SLB N.V. (NYSE:SLB)

Operating Income

Operating income demonstrates an overall upward trend from 2020 through 2024, increasing from $731 million to $1,408 million. The most notable growth occurred between 2020 and 2021, with a substantial rise of over 56%. After peaking in 2022 at $1,357 million, there was a slight decline in 2023, followed by a recovery in 2024, suggesting some volatility but a general positive trajectory.

Revenue

Revenue steadily increased throughout the five-year period, growing from $3,076 million in 2020 to $4,247 million in 2024. This consistent growth indicates expanding business operations or market penetration within the segment, with the largest annual increase occurring between 2023 and 2024.

Segment Profit Margin

The segment profit margin improved from 23.76% in 2020 to a peak of 36.43% in 2022, indicating enhanced profitability and operational efficiency. However, it declined in 2023 to 32.47% before experiencing a moderate rebound to 33.15% in 2024. This pattern suggests that while the segment generally achieved higher profitability over time, it faced some margin pressure or increased costs during the 2023 fiscal year.

The performance of the Reservoir Performance segment exhibits a consistent upward trajectory over the analyzed periods. There is a notable increase in operating income, which more than quadruples from 353 million US dollars at the end of 2020 to 1452 million US dollars by the end of 2024. This significant growth indicates an improvement in the segment's ability to generate profit from its operations.

Revenue figures demonstrate some variability but generally present an increasing trend. Revenue dropped from 5602 million US dollars in 2020 to 4599 million in 2021, followed by a recovery and growth to 5553 million in 2022. Subsequently, revenue shows strong growth, reaching 6561 million in 2023 and further rising to 7177 million by the end of 2024. This expansion suggests increasing demand or improved sales performance over the latter years.

The segment profit margin consistently strengthens throughout the period, rising from a modest 6.3% in 2020 to over 20% in 2024. This improvement in profitability margin indicates enhanced operational efficiency, better cost management, or a successful shift toward higher-margin offerings within the segment.

Operating Income

Demonstrates robust growth, increasing over fourfold from 2020 to 2024.

Revenue

Exhibits an initial decline in 2021 followed by steady recovery and growth through to 2024.

Segment Profit Margin

Shows a continuous upward trend, tripling percentage points to surpass 20% by 2024.

Overall, the Reservoir Performance segment displays healthy financial progress marked by expanding revenue and operating income along with improving profitability ratios. These trends reflect a strengthening business segment with positive operational dynamics over the five-year horizon.

Operating Income

The operating income exhibited a consistent upward trend from 2020 to 2023, increasing from $866 million to $2,932 million. This represents a significant growth in the segment's profitability over this period. However, in 2024, there was a slight decrease to $2,826 million, indicating a modest contraction after several years of strong growth.

Revenue

Revenue showed steady growth from 2020 to 2023, rising from $8,605 million to $13,478 million. This consistent increase in revenue suggests expanded business activities or improved market conditions. In 2024, revenue slightly declined to $13,357 million, suggesting a minor reduction in sales or market demand following the growth trend.

Segment Profit Margin

The profit margin improved substantially over the period, starting at 10.06% in 2020 and reaching a peak of 21.75% in 2023. This more than doubling of the margin indicates enhanced operational efficiency or improved pricing power within the segment. In 2024, the margin slightly decreased to 21.16%, which, while lower, still reflects a strong profitability level compared to earlier years.

Revenue Trends

The revenue of the Production Systems segment exhibited a consistent upward trajectory over the five-year period. Starting from US$ 6,650 million at the end of 2020, it increased moderately to US$ 6,710 million in 2021. This growth accelerated notably in subsequent years, reaching US$ 7,862 million in 2022, US$ 9,831 million in 2023, and culminating at US$ 12,143 million in 2024. This represents an overall significant increase, reflecting strong demand or pricing improvements in the segment.

Operating Income

Operating income experienced a similar positive trend, growing steadily from US$ 623 million in 2020 to US$ 634 million in 2021, followed by a more pronounced increase to US$ 748 million in 2022. The growth became more substantial in the last two years, jumping to US$ 1,245 million in 2023 and US$ 1,898 million in 2024. This indicates improved operational performance and possibly enhanced efficiency or higher profitability per unit of revenue.

Segment Profit Margin

The segment profit margin demonstrated a progressive improvement throughout the period. Starting at 9.37% in 2020, it saw minor incremental increases to 9.45% in 2021 and 9.51% in 2022. However, from 2023 onwards, the margin expanded more significantly, reaching 12.66% and then further increasing to 15.63% in 2024. This suggests that the segment has been able to enhance profitability notably, potentially due to cost management, higher-margin product mix, or pricing strategies.

