FTI - Earnings call transcript Q3 2017

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Operator

Good morning. My Name is Jackie, and I'll be your conference operator today. At this time, I would like to welcome everyone to the TechnipFMC Third Quarter Earnings Conference Call. [Operator Instructions]. Thank you. begin may you Seinsheimer, your conference. Matthew

Matthew Seinsheimer

and Conference Call. afternoon, welcome to Earnings XXXX Quarter Third TechnipFMC's Good

Our and caution on this our to earnings be forward-looking call. website. can release any I'd financial statements like made to statements you respect yesterday with during issued found

these Chief been now to Doug Pferdehirt, following had are to January on completed prior Executive any turn any our regarding prepared expressed of subject cause Although which assumptions those to obligation or as or forma pro our as materially recent are We result We whether AMF update or U.K. and that are quarter the Financial in XX-Q you described Officer. could hereof. we to to certain XXXX. future comparisons results these if material to undue information, is Exchange beliefs statements publicly statements the of actual our operation business X, to results. statements. from have undertake and most periodic over and forward-looking merger, the our the reliance caution on other cause revise factors on forma and financial our as risks statements forward-looking results French made the developments otherwise. with of filings speak differ our these merger TechnipFMC's the projected date Because expectations, no implied by that results conditions, I forward-looking wish a not call actual year XXXX All differ current in the Authority. after they third based statements, and and future XX-K, they events this the new are Conduct of to Known U.S. uncertainties pro could from for most place recent date only quarter Securities will are Commission,

Douglas Pferdehirt

review third update our our afternoon. I give Thank quarter and our an and strategy a will in allocation for you performance of and discuss then guidance Thank brief for will XXXX preliminary on participating will call introduce for before segment Good to good the provide market capital morning, also provide opening guidance. overview earnings outlook. third more Maryann XXXX you, Matt. in call. She quarter results, operational an detail questions. our update financial

all Third quarter across results performance another segments. demonstrated operational solid

We backlog the of short-cycle Total an with continue adjusted of for our long-cycle was billion, company million. well on XX.X%. $X.X to EBITDA on North Total while the in $XXX market EBITDA opportunities particularly businesses adjusted our exceeded capitalizing America. revenues in execute businesses, quarter margin

With and delivered adjusted projects. the quarter These and Looking progress a the continued commissioning hook-up billion, performance the company Subsea to across-the-board LNG, the quarter at orders And floating ended largest with were complete was was with on Technologies in we Onshore/Offshore Subsea $X.X results the several with moored TechnipFMC offering. individual Prelude to momentum billion for project all well successfully August XX.X%. of segments. was underway of the X. on unit XX, XX.X%, our demonstrate XX.X% modules XXX strong Surface margin operational Subsea margin EBITDA continued we the was Jamaal site backlog. with utilizing of Total Train $XX.X and FLNG,

from reminder, business Subsea Onshore/Offshore capture a the within not or As backlog our our activity reimbursable the does services. revenue reoccurring

technologies. drilling offering. of subsea distributions, and extending by outlined the cash and products increased and our to our We've systems development acquire the respect for recently of next-generation investment $X.X drivers agreement strong an Technologies' business, capital share balance repurchases. both with previously allocation followed the capital shareholder billion. growth priority, sheet With dividends cash Surface with in our Our net announced remains to growth, also integrated exploration as We've we investment services Lexuses of strategy,

and We And flexibility repurchase XXXX. base. commitment of the This also authorized end plan our to are on per focus shares no we recently a term. has keeps later dividend quarterly million the $XXX share that the competitive to ensures our of combination implemented than of of up share. to ordinary manage business distribution offer shareholders $X.XX disciplined to cash our our pleased an while investment in we ongoing to proper capital long for motion return announce of It Board can repurchase Directors that program, maintaining putting to

market expectation to North pace likely of unconventional America, a development The with lead activity. moderate the count In growth. to outlook. more Moving our of slow short-cycle is improvement resource continues rig to

We maintenance and reduced higher base. inspection, the needed hydraulic is of of fracturing larger levels also reactivations, repair by fleet install levels support offset anticipate that to work partially

Our to international encouraged of and we surface the Africa longer-term and North projects regions. and North The business, our outlook surface moving resilient, these been offer has has are activity pricing best see the environment forward outside activity near-term in America East, Middle for the stabilized. several Sea North

Moving refining increasing to Natural global natural debate of sector, long the delivery. gas longer-cycle share supply. for see the well. pursuing long-term incremental downstream need opportunities projects In continue $X project over the the near total know cost inbound are continues billion. aggregate petrochemical of to with demand, term. LNG we the we and to project will energy activity value little where reduce finding provide several businesses. industry There an and coming to over We of over is further the gas projects is ways these sizable take an from term, the

us served the as gives a us We important of involvement in is both technical on contractor, Project puts upfront businesses. or stronger strengths This a a understanding Management provider Consultancy We're pursuing and we Process original better our can project our in the much position. where and are working new distinction. very actively as compete opportunities which competitive Technology FEED the also

Subsea the demonstrates recovery tendering that activity is Turning to underway. Subsea. FEED and

list although pace be of projects the to can We Subsea that large recovery sanctioned at oil most prices, tempered been XX recognize uncertainty This than and has opportunity the product price We've over updated current by represents of near-term show opportunity approximately offering. continue our believe major more we returns. our us could forward project list $XX projects next XX breadth set billion market of significant project for service and now a months. given Subsea scope, the that move

order potential though, remain For projects confident a year. to X believe also for of the prior of direct X in forward. we the be awards, major inbound or in integrated XXXX versus step-up a for There's timing award. to possible we XXXX, it's X remainder that major the project still Regardless move activity at in

continued of We activity the order in bid in to momentum XXXX. lead also project will believe another growth year

visible While insight of projects, does the the Subsea entire the set market's it into provide that project most not reflect we are opportunities list does pursuing.

