2096 presentation q3 2011

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Q3 2011Financial Results

November 9th 2011

8/3/2019 2096 Presentation Q3 2011


Forward Looking Statements

This presentation contains forward-looking statements, including, without limitation, statements about

CGGVeritas (“the Company”) plans, strategies and prospects. These forward-looking statements are

subject to risks and uncertainties that may change at any time, and, therefore, the Company’s actual

results may differ materially from those that were expected. The Company based these forward-looking

statements on its current assumptions, expectations and projections about future events. Although the

Company believes that the expectations reflected in these forward-looking statements are reasonable, it

is very difficult to predict the impact of known factors and it is impossible for us to anticipate all factors

that could affect our proposed results. All forward-looking statements are based upon information

available to the Company as of the date of this presentation. Important factors that could cause actual

results to differ materially from management's expectations are disclosed in the Company’s periodic

reports and registration statements filed with the SEC and the AMF. Investors are cautioned not to

place undue reliance on such forward-looking statements.

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Q3 2011 Review

Financial Review

Operational Review

Outlook and Perspectives

Agenda

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Q3 2011 Strengthening Financial Results

Group Revenue was $797m, up 21% y-o-y and 6% sequentially

Group Operating Income was $98m, a 12% margin

Sercel delivered excellent results with Operating Income of $87m, a32% margin

Services strengthened with Operating Income of $53m, a 9% margin,mainly driven by strong Marine performance in a continued low pricedenvironment

Net Income at $41m

For the first nine months of the year, Cash Flow from Operations

was $486m, up 54% and Net Free Cash Flow negative at $8m

Net Debt to Equity ratio was stable at 41%

Backlog was $1.24 billion at the end of the quarter

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Positive Impacts of Performance Plan

Strengthening Fleet Performance

Strong utilization with vessel availability at 91% and production at 93%

Vessel upgrade plan on schedule:

• The upgraded Oceanic Phoenix and Endeavour returned to operations. The Endeavorcompleted the first BroadSeisTM wide-azimuth project ahead of schedule

• The Champion, the last of our vessels targeted for the performance program wentto shipyard for its major upgrade

•The X-BOW Oceanic Sirius was delivered on October 3

rd

, 2011

Commercial success of BroadSeisTM confirmed with more than 10surveys acquired this year

Strategic agreement with Spectrum finalized, generating a

capital gain of $19m this quarter. CGGVeritas now owns a 25%stake in the company

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Q3 2011 Review

Financial Review

Operational Review


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Agenda

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(In million dollars) Q2 2011 Q3 2011 Q3 2010

Revenue 750 797 656

Operating Income 16 98 27

Operating Margin (%) 2% 12% 4%

Cost of Debt -51 -40 -36

Other financial items -4 8 -9

Including one-off charges (refinancing) -17 0 0

Income Taxes -5 -19 -13

Deferred Taxes on CurrencyTranslation

1 -8 1

Equity in income of affiliates 6 2 -2

Net Income -38 41 -33

EPS (€) -0.19 0.18 -0.18

EPS/ADS ($) -0.27 0.25 -0.23

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Financial Performance Improving Sequentiallyand Year-on-Year

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2009 2010 2011

Q3 2011 Financial Overview

Revenue was $797m, up 21% year-on-yearand 6% sequentially

Sercel at $275m, up 11% y-o-y

Services at $592m, up 28% y-o-y

Operating Income was $98m, a 12% margin

Sercel continued to deliver strongperformance with a margin of 32%

• 29% in Q2 2011• 30% in Q3 2010

Services Operating Income grew to $53m

• Loss of $29m in Q2 2011

• Loss of $17m in Q3 2010

Services results were driven by Marine

performance, Multi-Client marine after-salesand Processing, Imaging & Reservoir

Net Income was positive at $41m

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Revenue(In million $) Q1

Q2Q3

Q1Q2Q3

136

OPINC (In million $)256

100

2009 2010 2011

2,361

1,999

2,275

731

656

797

27

58

98

9 Months

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2009 2010 2011

Q3 2011 Financial Overview

EBITDAs: $254m, a 32% margin

Sercel at $100m, a 36% margin

Services at $193m, a 33% margin

Cash Flow from Operations was $119m, up45% in Q3 and up 54% year to date, y-o-y

Total Capex of $179m

Industrial Capex: $104m

Multi-Client Capex increased to $75m this quarter,70% prefunded

• Marine MC at $29m, 63% prefunded

• Land MC at $46m, 74% prefunded

Net Free Cash Flow was negative at $66m forthe quarter and negative at $8m for the firstnine months of the year, compared to negative$213m for the first nine months of 2010

