CGG Announces its 2020 Third
Quarter Results
Solid Q3
Adjusted EBITDAs performance
Business activity
gradually resuming
PARIS, France – November 5, 2020 –
CGG (ISIN: FR0013181864), a
world leader in Geoscience, announced today its
2020 third quarter unaudited results.
Commenting on these results, Sophie
Zurquiyah, CGG CEO, said:
“CGG markets stabilized in Q3 as large
Independents and NOCs started to resume activity, mainly in their
core areas. We are on track with the implementation of the
cost reduction plan resulting in increased Adjusted EBITDAs. Our
high-end technology significantly improves our client’s
understanding of the subsurface and provides important insights to
the prioritization of their energy investments. This,
combined with our focus on mature basins and the technology vital
for step-out exploration, development and production, provides CGG
with a unique value proposition for our clients. We have been
able to maintain market share in our core businesses throughout the
year, and I have been pleased with our progress towards developing
offerings in adjacent fields, including structural health
monitoring, CCUS, geothermal and environmental geosciences. “
Q3
2020:
stable Revenue and
increased Adjusted
EBITDAs quarter-on-quarter
-
IFRS figures: revenue at $178m, OPINC at $(43)m,
Group net loss at $(93)m
-
Segment revenue at $199m, stable
quarter-on-quarter
-
Geoscience: Resilient activity of large and dedicated imaging
centers
-
Multi-client: Increased sales driven by higher after-sales
-
Equipment: Lower land activity and delays in deliveries
-
Segment EBITDAs at $52m and
Adjusted*
Segment EBITDAs at
$80m before
$(28)m of non-recurring severance costs, up 6% quarter-on-quarter,
a 40% margin
-
Segment Operating Income at $(38)m and
Adjusted*
Segment Operating Income at
$(4)m before $(34)m of
non-recurring charges
*Adjusted indicators represent supplementary information
adjusted for non-recurring charges triggered by economic
downturn. Liquidity of $465m at the end of September
2020
-
Q3 2020 negative change in working capital
of $(37)m supporting increased Q4 sales
-
Q3 2020 non-recurring cash costs
of $(26)m, including $(7)m severance and $(19)m of
CGG 2021 plan costs
-
Q3 2020 Segment Free Cash Flow at
$(59)m,
including high negative change in working capital. Net Cash
Flow of $(92)m
-
Liquidity of $465m and
Net debt before IFRS 16 of
$749m at
September 30, 2020
Confirming 2020 Cash Capex and 2020
cost reduction measures**
- 2020
Cash Capex around $300 million:
-
2020 Multi-client cash capex confirmed at around $225
million and around 75% prefunding
rate
-
2020 Industrial and development costs cash capex around $75
million
-
All saving plans (2021 plan and Covid-19) expected to generate cash
costs reductions of around $35m in 2020 and around
$135m annualized, including around
$90m of fixed cash costs
-
Covid-19 plan total expenses of around $(50)m,
with P&L impact of $(44)m in 2020 and $(6)m$ in 2021 and
cash-out sequence of $(15)m in 2020 and $(35)m in 2021
**As mentioned on May 12, 2020, capex and cost reductions are the
only two metrics for 2020 guidance provided by the company in
current crisis environment Sercel
and Shearwater agreed to suspend
negotiations on marine streamer
JV Due to the downturn in the oil & gas
industry, triggered by the COVID-19 pandemic, CGG and Shearwater
have jointly agreed to suspend negotiations around creating a
marine streamer equipment JV until visibility in the streamer
replacement cycle improves. Both parties continue to benefit from
the marine acquisition partnership and remain committed to the
establishment of its technology component to further their mually
beneficial cooperation. |
Key Figures - Third Quarter 2020 |
Key Figures IFRS - Quarter In million $ |
2020 Q2 |
2020 Q3 |
Variances % |
Operating revenues |
239 |
178 |
(26)% |
Operating Income |
(32) |
(43) |
(32)% |
Equity from Investment |
0 |
0 |
- |
Net cost of financial debt |
(33) |
(34) |
4% |
Other financial income (loss) |
(36) |
(12) |
(67)% |
Income taxes |
(33) |
1 |
103% |
Net Income / Loss from continuing
operations |
(134) |
(88) |
34% |
Net Income / Loss from discontinued operations |
(13) |
(5) |
62% |
Group net income / (loss) |
(147) |
(93) |
37% |
Operating Cash Flow |
81 |
12 |
(85)% |
Net Cash Flow |
(77) |
(92) |
(20)% |
Net debt |
783 |
910 |
16% |
Net debt before lease |
626 |
749 |
20% |
Capital employed |
2,129 |
2,172 |
2% |
Key Segment Figures - Third Quarter 2020 |
