Schlumberger Net Income dropped on 574% and EBITDA Margin dropped on 39.3 pp from 20.1% to -19.2%
17 Jan 2020 • About Schlumberger (
$SCL) • By InTwits
Schlumberger reported FY2019 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: -19.2% in FY2019, 20.1% in FY2018, 9.8% in FY2017, 9.2% in FY2016, 19.9% in FY2015
- Schlumberger has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.6%. At the same time it's a lot of higher than industry average of 4.7%.
- CAPEX is quite volatile: 114 ZMWm in FY2019, 150 ZMWm in FY2018, 155 ZMWm in FY2017, 50 ZMWm in FY2016, 247 ZMWm in FY2015
- The company has unprofitable business model: ROIC is -20.9%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.7x while industry average is -175.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Schlumberger's Revenue showed almost no change in FY2019. During the last 5 years Revenue growth topped in FY2017 at 9.5% and was decelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 26.1 pp from 1.8% to -24.3% in FY2019.
Gross Margin showed almost no change in FY2019. SG&A as a % of Revenue showed almost no change in FY2019.
Net Income margin dropped on 37.3 pp from 6.5% to -30.8% in FY2019.
Investments (CAPEX, working capital and M&A)
In FY2019 Schlumberger had CAPEX/Revenue of 5.2%. The company showed decline in CAPEX/Revenue of 2.2 pp from 7.4% in FY2016 to 5.2% in FY2019. It's average level of CAPEX/Revenue for the last three years was 6.2%. During FY2015-FY2019 CAPEX as a % of Revenue topped in FY2016 at 7.4% and was declining since that time.
Return on investment
The company operates at negative ROIC (-20.9%) and ROE (-33.6%). ROIC dropped on 26.4 pp from 5.5% to -20.9% in FY2019. ROE dropped on 39.5 pp from 5.9% to -33.6% in FY2019.
Leverage (Debt)
Debt level is 2.7x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 2.2x from 2.2x to in FY2019. Debt decreased on 4.7% while cash surged on 51.2%.
Schlumberger has no short term refinancing risk: cash is higher than short term debt (413.5%).
Financial and operational results
FY ended 30 Nov -0001
Schlumberger ($SCL) key annual financial indicators| mln. $ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 35,475 | 27,810 | 30,440 | 32,815 | 32,917 | 0.3% |
| Gross Profit | 7,154 | 3,700 | 3,897 | 4,337 | 4,197 | -3.2% |
| SG&A | 494 | 403 | 432 | 444 | 474 | 6.8% |
| EBITDA | 7,069 | 2,559 | 2,996 | 6,606 | -6,306 | -195.5% |
| EBIT | | | | 3,050 | | |
| Interest expence | | | | 575 | | |
| Tax | | | | 447 | | |
| Net Income | 2,072 | -1,687 | -1,505 | 2,138 | -10,137 | -574.1% |
| Stock Based Compensation | | | | 345 | | |
Balance Sheet
|
|---|
| Cash | 2,793 | 2,929 | 1,799 | 1,433 | 2,167 | 51.2% |
| Accounts Receivable | | | | 7,881 | | |
| Inventory | | | | 4,010 | | |
| Short Term Debt | 4,557 | 3,153 | 3,324 | 1,407 | 524 | -62.8% |
| Long Term Debt | 14,442 | 16,463 | 14,875 | 14,644 | 14,770 | 0.9% |
Cash flow
|
|---|
| Capex | 2,410 | 2,055 | 2,107 | 2,160 | 1,724 | -20.2% |
| Dividends | | | | 2,770 | | |
| Acquisitions | | | | 292 | | |
Ratios
|
|---|
| Revenue growth | -27.0% | -21.6% | 9.5% | 7.8% | 0.3% | |
| EBITDA growth | -40.1% | -63.8% | 17.1% | 120.5% | -195.5% | |
|
|---|
| Gross Margin | 20.2% | 13.3% | 12.8% | 13.2% | 12.8% | -0.5% |
| EBITDA Margin | 19.9% | 9.2% | 9.8% | 20.1% | -19.2% | -39.3% |
| EBIT Margin | | | | 9.3% | |
| SG&A, % of revenue | 1.4% | 1.4% | 1.4% | 1.4% | 1.4% | 0.1% |
| SBC, % of revenue | | | | 1.1% | |
| Net Income Margin | 5.8% | -6.1% | -4.9% | 6.5% | -30.8% | -37.3% |
| CAPEX, % of revenue | 6.8% | 7.4% | 6.9% | 6.6% | 5.2% | -1.3% |
|
|---|
| ROIC | 5.4% | -2.6% | -1.4% | 5.5% | -20.9% | -26.4% |
| ROE | 5.6% | -4.4% | -3.9% | 5.9% | -33.6% | -39.5% |
| Net Debt/EBITDA | 2.3x | 6.5x | 5.5x | 2.2x | |
| Interest coverage ratio (ICR) | | | | 5.3x | |
| Interest expence / Average debt | | | | 3.4% | | |
People
|
|---|
| Insider ownership | | | | 0.1% | | |
| Employees | | | | 100,000 | | |
| Revenue/Employee, th. $ | | | | 328 | | |
Peers in Oil Equipment, Services & Distribution
Below we provide Schlumberger benchmarking against other companies in Oil Equipment, Services & Distribution industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Enteq Upstream ($NTQ) | -24.6% | -66.1% | -24.3% | 35.7% | |
| |
|---|
| Median (1 company) | -11.9% | -33.8% | 30.9% | 35.7% | |
|---|
| Schlumberger ($SCL) | | -21.6% | 9.5% | 7.8% | 0.3% |
Top companies by Gross margin, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Enteq Upstream ($NTQ) | 37.3% | 65.0% | 65.1% | 66.9% | |
| |
|---|
| Median (1 company) | 29.8% | 35.7% | 29.6% | 66.9% | |
|---|
| Schlumberger ($SCL) | 20.2% | 13.3% | 12.8% | 13.2% | 12.8% |
Top companies by EBITDA margin, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Enteq Upstream ($NTQ) | -6.1% | -54.1% | -16.0% | 0.4% | |
| |
|---|
| Median (1 company) | -0.2% | -7.3% | 3.5% | 0.4% | |
|---|
| Schlumberger ($SCL) | 19.9% | 9.2% | 9.8% | 20.1% | -19.2% |
Top companies by CAPEX/Revenue, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Enteq Upstream ($NTQ) | 12.4% | 1.0% | 0.0% | 3.7% | |
| |
|---|
| Median (1 company) | 6.3% | 1.4% | 0.4% | 3.7% | |
|---|
| Schlumberger ($SCL) | 6.8% | 7.4% | 6.9% | 6.6% | 5.2% |
Top companies by ROIC, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Enteq Upstream ($NTQ) | -14.7% | -17.4% | -5.2% | -3.5% | |
| Wood Group(John) ($WG.) | 4.5% | 2.5% | 0.1% | | |
| Mycelx Technologies Corp ($MYX) | -11.0% | -13.2% | -3.6% | | |
| |
|---|
| Median (3 companies) | -7.4% | -3.9% | -2.2% | -3.5% | |
|---|
| Schlumberger ($SCL) | 5.4% | -2.6% | -1.4% | 5.5% | -20.9% |
Top companies by Net Debt / EBITDA
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Enteq Upstream ($NTQ) | | | | -534.5x | |
| |
|---|
| Median (1 company) | 1.2x | 1.5x | 3.4x | -534.5x | |
|---|
| Schlumberger ($SCL) | 2.3x | 6.5x | 5.5x | 2.2x | |
