CGG: Announces its Q4 and Full Year 2020 Results
CGG announced its Q4 and full year 2020 results, showcasing a challenging year impacted by the oil & gas market collapse. For Q4, revenue was $217 million, with a segment EBITDAs margin of 43%. Full year revenue totaled $886 million, down 35% YoY. Despite a net loss of $100 million in Q4 and $438 million for the year, the company expects a recovery in 2021 with positive net cash flow. Segment backlog as of January 1, 2021, stands at $421 million. CGG aims for carbon neutrality by 2050, highlighting its ongoing investments in geoscience technologies.
- Q4 2020 revenue at $217 million, up 42% Q/Q.
- Segment EBITDAs margin at 43%, despite challenging market conditions.
- Successful exit from the Acquisition business, focusing on high-end geoscience technologies.
- Anticipated positive net cash flow in 2021 as economies recover and oil prices stabilize.
- Full year revenue down 35% YoY to $886 million.
- Q4 net loss of $100 million, contributing to a full year loss of $438 million.
- Non-recurring charges totaling $61 million in Q4, impacting financials.
CGG Announces its Q4 and Full Year 2020 Results
Q4 Solid Operational Performance
2021 Positive Net Cash Flow sustained by gradual recovery
PARIS, France – March 5, 2021 – CGG (ISIN: FR0013181864), a world leader in Geoscience, announced today its fourth quarter and full year 2020 audited results.
Commenting on these results, Sophie Zurquiyah, CGG CEO, said:
“In the particularly challenging year of 2020, which saw the collapse of the oil & gas market across the second and third quarters, we finished the year with solid fourth quarter operational performance. During 2020, we successfully completed our exit from the Acquisition business while continuing to advance our high-end Geoscience technologies for reservoir development and production. We also delivered our Multi-client surveys in the industry’s core mature sedimentary basins and released new products while reinforcing our market leadership in Equipment. Our initiatives towards energy transition are accelerating with the development and commercialization of new business offerings, along with our announced target to achieve carbon neutrality by 2050. Looking forward, as global economies continue to progressively recover and with oil price stabilizing above
Q4 2020: Solid Operational Performance
Multi-client: Solid prefunding rate of Equipment: Solid quarter driven by land equipment deliveries
Full Year 2020: Financial performance hampered by Covid-19 pandemic impact
Liquidity of
With continuing acceleration of Covid-19 vaccinations world economies should continue to progressively recover from pandemic in 2021. Recent OPEC+ agreements support the rebalancing of supply and demand and Brent oil price has gradually recovered and stabilized above the CGG will continue to invest in geoscience technologies that support clients’ prioritization towards reservoir development and production optimization. After a low Q1, our Geoscience activity will start recovering during the second half of the year on the back of solid demand for best-in-class subsurface imaging technologies and sustained activity with large NOCs. Our Multi-client business will reduce capex keeping its focus on expanding our unique footprint offshore Brazil and in the North Sea while reprocessing existing data libraries with our latest imaging technologies. Our Equipment business should benefit from solid deliveries for land mega crews in Saudi Arabia in H1 and improved demand for its large portfolio of WING nodes onshore and GPR nodes offshore. CGG continues to progressively develop its existing energy transition businesses, leveraging its core capabilities into other domains (Geothermal, Mining and SHM), expanding into areas where clients are growing (Carbon capture, utilization and storage) and hiring new talents. Financial objectives: positive net cash flow in 2021 Given the context outlined above and assuming there will be no deterioration in Covid-19 pandemic and market conditions, CGG segment revenue is expected to increase by low single digits year-on-year with growth in Equipment, gradual recovery in Geoscience from H2 2021 and reduced Multi-Client prefunding revenue. Segment EBITDAs is expected to remain stable with a less favorable business mix. Net cash flow is anticipated to be positive. The Group will continue to focus on capital discipline and cash generation. Multi-client cash capex is expected to be reduced to around |
Key Figures - Fourth Quarter 2020
| Key Figures IFRS - Quarter In million $ | 2019 Q4 | 2020 Q4 | Variances % |
| Operating revenues | 426 | 217 | (49)% |
| Operating Income | 74 | (58) | - |
| Equity from Investment | - | - | - |
| Net cost of financial debt | (33) | (34) | |
| Other financial income (loss) | 2 | 2 | |
