SLB - Earnings call transcript Q1 2024

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Operator

Thank you, everyone, for standing by. Welcome to the SLB First Quarter Earnings Conference Call.

[Operator Instructions]

As a reminder, this conference is being recorded. I would now like to turn the conference over to James R. of and President Affairs. Vice Senior Investor Industry Relations McDonald, Please go ahead.

James McDonald

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

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

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

expressly any otherwise disclaim by as information, alter or law. statements, forward-looking and future except to result obligation update, events obligation no of revise any required as under whether a new otherwise, are or We

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

to comparable that finally, the SLB contain press with will the on Securities a transaction And release, the website. Additional quarter Commission U.S. details materials perspective a Exchange related our including fire most statement and which first the measures and GAAP can and statement found our of directly proposed reconciliation is in be registration to financial proxy ChampionX will parties.

will with may is SLB, perspective the which websites. their proxies are the Investors employees company's when from in and it transaction. participants website of This security proxy certain holders their once from from described members further read management can the in be officers be and the available, in considered be obtained statement those are they urged to and connection solicitation filed. directors, SEC's proposed of and materials executive shareholders the ChampionX, their

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

Olivier Le Peuch

Thank today. thank us Ladies call and you the James. gentlemen, joining on for you,

for we I results. our remarks, X sharing prepared will During topics: I of the quarter begin dynamics will the further overview will your details quarter. provide will the ongoing financial and finally, we and on opportunities with update line conclude my first and then Stephane year more the provide for areas outlook will an Then for market And questions. results, by anticipate where second open I on growth. discuss our an our will I full highlight

Let's begin. financial revenue EBITDA year strong Year-on-year, grew to line grew the in I'm pleased very mid-teens, with our XX% and XXXX. our in with start full ambitions.

year-on-year Additionally, of XX efficiency deliver revenue our value execution the the we Internationally, discipline margins with our growth for we excluding customers, the consecutive XXth Aker our the and digits. double by grew by when we adjusted to expanding differentiated increasing revenue of demonstrated year-on-year. contribution, broad-based Even continued XX EBITDA capital international impact our units activity harness international quarter.

East the These period results Middle same were the impressive of to by exhibited which and year Asia, remarkable compared growth led XX% ago.

Saudi Arabia slower North oil to led of ongoing projects in Specifically strong the United we by Meanwhile, the in Iraq, revenue effects year-on-year activity across Libya, consolidation. development in and And and East the offshore, activity X% investments price, Malaysia, Middle region Emirates. India. across continued in region, and to Indonesia, weaker notably discipline North the soft. and expansion gas China, declining contributed capital the Philippines Algeria, supported remains Qatar, Asia, by by America, sustained was year-on-year. and capacity in Due market in the cycle The in gas growth and activity long both Egypt, Arab Africa, saw

in I value this stimulation our Performance creation to the to pleased quarter. and visibly seen customers. growth Systems Reservoir Production this Well focused our on for see Next, year-on-year, and by our the venture may led a performance drive core divisions you core we our services. I on efficiency I particular, will and continue remarkable remain see division's and proud comment supported by very also margins In performance. have in that evaluation of resilient to continues expand was OneSubsea power I delivered increased also was trust Construction intervention will growth. as joint

digital continue performance integration. I to our closely. to Turning follow very

press sales Although we we grew double quarter, be the our adoption increased throughout projects the base of to of by expect highlights typical see of customer expensed this digital the pattern included load a first sales you year-on-year the seasonally visible rest still quarterly will of the ongoing morning. supported from the and year, year. digits and as the start release during This in uptick a can slower in digital

the our I I privileged year, delivering thank For to our the They revenue, for Overall, and team. capital benchmark digital year. entire grow teens first We'll on with feel in strong our revenue the performance. ]. throughout focused team start SLB cash maintained to of at full high quarter to continue the [ we work a and very with operate XXXX. to such generate I'm strong for talented ambition efficiency quality this flows remain to pleased execution the and returns industry, the want and to the discipline a shareholder level dedicated

or In assets in set hosting production Capital that first in Project life are oil. our in to exploration customers. today. market increasingly the to demand unique to change priorities I me first creating and critical the gas by resources. every case are We're [indiscernible] Asia in shift the for is cycle a are the we dynamics growing characterized reduction, to focus appraisal to and how the business. these midst in for partly phase of a opportunities and accelerate for time This let there benchmarks call where are region into fundamentals, strong much occasions, this development resilience described basin. uncommercial on producing and longevity. on cycle, certain recovery Step Next, efficiency our market display new this breadth, this in very continued deeper cycle security. several energy ongoing context,

