24th Annual Energy Conference

March 18-20, 2024 | Las Vegas, NV N Y S E : X P R O

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- 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, guidance, operating results, environmental, social and governance goals, targets and initiatives, estimates and projections regarding the outcome and benefits of the proposed Coretrax acquisition, Coretrax's estimated Adjusted EBITDA for 2024, the Company's ability to achieve the anticipated synergies as a result of the proposed Coretrax acquisition and the timing of the closing of the proposed Coretrax acquisition. 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 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 (including the ability to recover, and to the extent necessary, service and/or economically repair any equipment located on the seabed), 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, 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, 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, 2023 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, Contribution, Contribution 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, Contribution, Contribution 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 the management, 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, Contribution, Contribution 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, Contribution, Contribution 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, Contribution, Contribution 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.

The Company is not able to provide a reconciliation of Coretrax's forward-looking Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow Margin to the most directly comparable measure in accordance with U.S. generally accepted accounting principles without unreasonable effort because of the inherent difficulty in forecasting and quantifying certain amounts necessary for such a reconciliation, including net income (loss) and net cash from operations.

Downloadable Financials:

InvestorRelations@expro.com

Investors.Expro.com

Copyright 2024 Expro. All rights reserved.

Get to Know XPRO

~80% ~70%

I NTE RNATI ON ALO FFS HO RE

S TRONG CAS H

ZE RO NE T - DE BT

FLOW OUTLOOK

BAL ANCE S HE E T

with significant available liquidity

SAFETY & SERVICE QUALITY LEADER

~95%

2023 customer service, quality, and customer job performance rating

T T M R E V E N U E 1

$1,513m

Asia Pacific

16%

North & Latin

America

Middle East

BY

34%

North Africa

15%

REGION

60 Countries

Europe & Sub- Saharan Africa

34%

Well

Intervention

& Integrity

15%

Subsea

Well

Well Access

BY

Construction

13%

35%

PRODUCT

LINE

WELL

MANAGEMENT

65%

Well Flow Management

37%

~$2.2bn

Market Capitalization2

~$2.1bn

Enterprise Value3

Wall Street Estimates

$345m4

~6.0x3,4

2024E Adjusted EBITDA

Implied EV/2024E EBITDA

NYSE: XPRO

Headquartered in Houston, Texas

Note:

Certain totals may not add due to use of rounded numbers.

1)

Trailing twelve months 2023 revenue is based on the trailing twelve months for the quarter ended 12/31/23.

Copyright 2024 Expro. All rights reserved.

2)

Market capitalization based on approximately 110 million total shares outstanding and an XPRO price per share of ~$20.00.

3)

Based on $20m interest-bearing debt and $152m cash at 12/31/23.

4)

Average 2024 EBITDA estimates from Barclays, Goldman Sachs, JP Morgan, Piper Sandler, and Sidoti.

1

Balanced Portfolio of High Value-Added Services

Value-Adding Services Across the Well Lifecycle

Cost-effective, technology- enabled services and solutions for complex well construction, well completions, and lower carbon well production

Market Leadership

We "punch above our weight" because of long-standing customer relationships, technologically differentiated solutions, and superior execution, not because we are the biggest in the business

Global Operating

Footprint

Activity in +60 countries, with 80% of revenue from international markets and 70% of revenue related to offshore services

Focused on Expanding Margins and FCF

Sustainable free cash flow through cost discipline, additional scale and scale- based economies, and getting more value for the services and solutions we provide

Capital Efficiency

Capital allocation strategy focuses on maximizing utilization of existing assets and growing higher margin, lower capital intensity services and solutions

Strong Financial Profile

Conservative capital structure with a low leverage balance sheet and ample available liquidity; balanced capital allocation framework targets returning 33% of FCF to shareholders

Copyright 2024 Expro. All rights reserved.

