Release Date: November 21, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Schoeller-Bleckmann Oilfield Equipment AG (SBOEY, Financial) reported a solid cash flow increase to over 42 million EUR, significantly above the previous two years.
- The company achieved double-digit sales growth in the Middle East and Latin America, successfully reducing its US market exposure.
- The Oilfield Equipment division returned to profitability in Q3, showing a promising path with an EBIT margin of 8%.
- Schoeller-Bleckmann Oilfield Equipment AG (SBOEY) successfully completed a financing round, enhancing its liquidity and strategic flexibility.
- The company was honored with an ESG award, highlighting its commitment to environmental sustainability, social responsibility, and corporate governance.
Negative Points
- Sales decreased by 3% compared to the previous year, impacted by the weakness in the US market.
- The AMS division experienced a significant foreign exchange loss of almost 3 million EUR in Q3.
- Bookings in Q3 were 4% below the second quarter, indicating a moderation in customer demand.
- The company's EBIT of 51.8 million EUR was well below the previous year, driven by weaker performance in the first half of the year.
- The US market remains challenging with no significant rebound expected in the short term, affecting the Oilfield Equipment segment.
Q & A Highlights
Q: You mentioned in the release that you don't expect a significant rebound in the US market in the short term. Are the Q3 results a good proxy for expectations into Q4 and 2025 for the OE segment? Are there further measures to improve margins in that segment?
A: The US market did not improve, and current talks suggest it will remain at that level with slight increases. We managed to do better in the oilfield equipment division through operational efficiencies and regional expansion. We aim to generate EBIT margins in the double-digit percentage area in 2025. - Unidentified_1
Q: What drove the weaker Q3 results in the A MS segment? Which regions showed weakness, and are there initiatives to support margins?
A: The weaker Q3 results in A MS were driven by customers moderating their spending due to inventory levels and market pressure. We are experienced in adjusting our business to suit market conditions and are focusing on diversification strategies, particularly in additive manufacturing. - Unidentified_2
Q: What portion of the OE sales are non-US based?
A: Approximately 40% of OE sales are non-US based, spread across regions like the Middle East, Central America, Africa, Europe, and Asia. - Unidentified_1
Q: Could you elaborate on the impact of foreign exchange rates on Q3 revenues and EBIT per segment?
A: The most significant foreign exchange loss was in the A MS division with 2.7 million EUR, while oilfield equipment had a loss of about 300,000 EUR. The impact on sales was not significant due to average rate calculations. - Unidentified_1
Q: Were you surprised by the normalization slowdown in A MS, and could you speak on the operating leverage dynamics in this segment?
A: We were not surprised as we have been in dialogue with our customers, observing a gradual reduction in their requirements. We have been planning for this and adjusting our workforce accordingly. - Unidentified_2
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
