Viridien S/Adr

day and thank you for standing by. Welcome to the Viridian Q2 2025 Financial Results webcast and conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Alexandre Leroy. Please go ahead.

Good morning and good afternoon, everyone. Thank you for joining us today for the Oregon Q2 2025 results presentation. I'm Alexandre Leroy, head of investor relations and corporate finance. We are hosting today's call from Paris, and I'm pleased to be here with Sophie Zorkia, our chair and CEO, and Cheryl Zerv, our CFO, who will walk you through our Q2 2025 results. Before we begin, a few housekeeping items. This call is being recorded and accessible via both phones and online platforms. An audio replay will be available shortly on our website, www.terrigengroup.com. The presentation slides are also available from download from the website. Please note that today's presentation includes forward-looking statements. Actual results may differ materially from those expressed or implied today. Relevant risk factors are detailed in our 2024 Universal Registration Document, filled with the French Financial Market Authority, IMF. As usual, we'll conclude with a Q&A session. And finally, a quick reminder that the original comments primarily on segment figures, which reflect our internal management reporting. These differ from IFRS numbers, also published today, due to IFRS 15 impacts on our Earth Data Business accounting. With that, I now hand over to management, starting with Sophie, who will take you through the key business highlights for the quarter.

Thank you, Alexandre, and good morning, good afternoon, ladies and gentlemen. I'm on slide two. In Q2 2025, despite the challenging environment with tariff uncertainty, geopolitical instability, oil price volatility, and foreign exchange fluctuations, we delivered another solid quarter marked by sustained business momentum and consistent financial execution. Segment revenue reached $274 million, up 6% year-on-year, reflecting strong demand for our unique expertise and differentiated product offerings. Segment adjusted EBITDA came in at $107 million, up 14% year-on-year, confirming our ability to translate top-line growth into profitability. while continuing to execute on our SMO restructuring plan and fully benefiting from the positive impact of the end of EDA vessel agreement. We concluded the quarter with $30 million in net cash flow, underscoring our enhanced ability to generate cash flow from operations, thanks to our differentiated technology and a significantly more flexible asset-like business model. On the strategic front, we continue to build on the leadership of our three core businesses. In geoscience, our differentiation continues to grow and our expertise is increasingly sought after across a broader range of geography. Notably, we've secured more work from clients who maintain strong internal teams and technology development. It's an important endorsement of our capability and a strong driver for future growth. In Earth data, We launched new ocean bottom nodes projects, OBN projects, in our core basis, maintaining strict portfolio discipline, fully aligned with our cash-focused, balanced risk-return approach. And in sensing and monitoring, we achieved another innovation breakthrough, reinforcing our technology leadership in the land business with the launch of our new Axel technology and the next generation, which is the next generation land nodal solution. We also continue to execute on our restructuring initiative, which is progressing according to plan and delivering the expected margin improvement. We are reaffirming our 2025 guidance with 100 million net cash flow targets. Given our leading competitive positioning, strong backlog, active client discussions, and continued operational discipline, we are confident in our trajectory and in our ability to deliver on our cash generation objectives. Before diving into our Q2 2025 results, let me take a quick step back to remind you where we are today as 2025 is our first year as a truly asset-light company and is a key milestone for Veridia. So I'm now on slide three. Our strategy is defined around three pillars. The first pillar is about continuously strengthening our core business. We strongly believe that oil and gas will be required for many years into the future to support a rational energy transition. And in most market scenarios, our clients will need to improve their portfolio performance and ensure their reserves replacement is increasing. So we looked at our top 15 clients and their reserve life has been consistently dropping over the last 10 years. Oil prices may continue to fluctuate in the short term, But all fundamentals still point towards a relatively solid longer-term outlook for our coal market. And we intend to keep excelling there. The second pillar is about selectively developing new markets. The fact that oil and gas will remain critical for the long term doesn't mean we shouldn't prepare for a sustainable future and strengthen our transition. And we're doing so with several initiatives that you're already familiar with. leveraging our unique competitive strengths, our exceptional technical teams with their deep mathematical, scientific, high-performance computing and coding expertise, our rich Earth data assets and our ability to maximize the value we extract from them, and our industry-leading technologies in geoscience, imaging, and sensing and monitoring. These give us the ability to deliver unprecedented subsurface images and breakthrough products. The third pillar is about delivering operational excellence across everything we do. We fully recognize the importance of cash generation. The leveraging remains a top strategic priority. We are relentlessly focused on performance and discipline at every level of the company, from leveraging AI to ensuring the highest operational efficiency. Turning now onto slide four. For those of you who may be less familiar with Verigen and the seismic value chain, let me highlight an important point. We are now completely out of the seismic data acquisition services business, having refocused on asset lighter, technically differentiated, higher value added segments. Providing seismic acquisition services is about the management