A strong start to the year :
Revenue at $210m, up 37% y-o-y
Ebitda at $66m, up 71% y-o-y
PARIS, France – May 3, 2023 – CGG (ISIN: FR0013181864), a global technology and high-performance computing (HPC) leader, announced today its first quarter 2023 non-audited results.
Commenting on these results, Sophie Zurquiyah, CGG CEO, said:
“We delivered a strong start to the year, supported by robust performance in Geoscience, increased Earth Data sales, mainly in the Gulf of Mexico, and expected equipment deliveries in Sensing and Monitoring. I was pleased to see the continued progress of our Beyond the Core activities during the quarter, especially the signature of our first external HPC & Cloud Solutions contract, with BioSymulitics, supplying specialized HPC services to support their AI-enhanced molecular Pharma modelling.
Looking ahead, our clients are ramping up their longer-term exploration efforts with increasing emphasis on efficiency, effectiveness, and lowering their carbon footprint. Based on the market leading position of our advanced technology, across all Business Lines, and the continued growth of the digital and decarbonization markets, CGG is well positioned to answer the needs of our clients, reinforcing our confidence in delivering our 2023 objectives.”
Q1 2023: A strong start to the year
Cash flow and balance sheet
Post closing event
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Key Figures - First Quarter 2023
| Key Figures IFRS - Quarter In million $ | 2022 Q1 | 2023 Q1 | Variances % |
| Operating revenues | 175 | 178 | 2% |
| Operating income / (loss) | 11 | 7 | (40%) |
| Equity from investment | 0 | 0 | - |
| Net cost of financial debt | (26) | (24) | 7% |
| Other financial income / (loss) | 7 | 3 | (59%) |
| Income taxes | (9) | (1) | 83% |
| Net income / (loss) from continuing operations | (16) | (16) | 3% |
| Net income / (loss) from discontinued operations | (2) | (0) | 93% |
| Group net income / (loss) | (19) | (16) | 14% |
| Operating cash flow | 130 | 54 | (58%) |
| Net cash flow | 68 | 1 | (99%) |
| Net debt | 925 | 994 | 7% |
| Net debt before lease liabilities | 807 | 905 | 12% |
| Capital employed | 1,917 | 2,035 | 6% |
Key Segment Figures - First Quarter 2023
| Key Segment Figures - Quarter In million $ | 2022 Q1 | 2023 Q1 | Variances % |
| Segment revenue | 153 | 210 | 37% |
| Segment EBITDAs | 39 | 66 | 71% |
| EBITDAs margin | 25% | 31% | 6 bps |
| Segment operating income / (loss) | (5) | 13 | - |
| OPINC margin | (3%) | 6% | 9 bps |
| IFRS 15 adjustment | 16 | (6) | - |
| IFRS operating income / (loss) | 11 | 7 | (40%) |
| Operating cash flow | 130 | 54 | (58%) |
| Segment net cash flow | 68 | 1 | (99%) |
Key figures bridge: Segment to IFRS - First Quarter 2023
| P&L items In million $ | Segment figures | IFRS 15 adjustment | IFRS figures |
| Total revenue | 210 | (32) | 178 |
| OPINC | 13 | (6) | 7 |
| Cash Flow Statement items In million $ | Segment figures | IFRS 15 adjustment | IFRS figures |
| EBITDAs | 66 | (32) | 34 |
| Change in working capital & provisions | (4) | 32 | 28 |
| Cash provided by operations | 54 | - | 54 |
| Earth Data Data Library NBV In million $ | Segment figures | IFRS 15 adjustment | IFRS figures |
| Opening balance sheet , Jan 1st 23 | 283 | 109 | 392 |
| Closing balance sheet , Mar 31th 23 | 291 | 133 | 424 |
First Quarter 2023 Segment Financial Results
Digital, Data and Energy Transition (DDE)
| Data, Digital & Energy Transition (DDE) In million $ | 2022 Q1 | 2023 Q1 | Variances % |
| Segment revenue | 119 | 144 | 21% |
| Geoscience | 75 | 79 | 5% |
| Earth Data | 44 | 65 | 48% |
| Prefunding | 14 | 35 | - |
| After-Sales | 30 | 30 | - |
| DDE proforma | 119 | 144 | 21% |
| Segment EBITDAs | 57 | 71 | 24% |
| EBITDAs Margin | 48% | 49% | 1 bps |
| Segment operating income | 22 | 25 | 12% |
| OPINC Margin | 18% | 17% | (1) bps |
| Capital employed (in billion $) | 1.5 | 1.5 | - |
| Other Key Metrics | |||
| Earth Data cash capex ($m) | (33) | (28) | (16%) |
| Earth Data cash prefunding rate (%) | 42% | 126% | 84 bps |
Digital, Data and Energy Transition (DDE) segment revenue was $144 million, up 21% year-on-year.
