SLB Announces First-Quarter 2024 Results, Targeting to Return $7 Billion to Shareholders Over 2024-2025

KUALA LUMPUR, Malaysia - SLB (NYSE: SLB) today announced results for the first-quarter 2024.

SLB CEO Olivier Le Peuch commented, 'We have had an exciting start to the year with our announced agreement to acquire ChampionX Corporation (ChampionX), which will bolster our production and recovery portfolio. We also continued our growth momentum, with a strong first-quarter performance resulting from robust year-on-year revenue and EBITDA growth consistent with our first quarter and full-year guidance.

'Compared to the same quarter last year, revenue increased 13%, EPS (excluding charges and credits) rose 19% to $0.75, adjusted EBITDA grew 15%, and adjusted EBITDA margin expanded year on year for the 13th consecutive quarter. Approximately half of the year-on-year revenue increase came from the Aker subsea business, which was added as part of our OneSubsea joint venture in the fourth quarter of 2023.

'International revenue grew 18% year on year, compensating for a softer North American market where revenue declined 6%. Excluding the contribution of the Aker subsea business, international revenue grew 10%.

'During the quarter, we continued to benefit from our favorable exposure to the international markets, with remarkable year-on-year growth of 29% in the Middle East & Asia, in addition to growth of 18% in Europe & Africa.

'Sequentially, revenue declined 3% both in North America and in the international markets due to seasonality. However, this impact was less pronounced than in prior years as robust activity gains partially offset seasonal effects.

'I want to extend my appreciation to the SLB team for achieving these outstanding results. I look forward to building on this momentum in the coming quarters.'

First Quarter Powered by the Core

'Our Core business-comprising Reservoir Performance, Well Construction, and Production Systems-achieved revenue growth of 13% year on year and expanded pretax segment operating margin by more than 200 basis points (bps). This growth was supported by investments in long-cycle developments and production capacity expansions, particularly in the Middle East & Asia and Latin America.

'Production Systems revenue grew 28% year on year driven by the acquired Aker subsea business. Excluding the contribution of the Aker subsea business, Production Systems revenue grew 6% driven by a double-digit increase in international revenue resulting from higher sales of completions, surface production systems, and artificial lift. Reservoir Performance revenue increased 15% year on year due to increased stimulation, evaluation, and intervention services across all areas on land and offshore and from both exploration and production activity. Well Construction grew 3% year on year driven by a 9% increase in international revenue, led by Middle East & Asia but partially offset by reduced activity in North America.'

Revenue Growth, Margin Expansion, and Returns to Shareholders

'We remain confident in our global revenue growth outlook for 2024, with softness in North America being offset by upside in the international markets. The dynamics of this cycle remain intact, with international and offshore growth taking place across all geographies, benefiting all of our Divisions as we continue to be awarded new contracts, enhancing the quality and longevity of our revenue backlog.

'Our journey of margin expansion continues to be driven by tight service and equipment capacity internationally, increased technology adoption, and further operational efficiency. As a result, we affirm our previous guidance of mid-teens EBITDA growth for the full year.

'Turning specifically to the second quarter, we expect a seasonal rebound in activity in the Northern Hemisphere coupled with robust activity internationally, led by the Middle East, Asia, and Africa. This will drive broad sequential margin expansion across all Divisions and geographies.

'Based on our strong start to the year, confidence in our ability to generate robust cash flows, and the anticipated contribution of the announced ChampionX acquisition, we are targeting to return $7 billion to shareholders over the next two years. This represents a target for returns to shareholders of $3 billion in 2024 and $4 billion in 2025.'

The Momentum Continues

'The oil and gas industry continues to benefit from strong market fundamentals driven by a growing demand outlook. This is resulting in a significant baseload of activity, particularly in the international and offshore markets, closely aligned with the strengths of our business. As the cycle persists, we expect operators to increase their investments in production and reservoir recovery, with the goal of maximizing the efficiency and longevity of their producing assets. This will result in operating expenditures becoming an increasing part of global upstream spending over time.

