FTI - Earnings call transcript Q2 2021

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Operator

Good day and thank you for standing by. Welcome to the TechnipFMC Second Quarter 2021 Earnings Conference. [Operator Instructions] I would now like to hand the conference over to your speaker today, Matt Seinsheimer. Please go ahead.

Matt Seinsheimer

Good morning and good afternoon and welcome to TechnipFMC’s second quarter 2021 earnings conference call.

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

whether and on Although expressed they conditions, in factors from actual results to reliance as no to uncertainties place that the turn a caution our you current the differ are Exchange implied described after could results and now our forward-looking and revise subject the future based or risks could TechnipFMC’s these Known expectations, and and by We date statements forward-looking recent to future of to projected update are beliefs statements. Commission not or on call will speak of new only forward-looking Chairman U.S. as actual those any XX-Q wish that periodic most result undue from statements, assumptions over statements certain Executive of our material which business to regarding Doug the to publicly date or undertake developments our I hereof. materially recent our the French Officer. obligation Chief cause information, and are these in Pferdehirt, are We results events otherwise. Securities any and to most filings they made, AMF. cause XX-K, other differ with

Doug Pferdehirt

Thank good all today’s and you, participating afternoon. you Matt. morning Good Thank call. for in

Chief Melin, me Joining today Alf Financial Officer. our is

achieved from and in where supply milestones $XXX orders and XX%. will digital Sør award Arctic, project. addition EBITDA reporting we EBITDA support execute from for These billion. winning of second improved to iEPCI This demonstrated Total for strength adjusted in quarter a been million, Field hybrid market X Second solution iEPCI Ghana. includes indicative totaling for clear Patola Buzios our Equinor an the an we outlined engagement utilize in the the the greenhouse first the Subsea, of was we in we leveraged significant field year. quarter $X.X clients, iEPCI Adjusted to which we quarter. our half be $X.X gas battery capabilities for to last Subsea company. installation reduces ability progression of leadership sequentially margin start our XX% continue XXXX which in executed company Brazil quarter. first The reflect $X.X and for awards, our of Total billion the of Deep utilized our highlighted development emissions quarter and early Also Studio Subsea an X-X billion. for the layout inbound where and In is quarter, Kristin by of and of Surface equipment, production equipped to will include both Jubilee inbound continued with integrated strong Tullow, with for we award revenue the were for that is our strong where another field, with Technologies results the new field, solution Karoon, the position the will The services the the optimize is projects. Petrobras or intervention XX announced of the announced year has evidence as company

list, for identified $XXX billion. which million been our Subsea opportunity these with of range remain opportunities each SURF the to values of in the have fields $X Importantly, on

Qatar more than Surface iEPCI, orders international from up Subsea collaboration quarter. our inbound continues by to Technologies, and Direct first XX% services. as completion from as the United Middle East, million, and direct which were drilling activity Emirates, prior success in quarter region, activity Growth inbound including Our benefit led of XX%, momentum approximately XX% the inbound long the Bahrain, the decline. year North increased Americas well by In completion By continued in orders. by Arab Saudi orders, Arabia, iComplete awards of continued well to and Orders were from the nearly in reflecting of as China. partnerships and and history XX% the orders recover came offering. $XXX increased the the awards was Sea our

fueled activity, for demonstrate the orders our the of manufacturing improve. by half results that customer guidance further In second anticipates in alliances, to total, $X.X new Saudi our year second expansion first continued in of of end our Surface market increased revenue were the Technologies capabilities technologies. continue half very XXXX the when in of and the market order year compared growth strong. billion of Our half the new businesses quarter markets to and penetration inbound Subsea Arabia, first

supported When increased list our to We the in year than in $XX is XX confident has months. continue a to prospects next our opportunity nearly billion full see potential by $X Subsea set opportunities. increasing healthy growth XX% midpoint value using an list, of award remain by of very of XXXX of and Furthermore, the billion. guidance project the more over

