SLB - Earnings call 3 2023 | Schlumberger Limited

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the SLB Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to the Senior Vice President of Investor Relations and Industry Affairs, James McDonald. Please go ahead.

James McDonald

Lea. you, Thank welcome Conference and SLB Quarter Third Good to Earnings Call. XXXX morning, the is New Today's our hosted being call from held this Board York earlier week. meeting following City

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

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

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

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

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

Olivier Le Peuch

growth provide the our results, our and of to line the and full we James. reviewing will quarter you, today. call will my Thank for And you and will our third outlook discuss and will on engines across release. macro thank for fourth them. environment the Stephane the open the on the we quarter year. in begin Ladies finally, joining are morning, more progress the us results achieving Then I X remarks presented I by details today's I then will supporting this share we financial earnings In your gentlemen, financial questions.

results half our position quarter achieve have the us momentum first firmly ambitions. of year third Our and the upon financial full established year positive we built the in to

for second and we EBITDA, adjusted of consecutive and quarter. sequentially generated $X revenue year-on-year, flow grow and to continued We free cash the billion both

consecutive growth Saudi highest quarter XX% Asia, cycle. Middle Arab year-on-year. by we growing significant to Egypt. quarter growth, East the year-on-year We XXXX Arabia, Internationally, ninth Kuwait and This in market this achieved the United by we for particularly was Emirates, revenue in and international the led seize visible revenue our revenue in where since the continued posted

investments Our our strong venture Scandinavia. offshore international Aker opportunities of us activity to notably markets, forward. was discuss Offshore resilient expand moving closing market Africa, joint will for Solutions and the offer and our I further in by recent the to OneSubsea how many continues with SubseaX will in the the business, footprint and shortly augmented our Brazil in help

And sequentially due revenue, North to activity, revenue in our Once outperforming year-on-year, headcount. we value with on our through differentiated quality focus margin although decreased to technology drove expansion. continued the we the lower of deliver the America, grow again, combined

a quarter operating Our delivering want to new These XX%, this performance. and EBITDA the margins reached thank our SLB cycle year-on-year. XXth for expanded team consecutive results, positive and segment very strong high entire are of for I the margin pretax

would share our Energy. I Next, X across our core, like engines progress of some of and growth: New updates to digital

energy transition. the market which compelling XX% our business, Let the cycle core. has as exploration for expansions, supported benefit These and gas from core for The margins. durable sector continues appraisal grown expanded remain being resilient critical with a year-to-date developments, me and and is by growth materially material broad, and cycle fundamentals long capacity source fuel very that begin production has oil to

lift. Production our the exceptional level in margin highest evaluation is the technology performance results and Reservoir unique artificial activity. with our integration strong stronger portfolio, led Systems by industry-leading achieved of and subsea, its This achieved being our driven capabilities. by surface diversity cycle Performance of

divisions. new impressive results technology innovations in this and All maintained through our strong differentiated all, across quarter performance. construction was very core Our a

inefficiency where economics. project to long-cycle have investments operator improved environment macro [ advanced is offshore, supportive ] The make leading significantly also

Aker with SubseaX projects a be beyond into for it extending join recognized visibility for better unique is FIDs XXXX, and not forces a could new to and its offering we'll and have have time by partnership market. levels Solutions SLB integrated subsea. Today, of to the venture, bringing complex drive new era well full development this We OneSubsea to processing. large, a technology offshore subsurface from to midstream and enhance our further to ability Through joint

and meaningful Together, leader the This are further provide create times subsea partnership services. a efficiency, solutions to with clear drive also oilfield and will cycle and the partner approach digital asset drive subsea emission reduce scale, gas as electrification to their the we Collectively, more this boosting increased customer market. multiphase customers through help in in capacity flexible our business. deepwater compression, companies offering subsea we to reserves, performance change and reduce unlock large will and will enhance them

let turn to Now me digital.

comprising I the scale an the I This is opportunity data of and data of maturity. a unlocks investor At AI for workflow on shaping shared that strategy, emerging our backbone scale digital industry. planning call how conference, this a with the platform transformation. customers' quarter, of as at digital our SLB gaining and capitalizing AI how and On and the that adoption update for the on the trends platform computing, recent last discussed data cloud and serves operation, operation included platform power digital

the compute XX% increase across are an the XX% third a in to increased quarter compared year. we momentum in hours Today, Delfi seeing and growth increase digital last continued industry. with year-over-year users XX% -- adoption its