of assets and crews, the collection of subsurface data using source and receiver technologies. Whether offshore or onshore, this means deploying our vessels or land crews with various tools to capture seismic signals. This is a high fixed cost asset intensive business, but the key challenge and value generated is mainly around reducing costs and maximizing asset utilization. We exited this commodity business, which is the data acquisition business, to focus on our three differentiated technology businesses. With our sensing and monitoring systems and solutions, success depends on offering leading technology, industrial efficiency, and operational reliability. Our sensing and monitoring business is recognized for the quality and the robustness of its equipment solutions, and we have made a significant progress in lowering our base costs. Second, in multi-client data licensing, which is our Earth data business, success hinges on having the right data in the right place at the right time. This requires flexibility, being close to our clients, making smart basing selections, structuring deals intelligently, and providing excellence in the final product. These together are what ensures strong pre-funding, lower risk, and higher commercial potential on each survey. And thirdly, finally, in subsurface imaging driven by a geoscience division or business line, It's all about top-tier expertise, advanced technology and algorithms, optimized computing power, and delivering value to clients, which earns us recognition and repeat business. This strategic positioning allows us to focus on expertise-driven, cash-generating activities with higher competitive barriers and better margins. Let me take you to slide five. to say a few words about what makes us the global leader in sensing and monitoring. The key words are innovation, quality, optimization, and reliability, which together require technological leadership. In this business, we don't just sell leading equipment and systems. We deliver fully integrated solutions, combining products, the software that powers and optimizes their deployment, and a full suite of support services. This together ensures operational excellence from crew efficiency to final data quality. To stay ahead, we must be continuously improving our value proposition as well as our industrial structure and processes to optimally deliver our products and services. We help our clients solve their challenges, address their pain points, and ultimately optimize the operational performance while delivering the highest quality of data. This is how we differentiate ourselves and build lasting partnerships with our clients, a key driver of both our global leadership and the depth of our install base. Turning now to slide six for a quick focus on our approach to multi-client surveys. Multi-client is by nature the most cyclical and volatile part of our business, particularly when it comes to late sales. Now that we've exited the seismic acquisition vessel business entirely, We have the flexibility to adopt a discipline risk-managed approach to multi-client investment. We've chosen a balanced strategy that combines low risk, low investment re-imaging of legacy data, leveraging our geoscience expertise. We add significant value to existing data. So this is the first pillar. Second, strategic core based in enrichment and expansion where demand visibility is strong and where we can leverage our footprint. This is second pillar. And the third one is a selective opportunistic exposure to higher risk, potentially higher return frontier projects. Our key rule is simple. We are disciplined in selecting projects with strong economics, measured in pre-funding, and solid commercial potential. Our seismic multiplying strategy is not about volume, but focused on maximizing value creation and cash generation. Moving on to slide seven. on seismic image subsurface imaging. Geoscience is the global leader in seismic imaging because over the decades we have been relentlessly building with focus competitive advantages that truly matter in this market. First are people. Our team is second to none with over 300 PhDs in mathematics, physics, engineering and geosciences recruited globally. Out of 100 applicants, only 1% make it through our selection process. This talent base is the foundation of our success. Second, our technology. Though the industry called them by the same brand name, like Elastic for Waveform Inversion, we developed unique, highly advanced proprietary algorithms that are suited to a large variety of subsurface challenges, now even further enhanced by AI-driven models. Our subsurface imaging technologies are second to none, being consistently rated number one in the external Kimberlite survey. We also operate around 600 petaflops of computing power in highly optimized and specialized data centers, all fine-tuned specifically for high-throughput challenges like seismic imaging. Three, our corporate culture, which is deeply rooted in service quality and a commitment to problem-solving, openness, and excellence. This unique combination of talent, technology, and relentless drive for excellence is what makes Virgin the global reference in seismic energy. Finally, moving to slide eight, let me recall the philosophy behind our selective diversification strategy. We applied three key principles when evaluating new opportunities. One, they should preferably enable us to grow outside the oil and gas sector. Second, they should build credibly on our existing expertise, capabilities, and technology with minimal dedicated costs or capex. And they must offer strong growth potential. We are determined to prepare our future in the smartest, most disciplined possible way. Now, I'd like to move on to slide 10 to cover the quarterly performance review, starting with Geoscience. Q2 2025 was a solid quarter for geoscience, with external segment revenue up 10% year-on-year to $115 million. This strong performance was primarily driven by work performed in Latin America and the Middle East. Over the past few years, Viridion has experienced a steady increase in global demand for its high-quality, high-technology subsurface imaging solutions. Advanced elastic for waveform imaging technology represents a significant leap forward