as growth have IFEED, the We disclose in was Last activity. evidence integrated by studies, integrated approach. of expand, compelling since offered new integrated was award to strong this an market we that the to development. fuel FEED fall, XX approach list continues to evidenced opportunities or first This that of we embracing FEED integrated the

the third EPCI project, proprietary the of fifth our of that positions we project They not a market. have opportunities have This they being last economics the engagement TechnipFMC. months, the of by set list. were uniquely the platform Lancaster quarter, conversion and to to to we such into But customer the is for integrated is how today awards, announced leading award. awards. unique and FEED pursued IFEED intermediate-term integrated an the In increasing Subsea a project through Over more great FEED from TechnipFMC we more on sitting of - challenged number early address than direct, the integrated projects doubled of project EPCI importantly, example integrated not These this us were Hurricane project near portfolio integrated integrated came awards. XX give studies, growth projects actively an

driven customers of In In integrated XXXX. of largest well our of Subsea represent the across closing, to they particularly services coming We strong operational the projects. the and awards, Surface integrated execute thus of to They quarter repeat of be our regional continued with from our projects with at the portfolio, than And We approach. in total, alliance those continue the we Onshore/Offshore Looking integrated greater projects. which segments. integrated future mix our we accelerate. awarded partners, believe awards diversified Technologies momentum inbound business far. orders our a integrated from results several We a will will direct proportion and see model. by think of third be diversity benefited some larger operators, these will expand pace

to in And providing our in have we step-up North surface industry's guidance, in American land inbound from look opportunities a as install for confident integrated offering. our in provided also Surface into supporting continued year of the preliminary in XXXX. business activity, we the remain a in growth for and resurgence Our investment With near-term updates well base benefited XXXX. results, XXXX new as full both quarterly terms Subsea,

full as In capture in quarter of particularly For the segment. imply we estimate segment XXXX, third operational year-end, our our total into of Onshore/Offshore in well increase as strength EBITDA. year the momentum updates the changes an carry total, the adjusted the

operational revenue will our see to As opportunities needed we performance that fundamentals. We driven be we by the organization, the we and of significant as look these recovery. declines the into as ensuring core managing initiatives against market our competencies sustain are XXXX, investments well ahead, maintain strategic through internal can

before. And operational am models of the company. through optimistic I than differentiated Subsea, ever integration more I generate generate to savings and in our for will and continue efficiencies. will and will change our that future and customers We integrated confident for we further recovery sustainable of the benefits business TechnipFMC real, deliver even remain about

are areas Maryann. one can to where will over winning we are We the in true entity, as now global I differentiation. executing and provide turn well call we

Maryann Mannen

and continuing operating pretax Harvey. the our per Adjusted basis. in Thanks, Doug. to $XXX per earnings operations line the or after-tax on $X.XX charges a were related results solid credits million pretax delivered charges excluding $XX.X expectations. of from were of Charges quarter. of $X.XX above We and diluted share the when These credits quarter million were in totaled Hurricane share. impact diluted Included in

margins We Total shared have to adjusted and the decreased as the This our the for relate in improving severance majority release, XX.X% project the but you to with segment Surface quarter. company revenue was adjusted our Doug points Subsea Americas. and well project good and associated the result has in $XXX cost. provided with cost execution schedules items million Onshore/Offshore in XXX of cost Year-over-year restructuring highlights. detail despite declines. operational our is levels EBITDA basis EBITDA activity more in merger as accompanying to these

$XX is at This look $XX results was When associated includes the corporate items currency. million a million. $XX $XX and net additional expense million adjusted liability in gains take of Included foreign charges expense corporate was was Net Let's $XX excluding the of credits, the million. in million. venture with partners. joint the to Reported expense quarter. interest quarterly

tax the Our reported for $XXX tax in quarter million, rate provision of XX.X%. resulting a was reported

in certain when quarter tax final business. the week $XX.X a the time, as at was close In items. share effective rate program. XXX,XXX cost million of yesterday's total our we we XX.X% approximately of the our impact discrete of the began that However, have quarter, repurchased shares of excluding repurchase Since of

made for have full XXXX. year ahead, updates we guidance to Looking our

and same, credits. XXXX of our of billion Subsea, For margins remains and at at charges EBITDA revenues least the $X.X XX%, least with excluding guidance

guidance Due and the second X.X%, least for For least be the charges improved at year billion Onshore/Offshore, margin. EBITDA anticipate expected we year, be to in performance excluding and now of we at $X.X raising are to the and half revenue adjusted margins both credits. to revenue full EBITDA

billion. revenue For at expect full least Surface we Technologies, now $X.X year to be

quarter reflect We liability is by changes is expect margin to integration venture approximately points credit. items to cost our million for segment, to full expected spend and excluding be to increases interest fourth excluding North higher America. the are strong discrete the fourth does Net for basis be between now least following increasing the we expectations now the million that be Capital $XX for expected and approximately performance XXX any million at not items. our the $XXX operating for of item. and charges XX.X%, And year, and $XX EBITDA have and be in updated Outside adjusted assume we the in expected guidance rate to These expenditures XX% year. to for quarter. merger full partners. XX% Tax future are joint guidance