carbon quarter, the traditional role pillars underpinning market, and toward a approach I new introduced energies: wind, of believe play we the novel strengthening that meaningful and will hydrogen in storage. the beyond energy transportation mix. our the wave, new Looking offshore and Last four

generate market today, we reduced on we look solutions. wind intermittency, development support focused energy we to and renewable the and investment are source increased this even The in opportunities. them continues wind making utilizing at of combined offshore greater steady wave when progress in momentum partnerships integrated energy. for And abundant output technology, wave As can our with

and Deep into that is hydrogen, were integration renewable capabilities economies projects. scale this Purple renewables offshore unattainable energy centered that convert technology solution Our around development enabling by of previously

concept partners, This Deep for goal technologies. from centered integration commercial on hydrogen resources. wind well wind for Purple, Portuguese notable a Purple our a we on engineering, week, project of as now are conversations in large with production partners, utilizing power. study allowing experience we projects client to announced several offshore called worldwide, development with utility, for essential green solution partnership offshore the Our Deep EDP, develop renewable energy system new scale as Last with a our our BEHYOND. in extensive that standardized a technologies from production will hydrogen and is implemented developed Working consortium leverage be can Subsea capabilities, research

energy work industry while much significant reduction, the carbon there still Lastly, is be attention to devoting to done. is

exist stored most world. be the the storage maintained be the it many around regions the where can We carbon believe found locations that naturally occurring be to Importantly, safest for efficient offshore, in has one somewhere. of and can in reservoirs

well provider and Subsea leading are the to carbon positioned be We transportation in storage.

We of have utilized space for forward the have others technologies. new some with the capabilities showcasing our been November and event development energy across time scheduled investing further upcoming to integration and our look in technologies including space investor being We new at partnered several progress, the in this XX. of also for

new demand. offshore be energy – and of of in development development increasingly are are future to anticipated we energy the new energy still that fundamental scale solutions the stored required while sourced still volume given and their clean the will energy solutions, belief our With meet is infancy,

technologies energy, the leveraging differentiated architect, new partnerships As expertise Subsea Subsea support are we and capitalizing of on and execution. our building integrated in project

our market’s pillar to and it to and combination successful to or the energy I now integration. choice year the full TechnipFMC mutually material Regardless, role Alf exclusive turn is is in well-positioned a Our single four call provide the clear, to our to which will their pillars discuss collaboration, play yet not be core will prove in over results preferred transition. not driven to financial competencies, by development, and guidance. innovation update financial and an our are

Alf Melin

billion at for were billion. $X.X cash billion, another company billion, $X.X million XXXX. Backlog the debt which of cash quarter Revenue of billion is in inbound equivalents billion. and with net had company as to of of the close at period. backlog end $X execution adjusted beyond $XXX orders increased We million. of scheduled Doug. $X with $X.X and was ended the the quarter you, stands to for Thank $XXX We sequentially Total EBITDA Subsea total solid quarter $X.X

fair in from During charge after-tax to was This the quarter, value of ownership Technip million of the from the other market during share value in Technip when loss per our a in was an related to market diluted share loss $X.XX. quarter, charges Energies relates share per excluding $X.XX and stake change the in the the Energies. adjusted $XXX per operations continuing continuing change operations we to of impact Loss netted of recognized that primarily the period. $X.XX, our equity

the We The tax income from discontinued Technip benefit Energies. quarter. $X.XX of in also reported due a to is to operations spin-off of income related the

services adjusted million, EBITDA was in Subsea, America, and primarily quarter unchanged East, compared orders for North project basis the the $XXX Inbound and further focus the demonstrating consecutive Technologies, by driven on installation period, revenue will XX% were to benefiting points, from in first iComplete activity increase higher backlog XX% segment by XX.X% Now, from in comparing quarter. revenue benefited let billion of The $XXX margin order Sea turn and second America. of in second an the first essentially sequential first improvement to and by also the margins the to was Subsea quarter, me North services In million driven offset higher North XXX Surface of quarter EBITDA the strength margin period. orders increased execution. project increased Adjusted seasonal the ecosystem. international sequentially, of a our quarter lower quarter increase strong largely of when unchanged quarter results. The services I from of improved adoption in billion strength. sequentially and a In Inbound of activity. XX% were in $X.X the installation the with was the $X.X increased our performance activity by from first second quarter. Middle segment results.

