CGG Announces its Q1 2024 Results

May 14, 2024

Very strong start to the year

Revenue at $273m, up 30% y-o-y

ADJUSTED EBITDAs at $106m, up 58% y-o-y

Net Cash-Flow at $30m

PARIS, France – May 14, 2024CGG (ISIN: FR0013181864), a global technology and high-performance computing leader, announced today its first quarter 2024 non-audited results.

Commenting on these results, Sophie Zurquiyah, CGG CEO, said:

I am very pleased with our first quarter performance. At $273m, we delivered the best first quarter revenue since our strategic decision to become an asset light company in late 2018. Our $30m net cash generation, together with the recent upgrade of our long-term debt by S&P Global Ratings are positive steps of our financial trajectory and balance sheet deleveraging. The continued strong market environment across our core segments, combined with CGG’s recent backlog pick-up, further increases our confidence in achieving our 2024 financial targets.”

Q1 2024: Very strong start to the year

 

IFRS figures: revenue at $249m, EBITDAs at $80m, OPINC at $20m  

Segment revenue at $273m, up 30% year-on-year. Geoscience at $88m, up 11% year-on-year. Global activity remains strong sustained by demand for high-end large projects and NOCs increasing activity.  

Earth Data at $97m, up 50% year-on-year sustained by broader geographical demand. Prefunding revenue at $58m and after-sales up 32% year-on-year at $39m.  

Sensing and Monitoring at $89m, up 35% year-on-year, driven by high deliveries of land equipment.  

Adjusted Segment EBITDAs* at $106m, up 58% year-on-year including $(16)m fees from contractual vessel commitments and a 38% margin.Adjusted Segment Operating income* at $29m, up 107% year-on-year.Group Net Income at $(3)m compared to $(16)m last year.  

Cash-flow and Balance Sheet:

 

Net cash-flow at $30m, including $(20)m fees from contractual vessel commitments.Cash liquidity of $350m as of March 31, 2024, excluding $90m undrawn RCF.Net debt before IFRS 16 at $858m as of March 31, 2024.  

Post closing events:

 

On April 2, CGG and ONGC entered into a final agreement to settle an old litigation for a net cash amount of ~$30m.  

On April 5, S&P Global Ratings (“S&P”) has upgraded our Company’s issuer credit rating to ‘B-‘ from ‘CCC+’.  

2024 Financial objectives:

  The Group reiterates its 2024 financial objectives and its 2024-2025 financial trajectory.

  

Key Figures – First Quarter 2024

Key Figures IFRS 2023 2024 Variances %

  In million $ Q1 Q1 Operating revenues 178 249 40% Operating Income 7 20    Equity from Investment 0 (0) – Net cost of financial debt (24) (24) (2%)    Other financial income (loss) 3 (0) –    Income taxes (1) 2 – Net Income / Loss from continuing operations (16) (3) 83% Net Income / Loss from discontinued operations (0) 0 122% Group net income / (loss) (16) (3) 83% Operating Cash Flow 54 102 88% Net Cash Flow 1 30 – Net debt 994 966 (3%) Net debt before lease liabilities 905 858 (5%) Capital employed 2 035 2 033 (0%)

Key Segment Figures – First Quarter 2024

Key Segment Figures 2023 2024 Variances %

  In million $ Q1 Q1 Segment revenue 210 273 30% Segment EBITDAs 66 105 59% Group EBITDAs margin 31% 38% 7 bps Segment operating income 13 28 114%    Opinc margin 6% 10% 4 bps IFRS 15 adjustment (6) (8) (25)% IFRS operating income 7 20 199% Operating Cash Flow 54 102 88% Net Segment Cash Flow 1 30 –    Supplementary information       Adjusted segment EBITDAs before NRC 67 106 58%    EBITDAs margin 32% 39% 7 bps Adjusted segment operating income before NRC 14 29    Opinc margin 21% 4% (16) bps

Key figures bridge: Segment to IFRS – First Quarter 2024

P&L items Segment figures

  IFRS 15 adjustment

  IFRS figures

  In million $ Total Revenue 273 (25) 249 OPINC 28 (8) 20         Cash Flow Statement items Segment figures

