SLB LIMITED/NV Q3 FY2024 earnings call

• Olivier started by reviewing Q3 results, discussing leveraging market positioning, digital leadership, and operating efficiency. Mentioned Digital & Integration had strong sequential growth with digital business at new quarterly revenue high, Core divisions had varying performances. • Stephane discussed EPS, revenue, margins, liquidity, M&A, share repurchases, and return to shareholders. Highlighted Q3 adjusted EBITDA margin at 25.6%, highest since Q1 2016. • Progress in digital with new products, partnerships, and the Lumi data and AI platform. • Macro environment analysis noting commodity price pressures but long-term energy fundamentals in place. • Outlook for 2024 and 2025, including muted Q4 revenue growth but EBITDA margin expansion, and 2025 upstream spending outlook.

Digital & Integration: Q3 revenue was $1.1 billion, up 4% sequentially with margins expanding 456 basis points to 35.5%. Reservoir Performance: Revenue was $1.8 billion, flat sequentially. Well Construction: Revenue was $3.3 billion, down 3% sequentially. Production Systems: Revenue was $3.1 billion, up 3% sequentially, with margins expanding 110 basis points to 16.7%.

• Full-year 2024: Ongoing margin expansion to deliver adjusted EBITDA margins at or above 25%, strong cash flows and sale of Palliser asset support increased returns to shareholders. • 2025: Anticipates international upstream spending to grow in low to mid-single digits, North America spending flat to slightly down; directional outlook depends on geopolitical environment and commodity prices, updated view in January. • Q4: Expect muted revenue growth with year-end digital and product sales partially offset by E&P budget exhaustion in U.S. land and cautious spending from certain international customers, but EBITDA margin expansion anticipated.

• Geopolitical environment and commodity prices can impact upstream spending forecasts. • Integration risks related to the ChampionX acquisition and other M&A activities. • Volatility in customer collections affecting free cash flow and financial results.

Q: James West asked about margin expansion drivers and digital uptake.

A: Olivier discussed margin expansion from digital technology premium, international growth outpacing North America, and cost optimization. Mentioned digital forum success and growth in digital operation areas like production and drilling.

Q: David Anderson asked about deepwater as a growth driver.

A: Olivier noted long-cycle deepwater projects continue with significant FID, offshore FID expected to remain at current levels or higher, driving growth beyond 2025.

Q: Scott Gruber asked about margin improvement potential with flat upstream spending.

A: Stephane said margin expansion comes from mix of activities, digital contribution, and cost optimization.

Q: Arun Jayaram asked about pricing dynamics and New Energy.

A: Olivier said pricing environment constructive due to capital discipline and industry capacity, and discussed New Energy lithium DLE pilot progress.

Q: Neil Mehta asked about free cash flow and returns to shareholders.

A: Stephane discussed free cash flow driven by customer collections, intention to maintain share repurchases, and reaffirmed $4 billion return target for 2025.

Q: Kurt Hallead asked about pricing discussions with customers and New Energy generative AI.

A: Stephane said performance and technology maintain pricing, and Olivier discussed New Energy lithium DLE pilot next steps.

Q: Saurabh Pant asked about digital growth sensitivity to upstream spending and cash returns.

A: Olivier said digital growth is secular and uncorrelated with short-term upstream spending, Stephane said cash return percentage above initial targets due to strong free cash flow.

Q: Roger Read asked about digital growth bottlenecks and capital intensity.

A: Olivier discussed digital adoption through cloud, Lumi platform, and core division digital transformation; Stephane said digital investments are smooth with no spikes in capital intensity.

Q: Stephen Gengaro asked about Q4 seasonality and ChampionX integration.

A: Olivier discussed Q4 seasonality and muted growth, Stephane said ChampionX integration gives more confidence in synergies.