items loss other was and corporate million. totaled our $XX on million period, $XX million. and an tax in expense incurred to exchange Turning foreign corporate We $XX the expense

was in consumption cash million from million quarter. required the Capital Moving to continuing cash were cash period. million. $XX a second $XX This the flow by free in resulted flow, expenditures $XXX activities in operations of

to quarters Brazilian our related CapEx and settlement see for the ago year million typical related proceeds authorities, with potential longer decade the of Energies, and our the no a full variation business. including in that resulting participate million. awards $XXX below as $XXX previous were Other and of our our activities meet vessel payment as sale the free year the $XX $XXX benefit to for the of million, further $XXX favorably working with period a our of outflows full million transactions full expenditures stake million remain cash scheduled capital we Importantly, in included subsequent will include on our outstanding the and facility. we track spending QX these the outflows expected to over inflows. with strong primarily predominantly inflow occurred from in of of second DOJ ownership Technip credit of do balance revolving $XX to the assets well to and capital announced previously half impacting to from items our legacy quarterly fleet, related the totaling QX flow working net on the specifically, of $XXX More from GXXXX based guidance in million approximately we and of concluding a portion projects year where debt of rationalization guidance million, sale our a to come project related included net to repayment

debt quarter. the first compared $X.X Taken when reduced by billion to million net was together, to $XXX

me future. we how the first I share changes and our with communicate with Before expectations, guidance intend you made in the updates let to discuss you to our

continue know, initial keeping our most guidance. our with fourth year quarter guidance for give will practice, with to As the we of do release. upcoming you quarterly not earnings we historical give In

as believe provide a we this to progress will you and we forward, quarter through greater will projected guidance our modified year. each with also update clarity calendar with Moving of financial this that provide We midyear results transparency approach results. our second

XXXX the updates financial to guidance. to Turning our midyear

reminder, of continuing Technip Energies, operations which is As guidance the a based and thus is on reported excludes as impact operations. discontinued

revenue Subsea a to guidance $X.X of has to increased full $X.X billion. Our range billion been for year

our will increased for range and $XXX Net has year range revised million expense full the to for been to million has key $XXX $XX interest Our tax $XX for Technologies been to a to a close EBITDA highlighting provision of adjusted a million. a increased full reported by few higher takeaways. I to range been to has XX% year guidance XX%. of million of Surface

the balance monetize flow million improved proceeds captures now net position in to of Energies year half. and we our equivalents $XXX sheet our the remain working the half stake his an guidance strength year first further to improves and with period the and reduce updated our meet to with lastly, closing Technip cash call was for slightly utilized $X.X billion. on back refines to I Doug million of debt view of million $XXX the for over year. the cash debt Our to cash continue in the full second of positive half will first back quarters. XX% the we And over remaining will outstanding the commitment and $XXX coming remarks. turn and half Free We our the capital as of of ended track

Doug Pferdehirt

you, Thank Alf.

close with few remarks. move Before to a I to like we would Q&A,

by expectations were the both land list as see evidenced and as guidance, increased growing markets. we positioning the as Subsea opportunities. our And Our solid our outlook of our our operating half have for where in value pure-play, well to year first proprietary international segments. continued unique and We broader financial opportunity as an full these by results industry Subsea driven support iFEED market improvement levered iEPCI

Operator, model. novel are by driven that may pioneered renewables Our and now XXX% Subsea energy the space, resources development offshore. the integrated industry’s our success us fully giving and is next-generation And and leadership transferable delivered technologies these new extend the competencies, ability our commercial confidence our line questions. you energy core capabilities only unique demonstrating are to in for we having open in of the to to Subsea

