Tgs Asa · OSL:TGS
Tgs Asa — Q1 2024 Earnings Presentation
30 slides from Tgs Asa's earnings presentation, May 8, 2024
Slide 1: Q1 2024 Results
MAY 8, 2024 EARNINGS RELEASE Q1 2024 Results Kristian Johansen, CEO / Sven Børre Larsen, CFO O S L O , N O R WAY TGS.com
Slide 2: Forward-Looking Statements
Forward-Looking Statements All statements in this presentation other than statements of historical fact are forward-looking statements, which are subject to a number of risks, uncertainties and assumptions that are difficult to predict and are based upon assumptions as to future events that may not
Slide 3: Q1 highlights
SUMMARY Q1 highlights Total POC revenues of USD 227 million compared to USD 229 million in Q1 2023 • Late sales of USD 72 million in Q1 2024 vs. USD 46 million in Q1 2023 • POC Early sales of USD 78 million (early sales rate of 116%) compared to USD 98 million (73%) in Q1 2023 • Proprietary revenues
Slide 4: Operational Highlights
EARNINGS RELEASE Operational Highlights Q1 2024
Slide 5: Data acquisition activity in Q1 2024
Multi-client project OBN operation DES operation Data acquisition activity in Q1 2024 5 Q1 2024 RESULTS
Slide 6: Penyu Basin 3D Offshore Peninsular Malaysia
Penyu Basin 3D Offshore Peninsular Malaysia • Partnership with Malaysia Petroleum Management (MPM), PETRONAS and JV partners PGS and SLB to acquire 7,800 km2 of modern 3D data • Ramform Sovereign vessel mobilized utilizing state-of-the-art Geostreamer technology to better derisk subsurface • Provide
Slide 7: OBN Acquisition Contract in North America
OBN Acquisition Contract in North America • TGS secures a six-month-plus contract by a returning client • Project is expected to commence in Q3 2024 • OBN survey is expected to deliver high- quality seismic data to drive decision- making • Reinforces position in North America 7
Slide 8: Multi-Client Wind & Metocean Campaign Offshore Germany
Multi-Client Wind & Metocean Campaign Offshore Germany • Utilizes LiDAR buoys with additional wave and current sensors, reducing costs and timelines for offshore wind developers • Green Rebel-supplied buoys off Germany provide 24-month wind data suite • Includes 12 months of metocean data • Delivere
Slide 9: Update on PGS merger
Update on PGS merger • Norwegian Competition Authority gave clearance on 17 April, ahead of deadline on 22 April • Competition & Markets Authority (CMA) in the UK initiated phase 1 with launch of merger inquiry on 12 April • Deadline for phase 1 decision is 11 June • TGS expects a positive decision
Slide 10: Financials
EARNINGS RELEASE Financials Q1 2024
Slide 11: POC Revenues by type
POC Revenues by type Early Sales Revenue Late Sales Revenue 120 160 140 100 120 80 100 MUSD MUSD 60 80 98 137 40 88 60 78 66 97 59 40 76 65 62 72 72 20 34 39 59 33 31 20 46 0 0 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3
Slide 12: POC Revenues by Business Unit
POC Revenues by Business Unit Multi-client & Imaging Digital Energy Solutions 180 20 160 18 16 140 14 120 12 MUSD MUSD 100 10 80 164 156 18 138 146 8 60 128 124 107 110 113 6 12 12 11 40 9 10 4 7 7 8 20 2 0 0 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2022 Q2 2022 Q3
Slide 13: Operating Costs and POC EBITDA
Operating Costs and POC EBITDA Cost of sales Personnel Costs 80 40 70 35 60 30 50 25 MUSD MUSD 40 20 72 34 34 30 63 15 30 31 32 32 58 20 10 21 35 18 18 27 25 10 5 8 0 1 2 0 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023
Slide 14: Amortization, Depreciation and POC EBIT
Amortization, Depreciation and POC EBIT POC Amortization Depreciation 90 45 80 40 9 5 70 2 35 60 35 30 1 33 9 36 32 32 MUSD MUSD 50 1 25 22 15 8 13 40 20 38 30 15 30 20 39 39 37 40 40 41 43 41 10 19 21 36 17 19 10 5 5 5 6 0 0 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1
Slide 15: Acquisition - Cost of sales and IFRS 16 depreciation
Acquisition - Cost of sales and IFRS 16 depreciation 90 80 9 70 9 60 8 50 MUSD 18 40 70 63 25 30 56 20 34 24 10 0 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Cost of sales IFRS 16 depreciation 15
Slide 16: Bridge POC Revenues to IFRS Revenues
