FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer
Pursuant to Rule 13a- 16 or 15d- 16 of
the Securities Exchange Act of 1934

For the month of May 2011

CGG-Veritas

Tour Maine Montparnasse — 33 Avenue du Maine — BP 191 — 75755 PARIS CEDEX 15 (address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F þ       Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o       No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82 ____________

 

 

CGGVeritas Announces First Quarter 2011 Results

Group Operating Margin at 3%

Net Free Cash Flow of $65m

Significant Progress on Performance Plan

PARIS, France — May 4^th 2011 — CGGVeritas (ISIN: 0000120164 — NYSE: CGV) announced today its non-audited first quarter 2011 consolidated results. All comparisons are made on a year-on-year basis unless stated otherwise. All fourth quarter 2010 results are reported before restructuring and impairment.

	▪		Group Revenue was $728m, up 5% year-on-year and down 20% sequentially following a particularly strong fourth quarter. Seasonally low Multi-client sales and low fleet utilization contrasted with robust Sercel sales and a notable increase in Land revenue this quarter.
	▪		Group Operating Income was $23m.

	○		Sercel performance was excellent with an operating income at $95m.
	○		Services operating income was a loss of $26m mainly related to Marine. Services were also impacted by unrest in the Middle East and North Africa. Multi-client contributions were low while the North American land winter campaign was particularly strong and Processing and Imaging sustained high levels of activity.

	▪		Net Income was negative at $37m, including one-off $25m refinancing costs.
	▪		Cash flow from operations was $202m, up 34% year-on-year following a noticeable reduction of working capital.
	▪		Net Free Cash Flow was positive at $65m.
	▪		Net Debt to Equity ratio was 38% improving sequentially from 41% at the end of 2010.
	▪		During the quarter we made significant progress on our Performance Plan:

	○		Master and Endeavour major vessel upgrades are on schedule to be completed in the second quarter, Voyager ownership was transferred to CGGVeritas and we initiated a JV with Eidesvik for ship management.
	○		The cost reduction program is progressing well but exposed to rising fuel costs and the weakening dollar.
	○		Marine differentiation was strengthened technically with four BroadSeis projects awarded, and commercially with JVs announced in Russia, Indonesia and Vietnam.

▪

Backlog as of April 1st was $1.22 billion in a market expected to progressively strengthen.

First Quarter 2011 key figures

		Fourth Quarter				First Quarter
In million $		2010				2011				2010
Group Revenue			905				728				696
Sercel			284				275				222
Services			651				533				511
Group Operating Income			120				23				37
Margin			13	%			3	%			5	%
Sercel			101				95				50
Margin			36	%			34	%			22	%
Services			35				-26				14
Margin			5	%			-5	%			3	%
Net Income			53				-37				1
Margin			6	%			-5	%			0	%
Net Debt			1,536				1,444				1,343
Net Debt to Equity ratio			41	%			38	%			35	%

CGGVeritas CEO, Jean-Georges Malcor commented:

“As previously communicated, the first quarter was shaped by our planned vessel upgrades, maritime interruptions, geopolitical unrest and multi-client seasonality. Sercel continued to generate excellent performance and Land had a particularly strong winter campaign.

During the quarter, we made significant progress on our performance plan which focuses on operational excellence and financial performance while further developing our technological and commercial edge. Our cost reduction program which is progressing well remains exposed to rising fuel costs and the weakening US dollar. Our commercial JVs are already actively building backlog and several vessels will be operating on BroadSeis projects in the coming months.

In the context of strong oil and gas fundamentals, along with the fast changing geopolitical and economic environment, we maintain our cash generation and performance improvement objectives and continue to position the company to fully benefit from the progressive strengthening seismic market in the second half.”

First Quarter 2011 Financial Results

Group Revenue

Group Revenue was up 5% in $ and 7% in € year-on-year and down sequentially 20% in $ following a particularly strong fourth quarter. Low fleet utilization and multi-client sales offset robust Sercel sales and a notable increase in Land revenue.

		Fourth Quarter				First Quarter								First Quarter
In millions		2010 ($)				2011 ($)				2010 ($)				2011 (€)				2010 (€)
Group Revenue			905				728				696				534				498
Sercel Revenue			284				275				222				202				159
Services Revenue			651				533				511				391				366
Eliminations			-30				-80				-37				-58				-27
Marine contract			207				199				203				146				145
Land contract			106				160				114				117				82
Processing			108				99				94				73				67
Multi-client			230				75				100				55				72
MC marine			178				45				74				33				53
MC land			52				30				26				22				19

Sercel

Year-on-year, revenue was up 24% in $ and 27% in €. Sequentially, revenue moderated, down 3% in $ from a strong fourth quarter. Strong Sercel performance was supported by continued robust demand for both high end land and marine equipment, including increased new technology sales of Unite wireless and DSU digital sensors in land. Unrest in North Africa partially impacted land sales with expected deliveries postponed in Libya. Internal sales represented 29% of revenue, a record high level this quarter as Sentinel and Nautilus were delivered for the Pacific Finder and Master.