Overall Insights

The data shows a clear and robust growth pattern in both revenue and operating income, accompanied by improving profit margins. The marked increases from 2022 to 2024 imply a period of accelerated business expansion and improved profitability. The upward trend in segment profit margin, particularly in the latter years, highlights effective operational execution and a strengthening competitive position within the Production Systems segment.

The analysis of the annual "Digital & Integration" reportable segment reveals several noteworthy financial trends over the five-year period ending December 31, 2024.

Operating Income

The operating income demonstrates a general upward trajectory throughout the period. Starting at $731 million in 2020, it increased substantially to $1,141 million in 2021, followed by a further rise to $1,357 million in 2022. Despite a slight decline to $1,257 million in 2023, the figure rebounded in 2024, reaching $1,408 million, the highest level reported in this timeframe. This pattern suggests overall growth in operational profitability with minor fluctuations.

Assets

The total assets attributed to the segment exhibit a modest downward trend from $3,595 million in 2020 to $3,117 million in 2024. The decline is relatively gradual, with values hovering slightly above $3,100 million in the later years. This slight contraction indicates stable asset base with mild reductions which could reflect asset optimization or divestitures.

Segment Return on Assets (ROA)

The segment’s return on assets shows a strong positive trend, increasing from 20.33% in 2020 to 36.41% in 2021 and then to 43.33% in 2022. Although there was a slight dip to 40.69% in 2023, the ROA rose again to 45.17% in 2024. This upward progression indicates improved efficiency in generating operating income from the asset base, reflecting enhanced profitability and operational leverage within the segment.

In summary, the segment exhibits sustained growth in operating income coupled with a stable to slightly declining asset base, resulting in substantially improved asset utilization as evidenced by the increasing segment ROA. These trends point toward enhanced operational efficiency and profitability over the analyzed period.

The analysis of the Reservoir Performance segment over the five-year period reveals several key trends in financial performance and asset management.

Operating Income

Operating income has shown a consistent and substantial increase each year, rising from $353 million in 2020 to $1,452 million in 2024. This represents more than a fourfold growth in operating income over the period, indicating strong revenue expansion or improved profitability within the segment.

Assets

The asset base has experienced fluctuations but exhibits an overall upward trend. Starting at $3,489 million at the end of 2020, assets decreased to $2,923 million in 2021, recovered to $3,159 million in 2022, and then steadily increased to $3,802 million by 2024. The initial dip in 2021 suggests a possible divestment or asset revaluation, followed by renewed investment or asset acquisitions in subsequent years.

Segment Return on Assets (ROA)

Segment ROA has improved significantly from 10.12% in 2020 to 38.19% in 2024. This substantial increase demonstrates enhanced efficiency in utilizing assets to generate operating income, reflecting stronger operational performance and potentially better asset management practices within the segment.

Overall, the Reservoir Performance segment displays robust growth in profitability alongside a moderately increasing asset base, culminating in notably improved return on assets. The combination of escalating operating income and rising ROA suggests effective strategic execution and operational optimization during the period under review.

The analysis of the financial data for the Well Construction reportable segment reveals several noteworthy trends over the five-year period.

Operating Income

The operating income demonstrated a consistent upward trajectory from 2020 through 2023, increasing from 866 million US dollars to a peak of 2,932 million US dollars. This represents a substantial growth over the period, reflecting enhanced operational performance or improving market conditions in the segment. However, in 2024, there is a slight decline to 2,826 million US dollars, indicating a minor contraction or stabilization after significant growth.

Assets

The asset base exhibited relative stability between 2020 and 2021, slightly decreasing from 4,768 million US dollars to 4,714 million US dollars. Subsequently, there was a notable increase to 6,481 million US dollars in 2022 and further growth to 7,129 million US dollars in 2023, suggesting investment or capital expansion in the segment. In 2024, assets decreased to 6,741 million US dollars, which could imply asset rationalization or adjustments in the asset structure.

Segment Return on Assets (ROA)

The segment ROA displayed a marked improvement over the period, rising steadily from 18.16% in 2020 to 41.92% in 2024. This upward trend indicates enhanced efficiency in generating income from the asset base, correlating strongly with the increase in operating income and the effective utilization of assets. The improvement in ROA, especially its acceleration starting in 2021, suggests significant gains in profitability relative to assets deployed.

