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.

Thank you, Sophie. Good morning and good afternoon, everyone. I'm now on slide 17. As Sophie has already provided a detailed overview of the activity this quarter, I won't go into too much detail here. Overall, in H125, we generated total segment revenue of 575 million, up 8% year-on-year. In digital data and energy transition, our DD segment, which includes geoscience and our data businesses, segment revenue reached about 400 million, up 9% compared to H124. Sensing and monitoring delivered 180 million of revenues over the H1 period, representing a 6% increase year-on-year. Turning to slide 18, a few words on profitability. Group segments adjusted EBDA reached 250 million in H125, up 25% year-on-year, or 50 million more than H124. This solid performance was mostly driven by our DDE segments, where margin exceeded 60% of 500 basis points. DD delivered 40 million of incremental EBDA, thanks to a higher geoscience activity with strong margin conversion. And secondly, reduced penalties in EDA down to 12 million from 25 million last year, following the end of our vessel contractual agreement in January. Regarding our sensing monitoring they contributed to the remaining 10 million EBDA increase. Margin approached 15% of five points versus last year, and at EBIT level, we are not far from reaching 10%. This reflects both higher revenue and the positive impact of the transformation plan launched 18 months ago, which generated about 8 million in extra EBDA in H125. Finally, corporate costs slightly decreased, showing continuous cost discipline across all the groups. Moving to slide 19, here we do report the IFRS figures for the period. As you can see, the IFRS 15 adjustment is significant this year. Minus 83 million on revenues and EBITDA in H125, versus plus 34 million in H124. These adjustments mainly relate in H125 to our ongoing survey in the U.S. Gulf and Norway. As a reminder, IFRS 15 requires our data revenues to be recognized only upon delivery of process data, deferring pre-funding revenue and margin of ongoing surveys. This is different from our segment reporting, where we continue using the percentage of completion methodology, which better reflects our business activities and cash generation of the division. Also worth noting on this slide, the cost of debt remains pretty stable post-refinancing in March 25. Despite higher coupons due to the increased risk-free rate, this was partly offset by lower spreads thanks to our improved credit rating and a reduced bond nominal consistent with the deleverage pass we started two years ago. In other financial income, the minus 34 million mainly reflects to the non-call premium from the March 25 refinancing, along with unfavorable forex impacts. Moving on to slide 20 and how all this translates into cash flow. As you can see, we generated 10 million of community net cash flow in H125, including 30 million in Q2 alone. Just as a reminder, as defined in our annual report, net cash flow includes financial charges that exclude one-off costs related to the March 25 refinancing operation. Now, if we look at the bridge between H1-24, where we generated net cash of 24 million, and H1-25 at 10 million, there are two key elements that more than offset the 55 million gain in EBITDA. The first one, H1-24 benefited from one-off a one-off of 38 billion cash inflow coming from the settlement of the 10-year-old litigation with ONGC, the Indian National Oil Company. While this was partly offset by the fixed part of our vessel commitment in June last year, it still leaves a net gap of 31 billion when comparing both periods. The second effect is a significant negative change in working capital in H125, mainly due to the overdue receivables from PEMEX, the Mexican national oil company, totaling around 50 million at the end of June. Note that we are actively pursuing options to monetize part of this exposure, and as a base case, we expect to recover at least half by February. A quick word on our debt, which is on slide 21. As you know, we successfully refinanced our bond at the end of March 25, with good timing considering the volatility that followed. We issued two senior secure notes, one in USD and one in Euro, replacing the existing one. The USD note is now 450 million versus 500 million previously, and the Euro note is 475 million versus 585 million previously, reducing the total nominal value as mentioned earlier. Maturity was extended till October 2030, i.e. about five and a half years from now. The refinancing was well received with three times of our subscription and strong demand from a broad-based international investor. As of June 30, 2025, our net debt stood at 997 million, carrying about 80 million of negative Forex impact versus December 24. We also maintained strong liquidity with 162 million in cash in hand, as well as 100 million of unloaned RCS at the end of the semester, and the 25 ancillary facility, which is half drawn. With that, I will hand it back over to Sophie.