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Cash Flow / Capex (In million $)

EBITDAs(In million $)

Q1Q2Q3

Q1Q2Q3

201120102009

567

746

499

231

157254

448

486

471

315

470

643

179

119

16982

148

303

9 Months

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10 10 10165

305

530

350

400

2011 20 12 20 13 20 14 2015 2016 2017 2018 20 19 20 20 20 21

TLB - Mandatory redemption Unsecured HYB

510

155

350

400

650

510

20 11 20 12 20 13 20 14 2015 2016 20 17 20 18 20 19 20 20 2021

Unsecured HYB Convertible Bond

Year-end 2010

5.5 years maturity

7.3% cash interest

September-end 2011

6.25 years maturity

6.0% cash interest

Accelerated Refinancing Program with Debt MaturityExtended to 2021 Ahead of the Financial “Crisis”

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Financial Indicators – Strong Balance Sheet

Net CurrentAssets $ 565 m

$ 1,543 m Net Debt

Net FixedAssets

$ 1,574 m

MC Library $ 585 m

Goodwill $ 2,690 m

$ 3,871 m

Equity &

MinorityInterests

CapitalEmployed

$ 5 413 m $ 5 413 m Financing$ 5,414m $ 5,414m

Capital Employed as end of September 2011

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Agenda

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Q3 2011 Review

Financial Review

Operational Review


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2009 2010 2011

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Year-on-year, revenue was up 11% withsustained strong profitability

Land equipment

Robust 428 and UNITETM demand for highdensity surveys

Strong regional activity

Marine equipment

Continued robust Marine sales

Strong deliveries of SeaRay® Ocean BottomCable systems

Internal sales

25% of revenue with Sentinel and Nautilusdelivered to the Oceanic Sirius

Sercel outlook remains strong

Sercel: Q3 2011 Operational Overview

Q1Q2Q3

9 Months

643

716

817

247203

Revenue(In million $)

2009 2010 2011

Q1Q2Q3

258

148

189

74

37

OPINC (In million $)

275

87

9 Months

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Services: Q3 2011 Operational Overview

Revenue up 28% y-o-y, operating margin strengthened

Marine contract revenue up 69%

Early impacts of the Performance Plan

Increasing vessel utilization rates

Vessel upgrades on schedule with the Champion delivered toshipyard and due to return to operations in Q2 2012

BroadSeisTM, a strong commercial success with 10 contractscompleted in 2010 including the first wide-azimuth project

Land contract revenue down 17%

Operational difficulties on complex projects and ongoing impactfrom the earlier unrest in North Africa and the Middle East

Strong North American market expected to extend through the2012 winter campaign

Processing, Imaging and Reservoir revenue up 21%

Increasing activity for high-end projects including BroadSeisTM

Multi-Client revenue up 6%

Spectrum marine 2D strategic agreement finalized

Sustained strong levels of Multi-Client marine after-sales

North Sea library extension, first BroadSeisTM survey in Brazil

Marcellus program progressed in adverse weather conditions

Q1Q2Q3

2008 2009 2010 2011

Revenue(In million $)

2009 2010 2011

1,817

1,432

1,657

Q1Q2Q3

OPINC (In million $)

571

592

461

461

-2

3

183

53

-17

41

2009 20112010

9 Months

9 Months

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Agenda

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Q3 2011 Review

Financial Review

Operational Review


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Performance Plan progressing successfully

Operational and financial results strengthening Continued focus on performance, cost reduction and differentiation

We remain confident to achieve our 2011 objectives

A strong fourth quarter is anticipated for Sercel

Land mobilization ahead of an expected strong winter season and Marine seasonal

transits should moderate Services contract activity

Planned lease sales should drive strong Multi-Client sales especially near year-end

Longer term, strong underlying oil and gas fundamentals are expectedto drive high-end seismic demand

Seismic equipment sales are expected to remain strong

Activity should build globally in key basins

Marine overcapacity expected to progressively be absorbed

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A strong and financially resilient position for the future

2096 presentation q3 2011

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