Key Segment Figures - Quarter In million $ |
2020 Q2 |
2020 Q3 |
Variances % |
Segment revenue |
202 |
199 |
(1)% |
Segment EBITDAs |
68 |
52 |
(24)% |
Group EBITDAs margin |
34% |
26% |
(77) bps |
Segment operating income |
(53) |
(38) |
29% |
Opinc margin |
(26)% |
(19)% |
75 bps |
IFRS 15 adjustment |
21 |
(5) |
(123)% |
IFRS operating income |
(32) |
(43) |
(32)% |
Operating Cash Flow |
81 |
12 |
(85)% |
Net Segment Cash Flow |
(77) |
(92) |
(20)% |
Supplementary information |
|
|
|
Adjusted segment EBITDAs before NRC |
76 |
80 |
6% |
EBITDAs margin |
37% |
40% |
29 bps |
Adjusted segment operating income before
NRC |
(5) |
(4) |
15% |
Opinc margin |
(2)% |
(2)% |
3 bps |
Key Figures – 9 Months 2020 |
Key Figures IFRS - YTD In million $ |
2019 Sept YTD |
2020 Sept YTD |
Variances % |
Operating revenues |
930 |
669 |
(28)% |
Operating Income |
169 |
(115) |
- |
Equity from Investment |
0 |
0 |
- |
Net cost of financial debt |
(98) |
(100) |
(1)% |
Other financial income (loss) |
4 |
(42) |
- |
Income taxes |
(11) |
(37) |
- |
Net Income / Loss from continuing
operations |
63 |
(293) |
- |
Net Income / Loss from discontinued operations |
(151) |
(45) |
70% |
Group net income / (loss) |
(87) |
(338) |
- |
Operating Cash Flow |
572 |
238 |
(58)% |
Net Cash Flow |
179 |
(152) |
- |
Net debt |
732 |
910 |
24% |
Net debt before leases |
544 |
749 |
38% |
Capital employed |
2,312 |
2,172 |
(6)% |
Key Segment Figures – 9 Months 2020 |
Key Segment Figures - YTD In million $ |
2019 Sept YTD |
2020 Sept YTD |
Variances % |
Segment revenue |
1,004 |
672 |
(33)% |
Segment EBITDAs |
515 |
243 |
(53)% |
Group EBITDAs margin |
51% |
36% |
(152) bps |
Segment operating income |
175 |
(122) |
- |
Opinc margin |
17% |
(18)% |
(356) bps |
IFRS 15 adjustment |
(6) |
7 |
- |
IFRS operating income |
169 |
(115) |
- |
Operating Cash Flow |
572 |
238 |
(58)% |
Net Segment Cash Flow |
179 |
(152) |
- |
Supplementary information |
|
|
|
Adjusted segment EBITDAs before NRC |
515 |
281 |
(46)% |
Group EBITDAs margin |
51% |
42% |
(96) bps |
Adjusted segment operating income before
NRC |
175 |
32 |
(82)% |
Opinc margin |
17% |
5% |
(127) bps |
Key figures bridge: Segment to IFRS - Third Quarter
2020 |
P&L items - Q3 In million $ |
Segment figures |
IFRS 15 adjustment |
IFRS figures |
Total Revenue |
199 |
(22) |
178 |
OPINC |
(38) |
(5) |
(43) |
|
|
|
|
Cash Flow Statement items - Q3 In million $ |
Segment figures |
IFRS 15 adjustment |
IFRS figures |
EBITDAs |
52 |
(22) |
30 |
Change in Working Capital & Provisions |
(37) |
22 |
(16) |
Cash Provided by Operations |
12 |
(0) |
12 |
|
|
|
|
Multi-Client Data Library NBV In million $ |
Segment figures |
IFRS 15 adjustment |
IFRS figures |
Opening Balance Sheet, Mar 20 |
340 |
140 |
480 |
Closing Balance Sheet, Sept 20 |
345 |
154 |
499 |
Key figures bridge: Segment to IFRS – 9 Months
2020 |
P&L items - YTD In million $ |
Segment figures |
IFRS 15 adjustment |
IFRS figures |
Total Revenue |
672 |
(3) |
669 |
OPINC |
(122) |
7 |
(115) |
|
|
|
|
Cash Flow Statement items - YTD In million $ |
Segment figures |
IFRS 15 adjustment |
IFRS figures |
EBITDAs |
243 |
(3) |
240 |
Change in Working Capital & Provisions |
(1) |
3 |
2 |
Cash Provided by Operations |
238 |
(0) |
238 |
|
|
|
|
Multi-Client Data Library NBV In million $ |
Segment figures |
IFRS 15 adjustment |
IFRS figures |
Opening Balance Sheet , Dec 19 |
376 |
155 |
531 |
Closing Balance Sheet , Sep 20 |
345 |
154 |
499 |
Third Quarter
2020 Segment Financial
Results
Geology, Geophysics & Reservoir
(GGR)
Geology, Geophysics & Reservoir
(GGR)In million $ |
2020Q2 |
2020Q3 |
Variances, % |
Segment revenue |
144 |
150 |
4% |
Geoscience |
83 |
77 |
(7)% |
Multi-Client |
62 |
73 |
18% |
Prefunding |
46 |
39 |
(15)% |
After-Sales |
15 |
34 |
120% |
Segment EBITDAs |
74 |
56 |
(24)% |
EBITDAs Margin |
51% |
38% |
(137) bps |
Segment operating income |
(39) |
(25) |
37% |
OPINC Margin |
(27)% |
(16)% |
106 bps |
Equity from investments |
0 |
0 |
- |
Capital employed (in billion $) |
1.7 |
1.7 |
1% |
Supplementary information |
|
|
|
Adjusted segment EBITDAs before NRC |
81 |
85 |
6% |
EBITDAs Margin |
56% |
57% |
10 bps |
Adjusted segment OPINC before NRC |
9 |
10 |
7% |
OPINC Margin |
6% |
7% |
2 bps |
Other Key Metrics |
|
|
|
Multi-Client cash capex ($m) |
(73) |
(58) |
(20)% |
Multi-Client cash prefunding rate (%) |
63% |
68% |
43 bps |
GGR segment revenue was $150
million, up 4% quarter-on-quarter.
