Thank you and good morning, ladies and gentlemen. Good evening.

Welcome to this presentation of CGG's Third Quarter 2021 Results. The call today is hosted from Paris, where Ms.

Sophie Zurquiyah, our Chief Executive Officer and Mr. Yuri Baidoukov, our Group CFO, will provide an overview of the third quarter results as well as provide comments on our outlook.

Starting Q3 starting today, CGG is changing its financial communication schedule. We will release our financial results after market close at 5:45 PM, Paris time.

This new financial communication schedule should be an opportunity for US and UK investors and European investors to participate more largely in the conference call with the management. Let me remind you the forward-looking statements, as some of the information contains forward-looking statements, including without limitations statements about the CGG's plans, strategy and prospects.

These forward-looking statements are subject to risk and uncertainties that may change at any time and therefore, the actual results may differ materially from those that were expected. This is being said, now, just want to remind you that following the overview of the third quarter, we will be pleased to take your questions.

And now I will turn the call over up to Sophie.

Thank you, Christophe and good morning, ladies and gentlemen, and thank you for participating in this Q3 2021 conference call. I'm on slide five NOW, let me start with some general comments on our market environment.

Overall during the third quarter, the activity of our clients continue to show signs of a gradual recovery with international oil companies increasing their production related and near-field exploration activities. We also started to see this quarter IOCs initiating some discussions around various shorter term, lower carbon, lower cost exploration opportunities.

National oil companies, and independence remain more active in general and continue to gradually increase their activities. We operate today in a favorable macro environment as rent Brent oil price has stabilized the above $75 a barrel and is expected to continue growing from that level onwards.

This should continue to stimulate activity, aimed at maintaining or increasing production in the near future. As we know, E&P companies have focused historically on upgrading their portfolios to reduce their breakeven oil price.

And now there is the additional dimension of lowering carbon intensity of reserves, which should also trigger increased activity and exploration down the road and especially in the favorable macro market environment that we see at current. Also as the energy transition continues to move forward, we're seeing a regained interest in gas producing areas and overall, while our market is still challenging, we're clearly seeing positive signals that our clients have defined their priorities and are started to resume pending activity.

Along with their energy plans, digital initiatives remain at the heart of our client strategy as a source to drive increased efficiencies into their value chain. These trends should support increased activity as we move into 2022 and onwards.

We see already that geoscience is progressively recovering, thanks to increased demand for our superior technologies and services. While sales in Multi-Client and equipment are lumpy by nature, they were both particularly stronger this quarter driven by hiring multi-client pre-funding and solid equipment deliveries in our new -- of our new OBN system.

Looking forward, we're expecting a solid Q4 for our three core businesses and overall, and as anticipated after very low first half of the year, we're seeing both improved revenue and profitability in age 2021, and expect this trend to continue forward. As you'll see in our numbers, we managed through the pandemic effectively improving our profitability for the same revenue levels based on our cost reduction plans.

Earlier this year, I highlighted our initiatives focused on divesting non-core businesses to both further streamline performance through the pandemic and ensure we could focus investment on our strategic growth and core business initiatives. In early October, we sold our geo-software business for a total cash consideration of $95 million and the sale of the physical asset storage business along with the sale and lease back of our headquartered building are both progressing well.

With expected solid fourth quarter activity, CGG is well positioned to deliver its 2021 financial targets. Moving on to slide six, our Q3 revenue of $217 million, what was up 35% year on year and up 71% sequentially.

Group segment EBITDA was $118 million, a 44% margin due to business activities and sales mix. At this level, we delivered a solid $33 million operating income representing a 12% margin.

Segment free cash was $2 million due to lower collections of receivables during the quarter after the weak second quarter revenue in 2021. It is a significant improvement from last year.

And now let's look at our Q3 2021 operations in more detail by reporting segment. GGR segment revenue was stronger this quarter at $168 million of 12% year on year thanks to the progressive recovery in geoscience and solid multi-client sales in Q3.

EBITDA margin improved to 63% and opening margin also improved to 18%, thanks to the sales mix and our cost saving measures, which continue to generate a positive impact. Going on to slide nine now, Q3 geoscience external revenue of $77 million with flat year on year and up 5% sequentially.