  IFRS 15 adjustment

  IFRS figures

  In million $    EBITDAs 105 (25) 80 Change in Working Capital & Provisions (0) 25 25 Cash Provided by Operations 102 – 102         Earth Data Data Library NBV Segment figures

  IFRS 15 adjustment

  IFRS figures

  In million $ Opening Balance Sheet, Dec 31st 23 311 147 458 Closing Balance Sheet, March 31st 24 308 163 471

First Quarter 2024 Segment Financial Results

Digital, Data and Energy Transition (DDE)

Data, Digital & Energy Transition (DDE) 2023 2024 Variances %

  In million $ Q1 Q1 Segment revenue 144 185 28% Geoscience 79 88 11%    Earth Data 65 97 50%        Prefunding 35 58 65%        After-Sales 30 39 32% Segment EBITDAs 71 103 45%    EBITDAs Margin 49% 56% 7 bps Segment operating income 25 35 40% OPINC Margin 17% 19% 2 bps Equity from investments          Capital employed (in billion $) 1,5 1,5 4%    Supplementary information       Adjusted segment EBITDAs before NRC 71 104 46%    EBITDAs Margin 49% 56% 7 bps Adjusted segment OPINC before NRC 25 35 43% OPINC Margin 17% 19% 2 bps    Other Key Metrics       Earth Data cash capex ($m) (28) (50) 79% Earth Data cash prefunding rate (%) 126% 116% (10) bps

Digital, Data and Energy Transition (DDE) segment revenue was $185 million, up 28% year-on-year.

Geoscience (GEO) revenue was $88 million, up 11% year-on-year.

Geoscience had a very solid activity led by all regions. The level of commercial activity continues to be solid and order intake was up 48% year-on-year at the end of March sustained by continuing adoption of disruptive imaging technologies.

Earth Data (EDA) revenue was $97 million, up 50% year-on-year.

Earth Data cash capex was $(50) million this quarter, up 79% year-on-year. Prefunding revenue was solid at $58 million, up 66% and prefunding rate was at 116%. After-sales were at $39 million this quarter, up 32% year-on-year.

The segment library Net Book Value was $308 million ($471 million after IFRS 15 adjustments) at the end of March 2024.

DDE segment EBITDAs was $103 million, up 45% year-on-year, a solid 56% margin and including $(16)m from contractual vessel commitments.

DDE segment operating income was $35 million, up 40% year-on-year.

DDE capital employed at $1.5 billion at the end of March 2024.

  
Sensing and Monitoring (SMO)

Sensing & Monitoring 2023 2024 Variances %

  In million $ Q1 Q1 Segment revenue 66 89 35% Land 13 39 194% Marine 34 34 (2%)      Downhole gauges 6 5 (6%) Beyond the Core 12 11 (13%) Segment EBITDAs (0) 10    EBITDAs margin (1%) 11% 12 bps Segment operating income (7) 2 125% OPINC Margin (11%) 2% 13 bps Capital employed (in billion $) 0,6 0,5 (16%)    Supplementary information       Adjusted segment EBITDAs before NRC 1 10    EBITDAs margin 1% 12% 11 bps Adjusted segment OPINC before NRC (6) 2 134% OPINC Margin (9%) 2% 12 bps

Sensing and Monitoring (SMO) segment revenue was $89 million, up 35% year-on-year.

High level of land equipment sales at $39 million, up 194% year-on-year.Marine equipment at $34 million stable year-on-year.Downhole sales were at $5 million, stable year-on-year.Beyond the Core revenues were at $11 million.

SMO segment EBITDAs was $10 million.

SMO segment operating income was $2 million.

SMO capital employed at $0.5 billion at the end of March 2024.