2

Expro is Positioned to Capitalize on Increasing Demand for Energy Services

Favorable Macro Backdrop

  • Strong and stabile oil prices are expected to drive increased operator investment and activity after nearly 10 years of limited upstream spending
  • Project approvals will drive customer capital spending (~70% of Expro's revenue) for 3-5 years, thereby providing a stable customer spending foundation for the currently positive activity outlook
  • Market leading positions in deepwater well construction, subsea well access and well flow management

Note: All data excludes China, Iran and Russia.

  1. Rystad Energy UCube Reports as of February 2024.

Copyright 2024 Expro. All rights reserved.

Estimated Value of Projects Sanctioned/Expected to be Sanctioned ($Bn)1

$179

Deepwater FIDs +$200bn

for 2024-2026, levels not

seen in a decade

$148

$124 $122

$110

$96

$92

$92

$92

$83

$78

$76

$93

$87

$53

$60

$59

$67

$46

$41

$52

$51

$44

$48

$42

$36

$36

$33

$26

$24

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024e 2025e 2026e

Offshore Deepwater

Offshore Shelf

3

Investment Momentum Shifting to International and Offshore Markets Provides Opportunity for Expro

Increased offshore and international investment (i.e., long cycle development) provides Expro with business durability

Expected growth shifting from North America Onshore to International and Offshore markets

Business Mix

~80% ~70%

I N T E R N A T I O N A LO F F S H O R E

Note: All data excludes China, Iran and Russia.

  1. Rystad Energy UCube Reports as of February 2024. Growth rates indexed to 2019.

Copyright 2024 Expro. All rights reserved.

Total Capital Investments by Year ($Bn)1

50%

$600

40%

CAPEX

North America Onshore

International

Offshore

500

30%

20%

400

10%

0%

300

-10%

-20%

200

-30%

100

-40%

-50%

0

2019

2020

2021

2022

2023

2024e

2025e

2026e

4

Q4 2023 and Full-Year Results

Favorable long-term outlook and business momentum following strong Q4

Company Highlights

  • Revenue growth of 10% Q/Q and Adjusted EBITDA growth of 70% Q/Q driven by improving activity mix, operating leverage, and completing the acquisition of PRT Offshore in Q4
  • Recently announced the agreement to acquire Coretrax, a technology leader in performance drilling tools, wellbore cleanup, and well integrity and production optimization solutions
  • $186m of new contract awards in Q4; total order book of $2.3bn at YE 2023

Q4 2023

Full Year 2023

Revenue

16% YoY

Revenue

$407m

$1,513m 18% YoY

10% Q/Q

Adjusted EBITDA1Adjusted EBITDA2

$85m 21% YoY

$249m 21% YoY

70% Q/Q

Adjusted EBITDA Margin1

Adjusted EBITDA Margin2

21%

16%

1)

Excludes unrecoverable LWI-related costs of $4m, Adjusted EBITDA was $89m with Adjusted EBITDA Margin of 22%.

2)

Excludes unrecoverable LWI-related costs of $36m, Adjusted EBITDA was $285m with Adjusted EBITDA Margin of 19%.

5

Copyright 2024 Expro. All rights reserved.

Outlook for 2024

Market Outlook

  • Anticipated stable oil demand will be driven by continued recovery in Asia, improving macro-economic data in US and Europe and increasing global travel
  • Market tailwinds supporting sustained investment and activity growth in the high single to low double-digit levels
  • Long cycle development activities provide visibility for sustained offshore spending over the medium-term
  • Global offshore FIDs for both 2024 and 2025 likely to be in the $100 billion area, and projects in Norway, Brazil, Guyana, and Angola collectively attracting the largest share of offshore development budgets
  • Strong activity growth in international land is forecasted in the Middle East in countries such as Saudi Arabia, UAE, and Qatar in support of the ongoing large gas and LNG developments
  • Energy security, diversification of supply, operators' desire to maximize investments from existing assets, and a drive for cost-efficient, lower carbon production, continues to drive further demand for our production optimization-related activities within well flow management and well intervention and integrity product lines

