Who we are,
And what drives our business.
What we do,
Unlocking
energy answers
for tomorrow.
Delivering
technology, expertise and service
for the wells of today.
Headquartered in Houston, Texas and domiciled in the Netherlands.
Completed reverse merger with Frank’s International on October 1, 2021
NYSE: XPRO
~$1.5bn
Market Capitalization
~$1.3bn
Enterprise Value
5.3x
2023 EBITDA Multiple
Sustainable Energy Solutions
Well Intervention & Integrity
Subsea Well Access
Well Flow Management
WELL
MANAGEMENT
WELL CONSTRUCTION
A DIVERSE SET OF
GLOBAL CAPABILITIES IN:
$1,143m
2021
Revenue by Geography
34%
33%
17%
16%
North & Latin
America
Europe & Sub-Saharan Africa
Middle East
North Africa
Asia Pacific
OUR REVENUE
~80%
INTERNATIONAL
~7%
U.S. LAND
~70%
OFFSHORE
SAFETY & SERVICE QUALITY LEADER
2021 customer service, quality, and customer job performance rating
~95%
DEBT FREE
BALANCE SHEET
with significant available liquidity
STRONG CASH
FLOW OUTLOOK
EMPLOYEES
~7.2k
COUNTRIES
60
EXPRO at a Glance: We are "The Well Experts"
X
P
R
O
Leading & Differentiated Portfolio
Significant upside
from International &
Offshore Recovery
Through-Cycle
Resiliency
Driven by breadth
of services and technologies
Compelling
Rate-of-Change Story
Improving business mix
Recently deployed technologies
Merger synergies
Accelerating
Cash Flow
Debt free balance sheet and free cash flow upside provide tactical and strategic flexibility
Growing Shareholder Value
Performance is a Core Value
People | Partnerships | Performance | Planet
EXPRO OPPORTUNITY
After a strong recovery in the US onshore market, we are seeing increased demand for our services, with international activities expected to accelerate through H2 2022 and into 2023.
U.S.
International
~80%
~20%
INTERNATIONAL REVENUE
~80%
EXPRO OPPORTUNITY
Significant under investment in energy supply over the last decade, coupled with growing energy demand, is resulting in additional FID approvals, 60% of which are expected to be for offshore projects.
~30%
Onshore
~70%
Offshore
OFFSHORE REVENUE
~70%
EXPRO OPPORTUNITY
70% of our business is levered to drilling and completions activity, which is poised for strong growth across several geographies, with robust fall-through on incremental revenue. Brownfield activity will support steady growth in our production related business.
*Includes 3% Tubular Product Sales
~30%
Production Optimization
70%
Drilling & Completions
DRILLING & COMPLETIONS REVENUE
~70%
Well Positioned to Capture Significant Upside from Ongoing International, Offshore and Drilling & Completions Recovery
Leading & Differentiated Portfolio
A Leader in Well Construction
Leading & Differentiated Portfolio
A Leading Well Management Portfolio
Leading & Differentiated Portfolio
EMPLOYEES (approx)
2,100
Major Countries
Brazil
Guyana
Mexico
United States
10
COUNTRIES
Drilling & Completions
Production Optimization
$393m
86%
14%
REVENUE BY ACTIVITY
$500
50%
$400
40%
$300
30%
$200
20%
$100
10%
2014
2019
2021
$0
0%
Segment EBITDA
$304
$86
$75
Segment EBITDA Margin (%)
31%
15%
19%
REGIONAL SEGMENT EBITDA
Well Construction
Well Flow Management
Subsea Well Access
Well Intervention & Integrity
$393m
68%
18%
12%
3%
AREA OF CAPABILITY
North & Latin America
34%
2021 REVENUE
A Leading Well Expert with Global Presence
Leading & Differentiated Portfolio
1. Revenue synergies: Complimentary capabilities, operating footprints and customer relationships provide medium-term scope for up to $100 million of revenue pull-through at 30-35% Adjusted EBITDA fall-through.
