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EANS-News: Schoeller-Bleckmann Oilfield Equipment AG
Sound result 2014 - High
profitability in a volatile environment - Proposed dividend EUR 1.50 per share
-------------------------------------------------------------------------------- Corporate news transmitted by euro adhoc. The issuer/originator is solely responsible for the content of this announcement. -------------------------------------------------------------------------------- annual result/annual report Ternitz/Vienna, 19 March 2015. Schoeller-Bleckmann Oilfield Equipment AG (SBO), listed on the ATX market of the Vienna Stock Exchange, generated sound results with high profitability in the 2014 financial year. Consolidated sales rose by 6.6%, to MEUR 488.6 (2013: MEUR 458.6). EBITDA grew by 9.3%, to MEUR 149.3 (2013: MEUR 136.5) and earnings before interest and taxes (EBIT) before one-off effects went up by 9.2%, to MEUR 106.7 (2013: MEUR 97.7). The EBITDA margin was 30.6% (2013: 29.8%), the EBIT margin before one-off effects was 21.8% (2013: 21.3%). EBIT were impacted by one-off effects amounting to MEUR 39.2, which were caused by the volatile situation in the oilfield service industry. As a result, the goodwill of US subsidiary Godwin-SBO L.L.C. had to be adjusted and expenses were required for structural improvements of the company's shareholdings in the United Kingdom. However, SBO also benefited from the prevailing market conditions, as the contingent purchase price for acquiring Canadian oilfield service provider "Resource Well Completion Technologies Inc." (Resource) was reduced by MEUR 22.9. As a result, the second purchase price instalment does not have to be paid. At the same time, a non-cash-effective impairment of the company goodwill by MEUR 21.3 was effected. SBO is convinced that Resource provides - beyond the cycle - a strategically ideal platform for activities in the completion business. EBIT after one-off effects therefore came to MEUR 67.5, down 25.2% from last year's reading (2013: MEUR 90.2). The EBIT margin after one-off effects was 13.8% (2013: 19.7%). Profit before tax arrived at MEUR 80.0, slightly down from last year by 4.7% (2013: MEUR 83.9). Profit after tax decreased by 11.9%, to MEUR 54.0 (2013: MEUR 61.3). Earnings per share were EUR 3.38 (2013: EUR 3.81). The Executive Board proposes to pay an unchanged dividend of EUR 1.50 per share for 2014, the same as for 2013. Gerald Grohmann, CEO of SBO: "We generated sound results in 2014. Profitability is high, and bookings went up. Given the increasingly volatile environment over the third and fourth quarters, we are satisfied with what could be achieved", and Mr. Grohmann continues: "At the moment we cannot predict how the environment for our industry will develop over the next quarters. We started the new business year with well filled order books, but 2015 is definitely not going to be an easy year for the oilfield service industry. This is why we started to take measures in 2014 already to respond to the expected weakening of the market." Market development 2014 Average global oil consumption in 2014, according to the International Energy Agency (IEA), rose to 92.5 million barrels per day (2013: 91.8 mb/d). Due to high shale oil production in the United States the oil market was oversupplied. Existing oversupplies, accompanied by OPEC's decision not to cut crude production and a weaker than originally expected global economy caused a massive oil price slump in the second half of 2014. Nevertheless, the global rig count (number of active drilling rigs) climbed by 4.9% to an average 3578 units in 2014. Despite the oil price decline it still was up 2.6% in December from last year, but fell by 2.7% month-on-month in November. Business development 2014 Following a hesitant start in the first weeks, bookings were continuously picking up in all business segments over the rest of the year. Bookings in 2014 climbed by 16.9%, to MEUR 497.9 (2013: MEUR 425.9). The order backlog at year-end 2014 arrived at MEUR 122.1, up 9.5% from the previous year (2013: MEUR 111.5) and concerned mainly the High Precision Components segment. From Q2 2014 on, SBO has organised business in two segments, High Precision Components (manufacture of high-precision drillstring components) and Oilfield Equipment (non-magnetic drill collars, drilling motors, circulation tools, completion tools and other components including maintenance and repair). Both segments increased their bookings in 2014 compared to the previous year and generated sound results with high profitability. The High Precision Components segment developed in line with customers' capex spending. The Oilfield Equipment segment benefited from rising global drilling activity that lasted almost