In summary, the Well Construction segment shows strong financial performance growth in operating income and profitability efficiency as measured by ROA, accompanied by an initial increase in asset investment followed by slight contraction in the final year. This pattern may reflect a maturing phase of the segment's expansion or responses to shifting market conditions.

Operating Income

The operating income of the segment exhibits a consistent and substantial upward trend over the five-year period. Starting at 623 million US dollars in 2020, the figure increased marginally to 634 million in 2021. From 2022 onwards, the operating income grew more sharply, reaching 748 million in 2022, surging to 1,245 million in 2023, and further increasing significantly to 1,898 million by the end of 2024. This indicates robust growth in the segment's income-generating capacity.

Assets

The asset base of the segment also shows a steady increase throughout the period. Beginning at 4,665 million US dollars in 2020, assets experienced modest growth to 4,684 million in 2021. The growth rate accelerated in the subsequent years, with assets rising to 5,603 million in 2022, 6,640 million in 2023, and reaching 7,116 million by 2024. This consistent expansion suggests ongoing investments or acquisitions contributing to the segment's operational capacity.

Segment Return on Assets (ROA)

The segment ROA remained relatively stable between 2020 and 2022, fluctuating slightly around 13.35% to 13.54%. However, a notable improvement occurred starting in 2023 when ROA increased significantly to 18.75%, followed by a further rise to 26.67% in 2024. This marked enhancement in asset efficiency implies that the segment is generating substantially higher returns relative to its asset base in the most recent years, reflecting improved profitability and operational effectiveness.

Overall Analysis

The data reveals a positive growth trajectory for the segment, characterized by increasing operating income and asset base, coupled with substantially improving return on assets. The sharp rise in ROA in the final two years indicates that the segment has enhanced its ability to convert assets into operating income efficiently. The trends suggest successful strategic initiatives, improved market conditions, or operational optimizations contributing to stronger financial performance over time.

Revenue Trends

The revenue for the Digital & Integration segment has demonstrated consistent growth over the five-year period from 2020 to 2024. Starting at US$ 3,076 million in 2020, it increased each year, reaching US$ 4,247 million by 2024. This represents a cumulative increase of approximately 38% over the period, indicating a strong upward trajectory in sales or service income within the segment.

Assets Trends

The asset base of the segment shows a declining trend from 2020 through 2023, decreasing from US$ 3,595 million to US$ 3,089 million. However, there is a slight recovery in 2024, with assets increasing marginally to US$ 3,117 million. Overall, the asset level shows a modest contraction of about 13% from the beginning to the end of the period, suggesting possible asset optimization or divestitures during these years.

Segment Asset Turnover

The segment asset turnover ratio has improved steadily over the period, rising from 0.86 in 2020 to 1.36 in 2024. This ratio measures how efficiently the segment uses its assets to generate revenue. The consistent increase reflects enhanced operational efficiency, with the segment generating more revenue per unit of asset each year. The improvement aligns with the observed revenue growth despite the relatively stable or declining asset base.

Overall Insights

The Digital & Integration segment demonstrates a positive trend in revenue growth combined with a disciplined approach to asset management, as indicated by the reducing asset base and rising asset turnover ratio. This suggests that the segment has become more effective at leveraging its assets to drive sales, which may result from improved operational processes, better investment decisions, or a shift toward higher-margin offerings. The performance trends indicate a strengthening business model within the segment over the analyzed period.

Revenue Trends

The revenue experienced fluctuations over the observed five-year period. Starting at $5,602 million in 2020, there was a decline to $4,599 million in 2021. Subsequently, revenue recovered and increased steadily, reaching $7,177 million by the end of 2024. This indicates a strong rebound and growth trajectory after the initial dip.

Assets Trends

Assets showed a somewhat irregular but overall upward trend. Beginning at $3,489 million in 2020, asset values decreased to $2,923 million in 2021, then gradually increased in the following years, culminating at $3,802 million in 2024. This suggests continued investment or asset acquisition following the initial contraction in 2021.

Segment Asset Turnover Trends

The segment asset turnover ratio reveals an improvement in the efficiency of asset utilization. Starting at 1.61 in 2020, the ratio slightly decreased to 1.57 in 2021, then consistently increased each year, reaching 1.89 by 2024. This upward movement indicates that the segment has been generating more revenue per unit of asset over time, reflecting enhanced operational effectiveness.