in imaging quality, setting a new benchmark in the market. This strong demand has translated into healthy order intake, supporting a robust backlog that underpins our growth, margin expansion, and cash generation for the remainder of the year. Moreover, our strategic focus on complex projects a pivotal role in development and infrastructure-led exploration, and have strong relationships with less oil price-sensitive clients, such as key international oil companies and national oil companies, provide a solid foundation of growth and resilience for our geoscience business. On slide 11, we highlight a compelling example of how we have expanded our service offerings by leveraging the high-fidelity subsurface images we produce. Traditionally, these tasks were handled by our clients using laborious and time-consuming techniques. By turning to VeriGen, they now benefit from our advanced AI suite and high-performance computing capabilities, enabling faster, more efficient, and more effective results. In early 2023, Viridian completed the full processing of the largest ever OBN, Ocean Bottom Node, acquisition program in the UAE. Covering 26,000 square kilometers, the project deployed more than 2 million sensors and generated around 700 billion seismic traces, amounting to several dozen of petabytes of data. This was a monumental technological challenge successfully met thanks to our deep expertise and proprietary technology. Today, we are empowering our clients with extensive interpretation insights derived from the resulting seismic images using our advanced AI suite. The scale and complexity of this data demand exceptional computing capabilities, software, middleware, power, and storage, all optimized for the immense data and high throughput HPC requirements something only Verizon can deliver effectively. Off-the-shelf commercial platforms and cloud solutions simply cannot handle seismic images with the efficiency, precision, and scale that we provide. Ultimately, our seismic imaging expertise, powered by bespoke high-performance computing, remains a key competitive advantage. We continue to build on this strength to further expand our market presence and deliver unmatched value to our clients. Now turning onto slide 12 for the Earthdata performance review. Q2 2025 revenue declined 8% year-on-year, following a strong Q1 2025. Overall, as expected, multi-client performance for H1 2025 is relatively flat with H1 2024. In Q2, we started two surveys involving OBN acquisition, one in Norway and another in the US Gulf, with good pre-funding. We remain confident in the outlook for our multi-client business, supported by the strength of our modern, strategically focused data library and the relevance of our new projects, both in terms of industry alignment and commercial potential. As of the end of June 2025, our library's net book values stood at $508 million, primarily composed of recent, technologically advanced data sets. These are concentrated in our core basins, the three most active offshore regions for our clients, offshore Norway, offshore Brazil, and the U.S. Gulf. I'm now on slide 13. Earlier, I mentioned our disciplined approach to multi-client project investment. The Brazilian equatorial margin is a prime example of our prudent and strategic entry into emerging bases. Located offshore in the north and northeast Brazil, this region is highly prospective, with a petroleum system analogous to the prolific Guyana-Serenam Basin, one of the most active exploration hotspots in the recent years. Virgin is among the few players with existing data coverage in this area, and we currently hold the largest footprint. The region is drawing strong interest, particularly from Petrobras, which has designated it as a priority in its five-year exploration plan. Recent Brazilian licensing rounds also confirm growing interest for both international and national oil companies. In short, this is a commercially attractive basin. As it remains in the early stages of exploration, we are proactively securing partnerships to support our upcoming multi-client projects. This collaborative approach allows us to share risks, and optimize capital expenditure while positioning ourselves for long-term success. Now I'm moving on to slide 14, covering sensing and monitoring performance. In Q2 2025, SMO revenue grew by 14% year-on-year, reaching $93 million. This growth was primarily driven by strong land activity supported by sustained commercial momentum. Notably, we delivered significant volumes of our wing nodal systems in South America and 508 cable systems in the MENA region. Among our SMO new businesses, infrastructure monitoring recorded double-digit growth, while our Marlin offshore logistics solution achieved encouraging early commercial traction, including a contract signed with ONGC as announced earlier in the quarter. We remain confident in the outlook for SMO, underpinned by our large install base and the globally recognized quality and reliability of our products and solutions. And finally, our restructuring plan is progressing well, with implementation completed in France during Q2. The positive impact of these efforts is already reflected in SMO's financial performance. And finally, on slide 15, I'd like to highlight a major milestone achieved by RSC At the EAG conference in Toulouse this June, which is an important industry conference, we officially launched Accel, the world's first drop-only land node. This breakthrough innovation is the result of years of close collaboration with clients, extensive field experience, and focused R&D. Accel is purpose-built to enhance operational performance in desert environments and high-productivity surveys, enabling clients to reduce operating costs up to 30%. Its drop-only deployment method is the fastest ever introduced, significantly improving the efficiency of seismic campaigns, which are amongst the most logistically and resource-intensive operations in the industry. We are already seeing a strong client interest in this true step change in onshore acquisition, which is setting a new benchmark for the sector and reinforcing gradient leadership in seismic technology innovation. With this, I hand over to Jérôme, who will take you through the financial performance review.