8-KFinancial EventsRegulation FD

SLB LIMITED/NV 8-K Report, Exit or Disposal Costs (Jun 16, 2020)

Filed June 16, 2020For Securities:SLB

Summary

SLB Limited/NV (SLB) announced significant organizational restructuring and cost reduction initiatives on June 15, 2020. The company expects to permanently eliminate over $1.5 billion in annual structural costs through these actions, which include headcount reductions and asset rationalization. This restructuring is estimated to result in cash payments of approximately $1.2 to $1.4 billion. Furthermore, SLB anticipates additional non-cash charges related to the ongoing rationalization of its asset base. The exact amount of these non-cash charges could not be determined at the time of filing, indicating potential further impacts on the company's balance sheet. These disclosures were made in conjunction with a presentation by the CEO at the 2020 J.P. Morgan Energy, Power & Renewables Conference.

Key Highlights

  • 1SLB is undertaking a major organizational restructuring to permanently remove over $1.5 billion in annual structural costs.
  • 2The company anticipates cash payments of approximately $1.2 to $1.4 billion related to these restructuring and headcount reduction efforts.
  • 3Ongoing rationalization of SLB's asset base will result in additional non-cash charges, the amount of which is currently undetermined.
  • 4These significant operational and financial changes were communicated by the CEO at the 2020 J.P. Morgan Energy, Power & Renewables Conference.
  • 5The filing includes a cautionary statement highlighting the uncertainties and risks associated with forward-looking statements concerning financial targets, operational outlook, and strategic initiatives.

Frequently Asked Questions

The primary financial impact is the expected permanent reduction of over $1.5 billion in annual structural costs. This will be accompanied by significant cash outflows of approximately $1.2 to $1.4 billion for restructuring and headcount reductions.

Yes, SLB expects additional non-cash charges due to the ongoing rationalization of its asset base. The specific amount of these non-cash charges is not yet determinable.

These changes were communicated on June 16, 2020, through an 8-K filing and a presentation by the CEO, Olivier Le Peuch, at the 2020 J.P. Morgan Energy, Power & Renewables Conference.

The filing highlights various uncertainties including global economic conditions, changes in oil and gas exploration/production spending, pricing, the impact of health pandemics like COVID-19, the success of digital and New Energy initiatives, and regulatory changes.