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CGG Announces its Q1 2023 Results

CGG
CGG

A strong start to the year :

Revenue at $210m, up 37% y-o-y

Ebitda at $66m, up 71% y-o-y

PARIS, France – May 3, 2023CGG (ISIN: FR0013181864), a global technology and high-performance computing (HPC) leader, announced today its first quarter 2023 non-audited results.

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

We delivered a strong start to the year, supported by robust performance in Geoscience, increased Earth Data sales, mainly in the Gulf of Mexico, and expected equipment deliveries in Sensing and Monitoring. I was pleased to see the continued progress of our Beyond the Core activities during the quarter, especially the signature of our first external HPC & Cloud Solutions contract, with BioSymulitics, supplying specialized HPC services to support their AI-enhanced molecular Pharma modelling.
Looking ahead, our clients are ramping up their longer-term exploration efforts with increasing emphasis on efficiency, effectiveness, and lowering their carbon footprint. Based on the market leading position of our advanced technology, across all Business Lines, and the continued growth of the digital and decarbonization markets, CGG is well positioned to answer the needs of our clients, reinforcing our confidence in delivering our 2023 objectives.  

Q1 2023: A strong start to the year

 

  • IFRS figures: revenue at $178m, EBITDAs at $34m, OPINC at $7m

  • Segment revenue at $210m, up 37% year-on-year.

    • Geoscience at $79m, up 5% year-on-year. Sustained growing activity worldwide and increased level of order intakes, up 31% year-on-year.

    • Earth Data at $65m, up 47% year-on-year, as clients are returning to exploration. Prefunding revenue at $35 m and after-sales stable year-on-year at $30m.

    • Sensing and Monitoring at $66m, up 95% year-on-year. Better quarter than anticipated thanks to early streamer equipment deliveries. Significant commercial opportunities for land equipment and OBN sales.



  • Segment EBITDAs at $66m up 71% year-on-year, a 31% margin.

  • Segment Operating income at $13m.

  • Group Net loss at $(16)m.



Cash flow and balance sheet

 

  • Net cash flow at $1m including $(4)m negative change in working capital & provisions.

  • Cash liquidity of $301m as of March 31, 2023, excluding $95m undrawn RCF.

  • Net debt before IFRS 16 at $905m as of March 31, 2023.



Post closing event

 

  • On April 5, Fitch Ratings has upgraded CGG SA's to 'B' from 'B-', and its USD500 million and EUR585 million notes due 2027's seniorsecured rating to 'B+' from 'B'. The Recovery Rating on the notes is 'RR3'. The Outlook on the Long-Term IDR is Stable.

 

Key Figures - First Quarter 2023

Key Figures IFRS - Quarter
In million $

2022
Q1

2023
Q1

Variances %

Operating revenues

175

178

2%

Operating income / (loss)

11

7

(40%)

Equity from investment

0

0

-

Net cost of financial debt

(26)

(24)

7%

Other financial income / (loss)

7

3

(59%)

Income taxes

(9)

(1)

83%

Net income / (loss) from continuing operations

(16)

(16)

3%

Net income / (loss) from discontinued operations

(2)

(0)

93%

Group net income / (loss)

(19)

(16)

14%

Operating cash flow

130

54

(58%)

Net cash flow

68

1

(99%)

Net debt

925

994

7%

Net debt before lease liabilities

807

905

12%

Capital employed

1,917

2,035

6%

Key Segment Figures - First Quarter 2023

Key Segment Figures - Quarter
In million $

2022
Q1

2023
Q1

Variances %

Segment revenue

153

210

37%

Segment EBITDAs

39

66

71%

EBITDAs margin

25%

31%

6 bps

Segment operating income / (loss)

(5)

13

-

OPINC margin

(3%)

6%

9 bps

IFRS 15 adjustment

16

(6)

-

IFRS operating income / (loss)

11

7

(40%)

Operating cash flow

130

54

(58%)

Segment net cash flow

68

1

(99%)

Key figures bridge: Segment to IFRS - First Quarter 2023

P&L items
In million $

Segment figures

IFRS 15 adjustment

IFRS figures

Total revenue

210

(32)

178

OPINC

13

(6)

7

 

 

 

 

Cash Flow Statement items
In million $

Segment figures

IFRS 15 adjustment

IFRS figures

EBITDAs

66

(32)

34

Change in working capital & provisions

(4)

32

28

Cash provided by operations

54

-

54

 

 

 

 

Earth Data Data Library NBV
In million $

Segment figures

IFRS 15 adjustment

IFRS figures

Opening balance sheet , Jan 1st 23

283

109

392

Closing balance sheet , Mar 31th 23

291

133

424

First Quarter 2023 Segment Financial Results

Digital, Data and Energy Transition (DDE)

