entire million thank more for with buyback the of hard During worth team totaling program, their I really the like we successful share work repurchases relaunched to yet would than shares. and another quarter. $XXX delivering

the to upcycle describe constructive like would macro, more evident. have of resilience, these growth the to become breadth, multiyear outlook. a Moving few only maintain Through the and a factors. we quarter, minutes the durability take first to I

the of a from activity OPEC+ driving are the investments, and demand, conditions of uncertainties. outlook policy, long-cycle and security, de-coupling underlying economic for energy resilient, despite combination activity the sets begin, this demand uncertainties. To initiation short-term and short-term cycle The the projects, of

most countries, remains security top energy for priority is structural Indeed, a and driving

national interests. the these offshore in by primarily resilient East, and investments Middle broad-ranging is in basins, of outlook, the that The governed gas long-cycle a comprised in projects investments resulting extent predominantly international growth of are projects.

two-thirds the Collectively, we exceed segments these reach expect market or more of to than

spend activity a parallel, resilient over short-cycle long upstream few set of market, to years. is by In support next and global the America characterized exposure, also tail the total higher North

and benefit pricing. from positive demand outlook supportive commodity

However, this subsequently in short in an impacted will which by plateau volumes. be anticipated will term, production reflected the activity be

Middle best an East Moving by of to duration, are outlook for level This defining and upcycle. these breadth attribute segments is activity market of to is and supply of Fundamentally, anchors as latest many the both that visibility segments. scale a records. providing is unprecedented emphasized a pivot this and also the dimensions Offshore of growth the setting the investment

us largest investment East, support the on expect ever oil This our East to has over expansion capacity years, the Middle Middle putting in Consequently, ongoing four cycle will to ever in both gas. next commenced. now the revenue the track post In this we and year highest projects

growth multi-year our achieve aspirations.

major expansion in offshore Offshore continues to breadth further upside, to of diversity witnessing activity across are the opportunities we Simultaneously, all basins. surprise a markets. with the activity and

two FID and sector in growth its projects for $XXX indicate a the than highest years. latest reports set addition, in new industry projections with billion decade, is In offshore through the that more the next

will visible be of activity: XXXX. in across onwards. will by and very resumption of year in to First, from in basins, activity the which mature was infill growth supported multiple this continue geographies This Africa strengthen This tieback layers three

East in the This in are projects scale. development ramping-up and and and starting Qatar. Latin oil UAE. such as Saudi and in and large America gas to both as Guyana evident that in such in Arabia, is in ongoing Middle Second, Brazil,

which Mediterranean, the and And South pace basins existing unforeseen & just months momentum exploration few new appraisal ago. From starting frontiers. East exploration activity, that to a West are a resurgence to in and is was to at and appraisal gather Africa the of starting third, see strong we

awarded. elongate Additionally, and continues to the new activity pipeline new rounds licensing with blocks

will we that we result, to continue believe witness durable a As

investment many to offshore come. years for

means for what a spend me Let minutes couple SLB. of highlighting this

characteristics Construction; in Exploration opportunities have align cycle Core. intensity Systems. Reservoir continue will long-term Production I & strengths Performance described Appraisal support through our with growth the for for activity and return activity; This accelerated of the to additional potential in further growth As unfolds, the major Well

One Turkey. such TPAO This Sakarya Black in the Sea project is the Southern offshore example

Core involved Divisions development supporting all the project a gas of our challenging subsea

asset facility, Pore-to-Process. ability and the simultaneous construction scale, of at gas demonstrating unique from SLB's a production integrate to

the quarterly a lever ability potential. from demonstrating basins. Looking position more in We in-depth, to Offshore results us our is long-cycle the believe our to in is East, benefiting and in market strong fully year-on-year unique harness our Production set growth momentum a Systems Division continue, of with for as Middle its presence

anticipate billion In range we in bookings the up XXXX. billion cumulative significantly $XX this in of Division, to XXXX, $XX from

more least ambition this the We a strong have XXXX. through first bookings and outlook the bookings during step than in forward billion $X strong taken at supports quarter, towards with continued

durable essential with Overall, the of market strengthen base growth Deepwater this and success. significant much a of component exposure opportunity, services this installed to to revenue provide and years remains the In come. will part our for portfolio this growth we to subsea our an in context, our continue

depth years our our over Subsea, margins In grown the in the of building XX% technology, generating processing execution, already on and EBITDA have the teens, and last portfolio. two are in high performance we

and for through beyond. expect strong our business momentum We of to part this be XXXX sustained

our qualities industry-Resilience, execute in we for are outlook unique cycle midst a to our better long-term and backdrop could returns-focused pivot the for that a Offshore, Durability-all a with ask of a to Breadth, of E&A. reinforced the Gas, enhance conclude, We the Middle-East, and To by return not strategy.