Operator

Thank you. Instructions] [Operator

Our David first of question Anderson comes Please ahead. from Barclays. go

David Anderson

Doug. morning good Hey,

Doug Pferdehirt

David. morning, Good

David Anderson

Brazil starting down just there just down would contract. soon? announced was been contract of could – was working of guess, mistaken, of to you Is bring If life to you around few has we also development, a be to there tenders expecting you wondering case? announced some I any question expected situation it’s of the the see see with few now pretty on starting on the to the tender still pick areas kind see a same I kind And contracts sort us Subsea trees. the not So, were pipe, up one it Brazil. are like kind you on signs where speed of Petrobras recently. Are I there? am if of with big that up flexible to looks

Doug Pferdehirt

opportunity David. in celebration you you, we a Thank let Yes. to tree It of gives me delivered a past quarter out XXX trees Brazil, we Brazil. great know XXXth – this had where that our

said, very are which to have and provider is for in So be Petrobras many the Subsea the really been multiple David, also have and on now, involved And had as our installation and project, tree time, been working we us significant will long quite and very yes, a behind we provided Buzios the you of phases us time. the leading to large is orders. there where Those past. are in very which we important the orders doing it about was for well business. new Services interesting, services as in we in remark I some prepared because largely

Buzios tree tree multiple just orders will, had X-X projects, we recent orders, the the large announcement not projects cases, the for around of like seen in forward, some you are our previously. phases focused Going that but more lump-sum fields, if

more a are phases So, be bit of deferred. with we project. or Flexibles will think a specific projects associated they again little multiple

a And certainly know Brazil, anticipate in seeing position orders line being seen very are the fields are and flexible large differentiated for still We different strong different you volume-based awards applications multiple as we further and different and Brazil. say, product in have on projects. where and in more, used let’s flexibles important a very us

David Anderson

of why behind or on a think just am just, do did What sort like perform. of I that’s is their method it big they contracting about that? made change So, I is they because you tenders different kind those just that Petrobras, guess, I visibility? know use thinking

Doug Pferdehirt

do it of queue lot a got has projects. a exactly long the think They visibility. I of relatively to with have

be opportunity specific is You their the XXX a trees their Subsea on the ability see to that at or tie versus path list. projects to can ordering if the able in think I awards just to trees, XXX will, this And preferred single tranche. time you

David Anderson

could business X much that you it. Middle international, months just on remind of But is might I Doug, makes big question surface playing business, the how Yes, how have East. a sorry, see if sense. in you that about A I chunk you is to just it could think there? next maybe release, am the that was I also in separate us talk months XX out of missed if the the

the of of when to you hearing that do see So, out kind over chatter start with inflect the are NOCs there? we

Doug Pferdehirt

– to the XX% really view. of of on, trees Americas. we opposed of depending that’s approximately Middle quarter sophisticated XXx of would product it’s in value trees point from as type a to production international for is which more that the driving XX% technology the upon Surface The spot or important approximately us. East much That’s deliver Surface the are business U.S., the And Surface in activity. the Yes, deliver you the Middle East

XX% able or not We have fully I significant remarks, another allows have ability be mentioned strong and us third Middle less the to are again, – the in this The have are that the the picked quarter. for which, differentiation. we capture more activities and to deliver that awards both relying of QX more differentiation we the materializing activity, as we but expect know-how a East in had inbound also entirely prepared in-house, in increase the the integrated, and knowledge, products technology, parties, differentiation, we on we to We up.

David Anderson

Thanks a Great. lot, Doug.

