Viridien · EURONEXT:VIRI
Viridien — CGG — Q2 2020 Earnings Presentation
25 slides from Viridien's earnings presentation, 2020
Slide 1: Q2 2020 Financial Results
Q2 2020 Financial Results • Revenue and EBITDAs reflecting Covid-19 crisis and low oil price environment • Swiftly aligning CGG’s cost structure to the new baseline 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 ENVIRONMENT & PRIORITIES 02 OPERATIONAL REVIEW 03 FINANCIAL REVIEW 04 2020 OUTLOOK 3 Second Quarter 2020 Financial Results
Slide 4: E&P trends: severe upstream capex reduction
E&P trends: severe upstream capex reduction CAPEX Y.O.Y. CHANGE FOR EU AND US BIG OILS 2020 E&P Capex down ~25% year-on-year • Full effect of oil price drop impacting our clients • Frontier exploration deeply affected • Prioritization to extract more from existing reservoirs • Increased focus on ene
Slide 5: A clear roadmap focused on technology and solutions in key markets and proven regions
A clear roadmap focused on technology and solutions in key markets and proven regions • Deliver high-end premium imaging products and services Geoscience • Advance geoscience and digital technology leadership • Remain n°1 choice for nodes processing • Invest in our core areas in Brazil, US GoM and L
Slide 6: Covid-19: aligning cost structure to the new baseline
Covid-19: aligning cost structure to the new baseline Ongoing Capex reduction within all business lines • 2020 cash Capex around $300 million: – Multi-client cash capex at around $225 million at 75% prefunding rate – Industrial and development costs cash capex at around $75 million Ongoing cash cost
Slide 7: 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 8: Q2 2020 key highlights
Q2 2020 key highlights Segment revenue at $202m, down 41% y-o-y • GGR at $144m and Equipment at $58m Adjusted Segment EBITDAs at $76m before $(7)m of Covid-19 plan costs, a 37% margin Adjusted Segment Operating Income at $(5)m before $(49)m non- recurring charges, including $(17)m fair value adjustm
Slide 9: GGR key financial indicators
GGR key financial indicators SEGMENT REVENUE ($m) ADJUSTED SEGMENT EBITDAS ($m) 652 Geoscience Multi-Client 558 486 68% 63% 68% 60% 56% 254 +5% 59% 61% 204 * 149 81* 913 960 820 2017 2018 2019 H1 2019 H1 2020 2q 2019 2q 2020 * excluding $(7)m Covid-19 related NRC in Q2 & H1 2020 517 575 ADJUSTED SEG
Slide 10: Geoscience key business indicators
Geoscience key business indicators TOTAL PRODUCTION ($m) BACKLOG as of JUNE 30TH ($m) -0.01 495 527 522 Internal production -0.02 132 137 -8% External revenue -0.03 145 -0.04 257 237 -12% -0.05 273 292 395 73 61 128 -0.06 214 350 385 113 -0.07 184 176 35 30 -0.08 93 83 -0.09 2018 2019 2020 2017 2018
Slide 11: Geoscience operational highlights
Geoscience operational highlights Higher definition velocity Adapting to new ways of operating and reduced contrast in the model clients’ demand refines the reservoir Gas/Oil contact • Q2 activity across business lines impacted by the general slow- down of the economy and its effect on clients’ spen
Slide 12: Multi-Client key business indicators
Multi-Client key business indicators MULTI-CLIENT REVENUE ($m) MULTI-CLIENT CAPEX ($m) & PRE-FUNDING (%) 1.9x 2.3x 3.1x After-sales Prefunding Multi-client Capex Cash pre-funding rate +11% Cash on cash 574 518 118% 469 107% 218 97% 95% 216 -23% 88% -52% 251 269 223 216 186 74% 166 140 128 96 63% 302
Slide 13: Multi-Client - worldwide footprint in key mature basins