demonstrated our the During phase ahead North of early results of to have ability beyond capture growth cycle, activity expand led visibly and pre-pandemic by levels. this America, margins already our

International returns. are we and journey. momentum further is returns and capital for In our margins am forward, shareholder SLB. quarters our we continue about fully and that to underway, to harness now focus, Looking positioned the truly discipline, the ahead, commitment excited I Offshore outlook to demonstrate to will the expansion

shorter Next, comment progress I the our to like term. would over on

financial quarter in us for full XXXX. For renewed strong gives our year, first confidence the our ambitions

very year, margin international underpinned primed by through a for We and revenue are outlook. growth the solid expansion

America, ongoing gas a mainly tangible we a growth originally but the in anticipated rate at market prices. North of In as at start than year, the still result weakness expect lower of

Taken would support which offset full in intact, weakness any America growth ambitions keeping strong of North EBITDA excess the expect year our the to XX%, we in adjusted international mid-twenties. growth with together, in year-on-year growth

points about driven rebound continued More by grow by specific Growth to XX basis offshore Area, seasonal revenue the points with will second Asia & quarter. by Directionally, mid-to-high led basis single a we International margins markets. momentum Middle XXX be the to the East and expanding markets. in the in operating expect to digits

the extending ago another reach second full towards quarter our initiated Building achieving highs on cycle, we this, ambitions. adjusted step growth we in and new this further to EBITDA year XXquarters journey taking positive our expect earnings

over to I will now Stephane. the turn call

Stephane Biguet

and gentlemen. Olivier, morning, good you, and Thank ladies

First excluding compared $X.XX. quarter of quarter earnings represents XX%, charges the per and credits last when share an to of This year. or $X.XX, increase first was

all which recorded in EPS relating quarter Liberty, remaining during we our the to a first gain sale the addition, $X.XX of In to $X.XX. of GAAP brought shares our

growth billion revenue cycle year-on-year, increased $X.X in North represents more America first -on-year was the unfold. year a XX% decade. year-on-year the increased highest Overall, up quarterly revenue International as continues quarter our than to XX% of increase while This XX%.

XX% was quarter year-on-year. absolute dollars, margin EBITDA EBITDA for adjusted XX.X%. Company-wide adjusted increased first In the

As ambition for in is our terms, in percentage reminder, a mid grow, to the EBITDA adjusted

XXXX. for XXs year full the of

strong this goal. first certainly towards start a quarter was achieving The

as represented X%, our approximately lower On a revenue. Asia sequential and Russia QX Ecuador. lower as X% basis, in revenue driven seasonally revenue revenue APS by of Russia mostly consolidated decreased in well

points basis pretax significant seasonality XXX APS of with year-on-year basis in revenue. margins to lower segment perspective, margins three expanded growth a our operating four From our Divisions. XXX due declined Sequentially, margin and points largely

the Let me through quarter Division. for now go first each results

result project of commodity $XXX sequentially & in production XX% was points Canada. Ecuador decreased revenue pipeline to due data exploration in sales. margins of The revenue decreases disruption prices primarily million our First lower These were quarter impacting reduced percentage APS to seasonally and lower Digital a that X temporarily Integration revenue lower XX%. APS project a declining digital and decline licensing mostly and with

edge of year-on-year, including a by a more effect XX% growth, in and more offset strong cloud our issues, these declined result As digital APS than but was revenue increase solutions. than this

improve with to in Integration issue Digital trend. in expected the has as digital are QX for sequentially in Margins & usual pipeline and will increase Ecuador the the been sales as resolved seasonal division line

while of billion X% sequentially Europe lower declined revenue were in decreases reductions in Russia. to primarily and Performance to and activity Reservoir seasonal XXX $X.X Asia basis points revenue decreased margins These due XX.X%.