-
Geoscience revenue was $77 million, down (7)%
quarter-on-quarter.
Despite the general slowdown of the economy and
its effect on clients’ E&P spending, Geoscience activity
remained resilient, down sequentially (7)% driven by sustained
activity in the main large imaging centers, GeoSoftware and our
dedicated processing centers.
Geoscience is adapting to lower demand as Q3
total production was down only (2)% sequentially.Preservation of
business continuity and profitability remains the focus. CGG’s
Geoscience leading technology continues to be recognized by major
clients. GeoSoftware continued to delivered innovation this quarter
with new reservoir characterization cloud technology, and Smart
Data Solutions business won significant data management
contracts.
- Multi-Client revenue was $73 million this
quarter, up 18% quarter-on-quarter.
- Prefunding revenue of our multi-client projects was $39
million, down (15)% quarter-on-quarter as multi-client cash capex
was (20)% lower at $(58)m in Q3. Prefunding rate was 68%.We had
four multi-client programs this quarter: three marine streamer
surveys – Nebula in Brazil, Gippsland – in Australia and North
Viking Graben in Norway, and one ocean bottom nodes survey in the
UK North Sea.
- Multi-client after-sales were at $34 million this quarter
driven by Brazil and US Gulf of Mexico, up 120%
quarter-on-quarter.
The segment library Net Book Value was $345
million ($499 million after IFRS 15 adjustments) at the end of
September 2020, split 86% offshore and 14% onshore.
GGR segment EBITDAs was $56
million, with 38% margin.
GGR Adjusted
segment EBITDAs $85 million with 57% margin before
$(28) million of COVID-19 plan costs.
GGR segment operating income
was $(25) million.
GGR
Adjusted segment
operating income was $10 million with 6% margin before
$(35) million of non-recurring charges.
GGR capital employed was stable
at $1.7 billion at the end of September 2020.
Equipment
EquipmentIn million $ |
2020Q2 |
2020Q3 |
Variances, % |
Segment revenue |
58 |
50 |
(14)% |
Land |
45 |
31 |
(30)% |
Marine |
10 |
15 |
52% |
Downhole gauges |
3 |
2 |
(28)% |
Non Oil & Gas |
1 |
3 |
92% |
Segment EBITDAs |
0 |
(1) |
- |
EBITDAs margin |
0% |
(1)% |
(18) bps |
Segment operating income |
(7) |
(9) |
(27)% |
OPINC Margin |
(12)% |
(18)% |
(51) bps |
|
|
|
|
Capital employed (in billion $) |
0.5 |
0.6 |
5% |
Supplementary information |
|
|
|
Adjusted segment EBITDAs before NRC |
1 |
0 |
- |
EBITDAs margin |
2% |
0% |
(25) bps |
Adjusted segment OPINC before NRC |
(6) |
(9) |
(38)% |
OPINC Margin |
(11)% |
(17)% |
(58) bps |
Equipment segment revenue was
$50 million, down 14% quarter-on-quarter. External sales were $50
million.
-
Land equipment sales represented 62% of total sales, as we
delivered in Q3 over 50 thousand 508XT channels mainly in Russia
and India. Sercel also delivered its first land node WiNG system in
North America.
-
Marine equipment sales represented 29% of total sales driven by
spares sections sales of Sentinel streamers’ installed base.
-
Downhole equipment sales were $2 million and sales from non Oil
& Gas equipment were $3 million
Equipment segment EBITDAs was
$(1) million.
Equipment
Adjusted segment EBITDAs was $0m
before $(1) million of COVID-19 plan costs.
Equipment segment operating
income was $(9) million.
Equipment
Adjusted segment operating income
$(9) million before $(0.5) million of non-recurring charges.
Equipment capital employed was
up at $0.6 billion at the end of September 2020.
