CGG Announces its Q4 & FY 2023 Results
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
Q4 2023: A strong cash generation of $48m
- IFRS figures: revenue at $265m, EBITDAs at $68m, OPINC at $(11)m.
- Segment revenue at $320m, flat year-on-year.
- Geoscience at $98m, up 41% year-on-year.
- Earth Data at $103m, down (29)% year-on-year. Prefunding revenue at $62m, down (8)% year-on-year. After sales at $41m, down (47)% year-
on-year.
- Sensing & Monitoring at $119m, up 14% year-on-year.
- Segment EBITDAs at $122m, a 38% margin, including $(13)m fees from contractual vessel commitments and $(8)m old equipment inventory write- off.
- Segment operating income at $15m, a 5% margin.
- Group net income at $(15)m.
- Net cash-flow at $48m, including $(18)m fees from contractual vessel commitments.
- 1 -
Full year 2023: Strong financial improvement
- IFRS figures: revenue at $1,076m, EBITDAs at $351m, OPINC at $119m.
- Segment revenue at $1,125m, up 21% year-on-year.
- Segment EBITDAs at $400m, a 36% margin due to business mix as well as $(44)m fees from contractual vessel commitments and a $(8)m SMO inventory write-off.
- Segment operating income at $138m, a 12% margin due to business mix.
- Group net income at $16m.
- Net cash flow at $32m, including $(66)m fees from contractual vessel commitments.
Balance Sheet at the end of December 2023
- Liquidity of $417m, including cash liquidity of $327m and $90m of undrawn RCF.
- Net debt before IFRS 16 at $871m at the end of December 2023.
- Segment leverage ratio (Net debt IFRS 16 to adjusted* segment EBITDAs) was 2.4x at the end of December 2023.
2024-2026 Market Trends: Mid-single digit growth of our coremarket and accelerated growth of our New Businesses
- CGG anticipates market demand for its core businesses to continue to grow at yearly mid-single digit through 2026 sustained by offshore international activity and the middle east, selected exploration in key basins, and eventually an increasing need for technologies and subsurface understanding.
- Building on its key technology and proven expertise, CGG is strongly positioned to address the critical needs of new markets in low carbon (CCUS and Minerals and Mining), High Performance Computing (HPC) and Structural Health Monitoring (SHM). These three businesses are expected to develop rapidly at a CAGR above 30% during the period 2024 - 2026.
- 2 -
CGG 2024-2025 financial roadmap: deleveraging the balancesheet:
- CGG anticipates net cash generation to accelerate and represent around $100 million in 2025, based on the end of our vessel commitment and continued operational improvement, notably in SMO as well as growth of our core and New Businesses fueled by selective increase in organic investment.
- Based on this solid cash generation over the period 2024-2025 and with a reduced $100 million cash need to run its operations, CGG has a clear 2024- 2025 financial trajectory, starting with the extension of the RCF in 2024, a re-rating discussion with the Rating Agencies and with eventually about $300 million of cash available for a gross debt buyback program and/or reduced refinancing before Q1 2026.
- To ignite its financial 2024-2025 roadmap, CGG announces its intention to repurchase a first tranche of $30 million debt in 2024.
Full Year 2024 financial objectives1
- In 2024, segment revenue is expected to be aligned with 2023:
- Geoscience: continued growth driven by technology and demand for low carbon.
- Earth Data: increase driven by transfer fees and favorable impact of delayed 2023 licensing rounds.
- Sensing & Monitoring: to be down due to lower numbers of mega- projects.
- New Businesses expected to grow by more than 30%
- 2024 segment EBITDAs is expected to be positively impacted by business mix.
- 2024 EDA cash Capex is expected to be around $175 -$200m with prefunding above 75%.
- CGG is anticipating 2024 positive net cash flow2 to reach a similar level as 2023, considering that it is the last year of the negative impact of the vessel contractual commitment with Shearwater.