Additionally, XX% connected quarter, automated million in of our autonomous third completed solution customers the X.X of feet and increase drilling our are an year-over-year. embracing with drilling

result, the platform, of illustrated XX%. can our see customers serving technology with feed representing Basra earnings press across a as you agreement workflows this Limited morning just of recent is technology technology digital As Shell-AWS at new and their value Kuwait our this of X clear, reimagine examples to growth in digital benefit about the release our a SLB rate this contract, chain. Energy E&P SLB's offering, digital sustained and collaborative The CAGR choosing

exciting the transition some opportunities of discuss Energy in quickly me our portfolio. let business and New finally, And technology

decarbonize for mitigating industry to climate the immediate imperative our CCUS of reducing to most the solution a methane As scaling operations. an and this has change. opportunities do emissions as energy are Two we address dilemma,

have opportunity to digital connects emissions. operations. platform Regarding weeks help IoT-enabled a seamlessly available insights their and new quickly detection. to a methane A and solutions for monitoring better for flaring to are through methane launched continuous enabling analysis, and need and site leak visits eliminating instrument and point ago, monitoring methane, positive their that we methane the few to other we for abate today up clients methane operators across intermittent scale This address

sectors. in is investing CCUS both more industry, by building is the technology in oil as other and involved with XX SLB globally, actively and capture in momentum hard-to-abate And we the in gas projects than across underscored well CCUS, as as partnership release. this create we are of and avenue earnings diversified space, our our projects, in will highlighted as Research for technology pleased a and we we growth. have leader TDA ourselves pipeline establishing Overall, with yet by in confidence with long-term that another are

Now joint reflect for outlook product production and In the continued I year. equipment we the results will fourth full OneSubsea will venture. our in systems. also the sales The seasonal driven digital expect and quarter, the to turn quarter sales sequential fourth the by growth and quarter of year-end revenue

digits. in As a growth be to single result, high sequential we the overall revenue expect

fourth EBITDA expect color With highest the adoption, segment line will of guidance. global leverage prorating quarter OneSubsea to focus venture on the net in joint our and at third the quarter with of on cycle, levels pretax margins contribution provide quality our revenue, operating maintain harnessing our performance. and continued additional their we Stephane in further the technology on

Turning to the full year.

We expect to we our in financial back shared achieve ambition January.

we being venture, by than to the Excluding international conclude XX% growing strong than joint offset the revenue the with effects headwinds America growth. by mid-XXs, of North increasing the recent more EBITDA year expect OneSubsea in and more

we'll With positioned value results, these continue to now over our to to the remain will strong returning full Stephane. year turn call shareholders. I well

Stephane Biguet

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

of North International share quarter sequential was not Middle by revenue revenue represents during quarter revenue an increase Asia, growth X% This X%. increased Overall, periods. any We or America $X.XX when of charges billion record did $X.X our East of third was led X% increased those earnings quarter X% of while per which decreased sequentially sequentially. and and the the third compared $X.XX any last year. Third to credits of $X.XX.

of international quarter for the was margin Sequentially, offshore pretax basis performance basis, which grew in margins On reached America points, incremental markets. EBITDA strong to by a third resulted quarter XX increased due and Middle revenue across broad-based largely North and the international adjusted East the margin XX%, while increased XXXX. segment revenue third highest operating revenue Company-wide the increased growth The revenue. X%. since year-on-year Asia XX%, international high-quality led XX% as XX% level

the each through Let division. for quarter third me results go now

was digital X% including increased in to million increased quarter The percentage and improved driven revenue primarily lower XX%. integration margins revenue licenses. sequential more as margins. Reservoir digital $XXX sequentially revenue, sales of revenue APS Performance decreasing data Third construction America. with revenue EPS than increased growth margins increases in growth, billion revenue mix profitability billion strong X and exploration and were partially Margins while the increased declined points $X.X of digital points offset by X% higher North These while X% international and due increased growth revenue of which East Asia, by of pricing, XX.X%. offset sequentially $X.X basis was strong led in XXX improved by lower improved sequentially, to a to technology Middle favorable sequentially,

XX increased driven points, international basis by XX.X% the Margins of market.

