CGG (Hold, TP: EUR0.90) - Small Q3 beat adjusted for one-off, weak cash flow
Q3 EBITDA adj. was USD80m, just above our estimate and consensus on slightly lower costs in GRR and higher late-sales. Free cash flow was soft at a negative USD59m, due to negative working capital. The 2020 capex guidance was lowered by USD75m compared to early-March. Comments were upbeat on the usual seasonality uptick in Q4; however, we believe this is already reflected in consensus.CGG is a global participant in the geophysical seismic industry. Co. manufactures geophysical equipment and provides marine, land, and airborne data acquisition services. Co. also provides geosciences services, including data imaging, seismic data characterization, geosciences and petroleum engineering consulting services, and collecting, developing and licensing geological data. Co.'s clients are in oil and gas exploration and production industies. Co. divides its activities into four segments: Equipment, Contractual Data Acquisition, Geology, Geophysics and Reservoir (GGR), and Non-Operated Resources, including eight business lines, six Corporate functions, and four Group Departments.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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