Geoscience continued to show progressive recovery during the quarter. And some project that we'd worked on pre-COVID came back in for reprocesing in anticipation of client production optimization work.

Our clients continue to value our premium products and services in complex areas and as budget constraints start to moderate, these key activities come back to us. Backlog is up 8% year-on-year and productivity per head has increased as we get busier and more efficient.

Now on slide 10, the recovery in geoscience is led mainly by high end processing of offshore Marine streamer and ocean bottom nose data, mostly in producing areas such as the Gulf of Mexico and Brazil. Sea bed projects require more detailed advanced imaging for increased accuracy and we capture a higher percentage of that market, thanks to our technology differentiation.

We have now identified a portfolio of new businesses -- of new business opportunities beyond the core. These are maturing inside our three divisions.

We have assigned dedicated resources to develop our commercial offering, and we are gearing up to grow and track those businesses with KPIs. Inside geoscience, we classify these new opportunities under digital, energy transition and environmental geoscience.

And one of our key initiatives in energy transition is to leverage our geology and geophysics database to offer services around the identification and characterization of CCUS and geo thermal sites and we're seeing increasing interest in sales in this area. We are also involved in several digital and environmental projects aimed at digital transformation, cloud services and pollution monitoring.

Recent projects include several digital transformation pilots with our data hub services and environmental projects, which included a study focused on the identification and quantification of microplastics pollution on the Snowdon, the highest mountain in Wales. Going on to Slide 11, this slide is actually an interesting zoom into geoscience order intake, which is made of high end imaging of Marine streamer and CGG data.

In a CapEx constrained environment, it is critical to our clients to have access to the more precise images that CGG imaging can provide to increase their opportunities for success. Beyond the core, our order intake grew by 18% year on year and we are excited to see traction forming around these new businesses.

Slide 12, the geoscience industry is fascinating as every few years we bring a new breakthrough technology that drives the reprocesing of historical data. These breakthroughs are thanks to our unique capabilities and expertise in sophisticated algorithms and ultra-high performance computing today.

The must have technology is our industry's unique four way form inversion imaging, and CD's four way form aversion provides very detailed structural information that wasn't and discernible, historically, as you can see on this parent image, next one, which is 12 interest in our new, beyond the court businesses is significantly increasing and they represented more than 10% of our total bids spending. At the end of September.

Today, I'd like to highlight one of our business solutions, which is related to the mining industry with our technologies, combining satellite imaging and multiphysics processing. We can characterize in monitor tailing storage areas, which are a potential hazard and liability for the mining companies.

We successfully applied our technology on a landmark project for a global mining company using airborne electromagnetic 3d imaging over an area with 15 mind sites in Brazil, which enable the clear delineation of the damage storage areas, providing a baseline for monitoring our so cell sensor technology can be combined with that satellite and multiphysics capabilities to provide a reverse long-term monitoring and real time risk reduction solution. Moving on to a multi-line now multi-line cash CapEx was $57 million this quarter, stable year and dedicated to Marine multi-line program.

In Q3. We had three vessels working on multi-line programs, two on a five month 3d multi-line project in the Norwegian north sea, and one in Brazil on our ongoing ne lab project.

We also had five multi-line reprocesing projects this quarter, including a new one in the go Mexico. The increase in revenue disorder was partially driven by catch up in.

Pre-funding taking our year to date pre-funding rate to 70%. Now on slide 15 in Brazil, we secured significant pre-funding for the ongoing NELA program in the north sea.

We had two vessels and one node crew active this quarter in the north Viking cabin, which is expected to drive Q4 pre-funding us land activity. This quarter was supported by client M&A activity, and we are growing interest in us onshore gas assets.

This could drive further after-sales in the Gulf of Mexico, CGG is mainly focused on re-imagining projects, which in the absence of new acquisition provide a cost effective way to improve the understanding of the subsurface for enhanced production and near step by expiration. I move on to equipment now on Slide 17 equipment segment revenue was $101 million significantly up year on year end sequentially, which is mainly driven by high volume of deliveries of our new GP 300 ocean bottom nodes.

