Viridien S/Adr

Good day and thank you for standing by. Welcome to the GGQ3 2023 Financial Results Conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to CGG. Please go ahead.

Thank you. Good morning and good afternoon, ladies and gentlemen. Welcome to this presentation of the CGG South Quarter 2023 Results. The call today is hosted from Paris, where Mrs. Sophie Giacchia, our Chief Executive Officer, and Mr. Jérôme Serre, our Group CFO, will provide an overview of the quarter results. as well as provide comments on our outlook. Just let me remind you that some of the information contains forward-looking statements subject to risk and uncertainty that may change at any time, and therefore, the actual results may differ materially from those that were expected. Following the overview of the quarter, we will be pleased to take your questions. And now, I will turn the call over to Sophie.

Thank you, Christophe. And good morning and good afternoon, ladies and gentlemen. Thank you for participating in this Q3 2023 conference call. We're on slide five now. And before reviewing the quarter and market perspective, I'd like to start by highlighting the particularly strong ESG rating of CGG. After confirming our high MSCI and Sustainalytics rating, we received a silver sustainability rating from EcoBuddies. from their evaluation of a reduction of greenhouse gas emissions throughout the value chain. We prioritise ESG and are pleased to see this recognised in our performance. Macro oil and gas trends over the quarter have been fairly stable, with increasing realisation that all sources of energy will be required to optimally manage across the energy transition for decades to come. Our clients are trying to find the right balance between meeting the increased requirements for future production and managing long-term risks. To address this, we see progressively increasing interest in exploration, yet in lower time to market locations. As an example, in frontier areas that already have discoveries or in basins where infrastructure is already in place. This not only lowers risk, but importantly shortens cycle times. Good data and high-end imaging are fundamental to reduce exploration risks and maximize spill production. We are in a favorable cycle for CGG, where quality and precision increasingly matter, and our clients, especially NOCs, turn to best-in-class organizations capable of delivering integrated geoscience. I expect a continued trend of sustained higher levels of E&P capex, especially offshore and in the Middle East, both key markets for CDG. Looking at our Q3, we had an excellent quarter, both in terms of operational and financial performance. Geoscience revenue was $78 million, up 13% year-on-year, driven by innovations in high-end imaging. Earth data sales were $107 million, up 74% year-on-year, with solid after-sales at $52 million, up 21%. Pre-funding revenue was $55 million, with a $111 pre-funding weight. Sensing and monitoring sales were $122 million, up 42% year-on-year. Overall, our Q3 revenue reached $307 million, up 42% year-on-year. Segment EBITDA was $109 million, up 41%, including our payment this quarter of $20 million to Shearwater to compensate for the non-utilization of the streamer vessels. Q3 net cash flow was positive at $63 million, And we had $370 million of liquidity at the end of September, including $95 million of undrawn RCF. We'll change to slide 7 now. DDE segment revenue was $185 million in Q3, up 41% year-on-year, with double-digit growth in geoscience and strong Earth data sales. Profitability was solid despite the $20 million impact of non-utilization compensation fees to share water for their streamer vessels. Slide 8. Geoscience external revenue was $78 million in Q3, up 13% year-on-year, with growth coming from all regions. The geoscience business remains solid, supported by strong demand and by our technology differentiation, particularly valuable for OVN processing. Backlog is up 3% year-under, mainly due to delays in the award of large projects for NOCs. We continue to increase quality and extract more efficiencies as our work becomes more and more data-driven and less people-intensive. Slide 9. In geoscience, demand for a unique elastic full waveform inversion is very high, driven by North America and expanding worldwide. To support the ramp up of our activity, we are recruiting top talents from the best schools globally and remain highly attractive because of CGG's culture, advanced technology and focus on innovation. Our new highly specialized UK HPC hub is coming online to support running the most compute-intensive algorithms as demand for advanced technologies is picking up in the eastern hemisphere. The picture on this slide is a very nice example of CGG's imaging added value for CCUS projects. You can see the subsurface in the shallow waters of the Gulf of Mexico. Thanks to our unique high-frequency TLMWI velocity imaging technology, we can show the reservoir pressure differences across the fault and identify high-pressure areas which are not optimal for carbon storage. The range of our offerings in carbon sequestration is expanding with more projects targeting the monitoring phase, which is the most sensitive from a regulatory standpoint and offers longer-term business opportunities. Our scope of involvement in many of the mining covers a broad spectrum from exploration, such as our recent contract for lithium mining in Mongolia, all the way to production, where we provide services to assess mine stability. Overall, our quarterly revenue stream for these low-carbon services is showing a positive dynamic, as more companies acknowledge the need for high-end geofines, as an example, to explore for new mineral deposits buried in the subsurface that are needed for energy transition, or to characterize reservoirs for CCUS and better understand their long-term behavior. We'll go to slide 10 now. The most recent implementation