| Income taxes | 20 | 7 | (64)% |
| Net Income / Loss from continuing operations | 63 | (83) | - |
| Net Income / Loss from discontinued operations | (37) | (18) | |
| Group net income / (loss) | 26 | (100) | - |
| Operating Cash Flow | 179 | 26 | (85)% |
| Net Cash Flow | 7 | (95) | - |
| Net debt | 716 | 1,004 | |
| Net debt before lease liabilities | 540 | 849 | |
| Capital employed | 2,323 | 2,168 | (7)% |
Key Segment Figures - Fourth Quarter 2020
| Key Segment Figures - Quarter In million $ | 2019 Q4 | 2020 Q4 | Variances % |
| Segment revenue | 396 | 283 | (29)% |
| Segment EBITDAs | 206 | 118 | (43)% |
| Group EBITDAs margin | (103) bps | ||
| Segment operating income | 72 | (42) | - |
| Opinc margin | (15)% | - | |
| IFRS 15 adjustment | 2 | (16) | - |
| IFRS operating income | 74 | (58) | - |
| Operating Cash Flow | 179 | 26 | (85)% |
| Net Segment Cash Flow | 7 | (95) | - |
| Supplementary information | |||
| Adjusted segment EBITDAs before NRC | 206 | 122 | (41)% |
| EBITDAs margin | (90) bps | ||
| Adjusted segment operating income before NRC | 72 | 17 | (77)% |
| Opinc margin | (123) bps |
Key Figures – Full Year 2020
| Key Figures IFRS - YTD In million $ | 2019 | 2020 | Variances % |
| Operating revenues | 1,356 | 886 | (35)% |
| Operating Income | 244 | (173) | - |
| Equity from Investment | - | - | - |
| Net cost of financial debt | (132) | (134) | |
| Other financial income (loss) | 6 | (39) | - |
| Income taxes | 9 | (30) | - |
| Net Income / Loss from continuing operations | 126 | (376) | - |
| Net Income / Loss from discontinued operations | (188) | (63) | |
| Group net income / (loss) | (61) | (438) | - |
| Operating Cash Flow | 751 | 264 | (65)% |
| Net Cash Flow | 186 | (247) | - |
| Net debt | 716 | 1,004 | |
| Net debt before lease liabilities | 540 | 849 | |
| Capital employed | 2,323 | 2,168 | (7)% |
Key Segment Figures – Full Year 2020
| Key Segment Figures - YTD In million $ | 2019 | 2020 | Variances % |
| Segment revenue | 1,400 | 955 | (32)% |
| Segment EBITDAs | 721 | 361 | (50)% |
| Group EBITDAs margin | (137) bps | ||
| Segment operating income | 247 | (164) | - |
| Opinc margin | - | (349) bps | |
| IFRS 15 adjustment | (4) | (8) | - |
| IFRS operating income | 244 | (173) | - |
| Operating Cash Flow | 751 | 264 | (65)% |
| Net Segment Cash Flow | 186 | (247) | - |
| Supplementary information | |||
| Adjusted segment EBITDAs before NRC | 721 | 402 | (44)% |
| Group EBITDAs margin | (94) bps | ||
| Adjusted segment operating income before NRC | 247 | 48 | (80)% |
| Opinc margin | (130) bps |
Key figures bridge: Segment to IFRS - Fourth Quarter 2020
| P&L items - Q4 In million $ | Segment figures | IFRS 15 adjustment | IFRS figures |
| Total Revenue | 283 | (66) | 217 |
| OPINC | (42) | (16) | (58) |
| Cash Flow Statement items - Q4 In million $ | Segment figures | IFRS 15 adjustment | IFRS figures |
| EBITDAs | 118 | (66) | 52 |
| Change in Working Capital & Provisions | (88) | 66 | (22) |
| Cash Provided by Operations | 26 | - | 26 |
| Multi-Client Data Library NBV In million $ | Segment figures | IFRS 15 adjustment | IFRS figures |
| Opening Balance Sheet, Sept 20 | 345 | 154 | 499 |
| Closing Balance Sheet, Dec 20 | 285 | 207 | 492 |
Key figures bridge: Segment to IFRS – Full Year 2020
| P&L items - YTD In million $ | Segment figures | IFRS 15 adjustment | IFRS figures |
| Total Revenue | 955 | (69) | 886 |
| OPINC | (164) | (8) | (173) |
| Cash Flow Statement items - YTD In million $ | Segment figures | IFRS 15 adjustment | IFRS figures |
| EBITDAs | 361 | (69) | 292 |
| Change in Working Capital & Provisions | (89) | 69 | (20) |
| Cash Provided by Operations | 264 | - | 264 |
| 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, Dec 20 | 285 | 207 | 492 |
Fourth Quarter 2020 Segment Financial Results
Geology, Geophysics & Reservoir (GGR)
| Geology, Geophysics & Reservoir (GGR) In million $ | 2019 Q4 | 2020 Q4 | Variances, % |
| Segment revenue | 275 | 176 | (36)% |
| Geoscience | 106 | 75 | (29)% |
| Multi-Client | 169 | 101 | (40)% |
| Prefunding | 62 | 70 | |
| After-Sales | 106 | 31 | (71)% |
| Segment EBITDAs | 189 | 108 | (43)% |
| EBITDAs Margin | (78) bps | ||
| Segment operating income | 64 | (44) | - |
| OPINC Margin | (25)% | (479) bps | |
| Equity from investments | - | - | - |
| Capital employed (in billion $) | 1.9 | 1.6 | (10)% |
| Supplementary information | |||
| Adjusted segment EBITDAs before NRC | 189 | 111 | (41)% |
| EBITDAs Margin | (58) bps | ||
| Adjusted segment OPINC before NRC | 64 | 15 | (79)% |
| OPINC Margin | (168) bps | ||
| Other Key Metrics | |||
| Multi-Client cash capex ($m) | (32) | (41) | (26)% |
| Multi-Client cash prefunding rate (%) | (204) bps |
GGR segment revenue was
- Geoscience revenue was
$75 million , down (2)% quarter-on-quarter and down (29)% year-on-year.
