Schlumberger

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Schlumberger

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Schlumberger Announces Fourth-Quarter and Full-Year 2021 Results
  • Fourth-quarter revenue of $6.22 billion increased 6% sequentially and 13% year-on-year
  • Fourth-quarter GAAP EPS of $0.42 increased 8% sequentially and 56% year-on-year
  • Fourth-quarter EPS, excluding charges and credits, of $0.41 increased 14% sequentially and 86% year-on-year
  • Fourth-quarter cash flow from operations was $1.93 billion and free cash flow was $1.30 billion
  • Board approved quarterly cash dividend of $0.125 per share
  • Full-year revenue was $22.9 billion
  • Full-year GAAP EPS was $1.32
  • Full-year EPS, excluding charges and credits, was $1.28
  • Full-year cash flow from operations was $4.65 billion and free cash flow was $3.00 billion
Schlumberger CEO Olivier Le Peuch commented, “Strengthening activity, accelerating digital sales, and outstanding free cash flow performance combined to deliver another quarter of remarkable financial results to close the year with great momentum.

“In retrospect, we started 2021 with a constructive outlook and an ambition to visibly expand margins and deliver robust free cash flow, while remaining focused on capital discipline.

“In fact, we concluded the year with 88% growth in EPS, excluding charges and credits; adjusted EBITDA margin of 21.5%; and $3.0 billion in free cash flow. The adjusted EBITDA margin—which represents a year-on-year expansion of 320 basis points (bps)—is the highest level since 2018. We restored our North America pretax operating margin to double-digits and expanded our international margin, both exceeding prepandemic 2019 levels.

“This was also a momentous year for us in terms of our commitment to sustainability. We announced our comprehensive 2050 net-zero commitment, inclusive of Scope 3 emissions, and launched our Transition Technologies* portfolio.

“I am extremely proud of the full-year results, as we operationalized our returns-focused strategy and surpassed our financial ambitions with resounding success.

“Turning to the fourth-quarter results, sequential revenue growth was broad based across all geographies and Divisions, led by Digital & Integration.

“International revenue of $4.90 billion grew 5% sequentially, driven primarily by strengthening activity, increased digital sales, and early benefits of pricing improvements. The sequential revenue increase was led by growth in Europe/CIS/Africa due to strong offshore activity in Africa and new projects in Europe. This growth was complemented by project startups and activity gains in the Middle East & Asia and sustained activity growth in Latin America. The fourth-quarter international revenue performance represents a 13% year-on-year increase, enabling us to accomplish our double-digit revenue growth ambition for the second half of 2021 when compared to the same period in 2020.

“In North America, revenue of $1.28 billion grew 13% sequentially, outperforming the rig count growth. The sequential growth was driven by strong offshore and land drilling activity and increased exploration data licensing in the US Gulf of Mexico and the Permian.

“Among the Divisions, Digital & Integration revenue increased 10% sequentially, driven by very strong digital sales, as the adoption of our digital offering continues to accelerate, and from increased exploration data licensing sales. Reservoir Performance revenue increased 8% sequentially from higher intervention activity in Latin America, new stimulation projects and activity gains in the Middle East & Asia, and increased offshore evaluation activity in North America. Well Construction revenue increased 5% due to higher land and offshore drilling activity both in North America and internationally. Similarly, Production Systems revenue grew 5% sequentially from new offshore projects and year-end sales.

“Overall, our fourth-quarter pretax segment operating income increased 9% sequentially, attaining the highest quarterly operating margin level since 2015. Contributing to this remarkable performance are the accretive effect of accelerating digital sales and early signs of pricing improvements, particularly when driven by new technology adoption and performance differentiation.

“Looking ahead into 2022, the industry macro fundamentals are very favorable, due to the combination of projected steady demand recovery, an increasingly tight supply market, and supportive oil prices. We believe this will result in a material step up in industry capital spending with simultaneous double-digit growth in international and North American markets. Absent any further COVID-related disruption, oil demand is expected to exceed prepandemic levels before the end of the year and to further strengthen in 2023. These favorable market conditions are strikingly similar to those experienced during the last industry supercycle, suggesting that resurgent global demand-led capital spending will result in an exceptional multiyear growth cycle.

“Schlumberger is well prepared to fully seize this growth ahead of us. We have entered this cycle in a position of strength, having reset our operating leverage, expanded peer-leading margins across multiple quarters, and aligned our technology and business portfolio with the new industry imperatives. Throughout 2021, we continued to strengthen our core portfolio, enhanced our sustainability leadership, successfully advanced our digital journey, and expanded our new energy portfolio.

“The combination of our performance and returns-focused strategy is resulting in enduring customer success and higher earnings. As such, we have increased confidence in reaching our midcycle adjusted EBITDA margin ambition earlier than anticipated and sustaining our financial outperformance. I am truly excited about this year and the outlook for Schlumberger—rooted in capital discipline and superior returns while also continuing to lead technology, digital, and clean energy innovation—to enable performance and sustainability for the global energy industry.”
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