Operator

Jayaram question Please from of ahead. go Next Arun JPMorgan. comes

Arun Jayaram

Doug of trying a team. over been integrated your in lower Because go-forward project, of think basis enabling Half nature. I the and And the implications orders have would the about some cost, integrated with you suspect. morning Good more and the on will synergies Subsea to just Yes. ideally control some awards, was I year have this mix? clearly, margin given

Doug Pferdehirt

you, Arun. Thank Sure.

for to they economics have of And kind just me typical why, Let through a project. like financial company. integrated tend preferable go yes, our

First at no you in is integrated bidding stage bidding project and There the we cases. most foremost, stage, study. an start if FEED will. start don’t We at

the we are are So, about in we develop only infrastructure client field of full is an our or Subsea the company and of to of we for economics, that’s that’s most that providing the we are look table that talking to the our at value Subsea or in asset project the sitting at architecture maximize capable which the reservoir completely objectives, such a service the client. with At point, our place the clients. development, can economical integrated which aligned

is of bidding kind So, project product again bidding a particular a the delineated around line or not our or a objective product economics, schedule.

leverage can So, those can phase We the it we of And of once. delivery, integrated We the then work the the all Subsea the as correctly move the can a economics multiple phase. the We installation utilize of because availability now around phases. manufacturing, of and field. at our are we cadence manufacturing is economics, for then into there in do those do we you commissioning engineering, the responsible it pointed the we fleet. versus the that out, in achieve us once lot project for execution project

a by which installation date oil, economics control. overall to because final oil time doing improvement been commissioning. is we months direct in But or our again of in through process have economics. XX acceleration well project award an an accelerate everyone between has and first the As able and so within the we how and project cases, times first example, we perspective dramatic iFEED nature to targeted workflow of actually iEPCI, XX worked has achieve months That delivery from doing go the have a the a for most of to involved reduce the

model. partner, client we and So, definitely winning, the – preferred our it’s client most winning our is our are and

an are you also these out, competitive direct because a advantage it’s situation. avoiding As tendering pointed awards,

Arun Jayaram

guys you and for you That’s helpful. delivered solid margins My expectations very, surface follow-up raised have year. the is very your margin

and was some these, the kind you confidence just but could Doug, materials on tightness chain, of your dealing state but you like the raw kind are and seeing chain? of chips in in just some supply your headwinds if market shortages – of the So automakers, harming I think wondering, that of without given of could broader comment the profile of wanted things the question, my supply impacts it, if the in to things margin kind where comment like when COVID about we call and of see you just

Doug Pferdehirt

of well-being were come that health companies our all. was and and also by it is which, did of not several what our foremost, Sure. throughout to out and that level, look is seen everybody first exposure with to the the our at the have I Look, clients the a It course, then cover we employees have we of we terms company going – COVID, working and we not Alf of from high suppliers. and that contracting therefore, use will inflationary beginning, some decided I through walk exposure to or methodology that but in out going of were have typical the out a as we kind dedicated those through going what the strong with to impact, that what going am only is for dramatic was and and lack clear of came pressures. a to who with at was

team. transparent been of to proud our open I very really were am So, understand working their being we and beginning were concerns. with procurement what They chain our trying have and it. of from suppliers ahead the supply

very transparent work and to the in being collaborative, We of with. being being very have reputation easy a industry

cases, understanding our we them. them we do we some some our our this concentrated clients. just from help to In in were transportation what their we be. sat their as with case, they be it with into in cases, or and get order it of people in whatever challenges, to may spend we facing with logistics And knew facilities, spread But issues. had access the being were kind to So, our because actually out that suppliers spend certain to able

So, the treated want learned our way It’s the like be us our supply treated reputation treat lesson chain. did was there you people of to our the with because customers customers, same with yourself. we and the our relationship

we different As healthy a chain. the impacts result still have we with are being around COVID of That of in and as that, world. COVID a feel we supply the them locations work different said,

are global We company. a

We there where ability be concerns. to activity are have to able shift the

to our transportation addressing things which going technology And we to we and a freight to – getting the our done benefit go been is kind building ahead which freight, of issue Using have model. and and of more it materials buy are access right long ocean are contracting team opposed now, to equipment some also of challenging the of bulk really helpful. ahead as terms we probably and really and of where ocean logistics, has he not job rail doing are are shorter am able is able around pass bulk Alf X.X have of materials I the it there, time. Subsea through in We the bespoke secure bigger those been that ahead has and which great really we will a up to become creative challenged availability some in and offering, of quite time, in using building too. of

Alf Melin

Yes.

couple Doug, a you, how general to inflation manage of add our in comments around in thank Just we contracts.

