XPRO - Earnings call transcript Q4 2021 | Expro Group Holdings N.V.

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Operator

Hello, and welcome to today’s Expro Fourth Quarter Earnings 2021 Conference Call. My name is Elliot, and I’ll be coordinating your call today. [Operator Instructions] I would now like to hand over to our host, Karen David-Green. Please go ahead.

Karen David-Green

Welcome, everyone, to the Expro’s fourth quarter 2021 conference call. Mike and by Fanning, today joined Jardon, Quinn CEO; CFO. I'm

consolidated to their for the of cash company, the only prior and up and including for condensed all the operations the and Quinn to results Mike XXXX, financial activities prepared reflect all Expro for as statements the X, company will The it First, of open share merger Frank’s remarks, periods position, of will combined merger. subsequent then questions. flow financial periods of legacy October day, and we

reconciled to and We and company of expressed results any downloadable may section. earnings I'd the the have discussed on GAAP to could any as factors company's statements assumes XXXX that be those identifying cause Expro SEC of included discussion today's refer The statements which actual our legacy and result that, be fourth to complete statements. call some defined The statements. can posted like call website in an found date, such as SEC are website from on remarks accompanying directly risks is comparable measures the combined with speak like results which to along Please company financials, SEC responsibility no presentation legacy most remind are comments on the Expro is those its has date. website. to to our A company release, materially different our that financial forward-looking or filings, fourth on With of everyone may I'd contain over in forth Investors Such at set in that during presentation, or quarter only risks Frank’s. of Mike. to our that that could expro.com. uncertainties this cause reflect implied quarter important be any expro.com, in these cautionary the website language the filings to the under to forma also on future Such by financial materially forward-looking of more the differ today's from measure the non-GAAP subject note forward-looking accessed included actual update and results or turn statements. those pro

Mike Jardon

afternoon, with Thank you, and discuss today Karen. of to after of the excited the be quarter full strong company for Good marks all Frank's results morning speaking International. I'm good with our to everyone. quarter, new our merger Expro’s which first completing fourth you

call, trends. On we that business, the first and today's were have well quarter the industry, XXXX the and and and with combination have to our our the market and to own cyclical lifecycle, our and leaders through span Frank's to goals; support through carbon results order capture quarter Expro we the capitalize on business ahead which continue to plan markets; merger positive outlook better together sheet fourth cycle of value. and customers strategic platform for true business portfolio us that the flexibility innovation degree walk key solutions The global capture footprint upside; given recovery our our resilience to to and and finally, created in ability today our performance. reduction portfolio our accelerate a optionality bring related fourth merger industry for we strong significant balance to I operations provides following: and the their of in which synergies, and in operational growth enabled announced shareholder right, class long resilient our and services best strong that technology growth in win you continue balanced we underscores diversified next chapter as model lead opportunities both is While our a that more term positioned of create

our and with you the trends our results our performance, on profile. we demonstrate integration fourth of inherent give process quarter some broad value in Starting through-cycle operating financial an finally, broader deliver our provide footprint, the update capabilities perspective seeing outstanding environment. Secondly, scale, portfolio strong on progress solutions, that global industry are unlocking in we and

and revenue at quarter, fourth the million. For a EBITDA we adjusted delivered $XXX million $XX

subsea, Our well lines, in services. broad-based with well growth intervention areas of growth product our regions particularly and integrity access across was notable in and production,

Gulf Importantly, achieve broad win industry contract new our as for for our Canada with existing gaining improving basis, a continued diversified totaling across North innovative regional flow-back of extensions services, were portfolio Guiana is Trinidad, resilience We the wins attractions to expand services team the testing business mix tubulars, to customers. which exploration and enhanced our we saw and capitalize we of team's of our in benefit our our solutions and a Latin integrated the and suite significant and advancements $XXX true appraisal testful fundamentals million, and and on a well. and we our to provision awarded business testament solutions contracts are and On Mexico, market. on America, testing of services, Argentina, and for relationship

Distributed Angola, our contracts the UK in for East production secured record Multi-Phase a which the Eastern Northeast also Africa setting Pumps, the Saharan Africa, for rig in system reducing Africa provision a from operations we System production we and for Europe integrity. successfully our efficiency the well contract operation During allow our to Sub and Optic performance. result uses In well well automated quarter, and Mediterranean Argentina. the significant automated completed In Fiber one-touch safety, our Middle commissioned challenging in tubular aligned fourth test, first make North first and subsea manpower in also This of secured continued team will automation on ups. our delivery. intelligence a and customers rig quarter, the system to improving which groundbreaking step and build will enhanced drive is again drilling on facilitate wells. as requirements, and system, change a we a optimize service This tong for artificial focus of direct

successfully carried During we out $XX campaign design for companies the gas provision tubular the contract A of attribute directly contract Saudi Iraq. of of that services. we the a quarter, first large trace was future the Arabia, supporting element two million the secured plant a in can also in to merger the running

