Schoeller-Bleckmann Oilfield Equipment AG operating result turns clearly positive in 2017
- SBO benefits from strategic positioning in North America
- Bookings doubled to MEUR 342.0, sales up by 77.2 % to MEUR 324.2
- US acquisition exceeds expectations as reported, reflected in the financial result
Ternitz/Vienna, 21 March 2018. In the 2017 financial year, the market environment of the oilfield service industry recovered appreciably, with North America confirming its leading role as demand picked up sharply there. Schoeller-Bleckmann Oilfield Equipment AG (SBO), listed on the ATX market of the Vienna Stock Exchange, in the past years strengthened its positioning in the North American countries proactively, invested specifically in the Well Completion business, expanding it considerably by acquiring Downhole Technology in the second quarter of 2016. While the international market environment remained in stagnation, SBO started to benefit substantially from its strong position in North America in the 2017 financial year. The company grew sales by 77.2 %, more than doubled bookings by 102.1 % and brought the operating result back to clearly positive territory. In the second half of the year, the EBITDA margin already exceeded the long-term average.
"Consistent implementation of our strategy made us benefit fully from the upswing in North America and generate a clearly positive operating result in year 2017. Although the downturn seen in the years 2015 and 2016 was much deeper than in previous cycles, we took pinpoint measures aimed to perfectly prepare the company for the next upswing. After years of crisis, we have clearly demonstrated that we know how to take opportunities on our markets very efficiently and gain momentum immediately", comments Gerald Grohmann, CEO of SBO.
Operating turnaround achieved
Bookings received by SBO climbed by 102.1 %, to MEUR 342.0 (2016: MEUR 169.3). Sales went up by 77.2 %, to MEUR 324.2 (2016: MEUR 183.0). As a result, the book-to-bill ratio, which measures the number of orders coming in compared to sales and serves as an indicator of medium-term development, was greater than 1. The order backlog at the end of 2017 was MEUR 37.6 (31 December 2016: MEUR 20.5).
The increase in sales is reflected in the operating result of SBO. Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose from MEUR minus 2.5 in 2016 to MEUR 74.7, including one-off income from completed restructuring measures amounting to MEUR 1.9. Earnings before interest and taxes (EBIT) generated in 2017 were MEUR 25.6, following MEUR minus 58.3 in 2016. The EBITDA margin arrived at 23.0 % (2016: minus 1.4 %), and the EBIT margin at 7.9 % (2016: minus 31.9 %).
US subsidiary exceeds expectations
At the same time, a one-off effect impacts the financial result: As reported in October, the strong development and thus rising profit expectations for SBO's US-based subsidiary Downhole Technology required a one-off expense posting of MEUR 90.2, that has an effect on profit, but not on cash, for the existing put/call option, and is included in the financial result of the consolidated profit and loss statement (P&L) of SBO.
Therefore, the financial result for full year 2017 was MEUR minus 95.4 (2016: MEUR 13.3). The previous year's result had included a one-off income from the revaluation of option commitments amounting to MEUR 17.2. Profit before tax thus was MEUR minus 69.8 (2016: MEUR minus 45.1). Without considering option revaluations, profit before tax was MEUR 17.9, and the respective result of the year before MEUR minus 62.3. Profit after tax came to MEUR minus 54.4 (2016: MEUR minus 28.0). Earnings per share were EUR minus 3.41 (2016: EUR minus 1.75). The respective earnings per share before option revaluations were EUR 0.93 in 2017 (2016: EUR minus 2.93).
"Due to our sound operating performance we look back on a successful year 2017. We have launched excellent products in the market that are in great demand again as the upswing has set in. The fact that the strong growth of our subsidiary Downhole Technology has driven up its value, which required an expense posting, is further proof that we acquired the company at the right point in time", adds Mr. Grohmann.
Sound balance sheet
The balance sheet structure of SBO remains sound: At the end of 2017, the gearing ratio stood at 15.7 % (31 December 2016: 12.0 %), the equity ratio at 42.9 % (31 December 2016: 53.1 %), and net debt at MEUR 50.7 (31 December 2016: MEUR 51.0). Liquid funds totalled MEUR 166.0 (2016: MEUR 193.5), the operating cashflow MEUR 44.6 (2016: MEUR 31.3), and free cashflow MEUR 16.6 (2016: MEUR minus 69.1).
Spending for property, plant and equipment and intangible assets (CAPEX) went to MEUR 32.1 (2016: MEUR 13.0), including spending for expanding production capacities in North America. Purchase commitments for expenditure in property, plant and equipment were MEUR 1.2 (2016: MEUR 0.1).
The Executive Board will propose to the Annual General Meeting to pay a dividend of EUR 0.50 per share for the 2017 financial year.
Innovations for the future
SBO vigorously pursues its research and development activities. In 2017, innovations such as dissolvable balls in the Well Completion business and a new product family within the range of circulation tools were launched. "We are constantly working on innovative products and services offering new options to our customers. This is how we shape the future of our industry as frontrunner", says Mr. Grohmann. "We expect North America to remain the leading driver of growth in 2018. At the same time, the international market should recover gradually. This is what we prepared for proactively, and we will exploit every opportunity to participate fully in the upswing."
Comparison of SBO's key performance indicators
|
|
|
2017
|
2016
|
|
Sales
|
MEUR
|
324.2
|
183.0
|
|
Earnings before interest, taxes, depreciation and amortization
(EBITDA) |
MEUR
|
74.7
|
-2.5
|
|
EBITDA margin
|
%
|
23.0
|
-1.4
|
|
Earnings before interest and taxes (EBIT)
|
MEUR
|
25.6
|
-58.3
|
|
EBIT margin
|
%
|
7.9
|
-31.9
|
|
Profit before tax
(before option revaluation) |
MEUR
|
17.9
|
-62.3
|
|
Profit before tax
|
MEUR
|
-69.8
|
-45.1
|
|
Profit after tax
|
MEUR
|
-54.4
|
-28.0
|
|
Earnings per share
(before option revaluation) |
EUR
|
0.93
|
-2.93
|
|
Earnings per share
|
EUR
|
-3.41
|
-1.75
|
|
Cashflow from operating activities
|
MEUR
|
44.6
|
31.3
|
|
Liquid funds
|
MEUR
|
166.0
|
193.5
|
|
Headcount
|
|
1,432
|
1,200
|
SBO is a leading supplier of tools and equipment for directional drilling and well completion applications and the global market leader in the manufacture of high-precision components made of non-magnetic steel. The product offering ranges from complex customer-specific components for the oilfield service industry to high-efficiency solutions and products for the oil and gas industry. As of 31 December 2017, SBO employed a workforce of 1,432 worldwide (31 December 2016: 1,200), thereof 309 in Ternitz / Austria and 764 in North America (including Mexico).
Further inquiry note:
Andreas Böcskör, Head of Investor Relations
Schoeller-Bleckmann Oilfield Equipment AG
A-2630 Ternitz, Hauptstraße 2
Phone: +43 2630/315 ext 252, fax ext 101
e-mail: a.boecskoer@sbo.co.at
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