DEF: Schlumberger Aims for Shareholder Returns, Eyes ChampionX Acquisition in Strong 2024

Schlumberger (SLB) reports a strong 2024 with revenue and EBITDA growth, driven by its core business and strategic initiatives in digital and new energy, while also announcing an agreement to acquire ChampionX Corporation.

Summary

• Schlumberger (SLB) had a strong year in 2024, delivering revenue and EBITDA growth, margin expansion, and solid free cash flow despite macroeconomic headwinds.
• The company returned $3.27 billion to shareholders through dividends and share repurchases during the year.
• In January 2025, SLB increased the quarterly dividend to $0.285 per share, a 128% increase since the beginning of 2022.
• SLB initiated accelerated share repurchase transactions, aiming to return a minimum of $4.0 billion to shareholders in 2025.
• Digital revenue grew 20% to $2.44 billion in 2024, driven by cloud computing, AI, and digital operations.
• SLB announced an agreement to acquire ChampionX Corporation to strengthen its production and recovery capabilities.
• SLB reduced its Scope 1 and 2 emissions intensity by 11% and Scope 3 emissions intensity by 18% year-on-year.
• Women represented 25% of SLB's global salaried workforce at year-end, a key milestone in achieving the 2030 gender balance target.
• The company's revenue increased by 10% year-on-year, and adjusted EBITDA grew by 12%.

Sentiment

Score: 8

Explanation: The document presents a positive outlook for SLB, highlighting strong financial performance, strategic acquisitions, and commitment to shareholder returns and sustainability. While acknowledging macroeconomic headwinds, the overall tone is optimistic and confident in the company's ability to navigate the evolving energy landscape.

Positives

• SLB achieved revenue and EBITDA growth, margin expansion, and solid free cash flow.
• The company is committed to returning value to shareholders through dividends and share repurchases.
• SLB is making progress in digital revenue growth and expanding its exposure in low-carbon markets.
• The company is committed to reducing emissions intensity and improving gender balance in its global workforce.
• The acquisition of ChampionX Corporation will further strengthen SLB's production and recovery capabilities.

Negatives

• The document mentions macroeconomic headwinds that could impact future performance.
• The company's Scope 1 and 2 emissions intensity reduction of 11% fell short of its 14% target.
• The company's goal of 25.2% women in the salaried population was not achieved, with the actual figure at 25%.

Risks

• Changing global economic and geopolitical conditions could impact SLB's performance.
• Changes in exploration and production spending by SLB's customers could affect revenue.
• SLB's inability to achieve its financial and performance targets could impact shareholder returns.
• The ongoing conflict in Ukraine and foreign currency risk could impact SLB's operations.
• Challenges in SLB's supply chain and the availability and cost of raw materials could affect profitability.
• The inability to successfully integrate the business of ChampionX and achieve anticipated synergies could impact the benefits of the acquisition.
• The inability to secure government regulatory approvals for the ChampionX acquisition on the terms expected, at all or in a timely manner could impact the acquisition.

Future Outlook

SLB expects accelerating energy consumption from AI and data centers, together with global economic growth and the imperative for energy security, to drive increased demand for both oil and gas throughout the rest of the decade. The company will continue to harness its market exposure and performance advantage to further its margin expansion journey, deliver strong cash flows, and increase returns to shareholders.

Management Comments

• 2024 was a strong year for SLB, with the Company delivering revenue and EBITDA growth, margin expansion and solid free cash flow despite macroeconomic headwinds.
• SLB has the lead offering in Digital and we are pursuing meaningful opportunities in New Energy and decarbonization, where SLB has established a differentiated market position.
• Overall, SLBs 2024 results underscore the strength of our diverse portfolio to navigate evolving market dynamics.
• We are confident in our strategy and in our ability to continue creating value for our customers, partners and shareholders.

Industry Context

The announcement highlights SLB's strategic positioning in the evolving energy landscape, with a focus on digital solutions, new energy ventures, and decarbonization efforts. The acquisition of ChampionX is aimed at enhancing SLB's production and recovery capabilities, providing stability against industry cycles. The company's focus on shareholder returns and emissions reduction aligns with broader industry trends and investor expectations.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards in terms of financial metrics.
• The document does not provide specific comparisons to industry standards in terms of project results.
• The document does not provide specific comparisons to industry standards in terms of global benchmarks.
• The document does not provide specific comparisons to industry standards in terms of comparable companies.

Related Party Transactions

• SLB contracted in an arms length manner with Vista, where Mr. Galuccio serves as chairman of the board and chief executive officer, to deliver oilfield services and products in the ordinary course, for which Vista paid SLB approximately $421 million.

Stakeholder Impact

• Shareholders will benefit from increased dividends and share repurchases.
• Employees will benefit from the company's commitment to gender balance and talent management.
• Customers will benefit from SLB's enhanced production and recovery capabilities through the acquisition of ChampionX.
• The company's commitment to sustainability and emissions reduction will benefit the environment and society.

Next Steps

• The company will continue to harness its market exposure and performance advantage to further its margin expansion journey, deliver strong cash flows, and increase returns to shareholders.
• SLB will continue building businesses and forging partnerships across three key areas: industrial decarbonization, renewables and energy efficiency, and critical minerals.
• The company will continue to monitor the situation in Russia, including evolving sanctions, reputational impacts, and other risks, to determine whether or when to modify the measures it has taken to constrain its Russian business.

Key Dates

Keywords

Schlumberger, SLB, ChampionX, financial results, EBITDA, revenue, free cash flow, dividends, share repurchases, digital, new energy, emissions reduction, sustainability, proxy statement, executive compensation