Despite the general slowdown of the global economy and its negative effect on oil price and clients’ E&P spending, Geoscience production was more resilient, driven by stable activity for Naitional Oil Companies and sequential increase in GeoSoftware and Geovation sales.
CGG Geoscience technology leadership continues to be recognized by major clients.
- Multi-Client revenue was
$101 million , up38% quarter-on-quarter and down (40)% year-on-year.
Prefunding revenue of our multi-client projects was
We had one marine streamer multi-client program offshore Brazil and several reprocessing and reimaging multi-clients surveys this quarter.Multi-client cash capex was
Multi-client after-sales were at
The segment library Net Book Value was
GGR segment EBITDAs was
GGR Adjusted segment EBITDAs was
GGR segment operating income was
GGR Adjusted segment operating income was
GGR capital employed was stable at
Equipment
| Equipment In million $ | 2019 Q4 | 2020 Q4 | Variances, % |
| Segment revenue | 123 | 108 | (13)% |
| Land | 87 | 87 | (0)% |
| Marine | 23 | 13 | (43)% |
| Downhole gauges | 9 | 3 | (68)% |
| Non Oil & Gas | 4 | 5 | |
| Segment EBITDAs | 23 | 14 | (41)% |
| EBITDAs margin | (60) bps | ||
| Segment operating income | 16 | 6 | (63)% |
| OPINC Margin | (75) bps | ||
| Capital employed (in billion $) | 0.5 | 0.6 | |
| Supplementary information | |||
| Adjusted segment EBITDAs before NRC | 23 | 14 | (40)% |
| EBITDAs margin | (58) bps | ||
| Adjusted segment OPINC before NRC | 16 | 6 | (62)% |
| OPINC Margin | (73) bps |
Equipment segment revenue was
- Land equipment sales represented
81% of total sales, as we delivered in Q4 over 100,000 channels worldwide. Sercel also delivered WiNG land node systems in Latin America. - Marine equipment sales represented
12% of total sales driven by spares sections sales of Sentinel streamers to its installed customers base. - Downhole equipment sales were
$3 million and sales from non Oil & Gas equipment were$5 million
Equipment segment EBITDAs was
Equipment segment operating income was
Equipment capital employed was up at
Fourth Quarter 2020 Financial Results
| Consolidated Income Statements In million $ | 2019 Q4 | 2020 Q4 | Variances % |
| Exchange rate euro/dollar | 1.10 | 1.18 | |
| Segment revenue | 396 | 283 | (29)% |
| GGR | 275 | 176 | (36)% |
| Equipment | 123 | 108 | (12)% |
| Elim & Other | (2) | (1) | |
| Segment Gross Margin | 109 | 46 | (58)% |
| Segment EBITDAs | 206 | 118 | (43)% |
| GGR | 189 | 111 | (41)% |
| Equipment | 23 | 14 | (40)% |
| Corporate | (6) | (4) | |
| Elim & Other | - | - | - |
| Severance costs | - | (4) | - |
| Segment operating income | 72 | (42) | - |
| GGR | 64 | 15 | (77)% |
| Equipment | 16 | 6 | (62)% |
| Corporate | (7) | (4) | |
| Elim & Other | - | - | - |
| Non recurring charges | - | (59) | - |
| IFRS 15 adjustment | 2 | (16) | - |
| IFRS operating income | 74 | (58) | - |
| Equity from investments | - | - | - |
| Net cost of financial debt | (33) | (34) | (3)% |
| Other financial income (loss) | 2 | 5 | - |
| Income taxes | 20 | 7 | (64)% |
| NRC (Tax & OFI) | - | (3) | - |
| Net income / (loss) from continuing operations | 63 | (83) | - |
| Net income / (loss) from discontinued operations | (37) | (18) | |
| IFRS net income / (loss) | 26 | (100) | - |
| Shareholder's net income / (loss) | 25 | (102) | - |
| Basic Earnings per share in $ | 0.04 | (0.14) | - |
| Basic Earnings per share in € | 0.03 | (0.12) | - |
Segment revenue was
Segment EBITDAs was
Segment operating income was
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, which resulted in new severance costs and recognize other non-recurring charges.
