Good afternoon, ladies and gentlemen, and welcome to SBO's Capital Market Update 2025. Welcome to everyone here in this beautiful location in Vienna on a wonderful spring afternoon, and welcome also to everyone following the live stream online. My name is Monica Bell, I'm Head of Investor Relations for SBO, and I'm really happy to see that so many of you followed our invitation today to be with us as we have many interesting updates and news to share with you. We have published our 2024 financial results this morning, as you've seen, and we will spend quite some time reviewing that together with Klaus Mader, our CEO, and Campbell MacPherson, our COO. We will spend the majority of the afternoon looking forward. We'll look into the future of SBO. We will look at how we see our goals going forward and how we will achieve them.
Let me talk you through the agenda for the afternoon. We have a slide here. We will have a first section planned here to report on the results 2024, where we share the business highlights, the financial highlights, but we will also look at the short-term outlook for 2025 and where we see us going for this year. Before we will then move on and talk about the updated strategy for SBO. As you've heard from us, we have recalibrated our strategy over the last few months. As you might see here in the room, but also in the documents we published this morning, there's also a look and feel to SBO. We will also talk about that brand update, the new corporate identity, and share with you how this works together. After this first hour, we will have a Q&A session planned about 20 minutes.
We will take questions from people here in the room, but there's also an opportunity for everyone online to post their questions in the Q&A boxes in the screens. We will have a 20-minute break, stretch our legs a little bit before we come back at about 3:45 PM, where we continue the live stream with three strategic deep dives focused around diversification, market expansion, and technology and operations. Klaus will tell us more about those in a little bit. We will again have a Q&A session after the end of those deep dives, so there's another opportunity to ask questions on the strategy specifically at the end of those deep dive sessions. We will finish the part where we also live stream at around 5:00 PM before we take a break.
For the people here in the location here, we'll have a business reception at the end of this event as well. We have lots of information to share today, lots of exciting news, and I'm happy now to hand it over to Klaus and Campbell to talk us through the 2024 results. Thank you.
Monica, thank you so much for this excellent and nice introduction. Ladies and gentlemen, good afternoon. It's a pleasure to welcome you here on site. So many people physically here. This is so much different from earlier results calls. Also thank you to all the participants at the live stream who are going to watch us now. As Monica said, we are going to start with the business results first. As we have so many people here who do not know us that well, give me a very brief introduction about who is SBO? We are the global market leader in the manufacture of high alloy non-magnetic steel, high-precision components, and high-tech equipment, predominantly for the energy sector.
Our expertise is all around precision, and you will also see in our new claim look over there, our precision, your opportunities, because we have an outstanding materials know-how, high precision in high precision manufacturing, and customer-centric innovation. This is what we are standing for. Precision is the key differentiator. We are doing highest quality, highest precision for the customers who require that. We are very close to the customers with more than 20 locations on a worldwide basis. This is very relevant in times like these, our global presence with manufacturing facilities in Europe, in the U.S., in Asia, with presence in the Middle East, but also in Latin America. We will come to that also throughout the presentation. This is in times like these of increasing geopolitical tensions, geopolitical conflicts, trade conflicts, more and more relevant to be that global.
In 2024, we generated EUR 560 million in sales and a decent profitability of EUR 70 million. We do that with 1,600 employees. To dig a little bit more deeper, you know our two divisions, Advanced Manufacturing and Services and Oilfield Equipment. You will not hear that term going forward. This is the last time that we mention those divisions like that. In the division AMS, we are offering the high-precision components made of high alloy non-magnetic steels, and also high-strength non-magnetic steel. Increasingly more important becomes the 3D metal printing of very complex parts. We are going to talk about that in more detail also when we come to the strategy. We are also doing in that division, you see a big variety of business models, high-tech service and repair.
In the oilfield equipment division, it's a variety of product offerings for directional drilling and well completion with high-performance drilling motors, circulation tools, rotary steerable tools, all high-tech, well completion solutions for the oil and gas industry, and even more and more becoming important into the geothermal industry, helium drilling, lithium drilling industries that we are already in. When we come to the business results, the summary would be we generated solid results and a high cash flow in a challenging market environment. This is in one sentence the summary of the year 2024. The year 2024, the markets turned out to be more challenging than we initially thought at the beginning of the year with the weakness in the U.S. markets. Everybody thought drilling activity will go up. The recount was decreasing in the first half of the year and only remained flat then afterwards.
We were also experiencing cautiousness on the customer side in our AMS division starting in the middle of the year with economic uncertainties, geopolitical tensions, high oil price volatility, questions about China demand. This cautiousness and uncertainty did definitely moderate the spending of our customers, resulting also in a slowdown of the demand in the AMS division. By the way, after many outstanding years, the AMS division was growing by 75% in 2022, by more than 35% in 2023. A moderation had to be expected after those two years. We navigated those dynamics because one thing is the market, the second thing is what can you do against it. We definitely made solid progress in our strategic efforts. First, we generated significant growth in our strategic markets, the Middle East and Latin America, where we were growing by more than 30% in the year 2024.
We were expanding our facilities in Saudi Arabia, doubled the size of the facility. We are expanding in Vietnam currently. The new facility will be 50% bigger by mid of the year. We also have added 3D metal printing capacity. You see some products over there. At our facilities in Austria and also in Houston, one of an important step going forward. Strategic initiatives and investments on our agenda. We were also successful in turning around our oilfield equipment division that had quite a weak performance in the first half of the year, driven by the U.S. market, but not only. We made organizational operational changes to the team, increased and improved our fleet, came up with new product and new technology, and could clearly turn around and take that division back to the double-digit EBIT margin in the second half of the year.
When we summarize the key financial highlights, sales remained on a high level of EUR 560 million, which is the second best year in SBO history. EBITA and EBIT margin solid, below the levels of the previous year, but double-digit EBIT margin with 12.5% in a more and more challenging environment is, I call it solid. I do not call it excellent. I call it solid. The good news is on the cash flow. We doubled the free cash flow to EUR 67 million, and we increased our cash position to EUR 315 million as a result of the strong cash generation and also as a result of a successful financing round. We further reduced our net debt. SBO is in an excellent financial position. The gearing ratio went down to just 11%. The net debt is at just EUR 56 million, which is only 0.5% of the EBITA.
Our balance sheet continues to be very strong with an equity ratio of 50%. We are going to propose a dividend of EUR 1.75. It is slightly lower than the previous year. It is already a comment about that. Do not forget, the net income decreased by more than 30%. The dividend reduction is just 12%. We are at the high level of our dividend payout ratio. Dividend policy 30%-60%. Payout ratio is 61%. That is definitely a decent dividend payout and a dividend yield when you take the current share price of about 5%. Definitely more than you get on a bank account. Getting a little bit more into the details of sales and EBITA, and Campbell will elaborate that also on a divisional level.
We have been impacted in the AMS division in the second half of the year, and the reduction in the AMS division could partly be compensated by the oilfield equipment division based on the significant growth in Latin America and also in the Middle East. The EBITA and EBIT I mentioned already. The reduction in the amount of about EUR 30 million is coming from the gross profit with lower sales, lower capacity utilization, and also the headwinds that we had at the U.S. market and the restructuring where we had one-time costs in the oilfield equipment division in the first half of the year. EBIT margin remains solid. Profit after tax was impacted by a higher tax rate, 28.8%. This is not the tax rate that SBO normally has. We are normally between 20% and 25%. This was related to not capitalizing all deferred tax assets. It's a conservative approach. Going forward, we will come with our tax rate into the area of 20%-25%. With that information on a more high level, Campbell is going into the details on a division level.
Thank you, Klaus. Good afternoon, everybody from my side. Let's take a little closer look into the divisions to make sure we've got that correct. As Klaus already noted, group sales remained at a high level of EUR 560 million. This reflected a fairly moderate decline of 4.3% compared to the previous year. As Klaus has already mentioned, 2023 was quite an exceptional year. AMS accounted for 51% of group sales and OE 49% of group sales. In the previous year, the split was 56% and 44%, definitely showing OE's growing contribution in 2024. AMS sales declined just by over 13% year- on- year. As Klaus has already mentioned, this was really due to the softening demand that we started to experience from our core customers in the second half of the year.
However, OE, it grew its sales 7% year- on- year, driven by the strong performance in key international markets. In fact, particularly in the Middle East, we grew the business in OE by 48%. In Latin America, we grew the business by 35%. Real good success in terms of the team within OE in their international expansion efforts. Bookings were EUR 483.7 million for the end of the year. This was a decline of 11%, versus EUR 225 million in the previous year. The backlog amounted to EUR 141.8 million at the end of the year versus EUR 225 million the previous year. Looking at EBIT, EBIT for the year remained solid. Klaus used that word, EUR 70.1 million, resulted in an EBIT margin of 12.5% versus 17.5% in 2023.
AMS, as we said, was impacted by the lower sales due to the softening of the customer demand in the second half of the year. This, of course, led to lower capacity utilization, and we ended up with an EBIT of EUR 56.7 million for AMS, a reduction to 23, but I think still a very reasonable EBIT margin of 20% compared to 24% in the previous year. The OE division, they certainly faced a challenging U.S. market last year. As Klaus said, this prompted us to make a lot of quick organizational and operational adjustments in the first half of the year. These measures, combined with the strong international growth in the Middle East and Latin America, really led to a good and significant rebound in OE's performance, particularly in the second half of the year.
The full year OE EBIT reached EUR 16.7 million, which was a margin of 6.1% compared to 12.2% the previous year. In the first half of the year, OE EBIT was just EUR 2.2 million. The performance improved significantly after the changes. In the second half of the year, the EBIT was EUR 14.5 million, which was an EBIT margin of 10.1%. I'm glad to say that this really demonstrated the effectiveness of the measures we took in the first half of the year and the success of our market expansion efforts. Back to Klaus.
Thank you, Campbell. What I also would like to highlight is that the EBIT of EUR 70 million is very much in line with the preliminary figures that we presented mid of January, where we were coming out with an EBIT of EUR 69 million. Also, accuracy in our reporting and no surprises, as I also read earlier today, in terms of our financials compared to the preliminary announcement. When we go to the free cash flow, and I already teased it, it is significantly better than the years before. It doubled compared to the year 2023 and even more compared to the year 2022. This was driven by the reduction of working capital predominantly and only slightly lower CapEx. Last year, we had a working capital increase of more than EUR 30 million. This year, a working capital reduction of EUR 22 million.
