Schoeller-Bleckmann Oilfield Equipment AG: Sales and profit rising in the first quarter of 2017

Ternitz/Vienna, 24 May 2017. The oilfield service industry started into 2017 on an appreciable recovery of the North American market. Internationally, such revival has not yet started to take place. According to analysts, this picture should continue throughout the full year: For 2017, spending for exploration and production (E&P) is expected to increase by 21 % in North America, but only 2 % internationally. Thus, the repercussions of the sharpest decline in the industry in the past 30 years are still being felt.

Market developments in the first quarter of 2017 were also reflected in the business figures of Schoeller-Bleckmann Oilfield Equipment AG (SBO), which is listed on the ATX market of the Vienna Stock Exchange and has gained a strong position in North America. Improved activity levels of oil companies had positive effects for SBO. Sales generated by SBO in the first quarter of 2017 arrived at MEUR 60.1. Compared to the same quarter of 2016, this represents an increase of 28.5 % (1-3/2016: MEUR 46.8). Bookings rose by 72.0 %, to MEUR 69.9, following MEUR 40.6 in the first quarter of 2016. As a result, the book-to-bill-ratio, which measures the number of orders coming in compared to sales, was greater than 1 for the second consecutive quarter, indicating positive medium-term development. The order backlog totalled MEUR 30.5, following MEUR 28.3 as at 31 March 2016.

"After the fundamental crisis of the past two years our industry is now slowly turning into the right direction", explains Gerald Grohmann, CEO of SBO. "As we had expected, the United States are leading this cycle, which is why we have very consciously, at an early stage, positioned ourselves in the North American market. This is also reflected in the positive development of our quarterly figures. Internationally, such rebound is still some way off.”

SBO posts business result growth and fundamentally strong balance sheet structure

In the first quarter of 2017, SBO recorded earnings before interest, taxes, depreciation, and amortisation (EBITDA) of MEUR 7.2 (1-3/2016: MEUR minus 4.8). The operating result (EBIT) posted a clear increase, from MEUR minus 16.9 in the first quarter of 2016 to MEUR minus 5.8 in the first quarter of 2017. The EBITDA margin stood at 12.0 % (1-3/2016: minus 10.2 %), and the EBIT margin at minus 9.6 % (1-3/2016: minus 36.1 %). The cost-cutting - and sustained - measures taken in the past two years delivered a positive contribution to the development of SBO's business result.

The financial result amounted to MEUR minus 0.5 (1-3/2016: MEUR minus 3.3), including the positive result from the revaluation of option commitments of MEUR 0.9. Profit before tax was MEUR minus 6.3 (1-3/2016: MEUR minus 20.2), and profit after tax MEUR minus 4.9 (1-3/2016: MEUR minus 15.0). Earnings per share came to EUR minus 0.31 (1-3/2016: EUR minus 0.94).

The company has preserved its solid balance sheet structure: As at 31 March 2017, SBO's equity ratio was 52.6 % (31 March 2016: 57.1 %), and net debt was MEUR 54.9 (31 March 2016: Net liquidity MEUR 24.2). SBO again generated a positive operating cashflow of MEUR 2.1 (1-3/2016: MEUR 6.3) in the first quarter of 2017. The cash position was MEUR 188.8 (31 March 2016: MEUR 224.9).

Further market development to be monitored closely

The downturn in the oil market seems to finally have come to an end. A major factor of influence on this year's development will be OPEC's further line of action and the response of E&P companies in North America. At their meeting scheduled for 25 May 2017, OPEC members will decide on whether or not to extend the production limit initially set at 32.5 mb/d for a period of six months. Should the production limit be maintained, this should support continued stability in the crude oil market. All in all, 2017 is expected to be a transition year.

"We continue to closely monitor current developments and the North American market recovery. Short response times and high flexibility are key factors for managing the cycles of our industry", comments Mr. Grohmann, CEO of SBO. "We have used the challenging past two years to redesign SBO's corporate structure for improved long-term efficiency. Our ongoing spending for research and development activities coupled with a systematic building-up of our Well Completion business provide a sound basis to benefit fully from the next upswing as market and technology leader."

Comparison of Key Performance Indicators (KPIs)

 SBO is the global market leader in high-precision components made of high-alloy steel and a leading supplier of key components 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 March 2017, SBO employed a workforce of 1,236 worldwide (31 December 2016: 1,200), thereof 310 in Ternitz / Austria and 587 in North America (including Mexico).