Combined support costs declined from 31% of revenue in Q4 2020 to 22% in Q2 2022
100% of initial $55 million of merger synergies opportunity identified and actioned by June 30, 2022
$80-$100m in merger synergies, ($70m cost/$10-$30m revenue¹) expected within 24-36 months
TOTAL EXPECTED COST SYNERGIES ($m)
Merger Synergies Driving Incremental EBITDA and Margin Expansion
Compelling Rate-of-Change Story
EXPECTED IN FIRST 24-36 MONTHS
$70m
SAVINGS IN FIRST 12 MONTHS
$55m
IDENTIFIED
AND ACTIONED
100%
Increased Profitability & Cash Flow
Future-facing technologies to support sustainable energy solutions
Aggregate support costs down ~10% vs. Q4 2020
Activity and spending trends result in a more favorable business mix
- ~70% business leverage to drilling and completions activity
- Offshore revenue potential is 3-10x onshore (per rig)
FID estimates imply an approximate 50% increase in offshore investment in 2022-2024 versus 2016-2019
Higher Fall-Through on Incremental Revenue
We provide mission critical services and we are a service quality leader (~95% customer satisfaction)
Early innings of the international and offshore recovery and services capacity (personnel and equipment) is tightening
Limited upstream investment for +5 years; capacity additions required to support demand growth
Pricing Tailwinds
Compelling Rate-of-Change Story
Accelerating Cash Flow
OF FREE CASH FLOW
ANNUALLY
33%
OF TOTAL SHARES OUTSTANDING
ACQUIRED ANNUALLY
1-2%
RETURN CASH TO SHAREHOLDERS
Leverage and/or compliment existing capabilities and customer relationships; identifiable cost and revenue synergies
VALUE-ADDED ACQUISITIONS
Capital Allocation Framework
FREE CASH FLOW MARGIN
SCOPE FOR
8-10%
AVAILABLE LIQUIDITY
~$300m
OUTSTANDING
$0 Debt
Tactical and Strategic Optionality
Disciplined Capital Allocation
&
Debt Free Balance Sheet
to
Drive Shareholder Value
Accelerating Cash Flow
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, events or developments that Expro Group Holdings N.V. (the “Company”) expects, believes or anticipates will or may occur in the future are forward[1]looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this presentation include statements, estimates and projections regarding the Company’s future business strategy and prospects for growth, cash flows and liquidity, financial strategy, budget, projections and operating results and environmental, social and governance goals, targets and initiatives. These statements are based on certain assumptions made by the Company based on management’s experience, expectations and perception of historical trends, current conditions, anticipated future developments, and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Such assumptions, risks and uncertainties include the outcome and results of the integration process associated with the Company’s recent merger, the amount, nature and timing of capital expenditures, the availability and terms of capital, the level of activity in the oil and gas industry, volatility of oil and gas prices, unique risks associated with offshore operations, political, economic and regulatory uncertainties in international operations, the ability to develop new technologies and products, the ability to protect intellectual property rights, the ability to employ and retain skilled and qualified workers, the level of competition in the Company’s industry, global or national health concerns, including health epidemics, such as COVID-19 and any variants thereof, the possibility of a swift and material decline in global crude oil demand and crude oil prices for an uncertain period of time, future actions of foreign oil producers such as Saudi Arabia and Russia, the timing, pace and extent of an economic recovery in the United States and elsewhere, inflationary pressures, the impact of current and future laws, rulings, governmental regulations, accounting standards and statements, and related interpretations, and other guidance. Such assumptions, risks and uncertainties also include the factors discussed or referenced in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission (the “SEC”), as well as other risks and uncertainties set forth from time to time in the reports the Company files with the SEC. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events, historical practice, or otherwise, except as required by applicable law, and we caution you not to rely on them unduly.
This presentation includes the non-GAAP financial measures of Adjusted EBITDA, Adjusted EBITDA Margin, Support Costs, Adjusted Cash Flow from Operations and Cash Conversion, which may be used periodically by management when discussing the Company’s financial results with investors and analysts. Adjusted EBITDA, Adjusted EBITDA Margin, Support Costs, Adjusted Cash Flow from Operations and Cash Conversion are presented because management believes these metrics provide additional information relative to the performance of the Company’s business. These metrics are commonly employed by financial analysts and investors to evaluate the operating and financial performance of the Company from period to period and to compare it with the performance of other publicly traded companies within the industry. You should not consider Adjusted EBITDA, Adjusted EBITDA Margin, Support Costs, Adjusted Cash Flow from Operations and Cash Conversion in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. Because Adjusted EBITDA, Adjusted EBITDA Margin, Support Costs, Adjusted Cash Flow from Operations and Cash Conversion may be defined differently by other companies in the Company’s industry, the Company’s presentation of Adjusted EBITDA, Adjusted EBITDA Margin, Support Costs, Adjusted Cash Flow from Operations and Cash Conversion may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. For a reconciliation of each to the nearest comparable measure in accordance with GAAP, please see the Appendix to this presentation.