This was the predominant driver of the increase in free cash flow. CapEx amounted to EUR 35 million. It is very important and relevant to mention those are strategic investments also in the future setup of the company. The expansion in Vietnam that I already addressed, we bought, we increased the capacities of our 3D metal printers in Austria as well as in the US. Hand in hand with the restructuring of the oilfield equipment division, we also upgraded our rental fleet on the downhole drilling tools, predominantly also for the U.S. market. That results in a very solid, strong, excellent balance sheet with an increase in equity in total amounts with an equity ratio of 50% and a significant increase of the cash position. That is very relevant when we talk about the future of SBO to invest and to execute also our strategy going forward.
The net debt and the gearing ratio I already mentioned. ESG, you see our scope one, two, and three emissions we have done. Everybody who had already the chance to look at our annual report, it is probably double the size compared to the previous year because we were for the first year reporting according to CSRD, also including the double materiality assessment. What is really relevant is that we have been in the position to further reduce scope two emissions. On the one hand, by our increased photovoltaic capacity and also lower emission electricity that we use, predominantly coming also from Texas. Texans are using renewable energy. That is the primary driver for the scope two emissions reduction. For us, energy efficiency is very relevant.
Scope one and two emissions is also part of our strategic target, wherever it makes economic sense and is technically feasible. Also at our new facilities in Saudi Arabia or our expansion in Vietnam, of course, this is also heavy powered with photovoltaic and solar panels because the sun is shining there quite a lot. Let's come to the outlook for briefly. I mentioned it earlier today with the press conference with the journalists. It was never that challenging to do an outlook for the current year because at the moment, situations are changing almost on a daily basis. Market environment remains complex and volatile, I would call it, undermined by policy changes, geopolitical uncertainties, evolving global trade tensions. This is what we are having to deal with at the moment on a very daily basis. This is also what our customers are experiencing and is creating uncertainty.
Up to now, and you're all reading the newspaper, a lot of additional tariffs have been implemented so far, SBO is not impacted. We are not impacted by the 25% tariff on steel and aluminum going into the U.S. because we are not exporting a steel product, w e are exporting a downhole drilling tool or a high-precision component. That is not covered by the taxes. We are also not covered by the 50% taxes from Canada to the U.S. because we do not have deliveries from Canada to the U.S. but t he situation is fluid. Yeah. We are not impacted by the announced tariffs beginning at the beginning of April, but it is definitely something that has to be carefully monitored in doing and managing our daily business. So far, the news is that we are not being impacted by those tariffs.
The good news, and I'm stressing the topic now for the second time, is our global footprint with manufacturing locations across the globe. This will also help us in managing the supply chains, in talking and dealing with the customers if further actions or activities are popping up. I see this as one of the key competitive advantages of SBO being that global at the moment. When we look at the short-term outlook, it is a bit of a continuation of what we already said for the year 2024 in our Advanced Manufacturing and Services division, t he economic uncertainties are leading to a continued moderation in customer spending. We see that when we talk to our customers, they don't know where to place the order because they don't know from which country they should order and what tariff is imposed.
This means that going forward and as a continuation of the second half of the year, we see that also, at least for the first quarter of this year, a moderation in customer spending. What is SBO doing on that? What SBO knows to do? Adjusting capacities, managing the cycles. This is what we have done over the past 20 years. This is also reflected that we have reduced headcount in AMS. You see it already in the annual report of 2024 when you compare it to 2023. The situation in oilfield equipment is a bit different. I was standing here one year ago and had to report about the weaknesses that we have in oilfield equipment and the weak U.S. market environment. I said it, one thing is the market, the second thing is us.
We have really been in the position to turn this division around with strategic growth in other markets outside of the U.S., with coming up with new product generations and have a continued performance improvement in the second half of 2024. This is continuing also this year, even in a flat market environment, which is promising as we are currently taking market shares and are in oilfield equipment on a good track. When we look at the longer-term outlook, I'm very confident for the energy sector. Demand for energy is going to increase for the foreseeable future based on world population growth, based on new technologies, artificial intelligence, data centers. Energy demand is going to grow. We will see a sizable share of oil and gas also going forward based on the topic of energy security.
Energy transition is taking track and will continue, maybe a little bit less fast than we thought or hoped two to three years ago. It is definitely getting traction, and energy transition will play an important role. What does this mean for us? We are navigating those short-term dynamics, but we will going forward also implementing our recalibrated strategy. Now you say, what is the recalibrated strategy? Let's move to the recalibrated strategy in the second part of our presentation. In 2024, we took important steps in the positioning of SBO and have our existing strategy recalibrated in a way where we say it is four key elements of this recalibrated strategy. First, we are having measurable targets that we did not have before. You, Bernard, you know our strategy of core business, new business. We did not have a target for the next couple of years.
We have sharpened the strategy. We made it clearer, and we quantified it. The second key element is what is it based on? I told you we are known as the global market leader in the manufacture of high-precision components made of non-magnetic steel. We are a leading supplier of high-tech equipment. We are strategic customers to many customers who are significantly bigger than us. Why are we that? Because we are providing them with the highest precision and with the highest quality. That is our key differentiator to many others in our competition. SBO stands for precision. Precision is the foundation of our business. You see the new claim, our precision, your opportunities. We will base the new strategy on our core strengths and capabilities and competencies. We are known for our expertise in high-performing materials, for our precision technology, and for high-tech equipment.
This will allow us to leverage and capitalize on those core capabilities into new target industries also. The third key element will be diversification in attractive industries. We will come to that. It's a long afternoon. We are building that up from scratch. Industries that all require highest precision, working under extreme environments, hot temperatures, high pressure, corrosive conditions. This is what we know. This is what we deliver. This is what we offer. This is our foundation. We are targeting niches, profitable niches that are attractive to us where we can base exactly those capabilities. Hand in hand or in line with this new calibration is also the new brand identity, new corporate identity. You see it already around the room with a new brand identity, a new legal company name, new renamed divisions. We are coming to that shortly. What are our capabilities?
This is only a teaser now because Campbell, in his deep dive session, will talk a lot about our technological leadership, about our competencies, strengths, and capabilities, what we are known for, and our expertise in high-performance materials, precision technologies, and high-tech equipment. Just an example, subtractive manufacturing means boring and in German, sehr sparen, drilling, fräsen. Those are capabilities that we are known for in advanced machining. We are having more than 400 CNC machines around the globe. Campbell will elaborate on those core capabilities in terms of technology in his deep dive session. What I again want to mention is the global manufacturing locations, our global presence with manufacturing facilities around the globe also as one of the key capabilities.
We have, with our quantified strategy, also defined a purpose, a mission, and a vision that summarizes what I just mentioned over the past 10 minutes. Precision as the driver. We drive precision that transforms industries. This is our foundation. This is our core capability and c ombining our capabilities together with diversification into other industries is then mentioned in our vision and also in our vision. Wherever there are extreme conditions, hot temperatures, corrosive environments, we are targeting industries not just in oil and gas, but in the space, in water, in the earth, as well as also in the air. This is our way going forward. I already indicated what are our quantifiable targets for the next couple of years. It is growth and portfolio expansion. It is value creation and sustainable operations. We have generated EUR 560 million in sales in 2024.
Our target for the end of the decade is to increase our sales to EUR 900 million until 2030. From this EUR 900 million, EUR 200 million will be in new target industries, in new business areas outside of oil and gas, beyond oil and gas. Value creation is the target set with an EBITDA margin of more than 20%. Over the market cycle, we are in a cyclical business, but the EBITDA margin was 18% in the year 2024. The target for the year 2030 is doing more than 20%. Also on sustainable operations, we have set emission targets with a 30% reduction in scope one and two. This is what we can directly influence with a lot of operational efficiency, energy efficiency, new machines, changing energy providers to more renewable energy.
There's a clear target how to achieve that and 10% reduction on scope three because this is something that we can less influence because this is the target of the value chain. Those are the targets for the sustainable operations. When we dig a little bit into more detail how to generate those EUR 340 million in sales, it is a set of activities. It's a set of measures and initiatives that we have been internally setting in terms of market expansion, in terms of diversification, in terms of technological leadership and operational excellence. We will come up with new product generations, capacity optimization on the manufacturing facilities. All of them are organically strategic. Corporations will be one of the drivers that we are working with other partners in a win-win situation. Also M&A. We have EUR 315 million available.
Therefore, M&A will also be one of the drivers in order to generate the EUR 900 million in sales. All those pillars you are also seeing in what are the key execution drivers to reach those EUR 900 million. Before that, I would like to share with you also our capital allocation priorities. Our capital allocation priorities are number one, organic growth. This will be the key driver in executing the strategy till 2030 through diversification and through market expansion as the highest priority. I mentioned to you that we have doubled the size of the facility in Saudi Arabia, expanding in Vietnam, increasing our presence in Dubai. Therefore, organic growth investing into our business for the oil and gas industry and also organically into new industries will be the key driver. Second, dividends is important to us. You see the dividend proposal of EUR 1.75. It is more than 60% payout ratio.
Dividend remains the second highest priority in our capital allocation. M&A. SBO is known for M&A. SBO has also grown through M&A over the past decades. The whole well completion portfolio has been established through M&A. This is what we know. This is what we can do. This is what we are also financially capable of. Therefore, M&A will also be one of our priorities. Number four is share buyback. It has clearly the lowest priority. We have done it from time to time, but we are legally allowed to do it. Share buyback clearly has the lowest priority in terms of our capital allocation. In order to achieve and to generate EUR 900 million, we have defined four pillars: diversification, market expansion, technology leadership, and operational excellence.
All of that will be in much more detail discussed in the deep dive sessions after this initial presentation. I would like to take out diversification and teaser it a little bit in more detail. Coming back to our four key elements, measurable targets, capabilities that you are seeing here, new attractive industries, and then also the new corporate identity. Based on our capabilities, we are not only growing in the existing business, but targeting new industries in the energy transition and in other industrial sectors. That is key. It is very relevant that you understand what is SBO standing for, highest precision, and what are we doing with those competencies in going forward. I have now used three examples that underline our diversification efforts.
Number one is, and this is a business that we are already in, geothermal, lithium, helium, and also carbon capture and storage drilling. It's the perfect example for diversification based on existing capabilities because the geothermal is known for many decades. Since one or two years, there is an increasing momentum with next generation geothermal drillings, enhanced geothermal drilling, advanced geothermal drillings, where you use the technologies of the oil and gas industry, like directional drilling and well stimulation to target geothermal reservoirs. We are already in that business. The starting point was the existing technologies from the oil and gas industries, but we are already a step further. We are already upgrading our product portfolio for geothermal drillings because those drillings are to some extent deeper, but also definitely hotter than the oil and gas industry.