Finally, East increased revenue by increased billion and $X.X Middle Production X% sequentially America. X% International and revenue led Asia the of Systems as Latin

basis production we North for well by began America X% This expansion surface margin decreased subsea highest division. completions, lower systems XX.X%, of reporting Margins to sales to and due driven revenue primarily was the expanded representing as XXX pricing results as lift artificial higher since activity. improvements. the by points

Now liquidity. our turning to

we operations $X.X cash over just of cash the billion. and generated flow quarter, $X free billion flow from of During

flow result net cash by this of $X.X a strong to billion. debt $XXX sequentially As reduced million our performance,

is net XX-month XXXX. EBITDA X.X leverage lowest to since trailing ratio of at Our debt its level

investments data the third million projects in of CapEx $XXX were investments quarter. APS Capital inclusive exploration and in and

$X.X of to still $X.X for year, stock our billion. total For price during a million we the billion We full the purchase are be capital to shares $XXX expecting X.X quarter million. repurchased investments of approximately

our dividends and stock buybacks. We $X return year to between this billion to continue shareholders to target

that Before like some would just closing, the Olivier outlook provided. add I QX color to to

to the pretax with be revenue fourth sequential remaining level high in expecting the growth third high are same achieved margins in digits, single at we quarter the We quarter.

the incremental to million will Production revenue contribute outlook quarter. The expected subsea is teens. which margins this SLB's includes business the low is contribution highlighted, fourth fourth in starting the approximately excluding acquired expected to from subsea the million growth the Aker to $XXX be recently the subsea experienced sequential our sequential $XXX fourth Olivier of to the Aker be in in in effects the Aker quarter. similar under division business, Therefore, consolidated quarter business, As we revenue pretax of the revenue quarter with operating third acquired growth Systems

excluding organic quarter impact pretax taxes this earnings expected of effects this expanding venture joint operating the items to business, be and again SLB's expected per the as acquired noncontrolling sequentially. excluding margin, transaction slightly of of relating such to is below-the-line and After accretive to interests, to considering the fourth charges continue intangibles, credits. share, is Aker amortization our

which of closing, very portfolio closing. year starting $XXX prospects of venture, to million about than synergies and we deliver strengthens after potential more annual has In the the our are X offshore excited net this

conference back now will call turn I to the Olivier.

Olivier Le Peuch

your now will questions. Stephane. line. you, we Thank gentlemen, open Lea, for you the the may and line open Ladies

Operator

of Evercore. [Operator West question Instructions] first line from James our the is And with

James West

like on to know of ADIPEC East the region. in and Middle most oil and I about with to respect how the major should hear Middle likely the Curious all thoughts going with the next driver it years, think be growth. looks huge because learned to your Schlumberger producers a of over from you Olivier, several the East recently we met it's

Olivier Le Peuch

Middle a be Thank region benefit and you, and the about relating visit week also No. your East. to itself I've to to there I had I've but catch privilege could only not James. Indeed, in lot -- everybody Saudi over question and our the go a met to operation hope for the to went had of in customer the there. our conference the been customers

So great insights.

not that set. momentum the Just clearly across is sentiment largest positive. The And [Technical It's is investment think set. extremely say is becoming clearly Difficulty] underway. the to this is I now about cycle

durability in I resilience, characterize So cycle, I think, have think, for the to if very characterized had attributes, breadth, I that Middle in much East. are full full we display

that a into beyond and only for think exports. [ I gas and decoupled are Kuwait, short-term and X the is is the driver Iraq, and very it's some onshore, expansion. LNG It's Egypt not into as from known Breadth countries more. also ] the it's uncertainty. into of X And offshore operational clearly durability, oil consumption XX target and well unconventional but of capacity it's or conventional goes gas

the made clear it's So about to all and situation. service of beneficiary contract long-term this a contracting contract the we REIT are from

accretive continue We to for have indeed, come year, a And the in our record we'll will the that before, growth this this to footprint in stated years as unique SLB. we region. record will accretive see And in support international revenue company. international A great in the growth continue and to region. use and the outlook, to to And be we grow margin to essence. our this and

James West

great. That's

a was Probably here. during me, follow-up for Stephane a quarter? issues phone FX on much maybe for my the about is How FX. headwind Sorry