Thank you, Jérôme. I am now on flight 23 to share some perspectives. The oil price environment has been volatile in recent months, but the commodity remains above $60 a barrel, which we consider a general equilibrium point for the industry. And in this context, Olingasch companies have largely maintained exploration and production and development, especially in our core segments, offshore markets and business with major industry players. Assuming no major disruption to the current environment, we approach H2 2025 with confidence, given our active client discussions and continued operational discipline. And we're supported in particular by a solid backlog in geoscience, upcoming licensing runs that should sustain our multi-client activity, and continued broad-based demand in sensing and monitoring, especially for land solutions. We reaffirm our target of generating around $100 million in net cash flow for the full year of 2025. And to conclude, slide 24 recaps the key elements of the Viridian investment case. Viridian continues to perform reliably, supported by the strength of our team, our technology leadership, our asset-light approach, and focus on operational efficiency. These competitive advantages support our ability to grow profitably and generate consistent cash flow from operations. We remain firmly entrapped on our delivery journey, while responsibly preparing for the future to ensure the group's long-term sustainability. Thank you all for attending the Q2 2025 call. And for your attention today, we'll now open the floor for questions. And the operator, please start the questions over the phone.

Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. We will now go to your first question. One moment, please. And your first question today comes from the line of Guillaume Delabrie. Good afternoon, Dean. Please go ahead.

Yes, good afternoon, Sophie and Jerome. Three questions for Jerome regarding the cash flow statement. So first, on slide 20, can you remind us why the cost of debt in Q2 2025 is only One million, negative one million, so this is my first question. On slide 20, cost of debt for Q2 2025 in the... Oh, yeah, sorry. Yes, because as part of the refinancing, we paid our interest costs in Q1, and so that's basically the idea. Okay. So, second question. The increase in debt comes from, I would say, mainly from the negative foreign exchange impact on your bond. I think this is correct. Correct, yes. At the net debt level, there is about 80 million of foreign impact between December 24 and June 35. December 24, 104 on the exchange rate, June 1, 2017. That's a massive depreciation of the dollar. Okay. Third point. So, in your 100 million free cash flow guidance, you expect to cash back half of the PEMEX receivable. So, I think PEMEX is currently being refinanced through a $12 billion program. So, qualitatively or quantitatively speaking, do you feel today slightly more confident in your $100 million free cash flow guidance? And I will turn over. I mean, we reaffirm our cash flow targets. Yes, we are confident in... in reaching this 100 million. As we said, we are proactively pursuing different options for the collection of this Pemex Overdue. The first one being chasing Pemex itself. And the other alternative is reverse factoring and factoring scheme that we are discussing actively with Vance.

Very clear. Merci, Jérôme. I turn it over.

Thank you, Guillaume. Thank you. Your next question comes from the line of Jean-Luc Romain from CIC Market Solutions. Please go ahead.

Thank you. Two questions on SMO. First, on the potential of Accel. Do you see this as a new 408 or 428 acquisition system in terms of potential revenue? Second, on the marine revenue, it's striking that over the last two years, the marine revenue has never quite recovered. Do you see an inflection point or do you see the marine market definitely, I wouldn't say lost, but difficult? Okay.

Thank you, Jean-Luc, and good evening. So two questions on Axel potential. I think it has a huge potential. It will certainly, with time, start replacing the revenue from the cable system. Right now, we have a large install base. Mostly of the cable system and we do continue to sell those to complement and replace some of the existing so base now purpose for the future the market is moving towards no systems because they're more flexible and probably cheaper to operate and we believe we have a very strong value proposition with the system and And what I can tell you is that the system will preserve our margins, right? So we've worked it out that on the cost side that we can deliver the same amount or more margins that we've been delivering with the cable systems. So it does have very strong potential because that install base, which is the case of Marine, by the way, is aging. And eventually clients will be switching. So those who aren't switching are buying replacement parts, but eventually there will be a gradual shift. So I do expect a ramp up with this Axel system. On the marine side, what drove the revenue the last few years was the equipment with acquisition company equipping themselves with OBN, ocean bottom node, shallow, in shallow waters. Very, very much driven by the large campaign in the Middle East. And in a way, we... have saturated the market with those shallow water OBN. I think the acquisition company have what they need for their projected activity in the next few years or so. So the next opportunity to ramp up with OBN will be with deepwater OBN, which is eventually going to be becoming more active because the basins, the deepwaters in the world offshore are very much deepwater. and the acquisition company will be needing eventually more seaporter OBN to respond to the needs. And there are Chinese companies, acquisition companies, that want to enter that market. That's another additional opportunity to sell seaporter OBN. So we're targeting that market for the marine. And as always, we think there will be some, and there is already, and we sell some streamers as a replacement. It's not a high volume because, as you know, the number of vessels has been down. But we do sell some stream of replacement as well. But the big numbers and changes you've seen over the last few years have been driven by that OBN program.

