Margin Outlook
Q: How should we think about margin path in 2024?
A: Management sees upside in 2024 with continued margin expansion across core and digital segments. They anticipate mid-teens EBITDA growth driven by revenue growth and margin expansion, supported by operating leverage, pricing tailwinds in backlog, new technology adoption, and favorable mix, especially offshore.

Capital Expenditure (CapEx)
Q: Will CapEx need to increase with higher activity, maintaining 5–6% revenue ratio?
A: Management believes the current CapEx level from 2023 remains adequate for 2024 growth. They can address upcoming growth without increasing CapEx, maintaining guidance at the low end of 5–6% of revenue unless growth is much higher than expected.

Middle East Growth and Margins
Q: Can you maintain growth pace in Middle East in '24, or are you near capacity? Will margins expand as contracts reprice?
A: SLB is not at capacity in the Middle East and doesn't see a slowdown in revenue growth potential. Activity is broad across nearly every country. They have benefited from pricing over the last 18 months, with margins expanding in the region, supporting international margin expansion. They expect this to continue into 2024 and beyond.

Capital Returns Strategy
Q: How should we think about dividend evolution compared to 2014–2019 levels?
A: SLB prefers focusing on total shareholder payout, including buybacks. While happy with the 10% dividend increase, they aim for sustainable growth. Total payout is increasing from $2 billion in '23 to hopefully more than $2.5 billion in 2024, implying at least $1 billion in share buybacks, with potential to adjust upwards during the year.

Offshore Growth Outlook
Q: Is it fair to assume higher exit rates into 2025–2026 due to deepwater rigs?
A: Management confirms that offshore growth, both shallow and deepwater, is a distinct attribute of this cycle. They anticipate rig activity to continue increasing, with the exit rate of '24 above current levels. Growth is expected not only in '24 but extending into '25 and beyond, supported by offshore FIDs exceeding $100 million for each of '24 and '25.

Free Cash Flow Outlook
Q: Provide color on cash conversion rate and working capital outlook for '24.
A: SLB expects another strong year of free cash flow in 2024, following the impressive working capital release in Q4 '23. Working capital will increase in Q1 due to annual employee incentives and reversal of exceptional items but will improve gradually in subsequent quarters, aiming for a strong finish similar to the prior year.

Digital Revenue Growth
Q: Can you expand on increasing digital adoption and revenue growth targets?
A: Digital adoption is growing, with cloud users and compute hours increasing by 40%. Growth comes from transitioning existing customers to cloud, adoption of data and AI capabilities, and digital operations in drilling and production. These trends support the ambition to grow digital revenue by 50% over the next two years, driven by both existing and new customers.

Transition Technologies Growth
Q: What's the outlook for transition technologies' multiyear growth?
A: Transition technologies, distinct from new energy ventures like CCS, have over $1 billion in sales. These low-carbon, efficient technologies are seeing accelerated adoption, helping customers reduce Scope 1 and Scope 3 emissions. Management expects continued growth, supporting their ambition for a sustainable future and adding to core growth.

Exploration Activity Impact
Q: What do you expect for exploration over next few years, and its impact on SLB?
A: There is a resurgence in exploration activity, driven by the need for new gas reserves for energy security and oil exploration around offshore hubs. Activity is offshore and global, including Asia, and is expected to stay due to improved offshore economics. SLB benefits from this trend through their exposure in reservoir performance and digital segments.

North America Growth Amid Weakness
Q: How are you able to grow in North America despite weaker rig count?
A: SLB outperformed the rig count in 2023 and expects to continue outperforming in 2024. Growth is driven by exposure in Gulf of Mexico, East Canada, and Alaska, technology adoption in U.S. land market, and focus on efficiency, recovery, digital solutions, and low-carbon offerings. This positions them to reach mid-single-digit growth despite market outlook.

New Energy Revenue Target
Q: Update on progress toward $3 billion new energy revenue target by decade's end.
A: SLB is investing in five domains: CCS, geothermal energy, energy storage, critical minerals, and hydrogen. Early investments are yielding momentum in CCS and geothermal, exceeding expectations. The $3 billion target will be achieved through organic growth in adjacent markets and inorganic developments, with CCS likely leading contributions, followed by hydrogen later in the decade.

OneSubsea Customer Engagement
Q: How has customer engagement progressed with enhanced OneSubsea offering?
A: Customer feedback on the subsea joint venture with Aker and Subsea 7 is very positive. The venture has delivered strong results, and priorities include extracting value through synergy and capitalizing on the deepwater offshore cycle. Customers are approaching SLB for integrated solutions, and prospects ahead are promising.

NOCs vs. IOCs Spending
Q: Compare spending behavior of NOCs versus IOCs internationally.
A: SLB has seen significant investment rebound by IOCs over the past two years. National Oil Companies are expected to grow faster as we enter 2024, led by the Middle East. SLB anticipates continued momentum with IOCs due to offshore exposure and exploration activities, and acknowledges international independents are also executing their plans.

Industry Reinvestment and Oil Price Dependence
Q: Do we need higher oil prices for increased industry investment, or is reinvestment still too low?
A: Operators are focusing on meeting growing demand by accelerating supply from international markets. Investment is driven by the need to balance supply and demand, with favorable economics supporting long-cycle investments. Offshore development economics have improved, making investments attractive without solely depending on higher oil prices.