Karen David-Green
Chief Communications, Stakeholder & Sustainability Officer
Karen.David-Green@expro.com
Downloadable Financials:
Investors.Expro.com
OF REVENUE
7-8%
Maintenance capex/Growth capex
FUND ORGANIC GROWTH
Market Drivers
- Growth in customer capital expenditures
- Increased drilling and completions activity
Expro’s Business Opportunity & Value Proposition
- We are a “first call” for complex wells
- Technology focus on automation, digital and artificial
intelligence help reduce risk and increase efficiency
- Strong incremental margins from increased offshore
activity
- Offshore revenue potential is 3-10x onshore (per rig)
- Notable multi-year contract awards including merger
related revenue synergies
OFFSHORE
~80%
INDUSTRY LEADER WITH YEARS EXPERIENCE
+80
Revenue by Product Line Group
2021
38%
Well Construction
Well Flow Management
Subsea
Well
Access
Well Intervention & Integrity
62%
24%
7%
7%
NLA
ESSA
MENA
APAC
$1,143m
Well
Management
Well Construction Revenue:
2021
by Geography
$430m
$600
$500
$400
$300
$200
$100
$-
2019
2021
2022E
Revenue
-32%
+14%
-26%
+14%
+17%
Offshore Rigs
243
Offshore
Rigs
165
Offshore
Rigs
188
Offshore Rigs
214
Revenue
by Activity
Drilling & Completions
100%
Largest global well testing fleet
Market leadership in demanding environments, including high-rate gas flow back and HP/HT systems
Leading provider of Subsea Testing Tree Assemblies with ~75 strings and a wide range of fit-for-purpose subsea well access solutions; high incrementals
Mechanical slickline fleet with ~12,000 runs each month; opportunity to leverage large installed base and improve margin with higher value-added services via technology deployments
Plays a critical role in the Energy Transition in terms of measuring, managing and optimizing emissions, and geothermal characterization
Well testing primarily driven by exploration and appraisal activity and new completions
Production business leveraged to security of supply initiatives in Europe
Subsea driven by an expected upswing in deep water and ultra-deep
water drilling and completions activity
Well Intervention & Integrity is counter cyclical to core business and leveraged to customer Opex spending
Market Drivers
Expro’s Business Opportunity & Value Proposition
Well
Management
62%
Well
Management
Revenue
2021
$714m
38%
Well Construction
Well Flow Management
Subsea
Well Access
Well Intervention & Integrity
37%
10%
15%
Well Management Revenue:
2021
by Geography
$714m
18%
38%
23%
21%
NLA
ESSA
MENA
APAC
INTERNATIONAL
REVENUE
~90%
$1,000
$750
$500
$250
2019
2021
2022E
$-
Well Flow Management revenue
Well Intervention & Integrity revenue
Subsea Well Access revenue
-32%
Intl Rigs
1,059
Intl Rigs
719
IntlRigs
807
Intl Rigs
907
-12%
+12%
+10%
+12%
Revenue
by Activity
Drilling & Completions
52%
48%
Production Optimization
Illustrative Recovery Scenario
+ $75 Brent through 2024
Combination of incremental activity, revenue synergies and investments in new technology supports +15% top line growth for 2022-2024, excluding material improvements in net pricing and upside associated with energy transition initiatives
Merger related synergies and fall through on incremental revenue (particularly with regard to~70% of business levered to drilling and completions activity) supports +20% Adjusted EBITDA margins
70-80% cash conversion (Adjusted Cash Flow from Operations/Adjusted EBITDA)
7-8% Core Capex as a percentage of revenue
Significant revenue, margin and FCF upside with additional activity, operating leverage and improved pricing