Thank you.

You're welcome.

Thank you. Your next question comes from the line of John Olason from ABG Sundell Collier. Please go ahead.

Good evening and thanks for taking my question. My first question goes to Sophie. Some other oil service companies like SLB, Halliburton and Bake Hughes have expressed weakness in the outlook for the second half, in particular for short cycle markets, which arguably your industry is. But your outlook comments seem to be more optimistic than some of your peers have expressed. Is that correctly interpreted?

Hi, good evening, John. To a certain extent, it is, because if you start digging into where the softness was, a lot of it was North America. A lot of it was Mexico and Saudi Arabia. And those are markets where we don't see similar softness. We're not as exposed as they are to those markets. So in general, we are in markets offshore, deep water, where our clients, which is, you're talking here, national oil companies that have a long-term view, or large IOCs, are definitely taking a longer-term perspective to exploration and development. So in general, we see more stability. Arguably, if you look at the history of E&P CapEx, our sub-sector, our sector, has been the one most affected by previous cuts. And what we're seeing right now is the cuts are going more into other bits of the value chain and the drilling, certainly the land, the drilling, and driven by some of the climbs, some of the endless seasons, particularly in Mexico and South Korea.

Yeah.

Yeah. So how do you see the general market then for the second half? Is it flattish or is it even improving? What's your general?

I think I would call it flattish. And that's my comment is saying that as clients starting to arbitrate. So first of all, we're 2025. Most clients have been asking whether they're going to do with their ENP CapEx this year. They're pretty much the answer has been, are we keeping course? Some of them are saying we're going, we're shooting to the low end. brackets that they have given. But generally, they are staying the course. So we're seeing that stability in 2025 with here and there some delayed decisions. But there are the positive side and we have some misruns and there are some external factors that are sustaining our activity. Now, going into 2026 could be a bit of a different story. It depends on the outlook of all prices next year. As you've seen, the Q2 results from our clients have been softer because the oil price for Q2 was lower. And it really depends on what assumptions they're going to be making for 2026. If the oil price is 60, expect a bit of softness. If it remains at 65, 70. Right now it's 72. It should be really a continuation and even go up in this scenario where the oil price is staying at about 70. So it depends. And they're working through it, and their budgets are starting now. So we'll have a better view in Q3, Q4.

But if I look at the mix in the Q2 numbers, multi-client or earth data sales were down year on year, while the imaging business was very strong. Is that something you expect to continue to see in the second half at that time?

So, John, you know this industry quite well. You cannot read into a quarter It is a very, there's a lot of cutoff effect. First of all, I would advocate you to look at the multi-client over H1. And if you look at H1, actually our after cells, which is sort of the nice indicator, is actually up here on the earth. So it is, it might be down. There's been a very strong Q1. It's a bit of phasing here. I wouldn't read too much Q2 to project into the second half, given especially there are some important these rounds. that should help drive our business. And I did not mention that maybe in addition to that, there's a couple of transfer fees that should be helpful too.

And the transfer fee, I guess the biggest potential is from Chevron's acquisition of Hess. Is it possible to give some indication of what timing of the transfer fees and kind of like the size of it, how big could it potentially be?

I would say the timing would definitely be this year. Actually, I'd like it to be earlier in 2020 because they closed the deal and they want to be able to move on. We don't disclose the size. And there's a second deal that is happening right now, which is a new reptile in the North Sea. And between those two, we do expect a sort of an average or a reasonable average level of 20 feet.

Say again, please.

It's NEO Repsol. If you remember, Repsol is going to be a UK asset into NEO.

Yeah. And did you say something about this potential size of the transfer?

No. This is happening as we speak. The size of the magnitude of the transfer is being evaluated, and there are discussions with clients. It depends really on how much they decide to take on. In terms of data, how much overlap there might be between the two companies, there's a lot of factors coming into it. We haven't amended the numbers.

All right. And then my final question is back to the question about the net cash flow. Of course, you report the net interest-bearing debt increased by $76 million in the first half, which is roughly the same as the currency impact of $80 million. And I guess on top of this, you had the, as Jerome commented on, you had the costs related to the refinancing. Is it possible to say how much those costs were?

For the refinancing?

Yes.

Yes, we had about 20 million of non-contractors cost for calling the bond earlier than their maturity. And on top we had another 20 million, slightly above 20 million for advisory fee, including the banks which are issuing the two bonds. All right, so all in all about 40. Yeah.

