Viridien Société anonyme (VIRI) Earnings Call Transcript & Summary

[Interpreted] Good morning, ladies and gentlemen. Dear shareholders, we're delighted to welcome you today to our Annual General Meeting. Please switch off your mobile phones and note that this meeting will be recorded and available as an audio webcast on our website. I now propose you proceed with the legal formalities to set up the Executive Committee in accordance with Article R.225-101 of the French Commercial Code. It has been proposed that the 2 shareholders representing the majority of votes should act as scrutineers. We have with us today DNCA Finance holding 2.62% of the share capital and represented by Mr. Boris Radondy and then Innocap Gestion holding 1.38% of the share capital and represented by Mr. Geoffroy Perreira. These 2 shareholders who are present today and hold the largest number of votes have agreed in advance to act as scrutineers, and we thank them for doing so. Mr. Eduardo Coutinho, Group General Counsel, a member of the Executive Committee, will support as Secretary. We are also delighted to welcome the members of the Board of Directors: Ms. Anne-France Laclide-Drouin; Ms. Colette Lewiner; Ms. Heidi Petersen; Mr. Michael Daly; Mr. Mario Ruscev; and Mr. Patrick Choupin. Also present with the Management Committee: Jerome Denigot and Emmanuel Odin. We'd also would like to thank our statutory auditors, Mazars, represented by Mr. Daniel Escudeiro and Mr. [indiscernible] and EY, represented by Claire Cesari-Walch. We will be presenting their work on behalf of the college at this assembly. The officers being now in place, I declare the meeting open. I hereby inform you that the attendance sheet shows that the number of shareholders present represented or having voted by post represent the current state of our accounts a total of 227,598,242 voting rights, corresponding to 31.70% of shares with voting rights. We'll give you the final figure when we vote on the resolutions. So the quorum of 25% required for holding an extraordinary general meeting has therefore been reached. In preparation for the Combined General Meeting, in accordance with the law, a prior notice of meeting was published in BALO on the 8th of April 2024. The Combined General Meeting was convened by a notice of meeting published in BALO and Actu-Juridique.fr on 26th of April 2024. The convening brochure was sent to all registered shareholders. The General Meeting is therefore duly constituted. The deck contains all the documents required by law. These documents have been published on our website and are available to shareholders and our registered office within the legal deadlines. We have not received any written questions or requests for the inclusion of draft resolutions items on the agenda. I suggest we take a look at this morning's agenda. We'll begin this meeting with the presentation of our Board of Directors and its committees and Mr. Eduardo Coutinho will then review the remuneration packages for corporate officers. Sophie and myself, namely and the remuneration policies proposed for 2024. And Sophie will present the group's activities for '23 and its outlook for the future. Finally, our statutory auditors will present their work and their reports. This will be followed by a question-and-answer session before the resolutions are put to the vote. So point number I. on the governance, the composition of our Board of Directors remains unchanged. Since our last General Meeting at 9 directors, including 8 elected by shareholders and 1 director representing employees. During the 2023 financial year, the Board met 8 times with an attendance rate of 100%. One session was fully dedicated to the group strategy with a particular focus on the development of our new Beyond the Core businesses. In addition to reviewing the accounts and risks associated with CGG's activities, the Board approved the following matters during the year: The sale of CGG's entire stake in ARGAS to TAQA; the opening of a new high-performance computing center in the Southeast of England, bringing our global computing capacity to just over 500 petaflops. In accordance with the AFEP-MEDEF Code, the Board met once last December, an executive session, i.e., without the Chief Executive Officer being present, to discuss the Chief Executive Officer's performance and succession plan. Let's talk about governance now. The Board of Directors met its advisory commitments during the 2023 financial year. The Board is made up of a majority of women, 62.5%, well above legal requirements. 87.5% of directors are independent, well above the 50% recommended by the AFEP-MEDEF Code. Our Board also includes many nationalities, French, American, British, Norwegian. These countries represent key areas for our industry and our activities. Finally, the average age of its members is about 61. So the agenda for this General Meeting includes the appointment of Mr. Olivier Jouve who replaces Mrs. Heidi Petersen has been qualified as an independent member by the Board of Directors and the AFEP-MEDEF criteria, is appointed. We maintain the proportion of independent directors at 87.5%, reducing the proportion of women on the Board slightly from 62.5% to 50%, while complying with rules on parity [ on ]. The diversity of the Board is also illustrated by the wide range of expertise of its members, all of whom have international backgrounds and expertise in areas that are fundamental for the group: energy, innovation, digitization and IT technology and strategy. The Board has set up 4 committees, which report directly to the Audit and Risk Management Committee chaired by Anne-France Laclide-Drouin. This committee met 6 times in 2023 with an attendance rate over 10%, for your information. A second committee, the Remuneration, Appointments and Governance Committee, chaired by Ms. Colette Lewiner, this committee met 6 times in '23 with an attendance rate of 92%. Third committee, the HSC, Sustainable Development Committee, chaired by Michael Daly, this committee met 3 times in '23 with 100% attendance rate. Finally, the fourth committee, the Investment Committee, chaired by Helen Lee Bouygues, this committee met 4 times in 2023 with an attendance rate of 100%. Following this AGM, the Board will meet to approve a new set of internal rules designed to regulate its operations. In addition to reviewing the composition of its committees, the Board plans to create a new committee to be known as a New Business and M&A Committee. Its remit will be to support the company in developing new activities. This committee will replace the Investment Committee whose tasks have been split between the Audit and Risk Management Committee, on the one hand, and the New Business and M&A Committee on the other. In addition, the HSC and Sustainable Development Committee whose remit has been expanded as a result of the CSR directive will now be called the Sustainability Committee. The Board of Directors, on the recommendation of the Remuneration Committee, [ indiscernible] Committee and proposes that the term of office of Helen Lee Bouygues could be renewed for a period of 4 years, i.e., until the close of the Annual General Meeting to be held in 2028 to approve the financial statements for the year ended 31st of December 2027. Mrs. Helen Lee Bouygues has been a director of the company since 2018. She is 51 years old and a U.S. citizen. She holds 20,000 CGG shares. Mrs. Helen Lee Bouygues is also Chairman of the Investment Committee, shortly the New Business and M&A Committee and a member of CGG's Audit and Risk Management Committee. Her attendance rates at CGG Board meetings in 2023 was 100%. In '23, she received a remuneration in her capacity as director amounting to EUR 70,800. Helen Lee Bouygues also holds 3 other directorships, listed French companies, Burell, NEOEN, Atos, as well as the directorship in a listed Nigerian company, Guaranty Trust Holding Company. The Board supports the reappointment of Mrs. Helen Lee Bouygues and believes that her continued membership of the Board will enable the group's transformation, in which she has been involved since her appointment as director in 2018 to continue. Her presence on our Board will be instrumental in addressing future challenges and opportunities as we move forward. Move to Ms. Heidi Petersen has indicated that she does not wish to be reelected to the Board for personal reasons. I'd like, on behalf of the Board, to extend our sincere thanks for her dedication and contribution as a director over the last few years. On the recommendation of the remuneration appointments and Governance Committee, the Board of Directors proposes to appoint Mr. Olivier Jouve to replace Ms. Heidi Petersen as director for a term of 4 years until the close of the Annual General Meeting to be called in 2028 to approve the financial statements for the year ending the 31st December 2027. Mr. Olivier Jouve is 58 years and is as a Franco-American. Mr. Jouve is a pioneer in artificial intelligence, particularly in the field of natural language processing. He began his management career at SBSS Inc., a NASDAQ-listed company and a leader in the field of data mining. Over the course of his career, Olivier Jouve has developed expertise in cloud hyperscalers, artificial intelligence and product management and development, giving him a deep understanding of market transformation and business development. Since 2017, Mr. Olivier Jouve has held senior management positions at GENESYS, a company with revenues in excess of $2 billion where he now holds the position of EVP and Chief Product Officer. The Board supports the appointment of Mr. Olivier Jouve and consider that his expertise in the fields of science and new technologies will contribute to the richness of debates and the effective implementation of the group's transformation and will, in particular, promote the development of Beyond the Core activities. On this, I shall hand over to Mr. Coutinho, Group General Counsel, who'll present the remuneration of corporate officers submitted to the vote of the General Meeting.