reporting the be realized generate actions our savings Let of achieve in shown The to me are segment. in update XXXX. be and of The greatest the in the important savings across by included These believe to to furthering performance. the remain by an we preliminary of the run year our run the impacts disclosures made XXXX recent portfolio market anticipated allocation synergies. and realized provide we pricing in segment. preliminary total impact and segment with structure will will will cost intention guidance $XXX that the have in Subsea $XXX understanding provide for in as you earnings highlighting on Onshore/Offshore our savings we rate and it the confident XXXX million this our is release. view We the inbound expected a synergies, by million savings and on provided of end end savings We merger rate integration of

next we're still our planning for early a XXXX, actions total completing While provide and for view year. company to

a business, and year. of the is in understanding for good current of of operational our reflected outlook have We many this the drivers key next

to we billion billion the of expect to margin of XX%. with EBITDA Subsea, For $X.X revenues range in be at least an $X

we billion an with For EBIT in margin be revenues to $X.X of expect least at billion the X.X%. to $X.X range of Onshore/Offshore,

an charges be Surface XX.X%. excludes the $X.X and least note to expect all of guidance with range billion margin at the credits. $X.X in revenues Technologies, margin For to Please of billion we EBIT

complete will of quarter We and for our updated with provide the release earnings. fourth guidance XXXX

to Subsea first. Turning

earlier, that be the growth. that As order Doug year is underway we should commented of confident Subsea and recovery XXXX another remain

will recovery. order lag revenues However, the point for inflection the

revenue, we're of XXXX, which forecast billion $X secured Subsea booked backlog. an $X Also services revenue not This $X.X to in in range a billion. includes is backlog. is $X.X billion of billion the guiding For our of to yet included of majority estimated Subsea

XX% realizing the in approximately combined and confidence of these midpoint they streams, guidance of revenue at comprise have range. We together, our

This year next be least at margins of EBITDA to least Subsea guidance be at expect from XX%. We XXXX down XX%. will our

further our We primary base. the on should XXXX through revenues assume of fleet. effects fixed and guidance, quarter This cited our of One if XX%. you benefit walk guidance. revenue utilization this activity XX% be of third utilization are Lower impact XXXX decline due lower secured example will of asset will our XXXX, the we me Let fleet to anticipated drivers. reduced negatively although beyond backlog in the be margins midpoint Based across XXXX in looking approximately will out. to for the

Beyond impact, investment the will revenue be headwind a near-term on margins.

these new in the us investment are will investments XXXX. model. yield and should enable deliver important Our in technologies business strategic, long-term impact to critically and our costs benefits, These in differentiation

in is are that have and more cycle place. will our competencies competitive This to to for that market delivery impacted the XXXX of evident the the Subsea. trough. we related core in advance management is effects are of beyond by inbound in at impact people. takes retention critical a results profitability. These It has also our XXXX the investing successful trough. the to XXXX Additionally, conditions open on both project engineering more supported These tenders costs pricing of where some large and older be confidence towards by recovery cycle of project completion bidding our projects contribute will current market less competitive greater the encountered project

restructuring where headwinds on bidding the competitive technology merger-related we provide These look savings also the offset actions for can proprietary to the can market We time savings. undertake in to to that integrated conditions. cost. on would based and an be While offering deliver in Providing advantage. expected include margin projects both will significant opportunities a some may have we tenders, focused also differentiated participate open approach we're continue a or

confident will XXXX in segment EBITDA, ultimately in for margins While and should both Subsea years. we down higher translate revenues into the be remain that our in the coming in inflection order Subsea revenues

Onshore/Offshore. to Moving

expect to We range the revenues full year $X.X $X.X billion. to billion in be of

least at with levels, guidance margin EBITDA our declining, are revenues remains While at higher of XXXX. X.X% consistent

a from continued XXXX. expectation contribution project reflects move project incorporates strong Yamal EBITDA as revenue lower towards completion LNG margin execution. Our in the

full Technologies based an to in revenues segment, expect year EBITDA Surface with we least of Revenue $X.X at guidance be on following the billion the For margin range is billion expectations. to of $X.X XX.X%. our

North require support count volatility rig First, current may using assumptions, rig changes in to we to are full and America count year assumptions. these this our

increased that America. North integrated offering higher Next, hydraulic initiatives control demand place expand to are equipment. fracturing will to lead in our for intensity pressure in Last,

value. on now for focus cash to for call demonstrate expect that company we summary, may questions. the actions performance, So, combined should taken our strong up have initiative shareholder creating our in distribution we Operator, the cost-reduction and regard with open operational you

Operator

Instructions]. first from question McKean line [Operator comes from the And Sean JPMorgan. your of

Sean McKean

the maybe 'XX coupled might XQ commit that guidance to off next start potential bottom identifying - XQ But suggested quarter guidance Looking the the quarterly recognize - that implication at margin? a view Subsea. could the how guidance, from the bottom you does me point. we with represent Subsea with I guess, that result, be of start suggest ready margin odes here? you I with to the for the 'XX the let Or for in range this would for off margins from

Douglas Pferdehirt

confidence the of XXXX year. throughout on an providing way play we're margin a in that I of for will the for Subsea EBITDA the Sean, basis of we average that think that, quarterly guidance out have XX%,

the will provide in EBITDA early to this at continue will XXXX. be year play discrete into we did will than or time. quarterly bit we be year, have an for it But do see that that but guidance A update quarters. quarterly quarters certainly the get average as confidence margin to there stronger As other some we out, updates, overall