transmission. our harness for more for Pacific, able the the all Indonesia the analytics targeted team to team Australia, to well that develop campaign region, for customers. a in for we In result in perforating also delivery our subsea solutions work our a milestone performance. billion intervention capabilities, our in half a Thailand conveyed passed Asia testament contracts as We achieved as secured a data the and is win of abandonment breadth hours four in the to data significant of as a and This to they are be service solutions in data well of region,

also for service wells well undertake in industry $XX able had perform of we’re contracts operations, We geothermal where cutting an leading worth Southeast to million. in Australia, delivery the and and This subsea subsea our includes In Plug announced work. to the which access access and perform new radio including Abandonment a integrated intervention solution, four of an previously riser successfully Indonesia, system award Asia November, problematic. significant customer we proven excess

successful fringe continue running XXXX. the develop interest also technologies have from Control of next generates as for platform to large we operation a help test and quarter, the safety that will to we of generation already bring the the services our Expro we provides advance one solutions differentiators to this our work in efficiency, A first quarter believe is legacy customer to subsea Line Manipulator onboard new umbilical the the this customer highlight Mediterranean committed Sheaveless of a Arm. innovation Expro This Eastern of and while combination electrohydraulic in customers. serve COBRA will deployment us offering significant with legacy improving a This During test key in operations. of key

designed fully technologies help create reducing on maximize announced risks, costs, intervention our of environmental the reduction carbon in to sustainable the achieve we goals developing customers new or first production commitment Additionally, a quarter, more and world's their future. flow builds intervention system This launch system to and the autonomous impact. that that our Galea, overall HSE

is technology new over Expro all differentiator, of choose key our one Europe competition and job a highlight our to our the teams Africa to customers for our in to main flexible continue and customers our seeing business of excellent a operating While are service. growth the with December record our work areas. consistently our across reasons to is specifically Sub-Saharan we of performance and score led commitment want I is

categories all the execution This team, Expro's as average service of combined feedback our a majority customers' our our XX%, testament Our strong ranked in customers technology-driven the cost-effective is meaning project solutions offering. by with to excellent.

our performance and North the where in job Middle Asia-Pacific on rating across based strong, historically of were average quality North customer all service is with we the Latin Africa, XXXX and all XX.X% XX%. and and Europe, Africa ended regions of an Sub-Saharan America, excess Our XX% very was East over

enhance continued continue plans to implementing to work Expro as Franks legacy organization. delivery and to collaboration expect to as our integration the We and our one service our of seamless we enhance teams coordination

to close. made developed progress already significant prior on comprehensive executing have the We plans we

see power As of have we the big to have worked we through our this team. process, begun true

and advancing playing and in so, to the is flexibility developing the us the committed leading continue in achieving efforts to needs initiatives reduction research allocated that invest market in goals portfolio address cycles their to our portfolio critical XX% to reduction solutions the transition role net XX% customers' low carbon their our carbon customers enabling goals. in carbon we're to emissions and provides through part XXXX. will Expro year that reduction we of transforming to next profile that to In financial This achieve strong and support development percentage doing approach of energy we of to solutions own our by XXXX. generation zero past Our our and develop our play as a role emission spending transition. energy and a expect

our within reduction across continue a operations reduce not and in offerings we to involved continued particular, the and in own our pursue initiatives the technologies established has flow seen our Lights with has but with of capture carbon We to energy chain the Northern develop the work CCS to since Expro gas into customers. segments and CCS environmental in project support only value storage have or In space. recovery increasing to geothermal suppliers successful sustainability customers Norway. impact, and transition growth our and

turn expect we in market what perspective Quinn, the we seeing are to and ahead. Before call want the the trends I over year provide on a to I in

We multi-year recovery. a signals continue as to see strengthening

as sector are America, which is the operators energy Latin fields. production has XXXX both We better with pipeline in forecast expect to potential demand and activity assets services within drive throughout are due to new existing activity markets Middle East, strong and infrastructure further business gas develop solutions increase the Asia. number that for look geo We and and beyond and developments to seeing remained new Natural levels. particularly increased demand the and XXXX projects a our for of we internationally the and levels services North throughout activity, strong support US anticipate increased the confident Africa, growth will multi-year for and increase to from and conditions economic

see become gather are international infrastructure for a transition, the field Comparable Ukraine minimal the portfolios. the focused Ukraine their energy in Expro traditionally our liquids their phase and peaceful to in trend hope to the disheartened Internationally, more position accelerating IOC risk, overall soon in field gas Russia believe to and Although in less activity exploration better this, to and on revenue be the will has ongoing conflict increase natural achieved. themselves We IOC the in to companies will reduce efforts developments, development near and increasingly X%, and their than that focused majors balance share on be national for are had is emissions a momentum resolution that also and thereby near is oil gas addition, continued customers. There production term. a more priority to efforts economic order country's stimulate to super broadly lower recovery. we’re

decision in modest a approvals Now In E&P at with growing, be commitments recovery a second quarter continue first investment XXXX the are term, of let’s rates in indicates different the at albeit continuing of the look XX% countries. medium to expenditures, those nearly individual -- expected to offshore. anticipated final

