Viridien · EURONEXT:VIRI

Viridien — CGG — Non-Deal Roadshow (June 2016)

36 slides from Viridien's roadshow presentation, June 2016

1. Slide 1: Roadshow presentation

   Roadshow presentation Transformation Plan on track and strong cash generation Q1 2016 results strongly impacted by very low volumes Catherine Leveau, SVP Investor Relations, June 2016 All results are presented before Non-Recurring Charges & write-off, unless stated otherwise

2. Slide 2: Forward-Looking Statements

   Forward-Looking Statements This presentation contains forward-looking statements, including, without limitation, statements about CGG (“the Company”) plans, strategies and prospects. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore,

3. Slide 3: Our vision in 2016

   Our vision in 2016  Geology, Geophysics&Reservoir to represent 60% of revenues Portfolio Rebalancing  2/3 of the fleet dedicated to Multi-Client programs Towards  Multi-client vessel utilization: 70% in Q2 and 60% in Q3 Geoscience  SIR: focus on high-end added-value businesses and solutions Cont

4. Slide 4: Severe cost-cutting measures implemented over two years

   Severe cost-cutting measures implemented over two years Marine cost structure G&A expenses (base) 100 ($m) 216 (64)% (54)% 72 147 99 36 18 13 8 vessels vessels vessels YE 2013 YE 2014 YE 2015 2013 2014 2015 Full cost base including Depreciation & Amortization Headcount(1) Total Capex(2) (number of e

5. Slide 5: Proactive Debt Monitoring

   Proactive Debt Monitoring Refinancing implemented early and continuously in the cycle - Issuance of two new HYB maturing in 2020 and 2022, in Q2 2014, to refinance most of 2016 debt maturities - 2019 Convertible Bonds exchange offer, in Q2 2015, 90% successful - New 2019 Term Loan issued, in Q4 2015

6. Slide 6: A €350m equity increase to finance the transformation of CGG

   A €350m equity increase to finance the transformation of CGG New & Previous Transformation Plan: c.$300m of forward cash costs Cost of the November 2015 Origin of forward cash costs Timing of forward cash out Transformation Plan 200 200  $950m non-cash write-off in Q3 2015 100 100  $187m restructu

7. Slide 7: A dynamic transformation focused on less capital-intensive businesses

   A dynamic transformation focused on less capital-intensive businesses to weather the downturn  A rebalanced portfolio to manage the cycle with the right format  Overhead structure reduced by 55% and breakeven lowered in all businesses  R&D kept at high levels to maintain clear technology leadersh

8. Slide 8: Operational Review

   Operational Review GWccc Passion for Geoscience

9. Slide 9: Geology, Geophysics & Reservoir

   Geology, Geophysics & Reservoir

10. Slide 10: Multi-Client 2015: Active in safe harbors

    Multi-Client 2015: Active in safe harbors Multi-Client Dec’-end NBV  2015 sales at $546m, with strong Q4 at $243m  FY cash prefunding rate at 102% versus 86% in 2014  After-sales at $256m, up 38%  Solid demand for offshore high-quality images in traditional legacy basins: GoM 25%, North Sea 25%,

11. Slide 11: Multi-Client: World's most technically advanced data library in key locations

    Multi-Client: World’s most technically advanced data library in key locations will drive cash generation in 2016-2018  Harvest recent programs GoM lease round cycle (number of blocks) Expiration by Areas (EB, AC, GB, KC, GC, WR) Blocks  Once-in-decade opportunity for clients to 1 000 acquire block

12. Slide 12: Subsurface Imaging & Reservoir (SIR): A resilient and profitable business

    Subsurface Imaging & Reservoir (SIR): A resilient and profitable business  Subsurface Imaging 140 Processing Capability  Highly skilled engineers producing new PBytes 45 algorithms - 1,950 staff globally 120 PFlops 40 CPU(1)  Expanding computing power to handle large 100 35 data volumes - 11th in

13. Slide 13: GGR FY 2015: Sustained profitability despite slowdown in revenue

    GGR FY 2015: Sustained profitability despite slowdown in revenue GGR Revenue SIR ($m) MC Revenue 1,384 1,296  Total revenue at $1,108m, down (20)% y-o-y 1,108 697 676  Multi-Client revenue at $546m, down (21)% y-o-y 562 o With MC Cash Capex cut by half y-o-y 687 546 620  Subsurface Imaging (SI) &

14. Slide 14: GGR Q1 2016: Profitability impacted by low volumes and weak Multi-Client after-sales

    GGR Q1 2016: Profitability impacted by low volumes and weak Multi-Client after-sales GGR Revenue  Total revenue at $164m, down (31)% y-o-y (In million $) MC Revenue  25% of fleet dedicated to multi-client production SI & Reservoir 385  Fleet dedicated to multi-client expected to be 70% in Q2 and

15. Slide 15: Equipment

    Equipment ccc Passion for Geoscience

16. Slide 16: Equipment: A leadership position in an unprecedentedly difficult seismic equipment market

    Equipment: A leadership position in an unprecedentedly difficult seismic equipment market Marine: a leadership position in a tough market impacted by vessel withdrawal  Demand for new streamers sustained by oceanography and hydrography  Activity also sustained by replacement and repair of damaged

17. Slide 17: Equipment: Historically good profitability impacted by lower volumes

    Equipment: Historically good profitability impacted by lower volumes in the last two years Revenue 2015 sales at $437m (In million $)  Marine Equipment Land Equipment 1,045  69% Land and 31% Marine 802 453  Low volumes impacted by weak 287 land and marine sales 437  Marine sales levels only sust