Expro Financial Outlook

  • Anticipate a 9% increase year over year (YoY) at the mid-point of guidance for revenue
  • Adjusted EBITDA is expected increase +40% YoY (at the mid-point of guidance)
  • Expectations for full year Adjusted EBITDA Margin of 20% to 22% imply 400-600 bps of margin expansion YoY
  • Targeting return to shareholders of 33% of Free Cash Flow through share repurchase program

2024E Financial Outlook1

Revenue ($m)

$1,600-$1,700

Adjusted EBITDA ($m)

$325-$375

Adjusted EBITDA Margin (% of revenue)

20% -22%

Capital Expenditures (% of revenue)

7% -8%

FCF Margin (% of revenue)2

8% -9%

Target Return of

33%

OF FREE CASH FLOW

ANNUALLY TO SHAREHOLDERS

Note:

FCF Margin defined as Adjusted Cash Flow from Operations, less capital expenditures, expressed as a percentage of revenue.

1)

Coretrax assumed to contribute $70-$80 million of revenue at ~30% Adjusted EBITDA Margin to Expro's full year 2024 guidance, beginning Q3 2024. Excludes any revenue or cost impacts related to vessel-deployed LWI services in 2024.

Copyright 2024 Expro. All rights reserved.

2)

FCF Margin defined as Adjusted Cash Flow from Operations, less capital expenditures, expressed as a percentage of revenue.

6

Outlook for Medium-Term

Expro Financial Outlook

Medium-Term Targets for Revenue, Contribution Margin and Adjusted EBITDA Margin1,2

  • Intend to remain disciplined with costs and capex through this growth cycle
  • Multi-yeargrowth phase should support 1% to
    2% annual Adjusted EBITDA Margin expansion
  • Focus on maximizing utilization of existing assets and growing higher margin, lower capital intensity services and solutions
  • Business drivers to achieve medium-term financial targets:

✓ +10% of organic

✓ Modest net pricing

revenue growth

gains

✓ Improving activity mix

✓ Smart, synergies-

✓ Operating leverage

focused M&A

Targets

$2bn 25% 10%

REVENUE

ADJUSTED EBITDA MARGIN

FCF MARGIN2

3,000 57%

2,500

2,000

31%

1,500

1,000

500

$2,533

0

2014

Adjusted EBITDA Margin

Contribution Margin

39%

38%

39%

40%

37%

19%

22%

18%

20%

14%

10%

$1,600

$1,065

$1,143

$1,279

$1,513

-

$1,700

2020

2021

2022

2023

2024E

0.6

+40%

25% 0.3

$2,000

0

Note: FCF Margin defined as Adjusted Cash Flow from Operations, less capital expenditures, expressed as a percentage of revenue.

  1. 2022 and 2023 Contribution Margin and Adjusted EBITDA Margin excludes $28m and $36m of unrecoverable LWI-related costs, respectively. Actual Contribution Margin and Adjusted EBITDA margin was 37% and 35% and 16% and 16% in 2022 and 2023, respectively.

Copyright 2024 Expro. All rights reserved.

2)

Expro and Frank's merger closed October 2021. Comparative information for revenue, direct costs, support costs and contribution has been restated to align legacy Frank's revenue and costs with Expro's definition on a proforma basis.

7

Balanced Capital Approach to Create Long-Term Value for Shareholders

Maintain

Disciplined Capital Allocation

to Drive

Shareholder Value

Balanced Capital Allocation Framework

MAINTAIN STRONG BALANCE SHEET

FUND ORGANIC GROWTH INVESTMENTS

Committed to keeping total capex (maintenance and growth) at 7-8% of revenue

PURSUE ACCRETIVE, VALUE-

ENHANCING ACQUISITIONS

Leverage and/or complement existing capabilities and customer relationships to achieve scale and sustainable free cash flow; requires identifiable cost and revenue synergies

RETURN CAPITAL TO SHAREHOLDERS

Targeting return of 33% of free cash flow annually to shareholders

Copyright 2024 Expro. All rights reserved.

8

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

Expro Group Holdings NV published this content on 19 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 March 2024 12:10:27 UTC.