At that level of activity, EBITDA and opening substantially improved to 17% and 9% respectively. Next one land equipment cells represented 40% of the total in Q3.

As we delivered systems in various geographies like China, Russia, north Africa and India Marine equipment sell with $55 million or $55 million representing 54% of total sales due to the scheduled delivery of 18,000 GPR 300 nodes equipment division continues to innovate and recently launched the TPS tuned pulse source. This is the purpose-built acoustic source designed to further protect Marine wildlife from high frequency emissions while maintaining highly accurate and reliable results, seismic acquisition.

And finally, I'm pleased to report that during the quarter. We also made the first commercial sales of our new structural health monitoring system LAN thanks.

I'll now give the floor to Yuri for more financial highlights.

Thank you, Sophie. Good morning.

Good afternoon. And good evening, ladies and gentlemen, I will comment the third quarter 2021 financial results.

Looking at the consolidated PNL on slide 20 our segments, it was $270 million up 35% year on year and up 71% sequentially. It was a very solid quarter for CG group driven by continuing recovery in geoscience, significant increase in multiline sales and strong equipment deliveries.

SG&A segment revenue was $168 million up 12% year on year and up 53% sequentially geoscience revenue was 77 million stable year on year and up 5% sequentially multi-client revenue was $92 million up 26% year on year and up 149% sequentially refunding revenue of our multiline projects was $59 million up 51% year on year with refunding rate of 103% multi-client after sales were at $32 million this quarter, slightly down year on year. The equipment segment revenue was $101 million up 105% year on year and up 113% sequentially.

The respective contributions from the group businesses were 28% from geoscience 34 percent from multi-client 62% for G J segment and 38% from equity segment ABIDA was $118 million. This quarter up 127% year on year with a solid 44% margin adjusted segment.

ABI $118 million was up 48% year on year segment operating income was to $3 million up $71 million year on year with a 12% margin while adjusted segment operating income of $33 million was up $37 million year on year. After IFRS 15 adjustment of $13 million, cost of debt of $27 million, taxes of $7 million and net loss from continuing sorry, net loss from discontinuing operations of $3 million, group net loss was $17 million significantly less than $93 million net loss in the third quarter of 2020.

Moving to Slide 21, simplified the cash flow and looking at Q3 2021 segment free cash it was positive at $2 million, including $48 million negative change in working capital. Again, a significant improvement from negative $59 million in the third of 2020 due to this quarter's solid increase in EBITDA.

Total CapEx was $74 million stable year on year. Industrial CapEx was $8 million, capitalized development costs were $7 million and multi-client cash CapEx was $57 million flat year on year.

After $14 million of lease repayments, zero cash cost of debt, $7 million of CGG 2021 plan cash costs and negative $15 million free cash flow from discontinued operations, group net cash flow was negative $34 million, significantly improving compared with negative $92 million in the third quarter of 2020. Moving to Slide 21, group balance sheet and capital structure, at the end of September 2021, group liquidity amounted to $340 million, including $100 million on drawn RCF.

Group gross debt before IFRS 16 was $1.22 billion and net debt was $987 million. Group gross debt after IFRS 16 was $1.35 billion and net debt was $1.11 billion.

Group debt after IFRS 16 included $1.18 billion higher bonds due 2027. $49 million of other items and $127 million lease liabilities.

Capital employed was $2.14 billion down $28 million from the end of December 2020. Networking capital after IFRS 15 was at $153 million decreasing from $212 million at the end of December 2020 primary driven by reduction in net accounts receivable, inventories and the current provisions.

Goodwill was stable at one $1.19 billion, corresponding to 56% of total capital employed. Multi-client library net book value after IFRS 15 was up at $556 million, including $495 million of Marine and $60 million of land net book value.

Other non-current assets were at $376 million, including $221 million of property, plant and equipment, down $47 million from year end, which included $131 of IFRS 16 right of use assets and $96 million of other intangible assets, down $20 million from year end. Other noncurrent liabilities were at $136 million down $29 million from year end.

Shareholder's equity was $1.27 billion including $44 million of minority interests, mainly related to stamp duty. Now I hand the floor back Sophie for an outlook of 2021 market environment and our financial guidance.

