Expro Group Holdings N.v. · NYSE:XPRO
Expro — Goldman Sachs Global Energy & Clean Technology Conference 2023
45 slides from Expro's conference presentation, Jan 5, 2023
Slide 1: Goldman Sachs: Global Energy & Clean Technology Conference
Goldman Sachs: Global Energy & Clean Technology Conference January 5, 2023 | Miami, Florida 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 Recovery
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% U.S. ~30% 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 907 Well $1,000 Rigs 807 Intervention 719 +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 19% 30% 68% 15% 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 Exceeded first year targeted cost savings of $55m by +10% EXPECTED IN FIRST 24
Slide 17: Pricing Tailwinds Higher Fall-Through on Incremental Revenue
Compelling Rate-of-Change Story Pricing Tailwinds Higher Fall-Through on Incremental Revenue Limited upstream investment for +5 years; capacity additions required to support FID estimates imply an approximate demand growth 50% increase in offshore investment in 2022-2024 versus 2016-2019 Early
Slide 18: Accelerating Cash Flow
Growing Shareholder Value Leading & Compelling Accelerating Cash Flow Through-Cycle Differentiated Rate-of-Change Portfolio Resiliency Story Debt free balance sheet and free cash flow upside provide tactical and strategic flexibility Copyright 2022 Expro. All rights reserved. 18
Slide 19: Illustrative Recovery Scenario
Accelerating Cash Flow Illustrative Recovery Scenario Revenue 2024 Adjusted EBITDA ($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 and Debt Free Balance Sheet
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: Follow us
To learn even more about Expro, check out these additional places to get in touch with us. NYSE: XPRO Follow us on Connect with us on Subscribe to our channel www.expro.com
Slide 23: Appendix
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 24: Well Construction and 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 Copyright 2022 Expro. All
Slide 25: Q4 2022 Revenue and Adjusted EBITDA Expectations
Q4 2022 We expect revenue in the fourth quarter of 2022 to approach pre-pandemic levels of approximately $325-$350 million We expect Adjusted EBITDA margin of approximately 20% of consolidated revenue in line with previous guidance Copyright 2022 Expro. All rights reserved. 24 24
Slide 26: LTM Revenue by Product Line and Region (Q3 2022)
LTM Revenue by Product Line and Region (Q3 2022) Revenue by Product Line ($m) Revenue by Region ($m) Well Intervention Asia Pacific & Integrity $190 16% Subsea Well Flow Well Management Access Revenue Revenue by North & Latin Middle East $423 by Product Line $136 North Africa Geography America 38% $
Slide 27: LTM Revenue by Type of Activity (Q3 2022)
LTM Revenue by Type of Activity (Q3 2022) Revenue by Activity ($m) Drilling & Completions Revenue ($m) Production Optimization Revenue ($m) Tubular Product Subsea Well Sales Production $13 Access Optimization $42 $362 Well Flow Management Well Flow Well LTM LTM Well LTM Revenue $265 Revenue Construc
Slide 28: LTM Revenue by Region (by Product Line – Q3 2022)
LTM Revenue by Region (by Product Line – Q3 2022) North & Latin America ($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 $93 $111 $12 $
Slide 29: LTM Revenue by Region (by Type of Activity – Q3 2022)
LTM Revenue by Region (by Type of Activity – Q3 2022) North & Latin America ($m) Europe & Sub-Saharan Africa ($m) Drilling Construction & Completion Production Optimization Tubular Product Drilling Construction & Completion Production Optimization $70 $84 $41 $469 $365 $357 $281 Middle East & North