[Interpreted] Good morning, ladies and gentlemen. I would like to begin by promising that well, reviewing the 2023 financial year, the amounts paid of the Board compared with 2022 and are in line with policy approved by a General Meeting in 2023. The Chairman's ex-ante remuneration policy for 2024 will be unchanged from 2023. It will comprise of a fixed proportion of EUR 170,000 per annum in respect of his duties as Chairman, a variable portion of EUR 70,000 in respect of his duties as director. This variable portion will be subject to an annual attendance requirement of at least 90%. If attendance is less than 90%, his remuneration will be paid pro rata temporis. As for the other elements of his remuneration, the Chairman of Board is eligible for The General Provident and health scheme, a company car, but does not benefit from either. And I'm moving on to Slide 12. I propose that we move to the remuneration of the Chief Executive Officer. The remuneration paid as awarded to the Chief Executive Officer in respect of 2023 is in line with the policy approved by shareholders in 2023. The Board of Directors, under recommendation of the Remuneration Nomination or Appointment and Governance Committee, assess the amount of variable annual remuneration of EUR 775,656 for '23 based on an overall target achievement rate of 114%. In addition, 455,000 stock options were granted to the Chief Executive Officer at an exercise price of EUR 1.05. He was also awarded 455,000 performance shares in '23. Total long-term remuneration amounted to EUR 387,000 i.e., 56.8% of the Chief Executive Officer's fixed annual remuneration. The vesting period for these components of remuneration is 3 years. Regarding the remuneration policy, ex ante of the CEO '24, this remains unchanged from '23. It includes a fixed proportion of EUR 680,400. As for the annual variable component, this remains unchanged. The target is 100% of fixed remuneration, where 2/3 are financial objectives and 1/3 nonfinancial objectives. The nature of financial objectives remains unchanged from '23. The nonfinancial objectives remain similar to '23 and focus on the following points: managing the group's strategic and financial plan; managing the group's commercial and operational performance; organization and management of the group's human resources; and finally, the group's social and environmental responsibility and covenants. Long-term variable remuneration remains additional on certain factors based on growth in the CGG share price versus a growth index of a group of peers and revenues from new activities, subject to net debt-to-EBITDA ratio, the company ESG performance. The vesting and assessment period for the performance conditions of this long-term remuneration is 3 years. The remuneration policy for the CEO also includes other benefits such as a company car, a general health scheme, a supplementary pension, international medical insurance, unemployment cover for management severance pay and noncompetition undertake. With regards to the remuneration policy applicable to the Board of Directors in 2024, annual remuneration package remains unchanged at EUR 550,000 since 2020. The rules for dividing directors' remuneration to fixed component, representing 1/3 and a predominantly variable component representing 2/3 are unchanged from '23. I'd like to hand over to Mrs. Zurquiyah, Managing Director, for a presentation of our activities. Thank you.