Sean McKean

the building of be entirely to FEED it seems thinking to sounds in and progression, those. continue awards fair. like That confidence of ability about just And convert the queue Okay. order then terms the

some noted color next that just incremental of or some on of progression how in awards scale awarded compare of like, in wins projects. what the you in a remarks You expect to get you more Could types could could the on integrated some to the that to those little look prepared larger the so those how scaling quarters? that terms look - what us you several in give products far - expect of of you be were

Douglas Pferdehirt

pointed EPCI it integrated projects Yes. into as basis unique marketplace. on our with cases, critical The exclusive I we're awards us in view working gives the customers. really And out, company. are quite in And on many our an

typically these, having if venture of entity, So, pursued that joint years you we've and XX initially almost matures competition. now importantly to are as takes our projects now to this the and will, worked that it that then projects. for doing activity FEED X single a us FEED XX allows as TechnipFMC, been into by FID the integrated has convert into not EPCI which states, that which the typically have of to being stage, together the alliance integrated now through more advantage The and takes are work X We opportunity months in backlog take months.

and technologies, and differentiated early that help we where to the proprietary can have engagement on So, economical customers situation for while and the hurdle of Subsea But where visible the at well. at meet benefiting create the - new and a deliver participating where customers, economic limits. as rate end we're open these that we projects, both is unique because can unique ourselves introduce to our ourselves their we economical opportunity architecture think tenders looking integrated we setting limit for by our value

some the projects. able in are in far, have see maturation In awards comment So, of now list ability number it's that prepared majority gives in convert of EPCI to FEED that some that thus of the to the and the maturing projects received us of size remarks. larger unique integrated that projects, be we to XXXX increasing the that backlog hence, the than an we simply FEED,

Sean McKean

that to, style to projects that, then types say, it of the fair projects those procurement be to And will say a accretive legacy out put relative just button is on there?

Douglas Pferdehirt

be today's would in environment, Certainly, that correct.

Operator

question Your Lynch. Merrill from Fiona next comes from Maclean

Fiona Maclean

and that have not of It's you to need Fiona Day Maclean the to relates do give Capital to it from for the going flavor fact that in an why today. to the guidance And earlier question we of you end published Merrill for could Lynch. quarter? XXXX understanding Markets us get maybe want what I at first later be that just the event you should you're that November? the felt keep a at expecting My now

Douglas Pferdehirt

have we Look, we and so Day that exciting important many - substantial are future showing have really the our Markets industry we we need plenty industry. real, to driving our in opportunity to on we that a sustainable about this of on how making way at things focus the how and for focus day that to to and real, on talk impacting wanted we're how Capital change are

as things take XXXX. of so that opportunity to into thought our have the we about lots So, we today look exciting talk first on day, now we'd

Our share Day. you that Capital an even we we thought digest cycle, giving opportunity deeper XXXX also we'd that, and to the our more have discussion you, Markets can at the with then planning

Fiona Maclean

'XX that you us 'XX, map big project? a road to give second is question about and XXXX, bit there LNG. other for project be we Could looking Okay. going on progress at Yamal for of are then over a is And that milestones any whether my that should and how

Douglas Pferdehirt

to Yamal So, the project extremely well. continues execute

Russia. in that As I have the in a excited arrived site modules critical milestone. that of very now we're to the stated That's state very prepared of remarks, on all

the XXXX. in the Clearly, customer, support we Our support our of work that a focus is team reimbursable and our X LNG the in right additional to Train years done well and remaining facility. trains focus was of of ongoing of in the reimbursable X will have subsequent come be commissioning scope our decommissioning and with Train made focus. for 'XX. the and that now commissioning the commitment to is That that as to activity the on as is Train X of further 'XX or primary Along

Fiona Maclean

either Okay. And of a revenue are or Yamal? breakdown profitability 'XX for or for you willing contribution 'XX to on give us

Douglas Pferdehirt

mean, a very it's I successful project.

to projects, relative breakdown best interest as other very with that not well. be that our we our of execute continue And or competition. to scheduling customer the We don't would as in

Operator

Your next Wells Judd Bailey question comes from Fargo. from

Judson Bailey

could First question Maryann there guidance XX%. at is than us variable where you It on for could kind it to how the like a Couple that a component XXXX, looks of think is that fleet of think? you margin, on guidance toward? scenario then you XXXX, could work give recapture of sense the it into how scope margin is utilization. better lower variable trying of questions work, And up lost and going moving highlighted be, on the sense is margin as you that reasonable least the biggest of be of Just is some get could a we that Or component obviously the depending of that forward? that variable margin the on depending already? be. is, component lined Could to move that project obviously

Maryann Mannen

we on vessels. Judd. Thanks, making you're XXXX Subsea least Sure. right for our now guidance we lower that a will are XX%, utilization our assumption In at of for an right, see

is there and see do could as we we at the on point, improvement. additional to opportunity there to the work Now that to improvement we take look clearly, in your some is or inbound that potential some comes think

to for is further there improve. yes, us opportunity So

As it I early. mentioned, is

thought We are you But to X important that. a good we of months it ahead. is view again, view, good a give

bit on so some 'XX. communications Your second are things think for obviously million applies But on give talking of synergies that We're 'XX. XXXX. which got all be of as benefit about we've lot able around And synergies. around little early you really will working to to total of hold We'll some We'll bit to of on. is play commenting we'll off are us initiatives I question company, about of be 'XX, is And soon, we well. a a further $XXX clarity Subsea. another early have a it of we that 'XX worth for see our but we better a the portion in

