Credit Lunch Presentation Oddo Stephane-Paul Frydman, SEVP Finance - PowerPoint PPT Presentation

Credit Lunch Presentation Oddo Stephane-Paul Frydman, SEVP Finance & Strategy and Group CFO Paris, December 14 th 2015

Forward-Looking Statements This presentation contains forward-looking statements, including, without limitation, statements about CGG (“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. The Company assumes no obligation to update or revise any forward-looking or other statements. Actual results may vary materially. 2

Industrial & Financial Review FY 2014 and Q3 2015 are presented before Non-Recurring Charges (NRC), unless stated otherwise

CGG at a glance: An integrated business model in Geosciences  Market leader in geoscience industry globally and in each of its divisions, Diversified business providing a comprehensive range of leading geological, geophysical and reservoir capabilities Revenues split by activity (2)(3)  Market capitalisation of $0.5bn (as of December 10, 2015)  Around 7,200 staff working across the globe Equipment 20% Equipment targeting 25% of revenues Contractual Data Sercel, CGG’s Equipment division, is the world-leading designer 48% Acquisition and manufacturer of land and marine seismic equipment and 3 business activities reservoir monitoring instruments 32% GGR Contractual Data Acquisition targeting less than 15% revenues Geophysical data acquisition services include land, marine, multi- physics and seabed, being operated either directly or through joint Revenues split by region (2)(3) ventures Geology, Geophysics & Reservoir (“GGR”) targeting more that 60% of revenues Key activities include developing and licensing multi-client seismic 25% surveys, processing seismic data, data and software management, reservoir consulting services 44% 9 months 2015 Financials 20% Revenues: $1,512m EBITDAS (1) : $379m 11% Net Debt: $2,538m OPINC (1) : $(2)m APAC North America Central and South America EAME Note: (1) Before Non-Recurring Charges (2) External revenue (3) 9 months 2015 4

Market environment : A brutal change of paradigm  Price of Barrel seen now durably low within a $40-60 range (2016-2018)  Different from June Vision where we were anticipating a price of barrel recovery up to $70+ by year-end 2015 / mid 2016  2016 should be quite similar to 2015  No significant increase of the exploration budgets of the oil companies during this period ~(10)%  Cut of Exploration programs impacted ~(40)% significantly the Seismic Market ~(15/20)%  Marine contractual Acquisition market should remain depressed over the two years  Equipment market should remain low  SI&R Market also expected to be somewhat lower in 2016, although more resilient Reshape our portfolio as if the present E&P context would last a few years 5

Our long-standing Strategic Rationale  Transform CGG, from a Seismic Acquisition Company into an Integrated Geoscience Company  We have been pursuing this journey for the last two years  Today, we are intensifying our plan due to market conditions that could be lower for longer  Remain positioned over the three key seismic segments  Far less exposed to Marine Contract Acquisition, the most cyclical and capital intensive part of our operations  Focused on our high added value businesses 6

Transformation Plan: what we have delivered so far Marine monthly cost structure G&A expenses Base (m$) (51)% (55)% Full cost base including Depreciation & Amortization Headcount (2) Total Capex (1) (number of employees) (m$) (46)% (31)% [450/475]e Q4 15e 3Q 15a Source: Company (1) Excluding impact of variation of fixed asset suppliers of $3.5m for FY 2014 and $(3)m for 3Q 2015 7 (2) Including Manufacturing temporaries

Transformation Plan: The next step  GGR representing more than 60% of revenue and Contractual Data Acquisition less than 15% Portfolio  Operated fleet 2/3 dedicated to Multi-Client programs Rebalancing  Focus on high-end added value businesses  Marine 3D fleet reduced from 11 to 5 vessels Further Restructuring  3 vessels already cold-stacked by October-end, 3 more to come  Further cost reduction plan across the Group and worldwide Further Cost Reduction  Additional reduction of 930 positions worldwide  Industrial Capex further reduced by 20% to $100/125m in 2015(e) Capex Reduction  Multi-Client Cash Capex further reduced by 15% to $275/325m in 2015(e)  $950m non-cash write off Cost of Transformation  $200m of forward cash costs Financing  Group financing requirements: disposal of non-core assets and equity offering 8