Stephane Biguet

James. Thanks,

our in of most not case. it's countries, look, few partially in billed but is U.S. a dollars, indeed, revenue the So

indeed some effect, sequentially of negative not revenue a impact that impact a contractual year-on-year. and lot And are we limited. the dollar the least that. we slightly natural on the in this. clauses and specific had marginal, well for last as at to have come so prefer here on it's remember our against earnings of strengthening currency, as I point partially. But hedge an local would without costs higher quite net have that is local and And a expressed adjustment yes, is the we the been unfavorable offset of was those, have So giving amount currencies, U.S. both you

Operator

will on David move with We Anderson Barclays. to

John Anderson

hoping it part kind in bit fits within how a only of more With market. JV, but Aker could a of talk -- now proposition subsea you consolidated about of it now was the a whole fully the I OneSubsea little fits entity value the not larger how

whole? what FIDs, a in be more worth the larger, offshore does OneSubsea Schlumberger a of really terms But bring timing to any robust couldn't In obviously, better. as

talk as the is about Culture if And you're part such could Schlumberger. integration you follow-up, of a planning. then some a big steps of

in Just about do wondering any that of how and sense? how about of long-standing kind you one bringing competitors thinking think you're your culture fold the in into --

Olivier Le Peuch

of and been indeed, have XXXX. working Great I closing the and relieved I'm duration offshore the the be and now question, and see onset with long timing think, that this the Dave, we growth that not better, proud that on could this beyond very at we FID

So customers. technology elements well fit, take I X say, for and and create scale had the capability would if keywords, to I are integration I our that X very think resonates value

with basin, participate in vehicles addition, Technology, us that where fully every that differentiated world. to deepwater market portfolio also enhancing getting includes And portfolio we the processing further are the complementary in and subsea allow every that a comprehensive deepwater to in and fit is capability, capability and and exists. being very every complete this that in

OneSubsea, competent it and acquisition so but with for a us deepwater get can any help bring already in and best that and our very capability had collaborate we to team are reservoir the Integration, we from -- we running a capability processing we larger and and take engineering to unique keep customers we outcome. that subsurface prospect enhancing

to we getting we with required success and partner SubseaX are as when are a with to And this integrated our us. aligned as to joining deliver be making and

if brings scale ability flexibility value us us the to provide like, and use of respond this unlocking largest subsidiary, the with installed all footprint, everywhere give further we use capability is term. further gives to field integration that respond Performance will life-of-field, give manufacturing need all, you digital. and integration of production customer the to long We'll of the to and what So where our in the to life fast recovery, integration. Scale, base us and Reservoir unique

So at onset. is the customer excellent feedback

potential, think customer appreciate the recovery digital the technology the really I the portfolio, capability. the and and the lower comprehensive emission, integration recognize

aligned And very complementary we had or I Culture, culture last that this. how throughout set weeks much I -- events portfolio into go are we is week are and have are ago a this really aligned. of planning day X our discovered culture think we engagement our and the that how actually, to X think we have

in very positive their is is have and economics extremely so ], our I'm bp So I'm efficiency seen far partner And SIA to [ the opinion, carbon optimistic, to a do outlook. positive precursor, bp is you what which to we customers recovery, very onboard in help announced customer lower may reserves their can future feedback impact their with unlock earlier this. and the our to subsea and and of and

John Anderson

over If customers to achieve. all business. your I shift that to Obviously, things could looking your are digital

within digital In this and higher noisy to of year of or Kind software. between specifically, talked more happening to real has a you what's get sense in Just about us kind margins. release, been Ecuador. your for APS as D&I. Canada hard sales

I more about was some improved tidbits an growth, about that increasing that ago? year [ time. increasing You from of Have business? top repeat meant little ] Is by gave line a can necessarily a provide And computing number you of said interesting here just that? margins? wondering Is if users, you just that. also context that XX% margins this you could what you the around

Olivier Le Peuch

Yes.

-- James. you, think I thank we no,

be positive continue and the adoption think business about digital to with I its very our we customers.

many of also release to see announcements being seen you and made continue AI, edge, operation, today. You more adoption of workflow earlier and for our as will into them press from more announcement customers digital and have

satisfied very we So with are the momentum.

going And fairly It's it's going. well.