We have already produced for customers new types of plugs for geothermal drilling. This is an industry which is an ideal example of leveraging and capitalizing on our core strengths and capabilities. The second one is 3D metal printing. You see over there, and we afterwards also have the opportunity to touch those products, and we'll also have experts in-house to explain the products in more detail. It's one of our key competencies and capabilities that we have been developing over the past decades, 10+ years . It offers us, based on our strengths and capabilities, the opportunity to diversify into other industries like aero or space industry, semiconductor business, energy transition business, heat exchangers, for example. Our current portfolio of 3D metal printing business is already significantly more in other industries than in the oil and gas industry.
Again, based on our competencies and capabilities, because you are producing completely new products that you either are very difficult to machine or cannot even be machined. The USP for us is that those printed parts also need to be post-processed. Post-processing with subtractive manufacturing and precision technology is, again, one of our key competencies. This market should grow 10x during the next 10 years. Last year, about 3 million parts were printed. In the year 2023, 2024, already 40 million. 30 million0- 40 million parts are going to be printed. We see in geothermal and 3D metal printing definitely smaller markets than the oil and gas industry, but with higher growth rates.
The third one, many of you will say, "Okay, Klaus told us already about geothermal and 3D metal printing in the past." Flow control is the new kid on the block that, to some of you, will catch your attention. Flow control, we are also going to discuss in much more detail, market size, products, etc., etc., in the deep dive sessions. To summarize it, we are talking about technologies, components, solutions that involve the management and control of liquids, all kinds of liquids for all kinds of industries. Those products include compressors, pumps, valves, fittings, heat exchangers. It is a very significant, a very sizable market. Again, it supports the approach of entering, not only entering, increasing this market based on our core competencies. Because already today, SBO is in the flow control market, but only in oil and gas.
We are having advanced product portfolio that a downhole drilling motor or a circulation tool. Florian Schütz, VP of strategy, is going to elaborate on that in the deep dive session where we are already having a product portfolio in terms of flow control. When you look at the two bubbles, this industry is even bigger than the industry that we are currently in. This is also the rationale for further expanding into that industry. First, it has a great market potential. It is a market of $260 billion. Of course, we are not targeting the whole market. We are targeting the profitable niches in that market. The profitable niches in that market offer more than 20% EBITDA margin, which is our target also going forward for the strategy 2030.
We are in the position to, outside of oil and gas and geothermal, target significantly more industries. Those industries are less cyclical than the oil and gas industry. We can do that with the same technologies and applications that we have already. I mentioned it, number five, already in that flow control business, but just in oil and gas. Now leveraging on our core competencies and strengths, we are entering and expanding into that flow control industry. You see diversification once again based on our core capabilities, geothermal, additive manufacturing, and also flow control where we have our expertise already in terms of high-performance materials and precision technology and high-tech equipment. This market, and I also told you when we talk about the EUR 200 million beyond oil and gas, will also involve M&A. For M&A, we have set clear criteria.
It has to offer synergies. It doesn't make sense if we acquire a company for the sake of acquiring a company, then we are a financial investor. It has to have synergies and a cultural fit to us, as it was when we stepped from directional drilling to well completion. This is one of the key criteria. Primary focus is on North America and Europe because here we understand the cultural fit, and here we have the highest precision and technology in the product offering. It has to be an established business that offers us maybe a new market for us because the capabilities we already have, the technological one, and it should be non-dilutive. We are not going to invest in a startup. We are also not going to invest in a distressed company that needs to be restructured.
We are, as also in the past, targeting a majority acquisition or a full payout. Also here, Florian will give a deep dive and more details about that in his deep dive session, what kind of companies this could be. Second pillar, market expansion. Here we are coming back from the diversification to our business that we are currently in, predominantly the oil and gas industry. Also here, we see significant growth potential going forward. We do have a deep dive session headed by Gernot Bauer. Gernot Bauer is the Executive Vice President for the division oilfield equipment, but in five minutes, it will have a new name. I only want to teaser that with a couple of spots. We will see a 30% spending increase expected for international wells till the end of the decade.
These wells will be driven increasingly by complex horizontal drillings and well completion. This is exactly our business. We see a significant growth potential also in terms of horizontal wells. We will leverage this expertise that we have gained, and the oilfield equipment companies have all been founded in North America. Those are either U.S. or Canadian companies. Internationalizing those companies that we are already doing since last year, and you saw how successful we were with 30%-40% growth rates, we are going to continue in the Middle East and Latin America. Our new Dubai facility for our well completion business will even be the second headquarter for well completion.
At the moment, the location is in Houston, but this is a market that is continuing to grow, and we will also produce well completion in Dubai or in the Middle East, what we currently only have done in the U.S. The third pillar is technology leadership, and I mentioned a lot about our capabilities. Therefore, I'm skipping through that very quickly. Campbell will give a deep dive on advanced machining, on our cold forging capabilities, on 3D metal printing, but also here. This will help us to diversify into industries outside of oil and gas, like on geothermal or on many other industries like aerospace, space industry, semiconductor, and energy transition. The fourth pillar is operational excellence. Also here, a deep dive coming from Campbell, what we are planning in terms of capacity optimization, vertical integration, using our supply chains and operational efficiency.
With that, our strategy house is complete with a purpose, a vision, a mission with our targets till the end of the decades, and then the key drivers of diversification, market expansion, technology leadership, and operational excellence. In line with that, and you saw it already, with the recalibration of the strategy, we also have reshaped our corporate identity to reflect our positioning and the path forward. This is now visible in our new SBO brand identity with a streamlined forward-looking design. By the way, how do you like it? We have changed our branding just to SBO. Our well-established and known name that we already use, it is a strong, established, and recognized short name within our organization when talking to our customers. Anyhow, an American or an Asian always had difficulties in using the full name.
We are also harmonizing the legal company name to SBO AG. It's shorter. Although this has to happen via the general meeting because it is a change of the articles of association, therefore, we are going to do that in one month's time, but it will be shorter going forward. SBO AG, having the oilfield equipment out of the name because we are already doing much more outside of oilfield, and in going forward, we will even do more. This also goes hand in hand with a renaming of our divisions. Advanced manufacturing and services will be renamed to precision technology. Precision, again, I'm phrasing that again and again, our foundation, this is what we are standing for, and also offers a broader variety of our product offering.
Oilfield equipment will be changed to energy equipment because carbon capture and storage, geothermal, lithium, helium drilling is already part of the energy transition. With that, I'm going to close my presentation with the four key takeaways, the four key elements of our recalibrated strategy. Measurable targets, building on our capabilities, diversification into for us new targeted attractive industries. Flow control is just one. The new corporate identity unified with our brand identity and also legal company name as the four key takeaways of our recalibrated strategy. We are very excited in executing it. I'm pretty sure that you will have a bunch of questions related to it. As I said before, we are going to have deep dives on all those pillars, and we have now one Q&A and afterwards a Q&A. At the end of the day, you should be perfectly briefed and fully understand our recalibrated strategy. Ladies and gentlemen, thank you for your attention.
I'll let you go over there. All right. Thank you, Klaus. Thank you, Campbell, for that exciting outlook of our future. I would like to open it up now to Q&As. Just information for the people here on site, if you have a question, please raise your hand. We will have a microphone handed to you before you start talking so that people also in the livestream online can follow you. If you could state your name and company, please. For everyone following us in the livestream, you can use the foreseen Q&A boxes to post your questions there as well.
Good afternoon, Richard Dawson from Berenberg. Two questions, please, just on the AMS segment. You spoke about softening in demand in the AMS segment in the second half. Where internationally have you seen that weakness, and what, in your opinion, is key to getting customer spending again as you look out into 2025? Secondly as well, the press release mentioned adjusting the AMS capacity accordingly due to lower demand. What does that actually mean in practice, and do you expect any one-off costs in 2025? Thank you.
Thank you, Richard. I'll take that one. In terms of the AMS business, yeah, there's a softening of our customer demand, and it really started at the back end of last year. Our customers seem to be relatively well stocked in terms of what they have in the marketplace. This additional uncertainty that's come into the market with new trade tariffs is, I think, really stalling progress on that side of the business. Much of our conversations right now are with customers about where they can buy equipment and ship equipment to because they do not want to deploy any capital until they know when they deploy that capital what they are going to pay for in terms of any extra duties or anything like that. I think right now that's really dampening the market. We do definitely expect for the next quarters, it's going to be a soft environment in the AMS side of the business. What are we doing? As Klaus already said, the one thing that I guess unfortunately we are very experienced in is managing the upcycles and the downcycles.
At SBO, we're very good at this, and really we're downsizing our capacity to suit how we see the business going forward. We have made reductions in headcount starting at the back end of last year and ongoing at the moment in our facilities in Europe, in our facilities in the U.S., and also in our facilities in Asia.
There were other questions over there earlier. Baptiste.
Good afternoon. Thanks for your presentation. Two questions from my side. The first one is, let's say, regarding your comments on capital allocation. The first target for you is clearly organic growth. What does it mean in terms of CapEx as a percentage of sales? Does it mean that you will increase the CapEx as a percentage of sales? The second question is regarding the hydrogen business. You are one of the rare actors in the industry, not to speak about this business right now. Why? Is it a reality for you, but in the long term, and you prefer to be focused on other businesses in the short run? Thank you.
Absolutely. Yes, Baptiste, you're absolutely correct. Organic growth is the key priority. We want to invest in our current business, which is on the one hand side in the oil and gas business, but also in other industries that we are currently in, like additive manufacturing. For the year 2025, the CapEx programs are already in place, and I do not see a significant change to 2024 because those strategic investments, like the expansion in Vietnam or the increase of our facility in Saudi and Dubai, is part also of our CapEx budget. Yeah?
Therefore, I see, especially for the year 2025, no increase in CapEx coming from that. Rental freed also is something that we are going to do on a regular basis, and therefore, you can expect to be on that level. Also in 2024, we have increased our capacity in 3D metal printers. All those are organic growth initiatives going forward. In terms of hydrogen, yeah, I think that we all have seen two to three years ago the green hydrogen business more promising. I am not saying that this is gone now, that this is off the table, but I see it a bit delayed.
I'm fully convinced that those energy transition applications like geothermal or carbon capture and storage and also hydrogen will need our material know-how because if you take hydrogen, storage and transportation will be significantly based also on steel and also our precision technologies. What we have done also over the past couple of months in setting up that recalibrated strategy, we carefully looked at the market opportunities, we looked at the industry trends, and we saw hydrogen at the moment not as the key driver of our strategy. Going forward, in a couple of years from now, we are definitely also entertaining that. For us, geothermal, additive manufacturing, flow control, here we see more attractive industries for the time being and for the next couple of years.
