SBM Offshore’s Buyback: More Than a Transaction, It’s a Strategy

AMSTERDAM, December 10, 2025 – On the surface, the latest press release from SBM Offshore looks like routine financial housekeeping: a weekly update on its ongoing share repurchase program. The deepwater infrastructure giant detailed its buybacks from the first week of December, noting it has now completed over 78% of its EUR 141 million program. While such announcements are common, to dismiss this as mere corporate procedure would be to miss the bigger picture. SBM Offshore’s consistent and disciplined approach to buying back its own stock is not just a transaction; it's a multi-layered strategic maneuver that signals deep confidence, enhances shareholder value, and fortifies its position in a complex and evolving energy market. This isn't just about reducing the share count; it's about engineering financial resilience for the long haul.

A Disciplined Drumbeat of Shareholder Returns

At its core, SBM Offshore's capital allocation strategy is a masterclass in consistency. The current EUR 141 million (c. US$150 million) repurchase program, announced in February and set to conclude by early 2026, is not an isolated event. It follows a EUR 130 million program completed in April 2025 and similarly scaled buybacks in 2021 and 2020. This steady drumbeat of repurchases demonstrates a long-term commitment to returning capital to shareholders, a policy that has become a cornerstone of the company’s financial identity. As of December 10, over EUR 110 million has been deployed in the current program to buy back more than 5 million shares at a cumulative average price of EUR 21.76.

This strategy is not pursued in a vacuum. It is one half of a powerful dual-pronged approach to shareholder returns. In February 2025, the company announced a significant 30% increase in its fixed cash return to shareholders, a package comprising the US$150 million buyback and a proposed US$155 million dividend. By combining substantial, regular dividends with opportunistic and programmatic buybacks, SBM Offshore provides investors with both a predictable income stream and the upside of a shrinking share base. This balanced approach is particularly valuable in a capital-intensive industry, assuring the market that the company can fund its ambitious deepwater projects while simultaneously rewarding its owners. The message is clear: growth and returns are not mutually exclusive.

Engineering Financial Confidence and Market Value

Beyond the direct return of cash, share buybacks are a powerful signaling mechanism, and SBM Offshore is using it to full effect. By systematically repurchasing its shares—recently at prices hovering near a 52-week high of over EUR 25—management is broadcasting its conviction that the company’s intrinsic value is greater than its public market price. This is a classic move to telegraph confidence, not just in future cash flows, but in the firm’s entire strategic direction. The market, for its part, appears to be listening.

The company's stock has surged nearly 48% year-on-year, and analysts maintain a "Strong Buy" consensus with a target price suggesting a further upside of over 20%. This positive sentiment is underpinned by the tangible financial impact of the buyback. In November, SBM Offshore cancelled 5 million repurchased shares, instantly reducing its total share count by 2.8%. This seemingly simple act has a direct and positive effect on Earnings Per Share (EPS), a critical metric for investors. By reducing the denominator in the EPS calculation, earnings are spread across fewer shares, making each one more valuable. Coupled with stellar operational performance—including a 26% year-over-year jump in Q3 directional revenue and an upward revision of its full-year EBITDA guidance to around $1.65 billion—this financial engineering amplifies an already strong fundamental story. The buyback is not artificially inflating value; it is concentrating the company's robust profitability for the benefit of its shareholders.

Fueling Growth and Talent in a Shifting Seascape

Perhaps the most strategically nuanced aspect of SBM Offshore’s buyback program is its dual objective. While capital reduction is a primary goal, a significant portion of the program—up to US$25 million—is allocated to providing shares for management and employee incentive schemes. This is a crucial, and often overlooked, element of corporate strategy in highly specialized, talent-driven industries. Rather than issuing new shares for its Long-Term Incentive (LTI) plans, which would dilute existing shareholders, the company uses the buyback to acquire shares on the open market.

This method serves two vital purposes. First, it aligns the interests of employees and management directly with those of shareholders. The company's LTI plan, for instance, requires board members to build a significant shareholding and hold those shares for at least five years, fostering a long-term ownership mindset. Second, it accomplishes this without diminishing the ownership stake of the existing investor base. In an industry where success depends on retaining world-class engineers, project managers, and strategists capable of executing multi-billion-dollar deepwater projects, a well-structured and non-dilutive compensation plan is a powerful competitive advantage. The buyback, therefore, is not just a financial tool but a human capital strategy, ensuring SBM Offshore has the talent required to deliver on its ambitious projects and navigate the future.

A Capital Strategy for the Energy Transition

Contextualizing this transaction within the broader market reveals its ultimate strategic purpose. SBM Offshore positions itself not merely as a service provider to the oil and gas industry, but as a "deepwater ocean-infrastructure expert" pivotal to the energy transition. The company's narrative speaks of delivering "cleaner, more efficient energy production" while pioneering new markets in the "blue economy." Such a pivot requires immense capital, strategic flexibility, and unwavering investor confidence. The disciplined capital allocation policy, exemplified by the share repurchase program, is the financial bedrock upon which this strategic transition is built.

By maintaining a strong balance sheet and consistently returning surplus cash to shareholders, SBM Offshore builds credibility and financial stability. This stability grants it the license to invest in the long-term, technologically advanced projects that will define its future, from its standardized Fast4Ward® FPSO (Floating Production Storage and Offloading) design to new ventures in floating offshore wind and other renewables. The financial maneuvers of today are what enable the market-disrupting innovations of tomorrow. In the turbulent waters of the global energy shift, SBM Offshore's steady hand on its capital structure may prove to be its most critical asset, ensuring it remains resilient, well-funded, and positioned to lead.