Bridge POC Revenues to IFRS Revenues POC revenues Revenues Revenues IFRS revenues recognized from recognized performance according to POC obligations met in during Q1 24 16 Q1 24
Slide 17: IFRS – Profit & Loss
IFRS – Profit & Loss (MUSD) Q1 2024 Q1 2023 Change Early Sales 2.7 41.9 -94% Late Sales 71.9 45.5 58% Proprietary Sales 77.5 85.7 -10% Total revenues 152.1 173.2 -12% Cost of sales 35.0 57.8 -40% Personnel cost 32.5 31.3 4% Other operational costs 16.8 20.6 -18% EBITDA 67.9 63.5 7% Straight-line amo
Slide 18: IFRS – Balance Sheet
IFRS – Balance Sheet Change from (MUSD) Q1 2024 Q4 2023 Q4 2023 Q1 2023 Goodwill 384.6 384.6 0% 384.6 Multi-client library 772.8 753.1 3% 656.3 Deferred tax asset 73.2 67.9 8% 86.0 Right-of-use assets 135.6 78.2 73% 65.3 Other non-current assets 241.9 229.7 5% 222.1 Total non-current assets 1,608.1
Slide 19: IFRS – Cash Flow
IFRS – Cash Flow (MUSD) Q1 2024 Q1 2023 Change Operating activities: Profit before taxes -20.9 -12.9 62% Depreciation/amortization/impairment 77.3 70.3 10% Changes in accounts receivable and accrued revenues -34.8 76.1 -146% Changes in other receivables -9.4 4.1 -332% Changes in other balance sheet
Slide 20: Dividends
Dividends Dividend Per Share 1 Dividend Yield 2 1.6 7.0% 1.4 6.0% NOK 8.0 1.2 NOK 8.5 5.0% NOK 8.5 1.0 NOK 6.0 USD 1.08 4.0% USD per share 0.8 NOK 5.0 USD 0.8 3.0% 5.9% 0.6 USD 0.75 4.9% 5.2% NOK 4.0 4.6% USD 0.6 USD 0.6 USD 0.56 USD 0.56 USD 0.56 4.5% 4.3% 0.4 2.0% 4.0% 3.9% 4.0% 3.8% 3.5% 3.6% 3.7
Slide 21: Outlook
EARNINGS RELEASE Outlook Q1 2024
Slide 22: More oil and gas needed to meet long-term energy demand
More oil and gas needed to meet long-term energy demand Oil and gas supply 250 200 OPEC Exxon "In the near term, the markets are not IEA STEPS balanced; supply, demand is not 150 balanced. 2025 and beyond is when the Gap to be filled by new oil and MBOE/day world is going to be short of oil” gas fie
Slide 23: Exploration recovery takes time
Exploration recovery takes time E&P companies compensating by M&A Exploration spending Corporate M&A transactions in the E&P industry 140 20% 250 18% 120 Exploration spending indexed 16% 200 Billions of real 2023 dollars Exploration % of total 100 14% 12% 150 80 10% 60 8% 100 40 6% 4% 50 20 2% 0 0%
Slide 24: Significant upside potential in seismic market
Significant upside potential in seismic market Global marine seismic market 10.0 • The global seismic market has seen a recovery from 2020-21 – but still 9.0 low in a historical perspective 8.0 7.0 6.0 • Current seismic data spending too low to support significant USD bn 5.0 improvements in organic
Slide 25: Acquisition activity plan
Acquisition activity plan OBN Crew 1 OBN Crews OBN Crew 2 OBN Crew 3 OBN Crew 4 RM Source 1 RM and Source RM Source 2 RM Source 3 Q1 2024 Q2 2024 Q3 2024 Q4 2024 NSA EUR AMEAP 25
Slide 26: POC contract backlog & inflow
POC contract backlog & inflow Contract Inflow 400 Timing of expected recognition of 350 Acquisition backlog 300 250 MUSD 200 360 355 150 280 283 275 240 100 196 174 141 120 117 140 50 88 0 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Contract Backlog 600 500 Q2 2024
Slide 27: Summary
Q1 2024 Summary Total POC revenues of USD 227 million compared to USD 229 million in Q1 2023 High POC early sales rate of 116% Strong development in multi-client late sales, up 58% year-over-year POC EBIT of USD 40 million compared to USD 25 million in Q1 2023 PGS transaction expected to close on or
Slide 28: Appendix
EARNINGS RELEASE Appendix Q1 2024
Slide 29: IFRS contract backlog & inflow
IFRS contract backlog & inflow Contract Inflow 400 Timing of expected recognition of Early 350 Sales contract backlog 300 250 MUSD 200 360 355 150 280 283 275 240 100 196 174 141 120 117 140 50 88 0 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Contract Backlog 900 80
Slide 30: License Round Activity
NORTH AMERICA License Round Canada: • Newfoundland Q4 2024 (close) Activity • NW Orphan and Jeanne d’Arc US GOM: • Updated 5-year Plan Lease Sales commence in 2025 AFRICA Angola: • 2025 round – 10 blocks • Out of Round direct awards legally decreed L AT I N A M E R I C A Libya Brazil: • Licensing ro