Services

Year-on-year, revenue was up 4% in $ and 7% in €. Sequentially revenue was down 18% in $ impacted by lower vessel utilization rates, lower multi-client sales this quarter and unrest in the Middle East and North Africa in particular. Land revenue increased significantly and Processing Imaging and Reservoir remained strong.

	▪		Marine contract revenue was down 2% year-on-year in $ and stable in €. Sequentially, revenue was down 4% in $, with a lower vessel availability rate1 of 81% and production rate2 of 80%. Marine utilization was impacted by planned upgrades and higher than usual operational interruptions including exceptional adverse weather conditions and the mitigation of piracy risks in the Indian Ocean. 94% of the 3D fleet operated on contract. Our performance plan is on track as two vessels, the Endeavour and the Master, which were renamed Oceanic Endeavour and Oceanic Phoenix are undergoing major upgrades to respectively a 16 and 12 Sentinel solid streamer with Nautilus configuration. The Champion returned to operations during the quarter and is scheduled for its performance upgrade to 12 streamers in the second half of the year. Also during the quarter we initiated a Joint Venture with Eidesvik for the ship management of 10 of our high-end 3D vessels. Supporting our plans to streamline the number of our maritime partners, this Joint Venture is a significant step forward.
	▪		Land contract revenue was up 40% year-on-year in $ and 44% in €. Sequentially revenue was up 51% in $ supported by the very strong winter campaign in North America, particularly in Alaska, a trend we expect will extend into the 2011 and 2012 winter season. We operated a total of 14 crews this quarter in North America and following winter demobilization in the second quarter, summer activity in the lower 48 is expected to remain strong. With the unrest in the Middle East and North Africa, operations in Tunisia, Egypt and Oman slowed and the start up of one Egyptian crew was delayed. Worldwide demand for shallow water and OBC operations continue to be strong. We see growing interest for SeisMovie, our real-time reservoir monitoring and enhanced oil recovery technology.
	▪		Processing, Imaging and Reservoir revenue was up 6% year-on-year in $ and 9% in €. Sequentially revenue was down 8% in $ including disruptions to the operations of our processing centers in Tripoli, Tunis and Cairo. Demand is expected to grow in 2011 particularly for our high-end imaging. During the quarter, we acquired Petrodata Consulting LLC, a Moscow-based company, strengthening our reservoir expertise across the seismic to simulation workflow and further developing our presence in the important Russian oil and gas market.

▪

Multi-client revenue was down 26% year-on-year in $ and 24% in €, mainly driven by lower Gulf of Mexico marine sales, seasonality and reduced multi-client capex spending. Capex was low at $44 million (€33 million) this quarter. The amortization rate averaged 63%, with 72% in land and 58% in marine. Net Book Value of the library at the end of March was $602 million (€424 million).

			Multi-client marine revenue was down 40% in $. Capex was $20 million (€15 million). We began acquisition of our first BroadSeis multi-client program in the North Sea with high levels of client interest and commitment. Prefunding was $18 million (€13 million), a rate of 92%. After-sales worldwide were low at $26 million (€19 million) particularly related to the Gulf of Mexico.
			Multi-client land revenue was up 12% in $. Capex was $25 million (€18 million) mainly dedicated to our 1800 sqm Marcellus program. Prefunding was $22 million (€16 million), a rate of 89%. After-sales were $8 million (€6 million).

Group EBITDAs was $160 million (€117 million), a margin of 22%.

		Fourth Quarter				First Quarter								First Quarter
In millions		2010 ($)				2011 ($)				2010 ($)				2011 (€)				2010 (€)
Group EBITDAs			326				160				176				117				126
margin			36	%			22	%			25	%			22	%			25	%
Sercel EBITDAs			115				108				62				79				44
margin			41	%			39	%			28	%			39	%			28	%
Services EBITDAs			224				95				137				70				98
margin			34	%			18	%			27	%			18	%			27	%

Group Operating Income was $23 million (€17 million), a margin of 3% particularly related to Marine along with North African unrest and lower Multi-client contributions offsetting excellent Sercel performance, a strong winter Land campaign in North America and sustained levels of activity in Processing and Imaging.

		Fourth Quarter				First Quarter								First Quarter
In millions		2010 ($)				2011 ($)				2010 ($)				2011 (€)				2010 (€)
Group Operating Income			120				23				37				17				26
margin			13	%			3	%			5	%			3	%			5	%
Sercel Op. Income			101				95				50				69				36
margin			36	%			34	%			22	%			34	%			22	%
Services Op. Income			35				-26				14				-19				10
margin			5	%			-5	%			3	%			-5	%			3	%

Financial Charges

Financial charges were $59 million (€43 million):

▪

Cost of Debt was $44 million including $5 million accelerated one-off issuing fees amortization for our 2015 High Yield Bond and $3 million one-off cost of debt related to our High Yield Bond (due to the Convertible Bond February interest expenses overlap).

▪

Other financial items at $15 million include a $17 million one-off High Yield Bond 2015 call premium.