basis XX points increased sequentially, Year-on-year, strong driven revenue offshore. XX.X% Well and land revenue points. on of while by and both increased margins grew margins XXX of internationally, XX% decreased X% Construction billion basis growth $X.X

expanded across However, margins revenue with all very on higher favorable a Areas mix. grew activity, year-on-year strong XX% and while growth basis XXX technology pricing points increased

and was Finally, Production billion sequentially of revenue essentially Systems margins $X.X flat

declined and as all areas by points supply basis Europe America. and Year-on-year, to XX%, to activity revenue first Latin compared due quarter ease. activity seasonality chain points strong driven across the logistics mix and XXX Margins while by X.X% the to Asia. continued basis expanded XXX also America, of North margins year constraints increased led to and Europe, in improved last

to turning liquidity. Now our

increased net billion. $XX.X sequentially debt approximately to $X Our billion

of largely capital operations During of and in growth the typically reflects in the increase million that This quarter, annual $XXX working and anticipated of our payout $XXX throughout from first quarter. year. seasonal flow million cash we support buildup flow the cash the the the experience negative generated employee capital incentives free will working reflecting our we of

materially Our be flow to expected free and second higher cash continue quarter increase to to is

CapEx the data Capital of and inclusive third and million projects exploration first quarters. quarter. fourth in $XXX into and in the investments, APS investments were

For investments billion. expecting $X.X to are year, approximately $X.X the we to still full be capital

investment During in in Liberty, remaining resulted the quarter, net we which monetized our

million. proceeds of $XXX

We million, majority cash businesses, of also acquisitions Gyrodata other spent investments acquired, and of the $XXX the acquisition. net which in on to relates

program during stock the and million our X.X shares we Finally, repurchase repurchased resumed

$XXX total quarter a purchase price of for million.

previously as to shares our to We year total billion stock the and, dollars between to shareholders return repurchase continue targeting of buybacks. $X coming we are this will dividends announced, and in quarters a

will the now I conference back turn call to Olivier.

Olivier Le Peuch

I think now gentlemen, Stephane. to floor you, questions. and Ladies open the your will we Thank

Operator

go ISI. [Operator ahead. of We James to with West line Evercore Please go Instructions] the

James West

you we frankly, and perceiving kind awards, you cycle. quite Good outlined contract amount a the their would if forward, to your volatility of curious, And customers are Stephane, like go visibility see of about the or amount you years? as to something those global and thinking revenue contract you the have in what your into awards, that morning. of steadiness you guys as recession unprecedented, and Olivier, given to of you results? and the of these the an to economies kind durability even And things next talk are awards of that? How How nature. were that several ability influence continue how of now,

Olivier Le Peuch

you. James, thank No,

I in capacity indeed, East investment including commitments through, I we have long-term growth are in traveling in last forward by committed think my we think believe America. East, deploy I capacity think the growing certainly said, proportion have and South offshore coming and large assets I the back. and been highlighted ready supply Asia, to the view that to expansion to think, elements as the shared by prepared a cycle seen have I nature and at the months as I and resilience of develop Middle in to recent in long-cycle commit partnership quarter going the taking deepwater I they being customer, and including of Middle and rate, is need element led the we unique in this the that remarks,

of I seeing customer to durability and is East, mobilize - towards large-scale a infield countries improving improving from of for the capital targets country. breadth, is think of of the this most short-cycle expansion the everybody is redevelopment from the resource, for cycle, commitment duration production -- certainly decade. beyond enhancements, see time we I to Other for because of out sometimes end as development targeting the and the think, expansion And in development. are needs assets we 'XX The go, Middle everywhere reaching

in city for I've the to a pipeline FPSO the in and here subsea clear offshore X of is already up to And forward. in that Brazil XXXX, Brazil, going will ambition XX activity barrel million committed build contract by particular continue

long over to like, very East, international not precedent of offset to particular. Middle and positive a complement Middle and on commitment East you the offshore and cycle deepwater from the to this enhancements cycle turn long we cycle the short commitment about short risk address take the into So as towards anticipated I'm -- super turn, cycle mix, the if production offshore supply operator in is now and indicated, and so from

where we that's are confident. So very

James West

Okay. That's perfect, a for then follow-up And Olivier. me.

you're concerned to of maybe not In accept and It North offshore of kind terms more level seeing of willingness costs. concern terms level there availability actually looking but of versus in service of pricing America, what international it maybe concern what me pricing, capacity seems increases. rather offshore at like the or about and or of to customers internationally than

Olivier Le Peuch

Yes.

and to of us tight of first, things: of secure giving capacity supply -- has giving few have the the unique are quarters North market two I contract in starting pricing seeing indeed, going and and we international sense -- the securing a urgency level to tailwinds the elongating It global technology, think a America. forward, tailwinds -- pricing seen considering turned for equipment, contract. quite based in giving on we

nine You years we of made announcement into seen have the contract example today.

a same pricing Performance recognized I sense also gas, at And of for matters. a Performance of is time, And And and driving urgency matters difference premium. to matters there's to operator. accelerate cycle. think is a first integration priority. performance and technology the first makes This oil. is the one the offshore

us a technology So sense supply and serving is for capacity, combination that pricing would integration of, of well. the driving -- tailwinds performance the quest I very combination of deployment for say, urgency are and

James West

Oliver. Thanks Great.

