Digital Energy Journal- CGG Announces its Q4 2022 Results

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CGG Announces its Q4 2022 Results

Thursday, March 2, 2023

CGG announced today its fourth quarter and full year 2022 audited results.

PARIS, France - March 2, 2023 - CGG announced its fourth quarter and full year 2022 audited results.

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

'I am pleased to see our strong Q4 financial performance delivering higher than anticipated multi-client data and equipment sales. For CGG, 2022 was a year of continued high market volatility and transition with Beyond the Core revenue contributing 8% of total revenue. We are entering 2023 with improved visibility thanks to our higher backlog and cash generation. Looking forward, our Core businesses are expected to grow supported by our leadership positions, enabling us to further develop our Beyond the Core businesses and transform CGG into a global technology & HPC leader.'

Q4 2022: A strong quarter driven by EDA & SMO
- IFRS figures: revenue at $268m, EBITDAs at $142m, OPINC at $84m

- Segment revenue at $319m, up 6% and up 7% proforma* year-on-year

o Geoscience at $69m, down (22)% proforma* year-on-year from a very high Q4 2021, which was driven by software sales
o Earth Data at $145m, up 28% year-on-year. Prefunding revenue at $67m, up 14% year-on-year. After sales at $78m, up 43% year-on-year
o Sensing and Monitoring at $104m, up 10% year-on-year

Segment EBITDAs at $193m, a 60% margin, and adjusted** segment EBITDAs at $159m, excluding $34m gain on the sale of the US land Earth Data library, a high 50% margin
Segment operating income at $94m, a 29% margin, and adjusted** segment operating income at $66m, a high 21% margin

Group net income at $47m compared to a net loss of $(28)m last year.

Net cash-flow IFRS at $62m, including $63m proceeds from sale of the US land seismic data library.
Full year 2022: Significant improvement in financial performance with return to positive net income

IFRS figures: revenue at $927m, EBITDAs at $432m, OPINC at $182m
Segment revenue at $928m, down (1)% and up 3% proforma* year-on-year
Segment EBITDAs at $434m, a 47% margin, and adjusted** segment EBITDAs at $395m, up 17% year-on-year, a 43% margin
Segment operating income at $180m, a 19% margin, and adjusted** segment operating income at $147m, up 88% year-on-year, a 16% margin.
Group net income IFRS at $43m, a significant improvement compared to a net loss of $(180)m last year.
Net cash flow at $(3)m.

Balance Sheet at the end of December

Liquidity of $398m, including cash liquidity of $298m and $100m of undrawn RCF.
Net debt before IFRS 16 at $859m as of December 31, 2022.
Segment leverage ratio of Net debt to Adjusted** Segment EBITDAs was 2.4x at the end of December 2022, down from 2.9x at the end of December 2021.

Full Year 2023 financial guidance:

Backlog of $442m at the end of January 2022, up 44% year-on-year
2023 segment revenue is expected to increase by around [15% to 20%] primarily driven by SMO revenue growth
2023 adjusted** segment EBITDAs margin is expected to be around [39% to 41%] due to the business mix
2023 EDA cash Capex is expected to be around $200m with prefunding above 75%
2023 Industrial and R&D Capex is expected to be around $70m, primary driven by increase in High Performance Computing (HPC) capacity
CGG is anticipating 2023 positive net cash flow before change in working capital
CGG is anticipating quarterly segment revenue volatility to remain high in 2023 mainly driven by sequencing of equipment deliveries. Q1 2023 segment revenue is anticipated to be stable year-on-year.

* The proforma indicator represents additional information corrected for the Geosoftware and SDS activities sold in 2021
** Adjusted indicators represent supplementary information adjusted for non-recurring charges triggered by economic downturn.

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