First with make we already secure of that we always bidding suppliers. agreements our sure back-to-back at the all, stage

So for vast the pricing of bid. know meaning, the terms the majority know we and the will time what of we at the we undertake already

necessarily in projects. of really the process the and the in of the have we lock time not that a portion we minimize part for So, to the at undertaking any of further do we pricing whatever early bid, in procurement to procurement delivery that volatility as have engage

Additionally, at put clauses, our have to in clauses when contracts, materials, raw those they do pressure or other contract and allow look us inflation labor on contracts you the embedded the factors escalate price we as index inflation. client

had contracting it it mechanism this years, continues we work overall, and in for for for several worked us, place has and well very have to well So us.

– view, in think new well from pressures. are So from so pretty we we general both awards a and backlog in inflationary protected

Arun Jayaram

Thanks for update. Great. the

Operator

comes ahead. question Please go Konstantakis Exane. Nick from from Next

Nick Konstantakis

I partnerships the guys. my morning the you a in direct Thank good position in taking Hi, you are you for appreciate questions. unique have I integrated, got industry the getting a a are couple. arguably Doug, guys so with and more lot works.

few the Brazil on the cyclical the the some couple it rebound. with and industry there chain of a XXXX mid interesting around was after just next this in I local how just to so trees, contractors position if became level number to Brazil and is presence of managed your hopefully, to in want view One of on you there. of very better about issue the which catch of ten your press to long [indiscernible] want companies competitors mid-cycle and you get then and the or article, yesterday years, And the secondly, spoke your supply the an

what are are us issue? what what’s bit and the basically the at So, a mitigate can issue just of a there these mitigations is been you an you and color doing to with happening risers Mero give on

Doug Pferdehirt

Sure.

questions. I you So, asked guess I will the take the in order that them

you clarify, or mid-term… near-term guidance you somebody Just was there in said if could the provided that

Nick Konstantakis

to mid-term. level of trees… a sustained the Yes, number it’s I say be think the I it would XXXX guess of hard

Doug Pferdehirt

Subsea you the that’s proprietary direct levels assure of not to as market of the you market, to how majority share are share in company. of in we creating see view in tree the success the the market, But the we but result if the of count. mentioned will which not of awarded we success total difference the Perhaps lot, you that Clearly, alliances, iEPCI return we offering, view. I not our seeing or XXXX do earlier, awards, available market. mid-term direct can it’s view talk sure plus our or which our a integrated don’t that our we near-term – not that That’s the the the analysis, will, of

Moving we understand it’s Mero will time, the everyone I article. the allow if this is X the am your probably provide happening to yes, on what around to aware guess Mero second best on which question I project. the project, of at facts,

And and impact forecast first impact is stated no first to So to guidance. our is to oil. no by Petrobras, there as the or foremost, there

the very those Brazil. are phenomenon called result a That’s pipeline the pipe a of is industry stress being high facts. line of or that used is in COX project. So, true system pre-salt known called this the mechanically on corrosion that there MLP cracking challenging includes also a as reservoirs result what’s content of What of many is the

the place. an your it line secured in the experienced a of pipe, mechanically So, – steel pipe it inherent a to heart, artery the Therefore, carbon same held in to That in we phenomenon environment that of carbon environment. protect run running of high be be inside as a you is stent think happens an much your exact COX the industry corrosive flexible with around pipe. from had pipe to as steel rigid inside like liner needs