Olivier Le Peuch

Thank you.

Operator

with Next, Barclays. go Anderson ahead. to we Please go David

David Anderson

Hi, good morning, Olivier.

Olivier Le Peuch

Dave. morning, Good

David Anderson

a kind that. of Construction see cycle I you bit should core the you up about of kind in where surprise. have list. front where of to that also Well -- of question that a a America of business. shift think greatest would does the help and on am ramp--up us talk on kind technology this top obviously hoping greatest today? But can part you uptick most well? question duration that customers, what it you towards I has bit. And was similar is well here? the of as about year? I'm your to and fit James could sequentially, Middle But kind of see the that maybe one big the I X% to what of of And your pace So Is Noticed which East If the a in is capacity. you. activity of you construction if that the kind Well in Is understand question Construction? of of North was a of of in that that be the meant, -- Thank worried little sort in

Olivier Le Peuch

Yes. think correct. you are No, I

in I domain supply think the the is Well of under high-performance stretch Construction equipment today.

equipment, deliver closely digital to technology prioritize expect. think use use are application the integration, I and they working with our customers we very help price to performance

is So this. there stretch a indeed in

think going our to to resource ambition expand and we But to are forward, when and we the see align with accretive margins expectation committing be I our margins. to continue the returns

where activity, uptick offshore. an this quarter and will be is East So as case most see sequentially in the is clearly, the year Middle this we and next

mix integrated on A in forward offshore an combination more Middle we project, the combination deployments. of activity putting is will complex drive that equipment, And assets be unique occasion and in and East, think will that a lot intensity of technology relatively long-cycle revenue of development more have resource, technology of with demands short-cycle this is I contract more and a up.

David Anderson

offshore-driven that this onshore America And uptick, quarter? more North than was the was

Olivier Le Peuch

was, absolutely. it Yes, indeed,

I the and North Alaska Canada, pace offshore -- I and North not say, is activity. is grow our set and as international, would in go happening U.S. land think is which the of only offshore I think year, Mexico, this from northeast combination to America offshore America. the North

So of hold for on premium the we continues fit that a are on basin getting our North and grow share success and also help our in come benefit maintain, to us America pricing.

David Anderson

And then, help wondering obviously impacted APS you performing. of performance the little Olivier, is D&I business the a how bit pull and could kind I this us was maybe in business, the quarter. understand back Digital

of that the is to Digital where it more? can existing little Maybe you think Wondering we order in apps I'm at terms revenue if adding targets, a customers? in is that are And understand more... billion using us above? of those kind rate. all target. the $X of I Is hit customers run now goal Is adding help more us curious, more just it about Is to it your bit DELFI? tell a

Olivier Le Peuch

All of the above.

David Anderson

I Digital. that. feeling would had a you say

Olivier Le Peuch

I with think, indeed, obviously, aligned I our to rate XXXX our aligned But Digital quarter, double with revenue to in have the from this that Dave, we think ambition and is seen growth, XXXX. growth first, Indeed. in expectations,

here, it and production and like, full our satisfied operation go cloud We XX%, as are And well drilling is have where applications, deployment this the from deploy the domain, edge of technology don't slowing meeting mentioned, expansion and indeed, Petrobras, then at and that's will Obviously, And during in And if sounds, deploying we construction continuing digital in number growing seen, and as couple one of of prepared contractor years. operation, where the suite, multiple we That's growing today of to that sign into and automating largest come trajectory we we on his consumption more existing axis have. that down. of we to the have an the digital users. more from customer very dimension. the petrotechnical growing last remarks we getting want number rig the Stephane any see with new process. set were than are the beyond you we team

automated realize meet year. we again, bottom And very to that with look about Equinor this time the journey we'll to [indiscernible] Brazil, a autonomous top for digital the assembly, and after full in the platform, in full deploy side first we're pleased automated are to world

and announced have contracts we we So some have deployment, both you customers and application we this digital new have quarter. coming that in, the operation, [indiscernible] new seen the

would expecting to masked be in one quarter, And we to setback, be the was quarter. this resume by to to we trajectory and growing growth So we APS to this our are of sequential the pace second expect the unfortunately see in double. that leading you actually fully the this are but

David Anderson

Fantastic. Thank you.