[Interpreted] And now we'll review our 2023 performance. I will focus on Q1 results as announced last night. And I will share with you a few perspectives for CGG for the '24, '26 period. As presented on the occasion of our Q1 result presentation back in March, CGG is a key leader of geosciences on our core activities. Right here, Geoscience, ADA, so Geoscience data as well as sensing and monitoring, and we've successfully extended the scope of our activities. The first part that we refer to as low carbon and which is quite close to our core business and mostly, we focus on -- in carbon capture, business side and mining operations. And we look at 2 markets further afield from our core business: so high-performance computing and infrastructure monitoring. So you'll remember that CGG has always been committed to excellence in ESG. So we have, therefore, established and maintained our AA rating to rating agencies, such as MSCI and EcoVadis rating agencies that were established an ambitious road map with regards to ESG components. But just in better view, in particular, everything that falls around carbon emissions, CO2 emissions and our objectives extend over the period up to 2030. And we've already reduced by 58% these CO2 emissions and the Scope 1 and 2 by 58% since 2019. And we're looking at our energy mix, electricity mix, and 65% of this mix is low carbon. And we're also looking at a diversity, and so 25% women are in the upper echelons of the company and indeed, which is a great performance vis- -vis similar companies in our industries. And we've maintained a high level of performance with regards to HSC. In terms of head count, we have a workforce of 3,515 employees as of December 2023, of which 30% are women who were the sensing and monitoring activities that we very much based in France and across Europe. We have an overall gender mix with 30% of women. Let us look at the 2023 year performance. Financial performance has improved considerably compared with the previous years. Sales reached $1.125 billion, up 21% of organic growth and with an organic net cash flow of $32 million in spite [indiscernible] so we had to pay out $66 million of contractual commitments related to our -- contractual commitments on vessels. We ended '23 with $417 million of liquidity at the end of December, including $327 million of cash and $90 million of undrawn RCF. So EBITDA, $417 million. So let us take a look at this presentation on business lines. So Geoscience, up 18%. Sales reached $335 million. This is correlated to the offshore exploration and related operations. On the EDA data library, so down 10% at $337 million, which means that the clients wanted to acquire new data So the financial rate stood at 113%. We're focused on high-quality projects and these -- and 10% can be explained by our transfer fees, license transfer fees when the company was taken over by another company, so we have around $55 million. So therefore, the sales revenues was slightly up on data and the growth, we said that the CGG growth will be pulled upwards by Sensing and Monitoring and with sales of equipment, in particular on Marine and also the European and Middle Eastern markets. And on new activities, the Beyond the Core that we referred to earlier, $90 million revenues represented about 8% of the overall revenues of the company. So to sum up, thanks to the strong growth in '23, we consolidated the market positioning and Geoscience, and we have a 45% market share, thanks to our technologies and application of our technologies, which is highly differentiated. And we applied so that we've invested $700 million (sic) [ $ 171 million ] with the prefinancing rate of 113%, very high. And in Sensing and Monitoring, our market share remains around 45%, 50% mark, and we've significantly increased our market share, in particular, on marine node, which is really the future of the aqua marine-related acquisitions. I'd like now to share with you a few -- some insights, focusing on the differentiation in terms of position of CGG, both in Geoscience and seismic. I can show you the -- we can see here the type of subsurface imaging that can be delivered. And this is a way to model in a more and more precise manner physical phenomena. Thanks to this, the quality of imaging and the solution that we can generate is way superior to competition. So the can see the imaging created in '23 (sic) [ 2018 ] and the one created in '23. In terms of technological advances, it's absolutely essential to our clients that it can focus and sharpen there, and the explorations that can be way more efficient now. Actually, this type of imaging and this type of differentiation is reflected to the highest levels of the company. So we have the [ CGG ] CFO to really describe these technological innovations that allows you to get much sharper and much more precise analysis. Now these advances in modeling techniques, we've mentioned the 500 petaflops. You can see the evolution of these computing capacities from 60 to 500 petaflops. And this computing capacity allows us to deliver such images. And we are regarded as one of the global leading computing power in our field of activities. On data library, there you have the list the [ taxi ] projects, so 9 projects that were done in '23. Historically, we've focused on what we call key catchment areas that go from Mexico, Norway, and we've continued expanding our positioning in these areas, but we've started to try and position ourselves in new basins such as -- or which we think will be -- these could become active basins in the future. You can see investments in Suriname, in Uruguay, all for the end of the year, and in Malaysia, as you can see at the bottom of this slides. And we continue to revitalize our existing library by using latest imaging technologies on all data. So we have reprocessing projects to energize our library on the basis to meet customers' requests. You can see reprocessing [indiscernible] or in Norway, as an example. And on Sensing and Monitoring, SMO, the highlights, as you can see on the righthand side, this is activities focused on seabed node technology. And this emerging technology allows you to generate much superior quality imaging, and we've commercialized our first seabed node, the GPR 300, namely for shallow water marine mode from '21. And you can see in orange, the market penetration. And we now account for 36% of the installed base. So talking of new markets, and the 3 points that we've been focusing on, the 3 areas, the 3 markets is what we call low carbon solution around CO2 capture, mining operations and the cloud market or the high-performance computing and the monitoring as well as monitoring of infrastructures. So we've selected these fields because they're these -- that are leading-edge capabilities and we can see that we have a differentiated offering right there. Just a few examples of these new markets. So here, this one is about 2 projects to focus on securitization of carbon capture. We have a 4D base allowing clients on these areas of interest to process much further in their characterization of the sea there and now the characterization of the potential with just 1 project in North America, which is the most active area in this field, and in Southeast Asia. On the high-performance computing market side of things, we've started to pull out our offering. And this field is very much driven by exponential needs in terms of computing power and in terms of modeling and simulation capabilities. Markets we're focusing on with very advanced needs and departments all the -- that relates to life sciences and artificial intelligence, which is widely talked about right now. In '23, we signed contracts with 2 life sciences and artificial intelligence companies, and we've different publications on this. And the final point on monitoring and monitoring of infrastructures, we've been very active with test [ law ] and tests which we run in the U.S. and in Europe. Our technologies come from the technologies we've been using for our business, Sensing and Monitoring, allowing us to analyze data and behavioral data, helping us to understand the dynamic behavior of complex infrastructures such as bridges. As you can see here, on the lefthand side of the slide, we can anticipate maintenance needs and possible problems to be addressed. So I'd like to comment in more detail the 2023 financial results. So '23, plus 21% and revenues of [ $1,125 million ], and EBITDA at $400 million, with a negative impact of $44 million of additional costs related to ships assessments and this [ will weigh ] mechanically in '25 with the end of these contracts. So a positive net profit of $16 million. The cash generation, this was the good news of last year, organically speaking, $32 million worth. The strong increase in spite of the negative impact that I mentioned earlier, $66 million worth connected with our contractual commitments concerning our vessels. Purely organic performance, therefore, and the CapEx, USD 232 million, comprising cash and CapEx investments and industrial investments, which were going up connected with a piece of investment in the new data center in the United Kingdom. I'd like to briefly comment on the Q1 results, very good ones. Actually, we reported them last evening. The revenues of Geoscience in Q1 continues to progress by 11%, year-on-year that is, Q1 compared to Q1. This business activity is sustained in all of our regions. With this ongoing need by our clients for more and more accuracy, more and more precision so as to optimize the impact of their investments. Now Earth Data posting a good increase, up 50% compared with last year. And I mentioned last evening, the fact that we have more international companies there. The international companies that were less active when it came to exploration, especially the border exploration, and they are starting to invest once again. And then the Sensing and Monitoring revenues, up by 35% year-on-year, $89 million worth, thanks to good performance in terms of deliveries of land-based systems but also marine nodes for Europe in particular. Now the EBITDA, the adjusted EBITDA of the group's businesses, USD 106 million in Q1, an increase of 58% on year. Two positive events also to be reported after the closing of the accounts in favor of our financial trajectory. The fact that Standard & Poor's has now revised our rating upwards, it's now B-, and