Schoeller-Bleckmann Oilfield Equipment AG took advantage of momentum on international markets and posts a solid result for 2019
• In 2019 sound business development of SBO on international markets
• Sales rose to MEUR 445, operating result (EBIT) stood at MEUR 60
• Dividend proposal of EUR 1.20 per share following EUR 1.00 per share in the previous year
• Share buyback program of up to 700,000 shares resolved
Ternitz/Vienna, 18 March 2020. Schoeller-Bleckmann Oilfield Equipment AG (SBO), listed on the ATX market of the Vienna Stock Exchange, generated a sound result in 2019, despite large regional differences. The company's broad strategic positioning proved its worth in a highly dynamic market environment. Demand in North America showed a strong downward trend from mid-year on, due to the high investment discipline of North American oil and gas companies. By contrast, the international market environment developed positively. SBO's well-developed international business helped to compensate to a large extent for the weakness of the North American market.
In yearly comparison, sales increased by 6.0 % to MEUR 445.3 (2018: MEUR 420.2). Bookings amounted to MEUR 467.2, following MEUR 481.9 in 2018. The order backlog went up to MEUR 123.0 at the end of 2019 (31 December 2018: MEUR 97.7). Earnings before interest, taxes, depreciation and amortization (EBITDA) came to MEUR 108.6 (2018: MEUR 120.0). Profit from operations (EBIT) arrived at MEUR 60.2 (2018: MEUR 46.9). The previous year's figure includes a non-cash, retroactive restatement of the goodwill of a subsidiary in the amount of MEUR 23.9 as of 31 December 2018[1]. The EBITDA margin stood at 24.4 % (2018: 28.6 %) and the EBIT margin at 13.5 % (2018: 11.2 %).
The financial result for 2019 amounted to MEUR minus 12.3 (2018: MEUR minus 14.8). Profit before tax came to MEUR 47.9 (2018: MEUR 32.0), and profit after tax was MEUR 32.3 in business year 2019 (2018: MEUR 17.5). Earnings per share were EUR 2.03 (2018: EUR 1.10).
"Large regional differences between North America and international markets marked our business year and created an overall challenging environment for the oil and gas industry," comments Gerald Grohmann, CEO of SBO. "As the international market environment developed positively, SBO's global positioning helped to make good use of opportunities in these markets and reduce the impact of the weaker North American business. As a result, our business has continued to develop soundly in 2019."
Retroactive restatement of goodwill in 2018
Based on review findings from the Austrian Financial Reporting Enforcement Panel in December 2019, SBO made a non-cash, retroactive restatement of goodwill of a subsidiary in the amount of MEUR 23.9 as of 31 December 2018. The non-cash restatement of the goodwill as of 31 December 2018 had no impact on the 2019 results.
Sound balance sheet
SBO has a sound balance sheet structure: Equity increased to MEUR 370.1 (2018: MEUR 344.8).1 SBO's equity ratio climbed to 42.3 % at the end of 2019 (2018: 39.3 %), while net debt was reduced to MEUR 20.1 (2018: MEUR 62.5). Accordingly, the gearing ratio also fell, from 18.1 % to 5.4 % at year-end 2019. Cash and cash equivalents amounted to MEUR 265.2 (2018: MEUR 241.5). Cashflow from operating activities almost tripled, arriving at MEUR 98.1 at year-end (2018: MEUR 33.4). Free cashflow increased from MEUR minus 0.3 in 2018 to MEUR 63.8 in 2019, despite payments for the acquisition of minority interests of MEUR 30.1. Capital expenditure for property, plant and equipment and intangible assets (CAPEX) was MEUR 31.5 (2018: MEUR 35.9). On 31 December 2019, purchase commitments for property, plant and equipment amounted to MEUR 5.0 (2018: MEUR 2.1).
The Executive Board will propose to the 2020 Annual General Meeting to increase the dividend for the 2019 financial year to EUR 1.20 per share (2018: EUR 1.00).
Share buyback program resolved
The Executive Management Board of SBO resolved to make use of the authorization granted by the 2018 Annual General Meeting to buy back treasury shares. The share buyback is to take place in the period from 23 March 2020 to 24 October 2020 (expected). Under the program, it is planned to buy back up to 700,000 treasury shares, that is 4.375 % of the share capital at most, via the Vienna Stock Exchange at a minimum value of EUR 1 and a maximum value of EUR 35 per share. According to the resolution, the share buyback is to be used for employee programs or as a transaction currency.
Challenging environment in 2020
SBO got off to a good start in 2020, with sales and bookings developing in line with expectations. Starting in February, two events have put the capital markets under massive pressure: First, the development around the coronavirus set in and created direct effects on the global economy. This also had an immediate impact on oil prices. At present, it is difficult to predict how quickly the situation will calm down. On the weekend of 7 March 2020, there was a surprising escalation in the production conflict between Saudi Arabia and Russia as OPEC+ partner. Saudi Arabia stepped up production and flooded the oil market at discounted prices. This measure was taken very deliberately in an already weakened demand environment as a result of the corona epidemic. The next OPEC meeting is scheduled for 9 June 2020.
"As usual, we will make every effort to deal with the market circumstances and uncertainties in the best possible way. North America will remain weak due to the low oil price. On the international markets, there is hope that the oil and gas companies' spending for exploration and production will be adjusted only moderately. We are highly vigilant and are preparing for a challenging year 2020", concludes CEO Gerald Grohmann.
Comparison of SBO's key performance indicators
|
|
|
2019
|
20181
|
|
Sales
|
MEUR
|
445.3
|
420.2
|
|
Earnings before interest, taxes, depreciation and amortization
(EBITDA) |
MEUR
|
108.6
|
120.0
|
|
EBITDA margin
|
%
|
24.4
|
28.6
|
|
Earnings before interest and taxes (EBIT)
|
MEUR
|
60.2
|
46.9
|
|
EBIT margin
|
%
|
13.5
|
11.2
|
|
Profit before tax
|
MEUR
|
47.9
|
32.0
|
|
Profit after tax
|
MEUR
|
32.3
|
17.5
|
|
Earnings per share
|
EUR
|
2.03
|
1.10
|
|
Cash-flow from operating activities
|
MEUR
|
98.1
|
33.4
|
|
Liquid funds
|
MEUR
|
265.2
|
241.5
|
|
Headcount
|
|
1,535
|
1,646
|
SBO is a globally leading supplier of products and solutions used by the oil and gas industry for directional drilling and well completion applications. SBO is the global market leader in the manufacture of high-precision components made of non-magnetic high-alloy stainless steel. The company produces the components specifically according to the requirements of customers in the oilfield service industry. As of 31 December 2019, SBO employed a workforce of 1,535 worldwide (31 December 2018: 1,646), thereof 393 in Ternitz / Austria and 788 in North America.
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
[1] The figures for 2018 have been restated retrospectively (see Notes in the 2019 Consolidated Financial Statements).
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