CGG-Veritas
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a- 16 or 15d- 16 of
the Securities Exchange Act of 1934
For
the month of July 2008
CGG-Veritas
Tour Maine Montparnasse — 33 Avenue du Maine — BP 191 — 75755 PARIS CEDEX 15 (address of
principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form
20-F or Form 40-F.
Form 20-F þ Form 40-F o
Indicate by check mark whether the registrant by furnishing the information contained in this Form
is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes o No þ
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with
Rule 12g3-2(b): 82
CGGVeritas Announces 2008 Second Quarter Results
Revenue at $874 M, up 14% year on year
Net Income at $81 M, up 35% year on year
2008 objectives confirmed and solid market outlook for 2009
PARIS, France — July 31st 2008 — CGGVeritas (ISIN: 0000120164 — NYSE: CGV) today
announced its second quarter 2008 unaudited financial results1. All comparisons are
made on a year-on-year basis with second quarter 2007 figures unless otherwise stated.
During the second quarter of 2008:
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Group revenue was up 14% to $874 million. |
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Group operating income was up 11% to $151 million. Sercel delivered robust performance
and Services was in line with expectations resulting in a group operating margin of 17%.
With a constant $/€ exchange rate,1 the margin would be approximately 19%. |
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Sercel revenue grew 7% to $281 million with a 30% operating margin. With a constant
exchange rate, the margin would be approximately 34%. |
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Services revenue grew 17% to $613 million with a 14% operating margin. During the quarter
we saw lower marine availability and production rates as previously communicated and
strengthening multi-client sales. |
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Net income of $81 million represented 9% of revenue corresponding to $0.56 per ADS.
Net income in Euros was €52 million corresponding to €0.35 earnings per share (EPS). |
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Backlog as of July 1, 2008 remains strong at $1.7 billion. |
CGGVeritas Chairman & CEO, Robert Brunck commented:
“During the quarter, our revenue grew 14% year-on-year and net income grew 35%. At the operational
level, continued robust performance of Sercel, strong contract demand in Services and increasing
multi-client sales were offset partially by lower marine utilization rates, low seasonal activity
in land and the unfavorable euro/dollar exchange rate.
Sercel further expanded its leadership position as the 428 XL acquisition system and Sentinel
solid streamers saw accelerating technology adoption. Services continued to strengthen with
further wide-azimuth success and excellent take-up of land’s HPVA and V1 technology as well as
processing’s unique advanced imaging capabilities.
We confirm our 2008 objectives based on an expected strong second half of the year. In Services,
with our full fleet back in operation, vessel utilization rates will return to high levels and
multi-client sales will continue to increase especially in the Gulf of Mexico. In
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All the figures are provided in Euros and US dollars.
The $ figures are calculated based on a second quarter €/$ average exchange
rate of 1.562 (compared to 1.347 in Q2 2007) for the Profit & Loss and Cash
Flow Statement and are based on the €/$ closing exchange rate for the Balance
Sheet. EBITDAs figures are EBITDA before share based compensation. |
Sercel we will see even further strengthening of seismic equipment sales throughout the year.
Looking forward through 2009, demand outlook continues to remain strong across all segments of our
unique business portfolio and I am confident that we are well positioned to further extend our
leadership and grow our financial results.”
Second Quarter 2008 Performance and Highlights
Group Revenue was $874 million (€559 million), compared to $769 million (€571 million). Growth of
14% in $ was driven by strong sustained sales of Sercel equipment and increasing levels of
multi-client sales in Services.
Group Operating Income was $151 million (€96 million), up 11% in $ and down 4% in €, with a 17%
operating margin, compared to $136 million (€101 million) and an 18% margin last year. With a
constant exchange rate, the margin would be approximately 19%.
Group EBITDAs1 was $339 million (€217 million) up 20% in $ and up 3% in € compared to
$284 million (€210 million) last year. EBITDAs margin was 39% this quarter.
Group Net Income was $81 million (€52 million) compared to $60 million (€45 million), resulting in
an EPS of €0.35 per ordinary share and $0.56 per ADS.
The Effective Tax Rate, not including deferred tax on currency translation, was 32%. During the
quarter, we saw preliminary benefits from our tax planning program.