Third Quarter
2020 Financial Results
Consolidated Income StatementsIn million
$ |
2020Q2 |
2020Q3 |
Variances % |
Exchange rate euro/dollar |
1.10 |
1.17 |
6% |
Segment revenue |
202 |
199 |
(1)% |
GGR |
144 |
150 |
4% |
Equipment |
58 |
50 |
(14)% |
Elim & Other |
(1) |
(1) |
7% |
Segment Gross Margin |
24 |
27 |
13% |
Segment EBITDAs |
68 |
52 |
(24)% |
GGR |
81 |
85 |
6% |
Equipment |
1 |
0 |
- |
Corporate |
(6) |
(5) |
7% |
Elim & Other |
0 |
1 |
- |
COVID-19 plan |
(7) |
(28) |
- |
Segment operating income |
(53) |
(38) |
29% |
GGR |
9 |
10 |
7% |
Equipment |
(6) |
(9) |
(38)% |
Corporate |
(7) |
(6) |
8% |
Elim & Other |
(1) |
1 |
- |
Non recurring charges |
(49) |
(34) |
31% |
IFRS 15 adjustment |
21 |
(5) |
- |
IFRS operating income |
(32) |
(43) |
(32)% |
Equity from investments |
0 |
0 |
- |
Net cost of financial debt |
(33) |
(34) |
(4)% |
Other financial income (loss) |
1 |
(4) |
- |
Income taxes |
(24) |
1 |
104% |
NRC (Tax & OFI) |
(46) |
(8) |
83% |
Net income / (loss) from continuing
operations |
(134) |
(88) |
34% |
Net income / (loss) from discontinued operations |
(13) |
(5) |
62% |
IFRS net income / (loss) |
(147) |
(93) |
37% |
Shareholder's net income / (loss) |
(147) |
(93) |
37% |
Basic Earnings per share in $ |
(0.21) |
(0.13) |
37% |
Basic Earnings per share in € |
(0.19) |
(0.11) |
40% |
Segment revenue was $199
million, stable quarter-on-quarter. The respective contributions
from the Group’s businesses were 38% from Geoscience, 37% from
Multi-Client (75% for the GGR segment) and 25% from Equipment.
Segment EBITDAs was $52 million
and Adjusted*
segment EBITDAs
was $80 million
before $(28) million of Covid-19 plan costs, up 6% sequentially, a
40% margin.
Segment
operating
income was $(38) million and
Adjusted*
segment
operating
income was $(4)
million before $(34) million of non-recurring charges.
IFRS 15 adjustment at operating
income level was $(5) million and IFRS operating
income, after IFRS 15 adjustment, was $(43) million.
Cost of financial debt was
$(34) million. The total amount of interest paid during the quarter
was $(7) million.
Other Financial Items were
$(12) million including $(8) million of non-recurring charges
related to remeasurement of fair value of other financial assets
and liabilities.
Taxes were at $1 million.
Net loss
from continuing operations was $(88) million.
Discontinued operationsCorrespond to the former
Contractual Data Acquisition and Non-Operated Resources segments.
Main aggregates are as follows:- Q3 revenue from
discontinued operations was $6 million.- Net loss
from discontinued operations was $(5) million this
quarter.- Net Cash flow from discontinued
operations was $7 million before Plan 2021 |
Group
net loss was $(93) million.
After minority interests,
Group net
loss attributable to CGG
shareholders was $(93) million/ €(79) million.
Adjusted Net loss from
continuing operations, excluding
$(41) million of non-recurring charges, was $(47) million.
Global economic crisis, triggered by Covid-19
pandemic and unprecedented drop in oil price and E&P spending
lead CGG to launch cost reduction actions («Covid-19 plan») and
recognize other non-recurring charges.
$(41)
million of non-recurring
charges were booked during the third quarter of 2020:
- $(28)
million of severance costs
- $(6)
million of non-cash fair value remeasurement of assets available
for sale
- $(8)
million of non-cash remeasurement of other financial assets and
liabilities mainly related to Marine Acquisition exit
transaction
Non-recurring charges (in m$) |
Q3 2020 |
Operational costs provisions |
(28) |
Multi-client library Impairment |
|
Asset impairment |
(6) |
Goodwill impairment |
|
Other Financial Items (OFI) adjustment |
(8) |
Deferred Tax Assets impairment |
|
Total |
(41) |
Third Quarter 2020
Cash Flow
Cash Flow itemsIn million $ |
2020Q2 |
2020Q3 |
Variances % |
Segment Operating Cash Flow |
81 |
12 |
(85)% |
CAPEX |
(89) |
(71) |
(20)% |
Industrial |
(4) |
(5) |
21% |
R&D |
(12) |
(8) |
(33)% |
Multi-Client (Cash) |
(73) |
(58) |
(20)% |
Marine MC |
(62) |
(56) |
(9)% |
Land MC |
(11) |
(2) |
(84)% |
Proceeds from disposals of assets |
0 |
0 |
- |
Segment Free Cash Flow |
(8) |
(59) |
- |
Lease repayments |
(15) |
(15) |
1% |
Paid Cost of debt |
(32) |
(7) |
78% |
Plan 2021 |
(22) |
(19) |
15% |
Free cash flow from discontinued operations |
0 |
7 |
- |
Net Cash flow |
(77) |
(92) |
(20)% |
Financing cash flow |
0 |
(5) |
- |
Forex and other |
(1) |
16 |
- |
Net increase/(decrease) in cash |
(78) |
(81) |
(4)% |
|
|
|
|
Supplementary information |
|
|
|
|
|
|
|
Change in working capital and provisions,
included in Segment Operating Cash Flow |
15 |
(37) |
- |
COVID-19 plan Cash |
(3) |
(7) |
- |
Segment Free Cash Flow before COVID-19 plan |
(5) |
(52) |
- |
Total capex was $(71) million, down (20)%
quarter-on-quarter:
-
Industrial capex was $(5) million,
- Research
& Development capex was $(8) million,
-
Multi-client cash capex was $(58) million, down
(20)% quarter-on-quarter
Segment Free Cash
Flow, including $(37) million change in
working capital and $(7)m of non-recurring severance cash costs,
was $(59) million.
