Schoeller-Bleckmann Oilfield Equipment AG: Substantial profit improvement in fiscal 2010 – Dividend proposal EUR 1.00 after EUR 0.50

Ternitz/Vienna, 10 March 2011. Schoeller-Bleckmann Oilfield Equipment AG (SBO), listed on the ATX market of the Vienna Stock Exchange, announces final results for fiscal 2010 at its annual press conference.

Due to substantially increased bookings in 2010 amounting to MEUR 358.6 – up 222.7 % compared with the previous year – SBO significantly improved all key performance indicators. In view of the strong sales growth by 22.3 % to MEUR 307.7 (following MEUR 251.6 in 2009) and a steep rise in profit before tax by 82.7 % from MEUR 23.5 to MEUR 42.9 SBO brought fiscal 2010 to a highly satisfying end.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) arrived at MEUR 85.1, up 38.4 % from last year's MEUR 61.5. Earnings before interest and taxes (EBIT) stood at MEUR 49.4, increasing by 74.8 % from MEUR 28.2 in 2009. The EBITDA margin was improved in fiscal 2010 from 24.4 % to 27.6 %, and the EBIT margin by 11.2 % to 16.0 %. Profit after tax came to MEUR 27.3, up 78.7 % from MEUR 15.3 in 2009.

Due to the good result, the Executive Board will propose to the forthcoming Annual General Meeting a dividend increase of EUR 1.00 per share for fiscal 2010 (following EUR 0.50 in the year before). Based on the current share price, this represents a dividend yield of approximately 1.6 %.

"SBO is fully on course again. Following the turbulences of fiscal 2009, whose storms we weathered well, fiscal 2010 was characterised by continuous buoyancy over the quarters", says Gerald Grohmann, CEO of SBO, commenting on fiscal 2010. "For the time being, the global recession seems to be overcome and our industry clearly got back into gear again in 2010. Schoeller-Bleckmann Oilfield Equipment AG returned to its course for growth."

Market development 2010

The reasons for the recovery seen in the oilfield service industry were increasing oil consumption due to a more stable worldwide economic development, high demand for energy in the emerging markets and rising oil prices. These factors triggered more spending for production and exploration, which, in turn, was reflected in substantially improved order volumes for the oilfield service industry. However, the rebound did not yet create the market momentum observed in the previous peak of the cycle between 2006 and 2008.

As a result of the improved order situation the rig count, the leading parameter of globally active drilling rigs, also went up again. In December 2010 it stood at 3227 units, an increase of 28.6 % compared to the 2509 units operating in December 2009.

The moratorium on granting new offshore drilling licences in the wake of the Macondo oil spill (fire on the Deepwater Horizon platform in the Gulf of Mexico) halved the number of offshore drilling rigs in the US by the end of 2010. However, this decline was largely set off by stronger US onshore drilling activity.

Business performance 2010

SBO rapidly ramped up production capacities to meet the growing number of bookings. All segments of SBO profited from the market recovery. The drilling motor business also recorded a highly positive performance. At some locations additional personnel was hired. In part, skilled labour that had to be dismissed due to the order decline in 2009 could be recruited again.

SBO continued to pursue its strategy for growth also in the challenging year 2009 and to build the new sites in Vietnam and Brazil. Both companies got off to a good start in 2010.

In mid-September 2010 negotiations on the acquisition of Drilling Systems International Ltd. (DSI) were completed successfully. The acquisition was financed by using own resources and existing credit facilities. DSI has been fully consolidated as of the beginning of the fourth quarter of 2010.

Preliminary work on establishing a new production site of US-subsidiary Knust-SBO in Singapore started in the fourth quarter of 2010. Knust intends to better cover the growing market for its products (chassis/internals) in the Far East through its own production on the spot. Production is scheduled to start up in stages in the second half of 2011.

The SBO share: Top performing ATX share in 2010

The SBO share was the top performer within the ATX blue-chip index. Throughout 2010 it climbed by 87.1 % to EUR 64.50 per share at year-end.

Outlook 2011

The tenor of forecasts on global economic development in fiscal 2011 is basically positive. Should the global economy, as expected by the IMF, grow by 4.4 % in 2011, demand for oil and gas will continue to rise. At the same time, however, the geopolitical development particularly in the Arab region must be closely monitored, as it may have unforeseeable effects on the global economy and the oilfield service industry

According to IEA forecasts of February 2011, average global demand for oil in 2011 will be 89.3 million barrels per day, representing an increase of 1.7 % compared with 2010. Rebounding demand for oil and gas is the driving force behind increased exploration and production spending. Analysts predict that 2011 will see global capital expenditure in the sector to go up by 11 % from 2010 to USD 490 billion.

For 2011, Schoeller-Bleckmann Oilfield Equipment AG anticipates business performance to remain positive, given a stable global economic development. However, at the beginning of 2011 there are still overcapacities in the market, and some of SBO's customers have not yet fully drawn down their inventories.