with backdrop, And capabilities finally, barrels. combination to technologies delivering transform value and we continue integration, and by of on adoption carbon lower this digital operations emissions. the technology digital to innovate unlocking our and lower of cost to of customers fit-for-basin and use through Against AI focusing abate

this business, decade. international be and oil than and we benefiting to investments core exposure market. and more in trends provides our This investing in it nature across cycle we growth fastest-growing for the by basis, In through forward the look of these is the resilient target. from Middle gas most long to broad the the evident global the further are suppliers and markets. with oil cycle, cycle this to to both In the our of durability on countries Middle continues confidence our the offshore gas deliver increase and are East of East, nowhere working the is to defined customers end and continue The

offshore we relationships, process unmatched life we performance I'm past deep of Asia, joint FIDs from a assets, America Africa, many of not broad-based full Latin substantial commenced, strong activity SLB continue venture, our and deliver to towards sure to offering a foothold of OneSubsea benefiting customer and solutions. Through have backlog. cycle on few each has across and the the port years offer Europe. these offshore an the from our regions, leading operational fit-for-basin to offshore

assets. tomorrow, the their to our and producing Now for the the operators assets the we to and value including exposure looking work market, a OpEx in maximize recognize the need of increase more decline, spend today at to performance offset production resilient natural as priorities recovery extend

leading requires offshore ChampionX higher production acquisition for in intensity customers long be in flow Our our of [indiscernible] producing to of with our will production enforcing offshore sales business portfolio of chemicals particularly cycle well-established which and strategy. value opportunity basin This capture in every a environment, significant world. portfolio to with addition further this a the assurance, will of the benefits evolve the visible the our chemicals

Another notable market low energy. trend focus emission is in and the carbon reduction on enhanced the

results beginning Carbon this portfolio, Our technologies sequestration. core Capture space in and are to in our in the to notably in deliver energy and promising both investments new early transition

of the to our to an one same time, solutions. we're storage the to opportunities in fastest-growing and reduce the leveraging emissions value expertise throughout the our and domain to most address opportunities subsurface we are expanding also increased demand At and respond of knowledge chain. is CCS immediate carbon deep CCS

process few Aker together announcement complementary scale. saw an ago, and own our combined have the of technology into an agreement portfolio, project leading a expertise established an in entity. to Capture Carbon combine weeks exciting technology with to innovate to delivery our you and we is will business As entered industrial carbon solution at platform capture capture deliver an XX% design carbon bring and opportunity our This

positioning project ] international all-time that our clear technology broad across performance growth, for us portfolio, with across approach continued exciting America. strong and engines Looking is technology-driven are different Superior [ and each it unique to our North X our of pipelines portfolio horizons.

are investment for making longer. this We cycle better truly

conclude commentary cycle shared, confident quarter the will in financial first the I've growth characteristics remain and activity Based our with ongoing in just full international year I in year with guidance strong full second North our for quarter. on strength and outlook the Finally, results, slower of the the offsetting our America. we

oil on to by anticipate partially and international relevance an expansion, activity offshore with energy in support further fully investments global capacity we markets, demand our in [indiscernible], driven mix focus global continues to continue, deeper in The increasing markets across international and In projects of and energy momentum ambitions. gas even long-cycle security. aligned [indiscernible] in

in a XXXX this business very efficiency the work maximize of press Additionally, realize a operators we assets. and production to during on market producing further to to our and and for continued beyond. as recovery outlook expect strong growth longevity strengthening Altogether, their

second the expect digits the in single the America and to low revenue sequential Specific North mid-single in we growth quarter, digits. internationally

and of digital the expand followed XXX EBITDA be also from By Reservoir Performance, Systems which to We to winter sequential of we all bps. season. division, expect by led to are by expect margins Well integration, by Construction, conclusion rebounding Production XX growth adjusted

the to will I call turn Stephane. over now

Stephane Biguet

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

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

we during XX.X% million and business. In the first Overall, first recorded of revenue XXXX the [ of quarter, with Aker subsea acquisition addition, year-on-year. $X.X our of merger charges ]increased integration $X.XX quarter our associated

acquisition, XX% to revenue the Asia. from compared International contribution and X.X% of in when XX% Aker in year-on-year the same East of particular Middle and when more Subsea excluding impact growth was the the year. up revenue Aker, quarter year-on-year driven Excluding last the by increased XX% than

revenue land Company-wide Canada. in quarter of adjusted America year-on-year, U.S. pricing, XX% increased to EBITDA primarily was X% first lower decreased This and line gas the up adjusted for margin APS full year-on-year. rig EBITDA XX.X%, basis count absolute in lower points the mid-teens the project adjusted our effect which year-on-year. In guidance grow EBITDA due North XXXX. our to is impacted year XX of for in the in dollars, with for