18. Slide 18: Equipment Q1 2016: Strongly impacted by very low volumes

    Equipment Q1 2016: Strongly impacted by very low volumes Revenue (In million $) Land Equipment  Total sales at $73m, down (42)% y-o-y Marine Equipment  Particularly low volumes in Q1 125  72% Land and 28% Marine equipment 103 54 27  Internal sales at $11m, stable 73 21  EBITDAs at $(1)m 71 76 5

19. Slide 19: Contractual Data Acquisition

    Contractual Data Acquisition

20. Slide 20: Marine: A significant fleet downsizing

    Marine: A significant fleet downsizing  Pre-exploration and new frontier exploration currently halted CGG Average Fleet Trend  Reduced demand for deep and ultra deep water programs  Significant industry marine overcapacity  Recent industry vessels stacked and ready to resume service at limited c

21. Slide 21: Contractual Data Acquisition FY 2015: Difficult market conditions

    Contractual Data Acquisition FY 2015: Difficult market conditions Contractual Data  Total revenue at $616m Land & MP Acquisition Revenue (In million $) Marine  Marine revenue at $439m 2,226 440  Land & Multi-Physics total revenue at $177m 1,057  EBITDAs at $(24)m, a significant y-o-y 1,786 279 r

22. Slide 22: Contractual Data Acquisition Q1 2016: Weak market conditions

    Contractual Data Acquisition Q1 2016: Weak market conditions, Perimeter effects & Transformation Plan implementation Contractual Data  Total revenue at $89m, down (59)% y-o-y Acquisition Revenue (In million $) Land & MP Marine  Marine revenue at $58m, down (66)% y-o-y 219  75% dedicated to contra

23. Slide 23: Non-Operated Resources (N.O.R) in Q1 2016

    Non-Operated Resources (N.O.R) in Q1 2016 Non-Operated Resources OPINC  EBITDAs at $(10)m (In million $)  Operating Income at $(27)m Q1 2015 (1) Q4 2015 Q1 2016  Amortization of excess streamers and lay-up (3) costs (14)  Gradual cold-stacking of vessels negatively (27) impacting operating incom

24. Slide 24: Financial Review

    Financial Review 24

25. Slide 25: Q1 2016: P&L

    Q1 2016: P&L In Million $ Q1 2016 Total Revenue 313 Group EBITDAs excluding NOR 37 NOR (10) Group EBITDAs 27 Group OPINC excluding NOR (54) NOR (27) Group OPINC (81) Equity from Investments 5 Non-recurring charges (6) Net financial costs (41) Taxes (6) Net Income (130)  Group EBITDAs at $27m, EBITD

26. Slide 26: Q1 2016: Strong cash generation

    Q1 2016: Strong cash generation EBITDAs (In million $)  EBITDAs at $27m, down (81)% y-o-y 282  Operating Cash Flow at $238m, up 105% y-o-y 145  Not including $(42)m non-recurring payments related to the Transformation Plan 25.5% 47.8% 27 8.7%  Capex at $88m, down (20)% y-o-y Q1 2015 Q4 2015 Q1 2

27. Slide 27: Debt profile: No major debt instalment before 2019

    Debt profile: No major debt instalment before 2019  €/$ closing rate at 1.14  Average Maturity, excluding RCF, at 4.2 years as of end March 2016  Average cost of debt, excluding RCF, at 5.4%  $275m French RCF extended to June 2018 27

28. Slide 28: Q1 2016: Strong liquidity and stable leverage ratio

    Q1 2016: Strong liquidity and stable leverage ratio Liquidity by end March  Group Liquidity (available cash plus undrawn RCF) at $853m  Post c.$370m net proceeds of the rights issue  US & French RCF fully undrawn by end of March RCF Covenant Headroom  Group Net Debt at $2,102m as of 5,25x 5,00x

29. Slide 29: Conclusion

    Conclusion (ccc cgg.com Passion for Geoscience

30. Slide 30: Geoscience Solutions at all scales

    Geoscience Solutions at all scales : A dynamic transformation focused on less capital-intensive businesses Petroleum reservoir engineering Reservoir modeling Reservoir field and history matching development studies Well log interpretation Seismic reservoir characterization Seismic Licensing round Ac

31. Slide 31: Focus on Transformation Plan Execution and Cash Generation

    Focus on Transformation Plan Execution and Cash Generation  A depressed Oil & Gas environment  Unprecedented sequence of E&P investment cuts  Q1 2016 turned out to be one of the weakest ever  High uncertainties and volatility remaining  Increasing evidence of a supply and demand mid-term tighte

32. Slide 32: Thank you

    Thank you (ccc Visit our website at cgg.com Passion for Geoscience

33. Slide 33: Group Organization Chart

    wa Croup Organization Chart penta a ot atren 3, 2016 Q 33

34. Slide 34: Portfolio of high-value assets

    Portfolio of high-value assets  $3.7bn Capital Employed by end March 2016  Net debt at $2.1bn / Minority Interests at $0.05bn  Equity at $1.5bn post rights offering  $0.6bn Capital Employed for Contractual Data Acquisition  ~ half related to Investees (ARGAS, SBGS, etc.)  Capital Employed for

35. Slide 35: Q1 2016 Financial Highlights

    Q1 2016 Financial Highlights  In a depressed market environment, CGG delivered a weak operating income  Revenue at $313m, down 45% y-o-y and Operating Income at $(81)m  GGR: very low multi-client revenue after strong Q4, margin impacted by high amortization rate and low after-sales  Equipment: s

36. Slide 36: Q1 2016 Operational Highlights

    Q1 2016 Operational Highlights  Multi-Client  25% of fleet dedicated to multi-client production in Q1, notably active in Brazil  Fleet dedicated to multi-client expected to be 70% in Q2 and 60% in Q3  SI & Reservoir  Successful delivery of the first large high-density broadband integrated surve

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