Expro Group Holdings N.v. · NYSE:XPRO
Expro — Barclays CEO Energy/Power Conference 2022
43 slides from Expro's conference presentation, Sep 8, 2022
Slide 1: CEO Energy-Power Conference
CEO Energy-Power Conference September 8, 2022 | New York, New York NYSE: XPRO
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this presentation that address activities, e
Slide 3: Delivering technology, expertise and service
Delivering Unlocking technology, expertise energy answers and service for tomorrow for the wells of today Copyright 2022 Expro. All rights reserved. 33
Slide 4: Expro at a Glance: We Are "Well Experts"
EXPRO at a Glance: We Are “Well Experts” OUR REVENUE A DIVERSE SET OF GLOBAL CAPABILITIES IN: COUNTRIES EMPLOYEES WELL MANAGEMENT WELL CONSTRUCTION INTERNATIONAL U.S. LAND OFFSHORE Well Flow Management Subsea Well Access Well Intervention & Integrity Asia Pacific STRONG CASH FLOW OUTLOOK DEBT FREE B
Slide 5: Growing Shareholder Value
Growing Shareholder Value Leading & Through-Cycle Compelling Accelerating Differentiated Portfolio Resiliency Rate-of-Change Story Cash Flow Significant upside Driven by breadth Improving business mix Debt free balance sheet from International & of services and Recently deployed and free cash flow u
Slide 6: Leading & Differentiated Portfolio
Growing Shareholder Value Leading & Differentiated Portfolio Significant upside from International & Offshore Recovery Copyright 2022 Expro. All rights reserved. 6
Slide 7: Well Positioned to Capture Significant Upside from International, Offshore and Drilling & Completions
Leading & Differentiated Portfolio Well Positioned to Capture Significant Upside from Ongoing International, Offshore and Drilling & Completions Recovery INTERNATIONAL REVENUE OFFSHORE REVENUE DRILLING & COMPLETIONS REVENUE ~20% ~30% 30% U.S. Onshore Production Optimization * International Offshore
Slide 8: +$75 Oil Provides Strong Support for Offshore Recovery
Leading & Differentiated Portfolio +$75 Oil Provides Strong Support for Offshore Recovery Revenue Brent Price $3,000 $130 $140 $100 $112 $120 $2,500 $95 $100 $54 $2,000 $95 $72 $71 $79 $80 $1,500 $64 $69 $44 $55 $60 $42 $1,000 $40 $500 $20 $2,533 $1,978 $1,213 $1,085 $1,261 $1,390 $1,065 $1,143 $1,2
Slide 9: A Leader in Well Construction
Leading & Differentiated Portfolio Offshore Offshore Rigs Rigs 214 243 Offshore A Leader in Well Construction $600 $580 -32% Offshore Rigs Rigs 188 +14% 165 Well +14% Well Interventio $504 Intervention n& & Integrity Well Construction Market Drivers $500 -26% Integrity Well +17% Subsea Subsea 2021 C
Slide 10: A Leading Well Management Portfolio
Leading & Differentiated Portfolio Intl A Leading Well Management Portfolio Rigs 1,059 Intl Intl Intl Rigs -32% Rigs Rigs 907 Well $1,000 719 807 Intervention +12% & Integrity Well Construction Market Drivers $810 +12% 15% $784 • Well testing primarily driven by exploration and appraisal activity an
Slide 11: A Leading Well Expert with Global Presence
Leading & Differentiated Portfolio A Leading Well Expert with Global Presence 2021 REVENUE $500 50% 18% $400 31% 40% 14% Major Countries North & $300 30% 68% 15% 19% Brazil Latin America 12% $200 20% $393m $393m $100 $304 10% Guyana 3% $86 $75 Mexico Employees $0 0% 2014 2019 2021 86% United States
Slide 12: Through-Cycle Resiliency
Growing Shareholder Value Through-Cycle Leading & Differentiated Resiliency Portfolio Driven by breadth of services and technologies Copyright 2022 Expro. All rights reserved. 12
Slide 13: Expertise, Technology and Breadth of Services Provide Through-Cycle Resiliency