Our increased pretax basis segment operating driven margins margin strong by internationally. incremental points, XX

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

quarter increased million as growth, digital $XXX X% while revenue experienced integration was revenue revenue flat. double-digit of year-on-year EPS First and digital

Margins prices throughout the declined commodity lower sales QX the the higher with APS usual expected year XXX line will effects due of Canada. and of and seasonal digital in basis points as APS in in to increase the are XX.X% for improve & and Integration project to on the Digital division our sequentially year-on-year Margins rest amortization to trends. expense

due $X.X million $X.X XX.X%, in activity America. of billion higher and to to Middle points last international as [ year year-on-year XX.X% X% essentially X% [ and to year-on-year. ] flat offshore. Well increased XXX offset Construction of North of ] quarter pricing. revenue improved strong Margins was Margins by basis year-on-year expanded lower revenue stimulation and in revenue East largely growth the driven activity, of XX% compared as first were Performance Asia particularly by increased of Reservoir

increased revenue Production of billion year-on-year. Finally, $X.X Systems XX%

activity mix, of driven strong points effects XXX by the of Production pricing driven XX.X% by international basis sales. Systems revenue strong X%, Margins a execution grew Aker improvements. and the Excluding year-on-year, expanded acquired Subsea favorable business,

Now liquidity. to turning our

year. generated our flow employee to cash flows Free collections last of effects the of to Consistent and better $XXX During lower million cash payout the our and be of free following flow quarter with to historical expected in fourth fourth and seasonal flow the than incentives These receivable second slightly $XXX in operations. quarters. cash cash of performance strong we period of last is trends, in continue year. very the the cash the negative million annual reflect quarter, was the from same increase quarter third higher

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

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

total of million $XXX we for During million. purchase a X.X repurchased shares the quarter, price

XXXX to weeks As to and of $X.X for billion. we billion we targets a be shareholders returns disclosed couple our billion between from dividends This total share split raised ago, will have $X $X of capital evenly repurchases.

our will ChampionX we couple registration of require Lastly, the in relating transaction the filing S-X ChampionX plan on to next The shareholders. of weeks. approval acquisition the statement

During ChampionX period, after its vote, required the its the merger. for mails to buyback sustain are proxy shareholder share we our Until program.

for year. more will $X.X impact result towards heavily weighted billion, buybacks the of potentially not second this in approximately repurchases year it While of total being our share half the the our will

conference now turn to back the will Olivier. I call

Olivier Le Peuch

the are we Thank ladies you, floor questions. Stephane. to And believe your I gentlemen, and bringing

Operator

[Operator Instructions]

James from ISI. West Evercore question comes Our with first

James West

it So as how X Middle cycle and to well. you about subsea of and me, earlier, in awards. well. and Olivier, seen awards you last more where a this to of cycle thinking had out today we've -- right Because about alluded recently to are and equipment as Asia seems to so we But in you X, story, just going are and the and rig I the certainly we're thinking weeks I have or broaden cycle? as now, the amounts How contracts know increased the offshore it duration you about conversations but regions are it's East,

your So high-level big thoughts. to picture kind of I'm get curious

Olivier Le Peuch

Jim. you, Thank

from by first of I security think Energy is strong described we gas the resilience, foremost, the the think, the have durability cycle I revision. anything, of fully and are longevity is in place fundamental or the perspective, driven breadth, our demand, upwards the energy a that Asia demand, as There are shallow. if still and you from which ] deepwater But attributes So no already agenda. being cycle earlier, of training floor, combination in I oil supported over as the and the and the is critical think activity long-cycle of place of is [ realize short-cycle And both, top and flow such, on on is think I in ground. in this also, investment, to expansion, said, the very committed. capacity by base

new breadth, the And the the new of see exploration countries, Asia, diversity before their to I in here to in and Southeast not oil participate I offshore, think they to are it are for and because were entrants of the to Asia, coming that opportunity, the cycle, looking invest was they production. supply, was securing looking remarkable they are maintain number the onshore, appraisal

that that America, is international. combine happening is this America necessarily characteristics what short operating a of with in growth term. not the anticipation with within threshold significant is I you the which [indiscernible] So believe accentuating supply in North North in market if only and of This

is they reflect capacity customer can I the to maybe if Hence, of as sentiment we it engaging collaboration first them partnership get product deepwater such first securing are subsea, and looking highlighted, that as gas. help to best look for to the I projects X the more on or ago. lot trending -- X a can engagement, into it of and to customer from than months to months faster make secure was integration efficiency, long oil, XX X last And accelerate or positively capital the cycle the for sure

pipeline us anything, of cycle help projects So year see prolong beyond that what think if could to more this ago. a I anticipate help I we stronger will

