Slide 1: Q1 2020 Financial Results
Q1 2020 Financial Results Solid Q1 – Adjusting to an Unprecedented Crisis 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 OPERATIONAL REVIEW 02 FINANCIAL REVIEW 03 2020 OUTLOOK 3 First Quarter 2020 Financial Results
Slide 4: 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 5: Covid-19 situation
Covid-19 situation Employees health and safety is our top priority Strong business continuity • Majority of employees working from home • Geoscience fully operational • All Multi-client programs on-going • Equipment manufacturing gradually ramping-up, after shut-downs in several countries Preparing
Slide 6: Q1 2020 key highlights
Q1 2020 key highlights Segment revenue at $271m, down 4% y-o-y • GGR at $197m and Equipment at $75m Segment EBITDAs at $123m, up 3% y-o-y with 45% margin Segment operating income at: • $39m, a 14% margin, before impairment charges • $(31)m, after $(70)m impairment charges mainly related to multi- cl
Slide 7: GGR key financial indicators
GGR key financial indicators SEGMENT REVENUE ($m) SEGMENT EBITDAS ($m) & MARGIN Geoscience Multi-Client 652 558 486 68% 62% 0,05 59% 61% 58% 5% 0 960 105 123 913 -0,05 820 -0,1 2017 2018 2019 Q1 2019 Q1 2020 -0,15 517 575 SEGMENT OPINC ($m) & MARGIN 469 -0,2 211 10% -0,25 176 131 180 197 -0,3 351 39
Slide 8: Geoscience key business indicators
Geoscience key business indicators TOTAL PRODUCTION ($m) BACKLOG as of APRIL 30TH ($m) 495 527 522 Internal production -0,01 -0,02 132 137 External revenue -0,03 145 -0,04 -0,05 297 -0,06 272 256 350 395 385 129 125 -0,07 38 31 -0,08 91 93 -0,09 2017 2018 2019 Q1 2019 Q1 2020 2018 2019 2020 TOTAL PR
Slide 9: Geoscience operational highlights
Geoscience operational highlights Positioning for sustained performance • Q1 total production up 2% y-o-y in line with growth expectations driven by solid Imaging activity • Significant technology advances in processing of large high density land data sets Focusing on maintaining our technology lead
Slide 10: Dedicated Imaging Centers a "Win-Win" Strategy
Dedicated Imaging Centers a “Win-Win” Strategy CGG Imaging Centers • Straight-forward long-term contracts • No need for numerous tenders • Stable revenue, backlog & profitability in both good & challenging times • Dedicated team of experienced geoscientists • Exclusive access to CGG’s team of expert
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 Multi-client Capex Cash pre-funding rate After-sales Prefunding +11% 107% 118% Cash on cash 97% 574 518 251 469 223 218 186 216 269 +17% 104 67 356 40 302 89 200 42 57 47 47 2017 2
Slide 12: Multi-Client - worldwide footprint in key mature basins
Multi-Client - worldwide footprint in key mature basins Over 1.2 million km2 Alaska 348 km2 Q1 2020 PROJECTS N. Sea US Land – Central Basin Platform 277,521 km2 Caspian 4,270 (2D) km 13,122 (2D) km Bayou Bœuf (acquisition complete) US Land 54,387 km2 Brazil – Santos/Campos Nebula GoM Austral
Slide 13: 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% 8 17 22% -2% 11% 30 351 -6 10 79 2017 2018 2019 Q1 2019 Q1 2020 35 241 SEGMENT OPINC ($m) & MARGIN 8 92 67 24 -29% 15% 14% 3% 0% 91 326 105 12 15 - 2 75
Slide 14: Equipment overview
Equipment overview Installed base and renewed portfolio are key assets for Equipment Land • Over 80 thousand 508XT channels delivered in Q1 • Significant deliveries in North Africa, India and Russia • Significant orders for heavy duty Nomad 90 vibrators for North Africa and for 35 thousand channels
Slide 15: Financial Review
Financial Review
Slide 16: Q1 2020 P&L
Q1 2020 P&L In million $ Q1 2019 Q1 2020 Segment revenue (R.P.) 282 271 Segment revenue at $271m, down 4% IFRS 15 adjustment (11) (18) y-o-y IFRS Revenue 271 253 Segment EBITDAs 119 123 Segment Ebitda at $123m, up 3% y-o-y, a 45% margin Segment OPINC 11 (31) IFRS 15 adjustment 9 9 IFRS OPINC 20 (40)
Slide 17: Sound financial situation
Sound financial situation 1st lien HYB 2nd lien HYB Q1 2020 Net Cash Flow at $17m average cost of debt cost of debt at at 8.4% cash Libor/Euribor + 4% cash Q1 2020 positive cash flow generation + 8.5% PIK • Segment free cash flow from operations at $44m, significantly • Callable at 120% in Y.1 & 2 d
Slide 18: Group balance sheet at March-end 2020
GROUP BALANCE SHEET AT MARCH-END 2020 EQUITY & GOODWILL $ 1.20 bn MINORITY $ 1.50 bn INTERESTS MC LIBRARY $ 0.48 bn NON-CURRENT $ 0.21 bn LIABILITIES FIXED ASSETS $ 0.52 bn $ 1.33 bn DEBT CASH $ 0.62 bn CURRENT ASSETS $ 0.92 bn CURRENT $ 0.70 bn LIABILITIES ASSETS $ 3.73 bn $ 3.73 bn LIABILITIES 18
Slide 19: Outlook and conclusion
Outlook and conclusion
Slide 20: E&P trends: severe crisis following a modest recovery
E&P trends: severe crisis following a modest recovery Y.O.Y. UPSTREAM CAPEX EVOLUTION E&P Capex down ~20% on full year 2020 • International Capex more preserved • Prioritization towards “core” and lower breakeven hydrocarbons basins • NOCs and Midle-East region more resilient Clients maintaining the
Slide 21: 2020 Business outlook
2020 Business outlook Geoscience • Gradual business decrease throughout the year • Proprietary data acquisition projects delays and cancellations to be partially offset by reprocessing • High-end processing technology continues to be in demand Multi-Client • Healthy pipeline of multi-client programs
Slide 22: 2020 Adaptation plan & Focus on cash preservation
2020 Adaptation plan & Focus on cash preservation Ongoing Capex reduction within all business lines • Cash Capex around $300 million, down $(75) million vs. 20 - 25% E&P previous guidance of March 6, 2020: Capex Cut – Multi-client cash capex, down $(60) million, at around $225 million at 75% prefund
Slide 23: Conclusion
Conclusion Asset-light business model Solid backlog Strong liquidity and balance sheet Positioned in the more resilient segments of our markets • Proven basins, core to our clients • Step-out Exploration, Development Production • Limited exposure to US land market Leading market share in our busines
Slide 24: THANK YOU!
THANK YOU! Visit our website cgg.com Passion for Geoscience “ccc