Slide 1: Investor Presentation November 2023
Investor Presentation November 2023 CMG: TSX Simulation Technology to Advance Decisions 1
Slide 2: Disclaimer
Disclaimer Forward-Looking Information This presentation contains "forward-looking statements". Forward-looking statements can be identified by words such as: "anticipate", "intend", "plan", "goal", "seek", "believe", "project", "estimate", "expect", "strategy", "future", "likely", "may", "should",
Slide 3: CMG - Growth, Profitability and Acquisitions
CMG - Growth, Profitability and Acquisitions CMG is a global software and solutions company that combines science and technology with deep industry expertise to solve complex subsurface and surface challenges for the new energy industry around the world. Growth CMG 4.0 Strategy, announced in 2022, i
Slide 4: Consistent, long-term profitability with 80%+ recurring revenue
Consistent, long-term profitability with an average of 80%+ of total revenue from recurring annuity/maintenance1 software licenses 10-Year Total Revenue and Operating Profit Margin* Investment Highlights • Strong brand recognition and industry reputation; 40+ years of reservoir simulation $90,000 60
Slide 5: CMG experts in modelling and de-risking subsurface exploration
CMG are experts in modelling and de-risking subsurface exploration with the use of advanced physics-based simulation software and expert consulting Software Professional Services FY 2023 Revenue Reservoir Simulation Consulting Market-leading reservoir simulation software, Multi-disciplinary upstream
Slide 6: Global Customers
Global Customers Partner to Leading Energy Companies Globally 100% of the Super Majors 90% of the top-10 National Oil Companies 75% of the world’s top-25 largest oil companies 70% of the top unconventional producers Simulation Technology to Advance Decisions 6
Slide 7: Global Reservoir Simulation opportunity estimated at $1B by 2030
A market that continues to grow; Global Reservoir Simulation opportunity estimated at $1B by 2030 Global Reservoir Simulation Market $1B Market Opportunity Estimated $1B Global Reservoir Simulation Market Through 2030 CMG FY 2023 Revenue $73.8M Unconventional, Reservoir Simulation expected to grow 2
Slide 8: Energy Transition – multiple segments served by CMG
Energy Transition – multiple segments, in varying stages of maturity, are served by CMG’s current offering CMG simulation technology and expert consulting solutions support companies Carbon Capture and globally in the assessment and implementation Storage (CCS) of low-carbon energy technologies for
Slide 9: CCS – driving revenue now and forecast to accelerate
CCS – driving revenue now and forecast to accelerate in the future CMG HAS A 20+ YEAR HISTORY WITH CCS Capacity of large-scale CO2 capture projects, current and planned 2020 - 2030 CCS has significant need for simulation to comply with regulatory requirements and ensure safety. Government incentives
Slide 10: Reservoir Simulation
Reservoir Simulation Simulation Technology to Advance Decisions 10
Slide 11: Why Simulate – an investment that can yield substantial returns
Why Simulate – an investment that can yield substantial returns Consider an unconventional Montney gas asset... using IPSM to optimize facilities for reservoir performance and remove bottlenecks Increase Increase production in the pipeline network, a $150,000 investment in a simulation study generat
Slide 12: Simulation – end-to-end process flow
Simulation – end-to-end process flow SENSITIVITY ANALYSIS SIMULATION MODEL Understand and quantify the potential Dynamically model how operational impacts that variable and uncertain changes may impact recovery and the inputs may have on your operations value of the asset HISTORY MATCH GEOLOGICAL DA
Slide 13: CMG platform – scalable and extendable
CMG platform – scalable and extendable; simulator engines solve multiple problems Features and Benefits Flexible and reusable capabilities for a variety of industry applications Physics-based simulation, integrated reservoir & production modeling, data analytics and optimization Fit-for-purpose work
Slide 14: Testimonials – support for CMG software and solutions
Testimonials – support for CMG software and solutions CMG GEM is the de-facto IRS ONGC has been using CMG CMG’s visualization capabilities, standard platform for CCS software for reservoir commitment to research, and simulation. According to our simulation since 1992. We are easy-to-use interface ma
Slide 15: CMG Net Promoter Score 68% – strong customer loyalty