'We are already benefiting from these investments, and our recently announced agreement to acquire ChampionX will position us to further capture this growing opportunity through the addition of a leading production chemicals portfolio and a complementary artificial lift offering. We look forward to harnessing the strong capabilities of ChampionX to deliver superior performance for our customers.

'There also continues to be a growing emphasis across the industry on emissions reduction. This is presenting an exciting new market for lower-carbon technologies and carbon capture and sequestration (CCS), where we are positioned very well, as exemplified by the expansion of our CCS portfolio with our recent announcement of our agreement to acquire a majority ownership stake in Aker Carbon Capture.

'All in all, the dynamics of the cycle continue to reinforce our strategy and outlook for the future. I look forward to continuing to deliver exceptional service for our customers and results for our stockholders throughout the year.'

Other Events

During the quarter, SLB repurchased 5.4 million shares of its common stock at an average price of $50.13 per share for a total purchase price of $270 million.

On March 27, 2024, SLB announced an agreement to combine its carbon capture business with Aker Carbon Capture (OSE: ACC) to support accelerated industrial decarbonization at scale. Bringing together complementary technology portfolios, leading process design expertise, and an established project delivery platform, the combination will leverage Aker Carbon Capture's commercial carbon capture product offering and SLB's new technology developments and industrialization capability. It will create a vehicle for accelerating the introduction of disruptive early-stage technology into the global market on a commercial, proven platform. Following the transaction, SLB will own 80% of the combined business and ACC will own 20%. The transaction is subject to regulatory approvals and other customary closing conditions and is anticipated to close in the second quarter of 2024.

On April 2, 2024, SLB and ChampionX Corporation (NASDAQ: CHX) announced a definitive agreement for SLB to purchase ChampionX in an all-stock transaction. Under the terms of the agreement, ChampionX shareholders will receive 0.735 shares of SLB common stock in exchange for each ChampionX share. At the closing of the transaction, ChampionX shareholders will own approximately 9% of SLB's outstanding shares of common stock. SLB expects to realize annual pretax synergies of approximately $400 million within the first three years post-closing through incremental revenue and cost savings. The transaction is subject to ChampionX shareholders' approval, regulatory approvals, and other customary closing conditions. It is anticipated that the closing of the transaction will occur before the end of 2024.

On April 19, 2024, SLB's Board of Directors approved a quarterly cash dividend of $0.275 per share of outstanding common stock, payable on July 11, 2024, to stockholders of record on June 5, 2024.

About SLB

SLB (NYSE: SLB) is a global technology company driving energy innovation for a balanced planet. With a global presence in more than 100 countries and employees representing almost twice as many nationalities, we work each day on innovating oil and gas, delivering digital at scale, decarbonizing industries, and developing and scaling new energy systems that accelerate the energy transition. Find out more at slb.com.

Conference Call Information

SLB will hold a conference call to discuss the earnings press release and business outlook on Friday, April 19, 2024. The call is scheduled to begin at 9:30 a.m. US Eastern time. To access the call, which is open to the public, please contact the conference call operator at [phone] within North America, or [phone] outside North America, approximately 10 minutes prior to the call's scheduled start time, and provide the access code 8858313. At the conclusion of the conference call, an audio replay will be available until May 19, 2024, by dialing [phone] within North America, or [phone] outside North America, and providing the access code 4812789. The conference call will be webcast simultaneously at www.slb.com/irwebcast on a listen-only basis. A replay of the webcast will also be available at the same website until May 19, 2024.