Judson Bailey

follow-up those the increase. my to EPCI of the be presentation, And you listed model? for the award? - traditional to integrated But pretty those are are starting going I those of to integrated those projects Or candidate Okay. a in wanted are you've are type opportunities is, scope clarify, any all any mentioned that of Doug, your of much

Douglas Pferdehirt

the awarded Yes, EPCI. some to on for the be integrated list there projects of is an possibility as the project

Operator

Your Pulleyn comes Rob from next Morgan Stanley. question from

Robert Pulleyn

questions, may. couple So, I if of

bit a high firstly, So level.

this You're merger. XX months into

backlog later, that huge you consolidated but do Yamal again? stab given think a a second what's on level the underneath you've As you integration at that mentioned, Doug, have headwind, you team? for just follow-up all is the maybe been been group creates color now. book-to-bill, management What the pleasing growing frustrating, you the contract going a heard? just together to question, ask the what and how going? has working is of X group years May a bit And as more the a I the us give of when bit And could envisage a

Douglas Pferdehirt

give Rob. first second thanks, So, question Maryann. the I'll the take question to and

is what the exceptional I been of think here exactly The TechnipFMC. what's going communicating. created have operational since company we well we're today results

level level significant. level, has At the that collaboration, quite of the of So, project what does the been colocation mean?

and what's to most Sustainability, important. continued HSES perspective, first or That's, and Environment more an foremost, Safety have both from perspective. perform financially, Health Security We importantly, but well

incidents, quite into merger and been two by bringing coupled fact market, pleased a in extremely that a safety Those the within So, performance. a I'm that together industry, the not the distractions that challenging, create challenging cetera. so unique we're differentiated in the with They show up simply is company can truly very up the going environment can new, show et that that in fact operational the for backdrop case. And industry can through is leaders distractions.

extremely in well that area. executing are We

operate bit will the we a the That As simply company, a culture as the takes to and develop continue and new time. we that practices more a new company. way

on So to now unique closed majority the that's Maryann? we're our of of developing culture to putting year. since that focus is we where the we earlier continuing results you have deliver that and TechnipFMC this

Maryann Mannen

Hey, respect so things to Yes. backlog, Onshore/Offshore. the couple of a Rob. Around with

see, on we've billion doesn't And a about can now somewhere what course, reimbursables. that worth had in backlog. sitting of $X.X you 'XX as right of billion. As of you, is in $X.X we you for just with about share range know scheduled portion backlog of And include we're a

major worth are projects backlog billion good contribution of the obviously tracking will in have revenue. Onshore/Offshore. $X obviously We the and into They

In E&P are addition engineering that announce looking And projects, resilient. major had just prospects there the remained $X to you we're any And didn't several FEED worth as FEED of we as well. know, over our quarter, activity, billion midsized projects. In inbounds. at we that, activity

I PNT think our of our business as well. project strength business that speaks to and this

So, XXXX. as we're hopeful will that the is we're an quite you timing, uptick see quite know, in inbound we on critical. But hopeful

Operator

Your car Sachs. Goldman from scion next from fork question comes

Waqar Syed

from reimbursables guidance the Doug, into or Yamal no? are included

Douglas Pferdehirt

booked we provided. stream not into That the reoccurring that guidance. They're in guidance is the that is not

Waqar Syed

see and you you do lending kind 'XX bottom so? for or And in into margins? of of expect Onshore/Offshore, do the then to revenue bottom Okay. just the 'XX be terms So,

Douglas Pferdehirt

tracking if of my question. aggregate mention good much that well we have it's we these we positioned to not function very so We remarks in a that in value we're I a the an of on of of inbound feel would That's be going XXXX. And a opportunities few again, projects inbound $X over very projects. petrochemical projects, a It's are prepared been entity did have a developments sanctioned. have to billion. question be a on massive on some projects the the we're for that of making the big, that and actually we or the for up It's more awarded time our when will another and question be are projects. project. list the refinery be These the contribution period held would that reason to beyond of are one if winning

are we the they benefit anticipating, of So, of certainly when XXXX the that in XXXX. projects. we It's a timing sanctioned. If about the question they're very projects come will strongly feel as actually and just

Waqar Syed

awards, a But inbounds something even project Or still unique $X.X of quarter? there without awards, billion these major any were is about in without Onshore/Offshore this number? you some, big sustainable think that project

Douglas Pferdehirt

out, business, reimbursable a quarter-to-quarter. necessarily bit Consultancy that's be of could it level from and very But say mean, you're level I a as Again, Management projects, the activities service pointing obviously associated without was major wouldn't necessarily which so to is but number Project high I a what consider reimbursable strong I of you would than a unique, does of higher this our the anticipate. quarter. with vary important.

Waqar Syed

'XX? service And one in be you is the revenues be in Maryann, number likely What question. the billion mentioned in the could it just to $X last Subsea, about 'XX.

Maryann Mannen

Yes.

So, with roughly XXXX, the same. our so change relatively early is are about this consistent number No for significant 'XX we what forecasting year-on-year.

Operator

Your next Nick question from [indiscernible] from Barclays. comes

Unidentified Analyst

Just to you not is Yamal your that first in guidance? clarify, did reimbursable just say

Douglas Pferdehirt

That correct. is

Unidentified Analyst

the In revenue guidance?

Douglas Pferdehirt

Correct.