Scenario Assumptions
Recent guidance for Q4 2022 is $325-$350m of quarterly run-rate revenue ($1.3b-$1.4b annualized) and +/-20% Adjusted EBITDA margins
2024 Adjusted EBITDA ($M)
2024 ADJUSTED EBITDA MARGIN (%)
18%
20%
22%
BASE CASE
2014
FREE CASH FLOW MARGIN
BASE CASE
6%
8%
10%
2024 Free Cash Flow ($M)
2014
$350
$140
(40%)**
**Free Cash Flow/Adjusted EBITDA
3
Revenue
2014
70%
Drilling & Completions
~$1,250
~$1,700
Production Optimization
30%
2022
1
2
ACTIVITY
(+/-10% Per Annum)
REVENUE SYNERGIES
($100M within
2 years)
NEW TECHNOLOGY INVESTMENTS
($100M within
2 years)
SUSTAINABLE ENERGY SOLUTIONS
NET PRICING GAINS
2
1. Consensus ($1,250)
2. Assumes 50% realization in 2023, 100% realization in 2024
3. FCF (Adjusted CFFO –Core Capex) as a % of Revenue
+15% CAGR
Europe & Sub-Saharan Africa
33%
2021 REVENUE
1,800
EMPLOYEES (approx)
Major Countries
Angola
Norway
United Kingdom
25
COUNTRIES
Drilling & Completions
Production Optimization
$373m
74%
26%
REVENUE BY ACTIVITY
Segment EBITDA
Segment EBITDA Margin (%)
$500
50%
$400
40%
$300
30%
$200
20%
$100
10%
2014
2019
2021
$0
0%
$446
$87
$72
43%
23%
19%
REGIONAL SEGMENT EBITDA
Well Construction
Well Flow Management
Subsea Well Access
Well Intervention & Integrity
$373m
41%
27%
20%
12%
AREA OF CAPABILITY
A Leading Well Expert with Global Presence
Leading & Differentiated Portfolio
Middle East & North Africa
17%
2021 REVENUE
1,800
EMPLOYEES (approx)
Major Countries
Algeria
Qatar
Saudi Arabia
10
COUNTRIES
Drilling & Completions
Production Optimization
$194m
59%
41%
REVENUE BY ACTIVITY
Segment EBITDA
Segment EBITDA Margin (%)
$500
50%
$400
40%
$300
30%
$200
20%
$100
10%
2014
2019
2021
$0
0%
$45
$87
$56
29%
32%
29%
REGIONAL SEGMENT EBITDA
Well Construction
Well Flow Management
Subsea Well Access
Well Intervention & Integrity
$194m
69%
16%
15%
AREA OF CAPABILITY
A Leading Well Expert with Global Presence
Leading & Differentiated Portfolio
Asia Pacific
16%
2021 REVENUE
1,500
EMPLOYEES (approx)
Major Countries
Australia
Malaysia
Thailand
Indonesia
15
COUNTRIES
Drilling & Completions
Production Optimization
$184m
60%
40%
REVENUE BY ACTIVITY
Segment EBITDA
Segment EBITDA Margin (%)
$500
50%
$400
40%
$300
30%
$200
20%
$100
10%
2014
2019
2021
$0
0%
$158
$29
$35
44%
17%
19%
REGIONAL SEGMENT EBITDA
Well Construction
Well Flow Management
Subsea Well Access
Well Intervention & Integrity
$184m
41%
17%
17%
AREA OF CAPABILITY
A Leading Well Expert with Global Presence
Leading & Differentiated Portfolio
25%
1) Market capitalization based on approximately 109 million total shares outstanding and an XPRO price per share of ~$13.50
2) Based on no interest-bearing debt and $179m cash at 6/30/22
3) Based on Consensus estimate for 2023E Adjusted EBITDA of $241m
1 2 3
*
*Source Spears and Consensus estimates
*Source Spears and Consensus estimates
Segment EBITDA
Segment EBITDA Margin (%)
$1,250
50%
$1,000
40%
$750
30%
$500
20%
$250
10%
2014
2019
2021
$0
0%
$953
$290
$238
38%
21%
21%
TOTAL SEGMENT EBITDA
TOTAL SEGMENT EBITDA
FOR ALL REGIONS
TOTAL COUNTRIES
TOTAL EMPLOYEES
7,200
60
X
P
R
O
Leading & Differentiated Portfolio
Significant upside
from International &
Offshore Recovery
Through-Cycle
Resiliency
Driven by breadth
of services and technologies
Compelling
Rate-of-Change Story
Improving business mix
Recently deployed technologies
Merger synergies
Accelerating
Cash Flow
Debt free balance sheet and free cash flow upside provide tactical and strategic flexibility
Growing Shareholder Value
Performance is a Core Value
People | Partnerships | Performance | Planet