19.05.2015, 7101 Zeichen

Corporate news transmitted by euro adhoc. The issuer/originator is solely responsible for the content of this announcement.

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).
end of announcement euro adhoc
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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