Forward-Looking Statements

This first-quarter 2024 earnings press release, as well as other statements we make, contain 'forward-looking statements' within the meaning of the federal securities laws, which include any statements that are not historical facts. Such statements often contain words such as 'expect,' 'may,' 'can,' 'believe,' 'predict,' 'plan,' 'potential,' 'projected,' 'projections,' 'precursor,' 'forecast,' 'outlook,' 'expectations,' 'estimate,' 'intend,' 'anticipate,' 'ambition,' 'goal,' 'target,' 'scheduled,' 'think,' 'should,' 'could,' 'would,' 'will,' 'see,' 'likely,' and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain, such as statements about our financial and performance targets and other forecasts or expectations regarding, or dependent on, our business outlook; growth for SLB as a whole and for each of its Divisions (and for specified business lines, geographic areas, or technologies within each Division); oil and natural gas demand and production growth; oil and natural gas prices; forecasts or expectations regarding energy transition and global climate change; improvements in operating procedures and technology; capital expenditures by SLB and the oil and gas industry; our business strategies, including digital and 'fit for basin,' as well as the strategies of our customers; our capital allocation plans, including dividend plans and share repurchase programs; our APS projects, joint ventures, and other alliances; the impact of the ongoing conflict in Ukraine on global energy supply; access to raw materials; future global economic and geopolitical conditions; future liquidity, including free cash flow and future results of operations, such as margin levels. These statements are subject to risks and uncertainties, including, but not limited to, changing global economic and geopolitical conditions; changes in exploration and production spending by our customers, and changes in the level of oil and natural gas exploration and development; the results of operations and financial condition of our customers and suppliers; the inability to achieve our financial and performance targets and other forecasts and expectations; the inability to achieve our net-zero carbon emissions goals or interim emissions reduction goals; general economic, geopolitical, and business conditions in key regions of the world; the ongoing conflict in Ukraine; foreign currency risk; inflation; changes in monetary policy by governments; pricing pressure; weather and seasonal factors; unfavorable effects of health pandemics; availability and cost of raw materials; operational modifications, delays, or cancellations; challenges in our supply chain; production declines; the extent of future charges; the inability to recognize efficiencies and other intended benefits from our business strategies and initiatives, such as digital or new energy, as well as our cost reduction strategies; changes in government regulations and regulatory requirements, including those related to offshore oil and gas exploration, radioactive sources, explosives, chemicals, and climate-related initiatives; the inability of technology to meet new challenges in exploration; the competitiveness of alternative energy sources or product substitutes and other risks and uncertainties detailed in this press release and our most recent Forms 10-K, 10-Q, and 8-K filed with or furnished to the Securities and Exchange Commission (the 'SEC').

This press release also includes forward-looking statements relating to the proposed transaction between SLB and ChampionX, including statements regarding the benefits of the transaction and the anticipated timing of the transaction. Factors and risks that may impact future results and performance include, but are not limited to, and in each case as a possible result of the proposed transaction on each of SLB and ChampionX: the ultimate outcome of the proposed transaction between SLB and ChampionX, including the possibility that ChampionX stockholders will not adopt the merger agreement in respect of the proposed transaction; the effect of the announcement of the proposed transaction; the ability to operate the SLB and ChampionX respective businesses, including business disruptions; difficulties in retaining and hiring key personnel and employees; the ability to maintain favorable business relationships with customers, suppliers, and other business partners; the terms and timing of the proposed transaction; the occurrence of any event, change, or other circumstance that could give rise to the termination of the proposed transaction; the anticipated or actual tax treatment of the proposed transaction; the ability to satisfy closing conditions to the completion of the proposed transaction (including the adoption of the merger agreement in respect of the proposed transaction by ChampionX stockholders); other risks related to the completion of the proposed transaction and actions related thereto; the ability of SLB and ChampionX to integrate the business successfully and to achieve anticipated synergies and value creation from the proposed transaction; the ability to secure government regulatory approvals on the terms expected, at all or in a timely manner; litigation and regulatory proceedings, including any proceedings that may be instituted against SLB or ChampionX related to the proposed transaction, as well as the risk factors discussed in SLB's and ChampionX's most recent Forms 10-K, 10-Q, and 8-K filed with or furnished to the SEC.

If one or more of these or other risks or uncertainties materialize (or the consequences of any such development changes), or should our underlying assumptions prove incorrect, actual results or outcomes may vary materially from those reflected in our forward-looking statements. Forward-looking and other statements in this press release regarding our environmental, social, and other sustainability plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking environmental, social, and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. Statements in this press release are made as of the date of this release, and SLB disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events, or otherwise.

Contact:

James R. McDonald

Tel: [phone]

Email: [e-mail]

Media Josh Byerly

Vice President of Communications, SLB

Tel: [phone]

Email: [e-mail]

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