GDGE Viridien

Strong Financial Improvements in 2023:

Revenue at $1,125m, up 21%

Organic cash generation of $32m*

Positive net cash generation in 2024 and around $100m in 2025

to support the deleveraging roadmap

PARIS, France – March 6, 2024 – CGG (ISIN: FR0013181864), a global technology and high-performance computing leader announced today its fourth quarter and full year 2023 audited results.

Commenting on these results, Sophie Zurquiyah, CGG CEO, said:

“In 2023, CGG significantly strengthened its financial performance, and I am pleased to see that we returned to positive organic cash flow generation, while continuing to invest in our New Businesses. CGG today not only remains the clear leader in its core businesses, it also addresses the Energy Transition as well as the new technology-enabled markets of High-Performance Computing and Infrastructure Monitoring. After a good start in early 2024, we will continue to develop the company with a focus on further strengthening our core businesses, accelerating the growth of our New Businesses, and delivering our financial roadmap that prioritizes cash generation and balance sheet deleveraging.”

* including $(66)m fees from contractual vessel commitments

Key Figures - Fourth Quarter 2023

Key Figures – End of December 2023

Key Segment Figures - Fourth Quarter 2023

Key Segment Figures – End of December 2023

Key figures bridge: Segment to IFRS - Fourth Quarter 2023

Key figures bridge: Segment to IFRS – End of December 2023

Fourth Quarter 2023 Segment Financial Results

Data, Digital & Energy Transition (DDE)

Digital, Data and Energy Transition (DDE) segment revenue was $201 million, down (7)% year-on-year.

• Geoscience (GEO) revenue was $98 million, up 41% year-on-year driven by delivery of large processing projects. Activity remains solid worldwide with Elastic TLFWI technology continuing to prove its value and receiving recognition from clients. In November, CGG launched Outcome-as-a-Service (OaaS) – a new offering designed to deliver customized, capability-focused HPC and AI solutions for scientific and engineering domains.
• Earth Data (EDA) revenue was $103 million, down (29)% year-on-year.

Earth Data cash capex was $(29) million this quarter, up 16% year-on-year. Prefunding revenue of our Earth-Data projects was at $62 million and prefunding rate was high this quarter at 209%.

Earth Data after-sales were $41 million this quarter, down (47)% year-on-year mainly due to delayed licensing rounds in Brazil and in the GoM.

The segment library Net Book Value at the end of December 2023 was $311 million ($458 million after IFRS 15 adjustments).

DDE segment EBITDAs was $117 million, a 58% margin due to business mix.

DDE segment operating income was $20 million, a 10% margin.

DDE capital employed were stable at $1.5 billion at the end of December 2023.

Sensing & Monitoring

Sensing & Monitoring (SMO) segment revenue was $119 million, up 14% year-on-year.

• Land equipment sales represented 30% of total sales. Overall activity was high, mainly in North Africa.
• Marine equipment sales represented 55% of total sales with sales of nodes equipment to Asia and sections of Sentinel for a streamer upgrade.
• Downhole equipment sales were $6 million.
• Sales from The New Businesses were $11 million.

SMO segment EBITDAs was $11 million, a 9% low margin due to $(8)m old equipment inventory write-off.

SMO segment operating income was $1 million.

SMO capital employed was stable at $0.6 billion at the end of December 2023.

Fourth Quarter 2023 Financial Results 2023

Segment revenue was $320 million, stable year-on-year. The respective contributions from the Group’s businesses were 31% from Geoscience, 32% from Earth Data (63% for the DDE segment) and 27% from Sensing & Monitoring.

Segment EBITDAs was $122 million, including $(13)m compensation fees to Shearwater and $(8) million write-off of the equipment inventory, a low 38% margin due to business mix.

Segment operating income was $15 million, a 5% margin. IFRS 15 adjustment at operating income level was $(26) million and IFRS operating income, after IFRS 15 adjustment, was $(11) million.

Cost of financial debt was $(20) million. The total amount of interest paid during the quarter was $(44) million.

Taxes were at $11 million.

Net income from continuing operations was $(25) million. Group Net Income this quarter was $(15) million.

After minority interests, Group net income attributable to CGG shareholders was $(15) million/ €(14) million.

Fourth Quarter 2023 Cash Flow

Segment operating cash flow was $152 million, including $21 million positive change in working capital & provisions.