James West

Got Right. it.

the do about the as that's you've And lot then Okay. Makes you follow-up far, and tool. of the know just rollout customers probably I so it's platform. on number progress but years, the but adoption digital feel customers? the will happening a not side sense. nearly How got still of where the good powerful it is a X to there, a of DELFI maybe be penetration X by a in

And so from here? trending see how do adoption you

Olivier Le Peuch

favorably. trend to continued adoption the think I

we this expect see enhancements do the to quarter-after-quarter digital [indiscernible] cloud in operation in I set data as AI, I think both of and quarter. seen you'll workflow you what for need we announced continue diversity next adoption the deliver that have extract unlock in of cycle, to efficiency customers the quarter lower the quarter believe to for same accelerate assets. their carbon they and solutions because we and they they to need need realizing following that and

is So this pulling.

are we So still reach and have our -- renewed targets or growth we teens ambition exceed to high and year. digital this for

growth will continue. tens say, on year-on-year, teens digits. And anticipated. the started considering year, it the And was would double That low could what low I fully we we aligned have seasonal

contribution it see digital the platform So and will this another operation from adoption. will I I quarter and be digital coming with as more more with operation you to production our quarter-after-quarter transaction in And strengthen solution, will production digital of that ChampionX only and give and see adoption. see it automation offering the expansion drilling expand upcoming operation, complement us

So very long and I of it digital a throughout the will trend continue adoption constructive, believe is of that I rest the decade. that remain

Operator

on we to with Barclays. move Next, David Anderson

John Anderson

question So sort ChampionX the we of kind deal cycle. just on of and of in it relates are as to the timing the a where

cycle. acquiring that of you're structure all to upstream lines are particularly Conversely, slow these well the coming Primary up drivers a coming OpEx the positioned in life with the are ramping deepwater later targeting production spending be can is the company spend development side years. product cycle for timing So of might in that years. the suggest

sort kind sort a could appreciate expanding that I OpEx see higher, I think, little out of a of causing the us and maybe little dynamics, market, cycle I'm duration X works bit of it, just I in us today. timing understand cycle? of but the of you So the bit the the of the the as of help cycle the guess questioning but totally Can I understand thinking dynamics the the and CapEx you different help guess, you of OpEx just about sort cadence cycles. the just are how

Olivier Le Peuch

Yes. time. foremost, No, fair first I in and stepping think back it's And question. a

through we from further to a will core need will more because disruption I exploit into invest X need recovery. think we believe production strategy further chemicals, efficiency explore and our lead discovering where market believe, of prepare this production years that we the is and to innovation we hence gains create, we but an as full operation all, in and our further [indiscernible] back, production we from recovery to have not to this all versus that OpEx, -- be so market been chemicals, we these has opportunity participation that that this an benefit opportunity solution the this chemicals, market particular believe believe few to we things: digital, into identified of has only OpEx We lift optimized some with domain discovered, a technology, first, extent, is CapEx. solution production accelerate integration more And from life combined market in

and from increased from knowledge main and there market producing been and from work the we This of market we growing, put into for to that the see through the technology respond customer feedback the from into from efficiency a deployment together to equipment of leg clearly and increased new automation optimization create the engagement assets. reservoir will realizing can has process to are technology integration, we an in the is what had responding demand opportunity potential which willing we

last It for quarters of So increasingly I becoming of few OpEx. that part critical. production oppose recovery is been the become customers. is say will just I our -- not the the priority try will and has to

or market the that every well its amount and as production. resilience more an believe produced resilience assure of demand to this has we market less the world, further chemicals liquid production in in Now because

production long And complex of assets up be some coming more at the cuts, more will more to we our assets facility. believe time, a an the a will to as the adding water term, higher of need to same technical will increasing fleets flow. chemicals sophisticated and the the There as that process the most see see and

today opportunity So all and in an resilient for outlook tomorrow. a all,

John Anderson

not more It much, seen increasing. more OpEx technology That see so see, you you it's slowing. CapEx increasing So sounds... I've is that side and