Data, Digital & Energy Transition (DDE)
In million $

2022
Q1

2023
Q1

Variances %

Segment revenue

119

144

21%

Geoscience

75

79

5%

Earth Data

44

65

48%

Prefunding

14

35

-

After-Sales

30

30

-

DDE proforma

119

144

21%

Segment EBITDAs

57

71

24%

EBITDAs Margin

48%

49%

1 bps

Segment operating income

22

25

12%

OPINC Margin

18%

17%

(1) bps

Capital employed (in billion $)

1.5

1.5

-

Other Key Metrics

 

 

 

Earth Data cash capex ($m)

(33)

(28)

(16%)

Earth Data cash prefunding rate (%)

42%

126%

84 bps

Digital, Data and Energy Transition (DDE) segment revenue was $144 million, up 21% year-on-year.

ADVERTISEMENT
  • Geoscience (GEO) revenue was $79 million, up 5% 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 31% year-on-year at the end of March sustained by demand for high-end integrated projects and disruptive imaging technologies.

  • Earth Data (EDA) revenue was $65 million, up 47% year-on-year.

Earth Data cash capex was $(28) million this quarter, down (16)% year-on-year with one marine streamer program offshore Brazil. Prefunding revenue was solid at $35 million, up 152% and prefunding rate was at 126%. After-sales were at $30 million this quarter, stable year-on-year mainly driven by the US Gulf of Mexico.

The segment library Net Book Value was $291 million ($424 million after IFRS 15 adjustments) at the end of March 2023.

DDE segment EBITDAs was $71 million, up 24% year-on-year, a solid 49% margin.

DDE segment operating income was $25 million, up 12% year-on-year.

DDE capital employed decreased to $1.4 billion at the end of March 2023.

Sensing and Monitoring (SMO)

Sensing and Monitoring (SMO)
In million $

2022
Q1

2023
Q1

Variances %

Segment revenue

34

66

95%

Land

20

13

(34%)

Marine

6

34

-

Downhole gauges

4

6

53%

Non Oil & Gas

4

12

-

Segment EBITDAs

(12)

0

97%

EBITDAs margin

(40%)

(1%)

35 bps

Segment operating income / (loss)

(19)

(7)

63%

OPINC Margin

(64%)

(11%)

46 bps

Capital employed (in billion $)

0.5

0.6

20%

Sensing and Monitoring (SMO) segment revenue was $66 million, up 95% year-on-year.

  • Low level of land equipment sales at $13 million due to timing of deliveries.

  • Marine equipment at $34 million and better than anticipated due to early deliveries of asset of streamer for oceanographic operations. Significant commercial opportunities for OBN equipment deliveries over the next quarters.

  • Downhole sales were $6 million, stable year-on-year.

  • Beyond the Core revenues were high at $12 million.

SMO segment EBITDAs was $0 million.

SMO segment operating income / (loss) was $(7) million.

SMO capital employed increased to $0.6 billion at the end of March 2023.

First Quarter 2023 Financial Results

Consolidated Income Statements
In million $

2022
Q1

2023
Q1

Variances %

Exchange rate euro/dollar

1.12

1.07

(4%)

Segment revenue

153

210

37%

DDE

119

144

21%

Sensing & Monitoring

34

66

93%

Segment Gross Margin

23

46

-

Segment EBITDAs

39

66

71%

DDE

58

71

23%

Sensing & Monitoring

(12)

0

97%

Corporate

(5)

(4)

14%

Elim & Other

(1)

0

-

Segment operating income

(5)

13

-

DDE

22

25

10%

Sensing & Monitoring

(19)

(7)

63%

Corporate

(6)

(4)

30%

Elim & Other

(2)

0

-

IFRS 15 adjustment

16

(6)

-

IFRS operating income

11

7

(40%)

Equity from investments

0

0

-

Net cost of financial debt

(26)

(24)

7%

Other financial income (loss)

7

3

(59%)

Income taxes

(9)

(1)

83%

Net income / (loss) from continuing operations

(16)

(16)

3%

Net income / (loss) from discontinued operations

(2)

0

93%

IFRS net income / (loss)

(19)

(16)

14%

Shareholder's net income / (loss)

(18)

(16)

11%

Basic Earnings per share in $

(0.02)

(0.02)

11%

Basic Earnings per share in €

(0.02)

(0.02)

7%

Segment revenue was $210 million, up 37% pro-forma. The respective contributions from the Group’s businesses were 38% from GEO, 31% from EDA (69% for the DDE segment) and 31% from the SMO segment.

Segment EBITDAs was $66 million, up 71% year-on-year, a 31% margin.

Segment operating income was $13 million, a 6% margin. IFRS 15 adjustment was $(6) million and IFRS operating income was $7 million.

