Schoeller-Bleckmann Oilfield Equipment AG

EANS-News: Schoeller-Bleckmann Oilfield Equipment AG
Sound result despite unfavourable market environment - SBO consistently takes countermeasures - Very strong balance sheet structure: Liquid funds exceed MEUR 200

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quarterly report

Ternitz/Vienna, 19 May 2015. The oilfield service industry, as expected, was hit
by the massive decline in drilling activity and the following investment
reductions of oil companies in the first quarter of 2015. SBO responded to this
development by initiating a set of countermeasures at an early stage to partly
absorb the effects of the downturn. 

Sales declining by 4.4 % to MEUR 107.5 in the first quarter almost reached last
year's level (1-3/2014: MEUR 112.4), and here SBO still profited from the strong
bookings volume in the third and fourth quarter of 2014. Earnings before
interest, taxes, depreciation and amortisation (EBITDA) came to MEUR 29.0, down
by 8.9 % from last year's reading (1-3/2014: MEUR 31.8). Earnings before
interest and taxes (EBIT) arrived at MEUR 16.1, down by 26.3 % from last year
(1-3/2014: MEUR 21.9). Profit before tax fell by 27.4 %, to MEUR 14.5 (1-3/2014:
MEUR 20.0), and profit after tax by 28.2 %, to MEUR 10.4 (1-3/2014: MEUR 14.5).
Earnings per share in the first quarter were EUR 0.65 (1-3/2014: EUR 0.91). 

Despite the unfavourable environment SBO generated sound profitability: The
EBITDA margin was 27.0 % (1-3/2014: 28.3 %), the EBIT margin came to 15.0 %
(1-3/2014: 19.5 %) and the pre-tax margin to 13.5 % (1-3/2014: 17.8 %). As at 31
March 2015, SBO had a net cash position of MEUR 1.0 (31 March 2014: net debt of
MEUR 14.1). Liquid funds grew by 27.4 %, to MEUR 203.6 (31 March 2014: MEUR
159.8). Spending for property, plant and equipment and for intangible assets was
reduced by 31.1%, to MEUR 8.0 (1-3/2014: MEUR 11.6). The company has a very
sound balance sheet structure and thus was in a position to distribute to
shareholders an unchanged high dividend of EUR 1.50 per share for the year 2014.


Year-on-year, bookings fell by 49.9 %, to MEUR 57.1 (1-3/2014: MEUR 114.0). The
order backlog went down by 17.2 %, to MEUR 91.7 (31 March 2014: MEUR 110.7). 

Gerald Grohmann, CEO of SBO: "We delivered a respectable performance in an
unfavourable environment of the first quarter and posted sound results. The
reduced volume of bookings will confront us with further challenges in the
future. My assumption is that we have not yet reached the bottom. However, we
have once again adjusted to the current circumstances in our cyclical industry
at an early point and taken all measures required for coping with this difficult
time. We will continue this course consistently." 

SBO started already in the second half of 2014 to implement extensive
countermeasures: 

   -   SBO initiated a programme as early as in the third quarter of 2014 to
streamline cost structures of its UK activities. In view of the prevailing
business environment it was decided to merge business activities of the two
neighbouring subsidiaries "Techman Engineering Ltd." and "Darron Tool &
Engineering Ltd." at the site of Techman by the end of 2015. As a result,
structural and sustainable cost benefits will be created after the programme has
been completed. 

   -   Also in 2014, SBO started to internationalise the successful drilling
motor business of BICO. Apart from initial successes in Russia and the Far East,
drilling motors will be marketed henceforth both by our existing branch office
in Dubai and the newly established distribution company in Saudi Arabia. 

   -   Expenditure for plant, property and equipment (capex) was largely reduced
to maintenance investments in the first quarter of 2015. Spending for research
and development were not curbed. 

   -   SBO adjusted personnel capacities to the expected decline in demand
during the first quarter. The headcount at the end of the first quarter of 2015
was 1,534 (1,720 as at 31 December 2014 and 1,625 as at 31 March 2014).

Outlook

In its most recent forecast the International Monetary Fund (IMF) upheld is
growth projections for the global economy in 2015 at 3.5 % (2014: 3.4 %).
According to the IMF, the likelihood of recession in the eurozone has fallen
from 40 % to 25 % (IMF World Economic Outlook, April 2015). 

According to current expectations of the International Energy Agency (IEA),
global oil consumption for full 2015 will arrive at 93.6 million barrels per day
(mb/d). This means another increase of 1.1 mb/d or 1.2 % year-on-year (2014:
92.5 mb/d) (IEA Oil Market Report, May 2015). However, it cannot be predicted at
the moment how long the present oversupply in the crude oil market and the
resulting low oil price will last. 

The massive decline in global drilling activity by more than 50 % in North
America and 11 % internationally has considerably impaired the economic
environment for the oilfield service industry. At the moment, there are no signs
that the downturn has bottomed out yet. Our assumption is that SBO's customers
will continue their reduced spending policy in the coming months. 

Nevertheless, medium to long-term growth perspectives for the industry remain
absolutely intact: The IEA expects the global demand for oil to rise by around
30 % until 2040. This is why cutbacks on capital expenditure at present always
serve as a basis of dynamic growth of the oilfield service industry in the
future. Being a technology leader, SBO has an optimal strategic position for
sustainably benefiting from such long-term growth. 


Comparison of key financial figures


                                1-3/2015      1-3/2014         Change
Sales                in MEUR       107.5         112.4         -4.4 %
EBITDA               in MEUR        29.0          31.8         -8.9 %
EBITDA margin           in %        27.0          28.3            -
EBIT                 in MEUR        16.1          21.9        -26.3 %
EBIT margin             in %        15.0          19.5            - 
Profit before tax    in MEUR        14.5          20.0        -27.4 %
Profit after tax     in MEUR        10.4          14.5        -28.2 %
EPS*                  in EUR        0.65          0.91        -28.5 %
Headcount**          numbers       1,534         1,625         -5.6 %

*   based on average number of shares outstanding 
**  reporting date 31 March



Schoeller-Bleckmann Oilfield Equipment AG is the global market leader in
high-precision components and a leading supplier of oilfield equipment 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 31 March 2015, SBO has employed a workforce of 1,534
worldwide (31 March 2014: 1,625), thereof 420 in Ternitz/Austria and 608 in
North America (including Mexico).

Further inquiry note:
Florian Schütz, Head of Investor Relations
Schoeller-Bleckmann Oilfield Equipment AG
A-2630 Ternitz/Austria, Hauptstrasse 2
Tel.: +43 2630 315-251
Fax: +43 2630 315-501
E-Mail: f.schuetz@sbo.co.at

end of announcement                               euro adhoc 
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company:     Schoeller-Bleckmann Oilfield Equipment AG
             Hauptstrasse 2
             A-2630 Ternitz
phone:       02630/315110
FAX:         02630/315101
mail:     sboe@sbo.co.at
WWW:      http://www.sbo.at
sector:      Oil & Gas - Upstream activities
ISIN:        AT0000946652
indexes:     WBI, ATX Prime, ATX
stockmarkets: official market: Wien 
language:   English
 

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