Expro Group Holdings N.V. Announces Fourth Quarter and Full Year 2021 Results

2nd March 2022

Delivered solid performance in the fourth quarter as scale, broad portfolio, global operating footprint, through-cycle capabilities and strong financial profile enabled continued growth

Committed to further cementing the Company’s position as an energy services leader while driving strong financial performance and significant value creation for shareholders

Provides 2022 revenue and Adjusted EBITDA margin outlook

HOUSTON- March 2, 2022 - Expro Group Holdings N.V. (NYSE: XPRO) (the “Company” or “Expro”) today reported financial and operational results for the three months and year ended December 31, 2021.

Fourth Quarter 2021 Financial Highlights

  • Revenue was $296 million compared to revenue of $198 million in the third quarter of 2021, an increase of $98 million, or 50%. The merger between legacy Frank’s International and legacy Expro closed on October 1, 2021 (the “Merger”) and contributed $112 million of the sequential increase in revenue, which was partially offset by $21 million in legacy Expro production equipment sales that occurred during the third quarter and did not reoccur in the fourth quarter.
  • Net loss was $91 million, or $0.84 per common share, compared to a net loss of $12 million, or $0.17 per common share, for the third quarter of 2021. Adjusted net loss for the fourth quarter of 2021, excluding certain items, was $4 million, or a $0.03 loss per common share, compared to adjusted net income for the third quarter of 2021 of $1 million, or $0.02 income per common share.
  • Adjusted EBITDA was $51 million, a sequential increase of $20 million, or 61%, of which $17 million was due to the Merger. The remaining increase was driven by a more favorable activity mix. Adjusted EBITDA margin for fourth quarter 2021 and third quarter 2021 was 17% and 16%, respectively.

 

Full Year 2021 Financial Highlights

  • Revenue increased by $151 million, or 22%, to $826 million, compared to $675 million for the year ended December 31, 2020. The Merger contributed $112 million of the increase, with the remaining increase driven by higher activity across the majority of Expro’s operating segments.
  • Net loss was $132 million, or $1.64 per common share, compared to a net loss of $307 million, or $4.33 per common share, for the year ended December 31, 2020. Adjusted net loss, excluding certain items, was $19 million, or $0.24 per common share, for the year ended December 31, 2021, compared to adjusted net loss of $29 million, or $0.41 per common share, for the year ended December 31, 2020.
  • Adjusted EBITDA increased by $26 million, or 26%, to $126 million from $100 million in the prior year. Approximately $17 million of the increase was due to the Merger and the remaining increase was attributable to increased activity during the year ended December 31, 2021. Adjusted EBITDA margin was approximately 15% for both 2021 and 2020.
  • Expro achieved substantial growth in several product lines, capitalizing on improved industry fundamentals.

 

Michael Jardon, Chief Executive Officer, noted, “Expro delivered outstanding operational performance and encouraging financial results in the fourth quarter as we continue to unlock the benefits of the recently completed Merger while capitalizing on our increased scale, broad portfolio of solutions, global operating footprint, through-cycle capabilities and strong financial profile.

“Our solid performance despite the challenging operating environment is a testament to our team’s expertise and resilience, and our ability to continue to adapt to our customers’ evolving needs. We enhanced our business mix and our team is taking advantage of improving industry fundamentals and expanded operational capabilities. We achieved broad-based growth across our regions and product lines, with particularly notable growth in the areas of production, subsea well access and well intervention and integrity services. Of note, Segment EBITDA margin was up sequentially in each of our geography-based operating segments and Adjusted EBITDA margin increased 120 basis points sequentially, all reflecting an improved business mix. We also continue to realize the benefits of our investments to develop innovative, proprietary solutions to support our customers’ energy transition goals. We remain focused on expanding our portfolio of carbon reduction solutions to help lead our industry’s journey toward a lower carbon future.

“We are successfully implementing a thoughtful and comprehensive integration plan and have already made significant progress bringing the legacy Frank’s and Expro’s businesses together in order to capture the full potential of our combined platform. Through the careful and deliberate implementation of our integration plan, we are creating a stronger, more flexible business with a more competitive cost structure that will allow us to significantly expand our margins. Efficiencies are already being realized across our business and customers are experiencing the benefits of our expanded offering. During fourth quarter 2021 we identified and actioned cost savings that will allow us to capture more than 50% of our previously stated $55 million run-rate cost synergies target within the first 12 months following our closing of the Merger. We remain confident in our ability to achieve our synergy targets and our integration plan remains very much on track.

“In addition to the $55 million of run-rate cost synergies within the first 12 months, we remain confident that we will achieve at least $70 million of total savings within 24-36 months. We are also now pursuing growth opportunities afforded by our broader portfolio and geographic footprint, and our view remains that revenue synergies will allow us to realize up to $30 million of incremental Adjusted EBITDA growth as we continue to benefit from our strong customer relationships, global scale and the tailwinds from the multiyear industry and global economic recovery. As we further improve our cost structure and capitalize on the global recovery, we expect to generate strong free cash flow.

“We ended 2021 in a strong financial position with bright prospects for growth and profitability. Driven by performance and powered by our people, we remain confident in our ability to deliver on the significant opportunities ahead. In 2022, we intend to further cement our position as a full-cycle energy services leader while driving strong financial performance and significant value creation for our shareholders.

“Looking ahead, we expect that the first quarter of 2022 will show continued solid financial performance, tempered by the typical seasonally weaker activity levels in the Northern Hemisphere. As previously disclosed, we expect that revenue in the first quarter of 2022 will be relatively flat compared to the fourth quarter of 2021.

“Also consistent with comments on our third quarter earnings conference call, we continue to see strengthening signals of a multiyear recovery, with favorable macro fundamentals that are supported by a steady recovery in oil and gas demand, modest near-term supply additions and commodity prices that will support incremental international activity and increased investment in production capacity by our customers. In the near- to intermediate-term, we expect that revenue momentum will be driven by an increase in shorter-cycle, faster-return production optimization projects, which will most directly benefit our well flow management and well intervention and integrity product lines. We also expect to see a strong recovery in offshore development in the second half of the year for which our well construction and subsea well access businesses are very well positioned.

“We expect that Adjusted EBITDA margin in the first quarter of 2022 will be 12-14% of consolidated revenue, driven by a less favorable mix of activity. As we move into the Northern Hemisphere’s summer season in the second quarter of 2022 and onwards, we expect that our revenue run-rate will approach that of the pre-pandemic 2019 revenues of legacy Expro and legacy Frank’s on a combined basis. With the benefit of fall-through on incremental revenue and synergies, we expect that Adjusted EBITDA margins in the second half of 2022 will be in the area of 20% of revenue.”

Investors contact:

Karen David-Green - Chief Communications, Stakeholder & Sustainability Officer

[email protected] 

+1 281 994 1056

 

Media contact:

Hannah Rumbles - Global Marketing and Communications Manager

[email protected] 

+44 1224 796729

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