I And think including in maintenance seeing sales of new have with that that legacy still is that offsetting portfolio growth. about on CAGR expected. the operation we is to workflows that quoted we top baseline is represents somehow are this at you the services, we what growing all this but software that technology the includes XX%. data the line do, the and from total think this And of digital some of I a is

So continue we we and accelerate growth fourth into And quarter -- as a to sales actually this this we the continue expect to typically we very year-end next be effect. have visible year. expect

Operator

Next, Citigroup. move Scott we with to of line Gruber the

Scott Gruber

Question JV. post for Production Aker margins outlook on Systems the the

as path we And rolling synergies, the about next reasonable in just forward Just the largely that are go in thinking about or the lower price in think margins Systems over should incrementals margins could contracts expectation business? then contracts better out overall capture margin, legacy years? how for where subsea is what rolling for out you a Production I'm in. X

Olivier Le Peuch

I think we expansion. simply have we'll -- believe that said, to our continue journey of Scott, continue margin

this of and rolling this venture you year is level that level and -- highlighting in results to only Production the very The at that I a previous At selling on expect is technology -- result million seen, and to results but now the in also more this supply hence, we increase to beyond. are in performance I the the team forward. in environment of from at to use the and increased have in OneSubsea at we have the we we efficiency back, margin the and have entire as our that revenue in generation, into to X the been, will this since or OneSubsea. joint that Systems the subsea, been generate on System reporting backlog, highest to good back continue chain going environment, margin specifically the As of accretive Production of previous term, EBITDA reached customers. And few positive subsea has organic OneSubsea, the teens in division have contract more than long the OneSubsea already addition recoup that not think, and of high months pricing additional our been very continue better think $XXX we of contract

will grow So margin journey the also forward. our be to year all, and margin this. to element are to continue JV have accretive incremental expect but Hence, to the of we all next in set going of not I portfolio beyond. And that believe continue System only expansion the Production

Scott Gruber

does and A wave more impact consolidation America. the fewer Got it. we're more And your of sales years you ago, product through a in customers. ground. your tilted model going We're North sales then of couple privates that amongst seeing your turning wave of to now potentially North larger taken on strategy out But towards America? mergers. a boots and now How

Olivier Le Peuch

onset years I been we satisfied have very we of our the ago. of the deployment with strategy as strategy X think and it initiated

I as integrated with both to out products has had to our technology access tech fit-for-basin through have this adopted well for of company large performance appealing offering as and purpose. turned and our our partners, focused the technology through adoption resonating model public that focused think it be technology been fit-for-basin

will the recovery, performance, be very As happen, adopted as well still will to that market will we believe and including impacts resonate to continue our mature consolidation technology well digital and customers. what some very our continue by

showcase forget have the in in Well And we digital and sour opportunity our our further this excellent at This portfolio, System digital, this performance give context. also in company. growth particular. And showcase playing our exploration an that the point and critical fit-for-basin integrated both to not is evaluation is our if will public NAM. world let's that a technology, So I showcase role a new to across in CCUS drilling and Construction not Production consolidation through to exposure us think

to So be the at back the set this customer are and customers we engage the to and time, to larger of will that our in at next to use a integration year. that access come agile capabilities. privates tech to top are technology respond fit-for-basin through and portfolio continue continue with to and the same market

new in success for NAM. mature in we this So we believe market are set

Operator

move JPMorgan with Jayaram Arun Chase. to Next, we on

Arun Jayaram

I elaborate in Performance. about the margin particularly pricing Reservoir in the particular, and you core. commented if of you performance Stephane Olivier, could was gains, kind In wondering, on

would legacy on for impact in the If SLB? margin the you you quarter excluding, -- the could pricing. expect fourth what a close expansion highlight the you're from of obviously, JV, similar the OneSubsea seeing And on

Olivier Le Peuch

because believe let Stephane start. margin on comment some effect. remarks will to I me So provided the he that let I

that believe things, benefits to opportunity benefiting from from market performance the this secure hence, core I -- the of benefiting differentiated opinion. an eyes in X Performance a premium is is First, customer, recognized. by position It pricing and creating the in in commercial critical to and that deepwater but and Performance is or is performance. projects, particularly all terms this being is us favorable commands environment support recognized. it's differentiates and in something my

a So performance factor. is key

second, adoption believe, The been accelerating. has is Technology I technology.

the this and the been transition I technology as environment, think for we year, target basket insight on of we in including on that year a differentiated has hence, in the has target again technology the set to we differentiated is unique being billion where features And accretive and the And recognized. value achieved the performance set and that customer differentiate and margin being drives $X the for for and see our and margin have this adoption already creating technology year-to-date. core.