After $(15) million lease repayments, $(7)
million paid cost of debt, $(19) million 2021 plan cash costs and
$7 million free cash flow from discontinued operations, Net
Cash Flow was $(92) million.
First 9 months
2020 Financial
Results
Consolidated Income StatementsIn million
$ |
2019SeptYTD |
2020SeptYTD |
Variances % |
Exchange rate euro/dollar |
1.13 |
1.12 |
(0)% |
Segment revenue |
1,004 |
672 |
(33)% |
GGR |
685 |
492 |
(28)% |
Equipment |
329 |
183 |
(44)% |
Elim & Other |
(9) |
(2) |
74% |
Segement Gross Margin |
284 |
124 |
(57)% |
Segment EBITDAs |
515 |
243 |
(53)% |
GGR |
463 |
289 |
(37)% |
Equipment |
74 |
9 |
(88)% |
Corporate |
(21) |
(17) |
19% |
Elim & Other |
0 |
0 |
- |
COVID-19 plan |
0 |
(38) |
- |
Segment operating income |
175 |
(122) |
- |
GGR |
148 |
66 |
(55)% |
Equipment |
51 |
(15) |
- |
Corporate |
(23) |
(19) |
17% |
Elim & Other |
0 |
(0) |
- |
Non-recurring charges |
0 |
(154) |
- |
IFRS 15 adjustment |
(6) |
7 |
- |
IFRS operating income |
169 |
(115) |
- |
Equity from investments |
0 |
0 |
- |
Net cost of financial debt |
(98) |
(100) |
1% |
Other financial income (loss) |
4 |
3 |
(21)% |
Income taxes |
(11) |
(28) |
- |
NRC (Tax & OFI) |
- |
(53) |
- |
Net income / (loss) from continuing
operations |
63 |
(293) |
- |
Net income / (loss) from discontinued operations |
(151) |
(45) |
70% |
IFRS net income / (loss) |
(87) |
(338) |
- |
Shareholder's net income / (loss) |
(94) |
(340) |
- |
Basic Earnings per share in $ |
(0.13) |
(0.48) |
- |
Basic Earnings per share in € |
(0.12) |
(0.43) |
- |
Segment revenue was $672
million, down (33)% compared to last year. The respective
contributions from the Group’s businesses were 38% from Geoscience,
35% from Multi-Client (73% for the GGR segment) and 27% from
Equipment.
GGR segment revenue was $492
million, down (28)% year-on-year
-
Geoscience revenue was $253 million, down (9)%
year-on-year and more resilient mainly due to backlog.
-
Multi-Client sales were $239 million, down (41)%
year-on-year.
-
Prefunding revenue was $143 million, down (9)% year-on-year.
Multi-Client cash capex was $(198) million, up 29% year-on-year and
cash prefunding rate was 72%.
-
After-sales were $96 million, down (62)% year-on-year, including
large one-off transfer fees in Q3 2019.
Equipment revenue was $183
million, down (44)% year-on-year with a drop in equipment market
triggered by the Covid-19 crisis.
Segment EBITDAs was $243
million and Adjusted
segment EBITDAs
was $281 million, before $(38) million of Covid-19 plan costs, down
46% year-on-year, a 42% margin.
GGR adjusted EBITDA margin was at 59% and
Equipment adjusted EBITDA margin at 4%.
Segment operating income was
$(122) million and Adjusted
segment operating
income, was $32 million, before $(154) million of
non-recurring charges.
IFRS 15 adjustment at operating
income level was $7 million and IFRS operating
income, after IFRS 15 adjustment, was $(115) million.
Cost of financial debt was
$(100) million. The total amount of interest paid during the first
9 months 2020 was $(47) million.
Other Financial Items were
$(42) million, including $(45) million of non-recurring charges
related to remeasurement of fair value of other financial assets
and liabilities.
Taxes were at $(28)
million.
Net loss
from continuing operations was $(293) million.