So according to your definition in this first half, you generated a net cash flow of about $40 million. Is that a correct interpretation? And the second half should be about $60 million to get to $100 million for the year. Is that the correct interpretation?

So the net cash flow, by definition, excludes the cost of the refinancing. So the 10 million excludes those costs. So to get to the 100 million target, we need to generate 90 million in H2. So how do we go from 10 in H1 to 90 in H2? As Sophie just explained to you, we expect a stable environment that supports the activity level. That being said, the cash will benefit from four elements between H1 and H2. First, the traditional seasonality that we have between the two semesters. Just to give you an example, we pay our bonus in Q1. It's a significant number. We're talking 20 million plus that we pay to our employees in Q1. The second effect is the penalty that was incurred in January with the end of the contract for 12 million and in H2 we will have zero. As I mentioned, H1 was impacted by the working capital build up to lead to the overdues of Pemex. And we said we were confident to partial reduction of this working capital and partial monetization of this overdue. And the final element is Capex for our library. which we anticipate to be slightly lower than H1. So all those four elements give us confidence that we can generate a much more sizable net cash flow in H2 rather than H1.

So I got it right. You expected about $90 million in H2. in the net cash flow in the second half. So that should mean that net interest bearing debt should be about 900 million at the year end 2025. Correct. Are there any other costs? No, that's correct.

At constant effects, yes.

Yeah, so it should be about 900.

You have the increased interest, I think, on top, but I mean, it's... Yes, okay. What do I have on top, I'm sorry? The accrued interest at the end of December, because we pay our debt as per the bond documentation in March and end of October.

All right. I don't see how that's a negative impact.

It's basically more or less half of your interest cost for a semester for 2025.

Okay. Yeah, yeah, yeah. Okay. Thanks a lot for taking my questions. Have a great rest of the summer. Thank you.

Thank you. Bye.

Thank you. Your next question comes from the line of Kevin Roger from Kepler Sofa. Please go ahead.

Yes. Hi. Good evening. Thanks for taking the question. I would have two, please. The first one is maybe on your strategy regarding capex on new multi-client survey and nodes referring to the fact for example that during their conference call and earning presentation one of your peer and partner tgs mentioned that their partner was participating with less capex to the new survey and from what i understand laconia in the gulf of mexico is probably one of the key example where it seems that your participation to the project is now close to 30%. So I was wondering in terms of strategic investment and the tech that you're going to take in new multi-client survey, how should we think about your positioning inside the industry with those examples that we had from TGS a few weeks ago? And the second one is, on Geoscience that continues to be one of the very strong performance units for you. You still continue to increase the number of petaflops. You are now close to 600. So it has been a massive increase over the past year. At the end, can you again give us a bit of color on how much petaflop you need for external revenue, but also for internal research and development, etc.? ? and where you want to go for the petaflop capacity at the group level. Viridian, please.

Thank you, and good evening, Kevin. So first, your question on the multi-client capex. We have a, as I was explaining, we have a portfolio approach, right? We have three buckets. The repro is one where we look at data where we can add value. We look at the core bases and how do we... and our footprint, and we look at the, you know, strategically positioning and potentially frontier bases in the future, like we did in Europe, for example, where I was giving the example of Northeast Brazil. Now, the other dimension to that is the partnership, and more and more, and I did comment on that in the past, we're looking for partnerships because it helps manage the risk of the portfolio, and so we do this opportunistically, And in that case, there was an opportunity and willingness to do that. It took two or three to be able to do that. And where each of the parties sees the benefits for doing it. So I'd say you will continue to see us managing our portfolio, investing in the different types of investments. Some are more risky, some are less risky, and then continuing to look for partnership on the opportunistic basis to manage the portfolio risk. There is not one strategy. It's a bit of a case-by-case basis on our appreciation of the project and the appetite for other partners to join forces. The second one of geoscience, there's not an exact science to it. When I joined the company 12 years ago, we had 30 petaflops, and I thought 30 was a extremely high number, and now we're at 600. And so the petaflop follows the need for more computing as we advance technology. So there's a bit of a, it goes hand in hand with advancing technology, providing value to the client, because that's the bit you need to be checking, making sure you can charge for it, and then you can deliver value to the client. And so we gradually increase it and enhance, And if we test the market and see that the technology advances, bringing value to the clients and the clients are willing to buy that technology, we'll continue implementing that. Keep in mind that our computing is highly optimized. So perhaps to do what we do, if you took someone that didn't optimize their computing power, maybe they need two or three or four or five times more computing power. So it's a big number. The number, in absolute terms, doesn't mean completely everything, all of it, because it is, again, highly specialized and highly optimized for what we do. So where is it going? My suspect, as technology continues to advance, as we're being more and more precise in what we can deliver using more advanced algorithms, more advanced definitions and precision, I think we'll cross the 1,000 petaflops in the next few years, is my guess. And we do have a multi-year plan that eventually takes us there. I can't tell you today when because there's a cost associated to it. And we need to make sure as we do that that we can deliver the value and charge for it in the market.