of our full waveform inversion algorithm brings a higher geological fidelity to subsurface images. And this, together with our machine learning and AI techniques, is enabling a much more rapid and accurate interpretation of the data. As such, we are becoming increasingly involved in supporting activities that were historically performed exclusively by our clients and are expanding the scope of our services. Results are particularly striking with OBM data, and this is a key reason our clients are increasingly using OBM technology together with our high-end imaging, even though it is multiple times more costly than streamer acquisition. Processing is more complex, and with our differentiation, clients tend to use our unique and leading technology to extract the most value from the OBM acquisition investment. The images you see on the slide are five years apart, and the 2023 image is based on the most advanced acquisition and imaging technology. You can see that the details of the salt geometries are defined much more clearly, especially at the reservoir level. Slide 11. In early October, we opened our new UK high-performance computing hub in South East England. The initial capacity of the center is 100 petaflops, bringing CGG's global total to just over 500 petaflops. The highly optimized environment, together with the hub's use of 100% renewable energy, reflects CGG's commitment to sustainably meet the massive computing demand required by high-end scientific and AI applications. I expect the trend of increasing our computing capacity to continue in the future, possibly accelerate, as we not only support our traditional imaging business, but also our new and growing businesses in digital and data transformation, as well as new verticals. We announced this morning another new client, LightOn, a pioneering artificial intelligence AI company to our emerging HPC business. Our highly optimized and sustainable AI and HPC solutions will help Liton optimally evaluate and test large language models to support the industrial deployment of AI. Ultimately, our outcome-driven specialized approach combined with our proprietary technology enables companies such as Liton to accelerate and maximize their return on investment through evaluation, testing, scaling, and commercial production. This unique HPT AI solution brings tremendous value to our internal and external clients. We'll move to slide 12 with EarthData. Q3 EarthData revenue was $107 million, up 74% year-on-year. Pre-funding revenue was solid at $52 million, bringing the pre-funding rate for the first nine months to 93 percent and i am confident that we will finish the year above 90 percent earth data cash capex was 50 million dollars this quarter down 31 year-on-year and after sales were 55 million dollars up significantly year-on-year Overall, we see a strong improvement in pre-funding as we have been more selective on projects this year to focus on shorter-term cash return. Slide 13. In Norway, we completed the Sleipner 1200 square kilometer OBN acquisition, and the 2023 NVG East-West is now in the processing phase. We have several reprocessing projects ongoing across the globe to revitalize a library where clients are interested. This reflects the trend of renewed interest in more frontier areas where risks and time to market are lower. All these projects have industry-proof funding. The APAB bid round in Norway was closed on August 23rd with 25 companies submitting bids. Results will be announced in Q1 2024. In Brazil, the permanent offer bid round was launched in August, and we expect the bid round to be closed in December. Uncertainty remains around the timing of the Gulf of Mexico lease sales, which typically trigger after sales. However, we expect clients might still decide to buy data as part of the year-end budget. Going to slide 14. I'd like to highlight two new projects that started in Q4. The Selat Melaka 2D multi-client cycling program over the Langkas Suka Basin Offshore Malaysia. This project of 8,000 kilometers will take about 80 days to complete and is well-prefunded. It is our first project in Malaysia, a country where we see increasing activity. Second project, we kicked off a large-scale CCUS screening study in Southeast Asia covering Indonesia, Malaysia, Thailand, and Vietnam. Interest around carbon sequestration has grown in Asia, driven by both IECs and NECs. Now moving on to slide 15. On Q3, sensing and monitoring segment revenue was high at $122 million, up 42% year-on-year. Land sales at $58 million were driven mainly by deliveries of high number of vibrators. Marine sales at $45 million more than doubled year on year, supported by the sales of OBN to the Middle East. Sales from beyond the core were also up at $13 million, mainly from structural health monitoring projects. The profitability of SMO was exceptionally low this quarter, but we expect the profitability of the SMO business to come back to normal in Q4. Slide 16 for highlights. Q3 was another quarter of very high deliveries, both inland and marine, driven by stronger activity in North Africa and the Middle East. Given the success of our shallow OBN GPR 300, that features the best sensor in the industry, we are launching the full range of products to address deeper water markets. We are also promising a range of sources to offer broadband and solutions that lower any potential impact on the environment. Our MetaBlue product offers value-add solutions that complement our marine acquisition systems and make our clients more efficient both in planning and acquiring their surveys. In BTC, we are proud of our first commercial successes in Saudi Arabia for the identification and monitoring of sinkholes along railways. This is a multi-year contract which covers an initial phase of analysis and subsequent monitoring. We are also active in the space of wind turbine monitoring. Let me now give the floor to Jérôme for more financial details.