Cost of financial debt was $(24) million. Other financial items were at $3million. Taxes were at $(1) million.

Group net loss was $(16) million / €(15) million. And the shareholder net income , after taking minority interests into account, was a loss of $(16) million.

First Quarter 2023 Cash Flow

Cash Flow items
In million $

2022
Q1

2023
Q1

Variances %

Segment Operating Cash Flow

130

54

(58%)

CAPEX

(42)

(52)

24%

Industrial

(4)

(19)

-

R&D

(5)

(6)

6%

Earth Data (Cash)

(33)

(28)

(15%)

Marine Offshore

(32)

(28)

(14%)

Land Onshore

0

0

-

Proceeds from disposals of assets

(1)

(0)

92%

Segment Free Cash Flow

86

2

(98%)

Lease repayments

(13)

2

-

Paid Cost of debt

-

2

-

CGG 2021 Plan

(7)

(6)

13%

Free cash flow from discontinued operations

2

1

(60%)

Net Cash flow

68

1

(99%)

Financing cash flow

1

1

-

Forex and other

-

1

-

Net increase/(decrease) in cash

69

3

-

Supplementary information

 

 

 

Change in working capital and provisions, included in Segment Operating Cash Flow

90

(4)

-

 

 

 

 

Total capex was $(52) million:

  • Industrial capex was $(19) million

  • R&D capex was $(6) million

  • Earth Data cash capex was $(28) million

Segment free cash flow was $2 million, including $(4) million negative change in working capital & provisions. After $2 million lease repayments, $2 million other financial, $(6) million CGG 2021 Plan cash costs, and $1 million free cash flow from discontinued operations, Net cash flow was $1 million.

Balance Sheet 

Group’s liquidity amounted to $301 million at the end of March 31, 2023, excluding $95m undrawn RCF.

Group gross debt before IFRS 16 was $1,206 million$ and net debt was 905 million$ at the end of March 31, 2023. Group gross debt after IFRS 16 was $1,296 million and net debt was $994 million at the end of March 31, 2023.

Segment leverage ratio of Net debt to Segment adjusted EBITDAs was 2.4x at the end of March 2023.

Q1 2023 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 6.30 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, 2023

Unaudited Interim Consolidated statements of operations

 

 

Three months ended March 31,

(In millions of US$, except per share data)

 

2023

2022

Operating revenues

 

178.1

175.4

Other income from ordinary activities

 

0.1

0.2

Total income from ordinary activities

 

178.2

175.6

Cost of operations

 

(138.2)

(136.9)

Gross profit

 

40.0

38.7

Research and development expenses - net

 

(6.9)

(3.2)

Marketing and selling expenses

 

(9.0)

(7.3)

General and administrative expenses

 

(16.5)

(16.3)

Other revenues (expenses) - net

 

(1.0)

(0.8)

Operating income (loss)

 

6.6

11.1

Expenses related to financial debt

 

(25.8)

(26.0)

Income provided by cash and cash equivalents

 

2.0

0.3

Cost of financial debt, net

 

(23.8)

(25.7)

Other financial income (loss)

 

2.8

6.9

Income (loss) before incomes taxes

 

(14.4)

(7.7)

Income taxes

 

(1.4)

(8.6)

Net income (loss) from consolidated companies before share of income (loss) in companies accounted for under the equity method

 

(15.8)

(16.3)

Share of income (loss) in companies accounted for under the equity method

 

0.1

-

Net income (loss) from continuing operations

 

(15.7)

(16.3)

Net income (loss) from discontinued operations

3

(0.2)

(2.2)

Net income (loss)

 

(15.9)

(18.5)

Attributable to :

 

 

 

Owners of CGG S.A

$

(15.6)

(17.5)

Non-controlling interests

$

(0.3)

(1.0)

Net income (loss) per share

 

 

 

Basic

$

(0.02)

(0.02)

Diluted

$

(0.02)

(0.02)

Net income (loss) from continuing operations per share

 

 

 

Basic

$

(0.02)

(0.02)

Diluted

$

(0.02)

(0.02)

Net income (loss) from discontinued operations per share

 

 

 

Basic

$

-

-

Diluted

$

-

-

Unaudited Consolidated statements of financial position

(In millions of US$)

March 31, 2023

December 31, 2022

ASSETS

 

 