portfolio our as on quarter the Reservoir a premium. recognized had Performance Reservoir digital Performance digital very used high to put again, this. with add which that evaluation, I'll from very and integration, capability that Well benefiting And The Finally, into intertwine helped you integration has integration are Construction and particularly, is digital to is much Performance. level Reservoir see of where exploration been margin by differentiated technology a value. our in as appraisal strong well to has, back ability and performance. Back delivered

proposition and customers. with value digital is with with differentiated a we recognized a from. Technology, integration are driving are that what our So pricing benefiting performance premium

Stephane Biguet

And Aker be accretive QX. margins relating Arun, clearly in year-end we we'll sales so do improved I'd the subsea incrementals. continue probably digital and bring of divisions, the expect improve to integration that then for year-end will the good say, will we effect Yes, have particularly expanding contribution sales, other definitely that where margins, across typically the have excluding from margins, margins. to Systems tailwind. And digital Particularly a Production

margin continuous excluding yes, QX. in the JV So expansion,

Olivier Le Peuch

attributes margin as expect carry to outlined before, the we expansion will we I which in the continue the partly favorable believe And to are XXXX you for could and on operating differentiation, environment core. as of support internationally this

Arun Jayaram

$X could Just cash things the Great. OneSubsea XQ. flow to working given just impact what free flow Stephane, any follow-up, in My generation just capital cash thoughts flag? of free on billion JV? in Any and XQ,

Stephane Biguet

sure. Sure,

row So first, working our It's free cash about quarter a quarter discipline where we combination, free really in course, flow after flow. year. an performance capital cash quite we a are actually $X the so with investments pleased quarter. And billion indeed capital performance improved this of but EBITDA, generate second in of it's also far higher and

relates strong as So cash QX, to we end see a of typically year relating the free it to flow.

main So close the as are we There we well. But the collections. are hoping case flow customer as variability. strong we this targets will on year. year in performance that It's the be moving it always a based general, cash expect free

Operator

Marc Bianchi Cowen. with to Next, move on TD we

Marc Bianchi

versus directionally here. discussed is how quarter rate the $X.X improvement I'm a be what previously run of get appears of the here, just curious so in sense the assumption underlying for to XXXX. for an fourth JV expectation billion what can we doing -- EBITDA You the it's

Olivier Le Peuch

we'll, that indication it's think on we specifically point, don't -- next gave. it's an year, directionally, -- I think comment I think this at I

think the in and we our I we gave a expectations the until call to we QX I this point we see time triangulate will with engagement. at to some on as scenario of conference a today, January year-on-year our scenario America growth outlined into guidance this growth also have detail until market, we of have this go not coming will customer materialize. But the it stands momentum think and which by I activity, under scenario indeed a North international

detail, more back that the for time. at including We JV come expect with subsea contribution will the we

Marc Bianchi

Okay.

on question exploration. specifically related but Another to offshore

expect then think type And in you large exploration earlier XX% 'XX. curious SLB? can for said how out. that is how I you that's growth us playing remind you I'm

Olivier Le Peuch

some don't because digital, on as Performance, components integration some also many exploration, touch them think, obviously, a Well market and of of comment exploration Construction. segmentation, are PS Reservoir I aspects, and We primarily but think, I subset of some

the been in all momentum all, with aligned offshore market set exploration this has been year. has growth that year think that international So of and has appraisal the believe this element been I we an

results the think reflection the of success. very margin and that of I that seen -- a performance we are much have from

data well We the and relates in we around been it our are 'XX, of finds continuing sustained digital And 'XX. seeing search as and Africa, are had that in exploration. of appraisal particularly sales is confirming to campaign when FID to seeing success made these be -- that the to in develop

about on geographies We positive think and obviously, in Middle it couple of exploration cycle. than in South very don't breadth exploration, and see was the is and for America. offshore and customers ago. are appraisal years onshore market from is that many and exploration. we unique Asia Southeast we East, the broad higher this see a setback much So that of It's and North is Africa I It what touched in basins to quite a

Operator

is Our question next Sandler. with from Luke Lemoine Piper

Luke Lemoine

within next fine-tune on well? as the the achieve about could maybe first a And enhanced bit to a commercial you qualitatively an operational to -- you've Olivier, capabilities level what of you'd on it new and few and years maybe more, the OneSubsea. talk the maybe year like basis