Overall Insights

The segment experienced a temporary decline in both revenue and asset base in 2021, possibly indicative of external challenges or strategic adjustments. However, the subsequent years show a period of recovery and growth, with revenues surpassing the initial 2020 level significantly. The steady increase in asset turnover ratio suggests improving asset productivity and operational efficiency. The combined trends indicate successful management actions leading to stronger performance and asset utilization in the most recent years.

The financial data for the well construction segment over the five-year period reveals notable trends in revenue, assets, and asset utilization efficiency.

Revenue

Revenue showed an overall growth trend from 2020 to 2023, increasing from $8,605 million to $13,478 million. This represents a significant upward trajectory with a peak in 2023. However, there is a slight decline in 2024 to $13,357 million, indicating a mild contraction after the peak year but still maintaining a high level relative to the initial periods.

Assets

Total assets held within the segment grew steadily from $4,768 million in 2020 to $7,129 million by the end of 2023. In 2024, assets experienced a marginal decline to $6,741 million, which mirrors the revenue pattern but with a less pronounced decrease. This suggests a relatively stable asset base with minor reductions after a period of expansion.

Segment Asset Turnover

The segment asset turnover ratio, reflecting the efficiency of asset utilization to generate revenue, demonstrates a generally improving trend. Starting at 1.80 in 2020, it rose moderately to 1.85 in 2021, dipped slightly to 1.76 in 2022, then increased again to 1.89 in 2023, and further improved to 1.98 in 2024. This progression indicates enhanced operational efficiency, particularly in the last two years, where revenue generated per unit of asset value increased despite the slight reduction in absolute assets.

In summary, the segment experienced robust revenue growth through 2023 with a slight downturn in 2024, accompanied by a similar pattern in asset levels. The improving asset turnover ratio suggests that the segment has increasingly optimized the use of its assets to generate revenue, particularly notable in the final year where efficiency peaked. The minor declines in revenue and assets in 2024 could warrant further investigation but do not detract from the overall positive trend in operational efficiency over the period analyzed.

Revenue Trends

The revenue for the Production Systems segment demonstrates a consistent upward trajectory over the analyzed five-year period. Starting at 6,650 million US dollars at the end of 2020, revenue exhibits modest growth in 2021, increasing slightly to 6,710 million US dollars. A more marked acceleration is observed in subsequent years, with revenue reaching 7,862 million US dollars in 2022, then 9,831 million in 2023, and ultimately peaking at 12,143 million US dollars by the close of 2024. This pattern indicates strong growth momentum and expanding business activity within the segment.

Assets Trends

Segment assets follow a similar upward trend, though growth appears more gradual compared to revenue. Assets start at 4,665 million US dollars in 2020 and increase slightly to 4,684 million in 2021. From 2022 onwards, assets grow more significantly, reaching 5,603 million in 2022, 6,640 million in 2023, and 7,116 million in 2024. The increase in assets supports expanding operations but reflects a more conservative accumulation of resources relative to revenue growth.

Segment Asset Turnover

The segment asset turnover ratio exhibits relative stability initially, maintaining a value of 1.43 in both 2020 and 2021, before a slight dip to 1.40 in 2022. Starting in 2023, the ratio improves noticeably, climbing to 1.48 and then sharply increasing to 1.71 in 2024. This upward movement indicates enhanced efficiency in utilizing assets to generate revenue, suggesting stronger operational leverage and better asset management within the segment.

Overall Observations

The combined analysis of revenue, assets, and segment asset turnover reveals a robust expansion phase for the segment. Revenue growth significantly outpaces asset growth, leading to improved asset turnover ratios, which imply increasing efficiency and productivity. The data reflects strategic improvements in resource utilization and greater revenue-generation capability, underpinning positive operational performance trends in the Production Systems segment across the observed period.

Capital Investments

The capital investments exhibited a generally increasing trend over the observed five-year period. Starting at $413 million in 2020, the investments peaked in 2022 at $689 million, followed by a modest decline to $660 million in 2023, and a slight recovery to $682 million by the end of 2024. This indicates a sustained focus on expanding or upgrading the segment’s assets, with a notable acceleration in investment activity particularly between 2020 and 2022.

Depreciation and Amortization

Depreciation and amortization expenses showed some variability during the period. An initial decrease from $615 million in 2020 to $446 million in 2021 was observed, possibly reflecting asset write-offs or changes in asset base composition. Subsequently, these expenses increased steadily to $504 million in 2022, $578 million in 2023, and reached $654 million in 2024. This upward movement in the latter years indicates the aging and consequent expense recognition of the segment's assets, aligning with increased capital investments.