- Geoscience (GEO) revenue was $79 million, up 5% year-on-year.
Geoscience had a very solid activity led by all regions. The level of commercial activity continues to be solid and order intake was up 31% year-on-year at the end of March sustained by demand for high-end integrated projects and disruptive imaging technologies.
- Earth Data (EDA) revenue was $65 million, up 47% year-on-year.
Earth Data cash capex was $(28) million this quarter, down (16)% year-on-year with one marine streamer program offshore Brazil. Prefunding revenue was solid at $35 million, up 152% and prefunding rate was at 126%. After-sales were at $30 million this quarter, stable year-on-year mainly driven by the US Gulf of Mexico.
The segment library Net Book Value was $291 million ($424 million after IFRS 15 adjustments) at the end of March 2023.
DDE segment EBITDAs was $71 million, up 24% year-on-year, a solid 49% margin.
DDE segment operating income was $25 million, up 12% year-on-year.
DDE capital employed decreased to $1.4 billion at the end of March 2023.
Sensing and Monitoring (SMO)
| Sensing and Monitoring (SMO) In million $ | 2022 Q1 | 2023 Q1 | Variances % |
| Segment revenue | 34 | 66 | 95% |
| Land | 20 | 13 | (34%) |
| Marine | 6 | 34 | - |
| Downhole gauges | 4 | 6 | 53% |
| Non Oil & Gas | 4 | 12 | - |
| Segment EBITDAs | (12) | 0 | 97% |
| EBITDAs margin | (40%) | (1%) | 35 bps |
| Segment operating income / (loss) | (19) | (7) | 63% |
| OPINC Margin | (64%) | (11%) | 46 bps |
| Capital employed (in billion $) | 0.5 | 0.6 | 20% |
Sensing and Monitoring (SMO) segment revenue was $66 million, up 95% year-on-year.
- Low level of land equipment sales at $13 million due to timing of deliveries.
- Marine equipment at $34 million and better than anticipated due to early deliveries of asset of streamer for oceanographic operations. Significant commercial opportunities for OBN equipment deliveries over the next quarters.
- Downhole sales were $6 million, stable year-on-year.
- Beyond the Core revenues were high at $12 million.
SMO segment EBITDAs was $0 million.
SMO segment operating income / (loss) was $(7) million.
SMO capital employed increased to $0.6 billion at the end of March 2023.
First Quarter 2023 Financial Results
| Consolidated Income Statements In million $ | 2022 Q1 | 2023 Q1 | Variances % |
| Exchange rate euro/dollar | 1.12 | 1.07 | (4%) |
| Segment revenue | 153 | 210 | 37% |
| DDE | 119 | 144 | 21% |
| Sensing & Monitoring | 34 | 66 | 93% |
| Segment Gross Margin | 23 | 46 | - |
| Segment EBITDAs | 39 | 66 | 71% |
| DDE | 58 | 71 | 23% |
| Sensing & Monitoring | (12) | 0 | 97% |
| Corporate | (5) | (4) | 14% |
| Elim & Other | (1) | 0 | - |
| Segment operating income | (5) | 13 | - |
| DDE | 22 | 25 | 10% |
| Sensing & Monitoring | (19) | (7) | 63% |
| Corporate | (6) | (4) | 30% |
| Elim & Other | (2) | 0 | - |
| IFRS 15 adjustment | 16 | (6) | - |
| IFRS operating income | 11 | 7 | (40%) |
| Equity from investments | 0 | 0 | - |
| Net cost of financial debt | (26) | (24) | 7% |
| Other financial income (loss) | 7 | 3 | (59%) |
| Income taxes | (9) | (1) | 83% |
| Net income / (loss) from continuing operations | (16) | (16) | 3% |
| Net income / (loss) from discontinued operations | (2) | 0 | 93% |
| IFRS net income / (loss) | (19) | (16) | 14% |
| Shareholder's net income / (loss) | (18) | (16) | 11% |
| Basic Earnings per share in $ | (0.02) | (0.02) | 11% |
| Basic Earnings per share in € | (0.02) | (0.02) | 7% |
Segment revenue was $210 million, up 37% pro-forma. The respective contributions from the Group’s businesses were 38% from GEO, 31% from EDA (69% for the DDE segment) and 31% from the SMO segment.
