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, 2024 – CGG (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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