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SLB 8-K Report, Financial Results (Jan 19, 2024)

Reports
Earnings & Results·Regulation FD·Exhibits & Filings
Filing Date
Filed January 19, 2024
Period End
January 19, 2024
Security
SLB
In the record · 2016–202610-K1110-Q338-K144

SLB filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 144 current reports (8-K) between 2016 and 2026.

  1. Impairment8-K · Dec ’16Dec ’16
  2. Restructuring8-K · Jun ’20Jun ’20
  3. Leadership change8-K · Feb ’22Feb ’22
  4. Leadership change8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed January 19, 2024. Cited figures are marked; the original filing is the authoritative source.

SLB reported a strong close to 2023, with fourth-quarter revenue of $8.99 billiona, up 8% sequentially and 14% year on year, and GAAP diluted EPS of $0.77.

Excluding charges and credits, Q4 EPS was $0.86b, up 10% sequentially and 21% year on year. Full-year revenue rose 18% to $33.14 billion, full-year EPS excluding charges and credits rose 37% to $2.98, and adjusted EBITDA grew 25% to $8.11 billion, with the adjusted EBITDA margin expanding 147 bps to 24.5%. Growth was broad-based, led by international markets (up 20% for the year) and the Middle East in particular, and was supported by the acquisition of Aker's subsea business, which contributed roughly 70% of sequential Q4 revenue growth.

Cash generation was a standout. Full-year cash flow from operations was $6.64 billionc and free cash flow was $4.04 billion, which allowed SLB to reduce net debt by $1.4 billion to $7.98 billion while returning about $2.0 billion to shareholders through dividends and buybacks. Return on capital employed reached 16%, the highest since 2014.

Management also raised the quarterly dividend 10% to $0.275d per share and said it plans to increase share repurchases in 2024. Looking ahead, management expects another year of strong international-led growth in 2024, with Production Systems leading, continued momentum in Reservoir Performance, and increased Well Construction activity.

Capital investment guidance for 2024 is roughly $2.6 billion, flat with 2023. Investors should note that North America was flat in Q4 and that the Digital & Integration division's margins compressed year on year, though the results as a whole show a company with improving margins and returns.

02—Key points

Key Highlights

  1. Q4 2023 revenue of $8.99B rose 8% sequentially and 14% year on year; EPS excluding charges and credits of $0.86 rose 21% year on year.
  2. Full-year 2023 revenue grew 18% to $33.14B, EPS excluding charges and credits grew 37% to $2.98, and adjusted EBITDA grew 25% to $8.11B.
  3. Full-year free cash flow of $4.04B funded a $1.4B reduction in net debt to $7.98B and about $2.0B in shareholder returns.
  4. Quarterly dividend raised 10% to $0.275 per share, beginning with the April 4, 2024 payment.
  5. The acquired Aker subsea business drove about 70% of sequential Q4 revenue growth, while international revenue rose 18% year on year in Q4.
  6. Return on capital employed reached 16% for 2023, the highest level since 2014.
  7. 2024 guidance calls for continued international-led growth, a plan to increase share repurchases, and capital investment of about $2.6B, flat with 2023.

03—Questions

Frequently Asked Questions

  1. How did SLB perform in the fourth quarter of 2023?

    Q4 2023 revenue was $8.99 billion, up 8% sequentially and 14% year on year. GAAP diluted EPS was $0.77, while EPS excluding charges and credits was $0.86, up 10% sequentially and 21% year on year. Adjusted EBITDA margin reached 25.3%.

  2. Is SLB's dividend growing, and what is the new payout?

    Yes. The board approved a 10% increase in the quarterly cash dividend, from $0.250 to $0.275 per share. The increased dividend is payable April 4, 2024 to stockholders of record on February 7, 2024. Management also plans to increase share repurchases in 2024.

  3. What drove the strong full-year 2023 results?

    Growth was driven mainly by international markets, which grew 20% for the year, with the Middle East & Asia at record revenue. Offshore activity in Brazil, Angola, the US Gulf of Mexico, Guyana, and Norway also contributed. North America grew 12%, and the acquired Aker subsea business added to Production Systems growth.

  4. How strong is SLB's cash flow and balance sheet?

    Full-year cash flow from operations was $6.64 billion and free cash flow was $4.04 billion. Net debt fell by $1.4 billion to $7.98 billion at year end, and total shareholder returns were about $2.0 billion for the year.

  5. What is the outlook for 2024?

    Management expects another year of strong growth driven by international markets, with Production Systems leading, sustained momentum in Reservoir Performance, and higher Well Construction activity. Capital investment guidance for 2024 is about $2.6 billion, the same as 2023. Management expects record Middle East investment beyond 2025 and does not anticipate a significant impact from geopolitical tensions absent an escalation.

04—Continue

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