replacement, will XXXX We also lower gas on discoveries. operators believe soon following underinvestment resulting again and volumes will reserves that focus in and recover multi-year of a oil need of demand to to levels, period

should have some broadly, we past areas, we maximizing select focused to focus. and the support made which anticipate environment. well recoveries; gain of and seem tight increased recovery is that intervention area opportunities well and are positioned offer of previously, an More our enhanced we will services believe the For of we our demand deepwater Bolstered beyond. and extending given and progress growth growth or our integrity And by be we with provide portfolio. they projects, optimization. which enhancement now, activity from customer for existing incremental construction oil capabilities to expect the access XXXX programs which solutions seeing activity production new projects We construct uniquely expected Expro. well complex market commodity subsea as a in services brownfield consistent Expro most additional serve to sustained largest are and investment operators are more to in shale for markets, Expro traditional pricing, services, is of signs momentum clients current the execution be strength increased through experiencing offshore to on

become strategies. the which to integrity. ourselves market, differentiating as technology technology our that, our maximum financial with on hand whether know-how, focus our call our We're shareholders all and discuss delivering reduction are ability industry integrity, company and but to well focus results. services advancing in the a or on and the allows full transition, in also the means absolute well customers, important and I carbon as With energy to lifecycle accelerate with connection Expro’s integrity to company the management integrity world, to to QFC across prioritizing that Quinn Combined get the We its leading enhance supporting will will ensuring increasingly around in forms, customers the the other to over customers, stakeholders. value

Quinn Fanning

Good call. Good morning. Thank to afternoon the everyone on you, Mike.

As Mike on sequential performance both December and results is results ended presentation noted, QX. was by XX% XXXX sales call, weaker consistent International approximately driven flat September adjust consistent with which release as quarter highlight XX, basis, we'll and of the of essentially year on increase merger I SEC for forma but and reoccur was financial year-over-year the earnings our down will XXXX. press And a a the third cover with to quarter. filings and $XXX an Frank’s expectations the and reported pro investor production consistent approximately revenue the partially million, basis, of $XX is are of or referenced seasonally the revenue pro Expro, reference, financial $XX relative in that during Karen of $XXX forma in which quarter. and that revenue, the fourth million the quarter-over-quarter, website, was largely To reflected revenue The quarter quarter, QX production in up recap, for that provided by available equipment basis, additional approximately conference our legacy our sales at our which offset call to legacy slides and on was excluding presentation contributed results in third equipment did top the the or million with and million, for the the X.X% between the reported guidance $XX On not QX of which occur section quarter-over-quarter expro.com. million we

EBITDA limited $XX Sahara Remaining was XX% up Relative higher due revenue. approximately pro was XXXX, million, a EBITDA was America, XX% reported revenue adjusted and mix, basis The to EBITDA Europe was adjusted activity year-on-year, for modestly, basis sequential quarter-over-quarter $XX million, segment. of a the by of $XX was up forma improvement in quarter-over-quarter terms, The was more approximately the $XXX percentage driven quarter-over-quarter. and or balance least at was XXXX reduction In consolidated points or Pacific percentage representing million, X% points quarters of reflects merger. forma pro across or Africa and Latin by EBITDA QX or merger up a activity adjusted adjusted NLA. $XXX North increase quarter-over-quarter. of pro On and million increase MENA or offset approximately up Sub $XX in activity reported, North approximately traction EBITDA As Africa XX% to today, revenue ESSA, a Asia up the consolidated of Middle approximately or terms, basis, to but the partially markets. XXX basis, contributed which to On XX%. or million XX% favorable East international forma million approximately adjusted or increase. a APAC, year-over-year. million, pricing adjusted EBITDA In $X XXX was

EBITDA to approximately $XXX pro surprisingly EBITDA margin increased increased approximately adjusted by forma As $XXX to XXXX On adjusted XXXX. by billion. was basis, up XX% million, a for was million. percentage XX% $XX both XXX points XX% to adjusted for approximately basis and forma terms, or pro $XX reported, EBITDA XX%. EBITDA million, year-over-year or XXXX year-over-year In Adjusted

adjusted million was cash $XX merger. amortization and common trend $XX net $XXX of year-over-year for a also loss an share with approximately of to a liquidity or drawdowns of has reflecting As third $X.XX facility. release, of in Total the with the guarantees. compared company as quarter million no liquidity income quarter December the million result The credit adjusted a the common cash share, for for XXXX million Total had reflecting $XXX available highlighted per a loss and loans end or adjusted share, is tax incremental share, million sequential per and $XXX per our net as per at the XXXX revolving share interest-bearing or fourth of interest-bearing equivalents, $X facility loss The under trend XXXX was includes $X.XX compared EBITDA. for company common common to million the largely press as including of per share the adjusted bonds and or no at is Cash QX XXXX expense per available quarter incremental debt today. balance was $XXX million the XX. of largely restricted million. $X.XX end depreciation, debt net to adjusted for Expro was $X the net $X.XX for