Through-Cycle Resiliency Expertise, Technology and Breadth of Services Provide Through-Cycle Resiliency EXPLORATION DRILLING COMPLETION PRODUCTION ABANDONMENT SUSTAINABLE & APPRAISAL ENERGY SOLUTIONS Well Lifecycle WELL CONSTRUCTION WELL MANAGEMENT Well Flow Management Subsea Well Access Well Interv
Slide 14: Sustainable Energy Solutions for Expro and its Customers
Through-Cycle Resiliency Sustainable Energy Solutions for Expro and its Customers Emissions Management Environmental Efficiencies Annular Well Integrity Emissions Management SUSTAINABLE ENERGY SOLUTIONS WELL FLOW MANAGEMENT WELL INTERVENTION & INTEGRITY WELL INTERVENTION & INTEGRITY Customer reduced
Slide 15: Compelling Rate-of-Change Story
Growing Shareholder Value Compelling Rate-of-Change Story Leading & Through-Cycle Improving business mix Differentiated Portfolio Resiliency Recently deployed technologies Merger synergies Copyright 2022 Expro. All rights reserved. 15
Slide 16: Merger Synergies Driving Incremental EBITDA and Margin Expansion
Compelling Rate-of-Change Story Merger Synergies Driving Incremental EBITDA and Margin Expansion TOTAL EXPECTED COST SYNERGIES ($m) $80-$100m in merger synergies, ($70m cost/$10-$30m revenue¹) expected within 24-36 months 100% of initial $55 million of merger synergies opportunity identified and act
Slide 17: Pricing Tailwinds Higher Fall-Through on Incremental Revenue
Compelling Rate-of-Change Story Pricing Tailwinds Higher Fall-Through on Incremental Revenue Limited upstream investment for +5 years; capacity additions required to support FID estimates imply an approximate demand growth 50% increase in offshore investment in 2022-2024 versus 2016-2019 Early
Slide 18: Accelerating Cash Flow
Growing Shareholder Value Leading & Compelling Accelerating Cash Flow Through-Cycle Differentiated Rate-of-Change Portfolio Resiliency Story Debt free balance sheet and free cash flow upside provide tactical and strategic flexibility Copyright 2022 Expro. All rights reserved. 18
Slide 19: Illustrative Recovery Scenario
Accelerating Cash Flow Illustrative Recovery Scenario Revenue 2024 Adjusted EBITDA ($m) 2014 2014 Recent guidance for Q4 2022 is $325-$350m of quarterly run-rate revenue ($1.3b-$1.4b annualized) ~$1,700 and +/- 20% Adjusted EBITDA margins ~$1,250 $350 Scenario Assumptions 30% • + $75 Brent through 2
Slide 20: Disciplined Capital Allocation
Accelerating Cash Flow Tactical and Strategic Optionality Capital Allocation Framework FUND ORGANIC GROWTH Disciplined Maintenance capex/ Capital Allocation OUTSTANDING Growth capex & Debt Free OF REVENUE Balance Sheet VALUE-ADDED ACQUISITIONS to AVAILABLE LIQUIDITY Leverage and/or compliment existi
Slide 21: Growing Shareholder Value
Growing Shareholder Value Leading & Through-Cycle Compelling Accelerating Differentiated Portfolio Resiliency Rate-of-Change Story Cash Flow Significant upside Driven by breadth Improving business mix Debt free balance sheet from International & of services and Recently deployed and free cash flow u
Slide 22: Appendix: Our ESG report
NYSE: XPRO Appendix: To learn even more about Expro, check out these additional places to get in touch with us. Investors.Expro.com Downloadable Financials Our ESG report Follow us on Connect with us on Subscribe to our channel www.expro.com
Slide 23: Revenue momentum driven by shorter-cycle production optimization projects
Q3 2022 2022 Revenue momentum will be driven by an increase in shorter-cycle, faster-return production optimization projects We expect revenue in the third quarter of 2022 will be Recovering offshore market beyond the next few quarters up +/- 8% sequentially We expect that Adjusted EBITDA Delivering