Kevin.
Yes. Hi. Good afternoon. Kevin Rogers from Kempenberg. Two questions, if I may. First one, maybe short term. The recovery on the margin side on OE has been quite impressive, H2 versus H1, and also secondarily Q4, Q3. Is it a kind of run rate that you can assume now for 2025, or we had some exceptional due to Forex or whatever that played for you just to understand the margin that you expect now after the strong recovery, H2 versus H1? The second one, long term. You have this objective to get EUR 900 million revenue by 2030. Can you split a bit how much would be, in a way, coming from the outside due to the M&A with the EUR 200 million-EUR 300 million budget that you have, and how much would be from the onside with the organic growth, please?
More than happy to. You want to take it?
Yeah, I'll take the first one in terms of the short term with our OE division. In our OE division, last year, at the beginning of the year, we made some really quick changes in terms of issues we saw in some of the companies. We changed personnel on a divisional level and also at subsidiary level. Actually, Gernot Bauer here is our new Executive Vice President of what is now the Energy Equipment division. Gernot came into position last year. With those changes in management in some of the companies, we really got some good traction in terms of increasing our operational efficiency in the business. We put a lot of investment into our rental fleet and new technology. We're really starting to see that come to bear fruit just now. We also kind of focused on our strategic international expansion, which we talked about in the Middle East and Latin America. We absolutely do expect to see our margins improve in OE, still in the double-digit range. Yeah.
On the split, Kevin, without providing you an exact split in percentage, 58-42 or something like that, you saw when I presented that slide, we talked about diversification, market expansion, technology leadership. The majority of the targets that we were setting are organically driven. Hand in hand, raw material business outside of oil and gas, additive manufacturing, that is really gaining traction now and increasing the momentum. M&A is always an opportunity and optionality, and especially when you want to make a sizable step, for example, in flow control, it will be predominantly driven by M&A. We have set some money aside for that. We have a high cash position, but the key takeaway is the achievement of the revenue targets till 2030 is more driven by organic growth and diversification than really by M&A.
Okay. Any more questions in the room? Otherwise, we'll take a question that came in through the livestream, and I'll read it out. It's from Thomas Streeter at Streeter Research. To what extent can your core competencies and diversification plans tap into supplying products to the defense industry? Can you give examples of products and maybe customers?
It is a very valid and relevant question because when you take the topic of defense, we are seeing currently a change how to approach defense. For us, defense was not a strategic focus. For us, defense was somehow related also from a personal point of view, not a business that we feel comfortable with.
To some extent, also connected to corruption here and there. I also never want to see an SBO product in a war situation when you have a missile or a weapon and your logo is on. What is happening now is definitely something that needs to be followed. Defense is in the U.S. already since quite a time, also in Europe, from killing people and producing weapons more and more to securing democracy. I know that today the European Union is sitting together how to arm up Europe, and we are carefully monitoring that and also are following that. Theoretically, from our capabilities, it could be a market to entertain, but it is something that we have to carefully monitor. If the European Union is asking the European industries to support that, we will have a close look on it. But up to now, defense was something that we did not really want to do. Yeah. It is definitely something to be taken into consideration.
All right. Ladies and gentlemen, any more questions for now? Yes, please. Can we have a mic here, please?
Hi, Bernadette speaking. We talked a bit already about the international markets. Could you also give us your thoughts on the U.S.? Because we've seen the US and North America in general being quite weakish, not really recovering now. Oil prices have come down again, but the administration is very enthusiastic about drilling, let's call it that. How do you see that going forward? What' s the feedback from your customers there?
We really see the U.S. market quite stable at the moment. We've had this last two years of kind of moderation in the drill recount, and the expectation is that is to be relatively flat. I know that obviously Trump encourages drill, baby drill, but I think really the market is going to dictate what actually happens. Because when you look at the supply and demand balance, there's not really the incentive to drill more in the U.S.A. All it would do was effectively drive down the oil price. And these operators in the U.S. are comfortable operating in a range of about $70-$90 a barrel, but when it gets below that, then that is when they're underwater. They've really done very well over the last couple of years of maximizing the returns in the U.S. market. There's been a lot of heavy consolidation, and they've really focused on that consolidation and cost-cutting. I'd say the U.S. market just now is a relatively stable outlook for us.
If I may add to that, on the medium-term view, I'm more optimistic about it for two reasons. First of all, LNG and permits and also projects that are under construction are going to be live again. Second, not to forget, the U.S. electricity is based 40% on gas, and there is a significant increase in electricity demand expected till the end of the decade, predominantly driven by the artificial intelligence data center discussion. Therefore, we, as well as our customers, are definitely positive on LNG and also on gas going forward. Maybe not within the next couple of months, but definitely on a medium-term view.
The good news, and it was already a question by Kevin, that whatever thing we have done in our energy equipment division now, to start mentioning it, is helping us. Even in that flat market environment of the U.S., we see from quarter- to- quarter better performance in our energy equipment division, not only on the strategic markets, Latin America or Middle East, but also in the US. When I talk about the first two, two and a half months. The one thing is always the market. The second thing is how you can entertain this market. Therefore, this year, and this is also a bit the beauty of the SBO setup with the two divisions. We had now extremely strong performance of AMS over quite some time. This is softening, also given the uncertainty, but now energy equipment is taking over a bit and will clearly perform better than in the previous year after everything what we have changed last year.
All right. One mo re question here.
Thank you. Yeah, just a short congratulations on the great new corporate identity. It's a great look and feel. It really is. Two questions regarding capital expenditure. Can you maybe elaborate on how much is every year for repair and maintenance and the rest for growth? You said the majority is for growth, but can you be a little bit more specific maybe? Also in the targets, do we have free cash flow targets for the next years? Thank you.
On the CapEx, we normally say about an amount of about maybe EUR 15 million-EUR 20 million is relevant for maintenance to keep the business. The rest is for growth or strategic projects. In terms of free cash flow targets, we have not, of course, we do have a calculation of our business plan till the end of 2030. You know us since many years. For us, the cash flow generation was probably even more important than the profitability at the end of the day because for us, it counts what money do you have in the pocket that you also can distribute at the end of the day. It will also be very dependent on what part is organic growth, what part is an acquisition. In the year of an acquisition, the free cash flow is significantly down. A decent free cash flow generation, value generation is, of course, key for us.
Okay. Any more questions? All right. Everyone's waiting for the deep dive sessions probably in the afternoon to learn more about the different diversification pillars and the market expansion pillars. We'll have that for you, of course. Okay. If there's some more questions here, and also I think from the livestream, there's not any more urgent demand for answers, I would say let's take a break now and we'll reconvene here, I would say, in about 20 minutes. We start getting back into the room around 3:30 PM, and then we'll start at 3:35 PM with the livestream again. Thank you. All right, ladies and gentlemen, can I ask you to take your seats again so we can continue with the presentations and our live cast, please? All right, one more minute till we go live again, please. Can I ask everyone to sit down, please?
Sorry, but we need to be on time for the live cast. Welcome back, everyone, and thank you for joining us again for the second part of our updates today. We've heard a lot about 2024 and already the future ahead and where we're headed with the targets from Klaus and some of the pillars that were already discussed and how we will get there. Now we really want to dive into more detail, and I would like to draw your attention now to the next three sessions that we have planned for this afternoon. Florian Schütz, our Head of Strategy, will present to you the pillar of diversification and explain the topic of flow control in much more detail and in much more technical detail for those of you who are really keen to know much more about it.
We will have Gernot Bauer, who is our EVP for Energy Equipment. He will talk us through the market expansion plans and what we are doing here in the different regions internationally, how we use our capabilities outside of the North American market to grow the business outside of the US. Campbell will come back and share with us more details on technology and operations and how we will use our technologies and capabilities to drive that growth that the other two will present to us first. As indicated before, we will have another opportunity for Q&A at the end of those three deep dives. I would like to ask you all again to participate and, yeah, ask everything that is burning at this point. Without any further ado, Florian, the floor is yours.
Thank you very much, Monica. Before we get started, let me say thanks all for coming. I have to say I'm really glad to see you all. A lot of familiar faces, I have to say, even from more than 10 years ago. It's good to be here, and it's good to see so many of you here. Monica already put the bar quite high. She said, "I will give you some good insights, some more details on the topic of flow control." Not only that, I hope, but let me help you understand what's the rationale behind us going into this area and let me give you a little bit of a flavor here. I would like to start again with where we're coming from.
When Klaus and Campbell before explained the house of strategy, what you can see here at the bottom are those four pillars, the pillars of diversification, market expansion, technology leadership, and operational excellence. It is so important because whatever we do will be based on our capabilities. We will not do something that we have no idea of. Based on that, let us first look into the topic of diversification. Now, Klaus already mentioned before that when it comes to our capabilities, on the one hand side, we talk about high-performance materials, about steel, composites. You can see the components all here with regards to materials here on the 3D metal printing, heroes on the plugs for the composites. You see our high-performance materials.
It is also about how you manufacture those in an additive way, so when you print it, or in a subtractive way with cutting, turning, milling, honing, you name it. Beyond that, what is important with regards to capability is also your footprint. Where are you located? In times like these, more important than maybe in the past. We are globally spread, and this will help us to leverage our success. Of course, the entrepreneurial culture, the spirit that we have, and Klaus mentioned it before, typically in our subsidiaries, the individual managing directors have still stakes in their local companies. There is a clear entrepreneurial spirit of those to drive the business forward. When we talk about the future, we talk about very often R&D. For us, R&D means customer-centric R&D. I do not want to solve a problem nobody has, I want to solve a problem there is an unmet need for.
And this is what our focus is. Before, you already saw the slide here on the right on the screen, and it shows three examples of focus areas. On the left-hand side, we talked about geothermal before, helium drilling, CCS. We talked about 3D metal printing. We also talked about the new thing here, something that you might not have heard at least from out of our mouth in SBO called flow control. Now, if we dive a little bit deeper and we look into geothermal, let me tell you, geothermal has been there for quite a while. What changed in the past is that now things exist which are called next-generation geothermal.
What it does, it uses the capabilities of the oil and gas industry, high-tech components of companies like us to leverage that growth. Maybe you've read it very recently, the International Energy Agency made a big publication of a geothermal report where they say that with regards to baseload energy and also electricity capacity, generating capacity, geothermal has the second biggest potential after photovoltaic. That means, yes, it's still a small market, no doubt about that. There is a good future ahead of us. The second area that you know that we're in is 3D metal printing. Again, let me be clear, today it's still a niche market. You have to imagine that it's only 0.13% of all the parts that are manufactured today are done with metal printing, 0.13%. Now, if we just go to 1% or to 2%, that means you grow tenfold.