that's important when it comes to the refinancing deadlines that are upcoming; and also the settlement of the ONGC litigation going back more than 10 years for an amount greater than USD 30 million. Concerning the balance sheet, the group's liquidity is USD 440 million at the end of Q1. The gross debt of the group before IFRS 16 is $1.207 billion. And our debt-to-equity ratio has gone down, it's 2.2x now, an improvement compared with the end of 2023 when it was 2.4x. Now let's look to the future and talk about the period between 2024 and 2026 and see what's on the horizon. Our core businesses exposed to exploration and production are confronting fundamentals that are going up. You could see here in the CapEx, that's the expenditure by our clients in exploration and production going up since the post-COVID period started, and we're continuing to see an increase, and it will continue, of course, in the coming few years. Now clients are continuing to grant special importance to the less risky zones that are close to their existing production zones, but we're also starting to see a bit more activity in the border zones. So for the coming few years, we think the annual growth rate will be between 5% and 7% on our markets. And we expect these market fundamentals to be positive. Therefore, for CGG regarding Geoscience with clients that need this very high-precision imagery, and we hope to take part more in what's going on in the Middle East. There's a lot of seismic data acquisition going on there. And we're going to have to use the most recent technologies and grasp the opportunities, consolidate our positions there in key basins, but also be more involved in new geographies, like in the Mid East. Regarding our data libraries, we're going to continue investing in our key business, but also in these new basins that will be important in the future. Suriname, we'll continue to invest this year too; in Malaysia; and we've got projects in the pipeline in Uruguay; as well in Guyana; in Egypt as well. So there are new areas for us. Sensing and Monitoring, SMO, will be a building of our installed base. We have a big installed base, we've got 45% to 50% of our market share there actually, an installed base, that's aging that will need to be renewed, replaced. That's one point. And market growth should be with us like marine nodes where there's a big capacity increase going on, and there are ongoing needs for new capacity. So these trends should all be positive for CGG and bring our growth to something between 4% and 6% on average per annum over the coming few years. So I talked about our key basins and the positive trends. So we're entering the new low carbon markets too, carbon capture storage, mining, also digital solutions around HPC, high-performance computing and SHM, of course. These are new ventures, our new markets, our new businesses. And thanks to our accrued expertise, we think we're well placed to develop interesting solutions on those new markets. So you see the revenues of these new businesses in 2023, thanks to the positive momentum, that's growing off there and stronger growth of those new markets compared to our core businesses, we hope to double our revenue there by 2026 and double our revenues once again by 2030. These business lines, as we said, are underpinned by the energy transition. They are driven by the energy transition, and there's the digital transformation going on in the world we live in too, of course, huge needs for these solutions. Therefore, using artificial intelligence and so on, modeling and the Internet of Things, all very important for SHM in particular. In terms of our financial road map plan for 2024, the objectives for 2024, I'm sure you'll be interested in those. We expect to have revenues that should be similar to what we had in 2023, but with a slightly different mix. Geoscience should continue on its growth path. Earth Data will be driven by transfer cost for transfer of licenses and there will also be a favorable impact from the market in general. And conversely, SMO that posted strong growth last year, well, we're expecting there a drop, especially connected with major projects in the Middle East that are accruing delays and the revenues from the new business activities, Beyond the Core that is, we expect growth there of more than 13%. So the EBITDA mechanically will avail of a more favorable mix. Earth Data has an EBITDA that's much stronger than SMO, for example. So the mix will be in our favor in terms of the EBITDA performance. The cash investments, cash CapEx on our library, we stand at USD 175 million to USD 200 million worth, with prefunding more than 75%. And we were more than 100% in Q1, but this is the yearly figure for the current year. And we think our cash flow -- our net positive cash flow for 2024 will be similar to what we had last year. What's important to bear in mind is that in the last few years, we've had unfavorable impacts due to the contracts connected with our exiting from our vessels or vessel fleet decision that we took in 2020. And once we complete all those commitments by 2025 or January 2025, we will then retrieve the positive cash generation that will come from that process, [ $13 million ] the cash generation in 2023, and we'll have positive trends, thanks to the end of those commitments to do with our vessels. And we're continuing to improve our productivity, the whole time, in all of our business lines, but in particular, we will be rolling out precise action on Sensing and Monitoring. So as to improve our productivity, that should net in better cash generation. Also we'll be continuing to invest cash, organically speaking, in our business lines, and we will also see a favorable impact from the growth going on in our core businesses and our Beyond the Core businesses, our new businesses. And from 2025 onwards, we think we should generate on an organic basis, more than USD 100 million worth of cash. Now to give you an idea, a full idea of our financial road map for the period between 2024 and 2026, organic cash generation, USD 100 million, reduction of the minimum amount of liquidity necessary for our functioning, $100 million. Historically, it was about $150 million usually, so it's going down to $100 million. That's the idea. That's what we want to bring it to. And then cash available for the buyback of our debt and/or refinancing the liquidity, the cash available for that will be about $300 million. That's what we're striving to achieve. And we're extending our revolving credit facilities in 2024. We've already obtained the upgrading of our rating with S&P, with Standard & Poor's. And all of this will be a set of enablers for us going forward so as to press forward in deleveraging the company. That's between now and 2025. A few words now about our shareholdership as it stood at the end of March this year. A few points of note. Institutional investors by nature have gone down year-on-year, now 58% of the equity as opposed to 65% in 2023, whereas individual shareholders went up in percentage, went up in percentage and now represent 38% as opposed to 35% last year. French institutional shareholders went down in numbers in the last year and now represent 19% as opposed to 22% last year. So as you've seen, CGG has undergone a transformation since 2018. And we're continuing on our transformation path. We think that to develop a new market, it became important to acknowledge the transformation and that new profile of the company. And that's the reason why we're putting this in the vote today, the change of our name and we want to become Viridien. Now we're turning to the future where there will be growing energy demand, where there will be a greater and greater need to commit to taking care of Planet Earth and digital technologies transforming our lifestyles and the way we do our job. So as a company, we have a role to play in this context because this creates new opportunities for our company, too, of course, that we want to grab. We want to be part of all that. And our expertise is more than ever relevant for the business lines we're in. So we want to roll out this new brand name at the 10th of June EAGE event in Oslo. Now why have we chosen the name Viridien? Well, it was chosen as a tribute to our history and our ambitions. The origins of the name are the Latin word, "Viridis", meaning fresh, green, coming from the root. The roots are our history. I mean, 93 years, we're 93 years old after all. And the green represents our new areas of growth aligned to the energy transition and the acceleration of the digital trends. Viridien is also a blended color. It's bluish and greenish, reflecting the earth and all of its diversity. In this blend of blue and green, we see a few things, our geographical and cultural diversities and also the earth itself, Planet Earth, because given the kind of business activities we're involved in, we enable people to better understand Planet Earth. And with our new name, we are going to connect up our 93 years of history with the future. It imbues us with trust and confidence in the future. And in order to support the company's transformation, it's also proposed to you today that we should do a reverse share split, consisting of exchanging 100 former shares worth EUR 0.01 of par value as opposed to against a new share with a par value of EUR 1, without changing the registered capital of the company. We have a large number of shares out there at the moment and compared with the market standards and our market cap, and the low value of the stock prices and the euro penalizes the perception of the company and it increases volatility. So we want to propose the consolidation of shares here. And so to reduce the volatility of the stock price, foster stability and give new momentum to the market making that goes on on our shares. And we -- if you approve this resolution today, we hope to roll out the process in the coming few days. So to conclude my presentation, I'd like to congratulate our teams for their commitment, their professionalism. It's thanks to all of them that CGG has put in this fine performance in 2023. Our future success will be underpinned by the men and women working in the company, and we'll continue to recruit, motivate and develop the skills of our employees all over the world so as to continue our repositioning as a high-tech company. Thank you very much for your attention.