Olivier Le Peuch

to addition and customer, of is optimizing portfolio, believe We over what that production with see for we lift and growth to supplement quest the production talent a production CapEx. we and of automation. getting significant some their will And engagement OpEx path fast-track intervention expansion. new us for and and combination That OpEx I our we would we see through production chemicals, in in it see opportunity. be the combination our modernizing and that at including recovery addition market help will where we is opportunity in for cycle for this the Exactly. solutions recovery the digital are are of add this a of the capability ChampionX need only innovation of see not and all CapEx, capability and that relating

John Anderson

all synergies so ChampionX a ChampionX, see for a well is that in to follow-up Understood. down can $XXX little break as company on just was us you And running that help million the a you deal. not then I Like if surprised side. where don't about more? greatest hear the on synergies you synergy the do materialize. you be also, the ultimately the cost opportunity revenue expand time side? we bit honest, but revenue could To And see

where here side? ChampionX, revenue So in in have the confidence you what's synergy different more

Stephane Biguet

thanks Dave, the So yes, question. for

XX% So XX% years. accretive think said, transaction makes achieved earnings achieve synergies we again, first as of the year can $XXX yes, to share year, in X. And we annual per second in we which million X in the the to which

team So full going of place, through have the buckets estimates integration refining in now synergies. the all we

spent can split, most say, XX% rough that let's million most operations. the we it with for mentioned not is And lot if there. chemicals, of do synergies, the spend internalization and we so operating cost earlier, example, the G&A half the I'm revenue and as can We half with numbers, we XX%, to of so to for you savings an that to manufacturing spend. synergies, costs related give cost XX% ChampionX, initial about a XX% of think say definitive again, on or but related of And and helps. have the overall of over of would synergies, can that savings roughly you synergies be we So cost SLB $XXX going own synergies, approximate a of other great our of the is

Operator

Next, we move on JPMorgan. to with Arun Jayaram

Arun Jayaram

perspective maintain Olivier, to your the given and impacts picture a Saudi the their just but from to the suspend shift decision levels spare just the capacity you wanted I gas of in spending maximum obviously, decision get higher if on also wondered to And country. SLB Arabia potential at in development. maybe XX barrels, some drilling could to water I recent the address shallow million

Olivier Le Peuch

Yes. Thank Arun. you,

I me and to having project, XX and But jackups additional has in are last rigs let me year. I Safaniya maybe consolidation. the think give incremental project Maybe first being of Both X is suspended and the slightly these Manifa our at for a device And first unpack on rigs this this above data, were XX aligning these this of total suspended. think assets that context end to oil are simplicity in been of XX of assets and for operating combined program from some these both expansion expansion. think let I views. colors public

net year, this a XX the dozen necessary or a rig additional the rigs. both will math rigs slightly you of of anticipation have above the expansion, these we year. XX to assets rigs at of When end added host for of end last dozen make another at less than The the the

first, that's is offshore. on So what happening

XXXX. the towards increase by capacity XX% the contrast a gas gas that to and decision, market You was with coincidental this XXXX MSC decision to the compared with almost

rig and the XX net rigs the increase This addition unconventional the uncommercial end total and commercial drilling across and and column [indiscernible] entire between rig for the total is gas. of workover drilling actually the a rigs now resulting commercial, for almost and approximately in of rigs, rigs both activity the year

have actually gas. land gas that long switch Aramco, on from long very balanced from that the to and onshore, long it's Saudi actually switch on it believe. is this is strategy And offshore exposure the to on land, we oil of execution So I happened and of market

So And for X mix activity will a changed as this to on impact anticipated months gain not this an will support ambition for ambition change have will grow our continue this for wasn't ago. hence, consequence Middle This that growth. an international our Saudi, that full a this us, and and directed guidance growth not to a our rate sustained the is natural for East has while morning.

