(AOF) –
CGG
(+4.91% to 0.76 euros)
The oil services group leads the index, despite the stagnation of the Brent price. The latter, however, advanced on Friday after the closure in Europe. The stock’s rise since the beginning of the year has reached 26%.
AOF – LEARN MORE
Key points
– World leader in high-performance scientific computing and technology in geosciences;
– Billing of 949 million dollars coming 80% from the Geosciences branch and the rest from the Multiclient and Equipment divisions;
– “People, data, technology” business model: sustainability of the group through positive self-financing whatever the market conditions thanks to “asset-light”, strengthening in activities with a high generation of self-financing, balance of valuation and availability and diversification in the energy transition;
– Divided capital, Sophie Zurquiyah as CEO and Philippe Salle president of the 11-member board of directors;
– Adjusted balance sheet with, at the end of March, 2 billion dollars of capital employed against a net debt, with the rating increased in April, of 994 million dollars, which gives a leverage effect of 2.4 and 301 million of liquidity dollars.
betting
– 2025 strategy for transformation into a technology company, with leadership positions in subsurface imaging, cloud, data exploitation, sensors and acquisition systems: annual revenue growth of 13%; billing distributed between monitoring and observation (37%), digital science (35%) and energy transition;
– Innovation strategy at the origin of 30% of annual turnover
– driven by R&D that represents 6.2% of turnover, with a portfolio of nearly 1,000 patents and focused on computing power and image quality,
– based on a land data library with a book value of $291 million;
– Environmental strategy with 2 deadlines, 2030 and 2050: 50% reduction of CO2 emissions (compared to 2020) and then total neutrality / increase in the rate of use of renewable energy to 50% and then to 100 (compared to 30 % in 2020) / energy use efficiency / launch of credit lines aligned with ESG criteria;
– Strengthening the monitoring and observation division through the acquisition of Geocamp and ION’s software business;
– Return on investments in “Beyond the core” (HPC and Cloud solutions, Data Hub, IT capabilities, partnerships in hydrogen and decarbonization), aiming for a 25% share of revenue by 2030: acceleration of generative AI for HPC and Cloud solutions and the success of structural monitoring solutions in the United States and entry into the healthcare sector.
Challenges
– Sensitivity of activity to oil and gas exploration and of stock market valuation to changes in interest rates;
– After a 37% increase in turnover and net losses reduced to $16 million at the end of March, outlook for 2023: growth in demand for geoscience and land data, sustained land activity and therefore growth 15 to 20% of turnover and an operating margin of 39 to 41%;
– Suppression of the dividend.
Find out more about the “oil and oil services” sector
Biogas for green activities
It is obtained through the decomposition of waste and falls into the category of green energy. It is part of the strategy of many countries, particularly in Europe, to reduce their dependence on hydrocarbon imports. Oil groups have great ambitions in this field, as revealed by two recent operations. The British BP acquired the American Archaea Energy for 4.1 billion dollars. Then, the Anglo-Dutch Shell announced the acquisition of the Danish Nature Energy for $2 billion. These operations show high levels of valuation, which highlights the strong potential of the sector. TotalEnergies had already acquired a stake in the American Clean Energy Fuels Corp in 2018, of which it now owns 19%. It has recently joined forces with Veolia to recover biomethane from waste treatment facilities.