Segment EBITDAs was $66 million, up 71% year-on-year, a 31% margin.
Segment operating income was $13 million, a 6% margin. IFRS 15 adjustment was $(6) million and IFRS operating income was $7 million.
Cost of financial debt was $(24) million. Other financial items were at $3million. Taxes were at $(1) million.
Group net loss was $(16) million / €(15) million. And the shareholder net income , after taking minority interests into account, was a loss of $(16) million.
First Quarter 2023 Cash Flow
| Cash Flow items In million $ | 2022 Q1 | 2023 Q1 | Variances % |
| Segment Operating Cash Flow | 130 | 54 | (58%) |
| CAPEX | (42) | (52) | 24% |
| Industrial | (4) | (19) | - |
| R&D | (5) | (6) | 6% |
| Earth Data (Cash) | (33) | (28) | (15%) |
| Marine Offshore | (32) | (28) | (14%) |
| Land Onshore | 0 | 0 | - |
| Proceeds from disposals of assets | (1) | (0) | 92% |
| Segment Free Cash Flow | 86 | 2 | (98%) |
| Lease repayments | (13) | 2 | - |
| Paid Cost of debt | - | 2 | - |
| CGG 2021 Plan | (7) | (6) | 13% |
| Free cash flow from discontinued operations | 2 | 1 | (60%) |
| Net Cash flow | 68 | 1 | (99%) |
| Financing cash flow | 1 | 1 | - |
| Forex and other | - | 1 | - |
| Net increase/(decrease) in cash | 69 | 3 | - |
| Supplementary information | |||
| Change in working capital and provisions, included in Segment Operating Cash Flow | 90 | (4) | - |
Total capex was $(52) million:
- Industrial capex was $(19) million
- R&D capex was $(6) million
- Earth Data cash capex was $(28) million
Segment free cash flow was $2 million, including $(4) million negative change in working capital & provisions. After $2 million lease repayments, $2 million other financial, $(6) million CGG 2021 Plan cash costs, and $1 million free cash flow from discontinued operations, Net cash flow was $1 million.
Balance Sheet
Group’s liquidity amounted to $301 million at the end of March 31, 2023, excluding $95m undrawn RCF.
Group gross debt before IFRS 16 was $1,206 million$ and net debt was 905 million$ at the end of March 31, 2023. Group gross debt after IFRS 16 was $1,296 million and net debt was $994 million at the end of March 31, 2023.
Segment leverage ratio of Net debt to Segment adjusted EBITDAs was 2.4x at the end of March 2023.
Q1 2023 Conference call
- The press release and the presentation are available on our website www.cgg.com at 5:45 pm (CET).
- An English language analysts conference call is scheduled today at 6.30 pm (CET).
Participants should register for the call here to receive a dial-in number and code or participate in the live webcast from here.
A replay of the conference call will be made available the day after for a period of 12 months in audio format on the Company's website www.cgg.com.
About CGG
CGG (www.cgg.com) is a global technology and HPC leader that provides data, products, services and solutions in Earth science, data science, sensing and monitoring. Our unique portfolio supports our clients in efficiently and responsibly solving complex digital, energy transition, natural resource, environmental, and infrastructure challenges for a more sustainable future. CGG employs around 3,400 people worldwide and is listed on the Euronext Paris SA (ISIN: 0013181864).
