Schlumberger NV (SLB)

• SLB's strategic investments in production recovery technologies are yielding visible growth, with production systems expected to have positive growth driven by production recovery. This area is anticipated to outpace growth in exploration and development in 2025 and beyond, providing a strong long-term earnings potential. SLB is very positive that this will become a long-term earnings potential, becoming a significant part of their mix. -
• Despite a flat revenue outlook for 2025, SLB expects to maintain or exceed 2024 adjusted EBITDA levels due to positive growth in production systems, reservoir performance, digital integration, and effective cost management. This demonstrates the company's resilience in challenging market conditions and ability to deliver strong financial performance. - -
• SLB is well-positioned to benefit from future growth opportunities in the Middle East and deepwater projects. The Middle East remains a bright spot with commitments to expand oil and gas capacity, offsetting declines elsewhere. Additionally, deepwater projects are expected to ramp up in 2026 and 2027, with multiple FIDs (Final Investment Decisions) pending in regions like Suriname, Namibia, and Southeast China, positioning SLB for future growth. -

• SLB anticipates flat revenue in 2025 on a stand-alone basis, indicating limited growth prospects in the near term. -
• Declines in certain regions, such as Mexico, where "activity will decline and has already declined", may offset growth in other regions and impact overall performance. -
• The well construction segment is expected to decline in 2025, which may offset growth in other segments and potentially affect profitability. -

1. 2025 Revenue Outlook
   Q: Is 2025 revenue expected to be flat, with adjusted EBITDA at or above 2024 levels?
   A: Management confirmed they expect flat revenue for 2025 on a stand-alone basis, with adjusted EBITDA at or above 2024 levels, excluding the impact of the ChampionX acquisition. -

2. Share Repurchase Program
   Q: How will the accelerated share repurchase program affect returns to shareholders?
   A: The company paid $2.3 billion upfront to accelerate share repurchases, removing approximately 48 million shares from the outstanding count. This is part of returning at least $4 billion to shareholders in 2025, with potential to exceed this amount depending on free cash flow and M&A opportunities. -

3. Production Systems Growth
   Q: What is the growth outlook for the production-driven business, including ChampionX?
   A: Management expects positive growth in production systems, driven by production recovery. They anticipate growth to be high single-digit to low double-digit, outpacing exploration and development in 2025. Investments in technology, portfolio expansion, and the integration of ChampionX will contribute to this growth. -

4. International Activity Outlook
   Q: Is international activity expected to improve sequentially or be second-half weighted?
   A: A typical pattern is expected, with a low first quarter, followed by a rebound. Activity will be higher in H2, with potential upside from deepwater projects emerging later in the year. -

5. Russia Operations and Sanctions
   Q: What is the impact of sanctions on Russia operations and revenue contribution?
   A: Revenue from Russia has declined to 4% of global revenue in 2024, down from 5% the previous year. The company has curtailed activities and believes their measures align with new U.S. sanctions. -

6. Low Carbon Solutions Growth
   Q: How is growth in low carbon solutions and new energy segments expected in 2025?
   A: New energy activities generated more than $850 million in 2024 and are growing faster than the core business. Significant growth is expected, particularly in carbon capture and sequestration, geothermal, and data center infrastructure solutions. -

7. Digital Business Outlook
   Q: Is there an update on isolating the value of the digital business and its outlook?
   A: Management is confident in the digital business's growth, anticipating it to continue growing above and beyond the upstream market spend. They plan to provide more details on performance, margins, and capital in the coming months. Growth will be driven by cloud transitions and AI capabilities. -

8. Pricing Dynamics
   Q: Are there concerns about pricing softening in 2025, affecting margins?
   A: Management expects pricing to be resilient, supported by a disciplined market and high international activity levels. They remain constructive, leveraging performance technology and integration capabilities to defend and support pricing. -

9. Cost Structure Optimization
   Q: Is there an opportunity to reduce costs to improve margins?
   A: The company has executed cost-out programs that supported margin expansion in 2024. They will continue to monitor and adjust resources, using digital tools to extract efficiencies and enhance margins. -

10. International Upside Regions
    Q: Which regions have the most upside and downside in the international outlook?
    A: The Middle East is a bright spot, with ongoing commitments to expand oil capacity and gas production in countries like UAE, Iraq, and Kuwait, offsetting declines in other areas. Deepwater opportunities in Suriname, Namibia, Indonesia, and Southeast China are also expected to contribute to long-term growth. -

Annual guidance for FY 2025:

• Revenue: Flat revenue growth globally - (no prior guidance)
• Adjusted EBITDA: Expected to be at or above FY 2024 levels, excluding the impact of the ChampionX acquisition - (no prior guidance)
• Capital Investments: $2.3 billion - (no prior guidance)
• Shareholder Returns: Minimum of $4 billion - (no change from prior guidance of $4 billion - )
• ChampionX Transaction: Expected to close before the end of Q1 2025 - (no prior guidance)
• Palliser FPS Project Divestiture: Expected to close in the next few months - (no prior guidance)