Discontinued operationsCorrespond to the former
Contractual Data Acquisition and Non-Operated Resources segments.
Main aggregates are as follows:-First 9 months 2020 revenue
from discontinued operations was $25 million.-Net
loss from discontinued operations was $(45)
million.-Net Cash flow from discontinued
operations was $17 million before Plan 2021. |
Group
net loss was $(338) million.
After minority interests,
Group loss attributable
to CGG shareholders was $(340) million/
€(302) million.
Adjusted Net Loss from continuing
operations, excluding $(207) million
non-recurring charges, was $(86) million.
Global economic crisis, triggered by Covid-19
pandemic and unprecedented drop in oil price and E&P spending
lead CGG to launch cost reduction actions and recognize other
non-recurring charges.
$(207)
million of non-recurring
charges were booked during the first 9 months of 2020:
- $(38) million
severance cash costs related to Covid-19 plan
- $(69) million
non-cash impairment of the multi-client library
- $(23) million
non-cash fair value remeasurement of GeoSoftware business available
for sale
- $(24) million
non-cash goodwill impairment related to GeoConsulting business
mainly focused on exploration and appraisal
- $(45) million
non-cash remeasurement of other financial assets and liabilities
mainly related to Marine Acquisition exit transaction
- $(9) million
non-cash impairment of Deferred Tax Assets
Non-recurring charges (in m$) |
9 months 2020 |
Operational costs provisions |
(38) |
Multi-client library Impairment |
(69) |
Asset impairment |
(23) |
Goodwill impairment |
(24) |
Other Financial Items (OFI) adjustment |
(45) |
Deferred Tax Assets impairment |
(9) |
Total |
(207) |
First 9 months 2020 Cash
Flow
Cash Flow items(in
m$) |
2019SeptYTD |
2020SeptYTD |
Variances % |
Segment Operating Cash Flow |
572 |
238 |
(58)% |
CAPEX |
(205) |
(248) |
21% |
Industrial |
(28) |
(18) |
(36)% |
R&D |
(24) |
(32) |
31% |
Multi-Client (Cash) |
(153) |
(198) |
29% |
Marine MC |
(131) |
(169) |
29% |
Land MC |
(22) |
(29) |
30% |
Proceeds from disposals of assets |
0 |
0 |
- |
Segment Free Cash Flow |
367 |
(9) |
- |
Lease repayments |
(41) |
(44) |
(6)% |
Paid Cost of debt |
(47) |
(47) |
2% |
Plan 2021 |
(65) |
(69) |
(7)% |
Free cash flow from discontinued operations |
(35) |
17 |
- |
Net Cash flow |
179 |
(152) |
- |
Financing cash flow |
0 |
(5) |
- |
Forex and other |
(18) |
11 |
- |
Net increase/(decrease) in cash |
161 |
(146) |
- |
Supplementary information |
|
|
|
Change in working capital and provisions,
included in Segment Operating Cash Flow |
77 |
(1) |
- |
COVID-19 plan Cash |
- |
(11) |
- |
Segment Free Cash Flow before COVID-19 plan |
367 |
1 |
- |
Segment Operating Cash Flow was
$238 million compared to $572 million for the first nine months of
2019, a (58)% decrease year-on-year.
Capex was $(248) million, up
21% year-on-year:
-
Industrial capex was $(18) million, down (36)%
year-on-year,
-
Research & Development capex was $(32)
million, up 31% year-on-year,
-
Multi-client cash capex was $(198) million, up 29%
year-on-year.
Including negative change in working capital of
$(1) million and $(11) million of COVID-19 plan severance cash
costs, Segment Free Cash Flow before lease
repayments was at
$(9)
million.
After lease repayments of $(44) million, payment
of interest expenses of $(47) million, CGG 2021 Plan cash costs of
$(69) million and positive free cash flow from discontinued
operations of $17 million, Group
Net Cash Flow was $(152) million.
Balance Sheet
Group gross
debt before IFRS 16 was
$1,213 million
at the end of September 2020 and net debt was
$749
million.
Group gross
debt after IFRS 16 was
$1,375
million at the end of September 2020 and
net debt was
$910
million.
Group’s
liquidity amounted to
$465 million at
the end of September 2020.
Q3 2020 Conference
call
An English language analysts’ conference call is scheduled today
at 8:15 am (Paris time) – 7:15 am (London time)
To follow this conference, please access the live
webcast:
From your
computer at: |
www.cgg.com |
A replay of the conference will be available via webcast on the
CGG website at: www.cgg.com.
For analysts, please dial the following numbers 5 to 10 minutes
prior to the scheduled start time:
France
call-in: |
+33 (0) 1 70 70
07 81 |
|
|
UK
call-in: |
+44(0) 844 4819
752 |
|
|
Access
Code: |
8151668 |
|
|
About CGG
CGG (www.cgg.com) is a global geoscience
technology leader. Employing around 4,000 people worldwide, CGG
provides a comprehensive range of data, products, services and
equipment that supports the discovery and responsible management of
the Earth’s natural resources. CGG is listed on the Euronext Paris
SA (ISIN: 0013181864).