You see there's huge potential. Based on our capabilities, we're well positioned to take advantage of this growth. There's the third pillar, this ominous flow control, which you've never heard out of somebody here talking about from SBO. What you can see is the following. It's a huge market. It offers a lot of opportunities. I wanted to give you now a little bit of a flavor of how this market looks like. When you look at the products, what are those typically? You talk about things like pumps, yeah? Pumps, compressors, blowers. You talk about valves. You talk about automation devices, sensors, actuators, meters, but also filtration devices. All of that composes this global flow control market. What is in our focus has roundabout a market size of $225 billion U.S. dollars, just to give you a flavor.
Now, before I started with my presentation, I asked myself, what would be most interesting to you? Probably it is, show me a product. Show me something tangible so that I can really imagine what a product fit would be for SBO. What I brought with me was a very busy slide, as you can see, but I will try to guide you a little bit through. What you can see on the left-hand side in brown are so-called flow control components or semi-finished goods. You see a bearing. You see a fitting. When you look at all those pictures, what they all have in common is these are metal parts, right? These are parts made out of metal. They're pretty precisely manufactured.
What you will see is when you look at the end use of all those parts, they're all used in environments which are critical, which are challenging, where corrosion is a topic, where high temperature is a topic, where high pressure is a topic. This is exactly where SBO can leverage its capabilities. That's exactly the reason why this is the place to be for us going forward. I brought with me this topic of a bearing, the product of bearing. You can see you use it in machines in the automotive industry, in aerospace, but also, of course, as a smaller component within an equipment part like a valve, a pump, or a compressor. You can see the market drivers. I think they're quite clear. You have a lot of industrial, you have a lot of automation in industries.
is a lot of reliability topics, durability topics. Of course, what we always look for are only niches. We are not going to be a commodity player, just to be clear, no doubt about that. We will stick to a clear niche strategy going forward. Having said before, this market has roughly doubled the size of the office service industry. Yes, there are those niches which are attractive for us. Again, why this market? If you look at the innovation trends in those markets, you look for unmet needs because this is where you should innovate for. If you look for those unmet needs, you see this is in the area where the material is an issue. When you have a hydrogen going through the components, you will always talk about embrittlement, temperature, pressure, reliability.
This is again where our material competence and our machining competence comes into play, both in additive and subtractive manufacturing. On the right-hand side in blue, you see flow control equipment, right? You see a valve, a pump, or a compressor. What you can see is if you look at the end use, there are a lot of end uses. It is not just oil and gas. It is the chemical industry, food, beverages, pharma, or mining. You see that those kinds of components are used in a lot of different applications. That is something that we particularly looked into. Now, you can maybe ask yourself, okay, what legitimizes a company like us to go into that market, right? We asked ourselves exactly the same question. Why us and not somewhere else or somebody else?
A very good answer might be that we are already in that market. We are already in that market because we opened our perspective. Instead of looking at the oilfield service industry, as Klaus already showed you very nicely in the slide before, we are now in the oilfield service and flow control because they have a clear overlap. We have been there for a long time. Here on the left-hand side, you can see flow control components in PT, which means Precision Technology, former AMS division. As you might know, those who know us well, we have our drill collars for these measurement while drilling and logging while drilling tools, which do deliver real-time data in the wellbore on the pressure, on the flow, and also on the fluids.
What we provide there and what distinguishes us from competition is our material excellence and our precision manufacturing. It's the same things which are necessary in flow control outside of oil and gas. You also see here in the flow control equipment under the rubric of specialties, you see components or equipment that we already have today and where we are quite successful with. It's the so-called RSS tools called a rotary steerable system. What you can do there is you can really steer the drill bit when you're downhole, a super sophisticated tool. Maybe Campbell can later elaborate on that. We also have our drilling motors, which are even powered by fluids. We have our PBL tool, which can manage the flow which goes through downhole.
The message is we are in this market already for quite a while, and our appetite to grow in the future into other markets is there. What I did here, I named a few of those components. We have the same value chain as before, but here you see a couple of attractive components that we have appetite for. You have a component like a flange, a seal, a bearing. I made a picture before, a fitting, a disc, or a gate. You see some flow control equipment like a pump, a compressor, a valve, an actuator, a lot of those components. Again, all of those are used not only in oil and gas, but also in a lot of other industries. What does this mean for us? It means that there is a very clear rationale for us to go into this market.
Claus showed that slide before, but simply to reiterate it here, it's a big market. We know that there are attractive niches. We investigated that market thoroughly already. There are attractive niches which tick our very strict rules with regards to financial fit, strategic fit, all these kinds of things. There are various industries that we can enter which helps us to lower the cyclicality. We all know the oil and gas industry is very cyclical, but the more and more we grow into this other market, the more we can smoothen these cycles. Again, as I said, we can use the same technology in different industries, and we are already there. It's not something new that we have to create, but we're already there, and now we can leverage our capabilities to grow there. Claus mentioned before in his conversation that I will also briefly touch on M&A.
Of course, I cannot disappoint Claus, so we'll do that, of course. What you can see here are the three typical areas or the three areas of focus for us with regards to M&A. I think it's very simple and straightforward. What we look forward to is precision manufacturers in either energy transition or other industrial sectors. That could be flow control or equipment providers, equipment players in energy transition and beyond. Also 3D metal printing service providers. What is a service provider? That's exactly what we do. We produce parts, right? This industry is called a service provider. We also look for that. Please let me be very clear. We have very strict and clear criteria on M&A, but we also know very well what we're looking for these days. Sorry, Monica, I'm now two minutes faster than anticipated, but thanks, everybody, for your time. Thank you.
Thank you, Florian. Hello, everybody, from my side. My name is Gernot Bauer. I'm the Executive Vice President of the Energy Equipment Division. It's a great pleasure for me today to have the opportunity to present to you one of our core pillars. It was already mentioned to a certain extent before by Klaus that at the end of the day, market expansion is one of it. Market expansion in the area where we are already in, it's the oil and gas business. I was thinking, how could I prepare these slides for you in a way that we nicely guide through? For me, I want to focus more or less on three areas. Three areas.
First of all, we look on the market of the oil and gas industry. Is this market expanding in the next couple of years? First, we will cover this topic. Then we will look internally in our SBO structure and say, are we prepared for this growth? How is our setup of a structure from a company perspective? Third, we will look in then in one example in one of our entities to have a concrete example how we see the market growth in the next couple of years. Let's start together with the first one, which is the market expansion. How is the market expected to grow in the next couple of years? As you can see here on the left chart, international well spendings are expected to grow by around 30% when you compare 2024 with 2030.
There is an expectation of additional well spendings internationally. When you look on the international markets, where are these hotspots, so to say, where international growth for spendings will happen? Obviously, one market is the Middle East. Therefore, you see here expectations are around 40% growth, again, 2024 compared to 2030. It is not only the Middle East. There is as well South America as a market, which has good expectations. Another market is obviously Asia. Yeah? From that perspective, you get a little bit an understanding what are the expectations from a market perspective. Interesting to know, not only that these markets have good opportunities of growth, it is as well these markets require more technology because more sophisticated drilling is happening there, horizontal drilling. Therefore, you need technology. You need directional drilling equipment. That is exactly where we are in and what we are providing.
Now we come to our second point, which is how good is SBO prepared for this growth as it is internationally. Klaus explained before, SBO is quite an international company with an international footprint. A recap here on our structure now for everybody to be on the same page. First of all, SBO consists of these two main divisions. Precision Technology is the first one, was already explained today, but it's mainly our high precision machining, our non-neck experience, and the additive manufacturing area. The second division I'm in charge of is the Energy Equipment division. I like to always do it in two separate areas. One is the downhole drilling tools, where we have our motors, we have the circulating tools, and the rotary steerable equipment. The other one is the well completion area as well.
If you look on the right side now, the map, it shows you already we are based in all areas worldwide where oil and gas drilling is happening today. I want to dive with you together now more in the energy equipment division. Even in the energy equipment division, we are even more internationally. You see the bluish color areas. This is where we have our own operating facilities. On the other side, we are working with a lot of service partners worldwide. Overall, we are working in more than 60 countries worldwide. Therefore, we are quite well good prepared for this market expansion. If we look into the energy equipment division a little bit closer, you see on the bottom downhole drilling tools and well completion products.
Before we come to my third point, which is the concrete example of market expansion, which we will go through the company Wellboss with the well completion products, I only want to give you a little bit of flavor of the other downhole drilling tools here. Campbell, later on, will go in much more details on technology leadership there, what we are doing. At the end, Piko is an example. They are quite known in the United States for high performance mud motors. DTEC is a leading independent rotary steerable provider, and DSI is leading the field of circulating tools. When you look back a couple of years, I mean, there was vertical drilling, then you had directional drilling, horizontal drilling, and the wells were getting longer and longer, and therefore you needed more technology at the end of the day. Yeah?
What operators now are doing in the United States, which is quite interesting, they're not only drilling horizontal for even longer, they're even making U-turn wells, yeah? Horseshoe wells, it's called like in German Hufeisen, yeah? The thing is, sometimes the operators in the acreages are limited on the length of the horizontal wells, but they need enough contact to the reservoir section. They not only go down 2,000 meters, make a curve, go horizontally for 3,000 meters, they make another curve and go back for another 1, 2,000 meters. At the end, your total well could be up to 7,000 meters. For doing that, you need technology. The good news is SBO is part of that. With our RSS, only a couple of weeks ago, we had a record run with one of the operators over there.
You see technology will be in detail and explained later by Campbell, but this area, we are leaders in these niches. Now we dive further into the well completion products. All of these products here, we are the owners of the IP. We drive our own R&D. It is in our hands to develop these products further. What Wellboss is doing, after these wells are drilled in the United States with the unconventionals you have, after the well is drilled, you have plug and perf, yeah, to get the flow of the gas or the oil flowing. The next part at the end is the completion part. Here, Wellboss is a very important provider of completion equipment, which are going into different kinds of plugs.
These plugs are there, yeah, at the end of the, as the name says, that you have the opportunity to stimulate afterwards deformation. There are two main products what they are offering. The one is at the end, completion composite plugs, which you see on the left upper corner of the picture. That is composite material plugs. On the right below corner, you see dissolvable plugs. They are dissolving, they are out of magnesium. To get in place, you pressure up, you are stimulating your formation, and then you can start the production of oil and gas. This is what they are doing. They are experts in them. They have already delivered around about 1 million plugs in the United States, and they really know what they are doing. They are an expert in this niche.
