CGG : 2015 Third Quarter Results

• Positive Free Cash Flow in More Challenging Market Conditions
• Next Step in our Transformation Plan

Q3: Positive Operating Income¹ and Free Cash Flow¹

• Revenue at $470m, stable sequentially
• Group Operating Income¹ at $4m and EBIT1 at $15m
  • Contractual Data Acquisition2: reduced marine losses
  • Equipment: a 5% margin in low volumes
  • GGR: solid operational margin at 21%
• EBITDAs¹ at $122m and Cash Capex down 51% y-o-y, at $98m
• Net income at $(1,074)m after $(1,015)m impairment and non-recurring charges
• Q3 Free Cash Flow¹ at $22m and Year-To-Date FCF¹ at $(61)m
• Group Liquidity at $440m by September-end
• September-end Net Debt/EBITDAs ratio at 3.25x and covenant holiday by December-end 2015

Next Step: Focus on High Added-Value Businesses, Fleet Reduction to 5 Operated Vessels Mainly Dedicated to Multi-Client

• GGR to represent above 60% and Contractual Data Acquisition² below 15% of future Group revenue
• Marine fleet to be reduced to 5 vessels by Q2 2016; 2/3 dedicated to multi-client programs. 3 vessels already cold-stacked by October-end
• Reduction of 930 positions ³ worldwide and across the Group
• $950m non-cash one-off costs booked in Q3 corresponding mainly to goodwill impairment
• $200m forward cash costs to be booked and to be spent mostly in Q2-Q3 2016
• Financing of the Group transformation through disposal of non-core assets and equity offering or sale of a minority interest

1. Figures before Non-Recurring Charges related to the Transformation Plan
2. New reporting scheme (Ref. Appendix)
3. Plan subject to agreement with employee representatives

PARIS, France - November 5th 2015 - CGG (ISIN: 0000120164 - NYSE: CGG), world leader in Geoscience, announced today its non-audited 2015 third quarter results.

Commenting on these results, Jean-Georges Malcor, CGG CEO, said:

'In a very challenging market, our good cash performance this quarter is the result of the cost and capex reduction measures taken since the end of 2013 in the context of our Transformation Plan which aims at transforming CGG from a seismic acquisition company into an integrated geoscience company.

Anticipating market conditions that continue to deteriorate in Q4 and that could remain at such levels for longer, we intend to strengthen this strategy which has been implemented over the last two years. This new major step in our transformation will mainly translate into the resizing of our marine fleet to five vessels, two thirds of their capacity being dedicated to multi-client programs. Looking forward, this action will allow our contractual data acquisition activity to represent less than 15% of our consolidated revenue, thereby reducing the Group's exposure to this cyclical, highly competitive and high capital-intensive business. This adjustment of our fleet and the cost-reduction measures will result in the cut of around 13% of job positions worldwide. This new phase in our Transformation Plan is being submitted for the approval of our employee representatives to be implemented during the first half of 2016. It triggers $950 million non-cash costs already booked in our Q3 accounts and around $200 million cash costs to be booked in the future.

We plan to finance the Group needs, notably related to the Transformation Plan, through disposal of non-core assets and equity offering or sale of a minority interest.

This new phase will allow us to build a rebalanced company supported by our unique positions in Equipment, in Multi-Client, in Imaging and Reservoir and by our technology expertise in Data Acquisition. CGG should remain resilient all along the downturn of the cycle to become strongly cash-generative when the market bounces back.'

Post-Closing Event

CGG sold its Canadian onshore Multi-Client Library, on October 31, 2015.

Third Quarter 2015 Results:

• Revenue at $470m, stable sequentially
• Operating income, before Non-Recurring Charges (NRC), at $4m
• Group EBIT, before NRC, at $15m with positive contribution from Equity Income mainly driven by the SBGS Joint-Venture
• EBITDA at $122m, and positive Free Cash Flow before NRC at $22m
• Following the strong deterioration of market conditions and the reduction in CGG's fleet, assets impairment & write-off and Non-Recurring Charges of $1,015m booked in Q3:
  • $500m split between $365m of Marine goodwill impairment and $135m of additional impairments, mainly vessels related
  • $450m write-off mainly related to non-allocated GGR goodwill
  • $48m depreciation of our deferred tax assets on past losses
  • $17m other restructuring costs, mainly related to redundancies
• Net Income at $(1,074)m after NRC
• Backlog at $821m as of October1st, 2015. As of today, marine fleet coverage is at 92% in Q4 2015. Indicator no longer relevant in 2016, as the fleet will be mainly dedicated to Multi-Client activity

Decision to Implement in Q3 a New Segment Reporting

• New segmentation with no impact at consolidated level
• Creation of a new segment 'Non-Operated Resources' sheltering marine idle assets and Group restructuring costs
• GGR segment now includes Marine capital employed dedicated to Multi-Client activity
• Data Acquisition segment now strictly limited to contractual revenues

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