[Interpreted] Thank you, Sophie. Thank you very much. Well done. Thanks to the teams, too, of course. We'll now give the floor to our statutory auditors. Ms. Cesari-Walch, would you like to make your presentation on behalf of the joint auditors?

[Interpreted] Mr. Chairman, ladies and gentlemen, dear Board members, dear shareholders, on behalf of the joint auditors, EY and Mazars, I'd like to present a summary of the work we did in financial 2023, as reflected in our different reports drawn up for you. We issued 5 reports that we can classify into 3 categories. The first 2, concerning the Ordinary General Meeting, concerning our reports on the statutory accounts and the consolidated accounts of the company on the one hand; our Special Report on related party agreements on the other hand; the third category comprises reports concerning the resolutions within the remit of the Extraordinary General Meeting. These resolutions concern authorization delegations granted to the Board of Directors to conduct transactions on the equity of the company. The first 3 reports are reproduced in full in the universal registration document. The page numbers are on the screen here. And the others are available on the website of the company. And I'll just inform you of the conclusions if you don't mind. So for the ordinary part of the General Meeting, report on the statutory accounts and the consolidated accounts. First and third resolutions, that is. We issued nonqualified opinion to the statutory and consolidated accounts for 2023. They were drawn up as per the French GAAP and the IFRS rules that apply in the European Union. For the statutory accounts, the annual accounts, as last year, there's a key audit matter concerning the valuation of equity interest and associated receivables. And we did the corresponding valuation. Concerning the consolidated accounts, the key audit matters concern 3 main topics. Therefore, the valuation of goodwill because of their substantial size in the accounts and the estimates and judgments, appraisals of the management concerning them, especially in the context of energy transition; the valuation of Earth Data service underpinned by the appraisal done by the management, especially concerning the forecast for future sales; and the recoverability of deferred tax assets, DTAs, based on the appraisals and estimates of the management concerning, therefore, the recoverability of the deferred tax assets. So we also conducted specific verifications as provided for by law but we have no particular comment to make on the information provided in the management report and the report on corporate governance. So we were not advised of any -- the wrong slide. So the seventh resolution concerns what you see here on the screen, that we were advised of no related party agreement entered into in the past financial year to be submitted to you for approval. And we were advised of no related party agreement that was already approved previously by your Shareholders' Meeting that was pursued in the financial year in question. So for the extraordinary part of the meeting, the granting of free shares, the sixteenth resolution that is, and the authorization, therefore, to be given to your Board to provide bonus shares or free shares to corporate officers or employees of the company or affiliated companies. The issuance of ordinary shares or differentiated securities of the company reserved for members of a corporate savings plan, seventh resolution that is, the maximum amount capital increases, which could stem from the use of that delegation of authority is set at 2% of the total registered capital of the company. And this amount is to be taken off the maximum par value of ordinary shares that can be issued by virtue of the eighteenth resolution, and also with respect to the total cap set down in resolution #16 that was approved in May 2023. We have no particular comment to make further to that, and we will issue additional reports on an as-needed basis if use is made of the delegations granted to your Board in order to express an opinion on the definitive conducting of those transactions. Thank you.