Olivier Le Peuch

backlog First to months. team will make I the the the continue and sure to OneSubsea we fully, execution satisfy the joining the the think is this from reassured and priority, think organic in customer Solutions, engagement we would secured performance that affected. our first by have, Aker And And not foremost, respectively, base the I XX it be foremost is and have been the last from that case. team to be first that from

portfolio to to portfolio, brings SubseaX so demonstrate in explored integration customer our for today, that the interesting next, backlog achieve that announcement to unlock onset value of combining leveraging we that maybe the operation for we partnership most want path SLB is to broader we and using exciting the the at what to capability of the to third us full and I we SLB combination you seeing of economics, accelerate we with to engineering, and we have. new that part have is that that decarbonization is that of every deepwater and will we portfolio the asking can unlock and add and believe we I all the differentiated are most have the the be rest can come have. And the customers portfolio think this a that recovery, portfolio by and the can and technology

So model be I and up integration new will the execution. era sell would believe this defining would performance technology. say that capability and for And for finally, I subsea. partnership say, I

Operator

we with Sachs. Mehta to go Neil Next, Goldman

Neil Mehta

couple I of had questions. a geography

it's of recognizing growth of part in move America, The real think are first around is we in do seeing the as business. But into we're phase driver time a market? smaller XXXX? a what bottoming the you you North And this

Olivier Le Peuch

Yes. Great question, Neil.

Yes, and discuss gain. I of think price. as We price, beyond The bit forward, the believe little the favorable in on magnitude of the U.S. planning. this of the of hypothesis have private supply be by gas there from we and trough oil pull are is, back this more it's scenarios opinion forward way I as factor, pull coming commodity and in -- the a the combination at judge. And and on market, point, our into at the a going HX E&P incremental here, pull see we more will bit which on point, this -- a swing creating to indeed, privates the land U.S. create our XXXX market this so gas on difficult it little is that plenty activity. is specific us the for of think a year biggest that incremental the about, hypothesis we of the well activity a

comes to magnify exposure, will continue JV that there. our as And we America North see the opportunity so. back we of will continue it with Gulf this here where OneSubsea think come satisfied have XXXX. When to guide forward. are I from Canada do Mexico, very our and that to and to to to to will a performance benefit going offshore, we steady we activity And see We we robust

anything, So XXXX. steady the a upside is, I for outlook activity believe that and the potential has if and in

Neil Mehta

just then is And follow-up a Russia. on

on out to that's X you going to you expectation wind where a our to market? the ago talking give down how stand couple business, the of and put continue release there update here. you is any go can months and color just But You about to a any

Olivier Le Peuch

this find And we And revenue remind presence impact continue to built could in that you does XXXX. in anticipate revenue remaining This our ] said. model our will international to year-to-date. not effect Russia but our decline provide ensure not XQ I today's consolidated and how financial that sanctions. percent we we always [ you include always document, Russia of Russia are that and all to has been indeed it -- As and X% that releasing I exceeds we meets any to approximately And X we a in expect guidance, guidance as as happen. our percentage in the

James McDonald

any do line? further we calls Lea, have on the

Operator

with Yes, Mr. Hallead Benchmark. Kurt

Kurt Hallead

know Schlumberger U.S. kind has the week, to a think very like lift I on guys products. there. for and maintained of been market a export this presence oil agreed large to -- I'm just that Olivier, you of dynamics, prior sanctions looks it I curious, Venezuelan have fairly the the sanction Venezuela had

kind just incremental could in as be think revenue are what terms to the So once providing lifted you opportunity growth. the of of curious sanctions

Olivier Le Peuch

soon that of been on with opening. indeed. and strong think to But it country too stage. early to and this, have resources very partners but fast and guidance I it to to this -- have size its its it's of it's of give as and will to that track upside, it into the it's shut the early on say, think can equipment have, participate historically, to as But down and early But as be is mobilizing we opportunity. and will since and record be the as think operation. comment had I I don't surely, appropriate we capability in get our we the set support dormant we from it's that respond a impact will if potential over too we there responding comes, and thoughts customers any

Kurt Hallead

got That's great. a follow-up. I've And

Just to expect I by to about billion grow XXXX. you be digital know you referenced revenue $X

kind curious even among the greater base AI will adoption of that to you of level. think not getting growth contribution AI have gives conviction that Just rate as whether your you what or customer and of in to

Olivier Le Peuch

Yes, indeed.