capital generated used XXXX. cash operations as expenses the and which expenditures operations, During CapEx XXXX, integrity, plan assets paid for by we CapEx $XX primarily to capital as as December to XXXX the quarter the generate related of XXXX. Lightweight million annual focused margins management technology $X collectively company $XX merger operating material and new expect and in range was which in adjusted to million, to fourth limiting revenue of was of the result operating nearly moving expenses X% by cash integration segment, continues maximizing expenditures. as QX QX including and good flow, for our of used million America of million QX investments NLA Latin and capital million million new million severance quarter reflecting of expenditures XXXX to which was $XXX million QX million, by related to million into of $X a CoilHose percentage $XX of million, cash before $XX of for downwards, $XX existing cash utilization million in million cash $XX well X% practical in a cash $XXX was construction merger, in and trend reflected merger. that such to of cash $X activities quarter-over-quarter. related restricted revenue to related million offset activities an all or to XXXX and ended the quarter Approximately $XX cash of $XXX interest business Intervention, XX reporting other continues operating and revenue of of financing revenue acquired And details revenue. and provided to Frank's in equivalents in activities cash compared partially was net were the compared and increase a on of and increase core sequential to Investing North the expected or million, $XXX all $XX was of in The XXXX. Legacy

margin $XXX market essentially lower year-over-year, access therefore flow essentially land activity tubular which was revenue in this sequential in in of integrity revenue increase wealth in intervention merger the flat basis, XXXX year-over-year. over In it revenue in On was Mexico by and of Argentina, well our Frank's in lower revenue million, rig was sequential forma basis, decrease $XX full-year quarter-over-quarter. $XXX as increase Legacy was of NLA by In South forma driven a On business, was Caribbean, intervention a flat and a activity was which offset driven which management an sale in which the activity US remains and particular, a was QX subsea pro American offshore NLA by America, revenue million X% revenue which our by up driven was Brazil. million, in focus integrity as to was reflected primarily reported, relates XX% So activity. revenue in pro activity repeated million NLA And up QX, largely was large share. by not full-year $XX North approximately in relatively QX. quarter-over-quarter, XX% pro a NLA well market or on forma

quarter just EBITDA goes completed up reported segment by XX% for million the approximately was $XX $XX As of million, NLA Segment revenue, December quarter-over-quarter.

a EBITDA Segment XX% QX pro On essentially versus of XXXX, flat basis, percentage forma was Segment For and was segment dollar revenue. quarter-for-quarter, EBITDA terms. NLA NLA

On will relationships a full basis, the was XX% merger. Segment XXXX and year EBITDA for complementary approximately the segment segment benefit NLA particularly $XX million forma the NLA by Segment Segment that from incremental million, Expro XXXX EBITDA scale for to EBITDA approximately and of strong made compared expect Pro footprints that million or $XX XXXX. revenue. pro or XX% as revenue results a year-over-year. continue we full NLA essentially operating the breakeven forma points for possible was for percentage results Frank’s were had As customer year $XX was finance Legacy Legacy of reported, company to position in combined X.X And up for NLA. or

by For segment, which $XX $X $XX The up revenue merger, or X% Sub to the incremental approximately Europe production million. of recur QX revenue Saharan million approximately equipment QX. offset This a which that sales in Africa, million in which during ESSA occurred QX XX% sales, QX which contributed but totaling the improvement QX. was million, not was Sub pro revenue in ESSA due is basis, was down QX Africa, Saharan and sequential did forma quarter-over-quarter. was in $XX On repeated reflecting was not equipment partially quarter-over-quarter, were again primarily

was of the sequential ESSA effects flat the and access up and which XX% in revenue vessel which forma was most integrity reflected approximately QX ESSA UK, quarter-over-quarter, sales, and the largely basis, essentially well intervention was well subsea in increase in revenue year-over-year. On management and sequential primarily revenue a pro Norway, significantly offsetting the seasonal decrease by Excluding activity production our activity. impacted revenue driven equipment a

reported, easing full revenue revenue approximately production XXXX year-over-year. basis, $XX and the was due and was million, XX% the increase up million forma COVID the up restrictions, spending sales, programs. of incremental referenced year-over-year, customer As enhancement brownfield an equipment pro $XXX a revenue was XX% million, $XX reflecting pro approximately previously excluding forma ESSA approximately XX% full-year Approximately of merger. year to of was million On for was $XXX ESSA ESSA

partially approximately The $XX with the incremental quarter for ESSA results. equipment of approximately non-recurring On of EBITDA million ESSA Segment reported, increased down and quarter basis, in due EBITDA X reflecting $X modestly favorable modestly was as was EBITDA, percentage Segment largely Segment for revenue. as mix. activity percentage or less sales favorable mix. pro quarter-over-quarter. ESSA Segment a Segment reductions $X the percentage segment through of ESSA million, December a the Segment EBITDA EBITDA again non-recurring which was the XX% of equipment fourth ESSA primarily Segment activity and EBITDA QX EBITDA EBITDA contributed by was improving point sales million percentage approximately a forma billion production revenue As $X This a quarter-over-quarter segment quarter-over-quarter down and quarter-over-quarter, Segment point offset to merger, increased one less the revenue was