Olivier Le Peuch

you. Thank

Operator

Mulvehill we Bank with Next, ahead. line of go go the Please America. to of Chase

Chase Mulvehill

morning, Good Olivier.

Olivier Le Peuch

Chase. morning, Good

Chase Mulvehill

coming question. price six focusing oil international quick of a just back we've We've this So I and some there. last questions OPEC+ seen seen cuts. on to And of kind ramp. couple We a international the volatility. guess get because months,

And or a investor of OPEC of if kind been slowing get CapEx of questions of projects there's we any lot any kind plans. signs so planned down,

OPEC+ ask just you any in me members down of let if seen Middle indications at things you've So all slowing the East.

Olivier Le Peuch

it. seen not have we No,

set seen of any any businesses, focused capacity expansion very be have these plan. that to there national and are resource on believe not fully don't execute we the companies companies their and believe and We ambitious impact will really we mobilizing

many you Saudi. is are grow only all is I this This And gas in countries commercial gas UAE And not think and and oil both capacity the across to think aware region. also commitments. across I it's the GCC. and

indicative I tendered contract of awards in again, the multiyear, So recently rest had Inflection the of commitment of And them multiplicity are in that months seen have not Middle not see the the and the and any East plan and this the were and if of really last will sign started. I been happened beyond years, growing has challenging. for I've -- of have the capacity XX think expansion that most year. five you and

So impact. we any don't foresee

Chase Mulvehill

Okay, is of CCUS. The really awesome. there. on follow-up color kind Appreciate the

that But are are actually would for like parts, And good side. capture of the think which your had a that on chain. a fit obviously, side? SLB, the the press there other value there possibly would other in technology of highlighted be You lot parts announcements your release, experience really sequestration you

Olivier Le Peuch

No, absolutely.

emitters, and and play lot into that have to modeling we number translated are a the some I customers. of provided we the to write-off sequestration examples customers them some participate, think today. studies gas significant seen have as a approached services you and earlier the have have we And these release of and into of non-oil of indeed press a unique have us that gave digital in that

our partnering innovation of explore to the are invest And as into we CCS then project halogen domain application ammonia and to partner with and for using across technology capability hydrogen of the we ammonia capture or into and are natural decarbonizing technology and the blue gas, production. to

either are capture we investing that years hence will own broadening our play technology, or its stand of into beyond right in to So scope indeed business to associating sequestration create and a our using and the on expand come.

Chase Mulvehill

Awesome. the back Appreciate there. over. it Okay. Olivier. color Thanks I'll turn

Olivier Le Peuch

Chase. you, Thank

Operator

Please the Next, JPMorgan. we go go with Arun line of ahead. to Jayaram

Arun Jayaram

I Olivier, System. Production insights of the some Subsea seeing within you're what to on wanted get segment

update capabilities within backlog Systems, wondering growth to you potential well highlighted and to potential. SLB's broadly your I summer. maybe relative the if last as transaction peers billion technology billion or of integration characterize announced provide strategic bookings you Production this $XX think year offering could $XX you on any that as I was

Olivier Le Peuch

Yes.

Let me quick me first Production give the of let System a it take and level zoom. at

surface talking So division in encompassing System which you system subsea actually, as equipment from processing our completion, capabilities. the Subsea, is production actually well from in at system the capability booking we well pointed out, is the level, Production are about

was our TPAO provider a you and country. the in heard that Subsea into be celebrated participate we quite together, in to that integration yesterday at is you by flare the of end-to-end partner, to capability, with the an unique all So hence, delivery -- where realized pace have when and the you of to to about from get X, opportunity gas first scale process, processing put this product port from and

so is differentiated. quite this that's unique And

have gas end-to-end it our integration past our to with architecture. and the to capability. and We we design subsea completion in and develop development a it link participate we partners the and have can deploy We to can and facility, done

development. is a us into to this So quite at large unique scale and opportunity participate end-to-end give

this are highlight from think two to quite I to the we like particular Now we also very thing the in or specific would the we can into to one architecture. completion differentiated capability sub subsurface have connect that Subsea, the And and way things. I to integration

First this -- into subsea completion is capability electric of the the full X, electrical Subsea control electric and well subsea and transforming control capability.

is control equipment control of This the for and deepwater case game in and the -- completion. zone This again control and is a industry, equipment very changer of for changer game digital much low Brazil. carbon subsea

are soon very unique We have excellence, have, we to have sponsorship development a fortunate into step. from deploying septic the are we change deploy where center that with would valve, and program to a we the everything fully will established under to game creating joined working joint a operators here subsidiary A&P valve us and that electric, of control flow and multiple of new