CMG Net Promoter Score (NPS) 68% – strong customer loyalty from global customer base World Class: >70% 68% We have observed a significant improvement over the time we have used CMG technology. Our Exceptional: >50% model, being a giant model, initially took a B2B Software Average 41% considerable ti
Slide 16: CMG 4.0
CMG 4.0 Simulation Technology to Advance Decisions 16
Slide 17: CMG 4.0 – A multi-faceted strategy to drive growth
CMG 4.0 – A multi-faceted strategy to drive growth in the core reservoir simulation business while creating diversification through accretive acquisitions Accelerate software revenue with leading sales organization - Shift to customer segmentation and value-based pricing - Solution strategy and mark
Slide 18: CMG 4.0 – Two areas of opportunity for acquisitions
CMG 4.0 – Focused on two areas of opportunity to deploy capital into acquisitions that diversify and expand revenue Prudently invest excess capital, at attractive rates of return, to build durable, long-term software revenue growth and per share profitability. Acquire businesses that enhance and div
Slide 19: Upstream subsurface workflow provides opportunities for acquisitions
The upstream subsurface workflow provides opportunities to continue diversifying with future acquisitions Processing Log/Core Drilling Wellbore Economic Fluid Analysis Analysis Planning Modelling Modelling Inversion Geomechanics Facilities Financial & Geomodels & Drilling Modelling Regulatory Realiz
Slide 20: Bluware acquisition announced September 2023
Bluware acquisition announced September 2023 - two business segments which generated revenue2 of US$23.5 million and an estimated Adj EBITDA1,2 Margin of 5% in FY 2022 FY 2022 Revenue Breakdown By Segment Segment Summaries Services Tailored software and application development services • Consistent,
Slide 21: Bluware technology portfolio concentrated around key software
Bluware technology portfolio is concentrated around 3 key software that are driving transformed experiences VDSTM (Volume Data Storage) • Compress seismic data making it adaptable and scalable • Fast access; cost-effective cloud storage; supports compute-intensive workflows • OpenVDSTM available in
Slide 22: Strong, experienced and diversified leadership
Strong, experienced and diversified leadership Senior Management Pramod Jain, Chief Executive Officer Sandra Balic, Chief Financial Officer Long Nghiem, VP Innovation Lab John Mortimer, Chief Technology Officer Joined 2022 Joined 2009 Joined 1978 Joined 2022 15+ years international leadership 15+ ye
Slide 23: Financials
Financials Simulation Technology to Advance Decisions 23
Slide 24: Q2 2024 represented the 8th consecutive quarter of YoY growth
Strong revenue in Q2 2024 represented the 8th consecutive quarter of year over year growth Q2 2024 Software Revenue by Geography Quarterly Revenue by Type $25,000 $22.6 $20.3 $20.7 $20,000 $19.4 $18.8 Canada $18.1 18% $17.0 $16.1 $15,000 Eastern Hemisphere 43% United States $10,000 24% Strong Recurr
Slide 25: Strong Adjusted Operating Profit Margin, Adjusted EBITDA and Free Cash Flow
Strong Adjusted Operating Profit Margin*, Adjusted EBITDA* and Free Cash Flow* Adjusted Operating Profit Margin* Quarterly Adjusted EBITDA* % Free Cash Flow Per Share (basic)* 47% 55% 43% 44% 43% $0.14 41% 51% 47% 47% 48% 47% 37% 34% 34% 42% 42% $0.09 $0.09 $0.08 $0.08 $0.07 $0.06 $0.05 Q3 Q4 Q1 Q2
Slide 26: Quarterly Financial Highlights
Quarterly Financial Highlights Fiscal 2022(2) Fiscal 2023(3) Fiscal 2024(4) ($ thousands, unless otherwise stated) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Annuity/maintenance license revenue 13,575 14,306 13,529 14,825 15,533 15,803 15,607 17,610 Perpetual license revenue 1,497 2,351 386 780 518 1,556 1,849 1,176 S
Slide 27: Reconciliations
Reconciliations Free Cash Flow Reconciliation to Funds Flow from Operations Fiscal 2022 Fiscal 2023 Fiscal 2024 ($ thousands, unless otherwise stated) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Funds flow from operations 7,022 7,105 4,558 4,974 8,169 7,656 7,920 11,491 Capital expenditures (481) (62) - (130) (211) (1,
Slide 28: Reconciliation of Adjusted EBITDA to Net Income
Reconciliation of Adjusted EBITDA1 to Net Income Fiscal 2022 Fiscal 2023 Fiscal 2024 ($ thousands) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Net Income 5,574 4,952 3,813 4,410 6,349 5,226 6,904 6,516 Add (deduct): Depreciation and amortization 1,088 1,054 931 937 865 913 961 1,021 Stock-based compensation 413 1,382 7
Slide 29: Offices
OFFICES Global Head Office Calgary, Canada Regional Offices Houston, United States Bogota, Colombia Rio de Janeiro, Brazil Bengaluru, India Dubai, UAE Oxford, UK Kuala Lumpur, Malaysia