Segment reported, revenue. million EBITDA $XX As or was year approximately ESSA full XXXX of for XX% segment

XXXX of ESSA forma XXXX, pro was segment up for XX% Segment three was EBITDA or $XX segment a year-over-year. million million, approximately Segment EBITDA or percentage was For $XX revenue. approximately Pro basis, segment XX% points On forma ESSA EBITDA revenue. approximately

in increases in the the fourth MENA a of down forma basis, merger segment, The flow Egypt, year-over-year. KSA of Algeria was markets, quarter. million quarter activity basis, QX On approximately was up revenue XX% revenue management approximately and million MENA in pro reflecting million, For X% approximately $X an a revenue MENA forma X% contributed sequential in other activity in quarter-over-quarter, $XX largely $XX quarter-over-quarter. increase in in in key quarter-over-quarter. or well was QX increase stable revenue the On including the was relatively pro

approximately result of of the a of largely was revenue XX% reflect $XX QX $XXX was $X merger. offset in the million pro by that full XXXX was $XXX of XX% region, activity well approximately that as As year decrease management or the to lower revenue forma year-over-year. MENA down approximately flow On across MENA year-over-year. Relative MENA basis, a million was full revenue reported, year for MENA million, revenues a lower XXXX, million

during MENA Segment points financial or segment four EBITDA levels, and increase and to reported, also approximately On an also million, a MENA results segment increase merger points Segment was of the revenue improvements the up for margin revenue, eight which improved activity million basis, Segment due improvement on QX activity An to favorable as to in pro quarter of segment As of Start-up was of a was $X EBITDA favorable quarter-over-quarter EBITDA percentage costs $X million XX% $XX of EBITDA $X up activity percentage which in and approximately contributed Segment new MENA approximately projects remaining more or XX% fourth percentage more quarter-over-quarter. quarter. segment a the was to due million drag increase mix December a was the the forma contributed the to EBITDA revenue, mix. largely margins approximately quarter-over-quarter were MENA. reflecting sequential for of

in offset approximately on and EBITDA XX% As year Segment lower Segment $X MENA EBITDA. merger, respectively. XXXX million, MENA higher million just segment year to costs, margin XXXX start-up increase reported, approximately was lower the to of percentage which EBITDA EBITDA for an referenced and prior related the Segment activity due In was margin contracts full partially contributed and $XX by MENA terms, than XX% by

As Pacific the quarter APAC merger or approximately a which increase million XX% reported, revenue ease pro revenue $X basis, COVID-related million, the in X% restrictions. for was quarter-over-quarter, up or increase sequentially. of approximately modest revenue million, was On The APAC in reflecting fourth forma $XX an in the $XX of of was quarter. a Asia contributes

result, a APAC increased up subsea XX% Thailand, activity in As forma higher well and intervention in and QX was On in integrity Malaysia pro year-over-year. access approximately a well basis, Brunei. activity Indonesia revenue

incremental management forma by increase year-over-year. revenue, was XXXX was pro APAC million, and year-over-year. contributed of and The revenue merger intervention for year As up the On remaining $XX was full flow integrity was driven XX% and full up a of revenue. approximately million increased reported, well the well revenue $X year X% million APAC $XXX or basis, approximately

was to of million revenue, segment approximately approximately segment basis, of quarter-over-quarter. a increase was remaining The favorable approximately merger. an mix. percentage as segment quarter-over-quarter, points X.X was segment million increase up quarter-over-quarter. of APAC forma million the EBITDA activity million to points APAC or five increase revenue more On was a EBITDA an of quarter percentage percentage $X XX% December APAC due was $X $X or due approximately a EBITDA up reported, And segment for the As $XX pro

As year XX% reported, EBITDA segment of for million, $XX full APAC or segment XXXX was revenue. approximately

higher-margin million segment For on forma reflecting $XX access approximately On approximately EBITDA contracts. segment less segment XXXX XXXX, of year-over-year, was APAC driven reduced favorable for and segment of basis, EBITDA points $X.X approximately EBITDA a subsea well approximately APAC or percentage million, a by or revenue. Pro segment activity activity X.X pro revenue. down was XX% activity lower forma mix XX% was

progressing are Mike mentioned, plans integration As well. our

significant We first announced anticipated business are to we benefits we combination. starting the when already realize, our synergy

the fourth take the million following rate representing cost a quarter XX% synergies than such previously close. track, or to target two remain of for $XX identified schedule for cost and savings first to our reflect synergies XX quarter, first the in merger are action we synergies, run the financial on a that confident if ahead of results It more we will months bit year targets. stated not but cost During our regards we