Contacts
| Group Communications & Investor Relations Christophe Barnini Tel: + 33 1 64 47 38 11 E-Mail: christophe.barnini@cgg.com |
CONSOLIDATED FINANCIAL STATEMENTS March 31, 2023
Unaudited Interim Consolidated statements of operations
| Three months ended March 31, | |||
| (In millions of US$, except per share data) | 2023 | 2022 | |
| Operating revenues | 178.1 | 175.4 | |
| Other income from ordinary activities | 0.1 | 0.2 | |
| Total income from ordinary activities | 178.2 | 175.6 | |
| Cost of operations | (138.2) | (136.9) | |
| Gross profit | 40.0 | 38.7 | |
| Research and development expenses - net | (6.9) | (3.2) | |
| Marketing and selling expenses | (9.0) | (7.3) | |
| General and administrative expenses | (16.5) | (16.3) | |
| Other revenues (expenses) - net | (1.0) | (0.8) | |
| Operating income (loss) | 6.6 | 11.1 | |
| Expenses related to financial debt | (25.8) | (26.0) | |
| Income provided by cash and cash equivalents | 2.0 | 0.3 | |
| Cost of financial debt, net | (23.8) | (25.7) | |
| Other financial income (loss) | 2.8 | 6.9 | |
| Income (loss) before incomes taxes | (14.4) | (7.7) | |
| Income taxes | (1.4) | (8.6) | |
| Net income (loss) from consolidated companies before share of income (loss) in companies accounted for under the equity method | (15.8) | (16.3) | |
| Share of income (loss) in companies accounted for under the equity method | 0.1 | - | |
| Net income (loss) from continuing operations | (15.7) | (16.3) | |
| Net income (loss) from discontinued operations | 3 | (0.2) | (2.2) |
| Net income (loss) | (15.9) | (18.5) | |
| Attributable to : | |||
| Owners of CGG S.A | $ | (15.6) | (17.5) |
| Non-controlling interests | $ | (0.3) | (1.0) |
| Net income (loss) per share | |||
| Basic | $ | (0.02) | (0.02) |
| Diluted | $ | (0.02) | (0.02) |
| Net income (loss) from continuing operations per share | |||
| Basic | $ | (0.02) | (0.02) |
| Diluted | $ | (0.02) | (0.02) |
| Net income (loss) from discontinued operations per share | |||
| Basic | $ | - | - |
| Diluted | $ | - | - |
Unaudited Consolidated statements of financial position
| (In millions of US$) | March 31, 2023 | December 31, 2022 |
| ASSETS | ||
| Cash and cash equivalents | 301.2 | 298.0 |
| Trade accounts and notes receivable, net | 252.3 | 308.3 |
| Inventories and work-in-progress, net | 292.9 | 257.2 |
| Income tax assets | 55.1 | 53.4 |
| Other current financial assets, net | - | 0.1 |
| Other current assets, net | 113.1 | 99.9 |
| Assets held for sale, net | - | - |
| Total current assets | 1,014.6 | 1,016.9 |
| Deferred tax assets | 63.2 | 24.2 |
| Other non-current assets, net | 11.6 | 8.2 |
| Investments and other financial assets, net | 18.2 | 18.4 |
| Investments in companies under the equity method | 10.7 | 10.8 |
| Property, plant and equipment, net | 179.1 | 167.3 |
| Intangible assets, net | 578.9 | 554.2 |
| Goodwill, net | 1,091.1 | 1,089.4 |
| Total non-current assets | 1,952.8 | 1,872.5 |
| TOTAL ASSETS | 2,967.4 | 2,889.4 |
| LIABILITIES AND EQUITY | ||
| Bank overdrafts | - | - |
| Financial debt – current portion | 90.6 | 60.4 |
| Trade accounts and notes payables | 99.0 | 92 |
| Accrued payroll costs | 75.7 | 85.6 |
| Income taxes payable | 22.3 | 27.2 |
| Advance billings to customers | 29.0 | 29.4 |
| Provisions — current portion | 17.8 | 17.6 |
| Other current financial liabilities | 20.4 | 20 |
| Other current liabilities | 248.2 | 222.1 |
| Total current liabilities | 603.0 | 554.3 |
| Deferred tax liabilities | 57.2 | 18.7 |
| Provisions — non-current portion | 29.9 | 28.6 |
| Financial debt – non-current portion | 1,205.0 | 1.188.8 |
| Other non-current financial liabilities | 16.6 | 21.8 |
| Other non-current liabilities | 14.7 | 18.4 |
| Total non-current liabilities | 1,323.4 | 1.276.3 |
| Common stock: 1,102,899,675 shares authorized and 712,381,115 shares with a €0.01 nominal value outstanding at March 31, 2023 | 8.7 | 8.7 |
| Additional paid-in capital | 118.7 | 118.6 |