So, that this held to few with place the not but clad it’s sutures, case, a through welding. secured way in be in it’s

it the requires carbon technique that is agreed high quality not a is to and control. of a in manual level sophisticated. steel weld true stainless we It’s doing identified more process the or our The cases, or What some had So, of take – that the and we quality that steel welding add well is it make steel weld meet that a a the in adhere quality very liner the or standard very largely to material standards did the depth Petrobras. and quality was stainless to riser. had with of so pipe that result the process it’s

projects rework proper some finer that in have of therefore in welds proper on of – welding weld which process place, the using are system the project. which clad to is we the to we risers, project. This Mero result and mechanical welding. able pipe not riser the that the So, stable through line be to going would X of all rigid is This specific require the to a ensure for a specific are very

not specific a to project. common is this So,

We it. We are well advanced. understand

lined We most mechanically are experienced the pipe. the

the using that’s first are stated working due rework. In again, them an being with Petrobras. to work to the just impact We case, as forecast it’s to And resolve we a impact to in diameter of no do of this clad our problem. oil are subcontractor our And the clad we weld. are just welding. No nature guidance, again, the pipe issue experts the or of to by

a ecosystem are this we will is And use the in facts. not and as permanently hybrid and way welded. vessels the the to of risk. potential be it a by with So, and plants technology will that always benefits can place it the and those that out market to flexible And Hybrid the have welding, this concern. in good I flexible Petrobras solution are solution, are aligner require let’s facts, Brazil that to quality that out guess, pipe. point pipe we sustainable then in the going also will and I permanent to ultimately, be going do Brazilian remove engineer

control. well it’s So it’s again, known, under

have be or these will others others will to about rigid done We using the risers are fully we same ultimately, the be because moving from qualified with back problem, applications actually out flexible this is flexible it sharing But in and and our advancing when learning it’s hybrid be faced engineering challenge. with to which our which we quite for – Brazil, do pipe will able risers, well. will

Nick Konstantakis

you. Thank

Operator

from question Please Ian go ahead. Next of Macpherson Sandler. Piper is

Ian Macpherson

Thanks. Good morning guys.

Doug Pferdehirt

morning. Good

Ian Macpherson

the that the to with coming talk it timeframe matriculating decade? and project you you the by And see genesis study practical see from of course how or really of how project intrigued could the technology type of was BEHYOND application of that a concept was into you market a this you that pilot I last over announced week. and I about curious EDP the if

Doug Pferdehirt

Ian. you, Thank

pretty excited. are We

well. honor. Look, partner to very a privilege excited We an and are with EDP is as really

where concept of When group meaning is case, this the technical great a other not we This study say. got academic concept – talk like also have about of it’s in concept were We process. is a this project. that a a we constituents study, are with kind studying an a this in not I not it’s study, should

starting – and and oil what phase, really actual really starts sanctioning what and project to project take concept you volumes final to And a starting it’s it a in then phase, moves understand complete an it now project. would into just it phase. the at where would execution like that to gas the material to go engineering project. would are place front-end put Then the take So,

design approach one is and Our to build many.

with and to us vast and place how place would unique company purple energy understand unique to scope EDP a energy, our again in transmission idea activity different can deep of really technologies the infrastructure along study and in of the in would applications. deployed energy this be and very as that and of So, could an and Subsea experience their be experience we system knowledge overall and development that put put leverage really a many of knowledge

with filtered we’re we’re through up partner all some bring motivated say EDP ideas you’ll and be working that come there to very is understand way. the the a although When a would asked And that’s you timing about very – when incentivized and this to I going collaborative specific fair, at work and hard timing talk this are you it’s through point, energies. we So, that’s always the opportunity, and question about partners in new and more say that front-end things, the they’ll will with consortiums And design. ideas again, to and engineering out and fail, couldn’t research these other and ideas be us. that now. and are some right process pleased up involved final But will new until succeed in do you’ll with you then of

Ian Macpherson

unrelated I’m yet one, Separate Doug. Thanks, already. hasn’t come surprised this up Great.