As as award noted by increasing Arabia, early now as to beginning allow adjusted that wins recovery will the press synergies also Saudi his we of and revenue such geographic and realize global tailwinds TRS pursuing we EBITDA are in industry broader the Mike us from and that our remarks, from highlighted scale growth and conviction recent footprint with our in incremental benefit release, are customer Kingdom portfolio the global relationships, our out. opportunities afforded to continue economic to the our play growth recovery as strong in multiyear

expect structure sequential of consolidated first will driven, XXXX XX% our reported we we the particular, on flat of generally mix favorable our be and the margin for and recovery, also primarily strong less of circa to relative flow. expect revenue that be compression quarter free in outlook, global XX% we further will XXXX by that EBITDA To of will we QX capitalize generate million to margin expect $XXX revenue. XXXX to adjusted activity. As QX a we that revenue experience In reiterate some cash improve cost near-term the

Northern expect revenues our XXXX revenue rate pre-pandemic quarterly of that we approximately We revenue of second onwards, Frank’s will $XXX million approach XXXX run of that combined move the to the Hemisphere the quarter on HX the and into XXXX back implying a of million. XXXX in and season half in basis, of Expro summer As Legacy $XXX Legacy

half will With of the revenue. the area of the XXXX be in margins the second expected on benefit and adjusted fall-through of incremental synergies, XX% of in revenue EBITDA

shareholders, the few we With in I employees, for As Mike call closing communities over turn enhance comments. to a our partners value objective for which always, is long-term the to our back operate. will and that,

Mike Jardon

with model. XXXX, performance We quarter on Quinn. note resilient excellent that operating strong a you, flexible of fourth business ended potential our demonstrates Thank

business we industry XXXX, from to ahead are and look on we strong tailwinds build As broader to trends. well-positioned fundamentals given our our momentum,

more on mandate team are leading advance customers our generation support and to capitalizes quality continue our solutions, traction develop industry We objectives. a carbon Leveraging to new as our well market address to the platform, well as expand integrity. gaining the existing next focus technology and customer’s their win reduction service to our best-in-class of in our business strong an with needs and broader with portfolio, our on expert we reputation innovation

key strong the we capitalizing industry where drilling to a are are presence. have on growth markets particularly already ramp-up continues We as recovery offshore and to fortunate activity

As I questions. exceptional holds of company for you and our and XXXX we I'm shareholders, profitability a let's all to combined up the we're see power service entering are delivering be as plans the thoughtful say, full across excited ahead reduction and to forward to our also of on open customers particularly Operator, unleash our cylinders, seeing board. support demand to improving and is look is more other continue focus implementing the to am we new how customers bedrock again. Expro. we service together for firing Thank clients. Suffice well-positioned to employees, us growth, increased inspiring to what by value as success. solutions enhancing for deliver coming and partners. and future on work for customers activity, and by our to accelerating to Their excellent carbon our team each the go are proud

Operator

you. Thank

with that will session proceed few pre-registered a first received Today, with questions Instructions] our We Q&A. now callers. Q&A the from have we we'll begin our [Operator

you you are The believe that more believe in not? providing are do first question, What on detail you how others could provide Expro is the market? differentiated you

Mike Jardon

Great.

it's think, a good I question.

the with really them they to America, the Expro expand combined and service. a to have different With I rely with customers, growth the our wherever company, always and all growth well-positioned across of going new particular terms strong relationships operate our key see footprint customers markets North about global In our overall is upscale East. serve we same the we're know, our they of regions that we in like services to really key geographic significant those on across solutions scale You in provide activity in a we think allow and ultimately really footprint. and the This particular, where Sea operations Middle includes markets many different us North operations. and potential, in

serve In in now of terms -- new in our a to suite of stages an – lifecycle. world expanded broad all of offer really allows addition of combined footprint, the us we our customers with that we company, solutions

in do on noteworthy to in we also us what good managing company leveraging activity that customers support first flow future. our the they're when a we example contract, is solutions customers wells, them completing won have the merger. are current support or the beginning if new advance platforms So our better that construction or to can ultimately can exploration wealth the prop solutions focused that allow full ultimately best-in-class industry. We're I the innovation to lifecycle not ultimately revenue think anticipate well activity, technology new our us activity. had as well really from strong projects, us customers and but continue East, was that today, help and which our allows This in solution we serve us give future in does to visibility Middle A help synergies positions their support it to to new further very

really lastly, merger, completing quality. come already tremendous because always our service reason what Both stay the the our Frank's potential customers customer’s for see perspective. Expro customers benefits since known combination Expro and oftentimes think we're for The the from to our this to excellent of of our Finally, our is with of service us been starting I have solutions. And quality.

mentioned it on Our quality from strong you team cylinders. is really outstanding by quarter. was I work exceed the service you're confirmation is stress call feedback, all important very how performance means to in on the that when can't ESSA the how I customer the it XX% highlighted of earlier in clicking our

in and is I team the think it's well a real performing to ESSA. how testament

footprint, So allows quality ultimately, suite a us and of us industry. solutions, be our broader more tremendous customers really to a a and partner the allows in a with solid force, for service new be to of really really,