Contacts
Group Communications
& Investor RelationsChristophe BarniniTel: + 33 1 64
47 38 11E-Mail: : christophe.barnini@cgg.com |
|
CONSOLIDATED FINANCIAL
STATEMENTS
September
30,
2020
Unaudited Interim Consolidated statements of
operations
|
|
Nine months ended September 30, |
(In millions of US$, except per share data) |
|
2020 |
2019 |
Operating revenues |
|
668.9 |
930.1 |
Other income from ordinary activities |
|
0.5 |
0.5 |
Total income from ordinary activities |
|
669.4 |
930.6 |
Cost of operations |
|
(538.4) |
(652.3) |
Gross profit |
|
131.0 |
278.3 |
Research and development expenses - net |
|
(12.9) |
(17.9) |
Marketing and selling expenses |
|
(25.2) |
(34.3) |
General and administrative expenses |
|
(52.9) |
(54.0) |
Other revenues (expenses) - net |
|
(154.8) |
(2.9) |
Operating income (loss) |
|
(114.8) |
169.2 |
Expenses related to financial debt |
|
(101.6) |
(100.8) |
Income provided by cash and cash equivalents |
|
1.9 |
2.5 |
Cost of financial debt, net |
|
(99.7) |
(98.3) |
Other financial income (loss) |
|
(41.8) |
3.5 |
Income (loss) before incomes taxes |
|
(256.3) |
74.4 |
Income taxes |
|
(36.8) |
(11.2) |
Net income (loss) from consolidated companies before share
of income (loss) in companies accounted for under the equity
method |
|
(293.1) |
63.2 |
Share of income (loss) in companies accounted for under the equity
method |
|
0.1 |
(0.1) |
Net income (loss) from continuing operations |
|
(293.0) |
63.1 |
Net income (loss) from discontinued operations |
|
(45.0) |
(150.5) |
Net income (loss) |
|
(338.0) |
(87.4) |
Attributable to : |
|
|
|
Owners of CGG S.A |
|
(339.6) |
(94.2) |
Non-controlling interests |
|
1.6 |
6.8 |
Net income (loss) per share |
|
|
|
Basic |
|
(0.48) |
(0.13) |
Diluted |
|
(0.48) |
(0.13) |
Net income (loss) from continuing operations per
share |
|
|
|
Basic |
|
(0.41) |
0.08 |
Diluted |
|
(0.41) |
0.08 |
Net income (loss) from discontinued operations per
share |
|
|
|
Basic |
|
(0.06) |
(0.21) |
Diluted |
|
(0.06) |
(0.21) |
Unaudited Consolidated statements of financial
position
(In millions of US$) |
|
September 30, 2020 |
December 31, 2019 |
ASSETS |
|
|
|
Cash and cash equivalents |
|
464.5 |
610.5 |
Trade accounts and notes receivable, net |
|
259.0 |
436.0 |
Inventories and work-in-progress, net |
|
236.9 |
200.1 |
Income tax assets |
|
86.2 |
84.9 |
Other current assets, net |
|
84.9 |
116.7 |
Assets held for sale, net |
|
134.3 |
316.6 |
Total current assets |
|
1,265.8 |
1,764.8 |
Deferred tax assets |
|
10.7 |
19.7 |
Investments and other financial assets, net |
|
33.9 |
27.4 |
Investments in companies under the equity method |
|
3.6 |
3.0 |
Property, plant and equipment, net |
|
278.9 |
300.0 |
Intangible assets, net |
|
654.5 |
690.8 |
Goodwill, net |
|
1,181.5 |
1,206.9 |
Total non-current assets |
|
2,163.1 |
2,247.8 |
TOTAL ASSETS |
|
3,428.9 |
4,012.6 |
LIABILITIES AND EQUITY |
|
|
|
Financial debt – current portion |
|
73.4 |
59.4 |
Trade accounts and notes payables |
|
83.0 |
117.4 |
Accrued payroll costs |
|
123.1 |
156.6 |
Income taxes payable |
|
73.0 |
59.3 |
Advance billings to customers |
|
22.3 |
36.9 |
Provisions — current portion |
|
55.5 |
50.0 |
Other current financial liabilities |
|
37.0 |
— |
Other current liabilities |
|
230.9 |
327.3 |
Liabilities directly associated with the assets classified as held
for sale |
|
8.1 |
259.2 |
Total current liabilities |
|
706.3 |
1,066.1 |
Deferred tax liabilities |
|
15.8 |
10.4 |
Provisions — non-current portion |
|
48.0 |
58.1 |
Financial debt – non-current portion |
|
1,301.1 |
1,266.6 |
Other non-current financial liabilities |
|
47.9 |
— |
Other non-current liabilities |
|
47.8 |
4.0 |
Total non-current liabilities |
|
1,460.6 |
1,339.1 |
Common stock: 1,194,086,134 shares authorized and 711,324,363
shares with a €0.01 nominal value outstanding at September 30,
2020 |
|
8.7 |
8.7 |
Additional paid-in capital |
|
1,687.1 |
3,184.7 |
Retained earnings |
|
(371.9) |