Slide 24: Sustainable Energy Solutions
SUSTAINABLE WELL CONSTRUCTION WELL MANAGEMENT ENERGY SOLUTIONS Connection Integrity Well Test Module Riserless Well Intervention Annulus Integrity Solution Geothermal, (iTong™) (Mega Flow Separator) System (RWIS) (Octopoda™) Emissions Management and Carbon Capture & Storage Click Images to View Vide
Slide 25: LTM Revenue by Product Line and Region (Q2 2022)
LTM Revenue by Product Line and Region (Q2 2022) Revenue by Product Line ($m) Revenue by Region ($m) Subsea Well Well Intervention Access & Integrity $128 $185 North & Latin America Europe & Sub- Saharan Africa $437 LTM LTM $381 Revenue Revenue Well by Region by Product Line Construction $460 $1,203
Slide 26: LTM Revenue by Type of Activity (Q2 2022)
LTM Revenue by Type of Activity (Q2 2022) Revenue by Activity ($m) Drilling & Completions Revenue ($m) Production Optimization Revenue ($m) Subsea Well Tubular Product Sales $11 Access $41 Well Flow Management LTM Well LTM $254 LTM Well Revenue Well Flow Revenue Intervention Revenue Drilling & Const
Slide 27: LTM Revenue by Region (by Product Line – Q2 2022)
LTM Revenue by Region (by Product Line – Q2 2022) North & Latin America ($m) Europe & Sub-Saharan Africa ($m) Well Construction Well Flow Management Well Construction Well Flow Management Subsea Well Access Well Intervention & Integrity Subsea Well Access Well Intervention & Integrity $77 $108 $12 $
Slide 28: LTM Revenue by Region (by Type of Activity – Q2 2022)
LTM Revenue by Region (by Type of Activity – Q2 2022) North & Latin America ($m) Europe & Sub-Saharan Africa ($m) Drilling & Completions Production Optimization Tubular Product Sales Drilling & Completions Production Optimization $64 $104 $41 $437 $381 $332 $276 Middle East & North Africa ($m) Asia
Slide 29: Historical Revenue and Adjusted EBITDA (Annual)
Historical Revenue and Adjusted EBITDA (Annual) Revenue ($m) Adjusted EBITDA1 ($m) Expro Frank’s XPRO Expro Frank’s XPRO $793 Legacy Legacy $2,533 $1,978 $1,153 $447 $532 $975 $1,390 $1,213 $1,261 $1,143 $311 $1,085 $1,065 $580 $489 $522 $456 $390 $1,380 $172 $175 $158 $145 $109 $346 $21 $79 $1,003
Slide 30: Historical Revenue and Adjusted EBITDA (Quarterly)
Historical Revenue and Adjusted EBITDA (Quarterly) Revenue ($m) Adjusted EBITDA ($m) Well Management Well Construction Expro Frank’s XPRO Legacy Revenue up 26% since Q4 2020 $374 $348 $342 $326 $330 $313 $314 $296 Adjusted $139 $284 $280 EBITDA up $156 $139 $123 $250 $251 96% since $251 $144 $233 $1
Slide 31: Historical Revenue by Region and Product Line (Annual)
Historical Revenue by Region and Product Line (Annual) By Region ($m) By Product Line ($m) NLA ESSA MENA APAC Well Construction Well Flow Management Subsea Well Access Well Intervention & Integrity $2,533 $2,533 $197 $364 $273 $1,978 $1,977 $154 $150 $234 $152 $280 $910 $1,390 $1,390 $1,030 $1,261 $
Slide 32: Historical Revenue by Region and Product Line (Quarterly)
Historical Revenue by Region and Product Line (Quarterly) By Region ($m) By Product Line ($m) NLA ESSA MENA APAC Well Construction Well Flow Management Subsea Well Access Well Intervention & Integrity $374 $374 $348 $342 $330 $348 $342 $326 $56 $42 $313 $314 $326 $330 $38 $44 $40 $313 $314 $31 $42 $
Slide 33: Historical Revenue and Contribution by Areas of Capability
Historical Revenue and Contribution by Areas of Capability Revenue ($m) Well Management ($m) Well Construction Well Management $100 50% 40% 42% 40% 41% 40% 38% 38% 38% 37% $80 35% 36% 35% 35% 40% 33% $326 $348 $342 $374 $330 $251 $233 $250 $251 $284 $313 $296 $280 $314 $60 30% $40 20% $20 10% $73 $8