until the end of 2014. Additionally, sales went up for non-magnetic drill collars and high-tech repair and maintenance. Capital expenditure In the 2014 financial year, total additions to fixed assets amounted to MEUR 43.8 (2013: MEUR 62.6), with a focus on further expanding the drilling motor fleet in the US and Canada and the circulation tools fleet of subsidiary DSI. In November 2014, SBO acquired 67% of the Canadian oilfield service provider Resource. SBO took advantage of the falling oil price to buy a profitable, highly innovative business at a fair price and add the new Completion product family to the portfolio of SBO without moving away from its core business. Resource provides an ideal technology platform to further grow the profitable completion business. The SBO share In May 2014 the SBO share reached its new all-time high of EUR 96.57, but - like the entire oilfield service sector - came under pressure due to the dropping oil price in the second half of the year. The SBO share developed largely in line with the oil price: at year-end, the price of the share was down 26.9% from the beginning of the year. Outlook 2015 The International Energy Agency (IEA) expects global oil demand to rise further in 2015: Oil consumption in 2015 is set to come to 93.5 million barrels per day (2014: 92.5 mb/d), while crude production is set to rise clearly less sharply than seen in the year before. However, the currently volatile oil price development makes it impossible to deliver short-term projections on future market development. What is clear, though, is that 2015 is going to be a challenging year for the oilfield service industry. SBO already took initial action in 2014 to further improve its earnings structure and ward off effects of the expected weakening in the market environment: - SBO launched a programme already in the third quarter of 2014 at an early stage and regardless of plummeting oil price to streamline cost structures of its UK entities. - SBO extended its product portfolio to include completion products by acquiring Resource and took advantage of the weaker environment to buy a highly innovative company at a fair price. - SBO will adjust its own capex spendings in 2015 to market requirements, while keeping expenditure for research and development at a stable level. - If required by declining demand, SBO is in a position to adjust capacities very promptly and flexibly to the prevailing market conditions. Medium- to long-term growth perspectives for the industry remain absolutely intact: Experts of IEA expect global daily demand for oil to rise by 30% until the year 2040. Covering that demand calls for constantly growing use of high-tech equipment. As a technology leader, SBO is perfectly positioned to benefit sustainably from this growth potential for a long time to come. Key figures: 2014 2013 Change in % Sales MEUR 488.6 458.6 +6.6 Earnings before interest, taxes, depreciation and amortisation (EBITDA) MEUR 149.3 136.5 +9.3 EBITDA margin % 30.6 29.8 - EBIT before one-off effects MEUR 106.7 97.7 +9.2 EBIT margin before one-off effects % 21.8 21.3 - EBIT after one-off effects MEUR 67.5 90.2 -25.2 EBIT margin after one-off effects % 13.8 19.7 - Profit before tax MEUR 80.0 83.9 -4.7 Profit after tax MEUR 54.0 61.3 -11.9 Cash-flow from Profit MEUR 138.9 110.4 +25.8 Earnings per share EUR 3.38 3.81 -11.1 Dividend per share EUR 1.50* 1.50 Headcount 1720 1574 +9.3 * proposed Schoeller-Bleckmann Oilfield Equipment AG is the global market leader in high-precision components and a leading supplier of oilfield equipment for the oilfield service industry. The business focus is on non-magnetic drillstring components and high-tech downhole tools for drilling and completing directional and horizontal wells. As of 31 December 2014, SBO has employed a workforce of 1720 worldwide (31 December 2013: 1574), thereof 451 in Ternitz/Austria and 714 in North America (including Mexico). SBO financial calendar 2015 23 April 2015 Annual General Meeting 8 May 2015 Ex-dividend day, dividend payment date 19 May 2015 Result Q1/2015 20 August 2015 Result H1/2015 26 November 2015 Result Q3/2015 Further inquiry note: Florian Schütz, Head of Investor Relations Schoeller-Bleckmann Oilfield Equipment AG A-2630 Ternitz/Austria, Hauptstrasse 2 Tel.: +43 2630 315-251 Fax: +43 2630 315-501 E-Mail: firstname.lastname@example.org end of announcement euro adhoc -------------------------------------------------------------------------------- company: Schoeller-Bleckmann Oilfield Equipment AG Hauptstrasse 2 A-2630 Ternitz phone: 02630/315110 FAX: 02630/315101 mail: email@example.com WWW: http://www.sbo.at sector: Oil & Gas - Upstream activities ISIN: AT0000946652 indexes: WBI, ATX Prime, ATX stockmarkets: official market: Wien language: English