So that's differentiated. With differential obviously are processing, boosting and processing capability.

into award and this last a seen got remember for gas -- you in large two year Brazil, highlighting in equipment our subsea quarter installation award we processing capabilities. shell that the You into boosting have

to we're that that's equipment equipment position. with digital to subsea integrate capability processing have well into unique that And again, our adding well. is as And is we or surface of unique. So something ability rest the

outlook, think seeing comes of going to earlier. it the are to the JV, forward. regulatory of exciting what But move when This So in exciting bodies I we an we than I announced the process any we'll until different is the cannot opportunity. further close, world comment parts commented so

Arun Jayaram

Great. Olivier, follow-up. my

the in what You on wondering on spending two, And of to regime you're you fiscal and upstream was picture. regulatory this the next I the three the impact seeing had regime Rio recently a ground potential change characterize in terms could obviously, you if or we've the Board week. couple with any could the seeing Are new that spending over years? administration. changes are

Olivier Le Peuch

outstanding the laid anything, billion the from already highlighting outstanding FPSO out basins this reach mean, accelerating on X billion up or today, fulfilling a visit In accelerate deepwater I land for sub-salt for we they growth. potential of supply to or barrel enhancement foundation production has be already to continue -- clearly been significant and into have barrel the I ambition If Brazil both of into future, the customers the basin, of to Board, to and exceed X.X basin and has the the Brazil this of A&P outstanding, development as per engagement XX And said, play. have the the with day. the

already So about place. the future that another pushing explore leg, in are that give like, are in committed to also the of frontier. forward are Brazil I if the next us think contract margin They Ecuador beyond you they mid-tier to growth FPSO

any see don't we to highlight to outlook. I And Brazil an extension decarbonize, I've the anything, to that a change had acceleration If I a seen, duration if one commitment commitment noticeable see new commitment and that digitalize change. this So we operation think of to. see you leadership the the recommitted is is -- And CCS. the it seen and accelerate in main operator to we by have future. here. will in will Digital the it And this the country will accelerate Brazil of

the Bioenergia. on we ago, CCS and Latin We product FS to are the very they are we CCS days making are bioenergy America pleased met the on the with team and first Brazil. And only project progress in fortunate be in two very

and only no -- carbon upside upside and offshore accelerating So low see but slowdown, the activity and you will well. transition a environment then to more any digital as

Arun Jayaram

the detailed for Thanks Great. comments.

Olivier Le Peuch

Thank you.

Operator

Next, Goldman Please Sachs. ahead. we with Mehta to go go Neil

Neil Mehta

morning, Good team.

the moving could about of we reverse you the capital outflow modeled bigger quarter. some flow cash that working had question First was and and talk Does pieces year a specifically course over in around that? was around the the than of all

Stephane Biguet

Sure, Neil.

yes, does reverse. So it

year QX for As flow. always is the you lowest quarter the know, of cash free

is incentives. anticipated the And the million payout It employee build we a quarter. then working about particularly have one-off. annual we inventory mentioned, System we in the as typical was of capital first buildup. the Particularly, Production mentioned. $XXX in we've This As have growth, for division,

even So was cash own slightly the free actually remained expectations. of though -- came it negative, it flow our ahead

historically that. quite with lowest so the was for first DSO we a Our happy were quarter

discipline quarter will capital will on and second working yes, So second accelerate it increase in EBITDA, half higher the continuous it and capital unwinding. the in

will it in QX. materially increase our in flow annual Keeping the we typically of mind, in but cash generate majority HX,

And my and So be I the year. the return of cash flow XXXX year mentioned margin of it to remarks, to, last clearly, billion mentioned when higher for to to significantly -- will you shareholders prepared free us together, as Olivier XX% flow allow in form all we to close, cash buybacks and together. to will period. the And $X trajectory XXXX as put deliver dividend than XXXX on the the committed full just this free in

Neil Mehta

is That's Digital. really just margins helpful. the follow-up at The

give core as hard of sense would us I the imagine, of some think margin challenges. some strengthens the margin Digital you around progression, segment you volatility to how because in business? isolate underlying a Ecuador through work at Can APS. trends the QX, seeing I of of you're it's And these that

Olivier Le Peuch

Yes.