Unidentified Analyst

Okay, margins. starting on that's a chart point. on Thanks,

bit backlog a was into you forward? us you and awarded 'XX. and about Can about You help so think Subsea the want we to it? obviously just [indiscernible] when any about of down that and what's Is that going break can talk way there vintage don't talk can

Douglas Pferdehirt

Subsea years. projects, typically rate happens over to X X the burn

of at the the last go cycle to vintage of it, the environment. margin if portion a there's in there different higher point look X was it So, but obviously would activity being years and that back a last a of you where

have last So, step-up to that remind been a years. secured inbound that it's be X really you're a we're in X XXXX, beginning blend over blend I projecting to X XXXX. now a our margins that the from of see the of you, to

Unidentified Analyst

what see And be it synergies in I hard this it's Subsea, year missing? to by to or be that there, deliver multiply year going seem I and year merger significant than you're next then major look chart. to the you this What at benefits within the shouldn't of if more synergies implying merger the am

Douglas Pferdehirt

to that with remainder I comes quite going be about it line what should as don't chart. that as I merger as you end if that by not break in have think the synergies, across we well. No, They're anything. out down various well XXXX, indicated, $XXX indicated we've Subsea. you'll million of by by and of distributed believe the you're which see corporate, that expected we million, $XXX on XXXX, And the The as all segments missing business are

Unidentified Analyst

of than the is take less Subsea, that X give showing of thinking I'm chart those X/X of the X% just on Yes. $XXX billion. than average and it, or be more to seems base the of

Douglas Pferdehirt

have it's exactly sorry, No, we indicated. as

Operator

from from question is Kurt next Your Hallead RBC.

Kurt Hallead

I pricing the feed the context if guess Subsea business 'XX. tone direct about was percentage you to kind and thought At 'XX. feel growing the your of better And guess the being you I the in bar and potentially I free margins open you I that appreciate integrated bid kind of same negotiation I and provided curious then that I wouldn't then competitive of talked that's can of you guidance up I that elements what context, for least me. power, sets in heard, which the So, for of for the impression set I that a I correct you to effort work. be even XX% the dynamic think would subject under to didn't, be than

hoping So, that it? integrated higher negotiation little negotiation? Shouldn't we context open direct a of FEED bit direct the think margin that. can bid with a and along just versus work around give Does you carries

Douglas Pferdehirt

the that or not uniquely to is categories. that important correct, activity. always positioned, XXX% out correct, awards, of of exposed direct are are our our have have award to that portion a business is our we our tendering So services have from point open market integrated but the fall business. But activity addition That's inbound of we very partners, is alliance now That's it FEED But into that, not in our competitive direct which will to EPCI the have those that that those integrated particularly result that we had. Subsea today. we we

therefore, XXXX margin that account. into we you open to as a taking indicated, exposed we for why gross the be market And rest would guidance gave that a as lower am that margin that is that The the you So, is is did improving. indicate. generating of the that portfolio

Kurt Hallead

still of piece Yamal of better the the that thing get I appreciate is Onshore/Offshore And a for business a understanding to one and I'm trying Great. overall is and understanding the that. very piece that significant dynamic. feel

safe is revenue primary it, delivery progression train versus to of I the obvious that assume, the Is decline that is others really on guess, first year-on-year? the it be 'XX revenue because differential So, in effectively to in may Yamal? in the 'XX revenue, expected of

Douglas Pferdehirt

being onsite into project, overall have Train X. I of for all now of But part Well, and reimbursable [indiscernible] Train and been the we're delivered modules to it that the of project. activity it's delivery moving Yamal the X, the of on that now mentioned recall again, phase the X X

Operator

Jean-Luc from comes question next CM-CIC Your market. from Romain

Jean-Luc Romain

question so. build LNG or train. of your Nova Tech the to has Yamal My LNG couple years? relates its translate the to fourth announced revenues next How and could in inbound in intention that

Douglas Pferdehirt

project the lead you, decision commissioning Clearly, of future our remains make the on to such XXXX. focus we the our that leave Train discretion continued would to order Any train, Thank Jean-luc. success an of and doing of around fourth opportunities. and in could a to announcement. customer in delivering The success X

Operator

Bianchi Marc from comes question from Cowen. next Your

Marc Bianchi

turnovers. guidance of I 'XX? like $X.X scope rate billion billion other backlog growth just the 'XX, that billion for service, for for back of for I Subsea look to implies the If at guidance and Subsea. about it component of revenue What over already first $X.X going of so guess 'XX question, the $X that's look the booking would of kind

Maryann Mannen

Yes.

right. You're

As for guidance XX% in you that of our portion the the range we're of XXXX on certainly something chart, prior the see looking to about over year XX% can inbound. at

And of call in and the depending smaller-type a those they earlier, projects confidence can are turn timing the degree quickly. pretty they're or of whether we we mentioned internal Doug those them As we've book on what high whether got level of awards, activities.