Group Net Debt was stable over the quarter at $1.6 billion (€1.0 billion), representing 44% of
total shareholders equity of $3.7 billion (€2.4 billion).
Industrial Capex was $61 million (€39 million) while multi-client Capex was $143 million (€91
million) as the acquisition on our Garden Banks wide-azimuth (WAZ) in the Gulf of Mexico (GoM)
continued to progress well. Multi-client prefunding was 79%.
The Net Book Value of the multi-client library closed at $759 million (€481 million) distributed
respectively with $554 million (€351 million) for our marine library and $205 million (€130
million) for our land library. The multi-client amortization rate was 48%.
Comparison with Second Quarter 2007
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Second Quarter |
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Second Quarter |
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(in million euros) |
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(in million dollars) |
| Consolidated Statement of Income |
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2008 |
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2007 |
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2008 |
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2007 |
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Exchange rate |
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1.562 |
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1.347 |
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1.562 |
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1.347 |
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Operating revenue |
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559.0 |
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571.1 |
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874.1 |
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768.7 |
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Sercel |
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179.9 |
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196.2 |
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281.3 |
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263.5 |
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Services |
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391.6 |
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390.1 |
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613.1 |
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525.4 |
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Elimination |
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-12.5 |
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-15.2 |
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-20.3 |
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-20.7 |
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Gross profit |
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155.8 |
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174.9 |
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244.9 |
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235.9 |
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Operating income |
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96.1 |
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100.5 |
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151.1 |
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135.9 |
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Sercel |
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53.9 |
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67.3 |
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84.5 |
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90.5 |
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Services |
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52.7 |
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45.5 |
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83.6 |
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62.0 |
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Corporate and Elimination |
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-10.5 |
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-12.3 |
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-17.0 |
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-16.6 |
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Cost of financial debt |
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-18.4 |
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-26.2 |
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-28.8 |
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-35.3 |
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Income tax |
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-26.2 |
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-31.0 |
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-41.4 |
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-41.9 |
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Income from equity investments |
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0.2 |
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0.8 |
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0.4 |
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1.0 |
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Net income |
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51.8 |
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44.6 |
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81.5 |
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60.4 |
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Earnings per share (€) / per ADR ($) |
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0.35 |
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0.31 |
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0.56 |
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0.42 |
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EBITDAs |
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217.0 |
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210.2 |
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339.4 |
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283.6 |
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Sercel |
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60.1 |
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72.1 |
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94.1 |
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97.0 |
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Services |
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172.0 |
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147.1 |
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269.4 |
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199.0 |
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Industrial Capex |
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38.6 |
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48.1 |
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60.5 |
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65.2 |
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Multi-client Capex |
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91.2 |
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82.6 |
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142.7 |
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110.7 |
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Net debt / Equity gearing ratio |
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44 |
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44 |
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Second Quarter 2008 Business Review
Sercel
Revenue for Sercel was $281 million (€180 million), up 7% in $ and down 8% in €. Internal sales
were flat accounting for 7% of total sales. Continued increase in demand for high resolution and
highly productive solutions further extended Sercel’s technology leadership both onshore and
offshore as technology adoption of the 428 XL recording system and the Sentinel solid streamer
accelerated.
Operating Income was $85 million (€54 million), with a 30% operating margin, compared to $91
million (€67 million) and a 34% margin a year ago. With a constant exchange rate, the margin would
be approximately 34%.
EBITDAs was $94 million (€60 million), with a 33% EBITDAs margin, compared to $97 million (€72
million) and a 37% margin last year.
Services
Revenue for Services was $613 million (€392 million), up 17% in $ and stable in € supported by
increasing multi-client sales and continued growth in the contract market.
Operating Income was $84 million (€53 million), with a 14% operating margin, compared to $62
million (€46 million) and a 12% margin. Strong prefunding of multi-client surveys in the GoM and
growing after sales in Brazil were partially offset as anticipated by a lower vessel availability
rate2 of 86% and a lower vessel production rate2 of 80% as well as the
seasonal demobilization of our Arctic operations. With a constant exchange rate, the margin would
be approximately 16%.