(1,531.1) |
Other Reserves |
|
(33.1) |
(23.5) |
Treasury shares |
|
(20.1) |
(20.1) |
Cumulative income and expense recognized directly in equity |
|
(0.8) |
(0.7) |
Cumulative translation adjustment |
|
(48.9) |
(56.3) |
Equity attributable to owners of CGG S.A. |
|
1,221.0 |
1,561.7 |
Non-controlling interests |
|
41.0 |
45.7 |
Total equity |
|
1,262.0 |
1,607.4 |
TOTAL LIABILITIES AND EQUITY |
|
3,428.9 |
4,012.6 |
Unaudited Consolidated statements of cash flows
|
|
Nine months ended September 30, |
(In millions of US$) |
|
2020 |
2019 |
OPERATING |
|
|
|
Net income (loss) |
|
(338.0) |
(87.4) |
Less: Net income (loss) from discontinued operations |
|
(45.0) |
(150.5) |
Net income (loss) from continuing operations |
|
(293.0) |
63.1 |
Depreciation, amortization and impairment |
|
136.5 |
98.0 |
Multi-client surveys impairment and amortization |
|
227.4 |
175.6 |
Depreciation and amortization capitalized in Multi-client
surveys |
|
(13.2) |
(5.9) |
Variance on provisions |
|
22.5 |
1.7 |
Share-based compensation expenses |
|
3.9 |
4.0 |
Net (gain) loss on disposal of fixed and financial assets |
|
— |
(0.1) |
Equity (income) loss of investees |
|
(0.1) |
0.1 |
Dividends received from investments in companies under the equity
method |
|
— |
— |
Other non-cash items |
|
41.8 |
(2.8) |
Net cash-flow including net cost of financial debt and
income tax |
|
125.8 |
333.7 |
Less : net cost of financial debt |
|
99.7 |
98.3 |
Less : income tax expense (gain) |
|
36.8 |
11.2 |
Net cash-flow excluding net cost of financial debt and
income tax |
|
262.3 |
443.2 |
Income tax paid |
|
(3.4) |
(19.3) |
Net cash-flow before changes in working
capital |
|
258.9 |
423.9 |
Changes in working capital |
|
(20.5) |
148.5 |
- change in trade accounts and notes receivable |
|
70.6 |
199.6 |
- change in inventories and work-in-progress |
|
(34.8) |
(17.7) |
- change in other current assets |
|
(6.1) |
(13.8) |
- change in trade accounts and notes payable |
|
(14.9) |
(1.8) |
- change in other current liabilities |
|
(35.3) |
(17.8) |
Net cash-flow provided by operating
activities |
|
238.4 |
572.4 |
INVESTING |
|
|
|
Total capital expenditures (including variation of fixed assets
suppliers, excluding Multi-client surveys) |
|
(49.8) |
(52.3) |
Investment in Multi-client surveys, net cash |
|
(198.0) |
(153.2) |
Proceeds from disposals of tangible and intangible assets |
|
0.3 |
(0.1) |
Total net proceeds from financial assets |
|
— |
— |
Acquisition of investments, net of cash and cash equivalents
acquired |
|
(0.4) |
— |
Variation in loans granted |
|
— |
— |
Variation in subsidies for capital expenditures |
|
— |
— |
Variation in other non-current financial assets |
|
12.0 |
0.6 |
Net cash-flow used in investing activities |
|
(235.9) |
(205.0) |
|
|
Nine months ended September 30, |
(In millions of US$) |
|
2020 |
2019 |
FINANCING |
|
|
|
Repayment of long-term debt |
|
(5.2) |
— |
Total issuance of long-term debt |
|
— |
— |
Lease repayments |
|
(43.6) |
(41.1) |
Change in short-term loans |
|
— |
0.1 |
Financial expenses paid |
|
(46.5) |
(47.5) |
Net proceeds from capital increase: |
|
|
|
— from shareholders |
|
— |
— |
— from non-controlling interests of integrated companies |
|
— |
— |
Dividends paid and share capital reimbursements: |
|
|
|
— to shareholders |
|
— |
— |
— to non-controlling interests of integrated companies |
|
(7.2) |
(3.8) |
Acquisition/disposal from treasury shares |
|
— |
— |
Net cash-flow provided by (used in) financing
activities |
|
(102.5) |
(92.3) |
Effects of exchange rates on cash |
|
6.5 |
(14.5) |
Impact of changes in consolidation scope |
|
— |
— |
Net cash flows incurred by discontinued
operations |
|
(52.5) |
(99.1) |
Net increase (decrease) in cash and cash
equivalents |
|
(146.0) |
161.5 |
Cash and cash equivalents at beginning of year |
|
610.5 |
434.1 |
Cash and cash equivalents at end of period |
|
464.5 |
595.6 |
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