[Interpreted] Thank you, Madam auditor, and thank you to our joint auditors who are present with us here today. We can -- now before we move on to vote upon the resolutions, we can move on to a Q&A session, if you will, a question and answer. Well, you ask the questions, then we'll give the answer. [Operator Instructions]

[Interpreted] [ Frances Esqaries ] is my name. This year, I have several questions concerning the name change that well, we've heard about just today. It's early days yet. It's not a question, it's a remark. It's a bit early to change the name because I think because with less than 10% of new business activities, I think you should have waited to get up to maybe 20% of new business activities before you change the name. Anyway, that's my personal opinion. It's just a remark. Then concerning the actual name, I don't know if it will be understood very well by all the investors. New name, is there not a bit of risk inherent in that? Anyway, they're just remarks. Concerning the vessels, we won't have the commitments anymore connected with those vessels in the future. But if we need vessels, there will be additional costs surely. We'll have to up the vessel [indiscernible].

[Interpreted] Okay. Well, if you'd like to finish your questions and then we'll answer them.

[Interpreted] Okay. The next one concerning -- concerns our different business activities. Firstly, let me put it this way. Concerning our size. There are lots of companies working in AI. And I mean why don't we shoot for $40 billion of revenues because it seems to be the booming business these days? Are we not going to go into certain market segments, is my question? Are we not -- maybe we're not ambitious enough, I mean, in AI. And concerning Sensing and Monitoring, another question, set of questions. Firstly, how far can we go on reducing our carbon footprint in terms of 1 petaflop of computation power, computing power? And that's an interesting question, I think. Could we reduce by Factor V, for example? How far can we go? There must be some physical limitation, I would say. And that's for Sensing and Monitoring. And my next question has to do with the fact that there are several companies here in the Paris market that are providing new tools for real estate companies, for example, for real-time acquisition of data to do with temperature, pressure, all sorts of things like that because it's become compulsory or it's becoming -- going to become compulsory at least in France and in other countries, too. I'm thinking of the [ Weig ] company doing things in that respect. They have Equans, which is a subsidiary of theirs. There are lots of companies doing that. And are we positioned on that is my question, in that whole arena to do with property real estate?

[Interpreted] Well, that's already 5 questions.

[Interpreted] So on data processing I ask you a question a previous at the time on hydrocarbons on the surface of the sea and you weren't interested in surveying that. And I was giving thought in the meantime and the difficulty we'd have in evaluating those reserves would be that they're floating, those reserves. A lot comes and a lot goes. And I was just wondering, what can be done in that respect, regarding floating reserves on the surface of the ocean?

[Interpreted] Well, we will try and answer. I hope we got all of your questions, but firstly, on the name. Well, as you say, well, it's a comment you made, not a question. So I take note of it. You think it's early days yet, but we thought it was the right time. On the name itself, I think as soon as there's a new name, if you put 10 people in the room on this kind of thing, they'll provide you with 10 different opinions. So this is the name that was worked out. It was a laborious process, it was a lengthy process. It was done very diligently, and that's the name that came out of a lot of work with the Board, the management teams and all sorts of people involved. So I think personally that you've got to be a step ahead. When you're involved in new businesses, you should be a step ahead of yourself. And we're developing a lot. It's only 10%, I know for the moment, the new businesses, but then the oil and gas businesses are getting off to a new start very strongly, too. So the vessels, we won't have those commitments anymore as of January next year. So I think the timing is right for the new name. Sophie will maybe give you an answer on the boats, on the vessels. Well, we took them out of the balance sheet, as you know.