1 based on a 1.1 €/$ exchange rate 2 excl any debt buyback
- 3 -
Key Figures - Fourth Quarter 2023
Key Figures IFRS
In million $
Operating revenues
Operating Income
Equity from Investment
Net cost of financial debt
Other financial income (loss)
Income taxes
Net Income / Loss from continuing operations
Net Income / Loss from discontinued operations
Group net income / (loss)
Operating Cash Flow
Net Cash Flow
Net debt
Net debt before lease liabilities
Capital employed
2022
Q4
268
84
(18)
(24)
(2)
9
49
(2)
47
103
62
951
858
2,010
2023
Q4
265
(11)
(3)
(20)
(2)
11
(25)
10
(15)
152
48
974
871
2,038
Variances
%
(1)%
-
86%
(17)%
-
13%
(151)%
576%
(132)%
47%
(23)%
2%
1%
1%
Key Figures - End of December 2023
Key Figures IFRS
In million $
Operating revenues
Operating Income
Equity from Investment
Net cost of financial debt
Other financial income (loss)
Income taxes
Net Income / Loss from continuing operations
Net Income / Loss from discontinued operations
Group net income / (loss)
Operating Cash Flow
Net Cash Flow
Net debt
Net debt before lease liabilities
Capital employed
2022
Full year
927
182
(19)
(99)
0
(17)
48
(5)
43
346
(3)
951
858
2,010
2023
Full year
1,076
119
(2)
(95)
(4)
(14)
4
12
16
408
32
974
871
2,038
Variances
%
16%
(34)%
89%
3%
-
19%
(92)%
-
(63)%
18%
-
2%
1%
1%
- 4 -
Key Segment Figures - Fourth Quarter 2023
Key Segment Figures
In million $
Segment revenue
Segment EBITDAs
Group EBITDAs margin
Segment operating income
Opinc margin
IFRS 15 adjustment
IFRS operating income
Operating Cash Flow
Net Segment Cash Flow
Supplementary information
Adjusted segment EBITDAs before NRC EBITDAs margin
Adjusted segment operating income before
NRC
Opinc margin
2022
Q4
319
193
60%
94
29%
(10)
84
103
62
159
50%
66
21%
2023
Q4
320
122
38%
15
5%
(26)
(11)
152
48
121
38%
14
4%
Variances
%
0%
(37)%
-
bps
(84)%
- bps (177)%
-
47%
(23)%
(24)%
-
bps
(78)%
- bps
Key Segment Figures - End of December 2023
Key Segment Figures In million $
Segment revenue
Segment EBITDAs
Group EBITDAs margin
Segment operating income
Opinc margin
IFRS 15 adjustment
IFRS operating income
Operating Cash Flow
Net Segment Cash Flow
Supplementary information
Adjusted segment EBITDAs before NRC EBITDAs margin
Adjusted segment operating income before
NRC
Opinc margin
2022
Full year
928
434
47%
180
19%
2
182
346
(3)
395
43%
147
16%
2023
Full year
1,125
400
36%
138
12%
(19)
119
408
32
400
36%
138
12%
Variances
%
21%
(8)%
-
bps
(23)%
(7) bps
-
(34)%
18%
-
1%
-
bps
(6)%
(4) bps
- 5 -
Key figures bridge: Segment to IFRS - Fourth Quarter 2023
P&L items | Segment | IFRS 15 | IFRS figures | ||||||||
figures | |||||||||||
In million $ | adjustment | ||||||||||
Total Revenue | 320 | (54) | 265 | ||||||||
OPINC | 15 | (26) | (11) | ||||||||
Cash Flow Statement items | Segment | IFRS 15 | IFRS figures | ||||||||
In million $ | figures | adjustment | |||||||||
EBITDAs | 122 | (54) | 68 | ||||||||
Change in Working Capital & Provisions | 21 | 55 | 75 | ||||||||
Cash Provided by Operations | 152 | 0 | 151 | ||||||||
Earth Data Data Library NBV | Segment | IFRS 15 | IFRS figures | ||||||||
In million $ | figures | adjustment | |||||||||
Opening Balance Sheet, Oct 1st 23 | 359 | 117 | 476 | ||||||||
Closing Balance Sheet, Dec 31st 23 | 311 | 147 | 458 |
Key figures bridge: Segment to IFRS - End of December 2023
P&L items | Segment | IFRS 15 | IFRS figures | ||||||||
figures | |||||||||||
In million $ | adjustment | ||||||||||
Total Revenue | 1,125 | (49) | 1,076 | ||||||||
OPINC | 138 | (19) | 119 | ||||||||
Cash Flow Statement items | Segment | IFRS 15 | IFRS figures | ||||||||
In million $ | figures | adjustment | |||||||||
EBITDAs | 400 | (49) | 351 | ||||||||
Change in Working Capital & Provisions | 3 | 49 | 52 | ||||||||
Cash Provided by Operations | 408 | (0) | 408 | ||||||||
Earth Data Data Library NBV | Segment | IFRS 15 | IFRS figures | ||||||||
In million $ | figures | adjustment | |||||||||
Opening Balance Sheet , Jan 1st 23 | 304 | 115 | 419 | ||||||||
Closing Balance Sheet , Dec 31th 23 | 311 | 147 | 458 |
- 6 -
Fourth Quarter 2023 Segment Financial Results
Data, Digital & Energy Transition (DDE)
Data, Digital & Energy Transition
(DDE)
In million $
Segment revenue
Geoscience
Earth Data
Prefunding
After-Sales
Segment EBITDAs
EBITDAs Margin
Segment operating income
OPINC Margin
Equity from investments
Capital employed (in billion $) Supplementary information Adjusted segment EBITDAs before NRC
EBITDAs Margin
Adjusted segment OPINC before NRC OPINC Margin
Other Key Metrics
Earth Data cash capex ($m)
Earth Data cash prefunding rate (%)
2022
Q4
215
69
145
67
78
180
84%
90
42%
(2)
1.5
147
68%
62
29%
(25)
264%
2023
Q4
201
98
103
62
41
117
58%
20
10%
0
1.5
117
58%
21
10%
(29)
209%
Variances
%
(7)%
41%
(29)%
(8)%
(47)%
(35)%
-
bps
(78)%
- bps
-105%
2%
(20)%
-
bps
(67)%
- bps
16%
(54) bps
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.