EBITDAs was $269 million (€172 million), a 44% EBITDAs margin compared to $199 million (€147
million) a 38% margin last year.
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Marine contract revenue reached $214 million (€137 million) up 19% in $ and up 2% in €
in an undersupplied market. We operated 75% of our high-end 3D fleet on contract, mainly
in the Eastern Hemisphere. All vessels were in operations in June including the Symphony
following its loss of propulsion incident. |
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Land contract revenue was $110 million (€70 million) up 14% in $ and down 3% in € based
on growing demand for higher resolution data and increased take-up of our advanced HPVA
and V1 technology. We operated on average 16 crews in select locations with 11 crews in
the Eastern Hemisphere and 5 crews in the Western Hemisphere, as a result of the typical
seasonal low activity in the North American Arctic region. |
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Processing & Imaging revenue was $96 million (€62 million) up 7% in $ and down 8% in €
based on the strengthening position and take-up of our new high-end imaging and depth
migration technologies. |
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Multi-client revenue was $192 million (€124 million) up 21% in $ and up 5% in €. The
amortization rate for multi-client sales was 48% both in marine and land. |
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Multi-client marine revenue was $149 million (€96 million) up 14% in $ and down 2% in
€. Marine multi-client Capex reached $112 million (€71 million) with prefunding at 87%
driven by stronger sales of our leading WAZ programs. The Garden Banks high resolution
WAZ survey in the GoM is progressing well and is showing very promising preliminary
results. Prefunding for marine multi-client was $98 million (€63 million). After-sales
revenue was $51 million (€33 million). |
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Multi-client land revenue was $43 million (€28 million) up 58% in $ and up 38% in €
driven by strong demand for our Canadian data. Capex was $31 million (€20 million) with
47% prefunding as new programs were launched in Canada. Prefunding for land
multi-client was $15 million (€9 million). After-sales revenue was $29 million (€19
million). |
First Half 2008 Performance and Highlights
Group Revenue was $1,747 million (€1,144 million), compared to $1,546 million (€1,163 million).
This 13% growth in $ was driven by sustained sales of Sercel equipment and a high level of land
and marine contract activity in Services.
Group Operating Income was $335 million (€219 million), up 3% in $ and down 10% in €, with a 19%
operating margin, compared to $324 million (€244 million) and a 21%
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Vessel availability rate is the total vessel time,
reduced by the sum of the shipyard time and the steaming time, all then divided
by total vessel time. Vessel production rate is the available time reduced by
operational downtime and then divided by available time. |
margin last year. With a constant exchange rate, the margin for the first half 2008 would be
approximately 21%.
Group EBITDAs1 was $682 million (€447 million) compared to $622 million (€468 million),
EBITDAs margin was 39%.
Group Net Income was $177 million (€116 million) compared to $151 million (€114 million), resulting
in an EPS of €0.81 per ordinary share and $1.24 per ADS.
The Effective Tax Rate, not including deferred tax on currency translation, was 35.5%.
Industrial Capex was $137 million (€90 million) while multi-client Capex was $288 million (€189
million) reaching a peak in the first quarter as two large WAZ acquisition programs ran
concurrently in the GoM. Multi-client prefunding was 71% and the multi-client amortization rate at
the end of June was 49%.