Arun Jayaram

Great. Olivier, could in picture and outside characterize you spending of That's Middle just helpful. the my Saudi? And rest GCC the the follow-up, just East the of

Olivier Le Peuch

Yes.

execute Kuwait, you well days, I both now and that think West earlier been possible stop of them. cap country had as coming and Qatar expansion, a steady. for of that's these that citing very countries is gas remobilize the contract could the have of And it's activity a starting oil. includes that as is cash their few Actually, have to on other Iraq, morning, now exception UAE is listing significant a the considering structured not very growth this the country North addition situation. Obviously, almost and very in broad also Oman and every Egypt it seen, to growth in is uptick very good point. we all and all we field. region. have having commented I with some valuation But very nice almost

activity here in extent accelerate region. the region, growth comfortable So some of while actually, activity actually the activity couple offshore retained to more some the some breadth of for the to very and we growth or selling Asia. in already are rigs to supplement And the a others Southeast rig being the be the in help diversity could about redirected contract future are activity from

said last that believe earlier, market spend broke high. the I year total had that a East, was record So as we Middle and

think in is of just despite and this record slight and year and I extending activity of very offshore a breadth gas Saudi. this good oil with change onshore mix a

Operator

on move we Goldman to Next, Neil with Sachs. Mehta

Neil Mehta

questions. financial more of couple a had I Yes.

just the second QX got and quarter the first, The second EPS if look $X.XX was I quarter. to Street's The think at $X.XX, moving I in commentary,

your good So at perspective versus have love just would pretty you visibility XQ should build the as this think we about on into how the XQ second quarter. point

Stephane Biguet

seasonality, as reversal you Neil, and have strong mentioned, we see margin QX, So expansion. very the want, we of if always

So basis about EBITDA, expenses to to And we rest can below to nonoperating is of points in same first EBITDA helps. margin you if to just as that quarter, just well the in guided is XXX incremental the of the the EPS, very rest down basis terms all assume but go the XX about points. and

Neil Mehta

follow-up a with helps Street. softer come smaller just I where a extent, Construction. guess maybe Well well integration the on pretty was little in digital did a bit It and on EBITDA margins. on is Street The thousand, The to That than

the how and love EBITDA margins the about perspective conviction Just as work we through our thinking your on recovery your should way there? year, we be

Stephane Biguet

XX as quarters So that we has mentioned, been EBITDA Olivier consecutive increased year-on-year. it we margin

first every year. the well, So each case in it was single the and will the it remaining in quarter quarters and as the be of case the of

with year. So and us the growth EBITDA for EBITDA of this year-on-year expansion is

you Now D&A the mentioned margins.

this the typically are is seasonally the digital of know, mostly the lower in you As year, sales. first the quarter lowest they

X gas [indiscernible], it production. by amortization kind per to a expense Canada was due and APS in and revenue higher of made related effects, lower The assets our year, This unit lower of worse actually. pricing

that this after the the as digital total digital margin, sales Olivier the considering high as digital unfolds, are And intact. margins in the this and increase fixed. year due of a integration to incremental will most is drop APS, So year-on-year the quarter for at margins are this mentioned, costs of but will and in digital entirely be quarter resulted rest

continue full a D&I on for overall So above basis. we XX% to margins clearly shoot year

Operator

next Our Scott question with from Gruber is Citigroup.

Scott Gruber

wanted of I losses circle clarification. on Yes. rig that the comments mention a investors net XX for even did X-X, you the growth asked back few some Olivier, was just have XX, with to Saudi the because the jackups?

Olivier Le Peuch

Yes.

some contrasting case. I'm I think I that offset think

as this of is as improved driven Saudi So accelerate for the program, XX% was program, by plan XXXX. that the pace not to to has expansion there raise a There target And changed what has will gas XX% be increase. a year accelerated that of XX accelerated by expansion has year to that, expansion total to of into of program end, from that result total plans all market, rigs consequence will onshore. now previous rigs gas in the this the the beginning that was based year-on-year by add on the whole boosted will, the

So that's the of reality the market.

Saudi of XX becoming intervention commercial, on of in so workover, going significant in rigs activity forward. that's in market for it market a to to and commercial, it Some some gas in gas it a that a some is XX the is total of up strong commercial,

to that's where grow we expect activity continue So forward. going to

is deployed either across And we fit gas set have for we commercial for are that drilling the on [indiscernible] essentially on exposure tubing, being we such favorably exposed to project technology hence, or as we that explained. as we that and technology are long that this technology solution an from on And is used contract. cold as [indiscernible] that in gas integrated goes above, Saudi balanced use the we activity tubing we the [indiscernible] have is gas cool benefit

rig and total benefit the see, we that's the we see going that that's forward. So