$(4) million of severance costs$(29) million of non-cash Multi-client library impairments mainly in Africa and Ireland$(10) million of asset impairment$(15) million of non-cash fair value remeasurement of assets available for sale
| Non-recurring charges (in m$) | Q4 2020 |
| Operational costs provisions | (4) |
| Multi-client library Impairment | (29) |
| Asset impairment | (10) |
| Fair value remeasurement of assets available for sale | (15) |
| Other financial items (OFI) adjustements | (3) |
| Total | (61) |
IFRS 15 adjustment at operating income level was
Cost of financial debt was
Other Financial Items were
Net loss from continuing operations was
| Discontinued operations : Correspond to the former Contractual Data Acquisition and Non-Operated Resources segments. Main aggregates are as follows: - Q4 revenue from discontinued operations was - Net loss from discontinued operations was - Net Cash flow from discontinued operations was |
Group net loss was
After minority interests, Group net loss attributable to CGG shareholders was
Fourth Quarter 2020 Cash Flow
| Cash Flow items In million $ | 2019 Q4 | 2020 Q4 | Variances % |
| Segment Operating Cash Flow | 179 | 26 | (85)% |
| CAPEX | (55) | (55) | - |
| Industrial | (15) | (5) | |
| R&D | (8) | (9) | (10)% |
| Multi-Client (Cash) | (32) | (41) | (26)% |
| Marine MC | (21) | (40) | (88)% |
| Land MC | (11) | (1) | |
| Proceeds from disposals of assets | - | - | - |
| Segment Free Cash Flow | 124 | (29) | - |
| Lease repayments | (16) | (12) | |
| Paid Cost of debt | (33) | (34) | (2)% |
| CGG 2021 Plan | (71) | (18) | |
| Free cash flow from discontinued operations | 3 | (2) | - |
| Net Cash flow | 7 | (95) | - |
| Financing cash flow | (1) | 0 | |
| Forex and other | 9 | 16 | |
| Net increase/(decrease) in cash | 15 | (79) | - |
| Supplementary information | |||
| Change in working capital and provisions, included in Segment Operating Cash Flow | (20) | (88) | - |
| From severance cash costs | - | (3) | - |
| Segment Free Cash Flow before severance cash costs | 124 | (26) | (121)% |
Total capex was
- Industrial capex was
$(5) million , - Research & Development capex was
$(9) million , - Multi-client cash capex was
$(41) million
Segment Free Cash Flow was
After
Full Year 2020 Financial Results
| Consolidated Income Statements In million $ | 2019 | 2020 | Variances % |
| Exchange rate euro/dollar | 1.12 | 1.14 | |
| Segment revenue | 1,400 | 955 | (32)% |
| GGR | 960 | 668 | (30)% |
| Equipment | 452 | 291 | (36)% |
| Elim & Other | (11) | (4) | |
| Segment Gross Margin | 393 | 169 | (57)% |
| Segment EBITDAs | 721 | 361 | (50)% |
| GGR | 652 | 401 | (39)% |
| Equipment | 97 |
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FAQ
What were CGG's Q4 2020 revenues?
CGG reported Q4 2020 revenues of $217 million.
How did CGG perform financially in 2020?
CGG posted a full year revenue of $886 million, down 35% year-on-year, with a net loss of $438 million.
What is CGG's outlook for 2021?
CGG anticipates a positive net cash flow in 2021 as global economies recover and oil prices stabilize.
What is CGG's goal for carbon neutrality?
CGG aims to achieve carbon neutrality by 2050.
What is CGG's segment backlog as of January 1, 2021?
CGG's segment backlog stood at $421 million as of January 1, 2021.
CGG
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