Viridien S/Adr

Good day and thank you for standing by. Welcome to the Viridian Full Year 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1, 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1, 1 again. If you wish to ask a question via the webcast, please use the Q&A box available on the webcast link anytime during the conference. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Alexandra Leroy. Please go ahead.

Thank you. Good morning and good afternoon, everyone. Thank you for joining us today for Viridian's full year 2025 results presentation. I'm Alexandre Bollonroy of Investor Relations and Corporate Finance. We are hosting today's call from Paris, and I'm pleased to be joined by Sophie Soffiat, our chair and CEO, and Gérôme Serre, our group CFO, who will walk you through our performance. Before we begin, a few housekeeping items. This call is being recorded and is accessible via both phone and online platforms. An audio replay will be available shortly on our website, www.viridangroup.com. The presentation slides are also available for 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. sealed with the French Financial Market Authority, AMS. As usual, we'll conclude with a Q&A session. And finally, a quick reminder that the periodian comments primarily on segment figures, which reflect our internal management reporting, did differ from IFRS numbers also produced today, due to IFRS 16 impacts on our Earth Data Business account. With that, I now hand over to management, Starting with Sophie, who will take you through the key business highlights for the quarter. Sophie, the floor is yours.

Thank you very much, Alexandre. Good morning and good afternoon, ladies and gentlemen. I'm now on slide two. 2025 has been a very strong year. I would even say it has been pivotal in advancing the asset-light technology differentiated strategy that we initiated in 2018. as we are no longer exposed to vessel capacity, either directly or indirectly. 2025 was also a key year in our financial transformation. We successfully refinanced our bonds, extending their maturity to 2030, and generated a significant amount of cash, which we fully allocated to deleveraging the company. And more concretely, We generated revenues of nearly $1.2 billion, up 4% year-on-year. Performance was very strong across our data, digital, and energy transition businesses, with overall top-line growth of 8%. Geoscience once again delivered strong performance, leveraging our unique business model and clear competitive advantages in subsurface imaging. Earth data also performed well. supported by sustained customer demand for our advanced data sets in mature and strategic frontier basins, as well as by recent industry consolidation. Beyond revenue growth, profitability improved further, with segment-adjusted EBITDA exceeding $550 million. Net income increased by 40% year-on-year. We also delivered strong cash generation. Net cash flow reached $107 million. exceeding our full year 2025 guidance, driven by our first year of operations following the full implementation of our asset-light strategy, solid operating performance, and disciplined cash management. All the net cash flow generated was allocated in delivery. As per our commitment, combined with the refinancing completed last March, during which we reduced the principal amount of our bonds, This enabled us to lower growth debt by $230 million year-on-year at constant exchange rates. Moving on to quarterly performance by business line, I'm on slide four, starting with Geoscience. Four years 2025 was another solid year of revenue growth combined with continued productivity gains. Geoscience external revenues increased by 10%, reaching nearly $450 million. Performance was once again driven by three core basins of U.S. Gulf, Brazil, and Norway, where we delivered a significant volume of OBM imaging projects for leading IOCs and NOCs. The Middle East also showed solid momentum, particularly in Abu Dhabi and Saudi Arabia. Productivity per employee continued to improve, up 13% to 317%. $387,000 per employee, and this reflects our continuous improvement initiative and our increasing use of computing and AI to produce high-quality data-driven outputs while continuing to enhance efficiency. Backlog at year-end 2025 stood at $256 million, down from last year, while still providing good visibility and confidence as we move into 2026. Moving on to slide five, you can see how our unique differentiated business model enabled us to reinforce our competitive edge and consolidate our global leadership in subsurface imaging. Subsurface imaging is the highest value add activity across the entire seismic value chain. It is not a commodity service business. It requires elite talent, leading innovation and technology for scale, three structural barriers to entry. We support these with excellence in our services. A winning business model rests on two core pillars. First, people. We recruit and retain the very best experts worldwide and foster a culture of excellence. This is critical to addressing the most complex of the subsurface challenges that our clients bring to us. To give you an example, we enable clients to make exploration plans in areas that they historically would have discarded or deemed too risky, thus potentially improving their reserves. In 2025 alone, Geoscience received more than 8,000 postgraduate applications from leading universities and engineering schools worldwide. As every year, fewer than 1% were selected to join our team. This level of selectivity ensures that we work with the most talented, creative, and technically advanced experts in our field. We also maintain strong academic and scientific credibility. In 2025, 77 peer-reviewed technical papers were published by our team. And among them, we received the 2025 EAG Award for Best Paper in first break, one of the industry-leading technical publications. The award-winning paper highlights how our high-frequency four-way form imaging significantly enhances imaging and reservoir characterization in complex environments such as the band. The second pillar of our model is our deep expertise in algorithmics and high-performance computing. From the selection and optimization of the algorithm, software and hardware infrastructure, To the execution across tens of thousands of processing units 24 by 7, subsurface imaging requires highly customized, exceptional, and reliable computing capabilities. At year-end 