What is happening now on the market growth, coming back to the original story, these unconventionals are growing internationally. Yeah? At the end of the day, it gives us a good opportunity to grow with the market, to bring our core competences internationally to grow with these markets. Where are these international markets? The international markets, as you can see here on the left side, some of you already know Argentina. It's quite some known market for unconventionals, which we are already there. We deliver plugs there and other equipment. Maybe not so known for some of you is as well Saudi Arabia in the UAE, like Abu Dhabi, Australia. There are other projects in the pipeline. In the next coming years, like North Africa with Algeria, very close to the vicinity of Europe is natural gas.
Here's another unconventional place coming: Egypt, Namibia, and the rest of the Middle East. You see there are a lot of opportunities to grow outside of North America to take the opportunity of the growth of these unconventionals. Now coming back to SBO, how good are we prepared? Some of you are already aware, we acquired a company in the name of Brexis one or two years ago. Brexis is part of the Wellboss company of these completion products, and they're very strong in the Middle East. What we're doing, and Klaus mentioned it before, we are expanding this facility at the moment. We're in a very good position there. They have good sales structures, they have a sales force. They will help us to bring our products from the United States into the Middle Eastern market.
The other one, the facility in Saudi Arabia is expanded already last year, so we doubled the size there. Wellboss, as an example, they have a couple of years, five years roadmap already in place, approved by Aramco for local manufacturing and have not only manufacturing in Saudi. The other plan is as well to have this manufacturing in Dubai. Referring again to Klaus, he already mentioned that we will have a second well completions headquarter in Dubai. You see, at the end of the day, a quick summary of what Wellboss is doing: composite and dissolvable frac plugs. Campbell will go into the details and other backers and Wellboss construction equipment. Summarize my three points. Overall, the market is expanding internationally, Middle East, South America, Asia. Is SBO prepared? Yes, we are prepared. That's the good news. We have an international footprint.
The third one, in the example of Wellboss, they have this good growth opportunity with the unconventionals. It does not mean that the other companies in my division do not have plans. They have, obviously, they have as well market expansion plans in place. This was one concrete example for you to get a better understanding of what we are doing, which products we are providing. Looking forward to the Q&A session and later, if you have some comments, questions, it would be a great pleasure. Thank you. I hand over to Campbell.
Thank you, Gernot, and thank you, Florian. What I picked up from that is I have got a lot of things that I need to explain. I do not know if I will manage to get through them all. Good afternoon again from myself, ladies and gentlemen.
I will explain some of our technology in a bit more detail, and I'll try to bring some kind of a context to it. We also have in the room a number of experts with us, subject experts. We have Franz and Matthias over here, who can explain to you about additive manufacturing later on. We have Gernot again here, and he can explain about the composite plug and the dissolvable plug that we have there. We have Bernd and Sabrina, who can tell you all about our non-magnetic material or experience in the materials. Now that we've covered the pillars of diversification and market expansion, let's shift our focus to the last two pillars, which is technology leadership and operational excellence and how these two pillars are going to support SBO's long-term strategy. First, let's explore technology leadership.
I hope by now you all know that at the heart of SBO, precision is a part of absolutely everything that we do. Our expertise in forging, in materials, and CNC machining is what allows us to produce extremely high-performance products that meet the most demanding industry standards. SBO is the global market leader in the production of high alloy non-magnetic steel. This is material that's used in very much extreme environments. We've spent decades refining these materials, and we have one of our partners in the room here today from Böhler, who we work very, very closely with in developing our grades of material. We have been using this material predominantly in the oil and gas industry, but our non-mag material is engineered for superior strength, durability, and corrosion resistance.
These are critical factors that are also required in the energy transition space and also other industrial sectors, including aerospace, space, and semiconductors. With a global footprint of over 400 production CNC machines, we have the capability to scale high-precision production across multiple sites. This gives us the ability to ensure quality, reliability, and efficiency for our customers at every stage in the manufacturing process. This ability to manufacture these high-precision components makes us a key supplier for the next generation of energy transition and other industrial sectors. At SBO, we're not just leveraging on our subtractive manufacturing or precision engineering. We've really been pioneering in the next generation of effectively industrial manufacturing. This is additive manufacturing, namely 3D printing.
The components that you see here on the right-hand side of the room, this technology allows us to create very highly complex geometries with superior strength, lightweight, and minimum material wastage. There's a lot of components there that when they were traditionally made, they were made with maybe up to 40 or 50 different parts that were then welded and assembled together. With this technology, you can produce it from one solid part. I'm sure the gentleman over there will be happy to explain this technology in more detail. At SBO, we've really been at the forefront of 3D printing for 15 years when we installed our first machine in the U.S. Now we operate two dedicated manufacturing centers of excellence for 3D printing here in Austria and also in the U.S. We have 20 machines installed across that base.
The machines that we have installed there are basically the most advanced and capable machines that are out there in the market today. We print in multiple materials. We print in Inconel, titanium, copper, aluminum, and various stainless steels. The other thing that really differentiates us in this marketplace is our ability to do, and Klaus mentioned this, post-processing. What does post-processing mean? It means that when you 3D print a metal component, very rarely does that come off and it is finished completely to go into the application. It has to be machined. Sometimes the content of that machining can be up to 50% of the value of the overall component. With our experience in precision machining, this couples perfectly together. We have the additive manufacturing, we have the precision machining, and this makes us a full turnkey provider to our customers.
We have successfully commercialized our 3D printing, moving from prototype to serial production. We have really positioned ourselves as a turnkey provider in various industries to date. This includes the aerospace industry, the space industry, the semiconductor industry, and a number of other industrial sectors. This is really helping move us into new markets and new industries as part of our overall recalibrated strategy. Combining our additive capabilities with our precision machining, we are really positioned very well for the growing demand in high-performance niche products that provide this kind of performance. They are lightweight, they are durable, and they are components that are used in the most challenging applications on Earth, in space, in water, and in the air. Moving forward, still on technology, let's have a look at our energy equipment division. Here we are leading the way in cutting-edge drilling and completion technology for new energy markets.
We have got an example here, particularly the growing geothermal market. We have talked a lot about that, so use some applications in relation to that. Let us start on the left-hand side with our company, Piko. They produce the mud motor. At Piko, we are introducing Piko Plus. This is an industry first. This is a smart motor. There is no one else in the market that has this. This will be able to produce drilling data directly from the tool. This will provide the customer with the pressure, the temperature, the vibration, the RPM, and stick slip. That will really give them an amazing advantage in terms of their overall downhole performance. Beyond even the customer benefits, this data is going to help us improve tool reliability and the future product generations, ensuring that we remain ahead of the competition.
Our rotary steerable system, I'll talk about that on the next slide. At DSI, I think Florian mentioned it, we produce these downhole circulation technology tools that combat mud loss while you're drilling down a hole and also allow you to clean the hole as well. Our PBL tool range is the only range available on the market that allows you to actually clean the hole while drilling. What does that mean? It means that traditionally, if you clean a hole, you have to pull out of the hole. This could take two or three days to pull out of the hole and go back in. If you're on a rig that costs $500,000 a day, just the cost and time to do this is tremendous.
This is a super insurance policy for our customers that can save them a hell of a lot of money. Excellent technology there. At Wellboss, we're helping our customers lower their completion costs with our market-leading composite and dissolvable plugs. The guys talked about those already. Our high-pressure and high-temperature barrier solutions are already being used and deployed in geothermal applications, proving our ability to support the energy transition. Where Florian's standing, we have one of our geothermal composite plugs in there and a soluble plug. I'd recommend go over and have a look at those products. They're really quite something else. Across energy equipment and through technology leadership, we're really developing these next energy, next-generation solutions to really support the construction and the completion of geothermal, helium, lithium, and CCS wells, securing SBO's role in the future.
Let's have a closer look at our RSS technology. With DTEC, we are the number one independent provider of rotary steerable systems in the world. These tools really deliver superior performance to our customers, precision and cost efficiency to customers worldwide. We have developed this autonomous drilling system that, combined with what's called real-time capabilities, allows us to communicate what's going on up the well right back up to the rig site. It allows customers to really optimize their well placement because when somebody's drilling a directional well, they're looking at the reservoir that they're going to, and they call this the pay zone. The more accurately you can enter into that pay zone, the longer that well is going to be able to give you the appropriate returns.
That technology is so important for these operators to make sure they invest their cash right and extend the longevity of the recovery rates in the well. That precision is critical. I wanted to put that in context for you. In recent runs in the United States with some of our tools, we've drilled sections as long as 19,000 ft in one go. To put that in perspective, that's like punching through 13 Empire State Buildings stacked up one against the other, reaching nearly 6 km high. Quite an achievement with these tools. These tools have run continuously without failure for six days, carving through solid rock formation as well. The precision of these tools, if you can imagine, our long lateral, 6 km long. The pay zone or target zone can sometimes only be 3 m wide.
You can imagine we're hitting a target that's 6 km long, 3 m wide. That's the kind of technology that we're providing to the marketplace. DTEC's smart and scalable drilling systems are being deployed globally in high-growth markets, including Argentina, New Zealand, Saudi Arabia, Kazakhstan, and many more places, and also a lot of countries where these new energy transition projects are gaining momentum. We're involved next quarter in a project in the U.K. drilling for lithium. Really quite a groundbreaking project. Our teams are really driving this new energy business forward and making sure we participate within these things. Now that we've explored the technology leadership, let's move to the next pillar, the pillar of operational excellence. Operational excellence really is a key pillar. It drives our profitability and our long-term success.
We're continually optimizing our production capacities, and we want to align them with where the high-growth areas and regions are so we best serve our customers. We're really focused on, with our customers, giving them the right product at the right time in the right place. One way we achieve this is through vertical integration by bringing all of our manufacturing processes in-house. This helps us reduce cost and reduce lead time and gives us much more responsiveness in our supply chain, not depending on third parties, and allows us to squeeze our lead times and also tailor solutions to our customers. Klaus mentioned it before. Our global manufacturing footprint is a real key capability for us. If we look at the Precision Technology division, we have very high-end precision manufacturing facilities in three continents, in North America, in Europe, and in Asia.
This allows us and gives us great agility to be able to adapt to shifting trade policies, maybe sometimes geopolitical uncertainties, today tariffs or supply chain disruptions, making sure we provide continuity and reliability for our customers and serve them much closer to where their operations are. Another example of operational efficiency is our in-house machining. What we try to do, at least where it makes sense, is in Precision Technology, we try to manufacture the machine components that are required in our Energy Equipment division. This gives us a great deal of flexibility. It hopefully reduces our cost. It keeps it within our group as well and stops us relying on third parties. Of course, with a thinner Precision Technology division, we're offering the highest quality standards and giving hopefully our Precision Technology businesses and Energy Equipment businesses a competitive advantage.