Total Capex was $(42) million:

• Industrial Capex was $(8) million,
• Research & Development Capex was $(4) million,
• Earth Data cash Capex was $(29) million.

Segment free cash flow was $116 million.

After $(18) million lease repayments & asset financing, $(44) million cash cost of debt, $(8) million CGG 2021 Plan cash costs and $1 million free cash flow from discontinued operations, the Q4 2023 net cash flow was $48 million.

Full year 2023 Financial Results

Segment revenue was $1,125 million up 21% compared to 2022. The respective contributions from the Group’s businesses were 30% from Geoscience, 30% from Earth Data (60% for the DDE segment) and 40% from SMO.

DDE segment revenue was $672 million, up 2% year-on-year.

Geoscience revenue was $335 million, up 18% year-on-year, sustained by increasing demand worldwide for high-end imaging technology, including demand for OBN imaging.

Earth Data sales were $337 million, down (10)% year-on-year. Prefunding revenue was $194 million, up 43% year-on-year. Earth Data cash capex was $(171) million, down (17)% year-on-year and cash prefunding rate at the end of December was at 113% After-sales were $143 million, down (40)% compared to $239 million in 2022 that was sustained by high transfer fees and included the land data library.

SMO segment revenue was $453 million, up 68% year-on-year driven by deliveries of land equipment for mega crews and a very high demand for OBN equipment.

Segment EBITDAs was $400 million, down (8)% year-on-year, a 36% margin, due to a low business mix. DDE EBITDAs was $366 million, down (16)% year-on-year, a low 55% margin due to lower EDA sales, and Sensing & Monitoring EBITDA was $59 million, a 13% margin. Segment adjusted EBITDAS was $400 million, up 1% year-on-year.

Segment operating income was $138 million, a 12% margin.

IFRS 15 adjustment at operating income level was $(19) million and IFRS operating income, after IFRS 15 adjustment, was $119 million.

Cost of financial debt was $(95) million. The total amount of interest paid in 2023 was $(91) million. Other financial items were $(4) million.

Taxes were at $(14) million.

Net income from continuing operations was $4 million.

2023 Group net income was $16 million.

After minority interests, 2023 Group net income attributable to CGG’s shareholders at the end of December 2023 was $12.9 million / €11.1 million.

2023 Cash Flow

Segment operating cash flow was $408 million up 18% year-on-year, including $3 million positive change in working capital & provisions.

2023 Capex was $(232) million, down (11)% year-on-year:

Industrial Capex was $(44) million, up 33% year-on-year,

Research & development Capex was $(17) million, down (21)% year-on-year,

Earth Data cash Capex was $(171) million, down (17)% year-on-year.

Segment free cash flow was $181 million, up 21% year-on-year.

After lease repayments & asset financing of $(35) million, $(91) million of interest expenses, $(24) million of CGG Plan 2021 and $1 million from discontinued operations, Group net cash flow was $32 million.

  Balance Sheet at the end of 223 

Group’s liquidity amounted to $417 million at the end of December 31, 2023, including $327 million of cash liquidity and $90 million undrawn RCF.

Group gross debt before IFRS 16 was $1,198 million and net debt was $871 million at the end of December 31, 2023.

Group gross debt after IFRS 16 was $1,301 million and net debt was $974 million at the end of December 31, 2023.

Segment leverage ratio of Net debt to Adjusted* segment EBITDAs was 2.4x at the end of December 2023.

* Adjusted indicators represent supplementary information adjusted for non-recurring gains of asset sales

Q4 2023 Conference call

An English language analysts conference call is scheduled today March 6, at 6.00 pm (CET)

Participants should register for the call here to receive a dial-in number and code or participate in the live webcast from here.

A replay of the conference call will be made available the day after for a period of 12 months in audio format on the Company's website www.cgg.com.

About CGG

CGG (www.cgg.com) is a global technology and HPC leader that provides data, products, services and solutions in Earth science, data science, sensing and monitoring. Our unique portfolio supports our clients in efficiently and responsibly solving complex digital, energy transition, natural resource, environmental, and infrastructure challenges for a more sustainable future. CGG employs around 3,500 people worldwide and is listed on the Euronext Paris SA (ISIN: 0013181864).

Contacts

FINANCIAL STATEMENTS

31st DECEMBER 2023 

Attachment

• CGG Announces its Q4 & FY 2023 Results

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