First Quarter 2024 Financial Results

Consolidated Income Statements 2023 2024 Variances %

  In million $ Q1 Q1 Exchange rate euro/dollar 1,07 1,09 2% Segment revenue 210 273 30% DDE 144 185 28%    Sensing & Monitoring 66 89 35%    Elim & Other       Segment Gross Margin 46 64 38% Segment EBITDAs 66 105 59% Adjusted Segment EBITDAS* 67 106 58% DDE Adjusted*  71  104  46%    Sensing & Monitoring Adjusted*  1  10  – Corporate Adjusted* (4) (6) (48%)    Elim & Other Adjusted* (1) (2) – Segment operating income 13 28 114% Adjusted Segment Opinc* 14 29 DDE Adjusted*  25 35 40%     Sensing & Monitoring Adjusted*  (6) 2  134% Corporate Adjusted* (4) (7) (68%)    Elim & OtherAdjusted* (1) (1) – IFRS 15 adjustment (6) (8) 199% IFRS operating income 7 20 199%    Equity from investments 0 (0) – Net cost of financial debt (24) (24) (2%)    Other financial income (loss) 3 (0) (101%)    Income taxes (1) 2 243% Net income / (loss) from continuing operations (16) (3) 83% Net income / (loss) from discontinued operations (0) 0 122% IFRS net income / (loss) (16) (3) 83%    Shareholder’s net income / (loss) (16) (3) 81% Basic Earnings per share in $ (0,02) 0,00 100% Basic Earnings per share in € (0,02) 0,00 100%

*Adjusted for non-recurring charges and gains.

Segment revenue was $273 million, up 30% year-on-year. The respective contributions from the Group’s businesses were 32% from GEO, 35% from EDA (67% for the DDE segment) and 33% from the SMO segment.

Segment EBITDAs was $105 million, up 59% year-on-year, including $(16)m from contractual vessel commitments, a 38% margin.

Segment operating income was $28 million, a 10% margin. IFRS 15 adjustment was $(8) million and IFRS operating income was $20 million.

Cost of financial debt was $(24) million and financial income was $0 million. Taxes were at $2 million.

Group net income was $(3) million compared to $(16) million last year.

  

First Quarter 2024 Cash Flow

Cash Flow items 2023 2024 Variances %

    In million $ Q1 Q1   Segment Operating Cash Flow 54 102 88%   CAPEX (52) (58) 11%       Industrial (19) (4) (78%)   R&D (6) (4) (26%)       Earth Data (Cash) (28) (50) 79%   Marine Offshore (28) (50) 79%   Land Onshore 0 0 –   Proceeds from disposals of assets (0) 0 202%   Segment Free Cash Flow 2 44      Lease repayments & Assets Financing 2 (12) –      Paid Cost of debt 2 2 (6%)   CGG 2021 Plan (6) (4) 34%   Free cash flow from discontinued operations 1 1 (4%)      Net Cash Flow 1 30      Financing cash flow 1 (3) (341%)   Forex and other 1 (4) –   Net increase/(decrease) in cash 3 23      Supplementary information         Change in working capital and provisions, included in Segment Operating Cash Flow

  (4)

  (0)

  96%

     

 Total capex was $(58) million:

Industrial capex was $(4) million.R&D capex was $(4) million, down (26)% year-on-year. Earth Data cash capex was $(50) million.

Segment free cash flow was $102 million, including $0 million change in working capital & provisions. After $2 million other financial items, $(12) million lease repayments, $(3) million discontinued operations, Net cash flow was $30 million.

Balance Sheet 

Group’s liquidity amounted to $440 million at the end of March 31, 2024, including $90m undrawn RCF.

Group gross debt before IFRS 16 was 1,207 million$ and net debt was 858 million$ at the end of March 31, 2024. Group gross debt after IFRS 16 was $1,316 million and net debt was $966 million at the end of March 31, 2024.

Segment leverage ratio of Net debt to Segment adjusted EBITDAs* was 2.2x at the end of March 2024.

  

Q1 2024 Conference call

The press release and the presentation are available on our website www.cgg.com at 5:45 pm (CET).An English language analysts conference call is scheduled today at 6.00 pm (CET).

Participants should register for the call here to receive a dial-in number and code or participate in the live webcast from here.

A replay of the conference call will be made available the day after for a period of 12 months in audio format on the Company’s website www.cgg.com.

  
About CGG

CGG (www.cgg.com) is a global technology and HPC leader that provides data, products, services and solutions in Earth science, data science, sensing and monitoring. Our unique portfolio supports our clients in efficiently and responsibly solving complex digital, energy transition, natural resource, environmental, and infrastructure challenges for a more sustainable future. CGG employs around 3,400 people worldwide and is listed on the Euronext Paris SA (ISIN: 0013181864). 

