Viridien · EURONEXT:VIRI
Viridien — CGG — Q4 2019 Earnings Presentation
28 slides from Viridien's earnings presentation, February 2020
Slide 1: Q4 and Full Year 2019 Financial Results
Q4 and Full Year 2019 Financial Results Strong Operational Performance & Cash Flow Generation All figures are ‘segment figures’ used for management reporting (before non-recurring charges and IFRS 15), unless stated otherwise
Slide 2: Disclaimer
Disclaimer 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, the Company’s ac
Slide 3: Agenda
Agenda 01 2021 Strategy Update 02 Business Overview 03 Financial Overview 04 Outlook & Conclusion 3 Full Year 2019 financial results
Slide 4: CGG 2021 Strategy update
CGG 2021 Strategy update GWeccc Passion for Geoscience
Slide 5: CGG 2021 strategy: transition to an asset-light company
CGG 2021 strategy: transition to an asset-light company Asset light model… … delivered Marine 3-vessel fleet in 2019 Marine partnership with Shearwater Find a strategic partner closed on January 8th, 2020 No longer operate vessels by 2021 Land Last crew stopped early February, 2020 Operations wind d
Slide 6: 2019 business overview
2019 business overview All figures are ‘segment figures’ used for management reporting (including IFRS 16 and before non-recurring charges and IFRS 15), unless stated otherwise
Slide 7: Q4 2019 key highlights
Q4 2019 key highlights Segment Revenue at $396m, down (9)% y-o-y and sequentially up 4% GGR revenue at $275m and Equipment external sales at $121m • Solid Geoscience and Equipment activity • Good multi-client after-sales Segment EBITDAs at $206m, down (12)%, a 52% margin Segment Operating Income at
Slide 8: 2019 key highlights
2019 key highlights Segment Revenue at $1,400m, up 14% y-o-y driven by strong equipment business recovery and high multi-client sales GGR revenue at $960m and Equipment external sales at $441m Segment EBITDAs at $721m, up 30%, a 51% margin Segment Operating Income at $247m, up 74%, including $(86)m
Slide 9: GGR key financial indicators
GGR key financial indicators SEGMENT REVENUE ($m) SEGMENT EBITDAS ($m) & MARGIN Geoscience Multi-Client 652 558 486 68% 70% 69% 5% 0,05 60% 61% 0 231 189 960 913 -0,05 820 -0,1 2017 2018 2019 q4 2018 q4 2019 -0,15 517 575 -17% SEGMENT OPINC ($m) & MARGIN 469 -0,2 333 -0,25 275 211 -0,3 176 396 385 2
Slide 10: Geoscience operational highlights
Geoscience operational highlights Geoscience innovation drives performance Continued solid performance and market leadership position • Fourth quarter 2019 segment revenue of $106 million up 12% sequentially • External order intake at year end, up 23% year-on-year to $427m • External backlog $287m a
Slide 11: Geoscience key business indicators
Geoscience key business indicators TOTAL PRODUCTION ($m) BACKLOG as of DECEMBER 31ST ($m) 495 527 522 Internal production -0,01 -0,02 132 137 External revenue -0,03 145 -0,04 -0,05 286 287 239 395 385 141 137 -0,06 350 -0,07 33 31 -0,08 108 106 -0,09 2017 2018 2019 2017 2018 2019 q4 2018 q4 2019 TOT
Slide 12: Multi-Client worldwide footprint in key mature basins
Multi-Client -1.2 million km2 worldwide footprint in key mature basins Alaska 348 km2 2019 NEW PROJECTS N. Sea US Land – Chickasha extension 275,121 km2 Caspian 4,270 (2D) km 13,122 (2D) km US Land – Central Basin Platform US Land 54,387 km2 US Land – Bayou Bœuf GOM 376,712 km2 Africa Asia 72,
Slide 13: Multi-Client key business indicators
Multi-Client key business indicators MULTI-CLIENT REVENUE ($m) MULTI-CLIENT CAPEX ($m) & PRE-FUNDING (%) 1.9x 2.3x 3.1x Multi-client Capex Cash pre-funding rate After-sales Prefunding 107% 118% +11% Cash on cash 97% 574 251 469 518 223 186 218 -25% 216 269 224 40 33 356 107 169 302 62 200 117 106 20
Slide 14: Equipment overview
Equipment overview Portfolio of new technologies solidifies Equipment leadership Land • Close to 100 thousand 508XT channels delivered in Q4 • Significant deliveries in Russia • First sale of the WiNG system Marine and nodes • Activity in the streamer market remains low with mostly spares sales • Pr