Yeah, thank you, Yuri. Now we're on Slide 24.

Overall, the Q3 was solid quarter, and we expect the solid Q4 as anticipated earlier in the year. In this context, we confirm our 2021 financial objectives and looking forward, geoscience should continue its gradual recovery.

Multi-client has been the most affected by the current cautious client's environment where clients, especially the IOCs continue to delay decisions for the future. However, we do see the early signs of improvements as there is a need for our clients to constantly review their portfolios for economics and now for their carbon footprint, I think this will drive a bit more geographical positioning and acreage grabbing and we do see interest in our data for Q4.

In equipment, Q4 will see significant land equipment deliveries in North Africa. And while it's too early to provide a perspective for 2022, it's fair to say that our clients are organizing to increase their activity levels, even if they remain cautious, especially when it comes to exploration.

Technology and digital will remain high on their agendas and I believe the current trends will be supportive for CGG's core and growth beyond the core businesses. Our unique technologies, sophisticated algorithms, high performance computing, earth data and industry-leading sensors will play a key role in supporting the industry and its ambition through the energy transition.

Thank you for your interest and we're now ready to take your questions.

Sorry. Yes, yes.

I did not recognize the pronunciation of my name. My question relates to marine sales equipment.

It's quite impressive to see the increase in ocean devices. On streamers what's your prospect.

You think the market given the age of the streamers equipping there should be at some point large replacement of streamers. What's your vision of that?

We thank you, Jean, for your question. You're absolutely right in saying that the streamers are getting older and older.

So probably getting into the 10 years anniversary. But we don't see, I think I haven't changed my view that the replacement cycle will be starting more into end of '22 to 2023.

So I don't think the streamer replacement cycle will drive significant improvements in the Marine stream of numbers in equipment for 2022. I would say generally speaking, the prices for marine acquisitions seem to be on the way up, although in this Q4, you don't see Marine acquisition companies aren't that busy, but prices are heading in the right direction, which will eventually allow those companies to make investments to replace the streamers.

There is a need for that. It's just right now, they don't have the CapEx or the visibility in their business to make those investments.

I think this will come in 2023, for sure.

Yes, good evening. I think it's [indiscernible].

Can you hear me?

Yes. Kevin.

Yeah. Okay, perfect.

That's me. Sorry for that.

I have a few questions please. The first one is related to the working capital movements that you had in in Q3, I guess it's related to cell of sale and the fact that you are delivering node this quarter and you're expecting to deliver a stronger, let's say equipment -- strong volumes of equipment in Q4.

I was wondering if you can give us the magnitude of this working capital movement related to sales and how much we should expect to get back in Q4. That's the first question and the second one is related to the EBITDA of [ph] and is the let's say other nodes having a positive mix effect on your EBITDA because the performance was better than what I think everyone was anticipated in terms of margin.

So is the nodes a positive mix effect. And the last one is on the free flow from discontinued operation.

Can you give us some details on that? Is it related to the boats and the engagement that you have with your partner when the vessel high this, you can explain me the figure from this quarter.

Thanks.

Yes, Kevin and good evening. I will take your questions.

So you'll see in our financial statements that indeed this quarter, we had a negative change in working capital of overall of $48 million. And the reason for that is of course the, well, actually it's two things.

One you already mentioned. Yes, indeed obviously we had strong deliveries of equipment in the third quarter, primarily GPR node.

And with that, of course, accounts receivable in equipment business went up, but the second element is around the -- or relates actually to the sequential significant increase in multi-client sales as well. So multi-client sales increased from $37 million to $92 million and of course with that that's what drove overall the increase in accounts receivable.

So in other words, again, it's both businesses, it's multi-client and equipment and we expect of course this trend to change. Well, I kind of, again, into the fourth quarter, so the receivables will become collected most of them during the fourth quarter of the year.

Now regarding the EBITDA of sale, again there is definitely a positive impact from the sale of nodes. Why, because of course it's electronics.

