Slide 1: Q3 2020 Financial Results
Q3 2020 Financial Results • Sequential stable Revenue and increased Adjusted EBITDAs • Business activity gradually resuming 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 MARKET TRENDS 02 OPERATIONAL REVIEW 03 FINANCIAL REVIEW 04 CONCLUSION 3 Third Quarter 2020 Financial Results
Slide 4: Market trends
Market trends Geoscience & Multi-Client • CGG markets stabilized, supported by NOC’s and Independents • Clients prioritizing core producing and mature basins • Increased demand for high-end technology facilitates quicker turn-around decisions for portfolio optimization • High interest in technology
Slide 5: Operational review
Operational review All figures are ‘segment figures’ used for management reporting (including IFRS 16 and before non-recurring charges and IFRS 15), unless stated otherwise
Slide 6: Q3 2020 key highlights
Q3 2020 key highlights Segment revenue at $199m, stable quarter-on-quarter • GGR at $150m and Equipment at $50m Adjusted Segment EBITDAs at $80m before $(28)m of non- recurring charges, up 6% quarter-on-quarter, a 40% margin Adjusted Segment Operating Income at $(4)m before $(34)m of non-recurring c
Slide 7: GGR key financial indicators
GGR key financial indicators SEGMENT REVENUE ($m) ADJUSTED SEGMENT EBITDAS ($m) Geoscience Multi-Client 652 558 68% 486 463 68% 59% 56% 57% 289 * 59% 61% +5% 81 85 * 913 960 820 -28% 2017 2018 2019 9m2019 9m2020 2q 2020 3q 2020 685 * excluding $(28)m non-recurring charges in Q3 & and $(36)m Septembe
Slide 8: Geoscience key business indicators
Geoscience key business indicators TOTAL PRODUCTION ($m) BACKLOG as of SEPT 30TH ($m) 495 527 522 Internal production -0,01 -0,02 132 137 385 External revenue -0,03 145 348 -0,04 106 95 -0,05 256 261 -0,06 204 350 395 385 113 279 111 -0,07 253 30 34 -0,08 83 77 -0,09 2018 2019 2020 2017 2018 2019 9m
Slide 9: Geoscience operational highlights
Geoscience operational highlights Continued adaptation to lower demand Higher definition velocity contrast in the model • Q3 total production was down (13%) y-o-y and refines the reservoir (2%) sequentially Gas/Oil contact • Business continuity has been excellent and the team is focused on ensuring
Slide 10: Geoscience – providing solutions to industry in transition
Geoscience – providing solutions* to industry in transition “CGG delivers Global Geothermal Resource Study to support Client’s Energy Transition Strategy” “CGG’s best-in-class OBN imaging technologies to provide a step-change in image quality over the largest OBN survey in UK CNS” “CGG awarded large
Slide 11: Multi-Client key business indicators
Multi-Client key business indicators MULTI-CLIENT REVENUE ($m) MULTI-CLIENT CAPEX ($m) & PRE-FUNDING (%) 1.9x 2.3x 3,1x After-sales Prefunding Multi-client Capex Cash pre-funding rate +11% Cash on cash 574 518 406 118% 469 107% 218 97% 101% 216 -41% 251 72% 269 156 239 223 68% 186 198 +18% 153 63% 3
Slide 12: Multi-Client - worldwide footprint in proven & mature basins
Multi-Client - worldwide footprint in proven & mature basins Over 1.2 million km2 Alaska Q3 2020 PROJECTS 348 km2 Central Basin Platform N. Sea 278,469 km2 Caspian 4,270 (2D) km 13,122 (2D) km Brazil – Santos/Campos Nebula US Land 54,387 km2 Australia – Gippsland GoM 400,395 km2 Africa Asia North Se
Slide 13: Multi-Client – technology creates business reprocessing opportunities in key mature basins
Multi-Client – technology creates business reprocessing opportunities in key mature basins Improved Imaging of Gulf of Mexico Legacy Data Library Major reimaging campaign is conducted in the US Gulf of Mexico Advanced proprietary imaging technologies are applied to unlock the full potential of exist
Slide 14: Equipment key financial indicators
Equipment key financial indicators SEGMENT REVENUE ($m) ADJUSTED SEGMENT EBITDAS ($m) Third Quarter 97 Land Marine Downhole Non Oil & Gas 2020 452 Financi 74 +29% 17 al 42 22% Results 30 21% 12% 5% 351 -2% 9* 1 0* 10 79 329 12 -6 2% 0% 35 21 2017 2018 2019 9m 2019 9m 2020 2q 2020 3q 2020 241 -44% *
Slide 15: Equipment overview
Equipment overview Activity and demand still impacted by the downturn Land • Over 50 thousand channels delivered in Q3 • First delivery of a WiNG system in the US, with other orders in Latin America and Europe • Significant deliveries in Russia and India • Orders in Q3 included several WiNG systems,
Slide 16: Financial Review
Financial Review
Slide 17: Q3 2020 Income Statement
Q3 2020 Income Statement In million $ Q3 2020 Q2 2020 Segment Revenue (R.P.) 199 202 Segment Revenue at $199m, stable quarter-on- IFRS 15 adjustment (22) 37 quarter IFRS Revenue 178 239 Segment EBITDAs at $52m and Adjusted Segment EBITDAs 52 68 Segment EBITDAs at $80m, before $(28)m Adjusted Segment
Slide 18: Q3 / 9 months 2020 Simplified Cash Flow
Q3 / 9 months 2020 Simplified Cash Flow In million $ Q3 2020 9m 2020 9 months 2020 Segment FCF including change in working capital & before NRC at $1m Segment FCF, including change in (52) 1 Q3 segment Free Cash Flow, including change in working capital & before NRC working capital and before NRC at
Slide 19: Balance Sheet & Capital Structure at September 30, 2020
Balance Sheet & Capital Structure at September 30, 2020 • Cash liquidity at $465m 1st lien HYB 2nd lien HYB • Gross debt at: 8.4% cash Libor/Euribor + 4% cash + 8.5% PIK Callable at 0% in March 2021 $1,213m before IFRS 16 (in m$) $1,375m after IFRS 16 • Net debt at: $749m before IFRS 16 628 $910m af
Slide 20: 2020 Adaptation plan
2020 Adaptation plan Reduced Capex across all business lines • Cash Capex around $300 million, down $(75) million vs. previous guidance of March 6, 2020 – Multi-client cash capex, down $(60) million, at around $225 million at 75% prefunding rate – Industrial and development costs cash capex around $
Slide 21: Conclusion
Conclusion
Slide 22: Conclusion
Conclusion CGG markets stabilized Protecting core markets • Geoscience providing critical solutions for development and production • Multi-client positioned in core basins where our clients’ E&P Capex is focused • Equipment maintaining leadership in resilient NOC driven markets, such as Middle East,
Slide 23: THANK YOU!
THANK YOU! Visit our website cgg.com Passion for Geoscience “ccc
Slide 24: Q3 2020 and September 2020 YTD Non-recurring charges
Q3 2020 and September 2020 YTD Non-recurring charges In million $ Q3 9 months 2020 2020 YTD Global economic crisis, triggered by Covid-19 pandemic and unprecedented drop in oil prices and E&P spending lead CGG Operational costs to carry a full impairment test in Q2 2020 and launch cost (28) (38) red