Scott Gruber

be It's come back onshore kind turning are that expect those encouraging activity about the about half. And in expecting those thinking clarifying be grinding about we year-on-year Should flat strong of historically, and business, in just thinking they'll that. and second for be to in year. we seasonally I just the I mix improve flat activity, know offshore and weaker greater with always would to higher. margins. well for construction margins then to Should U.S. the

comment keeping those that the new you if some sales be in of but strategy color any impactful more Maybe maybe great. isn't mix just just on wealth year-on-year? year-over-year what's the the on would U.S., in of the flat kind So could construction margins

Stephane Biguet

that So kind year, masks for growth year, see in will the should year-on-year. of full in margin actually But year-on-year bit activity Well look, we indeed headwind so in a you QX they lower expansion margin the Construction. but through North what Construction, were the go the have you flat America, internationally, we Well as in the see expansion is

stuff year-on-year will from You coming a see timing a international. clearly But have margin of adjustments basis, basis. on and expansion quarterly on you certain

Olivier Le Peuch

addition that that in net half bit to in of of on due and acceleration clarity of Saudi. rest half the than uncommercial net split for is the bit addition gas The market in the the in a rigs. more Maybe the more XX A little expansion than commercial. about in the

the So changing by of the shift year indeed expansion characterized end that's accelerated end to this year this translating reduction of of onshore is the and this of gas effect the into acceleration from the the [indiscernible]. to to and from above offshore net offshore resulting rigs to plus Hence, of the gas expansion from oil XX%, mix last for that year year XX Saudi,

Operator

Benchmark. go we Hallead to with Kurt Next,

Kurt Hallead

I sliding you Thank that. in for appreciate here. me

Kuala you So in and airtime. of Lumpur be given to vehicles Asia currently lot one really seems your growth a and that of fact hasn't that the something are gotten

that to Just you as what regions Asia you? growth? is see is to kind of you standing within curious driving what out And

Olivier Le Peuch

Great question.

spotlight think, COVID been had team reason we reason of have and the the why, resilient is has supporting X years a the observing strength X over and I the last time. since weeks bit in I been expansion growth team, think, little first, delivering I rebound us think spending a region, the And delivered indeed, I to a here. margin the clearly we to have think more on And the a the from come region. giving but resilient

resource. foremost, I critical by first and this characterized think, say region is to I have the

and stabilize [indiscernible] gas prevent They going are investment they and to, would security of say, oil support production the to support further decline. putting to I and supply, are

production So entire sealing certainly to accelerating and has the the is that gas come stabilizing region. oil on

energy accentuated wave Bangladesh, security Indonesia, investments. into I in very see And it's India. to was and offshore a that by in in in is China, in It translating telling new -- further of think in South Malaysia,

new seeing Subsea. create this for back. is in there, appraisal few years certainly that and exploration not entrants new think and seen opportunity been of some not offshore I will I opportunity, deepwater And this have think of round were are that into of set a market both primarily that assets, them with We further creating new a

at all and onto this supporting assets, apparently a and and also as being oil. preventing investment. is I technology the said, offshore, And time, I for focus and is both there same put recovery across And is production intervention hence, stress, visible onshore decline to add

development are So all the of a exist for the to to markets you existing combine country investment get here new a intervention from region, for we from and declining across recovery-focused in and team, in us accelerating India, investment country. significant I Thailand, for new the China that think interesting succeed help And the offshore a very as this fit Bangladesh, we and to creating bring assets. They this this deploying technology by exciting to is very said, and region. continue to wave projects production on recipe this gas steady Indonesia with I and and onshore, market for in assets this resource exploration the investment grow every Malaysia, to responding and

Kurt Hallead

great great. that. appreciate I That's That's color.

lack boost price, chemical ChampionX margins growth and into curious production production position? clear When And and to rate profile, the referenced maybe to is potentially table business, the the just dynamic of opportunities a a the are you better a your ChampionX base substantially of boost piece of So chemicals follow-up kind and you recipes at hence, significant spending revenue to look production the there kind like bringing there. or tap ChampionX leader the is acquisition. the could of guys the enhance secret a as, as that some related you I'd that here customer