[Interpreted] Thank you, Mr. Chairman. On the vessels, well, the reason why we're paying penalties is connected with the nonuse of ships. We've a contract whereby we commit to use a ship for 24 months. And last year, well, we didn't use them the whole time, maybe 9 months' worth, that was all. So we still have to pay and there are penalties involved. And that's why it's part of cash CapEx in Earth Data. And in the future, we won't have the penalty part anymore. We'll still have the purchasing part, you have to purchase the use of vessels, that will be CapEx for Earth Data, but connection with projects, well we'll have prefunding already. So we won't have the penalties kicking in. So how we are going to acquire vessels in the future? Well, there's overcapacity in terms of vessels, so we're not too worried about the supply that will be available. We should be able to find them available. But at the moment, we're looking at how we can perhaps develop a partnership venture with companies that own ships, but without the commitments and the financial commitments. We did this contract just before COVID, in 2020 actually. Fortunately, we decided make that move. And the idea was to become asset-light, and we made the right decision. But given the number of vessels we've committed to that were in our balance sheet in 2019, and we sold off some in 2020, of course, but you couldn't sell them without giving commitments regarding their use. It couldn't be done at the time. So we negotiated between 2018 and 2019 on that. That's a 5-year agreement. That will expire at the start of next year. So as of next year, we won't have any obligations concerning the vessels that we sold off. We won't have commitments anymore, and we'll be back to purchasing capacity at market price, arm's length price. But not cost in the balance sheet, that's over. Yes. The market price going up, well, crash down in 2020 and 2021, but it's now gone up pretty significantly so the market price can be found through our sales in Earth Data. If we buy vessels at a high price for our library, we'll sell data in a commensurate way. So the market is, okay, without being out of proportion to the price of vessels and the price of fuel, these are fluctuating. These have been fluctuating significantly over the past few years and do impact our cost at any point in time. We calculate, we work out our cost and the cost of our study, and then the cost is passed on to the clients. And the clients know well what are daily costs, yes, generally speaking. So on the EOI, I can't quite remember what your question was about. It said, well, we could target $40 billion with CGG into industrial IoT. We're not into the standard way of approaching IT. We don't develop cloud solutions with ERPs. And we are talking about a very different modus operandi. So with large American companies that you're familiar with, do that, it's not that we don't want to do that or to get into that, but it's just that you need to understand that when you step out of your scope and business side, yes, you do that. But in pure in oils, the core business, this is about applying for a variety of industries. Okay, AI, pure, it may still remains a major market. 1 petaflop in terms of energy related to data capacity, yes, so the energy side of things for our data centers, we need power that we look at. Hence, the energy mix of our electricity. At this point in time, the majority of this is low carbon and our objective is to be 100% low-carbon energy. So this is a -- well, on our data center, we're now looking about a major mission or accomplishment. So in terms of we bring energy in the data center, we look at how much of this is used for computing power and how much is used for cooling. And then we look at this to see together the most efficient possible ratio to need as little power for cooling and as much as possible for computing capacity. We want to be responsible. We want to use as efficiently as possible and too, we want to have decarbonized energy as well. So these days, it's very easy to get good prices on decarbonized energy. And this is what we do. So IoT, the Internet of Things, you've talked about -- you've had the real estate market, but yet again, constraints have been voted on and they've never been applied in France IoT. For instance, related to the measure of energies in flats and apartments. So we don't -- we're supposed to have meters, but it's not really been applied in France. Now that's simple between voting in law and applying the law. So the IoT, yet, again, this is -- the Internet of Things is -- we may be fascinating, but it doesn't -- for when within this -- our scope and our capabilities, what we're looking at with that is [indiscernible] about the monitoring of infrastructure. It's slightly different. This is about sensors, installing to measure into structures, and the world of IoT is something that is not [indiscernible] CGG. And on the seabed and imaging, we -- let's remember that we are a service-driven company and working with a client. There's no market on this type of exploding methane stored in seabed layers. And if this market was what we can do about it, images is about depth and very complex. So imaging the seabed is not where we can develop a differentiating offering against obviously their competitors.

[Interpreted] Right. I think we've answered your many, many questions. So any additional questions in the room, please? Yes, that gentleman back there.

[Interpreted] [ Daniel Yerr ], individual shareholders for and have been an individual shareholder for a long time now. In terms of [ CDR ], what about Articles 6, 8 and 9 now? What is your position in terms of your computing power? Quantum computing, will this be -- could this be a solution to our significant consumption of computing power? In terms of carbon footprint now, everybody has been talking about Scope 1 and 2 and not much about Scope 3. So Scope 3 becomes Scope 1 and 2, these companies that we outsourced with and the Scope -- well, the businesses of the scope is one and is affected by Scope 1 and 2. And 1 and Scope 3 is about outsourced companies, so outsourced companies. And your major consumers of energies. You're telling us that you could be buying green energy. But everybody is saying that. Globally, energy currently is carbonized, it's very carbon loaded. Everybody is buying green energy. I think it's just about words and not applied in or not translating in real life. I don't quite understand your related activities. What do you mean related activities? Because you've shown us bridges. You could be working against construction companies or the monitoring companies, the Veritas and all, so this is not about expertise. You're just subcontracting. What is your added value on this, well, positioning?

[Interpreted] I'll take the -- that last questions of yours. We don't want to compete with construction companies, and we don't work with the likes of BV, Bureau Veritas. No, we make sensors. Thanks to the SMO technology, we're capable to manufacture sensors that will allow to work at the variations on a construction. So this is going to [ exit ] the SMO business. So this is the same type of technologies. So what we provide is both the equipment and the computation. So this is not only about computation. As you mentioned, we provide solutions allowing Bureau Veritas to issue or to render an opinion, to be well informed. In some of the cases, there are various types of clients, but we can work with a [indiscernible]. Well, they might like to install instruments on a bridge and we'll provide the user instruments so we'd come along with measurement devices, with solutions to enlighten the various players involved on the behavior of their infrastructure. We can't say that -- well, visual, we can always say that there's a crack on a bridge, but we look at the -- and if we meet the president of the [indiscernible] in the U.S., there are infrastructure issues because these infrastructures are aging as in the case of some of the structures in the U.S. So the point of this technology is just to try and anticipate maintenance, do planned maintenance. That is pretty significant maintenance of such infrastructures or the closing down or the shutting down of those infrastructures. And for dams, so dams have been monitored with search instruments for many, many years. But we're not in that business, but it's mostly bridges, and that some of those bridges have, well, collapsed. So there's one in Italy more recently. So on dams, you're absolutely spot on, but it's inherent to part of what we do, and this is mandatory for the operator to put monitoring in place.