So as you well know, in the kind of in the revenue mix of their sale, the mechanical products like vibrators, obviously have lower gross margin while anything electronics has a higher one and nodes ocean bottom nodes fall into this kind of higher gross margin category, therefore yes, we had positive impact. And your third question was what Kevin…

The free cash flow from discontinued operation, Yuri.

Oh, right. Yeah.

sorry. Free flow from discontinued operations actually it's kind of the usual story, primarily it relates to the compensation, but also in the third quarter in CGG 2021, we had an impact of tax legacy, tax settlement in Mexico of $14 million.

Okay. So that's vast majority of the $15 million is related to legacy tax settlement, and it's not related to the compensation that you have to pay to a share water for the item.

Because if and when we take a decision to share what it doesn't go for discontinued operations, it will go into the multi-client. Yeah.

Hi, good evening everybody. Couple of questions, if I may.

Firstly obviously you've made a couple of announcements this quarter where you've been investing jointly with some of your peers. Can you just talk about investing in cooperation with others?

Is that signal what we're going to see going forward? Is it a sign of capital tightness in the industry or what exactly is driving that moment?

They are actually, you're absolutely right. There is more collaboration and I, I do believe the future will be more collaborative if you look at our clients they've been collaborating for a while for a long time.

And especially when it came to activities that were more risky in exploration, particularly, you know, they come and form consortium. And so I think we've not been good at mimicking that from our space.

So one of the announcements that we made is in Sur and that's going to be three of us investing and that's about risk management. The second one that you would've seen is Iran, and that's a bit of a different one.

It's recognizing it's about delivering the data in an efficient way to our clients multi-client data and giving them access to their entitlements, recognizing that if you want is a bit of a backbone for multi-client, but is not a differentiator. It's not something that we believe, you know, TGS PS or us should differentiate on.

And rather we should join forces to just do the best product to serve our clients. So it's more about putting together resources to better serve our clients, which want, you know, efficient data delivery into their platforms.

The other one you would've seen is the collaboration on CCS with PS. And we felt that it would make sense to join forces with them because we are the two companies that have if you want the larger data sets and it was easier to collaborate on something new, like the CCUS.

So we thought, okay, why don't we do something together and see what we can provide to the, to the inter together and knowing that we've got data sets to do that. It's a bit of a different drivers, but generally speaking, risk management, efficiency and I guess business synergies would be the drivers, but different angles.

Okay. Very another question.

Yeah. Can I just ask about conversations you are having with your clients, obviously the gap between breakeven, and the oil prices, as big as we've ever seen at the moment.

And my US colleague today, we have to note with the word super-cycle. So and going into 4Q, obviously there's used the seasonal spend the year end.

Are you getting the sense that that's much more likely now with the environment and workload is coming back?

I would say it's really strange times because all price is super high. The, all of our clients are generating a, a very profitable and generating very strong cash flows.

I don't have a sense that they're going to be moving from their capital discipline. Now you have to keep in mind, they have under their well below their guided their guidance on CapEx band, which means they have a lot of sort of quote unquote "spare money" when it comes to year end.

I would say there are some signals that they want to discuss, yearend deals because they've been into the discipline of gather the needs from various departments and various groups and assets geographically into year end and trying to negotiate a larger deal. So I think that will certainly happen.

And I mentioned that like positive signal, I just don't know the magnitude of it and how much of that money they will actually release because they, again, they're well below their runway rates of spending. So that means they've got a lot of money, but I don't know if they will spend it all or if they will keep some under their, their shoulders and, or keep it to just give back through to the shareholders through other forms

Got you. And a quick one, if I just finish off pre-funding is above 100% obviously very good.

Is that just prudence on what you're investing and is it that reprocessing comes with higher pre-funding what's driving that a 100% plus?

The pre-funding should never, we should never look at it on a quarter to quarter basis. I did mention last quarter that there was a, a sort of a deal that we were working on that had moved into, into Q3.

So in reality, that prefund should have come in earlier in Q2, which would've made H one stronger and this one more normal. So it just, sometimes it's a bit lumpy and the sequencing makes it how happen that way.

And, and typically there is some level of catch up on pre-funding when it comes to more, you know, the later month of the year, which is what's happening. So you shouldn't read into this particular quarter, it was driven by a catch-up of pre-funding that should have really come last quarter, but it, but it does say though, is our proof funding at, year to date, the 70%.