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Equipment 10

Equipment: Impacted by lower volumes Revenue (In million $) Marine Equipment  Sales at $103m, quite stable sequentially Land Equipment 180  Low volumes impacted by weak marine sales 40  71% Land and 29% Marine 107 103  Resilient OPINC margin at 4.8% 26 29 140 81 74  Year-To-Date  3Q’15 EBITDAs at $57m versus 3Q’14 at $143m Q3 2014 Q2 2015 Q3 2015 7.7% YTD 2015 OPINC margi n  OPINC (In million $)  Sercel’s drivers 29 Continued cost reduction initiatives to lower breakeven  point  Land equipement sales driven by intensive production 16.2% coming from existing and depleting ressources 7 5 6.3% 4.8% Q3 2014 Q2 2015 Q3 2015 11

Contractual Data Acquisition 12

Contractual Data Acquisition 1 : Deteriorated market conditions Contractual Data Acquisition Revenue (In million $)  Total revenue at $152m, up 17% sequentially Land & MP Marine 235  Contractual Marine revenue at $110m 60  Higher availability rate at 84%, compared to 74% in Q2 152 130  Land & Multi-Physics total revenue at $42m 42 44 175 110  Operating Income at $(24)m 86  Long-lasting poor pricing conditions in Marine mitigated by cost cutting and better availibity rate Q3 2014 Q2 2015 Q3 2015  Year-To-Date: a huge year-on-year profitability drop Contractual Data Acquisition OPINC  3Q’15 EBITDAs at $5m versus 3Q’14 EBITDAs at $92m (In million $) Q3 2014 Q2 2015 Q3 2015  3Q’15 OPINC at $(103)m versus to 3Q’14 OPINC at $(19)m (4.8)% (15.6)%  With less than 2 vessels fleet, contractual marine (11) (43.4)% activity will be very low (24)  Will represent 7/8% of total group revenues (57) (1) New segment reporting (Cef. Appendix) 13

GGR: Geology, Geophysics and Reservoir 14

GGR: Resilient profitability GGR Revenue  Total revenue at $227m, down (12)% sequentially (In million $) SI & Reservoir MC Revenue  Multi-Client at $84m, down (30)% sequentially 305  Q3 and YTD cash prefunding rate at 83% 257  After-sales at $27m, down (25)% 227 172 137  Subsurface Imaging (SI) & Reservoir at $143m, 143 up 4% sequentially 133 120  Resilient activity in North America 84  Q3 2014 Q2 2015 Q3 2015 Operating income at $47m, a 20.5% margin GGR OPINC  Solid margin also supported by cost-cutting measures (In million $)  Year-To-Date 71  3Q’15 EBITDAs at $369m versus 3Q’14 at $486m 51 47  20% YTD 2015 OPINC margin 20.5% 23.2% 19.9% Q3 2014 Q2 2015 Q3 2015 15

GGR Multi-Client: Key driver for cash generation in 2016-17  Utilize 3 Marine vessels in average : Business Plan based on 36 vessel months Marine Capex NBV Sep.15-end by age  Market-wise: High end positionning Before 2013  No 2D Librairy, 100% 3D 13% Not on the frontier exploration  41% Library 2014  High number of data / sqkm 46% Surveys to be delivered  Harvest and continue to develop :  Strive for high prefunding (70%)  Harvesting our significant investments in Gulf of Mexico, Scandinavia, West Africa  Continuing to develop our core basins (Brazil, North Sea), and establishing large positions on specific basin,  Differentiate with technology (StagSeis, BroadSeis)  Reprocess old libraries, Mexico take-up with reprocessing opportunities 16