Schoeller-Bleckmann Oilfield Equipment AG

EANS-News: Schoeller-Bleckmann Oilfield Equipment AG
Sound result 2014 - High profitability in a volatile environment - Proposed dividend EUR 1.50 per share

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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: f.schuetz@sbo.co.at

end of announcement                               euro adhoc 
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company:     Schoeller-Bleckmann Oilfield Equipment AG
             Hauptstrasse 2
             A-2630 Ternitz
phone:       02630/315110
FAX:         02630/315101
mail:     sboe@sbo.co.at
WWW:      http://www.sbo.at
sector:      Oil & Gas - Upstream activities
ISIN:        AT0000946652
indexes:     WBI, ATX Prime, ATX
stockmarkets: official market: Wien 
language:   English
 



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