And we'll probably go better than that in Q4. Yeah.

It shows that we're investing in the right places and that there is interest in our projects, which is essentially Norway and Brazil

Okay. My, question relates to CCUS.

Yuri, you mentioned that in terms of the diversification away from oil and gas and that something your companies are, are mostly Americans are pointing to very seriously. What kind of services would it involves in of you mentioned her identification, but once it's done, would there be a need of permanent and that sort of services for CCUS.

Yeah. Yeah.

Thank you for that question. You'll find in the C CS very similar ingredients to the expiration and production.

So exploration is going to be similar ingredients, and that, that's what we aim to do with our data sets in in the north sea, particularly, that's going to be very active in CCGUS is identification and characterization. You could do this using geoscience at large.

So it definitely will involve geology and geophysics, and that geophysics will either be acquired on a proprietary basis or will be on a multi-line basis. So it will involve data sales one way or another, or data acquisition and processing activities.

And then there will be a perhaps more important component of monitoring because will be driven by regulatory requirements. Of course, if you think about it, you're injecting CO2 perhaps at high rates and you have a risk of fracking, the rock or breaking the integrity of the reservoir or the storage area.

And therefore there will be there will have to be mechanisms to monitor. I would think some permanent, perhaps combined with the likes of the 4s that we see in the oil and gas industry.

So, but there will be a definitely a component of permanent monitoring, which we intend to position on.

Yes. Hi.

Good afternoon. Thank you for taking my question.

Just one for my side. I just wanted to check on your non-recurring charges.

I seem to have a number of $32 million for 2021 as an adjustment to EBITDA well to EBITDA from $42 million in 2020. Would you confirm that that's still the number I should be looking for?

Because I think year-to-date, obviously there were no adjustments quarters, so you date where I think $3 million total. So how should I think about that?

Thank you.

So yes good afternoon. Are you looking at cash flow or P&L?

Sorry that's P&L.

Yeah. So on the P&L side we yeah, we have about no, we had a credit actually from early in the year from the reassessment of provisions for social planet France.

Right. So, basically we don't have the significant kind of the difference between the EBITDA and adjusted segment EBITDA.

Yeah I would say, this year is a fairly cleaner in terms of non-recurring costs, because last year we took all the provision, either the provisions or the cash costs for the reductions of essentially headcount, large headcount reductions. And we had the non-recurring on some adjustments, I guess, on multi-client data library.

But since the beginning of the year, we haven't made any, any adjustment. Actually, if anything, like Yuri mentioned, we got a credit because we took a larger provision for social plan in France and you don't know the exact number until the people actually leave because it includes, it depends on how long actually people take to find another job.

And so we actually had a fairly significant credit that we took and so it hit us. So our adjusted EBITDA is actually lower than our EBITDA.

Yeah. And, basically, yes, the difference between the two on the nine months year-to-date basis is $2 million, so $195 million EBITDA and $193 million adjusted EBITDA and when it comes to operating income.

So we have basically operating income for $14 million for the first nine months versus adjusted, operating income of $6 million. So in other words, again, there is last $9 million kind of positive or credit effectively related to the provisions and charges that we took last year.

Got it. So I shouldn't expect any meaningful adjustments in Q4 or in 2022?

No, not when it comes to P&L and then on the cash flow, you will see that obviously we'll continue kind of to pay those severance costs. And they go through the reduction in liability.

Other words the change in working capital.

Would you remind of those?

Again on the cash flow statement basically we see over the first nine months, the change in NRC liability of negative $19 million. So, basically that's what's happened on the year to day basis.

Yeah. And sorry.

Yeah. For, the '21 in total and 2022, what are your expectations?

Well, '22 should be close to zero because basically there might be a small tail end in France, but pretty much all of those severance costs are paid this year.

Okay. And then a similar number to Q3 and Q4, I assume, or slightly lower, but not increasing.

No, it's not increasing. Yeah, exactly.

So,

Okay, great. Thank you very much.

In fact, it's kind of gradual decreasing. Yeah.

That's what's happening.