Slide 15: Equipment key financial indicators
Equipment key financial indicators SEGMENT REVENUE ($m) SEGMENT EBITDAS ($m) & MARGIN 97 Land Marine Downhole Non Oil & Gas 42 452 21% 23 +29% 12% 18 17 -2% 17% 19% 30 351 -6 10 79 2017 2018 2019 q4 2018 q4 2019 35 241 SEGMENT OPINC ($m) & MARGIN 8 92 +14% 67 24 15% 13% 123 3% 9% 91 326 108 16 4 12
Slide 16: New technologies launched in 2019
New technologies launched in 2019 Geoscience Multi-Client • Enhanced FWI • First Multi-Client Ocean Bottom Nodes • Significant improvements in program imaging OBN surveys and other suitable datasets 30% of • Multi-wave inversion algorithms revenue from new technologies offering Equipment Digitalizat
Slide 17: Financial overview
Financial overview
Slide 18: Full Year 2019 P&L
Full Year 2019 P&L In million $ FY 2018 FY 2019 Segment Revenue 1,227 1,400 Segment Revenue at $1,400m, IFRS 15 adjustment (34) (45) up 14% y-o-y IFRS Revenue 1,194 1,356 Segment EBITDAs 556 721 Segment EBITDAs at $721m, Segment OPINC 142 247 a 51% margin Non-recurring charges (NRC) (288) - IFRS 15
Slide 19: Simplified Cash-Flow statement
Simplified Cash-Flow statement In million $ FY 2019 FY 2018 Q4 2019 Q4 2018 2019 Net Cash Flow at $186m Segment Free Cash Flow 434 128 108 85 • Segment Free Cash Flow, high at $434m including a positive $58m change in Cash Cost of Debt (81) (73) (33) (34) working capital and provisions Net Cash Flow
Slide 20: Group Balance Sheet at year-end 2019
Group Balance Sheet at year-end 2019 GOODWILL $1.21 bn EQUITY $1.61 bn & MINORITY INTERESTS • Gross debt at $1,194m before IFRS 16 and $1,326m after IFRS16 MC LIBRARY $0.53 bn NON-CURRENT $0.07 bn LIABILITIES FIXED $0.49 bn • Net debt at $584m before IFRS 16 ASSETS $1.33 bn DEBT and $716m after IFRS
Slide 21: Group Debt structure at year-end 2019
Group Debt structure at year-end 2019 1st lien HYB Gross debt at $1.194 billion with maturities in May 2023 2nd lien HYB and February 2024 1st lien : average cost of debt at 8.4% cash 2nd lien: cost of debt at Libor/Euribor + 4% cash + 8.5% PIK • Callable at 120% in Y.1 & 2 $615 m • Callable at
Slide 22: Outlook and conclusion
Outlook and conclusion
Slide 23: Our ESG strategy
Our ESG strategy To best protect the environment, climate and the communities where we operate, CGG Always acts responsibly and abide by all applicable environmental laws Continues to advance its technology and services to The health of the environment enable its clients to sustainably and responsib
Slide 24: 2020 Business outlook
2020 Business outlook Geoscience Increase in backlog and solid demand for high-end processing, including OBN should drive gradual increase in Geoscience top line Profitability and cash generation remain the top priorities Multi-Client Solid pipeline of multi-client programs in core mature basins bod
Slide 25: 2020 guidance: reinforcing our leadership positions
2020 guidance: reinforcing our leadership positions Mid-single digit Segment Revenue growth compared to 2019, excluding one-off transfer fees of $50m, assuming limited impact of the Coronavirus. We continue to monitor the situation and potential impact on our business as our clients might re-evaluat
Slide 26: On track to achieve 2021 targets and deliver value to all stakeholders
On track to achieve 2021 targets and deliver value to all stakeholders Leading market positions Organic FCF generation Focus on profitability Highly differentiated growth based on through the cycle and shareholder returns GEOSCIENCE MULTI-CLIENT EQUIPMENT $1.7bn 45% >15% $300m <1x Revenue EBITDAs ma
Slide 27: Thank you!
THANK YOU! Visit our website cgg.com Passion for Geoscience “ccc
Slide 28: IFRS 16 Impacts
IFRS 16 Impacts Lease liability by nature as of At January 1st, 2019 CGG applied IFRS 16. CGG recognized January 1, 2019 right of use assets and lease liabilities for operating leases. Operating leases expenses in gross cash costs are now 6% replaced by depreciation and interest costs. 17% Build