think reminder Digital everyone, a and I Performance our as division, exploration I Solutions. for & and our So Asset Integration combines digital data think, comprise with

the highly double to same the to accretive onset 'XX journey, margin digital SLB, at from our to time, to for at be of to our So set ambition 'XX. revenue have Digital growth we clear

are accretive that to delivering journey margin SLB. very a We and on clearly

the in last -- APS deliver visibly quarters digital we margin we year XX%. that DLM best have few and in So in demonstrated performance last when offering, excess we differentiated of our now we leverage

accretive combination similar deliver as highly notwithstanding the in ambition setback APS had continue setback XXs. in certainly as to margins, Now for we D&I is to a

a from growth APS with the return accretive very of we D&I a forward, to going APS. of for So improve for digital, very for margin the sequentially and decent margin and on expect Digital solid revenue returning combined based margins growth

expecting to in but year. the rest for So of as only we're accretive accretive margin be and expand to -- revenue continue increase sequentially the not highly to whole, a

Neil Mehta

Thanks Great. right. team. All

Olivier Le Peuch

Thank you.

Stephane Biguet

you. Thank

Operator

go Scott to Gruber the we go with Please ahead. Citigroup. of line Next,

Scott Gruber

morning. good Yes,

Olivier Le Peuch

Scott. morning, Good

Scott Gruber

the Good morning. programs G&G seeing though is the being Olivier, mentioned customer of you Is is strength experienced is front? geologists hear Or exploration, because the the scaled for exploration cycle? on the resurgence the limited departments of potentially constraint rebuilt to during which base to are What on industry? pandemic. SLB. across were legitimate the you exploration number that prosecute the there this across this capability just out One definitely concern in down a great

Olivier Le Peuch

not No, concerned by overly this. be I will

two are there this. that factors into think playing are I

we is digital set having seismic for as prospect significant -- Digital, significantly a data using analyzing process and call has it, I first prospects, The the generating at identification, modeling as for productivity the well to capability gain improved. from from think, as processing, to modeling, capability

create the been ever spotlight to last ability better pools, oil it's So on line certainly much the than or the than gas is cycle. I think, and better

all that modeling is I provide give the improve prospects. of higher complement from can seismic better productivity, to has say, and a team slowdown or consulting to service that and we accuracy, a support combine to technology, to and participate to customers and like into And sampling secondly, geology generate interpretation to improved to ability structural actually but our the capability digital, would give significant significant our G&G and help a customers. But I capability, better that and to not our technology there Reservoir think modeling [something] line, accelerate productivity support

to exploration believe So from development I'm not concerned. you see And prospect be that to forward. appraisal will fast-tracked I going this to

Scott Gruber

And of just consumed? to mid-to late potential as be So you towards great. those the exploration cycle? Could color us compare XXXX of Is XXXXs opportunities back some to get cycle how just the period? that strength levels XXXX strength possibly Just history we the path. are exploration to That's this the trajectory tieback the relative trending on are would would great. this back

Olivier Le Peuch

exploration or will asset, and a backyard by near-field I most basin exploration there it gained assets they operators of that do I and of the are is use by type to near-field have across access explore critical more tieback. want the think I think is in happening. So activity contrast exploration used exploration saying it And or called lot and that and beyond critical being to is that advantaged as

So And greenfield, is of maybe this has basin characterized going is exploration frontier different the been this lot that the been from that across has every basin, a characterize -- this trend major certainly there up. and trend happening exploration last cycle.

think, near-field mentioned before particularly, one. return reserves exploration, basins. and gas energy the However, beyond to happening this to it see driven by cycle, security, of a seeing we are replace the exploration, I total new secure frontier and many we margin by desire a as I across driven

a about, near-field exploration continuous across You obviously, heard which almost Guyana. exploration, becoming is

Atlantic, I into you across something been development. gas then will East for find very on has developing, oil in of industry of that south a Sea. But be helped and heard And success about happening some that the Black for was three go fast-track the Med, if in here significant Namibia operator huge you you onset that gave could on are the lot think, exploration development in the That the the or gas. two part of we also Africa,

invest to and regions well. So to security the very access invest and market is operator incentivizing people grow to demand to with is certain continuing into near-field

will in year. of So it's in this combination, from diversity this the is and of is different quality the past try scale the to and I quite basin terms interval compare and and unique the accelerating exploration not in really customers