2025, a proprietary infrastructure approached 700 petaflops of computing power. Excluding hyperscalers, which operate in a different category, This places us among the top five industrial players worldwide in terms of computing capacity. To give you a sense of scale, our computing power exceeds that of many national weather forecasting agencies or publicly funded nuclear research institutes. Cyclic data processing is one of the most demanding computing activities, with datasets reaching several hundreds of terabytes and growing further with the development of OBN technologies. And to continue addressing increasingly complex reservoir challenges, we invest continuously in our infrastructure. In that context, we have just approved the expansion of our U.S. HPC center with a phased investment plan over the next three years. This will ensure we remain at the forefront of the industry and continue to consolidate our leading global market. And finally, I would like to reiterate that high-end subsurface imaging provides value across the exploration, the development, and production value chain. In 2025, two-thirds of geoscience revenues were generated from development and production-related work. This makes the geoscience business structurally less sensitive to oil price volatility than more exploration-driven segments. And this performance is supported by a well-diversified client base, including national oil companies, majors, and independents worldwide. Now turning to slide six for the EarthData performance review. In four years 2025, EarthData delivered solid performance with revenues up 6% year-on-year. This growth was driven by two main factors. First, Sustained industry demand for high-quality data, both in mature basins and in high-potential frontier areas, where we are strategically positioned. And second, transfer fees generated by recent industry consolidation. Excluding transfer fees, which are a normal and recurring component of the multi-client business model, after-sales remain similar to the previous year. As of the end of December 2025, the net book value of our Earth data libraries to that $494 million. I'm now on slide seven to discuss our Earth data strategy and performance in more detail. While our primary focus remains on our core and most active offshore region, Norway, Brazil, and the U.S. Gulf, we continue to selectively assess attractive frontier opportunities. Now that we're no longer exposed to vessel ownership, which, when underutilized, can significantly weigh on cash flow and profitability and create incentives to produce suboptimal projects, we approach the multi-client business with a very disciplined portfolio framework. Our strategy combines highly profitable legacy data reprocessing projects, leveraging our unique subsurface imaging capabilities, with continued investment to strengthen our competitive positions in our three core offshore basins, Norway, the U.S. Gulf, and Brazil, while also making selective strategic moves into highly prospective frontier areas. In 2025, given the scale of the Laconia and Azera OBN projects, approximately 80% of our multi-client capex was allocated to reinforcing our library in our core basin. As a rule of thumb, in general, out of the roughly $200 million of multi-client capex we invest annually on average, reprocessing typically represents $30 to $40 million, or 15 to 20%. Emerging basins account for approximately 10 to 15%, meaning that around two-thirds of our yearly investments are normally directed towards a three-course basin. This disciplined allocation strategy once again delivered strong results in 2025 with cash EBITDA reaching $178 million and revenue to CapEx ratio of 2.4 times. Now moving on to slide eight, covering sensing and monitoring performance. For your 2025 sensing and monitoring, Revenues decreased slightly, posting negative 5% year-on-year, landing at $315 million. Some deliveries in our land business that were expected in Q4 were postponed to 2026. Overall, the picture for the year remains consistent with what we have previously indicated. The market dynamic in the marine segment was more subdued, but this was partly offset by the strength in our install base in the land segment. In land, our technologies continue to lead the market, both through our established product lines, such as the 528, WING, and through our new solutions like Accel. Now turning on to slide 9 for further insight into our sensing and monitoring strategy. CERCEL was founded in 1963 and is the incumbent leader in seismic equipment, software, and solutions design. The core recurring business of SMO is resilient through the cycle, supported by our streamlining efforts together with a large product portfolio. The largest install base worldwide and sustained R&D efforts that allow us to regularly launch new innovative products and solutions. Our services share of our core revenue represented around 15% and is growing, and our global market share is around 50%. The legacy activity represents 80% of total SMO revenue. To beyond this, reaching 20% of SMO revenue, we're actively pursuing a diversification strategy, leveraging our technological expertise across adjacent markets. Infrastructure monitoring includes surveillance, advisory services, and structural testing. This business has experienced good momentum for several years now, with revenues that grew by a further 20% in 2025. We are also expanding in defense markets, where demand for our specialized cables and subsea monitoring solutions are growing. Long-term framework agreements are currently under discussion with strategic partners. Another growth avenue comes from adapting our marine operational management platform, initially developed for seismic applications to new cases, use cases such as operational efficiency and safety enhancement for ports and offshore oil field infrastructure. In 2025, we also completed the restructuring plan launched two years ago at SMO. Our operations have been streamlined, allowing us to unlock additional value growing forward. And our efforts increased business resilience through the cycle by reducing SMO's cost base by $13 million, bringing EBIT and cash break even down to levels close to the lowest revenue environment experienced over the past decade, around $280 million, while also releasing $60 million of working capital. With that, I'll now hand over to Jérôme, who will talk you through, walk you through the financial performance review.