Slide 34: Historical Revenue and Contribution by Type of Activity
Historical Revenue and Contribution by Type of Activity By Type of Activity ($m) Tubular Product Sales ($m) $30 50% Production Optimization Drilling & Completions Tubular Product Sales 38% 37% $25 36% 35% 36% 31% 40% 31% $20 21% 25% 26% $400 23% 22% 30% $15 12% 19% $374 20% $10 $17 $16 $17 $348 $5 $
Slide 35: Historical Segment EBITDA by Region
Historical Segment EBITDA by Region North & Latin America ($m) Europe & Sub-Saharan Africa ($m) $50 35% $50 35% 30% $45 $45 30% 26% 30% $40 $40 25% 23% 23% $35 21% 21% 21% $35 22% 25% 19% 21% $30 $30 19% 18% 18% 16% 15% 15% 15% 20% 17% 16% 20% $25 15% 14% 15% 15% 12% $25 13% 14% $20 11% 15% 15% $20
Slide 36: Historical Support Costs (Annual)
Historical Support Costs (Annual) Historical Support Costs ($m) Geography-based support costs Product Line and other central costs Research, engineering and development $640 $24 $573 $128 $28 $116 $416 $406 $16 $363 $360 $25 $15 $20 $322 $116 $100 $297 $96 $17 $86 $10 $89 $489 $87 $430 $284 $281 $25
Slide 37: Historical Support Costs (Quarterly)
Historical Support Costs (Quarterly) Support Costs ($m) Last Twelve Months ($m) Research, engineering and development Aggregate support Research, engineering and development $101 $103 $102 $101 Product Line and other central costs costs down ~10% Chart Title Product Line and other central costs Geog
Slide 38: Historical Adjusted Cash Flow from Operations and Capex (Annual)
Historical Adjusted Cash Flow from Operations and Capex (Annual) Adjusted Cash Flow from Operations ($m) Core Capital Expenditures ($m)² Expro Frank’s XPRO Expro Frank’s XPRO $645 $646 Legacy Legacy $368 $438 $397 $173 $219 $170 $145 $100 $138 $103 $21 $109 $277 $118 $56 $62 $224 $89 $37 $28 $61 $20
Slide 39: Historical Adjusted Cash Flow from Operations and Capex (Quarterly)
Historical Adjusted Cash Flow from Operations and Capex (Quarterly) Adjusted Cash Flow from Operations ($m) Core Capital Expenditures ($m)² Expro Frank’s XPRO Expro Frank’s XPRO Legacy $73 Legacy $66 $27 $18 $52 $44 $41 $37 $33 $33 $35 $35 $32 $30 $26 $10 $28 $8 $9 $10 $10 $23 $22 $48 $17 $10 $20 $4
Slide 40: Non-GAAP Reconciliations (Annual)
Non-GAAP Reconciliations (Annual) Twelve Months Ended December 31 ($m) 2014 2015 2016 2017 2018 2019 2020 2021 Adjusted EBITDA 1 $ 793 $ 532 $ 172 $ 79 $ 145 $ 175 $ 109 $ 158 Depreciation, amortization and impairment expenses (274) (301) (677) (744) (241) (417) (547) (168) Severance and other expen
Slide 41: Non-GAAP Reconciliations (Annual)
Non-GAAP Reconciliations (Annual) Twelve Months Ended December 31 2014 2015 2016 2017 2018 2019 2020 2021 Total revenue $ 2,533 $ 1,978 $ 1,213 $ 1,085 $ 1,261 $ 1,390 $ 1,065 $ 1,143 Cost of revenue, excluding depreciation and amortization (1,648) (1,384) (973) (960) (1,077) (1,179) (934) (974) Ind
Slide 42: Non-GAAP Reconciliations (Quarterly)
Non-GAAP Reconciliations (Quarterly) ($ in millions) Three Months Ended LTM 2022 31-Mar-19 30-Jun-19 30-Sep-19 31-Dec-19 31-Mar-20 30-Jun-20 30-Sep-20 31-Dec-20 31-Mar-21 30-Jun-21 30-Sep-21 31-Dec-21 31-Mar-22 30-Jun-22 Adjusted EBITDA 1 $ 33 $ 45 $ 45 $ 51 $ 35 $ 24 $ 24 $ 26 $ 24 $ 39 $ 45 $ 51 $
Slide 43: Non-GAAP Reconciliations (Quarterly)
Non-GAAP Reconciliations (Quarterly) Three Months Ended LTM Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Total revenue $ 326 $ 348 $ 342 $ 374 $ 330 $ 251 $ 233 $ 250 $ 251 $ 284 $ 313 $ 296 $ 280 $ 314 $ 1,203 Cost of revenue, excluding depreciation and amorti
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