Marc Bianchi

Okay. of did guess would that's get for here? I imply that book-to-bill Great. Thanks well. Maryann. that Is you around Math that that, as to correct XXXX my X for I get also kind - a

Douglas Pferdehirt

of is yes. the range That in possibilities,

Marc Bianchi

Yamal rest some there reimbursable, On/Off to relative to you Okay. you're you reimbursables, And can into think just X.X%? help move the with one us then as going of is level? last On/Off, guiding on the margin these that above about the business that, it be getting If

Maryann Mannen

as So, as our managing more are just into and Yamal. we XXXX than know, at the we projects going you margins look Onshore/Offshore,

And we would about performance the scope, be We from on and backlog are have do well key a the And you that scope, our critical that, our we had well that well. We expectation of Yamal big is would reimbursable our seen for we as be those a reaching for sitting do reimbursable projects talk of backlog. being segment milestones high our prior degree in is we Onshore/Offshore do to our in XXXX of well. Yamal as XXXX obviously several one as with that. it as When in able have the, scheduling, portion there revenue years. quite of

is around good reimbursable So, portion that we color sure scope, clarity that. think earlier question the that be asked a and around just the I provide bit et little to was cetera, want I

see that in coming backlog a Yamal project. for and our scheduling can XXXX, sitting that is of you nice again, that from So our is piece

our degree able to portfolios our at of a and project well. continue to we look confidence. we high we milestones We're execute you reaching when line for sight So, Again, in achieving continue be XXXX, clear that XXXX. we well. We're the as expected, in see of have to performance cost

Operator

Your Michael from comes from question Redburn. next Rae

Michael Rae

I'm very I get well, sorry. as want right. this on It's, just But Yamal. to

saying So, people and modeling are Yamal reimbursable? $X.X view onshore of on when That's the you that look to for to the want of reimbursable, But a revenue billion that I a billion at purposes, backlog. to then, I portion on the question. take understand for $X.X you guidance add the it's range not XXXX, first top,

Maryann Mannen

for Yamal the with of do lot a with And as backlog. yes, is currently in a I revenue associated have our we XXXX is lot X. that, earlier, mentioned of So, Train

lot work is there that in is would So, to the to see scope continued X XXXX. extent around today. activity our the backlog as improvement that that of associated Train piece, with But we potential reimbursable a

Michael Rae

can also that question the also you, Yamal. line second assume which Maryann, through the for to is And relates clear. that's below see these Okay, charges interest, just taking you're I I

of guide is interest you that Yamal. presumably So, million excludes in further my $XX to any when QX, question evaluation of

wondering so, us and QX any I'm steer could just might be can it you what be give in in additional what XXXX? any And charge on

Maryann Mannen

the no to this at absolutely interest are when to That XXXX we not fourth of movement are When any well, You're have the quarter in point not respect guidance contract. with for And in time, I our the haven't about additional that. associated guide we QX not incremental. included excluding Yamal on provided am that. with I talk But correct. the the - interest expense, And I this would at forecasting, any juncture, we mean, we as clarity, be obviously, of we just sake guidance.

Michael Rae

okay. don't Okay, that that you to But yet? present It's just the happen market could obviously? information it

Maryann Mannen

correct. that's Yes,

be provided not If to should provided normal our forecast interest you that. go net say, of X quarters, back quarters, I a in any expense X X would Correct. We have interest our we what interest prior expense be. on expense,

Operator

question from Michael LaMotte Guggenheim. comes next from Your

Michael LaMotte

$XXX a it, XX large billion project. the scope, averages, projects million average $XX the Doug, call

or in how high are are this bigger the called XX out? XX so much that they relative that you the to FEED For pipeline,

Douglas Pferdehirt

quite a Yes. Michael, there's wide list, would in integrated from the as just you range. the FEED just expect EPCI integrated

Some side. are smaller on the

is be in that model integrated take kind a scalable. is - EPCI completely the that the of could is range. this away important But average Some

XX% that the well showed greenfield expansion. information you And we it and to to now, is and previously applicable relative our that could XX% by And feedback is as provide on brownfield. available, greenfield, it's breakdown right have we activity. So, also you. the X Subsea this, And about we tieback size, is to shown integrated a of

project being of said, and we greenfield quite Clearly, were it's XXXX. were can tieback broad range. That distributed many appropriately was of be to more the you'll there greenfield sanctioned activity applicable XXXX, excited than sanctioning. see across in the part So, that very be in projects brownfield

which well projects on to large the that some projects, shared. possibility list of we're a that from opportunity opportunity that both signaling there's list to sanctioned, we XXXX, as forward additional as lie for be Looking iEPCI Subsea

Michael LaMotte

more you European And a Or then just dividend on steady as of Do fixed following model? are quickly strategy. variable with growth model? you the anticipate

Douglas Pferdehirt

you update share commencement of commenced the right the distribution. that at the repurchase very And were of to expect excited we dividend announce later an million cash end gave question of our complete XXXX of share quarter. than we the as that, no Maryann $X.XX. end last on thank shareholder the We much for So, today of $XXX to that of repurchase of the as that initiation well

said our of on the ROIC. So, you well as on we by part an obviously delivering cost distribution policy. important tax shareholder the We've XXX strategy. It's of thank basis That's side would total and very deliver much. points as our energy some synergy improvement then savings

the through is time. that And initiate type previously said we that - we have this implemented model so and that's of a the have that cycle. sustainable was at felt dividend that would We we

Operator

MacKenzie Your Robert next comes Iberia question Capital. from from

Robert MacKenzie

on and subsea to and into, perhaps, your any to us you the that run how see hoping next-generation in of changing, give release wanted the you I development dig like technology your comments your developments recent manifold? you color to but that Doug, about how analyst that prepared that, front event, can I'm scope, about the not trying talk investing how what systems, press relate compact in might

Douglas Pferdehirt

we generation don't equipment evidence the mind, of to a of This and extremely deliver vision TechnipFMC. have of about robotic we driving an that talked lot as to away. manifold the be that next And that. to and you here. XX more that. smiling showing compact able going family, and we're talked we'd significant see that It's going be more now Yes, with tangible talked industry. to and market seeing all Offshore as developments adoption, to about share showcase the than expansion the the We're compact highlighting really we're to actually in we're a less And penetration go, we're It's that Rob, like compact We've We and manifold. company, the meaningful. going and there's to So, days see manifold. if we you is you subsea lot about have integrated real much more. And go. the we're change the and