Taxes were $3 million (€2 million) including the favorable impact of $5 million (€4 million) of currency translation.

Group Net Income was negative at $37 million (€27 million).

Net Income attributable to owners of CGGVeritas was negative at $41 million (€30 million), resulting, after the impact of minority interests of $4 million, in a negative EPS of -€0.20 per ordinary share and -$0.27 per ADS.

Cash Flow

Cash Flow from Operations

Cash flow from operations was $202 million (€149 million), up 34% year-on-year following a noticeable reduction of working capital requirements this quarter.

Capex

Global Capex was $123 million (€91 million) this quarter, a reduction of 13% year-on-year.

	▪		Industrial Capex was $79 million (€58 million)
	▪		Multi-client Capex was $44 million (€33 million) down 49% in $ with a 90% prefunding rate.

		Fourth Quarter				First Quarter
In million $		2010				2011				2010
Capex			121				123				142
Industrial			64				79				55
Multi-client			57				44				87

Free Cash Flow

After interest expenses paid during the quarter, free cash flow was $65 million.

Balance Sheet

Net Debt to Equity Ratio

On January 13^th 2011, we completed the acquisition of the Geowave Voyager through the NOS transaction, leading to a $48 million net debt increase.

On January 19^th 2011, we successfully issued a €360 million 2016 convertible 1.75% bond. The net proceeds of the issuance was used to repay ($460 million) part of the 7.5% Senior Notes due May 2015, allowing the Group to reduce its cash interest expense.

Group gross debt was reduced to $1.955 billion (€1.376 billion) at the end of March 2011.

With $512 million (€375 million) in available cash, Group net debt was reduced to $1.444 billion (€1.016 billion), from $1.536 billion at the end of 2010.

Consequently, the net debt to equity ratio improved from 41% at the end of December 2010 to 38% at the end of March 2011.

First Quarter 2011 Comparisons with First Quarter 2010

Consolidated Income		Fourth
Statement		Quarter				First Quarter								First Quarter
In millions		2010 ($)				2011 ($)				2010 ($)				2011 (€)				2010 (€)
Exchange rate euro/dollar			1.329				1.363				1.398				1.363				1.398
Operating Revenue			905.0				728.2				696.1				534.3				498.0
Sercel			283.7				274.8				221.9				201.6				158.9
Services			651.3				532.9				511.3				391.0				365.7
Elimination			-30.2				-79.5				-37.1				-58.3				-26.6
Gross Profit			208.8				96.7				148.1				69.4				105.9
Operating Income			119.9				23.1				36.8				17.0				26.3
Sercel			101.0				94.6				49.6				69.3				35.5
Services			34.7				-26.0				14.1				-19.1				10.1
Corporate and Elimination			-15.8				-45.5				-26.9				-33.2				-19.3
Financial Items			-36.4				-59.0				-23.9				-43.3				-17.1
Income Tax			-27.5				-8.1				-8.9				-5.9				-6.4
Deferred Tax on Currency Translation			-6.1				5.2				-3.8				3.8				-2.7
Income from Equity Investments			3.4				2.0				0.3				1.4				0.2
Net Income			53.2				-39.8				0.5				-27.0				0.4
Earnings per share (€) / per ADS ($)			0.34				-0.27				-0.02				-0.20				-0.02
EBITDAs			325.6				159.8				175.5				117.2				125.7
Sercel			115.0				108.1				61.7				79.3				44.2
Services			223.6				95.1				136.8				69.8				97.9
Industrial Capex			64.0				79.4				54.9				58.2				39.3
Multi-client Capex			57.0				44.5				87.0				32.6				62.2

About CGGVeritas

CGGVeritas (www.cggveritas.com) is a leading international pure-play geophysical company delivering a wide range of technologies, services and equipment through Sercel, to its broad base of customers mainly throughout the global oil and gas industry. CGGVeritas is listed on the Euronext Paris (ISIN: 0000120164) and the New York Stock Exchange (in the form of American Depositary Shares, NYSE: CGV).

Investor Relations Contacts

Paris:		Houston:
Christophe Barnini		Hovey Cox
Tel: +33 1 64 47 38 10		Tel: +1 (832) 351-8821
E-Mail: invrelparis@cggveritas.com		E-Mail: invrelhouston@cggveritas.com

The information included herein contains certain forward-looking statements within the meaning of Section 27A of the securities act of 1933 and section 21E of the Securities Exchange Act of 1934. These forward-looking statements reflect numerous assumptions and involve a number of risks and uncertainties as disclosed by the Company from time to time in its filings with the Securities and Exchange Commission. Actual results may vary materially.

THIS FORM 6-K REPORT IS HEREBY INCORPORATED BY REFERENCE INTO THE PROSPECTUS CONTAINED IN CGG VERITAS’ REGISTRATION STATEMENT ON FORM S-8 (REGISTRATION STATEMENT NO. 333-150384) AND SHALL BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, Compagnie Générale de Géophysique — Veritas has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date May 4th, 2011		Gerard CHAMBOVET
		EVP General Secretary