Operational excellence is also about sustainability and cost-effectiveness. We integrate smart energy solutions where we can. Klaus mentioned the photovoltaic panels. We have photovoltaic panels installed in North America, in Europe, in the Middle East, and are installing them now in Asia. The important thing is we do this where it is commercially viable, technically viable, and makes sense. We are doing it to lower our energy costs and reduce our emissions where we can. We need to be sensible and pragmatic about it, not just doing it for the sake of doing it. Let's have a little bit more of an explore into vertical integration and see how that applies in our well completions portfolio. Gernot, I think, already put up a slide similar to this. We are going to talk about Wellboss here.
As we said, vertical integration really is a strategic advantage, allowing us to control every stage of production from material selection and precision machining to assembly, test, and final output to our customers. By vertically integrating our composite plug manufacturing, we eliminate dependencies on these external suppliers and give ourselves much more fuller control. One of the key advantages here is to be able to customize the solutions for different wellbore conditions. We manufacture plugs in-house really from the ground up. We use basically filament winding technology. We take effectively continuous composite fiber that's impregnated, and we wind it around a mandrel to form the actual body of the composite plug. Why do we do that? There's cost savings to be had rather than buying this material already from another supplier. There's quality control.
We can ensure we know exactly what we're providing to our customer. The other side is there's the ability for us to be able to adjust and change the chemical and mechanical composition of that composite to suit the different wellbore types. This plug that we developed for a customer called Fervo in the U.S. for geothermal was that we would only have been able to achieve that by having that in-house vertical capability. Something that's really important to us. Another key driver of operational excellence is our commitment to engineering innovation and new product development. At SBO Engineering, I think to the correct slide here, apologies. At SBO Engineering, it is a core driver of success, but what truly sets us apart is our customer-centric R&D and entrepreneurial culture. Florian mentioned that about our entrepreneurial culture earlier.
These two capabilities ensure that every solution we develop is not just innovative, but directly aligned with real-world needs, what our customers are actually wanting and addressing industry challenges, not just doing it for the sake of doing it. Our ability to develop and introduce high-performance solutions at scale makes sure we stay ahead of the competition in driving these industry-leading advancements. Another good example, and I'll use Wellboss in terms of this strategy in action, is if we take our Wellboss portfolio of products, 30% of the revenue we enjoy today comes from product that was developed in the last three years. You think about that, that's quite an achievement. This year, we fully anticipate that about 40% of the product that we sell today will come from product developed in the last three years.
Our ability to rapidly test and commercialize new technologies is really fueled by our entrepreneurial culture, encouraging agility and fast decision-making. We're not waiting for change, we want to be leading it. Operational excellence is also about investing in people. With skilled workers and high demand, we really take a proactive approach through our award-winning apprenticeship scheme here in Austria. France might be able to tell you more about it, but this is something that we're extremely proud of. We really properly train the next generation of engineers through a structured apprenticeship program. It helps us build a strong talent pipeline, basically securing our expertise for the future. By combining our customer-centric R&D and our entrepreneurial culture, SBO stays at the forefront of operational excellence.
To wrap up, technology leadership and operational excellence are not just strengths; they are the foundation of our strategy, driving SBO's growth and positioning us for long-term success. With that, you've made it to the end of the last presentation, folks. I hope I managed to explain enough. If I haven't, please come and ask me or any of the guys there, and they'll happily give you more details. Thank you.
All right. Thank you, Campbell. I think nobody here will look at the Empire State Building the same way again after your explanations here. All right. We're opening up for another round of questions. Should there be any left, of course? I would like to ask all my colleagues now to perhaps take a seat here in the front so we can just continue the dialogue. Obviously, the Q&A session is also open for our viewers online. If there are any more questions, please type them in, and we'll take them as they come. Kevin, yes, more questions on flow control.
Yes, sorry, it's exactly that. It's on flow control. Sorry, but there is something that I do not really understand on the strategy that you presented. Does it mean that you are transforming yourself in a new manufacturer of a new kind of product with, for example, you mentioned the compressor in the sense that you're going to compete with companies that are currently focusing on that, such as Burkhardt Compressor in Switzerland, and that you want in a way to be now part of those businesses, manufacturing your own products? That is going to mean for you maybe some research and development, some CapEx on tools, etc., just to understand exactly because I struggle to really fit the things together. Yeah. Does this work?
Okay. Thank you very much for this excellent question. It is a fair one. Maybe the journey was like this. We asked ourselves, where can we use our core capabilities? That is on the material side. That is on the manufacturing side. What we realized is that in flow control, there are components where we can use both. We can use material excellence and we can use manufacturing expertise, both subtractive and additive manufacturing. This means that it could be components that we manufacture for bigger parts, bigger equipment, like valves, flanges, right?
It also could be that by an M&A deal, we look for niche players who manufacture themselves equipment in this area where you use then a specialized pump in a certain market, for instance, or in a couple of different applications. That is the logic behind that there are clear synergies on the material side and/or the manufacturing perspective. That is why this market looks very attractive to us. Does this clarify that? Just to be sure that it works based on research and development process, is it still too early for everything else? Or maybe you define the. No, we are in the search process for that, both on the organic side, what we can do there, but also on the M&A side.
Thank you. Baptiste back from Odo. One question still on this business. Is it a business where you want orders, and in that case, you have visibility? What is, let's say, the timing between orders and delivery for this type of products? Is it, let's say, standard products where you must have a strong, let's say, level of storages or products on shelves, which imply in that context more working gap? Thank you.
Is this again? Is this in relation to flow control? Sorry? Compressor. Maybe if I answer that a little bit. I think you see the size of the flow control market. What we are focusing on in the flow control market is the high-end niche specialist components. What we're really using is our experience in high-end materials and manufacturing to look where there is the ability to support some of these very high-end manufacturers in their component supply on the one side, and is there any potential for us to look at an acquisition of such a player on the other side as well? Not in the commodity-related business. This is where we can really leverage our experience from forging, from material, and from machining to help support the key players that we see in that industry that could benefit from our expertise, the ones that are involved in basically transmitting the highest pressure or the most corrosive fluids and environments. These have to be very durable. They need to be made from all of the highest-end material.
Yeah. First of all, thank you very much for an excellent presentation. Gernot Bauer, over to you. I have a question in relation to digital technology. Which role would you see does digital technology play in your portfolio? You mentioned the motor example, which I like very much. Do you see an opportunity to go via digital components or elements in your product to more recurring revenue?
Yeah, yeah. More than happy to answer. I mean, as you know, we are already having equipment which is essential for digitalization in autonomous drilling, like rotary steerable equipment with data transfer and changing the direction of the drill string. We already did to a certain extent. On the other side, we have the circulating tool, which is enabled for IntelliServe pipe as well for data train transfer. The motor is another good example. What we are doing here is that you have a sensor downhole which is measuring data.
It's the first one in the industry. I think you see a clear trend in this direction that we are enabling our equipment and go with the industry at the end of the day. I think that's what we are seeing at the moment. More and more digitalization is coming. Artificial intelligence is getting into this business. Yes, step by step, we are obviously increasing our fleet. Internally, we have obviously this deep tech with the RSS, some electronic background know-how. At the end of the day, with the right partners, we can develop our product portfolio further.
I think there was another question over there.
Hi, thank you. Richard Dawson from Berenberg. I've got a couple, but I'll just start with flow control. Florian, you mentioned targeting niches within that market. Can you maybe give us a flavor of what those are and maybe which end markets they're particularly looking at?
Yes and no. Let me put it that way. I mean, what we don't look for, start with a subtractive manner, what we don't look for are standard products. Yeah, companies which offer a standard product from an M&A perspective, yeah, which cannot really differentiate. What we look for is for companies who offer components or equipment which differentiate themselves, where we can add value. As mentioned, when you use those products in very harsh environments, when hydrogen is going through, for instance, this is where you know embrittlement is critical. Yeah, this is what is attractive, appealing to us. I cannot give you the number of those different niches because it's not only us here listening to, but also some of our peers listening to I hope you understand. We have a clear list of criteria that we're following through. Once we are there, we will happi ly let you know.
Okay, fair enough. Maybe just switching to more the geographical diversification, and particularly on the energy side. When you target sort of the growth into the high-growth areas, say Middle East, South America, does that change your strategy in the U.S. at all in any sense? How do you see the relative importance of the U.S. in 2030 compared to where it is today?
As you want. Yeah, please. Actually, at the end of the day, the U.S. market will be always a very important market. You have 500-plus rigs there, and the expectations are that it is somehow a flat-ish market over the next couple of years. It will be still a very important market for us and for our products and entities. We only take the opportunity that we move with growing opportunities internationally. That's at the end of the day. We still are there. We're participating. We hope growing markets here over there in the U.S. with more expertise, with more technology, but obviously take opportunities on growing international markets. I think that's the main idea.
Okay, if I may add to that, when I joined SBO now almost 10 years ago, 2016 was this absolute downturn year where the Saudis more or less opened up the pipe for oil and nobody was investing, and the U.S. business was totally down. That was the first time when the U.S. market was talking dead. Second time was during the pandemic when the Americans were really switching off immediately with significant reduction in CapEx.
The U.S. market was the first to recover, like back in 2017, then also at the end of 2020. Also last year, when the RIC activity decreased because of efficiency increases, consolidation, etc., etc., people were starting, is this now again the end of the U.S. market? It is not. The U.S. is producing at record levels. Drilling and completion went down. You cannot continue like that when you do not increase also the drilling and the completion activities. We are now in a situation of a kind of a flat-ish market. As I also said before, the LNG wildcard and also the fact that the energy demand also is increasing in the U.S. will, on a medium term, also increase that market again.
We are exposed to this market, but this does not mean that we are exposed to that market, and therefore we need to move away from that market to other areas. We take that experience and also enter, in addition, as an organic growth, markets that we have not been in that much. You see also with, of course, what we did in the well completion business in the Middle East, but it was the acquisition of Praxis who gave us this footprint, the connections also to the customers who is driving those growth rates. Therefore, to sum up, the U.S. market will be a tremendously important market for us also in going forward.
Okay, thank you. Maybe just one follow-up, if possible. I mean, there has been a lot of talk about sort of reducing cyclicality, so moving away from just oil and gas. Do you have any targets for non-oil and gas revenue by 2030?