Yes. Good afternoon.

Thanks for taking my question. Very quick question for me in today's environment we see some bottlenecks like in semiconductors, but also in some different for you.

Is it a risk for your equipment divisions? And what's the most, let's say risky equipment for you.

We should focus on and second question still linked to this point. There is also some increase of roadmap costs.

Do you think that it's possible for you to preserve your margin in this context? I always think about equipment division.

Thank you.

Very good question. And it is something that we're looking at very carefully as we're planning into 2021.

So I'll just say generally speaking on the equipment side, we plan probably a year ahead. So we place the orders for critical parts quite early in the cycle.

And that's why we've been I mean, we haven't felt any issues this year of this bottleneck on semiconductors or increases in raw material. So we might see we're starting to see some tension on electronic equipment not necessarily the raw materials.

That's not a concern to us. And it's something we're working to resolve.

We do think that if we get affected for a period of time next year, it would be a short period and that we would be able to catch off during the year. So we're not planning right now.

We're planning to be able to deliver what we need to deliver next year, basically. And that, and it, that is mainly because we've anticipated a lot of the orders.

Does that answer your question?

Yes. Thank you.

And regarding the cost of -- the increased cost of input and your margin and your ability to preserve your margin and speaking with clients do you…

Yeah, we're not seeing yet. I mean, again, this is, like I said, we place the order quite ahead of time.

So we haven't seen any inflation on the raw materials on what we buy. It's more about the issues, been more about the availability of some electronic electrical components and that we've been working on.

So I would think, yeah, we're not, I mean, right now we're not seeing impact on our margin and our margins are more dependent on the mix of products that we deliver. And as Kevin pointed out earlier, someone asked the question on the GPR, the GPR is a good margin.

So it really depends on what we're selling rather than the inflation on the raw materials.

Okay. Any additional questions?

Hey, thank you very much. So I have a quick question about the cash flow generation and leveraging in the remaining part of the 2021 in 2022.

So should we assume that $95 million you're going to receive from geoscience will go towards the leveraging? That's the first question.

And the second question would be going into the future and going into 2022 as that activity, as you mentioned, is picking up, how should we think about cashflow generation? I, I, I E the pre-funding levels are relatively low at the moment, and we expect them to go back quickly towards the 95%, 100% levels.

That would obviously help a little bit I mean, that's basically the key question.

Yes. Thank you for your question.

I'll take the question on, on pre-funding. If you, if you remember, historically, we've always committed to sort of a 75% pre-funding, which we felt offered the right balance of finding projects, the best projects, because the best projects aren't necessarily the ones that are the most prefunded in early stages.

So we wanted to make sure we had the mix. So the high funding is not necessarily a sign of a good performance of multi-line.

It needs to be, I believe over that 75%, but a 100% might actually be too high, meaning you're not taking enough risks on the projects and on your portfolio, or you're not investing enough now, of course, what we want and what we need is more after sales. And that's what we've been short on from, I guess, the started last year because of the COVID crisis and into this year.

And that's where you're seeing the discipline of our the ISS and our clients play is they're just not buying data that from the shelf. So if we do see the, when, or if we see that after sales pick up of, obviously this is a direct cash generation and they will be falling through all the way into cash.

So I'd say this year we've committed to be sort of cash positive. And so that will not, unfortunately allow us to deleverage and 2022, I think it's too early to say which way it's going to pan out.

Do you want to add anything fair

Well, we will under, under the new ones kind of in terms of conditions we have until April of next year to decide whether to apply this generated cash against the 10% repayment. So as Sophie rightly said, we'll be looking at next year and once we have more visibility, then we'll make those decisions, but it will apply to leveraging us indirectly.

In other words, obviously the cash on debt reduces.

Yeah, that's what I meant. Thank you very much.

That's helpful.

Okay. All right.

Well, thank you very much. It's been a great call.

Many more question than in previous call. So I think we were right to change the time and the scheduling.

So thank you very much for your question. Thank you for the interest in CGG.

And I look forward to meeting some of you in the next few days.

Yeah. Thank you everybody.

Thank you. Have a good evening.

Have a good evening and good afternoon.