Comparison with First Half 2007
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First Half |
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First Half |
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(in million euros) |
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(in million dollars) |
| Consolidated Statement of Income |
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2008 |
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2007 |
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2008 |
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2007 |
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Exchange rate |
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1.527 |
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1.329 |
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1.527 |
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1.329 |
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Operating revenue |
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1144.0 |
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1163.3 |
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1746.9 |
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1546.0 |
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Sercel |
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368.7 |
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400.6 |
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563.0 |
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532.2 |
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Services |
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824.9 |
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815.7 |
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1259.6 |
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1084.2 |
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Elimination |
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-49.6 |
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-53.0 |
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-75.7 |
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-70.4 |
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Gross profit |
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356.2 |
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381.3 |
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544.0 |
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506.8 |
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Operating income |
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219.5 |
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244.0 |
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335.2 |
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324.3 |
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Sercel |
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114.0 |
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136.3 |
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174.1 |
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181.1 |
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Services |
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141.8 |
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146.7 |
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216.5 |
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195.0 |
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Corporate and Elimination |
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-36.3 |
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-39.0 |
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-55.4 |
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-51.8 |
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Cost of financial debt |
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-41.2 |
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-60.0 |
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-63.0 |
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-79.7 |
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Income tax |
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-64.3 |
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-72.0 |
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-98.2 |
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-95.7 |
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Income from equity investments |
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3.0 |
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1.2 |
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4.6 |
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1.7 |
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Net income |
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115.9 |
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113.6 |
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176.9 |
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151.0 |
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Earnings per share (€) / per ADR ($) |
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0.81 |
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0.83 |
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1.24 |
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1.11 |
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EBITDAs |
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446.8 |
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468.1 |
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682.3 |
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622.1 |
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Sercel |
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126.1 |
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145.9 |
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192.6 |
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193.9 |
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Services |
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362.5 |
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357.4 |
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553.5 |
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475.0 |
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Industrial Capex |
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89.8 |
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121.4 |
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137.1 |
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161.3 |
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Multi-client Capex |
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188.5 |
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144.4 |
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287.9 |
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191.9 |
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Net debt / Equity gearing ratio |
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44 |
% |
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44 |
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2008 and 2009 Outlook
Looking forward we confirm our 2008 objectives. The second half of the year is expected to be
stronger than the first half for both Sercel and Services. In Services, vessel utilization rates
should return to high levels and multi-client sales should increase to meet early 2009 Gulf of
Mexico lease sales. Sercel should increase even further with seismic equipment sales growing
quarter by quarter.
Global seismic demand outlook remains strong through 2009 across all segments of our equipment and
services business. In this market, CGGVeritas is well positioned to further extend its leadership
and grow its financial results.
Other information
The quarterly financial information including press release, 6K and presentation are available on
our website at www.cggveritas.com today July 31, 2008.
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A French language conference call is scheduled today for 9.00 AM (Paris) — 8:00 AM
(London). |
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French call-in
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01 72 28 01 75 |
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International call-in
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44 207 098 0694 |
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Replay
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01 72 28 01 39 or 44 207 075 3214
code 227126# |
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The updated English language conference call is scheduled today for 3:00 PM (Paris) —
2:00 PM (London) — 8:00 AM (US CT) — 9:00 AM (US ET). |
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US call-in
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+1 888 241-0558 |
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International call-in
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+1 647 427-3417 |
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Replay
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+1 402 220-4285 or +1 800 839-9879 |
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code 35067015 |
To take part in the conference calls, simply dial five to ten minutes prior to the scheduled start
time to register and to check your connection is working properly. You will be asked for the name
of the conference: “CGGVeritas 2008 Q2 results”.
CGGVeritas will also provide a streaming audio webcast of the conference calls accessible for two
weeks following the conference calls on our website.
About CGGVeritas
CGGVeritas (www.cggveritas.com) is a leading international pure-play geophysical company
delivering a wide range of technologies, services and equipment through Sercel, to its broad base
of customers mainly throughout the global oil and gas industry. CGGVeritas is listed on the
Euronext Paris SA (ISIN: 0000120164) and the New York Stock Exchange (in the form of American
Depositary Shares, NYSE: CGV).
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Investor Relations Contacts |
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Paris:
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Houston: |
Christophe Barnini
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Hovey Cox |
Tel: +33 1 64 47 38 10
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Tel: +1 (832) 351-8821 |
E-Mail: invrelparis@cggveritas.com
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E-Mail: invrelhouston@cggveritas.com |
THIS FORM 6-K REPORT IS HEREBY INCORPORATED BY REFERENCE INTO THE PROSPECTUS CONTAINED IN CGG
VERITAS’ REGISTRATION STATEMENT ON FORM S-8 (REGISTRATION STATEMENT NO. 333-150384) AND SHALL BE A
PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY
DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Compagnie Générale de
Géophysique — Veritas has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: July 31st, 2008
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By |
/s/ Gerard CHAMBOVET
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Gerard CHAMBOVET |
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Senior EVP QHSE, Career Development
&
training, Communication and Audit |
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