| Retained earnings | 952.9 | 967.9 |
| Other Reserves | 41.7 | 50 |
| Treasury shares | (20.1) | (20.1) |
| Cumulative income and expense recognized directly in equity | (3.4) | (3.4) |
| Cumulative translation adjustment | (97.2) | (102.4) |
| Equity attributable to owners of CGG S.A. | 1,001.3 | 1.019.3 |
| Non-controlling interests | 39.7 | 39.5 |
| Total equity | 1,041.0 | 1.058.8 |
| TOTAL LIABILITIES AND EQUITY | 2,967.4 | 2.889.4 |
Unaudited Consolidated statements of cash flows
| Three months ended March 31, | ||
| (In millions of US$) | 2023 | 2022 |
| OPERATING | ||
| Net income (loss) | (15.9) | (18.5) |
| Less: Net income (loss) from discontinued operations | 0.2 | 2.2 |
| Net income (loss) from continuing operations | (15.7) | (16.3) |
| Depreciation, amortization and impairment | 20.2 | 22.2 |
| Earth Data surveys impairment and amortization | 11.3 | 31.0 |
| Depreciation and amortization capitalized in Earth Data surveys | (4.7) | (3.8) |
| Variance on provisions | 0.4 | (0.8) |
| Share-based compensation expenses | 0.8 | 0.7 |
| Net (gain) loss on disposal of fixed and financial assets | 0.1 | (0.1) |
| Equity (income) loss of investees | (0.1) | — |
| Dividends received from investments in companies under the equity method | - | — |
| Other non-cash items | (2.9) | (6.9) |
| Net cash-flow including net cost of financial debt and income tax | 9.4 | 26.0 |
| Less : net cost of financial debt | 23.8 | 25.7 |
| Less : income tax expense (gain) | 1.4 | 8.6 |
| Net cash-flow excluding net cost of financial debt and income tax | 34.6 | 60.3 |
| Income tax paid | (7.1) | 1.7 |
| Net cash-flow before changes in working capital | 27.5 | 62.0 |
| Changes in working capital | 27.6 | 67.8 |
| - change in trade accounts and notes receivable | 88.5 | 122.5 |
| - change in inventories and work-in-progress | (31.5) | (20.5) |
| - change in other current assets | (7.4) | (6.7) |
| - change in trade accounts and notes payable | (10.5) | (7.8) |
| - change in other current liabilities | (11.9) | (19.7) |
| - Impact of changes in exchange rate on financial items | 0.4 | |
| Net cash-flow provided by operating activities | 55.1 | 129.8 |
| INVESTING | ||
| Total capital expenditures (including variation of fixed assets suppliers, excluding Earth Data surveys) | (24.5) | (9.6) |
| Investment in Earth Data surveys, net cash | (27.8) | (32.7) |
| Proceeds from disposals of tangible and intangible assets | - | — |
| Total net proceeds from financial assets | - | — |
| Acquisition of investments, net of cash and cash equivalents acquired | - | (1.4) |
| Variation in loans granted | - | — |
| Variation in subsidies for capital expenditures | - | (0.1) |
| Variation in other non-current financial assets | 1.6 | — |
| Net cash-flow used in investing activities | (50.7) | (43.8) |
| Three months ended March 31, | ||
| (In millions of US$) | 2023 | 2022 |
| FINANCING | ||
| Repayment of long-term debt | 0.3 | — |
| Total issuance of long-term debt | 14.3 | — |
| Lease repayments | (12.5) | (13.1) |
| Change in short-term loans | — | — |
| Financial expenses paid | 1.0 | (0.2) |
| Net proceeds from capital increase: | — | 0.4 |
| — from shareholders | 0.1 | 0.4 |
| — from non-controlling interests of integrated companies | — | — |
| Dividends paid and share capital reimbursements: | ||
| — to shareholders | — | — |
| — to non-controlling interests of integrated companies | — | — |
| Acquisition/disposal from treasury shares | — | — |
| Net cash-flow provided by (used in) financing activities | 2.6 | (12.9) |
| Effects of exchange rates on cash | 1.0 | 0.1 |
| Impact of changes in consolidation scope | — | — |
| Net cash flows incurred by discontinued operations | (4.8) | (4.3) |
| Net increase (decrease) in cash and cash equivalents | 3.2 | 68.9 |
| Cash and cash equivalents at beginning of year | 298.0 | 319.2 |
| Cash and cash equivalents at end of period | 301.2 | 388.1 |
Attachment