- 7 -
Sensing & Monitoring
Sensing & Monitoring
In million $
Segment revenue
Land
Marine
Downhole gauges
Beyond the Core
Segment EBITDAs
EBITDAs margin
Segment operating income
OPINC Margin
Capital employed (in billion $)
Supplementary information
Adjusted segment EBITDAs before NRC
EBITDAs margin
Adjusted segment OPINC before NRC
OPINC Margin
2022
Q4
104
62
22
7
14
20
19%
12
12%
0.6
20
20%
12
12%
2023
Q4
119
36
66
6
11
11
9%
1
1%
0.6
9
8%
(1)
-1%
Variances
%
14%
(42)%
207%
(9)%
(20)%
(46)%
- bps
(93)%
-
bps
(8)%
(56)%
-
bps
(108)% - bps
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.
- 8 -
Fourth Quarter 2023 Financial Results 2023
Consolidated Income Statements In million $
Exchange rate euro/dollar
Segment revenue
DDE
Sensing & Monitoring
Elim & Other
Segment Gross Margin
Segment EBITDAs
Adjusted Segment EBITDAS *
DDE Adjusted*
Sensing & Monitoring Adjusted*
Corporate
Elim & Other
Non recurring charges
Segment operating income
Adjusted Segment Opinc *
DDE Adjusted* Sensing & Monitoring Adjusted* Corporate Elim & Other
Non recurring charges IFRS 15 adjustment
IFRS operating income Equity from investments Net cost of financial debt Other financial income (loss) Income taxes
Net income / (loss) from continuing operations
Net income / (loss) from discontinued operations
IFRS net income / (loss) Shareholder's net income / (loss) Basic Earnings per share in $ Basic Earnings per share in €
2022
Q4
1.00
319
215
104
0
101
193
159
147
20
(7)
(1)
0
94
66
62
12
(8)
(1)
0
10
84
(18)
(24)
(2)
9
49
(2)
47
46
0.06
0.06
2023
Q4
1.07
320
201
119
0
52
122
121
117
9
(8)
2
0
15
14
21
(1)
(8)
2
0
26
(11)
(3)
(20)
(2)
11
(25)
10
(15)
(15)
(0.02)
(0.02)
Variances
%
7%
0%
(7)%
14%
-
(48)%
(37)%
(24%)
(20)%
(56)%
(7)%
-
-
(84)%
(78%)
(67)%
(108)%
(3)%
-
-
177%
(113)%
86%
17%
13%
(151)%
-
(132)%
(133)%
(133)%
(131)%
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.
- 9 -
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
Cash Flow items
In million $
Segment Operating Cash Flow
CAPEX
Industrial
R&D
Earth Data (Cash)
Marine Offshore
Land Onshore
Proceeds from disposals of assets Segment Free Cash Flow
Lease repayments & asset financing Paid Cost of debt
CGG 2021 Plan
Free cash flow from discontinued operations
Net Cash Flow
Financing cash flow
Forex and other
Net increase/(decrease) in cash
Supplementary information
Change in working capital and provisions, included in Segment Operating Cash Flow
2022
Q4
103
(50)
(18)
(6)
(25)
(25)
0
62
115
(2)
(45)
(3)
(2)
62
5
6
73
(61)
2023
Q4
152
(42)
(8)
(4)
(29)
(29)
0
7
116
(18)
(44)
(8)
1
48
(2)
8
52
21
Variances
%
48%
(17)%
(55)%
(32)%
16%
16%
(89)%
1%
-
3%
(122)%
143%
(23)%
(147)%
19%
(29)%
135%
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.
- 10 -
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CGG SA published this content on 06 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 March 2024 17:29:02 UTC.