01—Abstract
Summary
Summary of the 10-K filed January 25, 2023. Cited figures are marked; the original filing is the authoritative source.
SLB (formerly Schlumberger) has demonstrated a strong financial performance in 2022, marked by a 23% increase in revenue to $28.1 billiona, driven by double-digit growth across all its divisions and geographical segments.
This growth reflects a strategic focus on high-grading its portfolio, optimizing operations, and enhancing its go-to-market approach through its Basin organization. The company has successfully navigated the early stages of an energy sector upcycle, particularly in North America where it saw significant margin expansion and outperformance in drilling markets. International markets also showed resilience, with activity increasing in the second half of the year, positioning SLB to benefit from expected continued upstream investment by national oil companies.
SLB is actively pursuing its transformation into a global technology company focused on energy innovation for a balanced planet. This includes investments in its core oil and gas services, alongside a growing emphasis on digital solutions and new energy technologies like carbon capture, hydrogen, and stationary energy storage.
The company also made significant progress on its sustainability goals, reinforcing its commitment to a net-zero emissions target by 2050. Financially, SLB strengthened its balance sheet by reducing net debt and increased shareholder returns through a substantial dividend increase, signaling confidence in its strategic direction and future performance.
02—Key points
Key Highlights
- Full-year 2022 revenue reached $28.1 billion, a 23% increase year-over-year, with all divisions and geographical areas experiencing double-digit growth.
- The company achieved significant margin expansion in North America, nearly doubling its pretax operating income and outperforming rig count growth.
- International revenue grew by 20% in 2022, with strong performance in the Middle East and a positive outlook due to expected upstream investment.
- SLB's Transition Technologies portfolio revenue grew over 30% year-on-year and is projected to exceed $1 billion in 2023, highlighting progress in decarbonization solutions.
- Net debt was reduced by $1.7 billion to $9.3 billion, its lowest level since Q2 2016, strengthening the balance sheet.
- Shareholder returns were enhanced through a 40% dividend increase in April 2022 and a further 43% increase announced for January 2023, with share buybacks resuming in Q1 2023.
- The company is strategically investing in 'New Energy' sectors, including carbon solutions, hydrogen, geothermal, stationary energy storage, and critical minerals.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2022filed January 25, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $28.09B$22.93B | +22.5% |
| R&D Expenses | $634.00M$554.00M | +14.4% |
| Operating Income | $5.01B$3.37B | +48.9% |
| Interest Expense | $490.00M$539.00M | −9.1% |
| Net Income | $3.44B$1.88B | +82.9% |
| EPS (Basic) | $2.43$1.34 | +81.3% |
| EPS (Diluted) | $2.39$1.32 | +81.1% |
| Shares Outstanding (Basic) | 1.42B1.40B | +1.1% |
| Shares Outstanding (Diluted) | 1.44B1.43B | +0.7% |
05—Questions
Frequently Asked Questions
What is SLB's overall financial performance for 2022?
SLB reported strong financial results for 2022, with total revenue of $28.1 billion, a 23% increase compared to 2021. All divisions and geographic regions experienced double-digit revenue growth. The company also saw significant pretax operating margin expansion, particularly in North America, and a reduction in net debt.
How is SLB positioning itself for the energy transition?
SLB is actively transforming into a global technology company focused on energy innovation. This strategy involves strengthening its core oil and gas business, expanding its digital solutions, and investing significantly in 'New Energy' sectors like carbon capture, utilization, and sequestration (CCUS), hydrogen, geothermal, stationary energy storage, and critical minerals. The company also offers 'Transition Technologies' aimed at decarbonizing oil and gas operations, with revenue from this segment projected to surpass $1 billion in 2023.
What is SLB's approach to returning value to shareholders?
SLB has increased its commitment to shareholder returns. In 2022, it raised its quarterly cash dividend by 40% and announced a further 43% increase in January 2023. The company also resumed its share buyback program in the first quarter of 2023, demonstrating confidence in its financial performance and strategic direction.
What are the key risks facing SLB?
Key risks for SLB include the cyclical nature of oil and gas prices affecting customer spending, geopolitical instability in operating regions, potential disruptions from the energy transition, cybersecurity threats, intense competition, and regulatory changes. The company also notes risks associated with its sustainability goals and the failure to attract and retain qualified personnel.
06—Continue