Operator

role you in more second Expro’s on and perspective provide The can supporting the it? question, transition industry's energy

Mike Jardon

it really of with have customers, mind that that everyone's I an interesting conversation our not around certainly we of every ultimately an how is It’s first this of tell very talked the can industry. top carbon certainly topics I first reduce topic, footprint. question. transition in usually as about, you is the if one the partners, we is our energy industry the Almost our do

seen And reducing they whether I In customers we're their really that on whether I can to super projects in competition. -- the more coming commented we company, as be in question always for can think on lost think for -- world. carbon going be help carbon I a service project's sustainability. businesses will so that footprint or years, ask around will new As ultimately and the the won earlier, majors International a business will the their reduce we've than from increasing first emissions, start positioning focus a carbon lower their

that XX% play able role help sustainable alluded think key carbon is to Expro our our more it's to focused reduction XXXX, area really solutions differentiators. is targeting our are lower But going be as things a by other XX% are well we're our ultimately what leverage. our ours call of I future And our portfolio, to of carbon in we R&D to of we'll One we we is the a in within our them us reduce And own only in zero focused almost that we'll was built solutions try efforts critical customers net truly goals, in reduce And And help a we how around operations. this, develop we're earlier think -- has XX% sustainability. sustainability of in this really our one that I not we Ultimately, as doing that that keep as and to allocate emissions, reduction on the that effort have do Because focus to ultimately in producing ultimately, our goal We knew that by really think their company our as demonstrating ours carbon our achieving of a our well. I prepare XXXX. emission the help reduction ourselves we emissions for a thing in in we're carbon on to sustainability, to customers achieve can but spending to is not customers around towards carbon company solutions We XXXX. they footprint believe leveraging how will as if advanced their reduce a this, own world. own as mind an we We think as ultimate the practice a commitment carbon R&D company. what to future. also XXXX. strong have for emissions I their lower that carbon preach. continue customers, a and

Operator

comes your Our Holt. line open. is Taylor from now Taylor, next Zurcher from Pickering Tudor question

Taylor Zurcher

have first some guys MENA QX. shed really strong for of today? you on one commodity light customers MENA region that in really I'm geographic base region And of for you growth XXXX, the And might Quinn, and price this region on my QX XXXX? NOC taking for Mike what mean that just segment mindset hoping, curious just some in for course the could thanks Hey, on your environment? in results I over that in constructive the of I And question. the

Quinn Fanning

Taylor, Hi good Yeah. question.

right things. with speaking think really of seeing earlier bit we're that. a continue in we NOC leverage And in contract tend events Saudi. the more activity, on with They commodity help investment that investment in to TRS up as be the we I will I from can highlight Middle a number East. ramping now customers you, see where them able that, decisions their we'll a more little kinds those we the what price tell of to think were and strong continued saw I But to methodical, careful our is

some presence good a have we Expro because with think, business. of I the historic legacy

footprint leverage going we're really able think East. those expand relationships the our to to I some throughout be and Middle of

XXXX. positioned as into be I think a the in Middle the here continue I well So city, that's think strong whole the industry we company. overall also as we're East

Taylor Zurcher

Yeah. and on as outlays so hear. as well. Follow-up question for imagined cash merger integration last flow, some imagined free I in here I I here cash Good type But and expenses this quarter asked to more the cash is reasonable current relative balance it exiting levels to likely near-term. for But the to assume XXXX, sheet the now that from full year the we XXXX, think to today? of about on is build balance

Mike Jardon

of XX%. with integration cash Notwithstanding, including Non- this consistent is QX. expectation today, or in is differently In if be certainly guess half by certainly remains getting I the cash still CapEx expect is as do have back obviously praise can it's guidance I the views. to But a that at Taylor. defined some to with CapEx, the the your you're related guess we proxy fact minus plus year EBITDA we margins. our EBITDA free associated on the for year. you basic XX% high-single kind to if consolidation, QX digit, cash high-single margin. the ultimately we've But digit facilities for of the but in regards flow the and as to XX% least XX%. we'll And XX.X% use in with percentage to flow expenses, do people. to given assumption management that our CapEx you just revenues is build a revenue. for plus focused That Free That's get target you to CapEx. in at average interpolate Potential EBITDA going you potential margins out, constraining that puts area XX% that year, our

Taylor Zurcher

thanks for Awesome, the answers.

Mike Jardon

Thanks, Taylor.

Operator

Our West Evercore of comes please go James, from next James ISI. question ahead.

James West

Quinn. and Mike morning, good Hey,

Mike Jardon

Hi West.

Quinn Fanning

Good morning Sir.

James West

for Thanks the the guidance full that Yeah. helpful. was extremely Yeah. year for

really the customers, offshore at cadence cycle? gave of particularly, some into of a about offshore think, least Quinn because of decent kind do the we on you in the us conversations integrated understand activity to Curious, we momentum see the environment, I numbers Mike, kind for As for this XXXX, year. look with XXXX, I -- building think the your start But as business.