Contacts

Group Communications & Investor Relations
Christophe Barnini
Tel: + 33 1 64 47 38 11
E-Mail: christophe.barnini@cgg.com

   

CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

Unaudited Interim Consolidated statements of operations

(In millions of US$) Notes March 31, 2024 December 31, 2024 ASSETS       Cash and cash equivalents   349,9 327,0 Trade accounts and notes receivable, net   294,9 310,9 Inventories and work-in-progress, net   209,0 212,9 Income tax assets   31,7 30,8 Other current financial assets, net       Other current assets, net   91,2 92,1 Total current assets   976,7 973,7 Deferred tax assets   37,5 29,9 Other non-current assets, net   7,0 6,8 Investments and other financial assets, net   25,2 22,7 Investments in companies under the equity method   1,9 2,2 Property, plant and equipment, net   206,7 206,1 Intangible assets, net   588,8 579,7 Goodwill, net   1 094,1 1 095,5 Total non-current assets   1 961,2 1 942,9 TOTAL ASSETS   2 937,9 2 916,6 LIABILITIES AND EQUITY       Bank overdrafts       Financial debt – current portion   83,2 58,0 Trade accounts and notes payables   104,5 86,4 Accrued payroll costs   76,0 89,1 Income taxes payable   14,6 12,5 Advance billings to customers   22,4 24,0 Provisions — current portion   7,7 8,7 Other current financial liabilities   16,7 21,3 Other current liabilities   253,0 250,3 Total current liabilities   578,1 550,3 Deferred tax liabilities   25,8 24,3 Provisions — non-current portion   30,6 30,1 Financial debt – non-current portion   1 232,4 1 242,8 Other non-current financial liabilities   0,0 0,5 Other non-current liabilities   4,2 4,3 Total non-current liabilities   1 293,1 1 302,0 Common stock: 1,102,899,675 shares authorized and 712,381,115 shares with a €0.01 nominal value outstanding at March 31, 2023   8,7 8,7 Additional paid-in capital   118,7 118,7 Retained earnings   978,2 980,4 Other Reserves   37,0 27,3 Treasury shares   (20,1) (20,1) Cumulative income and expense recognized directly in equity   (1,1) (1,4) Cumulative translation adjustment   (96,5) (90,8) Equity attributable to owners of CGG S.A.   1 024,9 1 022,8 Non-controlling interests   41,8 41,5 Total equity   1 066,7 1 064,3 TOTAL LIABILITIES AND EQUITY   2 937,9 2 916,6        

Unaudited Interim Consolidated statements of operations

    Three months ended March 31, (In millions of US$, except per share data) Notes 2024 2023 Operating revenues 4 248,6 178,1 Other income from ordinary activities   0,1 0,1 Total income from ordinary activities   248,7 178,2 Cost of operations   (192,8) (138,2) Gross profit   55,9 40,0 Research and development expenses – net   (4,9) (6,9) Marketing and selling expenses   (8,8) (9,0) General and administrative expenses   (21,3) (16,5) Other revenues (expenses) – net 5 (1,1) (1,0) Operating income (loss) 4 19,8 6,6 Expenses related to financial debt   (27,4) (25,8) Income provided by cash and cash equivalents   3,1 2,0 Cost of financial debt, net   (24,3) (23,8) Other financial income (loss) 6 (0,0) 2,8 Income (loss) before incomes taxes   (4,5) (14,4) Income taxes   2,1 (1,4) Net income (loss) from consolidated companies before share of income (loss) in companies accounted for under the equity method   (2,4) (15,8) Share of income (loss) in companies accounted for under the equity method   (0,2) 0,1 Net income (loss) from continuing operations   (2,6) (15,7) Net income (loss) from discontinued operations 3 0,0 (0,2) Net income (loss)   (2,6) (15,9) Attributable to :       Owners of CGG S.A $ (3,0) (15,6) Non-controlling interests $ 0,4 (0,3) Net income (loss) per share       Basic $ (0,00) (0,02) Diluted $ (0,00) (0,02) Net income (loss) from continuing operations per share       Basic $ (0,00) (0,02) Diluted $ (0,00) (0,02) Net income (loss) from discontinued operations per share       Basic $ – – Diluted $ – –