[Interpreted] So you're following deformation of the structure or changes in shapes of the structure.

[Interpreted] Well we agree. Yes, we agree. Well, can you reiterate your questions on the CSRD? That was your first question, right?

[Interpreted] What is your position vis- -vis the European regulation science. Are the article 6, 8 or 9 in terms of the funds?

[Interpreted] I can tell you, Article 6 is about companies that have very poor rating carbon-wise. It is a bit better now. It's the top notch. So Total has been under Article 6 in terms of investors. This has been a sideline because these are investments that are highly polluting.

[Interpreted] What is your ranking in terms of vis- -vis investors? How do they regard you?

[Interpreted] I don't know whether we do have this type of information available. We'll get back to you on that. I don't believe that we are in Article 6, and I think we should be under Article 8 or 9. We're not the most virtuous around the world.

[Interpreted] But then you quantum calculate, your computing?

[Interpreted] Yes. And we're looking at too quantum computing. But we think for the time being, that it's not adapted to the type of computing that we require and the GPU innovations are more adapted on what fit for our needs. We're looking into this, but in a short term, we don't see any -- we don't foresee any changes there, any move to quantum computing. The artificial intelligence will come along. But we are really focusing on physics.

[Interpreted] And the -- and I'll tack this as the comment to your question 3. We are scrutinized on Scope 1 and 2. Scope 3 is part and will one day be part of this but -- of our scope. But we're not scrutinized on this, but you're absolutely right. Scope 3 becomes Scope 1 and 2 of our suppliers. You're absolutely spot on in that regard. So yes, we buy our energies and well, we buy energies that is set by that this energy is green. If everybody does that with the nuclear mix at 20% means that there is a problem somewhere along the lines. But I can't make any comments on that. But our target, in answer to your questions then, are to see how the energy mix can be certified, in any case, with as little carbon as possible on Scope 3. Needless to say, we do scrutinize our suppliers. Indeed, this is now the measure that we or KPI, we run as such. Thank you very much. Gentleman in front, yes, had a question, please. Yes. Over to you with the roving mic.

[Interpreted] I've been a shareholder for the past 5 years, and this year, you ramped up operations, but this is not reflected in the perspective. I think profits increased last year. I think your total debt stood at $900 million this year. Now this is going to $1,200 million. That'll be the second question. Third question. Could we have on top of that of the [ scrutineer's ] last year, as an overview, the operating results and the financial statements of last year. And with that EBITDA, $100 million, $90 million, so the average credit gearing stood at 10%. And how about taking the time period, we have relatively lower interest rates beyond -- below 10% to carry out profound changes. So rearrangements.

[Interpreted] I would like to take your question about the gross debt and the net debt, so $1.2 billion of gross debt and $900 million of net debt. So the net debt is flat with $80 million, $90 million cash. So renegotiating the debt, you're obviously right, we were rated the CCC on Standard & Poor's rating. It's impossible to renegotiate a debt with a CCC rating. It was regarded as a junk investment. So we're on to category BB1, which is our rating with other companies, or rating agencies like Moody's. And indeed, one, the average net debt paid under the $100 million out of $1.2 billion, so that's 8%. So we had 2 debts, an American debt and a debt in -- so a debt in dollars and debt in euros around 8%, 9%. So if we could -- could we bring down those rates? No, the answer is no. As you know, the U.S. rate has stood around 5 points and the [ BCE ] at 40, European Central Bank at 4%. And so when we are a B1 issuer, and a B1 issuers, that 800 basis points. So that's too early days. Maturity, well, we'll come to maturity in '27, so by '25, '26, this will have to be reviewed. We need to wait for the drop in rates some. Europe's and Central Bank is anticipating this, and we don't know where this will take us. If we look at the analyst ratings, we said there would be 3 drops in rates and we all will sit around 3%. So there will be a window of opportunity in 2025. So refinancing -- refinancing '25, '26, act of this, we'd be winners of opportunities there, coming along too. In these financial costs have very deep impact on the -- yes [ 8 ]. It happens that half of -- it takes up half of our cash flow, so the answer is yes. That's about how to refer our cash. Any additional questions in the room? If we can just pass the roving mic.

[Interpreted] [ Michelle Vastray ]. I've been a shareholder, representing [ 60 ] shares, holding under 100 shares at this point in time. What are my possibilities to go beyond this 100 share threshold, to get 1 new share? I've been with the companies with -- I've stuck with the companies and throughout all our vagaries, and it would be nice to de facto upgraded bearing in mind that the [ fashion ].

[Interpreted] It's very, very limited indeed. This is a highly technical questions that you're asking us because indeed, the split in number of shares by 100 is highly regulated indeed. This is highly regulated. We can -- well, it would be impossible to make exceptions. We'll do options at the end of the day for these shareholders I believe to be supplemented to gain or to get 1 new share or the [ vestition ] of the full amount.

[Interpreted] Restitution?

[Interpreted] Yes. Absolutely. [indiscernible] progress. If this is provided, we can get a vote on these resolutions this morning, these will be complex as it will be taken several months. So no more questions, no more light. No more questions. No microphone, please. Can you possibly give a microphone, a roving mic, to the person asking a question.

[Interpreted] The interpreters cannot hear the person. Microphone, please. Microphone, please. Microphone please. The question is inaudible. Apologies.