HY 2023: SBO with high profitability and double-digit growth

·       Sales up by a third to MEUR 294.7, bookings up by 10 % to MEUR 299.2

·       EBIT rises to MEUR 55.4 (+24 %), high operating margin of 20.7 %, profit after tax at MEUR 43.1 (+25 %)

·       Half-year financial report now available at https://www.sbo.at/letters

Ternitz, 24 August 2023. Schoeller-Bleckmann Oilfield Equipment AG (SBO), listed in the leading index ATX of the Vienna Stock Exchange, continued its strong growth in the first half of 2023 following the excellent year 2022. The company was taking advantage of the positive market environment in the energy sector and achieved double-digit growth in all relevant financial figures. A strong revenue growth of over 30 % yielded total sales of MEUR 294.7, backed by robust bookings that saw a 10 % increase to MEUR 299.2. EBIT showed a significant increase of 24 %, reaching MEUR 55.4. Adjusted for exchange losses, EBIT margin climbed to a high of 20.7 %, reflecting strong operational execution. Net liquidity remained high at MEUR 24.5 and the gearing ratio was at minus 5.7 %. %. In addition, an excellent Free Cashflow of MEUR 27.0 underlines SBO's strong financial footing. The company paid a dividend of EUR 2.00 per share in the second quarter.

The acquisition of Dubai-based Praxis Completion Technology, announced in June 2023, strengthens SBO's market positioning in well completion outside North America. The bolt-on acquisition not only enhances the company's position in the Middle East, which is considered the market with the greatest growth momentum in the energy sector, but also expands SBO's product offering with a meaningful well completion technology. In addition, Praxis offers products for Carbon Capture & Storage (CCS) applications.

Gerald Grohmann, CEO of SBO: “Our performance in the first half of this year demonstrates our financial and operational strength. In addition to capitalizing on existing market opportunities, we have further bolstered our foothold in an important area of our core business through the acquisition of Praxis Completion Technology. This acquisition also opens the door towards climate change mitigation technologies, in particular in the promising area of carbon capture and storage, where the company already enjoys first successes.”

Continued strong growth in sales and profit

Demand for SBO's products and services remained strong in the first half of 2023: Bookings rose by 10.2 % to MEUR 299.2 (1-6/2022: MEUR 271.5). Sales increased strongly by 32.3 % to MEUR 294.7 (1-6/2022: MEUR 222.7). Order backlog at the end of June 2023 stood at MEUR 262.1 (31 December 2022: MEUR 265.0).

Earnings before interest, taxes, depreciation and amortization (EBITDA) increased to MEUR 69.0 in the first half of 2023 (1-6/2022: MEUR 60.9), the EBITDA margin reached 23.4 % (1-6/2022: 27.3 %). Excluding MEUR 5.5 in exchange losses, adj. EBITDA even reached MEUR 74.5 or 25.3 % of sales in the first half of 2023. In the same period of 2022, adj. EBITDA arrived at MEUR 49.0 or 22.0 % (excluding MEUR 11.9 in exchange gains).

Profit from operations (EBIT) rose by 23.5 % to MEUR 55.4 (1-6/2022: MEUR 44.8) and reached 18.8 % of sales (EBIT margin 1-6/2022: 20.1 %). Adj. EBIT (excluding exchange losses of MEUR 5.5) rose to MEUR 60.9, resulting in an adj. EBIT margin of 20.7 %. In the first half of 2022, adj. EBIT (excluding exchange gains) amounted to MEUR 33.0 and resulted in an adj. EBIT margin of 14.8 %.

SBO's profit before tax grew by about a third (up 31.3 %) to MEUR 56.0 (1-6/2022: MEUR 42.7), while profit after tax rose by 25.3 % to MEUR 43.1 (1-6/2022: MEUR 34.4). Earnings per share in the first half of 2023 further improved to EUR 2.74 (1-6/2022: EUR 2.19).

Both segments with on-going positive development

The SBO Group’s business is divided into two segments: Advanced Manufacturing & Services (AMS) and Oilfield Equipment (OE). The AMS segment continued its strong performance, and sales increased to MEUR 162.7 in the first six months of 2023 (1-6/2022: MEUR 108.9), while profit from operations (EBIT) rose to MEUR 35.0 (1-6/2022: MEUR 22.0). Sales in the OE segment grew to MEUR 131.9 (1-6/2022: MEUR 113.8), and EBIT increased to MEUR 24.0 (1-6/2022: MEUR 20.0).

"Our strong operational execution is reflected in the Group's growth and profitability. We achieved a double-digit increase in all relevant financial figures, continuing our upward trend. Both segments have been performing well and contributed to this success. Our high liquidity and cashflow generation demonstrate our financial strength and provide a solid base for continued growth," says SBO CEO Gerald Grohmann.

