Schoeller-Bleckmann Oilfield Equipment AG: Sales increased steeply in first half of 2017, bookings doubled

Ternitz/Vienna, 24 August 2017. The business environment of the oilfield service industry shows strong signs of recovery. While stagnation is observed internationally, the United States and Canada are driving this development. This is where spending for exploration and production (E&P) is set to grow by 41 % in year 2017. Schoeller-Bleckmann Oilfield Equipment AG (SBO), which is listed in the ATX segment of the Vienna Stock Exchange, benefits from its strong positioning in the North American market and posts substantially higher sales and bookings figures for the first half of 2017.

SBO generated sales amounting to MEUR 135.7 in the first half of 2017. Compared to the crisis year of 2016, this marked a sharp increase of 54.2 % (1-6/2016: MEUR 88.0). Bookings in the first half of 2017 doubled and arrived at MEUR 150,0, following MEUR 75,0 in the first half of 2016. Strong performance in the second quarter of 2017 has further driven the sound development seen since the beginning of the year. The order backlog at the end of the first half of 2017 stood at MEUR 34.7, following MEUR 21.1 as of 30 June 2016.

The steep increase in sales is reflected in a distinct improvement of earnings. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) returned to positive territory, from MEUR minus 5.7 in the first half of 2016 to MEUR 22.0. The strong development is mirrored also in the operating result (EBIT), which improved from MEUR minus 36.2 in the first half of 2016 to MEUR minus 3.6 in the first half of 2017. In the second quarter, and for the first time following the two years of crisis, the company's operating result (EBIT) came in on the positive side again, at MEUR 2.2 after MEUR minus 5.8 in the first quarter of 2017. The EBITDA margin stood at 16.2 % (1-6/2016: minus 6.5 %), the EBIT margin at minus 2.6 % (1-6/2016: minus 41.1 %).

"We have implemented our strategy consistently even in the years of the crisis, expanded the Oilfield Equipment segment and widened our presence in North America. This is what benefits us now, as the business in this region is already running at full pace", comments Gerald Grohmann, CEO of SBO. "In particular the second quarter was very strong. We have again improved sales and results over the start of the year and turned around our operating income which has re-entered positive territory for the first time in two years.“

Improved earnings, sound balance sheet

In the first half of 2017, profit before tax came to MEUR minus 8.0 (1-6/2016: MEUR minus 26.8), profit after tax to MEUR minus 6.2 (1-6/2016: MEUR minus 16.9). Earnings per share were EUR minus 0.39 (1-6/2016: EUR minus 1.06).

The sound balance sheet structure allows SBO to respond timely to market developments and invest where appropriate. SBO's equity ratio as at 30 June 2017 stood at 51.1 % (30 June 2016: 54.7 %), net debt at MEUR 62.8 (30 June 2016: MEUR 59.7). Liquid funds at the end of the first half of the year were MEUR 177.6 (30 June 2016: MEUR 137.9), the operating cashflow was MEUR 6.3 (1-6/2016: MEUR 18.5). Spending for property, plant and equipment and for intangible assets (CAPEX) went up to MEUR 11.8 (1-6/2016: MEUR 5.9).

"Currently, we invest in North America where we are expanding our capacities in the Oilfield Equipment segment. This helps us prepare for a continued participation in the upswing“, says SBO's CEO Grohmann.

Volatile market environment

Whereas the market is picking up sharply in North America, the international environment is stagnating. This is illustrated by the projected spending for exploration and production (E&P spending): It should go up, for the first time since 2014, by around 8 % globally in 2017. While it is set to rise by 41 % in North America, internationally, it is expected to decline further, even though only by 1 %.

The oil price is exposed to increasing volatilities. On the back of rapidly rising production volumes in North America, the oil price is coming under mounting pressure. This, in turn, has a dampening effect on the industry outside North America and the OPEC countries. What is ignored here is the fact that this market has a share of 42 % in global crude supply. "High volatility does not come as a surprise in a year of transition", adds SBO's CEO Grohmann. "North America and OPEC countries deliver only somewhat more than half of the world's total output. The other half comes from those countries still characterised by many years of ongoing underinvestment. This is where spending for new exploration projects needs to be ramped up massively in the years ahead, because this is the only way to ensure that growing demand can be met over the medium and long term".

Due to its optimised group structure, expansion of the Well Completion business and successful research and development activities, SBO is already in a position to benefit increasingly from the upswing in North America. "We continue to implement our strategy systematically. Together with our target-oriented spending projects, this will help us to take every advantage from the market revival further down the road“, concludes Mr. Grohmann.

Comparison of Key Performance Indicators (KPIs)

		1-6/2017	1-6/2016
Sales	MEUR	135.7	88.0
Earnings before interest, taxes, depreciation and amortisation (EBITDA)	MEUR	22.0	-5.7
EBITDA margin	%	16.2	-6.5
Earnings before interest and taxes (EBIT)	MEUR	-3.6	-36.2
EBIT margin	%	-2.6	-41.1
Profit before tax	MEUR	-8.0	-26.8
Profit after tax	MEUR	-6.2	-16.9
Earnings per share	EUR	-0.39	-1.06
Cashflow from operating activities	MEUR	6.3	18.5
Liquid funds	MEUR	177.6	137.9
Equity ratio	%	51.1	54.7
Headcount		1,295	1,183

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 30 June 2017, SBO employed a workforce of 1,295 worldwide (31 December 2016: 1,200), thereof 310 in Ternitz / Austria and 633 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

back