Olivier Le Peuch

I think been in foremost, there chemicals, market. albeit and smaller are think First scale production have this, at to okay? a also we operating multiple international aspects I

recovery intervention program optimize extract in markets. international chemicals that stimulation our a having We are reservoir and in actually portfolio also quite are and helping us

this believe reservoir compare will we are strengths. solutions, combining [ [ both open ] facility help from FID I ] FID coming and solution. us positional process optimize And for that for and we And think different

process We a equipment process onshore portfolio, have both onshore. and portfolio,

expertise chemicals reservoir have the We [indiscernible] obviously reservoir of understanding production portfolio. and they and chemistry and domain of expertise freed have subsurface the and

full obviously this including lot think, and of I integrated production this they that the we see both, our on try to solutions, deliver that add process a and including potential lift We'll intervention to a including combining is, equipment is indicating in in think over solution, optimization opportunity including from I feedback and opinion, and extend So unique place. digital combination. customers a

environment. is there a opinion, will place further where this have my So offshore effect, an is

portfolio each help solutions and compare further complement we the low other trying market. also of find for on sustainable differentiated chemical created that also, production portfolio carbon will to and And a

technology, upside strength to North our footprint America. use in addition on an of have complement into in have production we So an upside quite to of international the ChampionX to expansion market chemical

Operator

And our last question comes with Sandler. from Lemoine Luke Piper

Luke Lemoine

But capture, X with is can carbon this the and on combinations what along you the what Olivier, entities? than doing see SLB stand-alone Aker you understand how doing. frame developing greater help is business how

Olivier Le Peuch

Yes, great question.

our I foremost, think markets decarbonization adjacent obvious addressable Total most and market. to CCS space of the and attractive certainly contribute see space. most dual we and First the where to the we can

a for carbon and to characterization play we site only deliver and not our of position of through the and development selection, site solution but lot market technology, site believe digital into our we also So are first sequestration sequestration. to

we and significant So by number that through that's gas to gas beyond customers and this, oil -- [indiscernible] access develop. oil doing willing large that a have to are operator and to of that within and the

there. a lot have us projects, time. across think part quite any So point we at of always have the we this many are FIDs of as in point a had and XX market more and many that I the give of quoted we we experience And starting projects, access of than

to that So But into in stream a [ of to payment Carbon us intervention the platform base such for we concentration Capture commercial for into disrupt technology. stream of what we of brings [indiscernible] -- for or this economics serve sector. the RTI have for as the our have cable expansion a will COX is solution recommercialize we local Aker are trying trying technology have that disrupt non-[indiscernible] also invested which we done, solvent, capture as -- ], capture where are low

offering, in to have European they in to America, North our success initial use deploy they to and innovation the innovation. we Asia capture carbon but had the that a this supplementing this deploy this see platform market on and evolving and markets our build it where that investing the we'll go-to-market also using platform And as this East using with are footprint Middle and some fast for being are platform solution we and

is this exists using using technology. sequestration ambition the we deploy intention today combining disruptive have. opportunity capture, the commercial it Aker as capture to we this solution a Carbon technology purpose, new That's and platform and this the in have customers So market. Capture platform for combined that and commercial of offer the and with the That's and supplement that's and the to carbon add

Luke Lemoine

the Okay. but And your then of over you America, talk it piece maybe on can a see of how developing past XQ? course North business, the year it's about you smaller

Olivier Le Peuch

Yes.

growth. anticipated outperform by may consolidation muted resilience, full posting year international had potential the than have, see forward, we considering see to market we will still we on capital of beginning going positive And be the basis, where our fully considering low we expect, that by the the year-on-year guided guidance the that low the We markets. in growth think further we I offset offset see the that market. But growth of and the activity a been single-digit that start muted, decline will but have end the sequentially. year originally anticipate we it many growth this year, at the we the and commented price, shortfall and also we as guiding persistent on the we a in of be gas are the we of more year, at keeping the we believe market discipline softness the at

guidance. full So hence, have year our reiterated we

Operator

We'll closing turn comments. for back Olivier the Peuch Le to conference

Olivier Le Peuch

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

landscape is compelling global our accelerating, very aligned engines of are energy in with remains dynamics for Demand the and this for our X First, activity energy that closely resulting is growth. business. strong

with to demand and to core come. new continue meet years We digital energy customers to innovate in this our will the across

the And of and to and have positioned optimally apart our oil fastest-growing ongoing unique remains We SLB unmatched us drive further set in continue outperformance differentiate technology markets internationally. growth. a to we will North that Together, us [indiscernible] services operate for cycle resilient America. Second, our offerings and in portfolio the most and globally. and footprint gas

XXXX a forward time third, full strong exciting after the the for an achieving and look visibility our in all for a and industry, call, better morning's strategy for pretty shareholders. our thank I return. financial commitment our start into to ambition customers to continue delivering and for year I'm confident that, joining. And With year is and clear not ahead, shareholders' you the to we future. This could we'll for backdrop to hope conclude this

Operator

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

now may You disconnect.

Schlumberger Limited (SLB) 19 Apr 242024 Q1 Earnings call transcript