Strong balance sheet

In the first half of 2023, SBO’s equity increased to MEUR 430.7 (31 December 2022: MEUR 425.0). The equity ratio improved slightly to 47.7 % (31 December 2022: 47.1 %). Net liquidity remained strong at MEUR 24.5 (31 December 2022: MEUR 34.5) even after the dividend payment of MEUR 31.5. Gearing stood at minus 5.7 % (31 December 2022: minus 8.1 %). Liquid funds amounted to MEUR 266.8 (31 December 2022: MEUR 287.8). Cashflow from operating activities almost quadrupled to MEUR 43.1 in the first half of 2023 (1-6/2022: MEUR 11.4), and Free Cashflow was at high MEUR 27.0, after a negative Free Cashflow of MEUR minus 2.4 in the first half of 2022. Capital expenditure on property, plant and equipment and intangible assets (excluding right of use assets) amounted to MEUR 17.3 (1-6/2022: MEUR 13.8).

Optimistic outlook

For the second half of 2023 and beyond, the oilfield service industry is looking optimistically towards the future. The industry is experiencing a rise in global energy demand, which is driving the need for additional investments. Over the year 2023, projections indicate an 11 % increase in global exploration and production spending in the oil and gas markets.[1] SBO takes advantage of this market environment. The company's outlook is supported by fairly high visibility and customers' confidence in the longevity and strength of this cycle. Order books are strong already, in particular from orders that are related to the international business of SBO. Despite the expected normalization of order behavior by its major customers and the easing of the North American markets, the outlook remains positive.

The acquisition of Praxis Completion Technology, which is expected to be completed in the second half of 2023, will strengthen SBO's market position in the fast-growing energy market in the Middle East. This bolt-on acquisition enhances SBO’s activities in its attractive core business. In addition, SBO is pursuing a number of projects for the development of its new business with great effort. A key element of the Strategy 2030 is to build a new segment in the area of “New Energy” to drive forward the energy solutions of tomorrow. To this end, SBO plans to make strategic investments or acquisitions with focus on hydrogen and hydrogen derivatives. In the long term, SBO aims to generate around 50 % of its sales mainly in sustainable energy technologies.

"Energy is our business. Market conditions remain favorable and we are in an excellent position and will continue to take advantage of this environment. As a result, we are on track to deliver another strong year 2023," says CEO Gerald Grohmann.

 

SBO’s Key Performance Indicators at a glance

 

		1-6/2023	1-6/2022
Sales	MEUR	294.7	222.7
Adj. EBITDA (Earnings before interest, taxes, depreciation, and amortization adjusted for exchange gains and losses)	MEUR	74.5	49.0
Adj. EBITDA margin	%	25.3	22.0
EBITDA (Earnings before interest, taxes, depreciation, and amortization)	MEUR	69.0	60.9
EBITDA margin	%	23.4	27.3
Adj. EBIT (Earnings before interest and taxes adjusted for exchange gains and losses)	MEUR	60.9	33.0
Adj. EBIT margin	%	20.7	14.8
EBIT (Earnings before interest and taxes)	MEUR	55.4	44.8
EBIT margin	%	18.8	20.1
Profit before tax	MEUR	56.0	42.7
Profit after tax	MEUR	43.1	34.4
Earnings per share	EUR	2.74	2.19
Cashflow from operating activities	MEUR	43.1	11.4
Free Cashflow	MEUR	27.0	- 2.4
Liquid funds as of 30 June 2023 / 31 December 2022	MEUR	266.8	287.8
Net liquidity as of 30 June 2023 / 31 December 2022	MEUR	24.5	34.5
Headcount as of 30 June 2023 / 31 December 2022		1,559	1,484

 

SCHOELLER-BLECKMANN OILFIELD EQUIPMENT Aktiengesellschaft (SBO) is a globally operating group of companies and world market leader in the manufacture of high-alloy, non-magnetic stainless steels. The SBO Group is engaged in high-precision production of stainless steels as special components for the oil, gas and other industries by applying innovative and additive technologies. The SBO Group is equally recognized worldwide for its directional drilling tools and equipment for well completion. With its subsidiaries and more than 1,500 employees worldwide, the Group is successfully positioned in technologically demanding, profitable niches. The Group is headquartered in Ternitz, Austria. Making an active contribution to energy transition is a key element of the Group's Strategy 2030. More detailed information on the Strategy 2030 and sustainable management (ESG) is available in the Annual Report 2022 at https://www.sbo.at/publikationen.

Contact:

Andreas Böcskör, Group Communications

Schoeller-Bleckmann Oilfield Equipment AG

Tel: +43 2630 315 DW 252

E-Mail: a.boecskoer@sbo.co.at

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