Cash and cash equivalents

301.2

298.0

Trade accounts and notes receivable, net

252.3

308.3

Inventories and work-in-progress, net

292.9

257.2

Income tax assets

55.1

53.4

Other current financial assets, net

-

0.1

Other current assets, net

113.1

99.9

Assets held for sale, net

-

-

Total current assets

1,014.6

1,016.9

Deferred tax assets

63.2

24.2

Other non-current assets, net

11.6

8.2

Investments and other financial assets, net

18.2

18.4

Investments in companies under the equity method

10.7

10.8

Property, plant and equipment, net

179.1

167.3

Intangible assets, net

578.9

554.2

Goodwill, net

1,091.1

1,089.4

Total non-current assets

1,952.8

1,872.5

TOTAL ASSETS

2,967.4

2,889.4

LIABILITIES AND EQUITY

 

 

Bank overdrafts

-

-

Financial debt – current portion

90.6

60.4

Trade accounts and notes payables

99.0

92

Accrued payroll costs

75.7

85.6

Income taxes payable

22.3

27.2

Advance billings to customers

29.0

29.4

Provisions — current portion

17.8

17.6

Other current financial liabilities

20.4

20

Other current liabilities

248.2

222.1

Total current liabilities

603.0

554.3

Deferred tax liabilities

57.2

18.7

Provisions — non-current portion

29.9

28.6

Financial debt – non-current portion

1,205.0

1.188.8

Other non-current financial liabilities

16.6

21.8

Other non-current liabilities

14.7

18.4

Total non-current liabilities

1,323.4

1.276.3

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

118.6

Retained earnings

952.9

967.9

Other Reserves

41.7

50

Treasury shares

(20.1)

(20.1)

Cumulative income and expense recognized directly in equity

(3.4)

(3.4)

Cumulative translation adjustment

(97.2)

(102.4)

Equity attributable to owners of CGG S.A.

1,001.3

1.019.3

Non-controlling interests

39.7

39.5

Total equity

1,041.0

1.058.8

TOTAL LIABILITIES AND EQUITY

2,967.4

2.889.4

Unaudited Consolidated statements of cash flows

 

Three months ended March 31,

(In millions of US$)

2023

2022

OPERATING

 

 

Net income (loss)

(15.9)

(18.5)

Less: Net income (loss) from discontinued operations

0.2

2.2

Net income (loss) from continuing operations

(15.7)

(16.3)

Depreciation, amortization and impairment

20.2

22.2

Earth Data surveys impairment and amortization

11.3

31.0

Depreciation and amortization capitalized in Earth Data surveys

(4.7)

(3.8)

Variance on provisions

0.4

(0.8)

Share-based compensation expenses

0.8

0.7

Net (gain) loss on disposal of fixed and financial assets

0.1

(0.1)

Equity (income) loss of investees

(0.1)

Dividends received from investments in companies under the equity method

-

Other non-cash items

(2.9)

(6.9)

Net cash-flow including net cost of financial debt and income tax

9.4

26.0

Less : net cost of financial debt

23.8

25.7

Less : income tax expense (gain)

1.4

8.6

Net cash-flow excluding net cost of financial debt and income tax

34.6

60.3

Income tax paid

(7.1)

1.7

Net cash-flow before changes in working capital

27.5

62.0

Changes in working capital

27.6

67.8

- change in trade accounts and notes receivable

88.5

122.5

- change in inventories and work-in-progress

(31.5)

(20.5)

- change in other current assets

(7.4)

(6.7)

- change in trade accounts and notes payable

(10.5)

(7.8)

- change in other current liabilities

(11.9)

(19.7)

- Impact of changes in exchange rate on financial items

0.4

 

Net cash-flow provided by operating activities

55.1

129.8

INVESTING

 

 

Total capital expenditures (including variation of fixed assets suppliers, excluding Earth Data surveys)

(24.5)

(9.6)

Investment in Earth Data surveys, net cash

(27.8)

(32.7)

Proceeds from disposals of tangible and intangible assets

-

Total net proceeds from financial assets

-

Acquisition of investments, net of cash and cash equivalents acquired

-

(1.4)

Variation in loans granted

-

Variation in subsidies for capital expenditures

-

(0.1)

Variation in other non-current financial assets

1.6

Net cash-flow used in investing activities

(50.7)

(43.8)


 

Three months ended March 31,

(In millions of US$)

2023

2022

FINANCING

 

 

Repayment of long-term debt

0.3

Total issuance of long-term debt

14.3

Lease repayments

(12.5)

(13.1)

Change in short-term loans

Financial expenses paid

1.0

(0.2)

Net proceeds from capital increase:

0.4

— from shareholders

0.1

0.4

— 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

2.6

(12.9)

Effects of exchange rates on cash

1.0

0.1

Impact of changes in consolidation scope

Net cash flows incurred by discontinued operations

(4.8)

(4.3)

Net increase (decrease) in cash and cash equivalents

3.2

68.9

Cash and cash equivalents at beginning of year

298.0

319.2

Cash and cash equivalents at end of period

301.2

388.1

 

Attachment