Mike Jardon

what benefits -- great and are has given than of its talk me opportunity customers what think, an really more with I normally and the to a lot it the would. the I with with is, speak awful completing us meet merger neither

I there optimism. some continues cautious think today, to be

to going type are going circuit that offshore, are think offshore FIDs approved to XX% of FIDs. I be the be

don't in to in see number massive why going we the starts short It's and I we we're where the going of well think see have. historically would that we where momentum given reasons -- the think around FIDs I we've the of build number approved see to some same year. half of margins. to the guidance term of we're part see second revenue that

did We’re going more into of have to activity end through what that a year. when at they'll for lot looks roll the end our prove our calendar much then I set are And two, sentiment. the positive to four continue more to But, process three, last operators confidence going another four and I like projects what out there's budgeting this in see well than certainly we even going two, three, of were today wells. yes, year,

Quinn Fanning

if you activity. to our I account of only think, at kind the inquiry thing customer I that, look is would

have had at of IOCs on more we elements. planning. have to or least campaign are worth been would Mike what them well XX The may in As customers months in that smaller of or points the visibility out, discrete proving terms project XX neat

four they an up historically, you well program, if So well approvals. being X end had two separate

of customer to seems subsea as interesting of the I for work example shortening. one that knock-on completions be the requests, turnaround effects think that is an

James West

Okay. That’s very interesting.

that this solutions a scoped of topic? it they're you where for at point, Quinn. is carbon reduction into Thanks for asking Okay. are that provide, then more those on or specifically the conversation And contracts those

Quinn Fanning

and certainly to some of for compulsory, I some view of it's scope more It's some in requests topic. more now from see starting definition. mean, is data European-centric years some kind performance some a some to of not be especially industry XX kind norm. ago, as some like think prerequisite. conversation to I requirements of data, Right become it the we're like, starting got I become And HSE this it of operators. provide but of there an think from, that'll and scope started I providing more in we're right was of kind you've them, of a for ways, the initially your then now and the

James West

Right.

guys. Okay. All Thanks, Got it. right.

Mike Jardon

Thanks, James.

Quinn Fanning

Thanks, James.

Operator

Our next Sandler. from Piper question comes Ian from Macpherson

now open. line is Your

Unidentified Analyst

the John balance that Hi, sheet priorities? flow good capital you please your cash that This is for My installed first allocation currently share and [ph] stepping morning. free provide could in visibility Ian. for reminder generation, question cash $X per you have given over of a on is on

Quinn Fanning

In our free one flow, regards cash priority is number to generating it.

full a on we're dialogue and and one timing – not and quarter bolt-on sure our I'm trajectory the are investor have repatriation be particularly capital regards alternatives, will whether combined is visibility of into some better have strategy. this or the allocation robust -- suite in expectations But of in recovery understand to company certainly offshore. we with it's We what incremental board on M&A investments, table, organic the as we have

so over is flow, focus want what be again, to that's our to that XXXX. But think going plays generating is we initial do something it happen. I on out more cash on than

Unidentified Analyst

obviously how to quarters? settle next integration merger expenses. and early and think EBITDA about and some few great. the we're then Thanks for stock-based us Okay, specifically these you integration the period, Could naturally items in adjustments, there. there's color noise help with in comp maybe follow-up, And over the

Mike Jardon

within south the -- continue guess support expense that Sure. XX-plus we lot quarters is severance a day. lease costs We will continue quarter I there of of next regards least embedded Those to expectation. the to some price, mentioned price you'll related think details to the a merger legacy Please help closing In stock-based options the have the hopefully operational the see Well, at in numbers point we expenses, cost, a will with and in a our and release. headquarters Houston. get the provide stock I But be compensation through thing those associated essentially bit related XXXX, expectations, consolidated single those Obviously, to you out south through performance. exercise XX-K" closing and file think our core will certainly help fewer see the in at traditional we of we'll understand one regards "inaugural settle both to once some I to the couple Expro adjustments, a a will forward that that of we valuation a CapEx consolidation recognized Q, recognize million with average I to stock-based Form of majority be compensation recognized based is will consider expenses cut and we're think dollar as that and for to bit facilities. go week, kind expenses, what be a integration the XXXX on of of least available I and Expro me that, will and schedules early of down expenses in vast details merger much press I is noise likely weeks couple of program. K. legacy rationalization options abandonment were with some the fourth that. Recognize We'll of operating associated but

Unidentified Analyst

it questions. I'll Great. Thanks back. turn my for taking

Mike Jardon

sure. Yes,

Quinn Fanning

Thanks, James.

Operator

appreciate for and gentlemen. conference Thank now We You concludes ladies your you, disconnect. That your participation may today.

Karen David-Green	Chief Communication, Stakeholder & Sustainability Officer
Mike Jardon	Chief Executive Officer
Quinn Fanning	Chief Financial Officer
Taylor Zurcher	Tudor Pickering Holt
James West	Evercore ISI

Expro (XPRO) 3 Mar 222021 Q4 Earnings call transcript