Okay. Okay. Thanks for all those questions. Sure.

Thank you. Thank you. Your next question comes from the line of Baptiste Lebac from Odo BAS, please go ahead.

Yes, good evening everybody. Just two very quick questions, I guess, from my side. The first one is a technical one regarding Accel and your, let's say, industrial footprint. Do you need to increase your, let's say, capacity? In other words, do you need to put some additional capex if there is a strong acceleration of demands? And still on the technical side, is it a solution with no cables between the different nodes? And second question, Sophie, you mentioned, let's say, the resilience of national oil companies. Could you give us a split of your, let's say, I don't know, cells in DDA, for example, between NOC, IOCs, and independent? Thank you.

Okay, so thank you and good evening, Jean-Baptiste. So in Excel, what makes it different is it's a node, and a node meaning it's independent, it's by itself. And what that allows to do, first of all, it's super small, and you can put it in a backpack and you can drop it, and that makes a huge difference from the past. The nodes in the past had to be planted in the ground and that increased the operation. It was more heavy, heavier operations. So this one is smaller, can be put in the backpack, the person can be walking and just dropping the note. So that's what makes it different. And as I was saying, the market is generally shifting from cable system when the sensors were connected between each other through cables to just independent notes that are sitting on the floor. That's the technical side of AXA, and there's a really impressive value proposition, and the clients are reacting very well to that. The NECs, they've always been in our mix, and sometimes they go up and they go down, but in general, I would say they represent somewhere, if I look at DDE, somewhere around 20% to 30% of our revenues. And it could vary. SMO is, we don't sell to E&P companies. We sell to acquisition companies. But I say in SMO, our exposure to NOC is even higher because eventually we're selling to acquisition companies that are very much operated in countries that are NOC driven, like the Middle East, Pakistan, India, South America. But in the In the DDE side, it's much more balanced, you know, between the different client profiles. We call it a third. To make it simple, probably a third. Third, you know, IEC is a third or 20% to 30% in large independents and then national companies. And we work with everyone.

I think that is your question on the manufacturing portfolio. footprint and the impact of Excel has no impact. The way we manufacture this product, like any other product for Excel, is a mix of in-house manufacturing and outsourcing to suppliers. In-house is usually the electronics and and we have the capacity to do another product like Excel.

Thank you very much.

Thank you. Thank you. As a reminder, if you would like to ask a question, please press star 1 and 1 on your telephone. That is star 1 and 1 if you would like to ask a question. We will now go to your next question. which is a follow-up question from the line of Jean-Luc Romain from CIC Market Solutions. Please go ahead.

Yes, thank you. Just a follow-up. After the law in the United States passes, the big digital law, as the administration calls it, do you see a renewed or do you there could be renewed interest in carbon capture and in safety for carbon capture projects as the credits have been extended or something?

Yes, Jean-Luc, I'll take that one. It's actually, if anything, right now we're seeing a slowdown in the CCUS phase. A lot of those projects were driven by the traditional oil and gas clients. And they just are arbitrating more towards oil and gas. If you remember throughout the downturn and the energy transition or the COVID era, where energy transition became more important, they cut more their E&P capex and created money, carved out money for the low carbon and other initiatives. And right now what we're seeing is a little bit the opposite, where oil and gas is being preserved more than the carbon sequestration project. So if anything, we're seeing, in general, a slowdown in that space, things being delayed.

Thank you.

Sure.

Thank you. There are currently no further phone questions. I will hand the call back to Sophie.

Thank you very much. I appreciate you taking the time. It's a really, really busy time of the year. and for the good questions, and wish everyone a good break, summer break, and we'll see you in September.

Thank you, everybody.

Have a good night. Bye.

Thank you. This concludes today's conference call. Thanks for participating. You may now disconnect.