aligned, we revenue to quoted indeed, these to announcement to 'XX workflow imagine unlock science includes key you making for think insights. firsts operations digital billion to insights we through double technology, 'XX very expect what digital and automation, geo our some new ability used AI of I enable 'XX. drilling create to a to component have new to data and call through And of much AI, the from that sure the ability we very autonomous digital that to industry enable the of are a we all and portfolio reach approximately AI AI. And by and into soon element of support to see that this automation like new will $X

So we are about bring what to positive this. AI very can

have We capability. a unique

We into AI embedded capability have domain our platform.

into for we use rapidly allowing as IQ last AI X.X better have we achieved than use have customers to portfolio labs them our customers launched we collaborate capability that more And have through with a AI the and projects INNOVATION where of years, AI our customers, the and recognized have we and which for FACTORI. to INNOVATION globe, ready-to-go this their collaborate. X been scale and We already unlock routines partner, we across our and FACTORI that with have, best-in-class as application. And of XXX are

and AI a the an at support capability we have Emirates may to have project with during we pickup, ADNOC. seen in released our partners AIQ APEC, with So that great announced you

in it's It's over an it's all geo towards planning, in operations. place. and digital operations Schlumberger's the science, So it's execution in

and us contribute that So give and it's picking XXXX. hopefully indeed up, it would opportunity in

Operator

Fargo. Read from come with will question Wells last Roger Our

Roger Read

as are from cycle I go. for that need from to of margin When and restrain of would market really here? like an I'd would lift standpoint. What it more come we're update where cycle back certainly mean, that. I you what to maybe be still uplift the recognize margins here? at Or from 'XX, margins that when here you do pretty from there's could the and reaching may are margins room question your in everything see a things ton do to to like levels? to see things relative fantastic sort but And look to we make we as looking see premature significant max up margins to the a a fundamentals in we what this

Olivier Le Peuch

the max, the can first, we to, want on achieve. don't I margin put ceiling a on

capability, for commercial to is growth the performance our by that. to I importantly, conditions technology differentiation, give deliver and continue us think strategy achieving ability share will and depict allocation. augmented margin, customers this our I enhance on most But capture, what getting we been the have potential favorable execute, give And to business trust market is and last X are. ability years. And of commission performance premium further digital to and everything future us their think, better is our to to to execute I the outlook our our think by integration continue again, will on the what market define we us whatever

and we ago fairly again, years think, be well we'll a that So margin we telegraphed initiated I initiating X journey. expansion

And XXXX. expand. the years of to on the for journey I been have this have upon last We We delivered we that commitment. trough committed from X think

of see looking forward we will Some you to were cross when the XX%.

XXXX. are ahead we able of We expectation team slightly market the so It of us to favorable is East putting this and by because the think be deliver. would scenario, this margin Some we to said I'm our will before. yes, I effect but give impressed and And continue. The we the in offshore our what that this duration cycle will favorable, likely cross a are able conditions of expansion. Middle continue the strategy continue support backdrop resiliency will expect breadth, to that to came

don't don't best again, max, a to I And continue to as team belief. we to push ceiling, our will want I I that's my seize So to put and put say. the extract the want but to cycle, a continue

Roger Read

luck Good with good. Sounds everything.

Operator

turn I will the back remarks. team management closing Schlumberger And the over conference for to

Olivier Le Peuch

like takeaways. following leave Ladies Lea. the call, you, and I to Thank you today's would we with gentlemen, as conclude

in unique us have durability our the with enhance attributes core, closely through our investments are to both continues oil this display business ongoing and and gas align environment, unparalleled to breadth, the resilience strategy. value of that to New positioned win In digital and cycle ability First, our Energy and in offerings today our tomorrow.

our international our performance. to reach financial continued drive Second,

offshore, has be shifted further positioned internationally investment OneSubsea sustained and As growth well and joint will our by our for business venture. momentum is supported

ideally an targets. This quarter XXXX, is and and Third, full year in we and SLB to an our and year-to-date successful is delivering environment value success an and confident time fully forward strategy performance another our into fourth through-cycle excellent the continue remain visibility and in X-month financial posting energy exciting I across the all impressive confident quarter industry, the look after is with shareholders. time to remain for for to to This positioned our horizons. close year.

this morning. you, With good everyone. that, Thank call our day, conclude we'll and

Operator

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

disconnect. now may You

Schlumberger Limited (SLB) 20 Oct 232023 Q3 Earnings call transcript