Scott Gruber

color. Thank you. I the appreciate

Olivier Le Peuch

you. Thank

Operator

with Roger the to Wells go Fargo. ahead. line go Read we Next, of Please

Roger Read

And to good Rio. exploration the question. you. imagine come appraisal in of back kind to I Yes, thank just Maybe afternoon

slowdown offset in going or earlier, America North E&A. what's that than mentioned offset by more in on You

also prices in had last right? in of curious So to not 'XX, couple there because And you weren't 'XX. been what has I really thus it and this as exceptional far led think it's months. haven't if improved you I the E&A mentioned was think commodity something just What in in -- good materially increase

is customers looking improvement? So your helping at just in else is Or their a something that's future change are there this to drive how inventories? it

Olivier Le Peuch

price reserve security, the gas existing and advantage or the the or I basin pools fast-track as new to and energy indeed the oil I to explore back desire cycle the earlier. to outlook community and think go supporting to leverage described to tie

Now of is the the this is contracting the more it, some when when or the of land think, the rigs of to linked happening. contracting timing or -- it availability occasion is of rigs and on exploration I acceleration, offshore deepwater --

opportunity mix to More part the of will leg in and the new started and a to that give of than activity and acceleration. have of FID And extend appraised E&A the return with year is extent, be those cycle be last but been think yes, an new create a time. three when at two some exploration or has will line of from I FID will will now accelerating it offshore years in leg and

uncertainty and I that committing last more the new And basin price view commodity variation quarters long on have So I in have think is expanding near-field think exploration. underlying started trend taking looking it's few or a short-term that customers more at and -- are one committing on that short-term accelerated. it's not the and or an

we seen that's So way it. the have

Roger Read

Okay.

mean, So exploration maybe had a just for the as some some other so cycle, up. you pick the question natural duration, get APS, would highlighted evolution One of things obviously, I issues. kind just within to expect you,

aggressively. it years, disposing up the picked has in I the least these of E&P of within of talk last them like sector. couple just Looking of at back talk least investing not there's at M&A or assets been potentially or over it was curious, seems

to less for likely, same exit forward? these go look to you So a more as way likely, assets

Stephane Biguet

no really projects assured, There's are distinguish tariff-based. Roger, These look, service intention to And terms maintain are but level not need do a have Ecuador. on these in cash highly only we of exit. So to minimum EPS, rest contracts, flow. we investment. positive to of earnings But

we satisfied This the a particular even that we on And current is position. asset last is a And asset in offers with received. year. Canada The bit very also were prices. of know, a process commodity equity cash at it's you run accretive We pure terms different. not as flow

price, happy the cash are So But if one it. at flow right we'll there the it consider certainly moment, keeping that day, an with the asset at we offer and is generates.

Roger Read

Okay. Appreciate it. Thank you.

Olivier Le Peuch

to want a So to ladies almost hour. close this gentlemen, give It's I call. and think the I to

takeaways. like call, leave So to the with today's following I conclude would you to

balance tight unique First, both reinforced further supply as upcycle highs the gas resilience, attributes and is by the unfolding forecast by and new improving, offshore oil strengthening evidenced East quality year-end. demand in the This and at very duration. with of of much outlook is Middle approach and markets in the breadth

ambition. Second, North activity will our strong full growth financial further the gives likely in offset moderation year start of of markets confidence international in our America. in Directionally, the us the dynamics year

a our from for and witnessing a gradual with effects closely short-to outlook strengths paving long-cycle exciting years investment international, are we way aligned to and for transition fact, with an shift both come. the to In further

our segments market of oil gas and globally, portfolio, focused overall demonstrates low-carbon attractive our strength solutions. resilient both performance on most Third, and in the the and

at digital with transformation most performance mandates. align Our as on and to customers priorities industry decarbonization with divisions to continue and integration, value delivered

products us value for Additionally, positively, enabling more extract to our pricing services. and to continues trend

the in remain to a the cycle to result, to as new context. market I team ambition margins quarter. of in fully the grow trends our to very cycle to outperforming we this unfolds, to and levels as reaffirm shareholders we increase earnings confident this expand SLB the strategy further trust to significantly energy As formal demonstrated and in alignment this in our returns continue

three Maduemezia that as to to I and engagement who VP Welcome, previous with before is our ND, Replacing ND is investors role support new Land Americas Relations for the for in the wanted position moving his and Basin after transitioning James be McDonald, as Now James. years. his SLB close, analysts. announce you, will from I market positive Investor Thank ND career President. in past stands remarkable a

you today's you. to close With day, and the best. everyone. want Good Thank call all this, I wish

Operator

today. Ladies you this conference conclude participation. does for and gentlemen, your Thank for your

disconnect. may now You

Schlumberger Limited (SLB) 21 Apr 232023 Q1 Earnings call transcript