Slide 30: Historical Revenue and Adjusted EBITDA (Annual)
Historical Revenue and Adjusted EBITDA (Annual) Revenue ($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 $1,003
Slide 31: Historical Revenue and Adjusted EBITDA
Historical Revenue and Adjusted EBITDA Revenue ($m) Adjusted EBITDA ($m) Well Management Well Construction Expro Frank’s XPRO Revenue up Legacy Adjusted 34% since EBITDA up Q4 2020 85% since $374 Q4 20203 $348 $342 $334 $326 $330 $313 $314 $296 $51 $51 $51 $139 $284 $280 $48 $45 $45 $45 $156 $139 $1
Slide 32: Historical Revenue by Region and Product Line (Annual)
Historical Revenue by Region and Product Line (Annual) By Region ($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 $1,978 $154 $150 $234 $152 $280 $910 $1,390 $1,390 $1,030 $1,261 $
Slide 33: Historical Revenue by Geographical Market and Product Line
Historical Revenue by Geographical Market and Product Line By Geographical Market ($m) By Product Line ($m) NLA ESSA MENA APAC Well Construction Well Flow Management Subsea Well Access Well Intervention & Integrity $374 $374 $348 $342 $348 $342 $56 $330 $334 $42 $330 $334 $326 $326 $38 $313 $314 $40
Slide 34: Historical Revenue and Contribution by Areas of Capability
Historical Revenue and Contribution by Areas of Capability Revenue ($m) Well Construction ($m) $70 42% 45% 44% 42% 43% 44% 50% 41% 42% 41% 42% 41% 42% $60 38% 40% 37% 40% $50 $374 $40 30% $348 $342 $330 $334 $326 $30 20% $313 $314 $296 $20 $139 $284 $280 10% $10 $59 $66 $63 $58 $47 $34 $32 $39 $39 $
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% 30% $45 $45 30% 26% 30% $40 $40 22% 25% 23% 23% $35 21% 21% 21% $35 21% 25% 19% 19% $30 20% $30 18% 18% 18% 16% 15% 15% 15% 17% 16% 20% $25 15% 14% $25 15% 15% 14% 12% 11% 15% 13% $20
Slide 36: Historical Support Costs (Annual)
Historical Support Costs (Annual) Historical Support Costs ($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 $25
Slide 37: Historical Support Costs
Historical Support Costs Support Costs ($m) Trailing Twelve Months ($m) Research, engineering and development Research, engineering and development Product Line and central costs Chart Title Product Line and central costs Geography-based support costs Aggregate support Geography-based support costs
Slide 38: Historical Adjusted Cash Flow from Operations and Capex (Annual)
Historical Adjusted Cash Flow from Operations and Capex (Annual) Adjusted Cash Flow from Operations ($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 $20
Slide 39: Historical Adjusted Cash Flow from Operations and Capex
Historical Adjusted Cash Flow from Operations and Capex Adjusted Cash Flow from Operations ($m) Capital Expenditures ($m) Expro Frank’s XPRO Expro Frank’s XPRO Legacy Legacy $73 $40 $40 $66 $37 $37 $33 $33 $27 $10 $10 $18 $52 $31 $10 $10 $44 $28 $41 $8 $9 $5 $32 $26 $22 $28 $21 $22 $20 $21 $48 $46 $
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
Non-GAAP Reconciliations Three Months Ended TTM 2022 ($ in millions) 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 30-Sept-22 Adjusted EBITDA 1 $ 33 $ 45 $ 45 $ 51 $ 35 $ 24 $ 24 $ 26 $ 24 $ 39 $ 45 $ 51 $
Slide 43: Non-GAAP Reconciliations (continued)
Non-GAAP Reconciliations (continued) ($ in millions) Three Months Ended TTM 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 Q3 22 Total revenue $ 326 $ 348 $ 342 $ 374 $ 330 $ 251 $ 233 $ 250 $ 251 $ 284 $ 313 $ 296 $ 280 $ 314 $ 334 $ 1,224 Cost of revenue, exclu
Slide 44: Notes
Notes: 23
Slide 45: NYSE: XPRO www.expro.com
NYSE: XPRO www.expro.com
Expro Group Holdings — Goldman Sachs Global Energy & Clean Technology Conference 2023 on 6ix