We do. It's EUR 200 million in our business plan.
That EUR 200 million includes 3D printing, for example. What you mean by that?
3D printing, geothermal, and also sizable business in flow control. Yes.
Yeah. Thank you.
Actually, there's a follow-up question here, perhaps to this last one from Richard from Jens Hillers Online. He's asking, going forward, how can we measure progress in growing the new opportunities outside oil and gas? Change in segment reporting anticipated at some point or additional details in each quarterly report for the time being?
This will definitely be the case as we move forward. Yeah, this is no doubt about it. When the business is sizable enough, we will therefore definitely also have a reporting related to that. You also saw the EBITDA target for the year 2030. We will, going forward, not only report the EBIT of the division, but also the EBITDA of the division. When time is coming, when it is sizable enough, of course, we are also going to report on that.
Okay, Jens also had a second question, if I may just add on that. Regarding M&A for the new growth opportunities, how many potential targets have you identified? Is there any chance to expect a first transaction in 2025?
That's the $1,000 question. If there is already a chance for that, I might have to go even out with an ad hoc message. Therefore, I am also very careful and silent about it. It is a matter of fact that M&A is on our agenda. I always said, it's not about the fast acquisition, it's about the right acquisition. I do remember when we were pushed and pressured when we said 10 years back, we want to step out of the drilling also into another area. Hey, come on, guys, when is there the acquisition, etc., etc. We did first with resource, then with downhole technology, and then also now combined with Brexis, building up a very nice well completion portfolio. Give us a time. We have very strict criteria. We may get a lot of applause when doing the first acquisition, but a lot of critics when the acquisition does not fit, when it does not deliver the returns. The money is available. Our criteria are set. Of course, we are happy to make this acquisition the sooner the better. At the end of the day, a lot of prerequisites have to be fulfilled to make this acquisition.
Okay. Peter Unger from Raiffeisen. One question with respect to carbon capture and storage, in particular carbon storage. I think this is something that over a five-year period, you think it's sufficiently sizable to look at it in more detail, or is this rather niche that you're just kind of following? Do you want to take that download with the backers and also with the drilling?
Yes. What we are seeing at the moment, we are part of this project at the moment. Whenever there is drilling required for it, obviously, you have to drill to get access to that carbon capture opportunities. At the end of the day, our motors, as an example, in the United States are used by an operator. We have good opportunities with our backers business from Brexis, which we acquired. Here, we are prepared.
How sizable this business in the future will a little bit depend on how the market is developing, obviously. Yeah. On the other side, we saw very good opportunities in growth when you look to geothermal. Wherever they drill, they need technology in the same as here with carbon capture. At the end, R&D on the one side, we have good opportunities and with existing tools, a little bit depending on how the drilling is progressing here. That would be my answer. One of the reasons for the acquisition of Brexis Completion Technologies one and a half years ago was also that they have a product in the portfolio that is used for carbon capture and storage applications. When we acquired this company, we had three reasons. We wanted to explore and extend our product offering in the well completion area. We have the sliding sleeve systems.
We have the plugs. We have, of course, the dissolvable plugs, Kevin, various with the Solo Boss and the Baby Boss. With Brexis, we added something in addition. That was the reason number one. Second was to be more present also in the Middle East market, and we see how beneficial that is. Third was that Brexis has carbon capture and storage applications, backers in its portfolio. What we all have to admit is that those markets are growing markets like hydrogen, but they are not there. Going forward, mid to long run, I'm totally convinced that this is coming. As I also said, even beneficial for our material business because geothermal, hydrogen, carbon capture applications will all be based on steel. You need the high-performance material know-how. You need the machining capability.
At the moment, many projects are indicated, and if they are not subsidized, they are not getting started. Therefore, it's good to have the foot into the door, but the market at the moment is not that sizable enough. Thank you. Welcome. Now you want to have a quick—yeah, that wasn't the way.
Yeah. That was a follow-up not to me because you said that on the well completion activity, you expect something like 40% of the top line to be made with tools that have been developed over the past three years. Can you give us a bit of color on how then the competitive landscape has evolved over the past three years? Because frankly, 40% is quite impressive. How is the market now structured in terms of competitive landscape? What's maybe the mix in terms of dissolvable, sorry, versus composite, etc.? Just to understand where do we stand here on this famous plug market, please.
Yeah. What we are seeing over the last years, I think, first of all, the US market is a very composite-orientated market as of today, and disposables are growing to a certain extent. When you look on the international market, it's a little bit the opposite. It's more disposables than composites. We did a very good development internally with our own products in regards to the disposables as an example. Yeah. What helped us is our vertical integration, our own R&D internal because Wellboss, as an example, has a lot of R&D expertise, really overall from a company perspective. We have a lot of engineers to develop because otherwise this would not happen what Campbell explained.
From that perspective, I see a very nice development over the last two, three years with our plug business, in particular with the disposables, where we really, again, why we are so successful? Because we could make tailor-made solutions to our customers for a problem that they have. We could quickly in R&D because we're still a small company compared to the competitors, which are more big guys, yeah, big service companies in the U.S. We really, as a smaller company with a lot of R&D focus, we could quite quickly adjust and make tailor-made solutions to the customers. This helped us, I would say, in the last one, two years we nicely saw a good development of this business.
Even another one on the composite side with the geothermal operator in the U.S., which was mentioned before, we were able to develop a very specific composite plug, which was on the one side required to have high pressure and high temperature. We're talking about 170 degrees Celsius and roughly 1,000 bar what they need for this geothermal project. Wellboss was able to deliver quickly, and it was successful. At the end, this recipe is a small company focused on the niche and makes tailor-made solutions, I think helped us a lot. I hope that answers your question.
I just have a small follow-up question regarding the intensity of the business because we always hear U.S., the business is going down. I think we have in every year for the last 15 years drilled more footage in the U.S. It is less rigs, but not less wells. My follow-up question to this is, are you thinking of products that benefit from more wells, more footage, rather than from more rigs? You will see the same happening in the Middle East. They get more efficient. You will see fewer rigs, but more wells. How can you account for that? Yeah, you're absolutely right. The rig count is stable or even going down, and they're doing much more.
They're drilling much longer laterals and doing new creations like Gernot mentioned in terms of U-turns. That's really good for our business because the longer and deeper they go, the more technologically advanced tools that they need. It puts DTEC in the frame. It puts Piko in the frame. The longer the laterals are and the more they go through the P-zone, the more what they call stages they need to complete the well. It just means more plugs. That is very much one of the, not the only reason, but one good reason why in our energy equipment business, the US market still offers great opportunity for us to grow the business.
Thank you. Just one follow-up question regarding 3D printing business. You gave some indication regarding the size of the market and the evolution moving from $1.1 billion- $4.8 billion. You are starting with 20 3D printing machines in 2030. What is your target to invest more and to have, let's say, a stronger market share or to invest exactly in line with the dynamic of the market? Thank you.
Good question. Yeah, with 20 machines and where we are today, we fully anticipate by the end of this decade into 2030 that we could easily look at two to three times the amount of printers to get us to our initial target revenue that we have. We have a strategic initiative in our business called our SBO additive manufacturing strategic initiative, and it's driven between our business here in Austria and also our firm in Houston, where the two teams are working extremely closely to basically grow that market and work with customers across both of those continents to try and develop the business. A very, very focused initiative that's got a lot of resources from all sides to try and drive this business. Yeah, we're really focusing extremely heavily on that. There was another question over here. Maybe also kind of a follow-up on the competitive situation.
I mean, with your strategy of market enlargement, bringing North American technologies into other areas of the world, I mean, your competitors are also probably trying to do that. How do you see yourself positioned versus some of the bigger players there? Because they already have quite a big foot in the market usually. How do you see yourself positioned?
At the end of the day, I think I nicely explained that SBO is already quite an international company. With the acquisition, when we come back to the one example of Wellboss, we have Brexis over there as a company who has the sales structure. If you have the sales structure and a good product, you have already a good base at the end of the day. Obviously, there always will be competition out there, and it's part of the game. I think the important part is, a little bit repeat myself, that you find your niches, that you find your advantages, what you provide to your customer. As long as we are able to do that, and it shows us we have opportunities in Argentina, we are supplying equipment to Aramco, we are supplying equipment in Abu Dhabi. At the end, I think we're doing a reasonably good job to penetrate this market successfully as of today. Obviously, there's always competition, which is part of the game.
All right. In view of time, I would say we have one more question that we could take if there's any out there. Otherwise, I would say, Klaus, I would ask you to probably wrap it up for today.
Of course. Of course, Monica. More than happy to do that. Yeah, ladies and gentlemen, because we still have the live stream ongoing, let me wrap up a little bit what we have discussed for the last three hours about our recalibrated strategy. First of all, I would like to thank Florian, Gernot, and Campbell for their deep dive presentations because for most of you who are more generalistic persons for that market, you get a much better understanding of what we are doing about our technological capabilities, about our market expansion efforts, where we are placed. That was definitely the reason also for this afternoon to give you more insight about what we are doing and also take away, are they even capable in executing that strategy, which is ambitious, measurable, and also quantified? Thank you for that and also for Monica for organizing and rounding up and guiding us through the afternoon.
What I would like you to take away from today's session, and it was a lot of information and you will have a lot of follow-up questions, are the four key elements of our recalibrated strategy. That is quantified, measurable targets where we are heading to till the end of the decade in terms of sales growth, in terms of business outside of our traditional oil and gas business, as well as profitability, that this is based on our core competencies. That is very important. We are not looking for some visionary next step, artificial intelligence, where I say, where is the key competence for SBO in artificial intelligence? We are not programmers, but we take our core competencies and take it to new target industries where we feel comfortable that we will be successful in. We diversify in those new industries. We gave you three examples.
There are definitely also more to come. For me, it is a reshaped, a clearer strategy. I heard it also after the first session. It is received that we give more color about our targets and where we are heading to. Rounded up by the new corporate identity, brand identity in the first break, I heard already it is a cool new logo. It is forward-looking. It is crystal clear and sharpened and precision. Fits very well together. We have some people from our branding agency here. Thank you for that in supporting us. It is quite a process. Please also look at our website. It is a revolution, our website. It also took some time to the company brand unit based here in Vienna who did an amazing job with us and over us to define that. I really appreciated that. With that, I am closing the live stream.
The ones who are here, we are very happy to further discuss with you, also to have a drink at the terrace. It is still very nice here in Vienna. Spring is coming already. Thank you to everybody for being here, for participating via the internet. Thank you for your attention, and we are excited about executing this strategy. Thank you.