Multi-Client - worldwide footprint in key mature basins Over 1.2 million km2 Alaska 348 km2 Q2 2020 PROJECTS Central Basin Platform N. Sea 276,769 km2 Caspian Brazil – Santos/Campos Nebula 4,270 (2D) km 13,122 (2D) km US Land Australia – Gippsland 54,387 km2 GoM North Sea – Cornerstone OBN 3
Slide 14: Equipment key financial indicators
Equipment key financial indicators SEGMENT REVENUE ($m) ADJUSTED SEGMENT EBITDAS ($m) Second Quarter 97 Land Marine Downhole Non Oil & Gas 2020 452 Financi +29% 17 22% al 50 Results 42 22% 30 21% 12% 7% 27 351 9* -2% 1* 10 79 -6 0% 35 2017 2018 2019 H1 2019 H1 2020 2q 2019 2q 2020 241 * Excluding $(
Slide 15: Equipment operational highlights
Equipment operational highlights Reduced activity and demand worldwide due to impact of Covid-19 and drop in oil price Land • Over 60 thousand 508XT channels and 10 Nomad 90 delivered in Q2 mainly in North Africa and Middle East • First delivery of WiNG system • Orders in Q2 included a 508XT system
Slide 16: Our ESG business initiatives
Our ESG business initiatives Always act responsibly and abide by all applicable environmental laws Continue to advance our technology and services to enable our clients to sustainably and responsibly discover, develop and manage the Earth’s resources Continue to advance our data collection capabilit
Slide 17: Environmental
ESG business solutions Environmental monitoring Offshore pollution monitoring Sercel QuietSea Minescope & MotionMap CGG uses frequent acquisitions of Fully integrated, passive acoustic Precisely map and monitor satellite imagery to enhance our monitoring to detect presence of marine the stability of
Slide 18: Financial Review
Passion for Geoscience
Slide 19: Q2 / H1 2020 Non-recurring charges
Q2 / H1 2020 Non-recurring charges In million $ Q1 2020 Q2 2020 H1 2020 Global economic crisis, triggered by Covid-19 pandemic and unprecedented drop in oil price and E&P spending lead CGG to carry a full impairment test in Q2 2020 and launch cost Operational costs reduction actions («Covid-19 plan»
Slide 20: Q2 2020 Income Statement
Q2 2020 Income Statement In million $ Q2 2019 Q2 2020 Segment Revenue (R.P.) 340 202 Segment revenue at $202m, down 41% IFRS 15 adjustment (5) 37 Segment EBITDAs at $68m, including $(7)m Covid-19 plan costs, a 34% margin IFRS Revenue 335 239 Segment EBITDAs 170 68 Segment OPINC negative at $(53)m, i
Slide 21: Q2 / H1 Simplified Cash-Flow
Q2 / H1 Simplified Cash-Flow H1 Net Cash Flow at $(60)m In million $ Q2 2019 Q2 2020 H1 2020 • Q2 Segment Free Cash Flow at $(5)m before Segment Free Cash Flow 51 (5) 54 $(3)m Covid-19 plan Cash Cost of Debt & Lease repayments (46) (47) (68) • Q2 Paid Cost of Debt at $(32)m Net Cash Flow from (20) -
Slide 22: Balance Sheet and Capital Structure at June-end 2020
Balance Sheet and Capital Structure at June-end 2020 • Cash liquidity at $546m 1st lien HYB 2nd lien HYB • Gross debt at: EQUITY & 8.4% cash Libor/Euribor + 4% cash GOODWILL $ 1.18 bn $ 1.35 bn MINORITY INTERESTS + 8.5% PIK $1,172m before IFRS 16 Callable at 112.5% in 2020 $1,329m after IFRS 16 MC L
Slide 23: Outlook and conclusion
Outlook and conclusion
Slide 24: 2020 Outlook and conclusion
2020 Outlook and conclusion CGG value proposition remains intact • Solid capital structure and liquidity • Leading market positions and differentiated businesses • Focused on more resilient markets H2 to be driven by stability of 2020 clients’ budgets and their confidence in 2021 perspectives 2020 t
Slide 25: THANK YOU!
THANK YOU! Visit our website cgg.com Passion for Geoscience (ccc