See the notes to the Unaudited Interim Consolidated Financial Statements

Unaudited Interim Consolidated statements of comprehensive income (loss)

  Three months ended March 31, (In millions of US$) 2024 2023 Net income (loss) from statements of operations (2.6) (15.9) Net gain (loss) on cash flow hedges 0.3 – Exchange differences on translation of foreign operations (5.8) 5.8 Net other comprehensive income (loss) to be reclassified in profit (loss) in subsequent period (1) (5.5) 5.8 Net gain (loss) on actuarial changes on pension plan 0.0 – Net other comprehensive income (loss) not to be reclassified in profit (loss) in subsequent period (2) 0.0 Total other comprehensive income (loss) for the period, net of taxes (1) + (2) (5.5) 5.8 Total comprehensive income (loss) for the period (8.1) (10.1) Attributable to :     Owners of CGG S.A. (8.4) (10.4) Non-controlling interests 0.3 0.3

Unaudited Consolidated statements of cash flows

    Three months ended March 31, (In millions of US$) Notes 2024 2023 OPERATING       Net income (loss)   (2.6) (15.9) Less: Net income (loss) from discontinued operations 3 (0.0) 0.2 Net income (loss) from continuing operations   (2.6) (15.7) Depreciation, amortization, and impairment   24.2 20.2 Earth Data surveys impairment and amortization   39.0 11.3 Depreciation and amortization capitalized in Earth Data surveys   (3.8) (4.7) Variance on provisions   0.3 0.4 Share-based compensation expenses   0.9 0.8 Net (gain) loss on disposal of fixed and financial assets   – 0.1 Equity (income) loss of investees   0.2 (0.1) Other non-cash items   1.2 (2.9) Net cash-flow including net cost of financial debt and income tax   59.4 9.4 Less : net cost of financial debt   24.3 23.8 Less : income tax expense (gain)   (2.1) 1.4 Net cash-flow excluding net cost of financial debt and income tax   81.6 34.6 Income tax paid   (3.2) (7.1) Net cash-flow before changes in working capital   78.4 27.5 Changes in working capital   22.3 27.6 – change in trade accounts and notes receivable   33.6 88.5 – change in inventories and work-in-progress   0.2 (31.5) – change in other current assets   (2.1) (7.4) – change in trade accounts and notes payable   15.4 (10.5) – change in other current liabilities   (24.8) (11.9) – Impact of changes in exchange rate on financial items   – 0.4 Net cash-flow provided by operating activities   100.7 55.1 INVESTING       Total capital expenditures (including variation of fixed assets suppliers, excluding Earth Data surveys)   (8.3) (24.5) Investment in Earth Data surveys, net cash   (49.9) (27.8) Proceeds from disposals of tangible and intangible assets   0,5 – Total net proceeds from financial assets   – – Dividends received from investments in companies under the equity method   0,2 – Acquisition of investments, net of cash and cash equivalents acquired   – – Variation in loans granted   – – Variation in subsidies for capital expenditures   – – Variation in other non-current financial assets   (3.3) 1.6 Net cash-flow used in investing activities   (60.8) (50.7)        

    Three months ended March 31, (In millions of US$) Notes 2024 2023 FINANCING       Repayment of long-term debt   (0,2) 0.3 Total issuance of long-term debt   — 14.3 Lease repayments   (11.8) (12.5) Change in short-term loans   — — Financial expenses paid   2.0 1.0 Net proceeds from capital increase:   — — — from shareholders   — 0.1 — from non-controlling interests of integrated companies   — — Dividends paid and share capital reimbursements:       — to shareholders   — — — to non-controlling interests of integrated companies   — — Acquisition/disposal from treasury shares   — — Net cash-flow provided by (used in) financing activities   (10.0) 2.6 Effects of exchange rates on cash   (4.1) 1.0 Impact of changes in consolidation scope   — — Net cash flows incurred by discontinued operations 3 (2.9) (4.8) Net increase (decrease) in cash and cash equivalents   22.9 3.2 Cash and cash equivalents at beginning of year   327.0 298.0 Cash and cash equivalents at end of period   349.9 301.2

 

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CGG Announces its Q1 2024 Results

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