Segment Capital Expenditures to Depreciation Ratio

The ratio of segment capital expenditures to depreciation provides insight into the segment’s reinvestment rate relative to asset consumption. It rose significantly from 0.67 in 2020 to a high of 1.37 in 2022, suggesting a period of strong investment exceeding asset depreciation. Following 2022, the ratio declined to 1.14 in 2023 and further to 1.04 in 2024, implying a moderation in reinvestment intensity. Despite the decline, the ratio remaining above 1.0 toward the end of the period indicates that capital expenditures still slightly outpaced depreciation, thus supporting asset base growth.

Capital investments

The capital investments in the Reservoir Performance segment exhibit a continuous upward trend from 2020 through 2024. Starting at $384 million in 2020, the investments decreased slightly to $348 million in 2021 but then increased significantly each subsequent year, reaching $624 million in 2024. This pattern indicates a substantial increase in funding allocated toward capital assets over the five-year period.

Depreciation and amortization

Depreciation and amortization expenses show a decreasing trend from 2020 to 2022, dropping from $549 million to $386 million. The amounts remain relatively stable in 2023 at $387 million, followed by a slight increase to $403 million in 2024. This suggests that while asset base depletion slowed after 2020, the expenses began to rise modestly again in the final year observed.

Segment capital expenditures to depreciation ratio

The ratio of capital expenditures to depreciation has steadily increased each year, moving from 0.7 in 2020 to 1.55 in 2024. This indicates that the segment has been investing increasingly more in capital assets relative to the rate at which the existing assets are depreciated. Such a trend may reflect an expansion phase or significant modernization efforts within the reporting segment.

The "Well Construction" reportable segment exhibits notable variations in capital investments and depreciation over the analyzed periods. The capital investments show an overall increasing trend from 420 million US dollars in 2020, peaking at 908 million in 2023 before declining to 745 million in 2024. This indicates a phase of heightened investment activity culminating around 2023, followed by a reduction in the subsequent year.

Depreciation and amortization expenses demonstrate a general decrease from 580 million US dollars in 2020 down to 524 million in 2022, suggesting a possible slowdown in asset aging or changes in asset base valuation. However, this trend reverses after 2022, with depreciation rising to 587 million in 2023 and further to 649 million in 2024, which may be indicative of increased asset utilization or addition of depreciable assets during these years.

The ratio of segment capital expenditures to depreciation, which provides insight into the balance between investment in assets and their consumption, amplifies the observed trends. This ratio increased from 0.72 in 2020 to a peak of 1.55 in 2023, highlighting a period during which capital expenditures outpaced asset consumption, likely reflecting expansion or modernization efforts. In 2024, the ratio decreases to 1.15, still above 1.0, implying that despite a reduction from the previous year's peak, investments remain substantial relative to depreciation.

Key observations:

Capital investments increased substantially until 2023, then declined in 2024.

Depreciation decreased initially but reversed course and increased after 2022.

The capital expenditures to depreciation ratio peaked in 2023, indicating a period of high investment relative to asset consumption, followed by a decline in 2024 while remaining above unity.

The data suggests a strategic phase of asset growth or replacement leading up to 2023, with a possible consolidation or adjustment phase occurring in 2024.

Capital Investments

Capital investments within the production systems segment exhibit a consistent upward trend over the analyzed period, increasing steadily from $240 million at the end of 2020 to $418 million by the end of 2024. This reflects a significant growth of approximately 74% over five years, indicating a strong commitment to expanding or upgrading capital assets within the segment.

Depreciation and Amortization

Depreciation and amortization expenses demonstrate a slight fluctuation over the same period. Starting at $338 million in 2020, the expense decreased to $302 million in 2021, followed by a gradual increase reaching $348 million by the end of 2024. Despite the initial dip, the overall trend from 2021 onwards shows a slow but steady rise, consistent with the increase in capital investments.

Segment Capital Expenditures to Depreciation Ratio

The ratio of segment capital expenditures to depreciation has increased notably from 0.71 in 2020 to 1.20 in 2024. This upward trend indicates that capital expenditures have been growing at a rate faster than depreciation expenses. A ratio above 1.0 suggests that new investments are exceeding the allocated depreciation, implying ongoing asset base expansion and potential modernization within the segment.

Overall Analysis

The production systems segment shows a strategic increase in capital investments over the five-year period, accompanied by a corresponding moderate rise in depreciation and amortization. The increase in the capital expenditures to depreciation ratio further supports the view of expanding asset capacity or modernization efforts. These trends collectively point to a focus on sustaining and possibly enhancing operational capability and efficiency in this segment.