Robert MacKenzie

don't a yet, I'll about that. respect I'll surface maybe that into think And dig been asked bit. I much little has Okay,

your American pumping billion versus for attribute Technologies In land business you Surface the of segment? of North how next that the kind other of $X.X that year, guidance, of terms revenue side pressure much of Maryann, would $X.X billion,

Maryann Mannen

year-on-year, look, that the increased of current relying the - within associated fracturing. We're fairly count growth at so in mentioned Rob, you're rig of we're I requirements looking kind I'd Yes. going to hydraulic rig see assuming as my the stable we're with comments, a count. say, on majority

surface of that piece our as control the improvement well of of relying that pricing, piece international were good We're stable in fluid you coming coming from strength on as So, on a you side. know, kind of North course. But as a the from big business that that control Obviously, on America. fluid. wellhead of there suggest, growth talking piece. But is of fluid most the is, about

Operator

from question your And comes Morgan [indiscernible] from Stanley. last

Unidentified Analyst

the of of lot since on little assets few, of pressure a a is Apache reinvest of I to disposal U.S. companies tide shale debate mentioned lot in in and a And bit. two the the a as Offshore offshore shale. viability there's Doug, relative oil oil turning Chevron about kind and big Anadarko, still

now the us you to how activities, that drilling sort So, that has of that to investment extent become oil? because in that this of what how have of on just and market as course, whether mentioned summary, are both with facilitate time been whole competitive other cost wonder are view I and a competitive studies you but doing? of first architecture respect a bunch the could can lower So, driving technology level you're cost high terms particularly give you us of the become reductions [indiscernible] in you and, alternatives? But to of offshore breakeven relative happening also the your result on reductions could, a give that how of you

Douglas Pferdehirt

much you the very question. I'll a question, but be it try is for very to important thank brief, and Well,

sustainably more of been important project oil working that acceleration cost you have ways could past to point X And development. the years actually for proposition is actual value we first So, diligently look the economics. as put a to the unique of at out, than the improve together

ability the do both is So, to for the project economics driving to customers. our of what's improvement really able be

past. So, examples the we've given of

that, the top deliver XX we XX months. peak that We that that to almost some months are and taking to commissioned a the offshore with been the of can has integrated they're and specifications subsea typically months in and XX remains we the working deliver I'd a viewed can of industry than a That architecture in deliver installed seabed where our now way now towards took of about on we're standards of customers have. the using to model the major, months, business. the past. our On our is at Further using we that in working that, and less distinctions reservoirs becoming XX average. delivery on activity, of reservoirs say short-cycle Subsea XX most And major from prolific some new

that going lower today single prolific time cetera, unnecessary investment new early total driving We've really with in integrated seen on to XXXX, success technology terms with the much So, XXXX. greater with in can it's of seen and company interfaces, the by involvement, that the in seabed, reservoirs by you anticipate couple approach that. with model a a an reduced et delivery an we cost installed used removing that's we change. capital of had We've integrated success deliver and and

As come down these you the on point projects breakeven significantly. have out, overall

into these One believe below breakevens investment the barrel. moving projects - on backed alternative remain competitive that's developing, these of our area operators heard unique really development private by that's barrel, an that's with trend customers last can assets. $XX equity seeing of emerging You and money, talk independent we're we really at a certainly We that about $XX a choices. other

times always trends we're - developed. And always developed cycle, offering TechnipFMC. be They we're of will be the the of the different at very of by customers unique forefront may different at but develop. seeing interesting because there's that So, the reservoirs in

Unidentified Analyst

[indiscernible] [indiscernible] And clearly BP assets here them are anything is your Because an Norwegian set several there the I seem because this lot views. fell? happened of point a to very has last a is, Doug, to last to of who's has chase with think a set or rightly to with rose these so going I some point it reluctant a de-emphasize I offshore to lot ownership of prospect of sold diversion the going because was Anadarko, this? hands interesting for talked made of [indiscernible] and new Apache, new again, That's what you incumbents do in for [indiscernible] kind this, shale. of that get this interesting very in all actually, we're do XX%, assets with

I a you made to? little are think that on that the that's you important terms customers of bit could you're new in because last talking who So, elaborate quite point very

Douglas Pferdehirt

announced foremost, year I and likes the development and going economics developments, want schedule to first and the ExxonMobil such be forward from the Well, likes returns there's I on the Shell, down. this driving part certainty the was awards also portfolio, from as So, as continue the [indiscernible] driving to mean, be overruns of careful. incumbents project are the the is major moving we've what project of and projects and meaningful those to their right?

the in project. in And Lancaster now happened that Hurricane it's economics certainty we talked the as our the onshore But improve including that. happening. schedule can really integrated project an the of past. showing the but the model industry, of example the is And there finalization transition behind our of We in today are not parts and we other only about a

we inbounding like that of several customer our Subsea with We being the in and the evolution examples have announce able expand base to XXXX we will and that, market. Deepwater anticipate as more the

Operator

to turn questions. the call There back presenters. further no over I'll are the

Matthew Seinsheimer

p.m. Quarter Third will A in Call. today. replay website call our on our available concludes This beginning British Summer be Conference of Time X approximately our

please me. any for us. have further feel you the free you joining Operator, you Thank questions, end to call. contact may If

Operator

This conference concludes today's call.

disconnect. You may now

TechnipFMC (FTI) 26 Oct 172017 Q3 Earnings call transcript