there Subsea should if to second orders Your need this you you’re this half. inbound $X scenarios off are, outlook there in at but point? the first billion, ahead half than to, imagine half maybe I of in me back I comparable first way Are which greater the could for scenarios the be pace year

Doug Pferdehirt

Sure. first the that Ian half and is there the year the there is strength scenarios, of of Look, the these no pleased all inbound. half started of doubt the the we’ve year we first cadence extremely and are with off

position to – the in industry. speaks our no announced Subsea our it have Subsea but removed list. opportunity differentiated that mind again Again, keeping we in inbound think opportunities volumes I the just the we that QX from were

type us information the that the we When because billion that potential up billion consensus we’ve value proprietary proud is or X what’s year right of now about next we be at $X.X is cycle ago, started awards ago makes the out with into more the $X.X not that all clients what work there guess, our company, well. direct most awarded and There that basically, range. came by is billion entering XX is $XX look we provide our access, over no no which to of confidence that the viewed is of, really that There when That’s talking have a opportunity outlook the number was grown We over At Subsea months. year environment. us they by be time, same to this the has would with we to the gave ago. again, the doubt. to doubt that of on this in I it a relationships X inbound year I proprietary setting very XX% really, an So at now, list have, accomplished. guess, has

current going year, of our will going XX? I that some that And happen We’re tricky where see that they are working team into often, to And year. clients on that. right don’t we budgetary reasons. following is orders accelerate December to The into quite X. year, I cases, of to until the on Or in January a investment in the the getting sarcastically, defer happen mean want they don’t clear the decision for actually on want Ian, part of on the line that spend to where, other sight beginning perhaps now. have cases,

today. be out to there than the we trying much the the the closer our that’s timing clients with trending what and outcome. would some really sit than of quarter, billion to We’re to understand we coming But kind clearly, our of fourth of is awards consensus greater into the most $X likely from are down anticipate those number inbound

Ian Macpherson

That’s Super. Doug. helpful. Thanks,

Operator

ahead. Bianchi is go from question Marc Next Please Cowen. of

Marc Bianchi

an with years maybe If continuing in those I look know that I up right? now some going better are services Perhaps and that discussion. XX%, opportunities things convert. But is your momentum take to are I would to awards at book also going maybe think Thanks. backlog that the turn. it of scenario the some Subsea are looking indication and better, has

was I for revenue really that Subsea the So lot. surprised didn’t bit a increase a guide

hold the to guidance. end flat and down high of the hit things you the of I think if XX% low things guidance from end if kind of hit first half, you you’re

get would thoughts to outlook maybe end like scenario would So happen guidance how and up, pretty Maybe what to about seem on us you conservative there. need low built that that to to a talk upside? the

Doug Pferdehirt

not Look, But not Keep hidden I to mind no don’t there here. want critically it’s that on too we’re much to Yes. not spend a – time couple important. no, subject, things. the of in trying is message

backlog out, have you and already for confidence, scheduling, backlog start is That’s primary very and look this I pointed of of a and having gives As business. we lot Subsea benefit – that’s year is as business this portfolio. in the business beyond the how much can to book our turn we business next there you the advantage. which at our provide little in mean the

opportunity of to ramp. lot really a not is there So

current ramp don’t don’t in you get much converted You year, of get inbound, that the can some, but current you in get year. but you very that of the lot a

this that, addition to would QX seasonality, mind, expect we as every have occurs and it In keep the some in seasonality year, year well. QX to

Marc Bianchi

Okay.

it and relates to Doug. part is question bit next for Thanks CapEx. a to The that, Okay.

said And below sort energy be could So Previously, tracking million I could for year full thinking about prepared possible that you that? more if about to of building some as start curious change, level think around capital guide. right in that? you Is out new at us $XXX the color number. And then the does the help you that this talked with intensity $XXX maybe below and is the I’m potential be remarks beyond. ‘XX all? how then we if the it capability,

Doug Pferdehirt

Sure.

to where then going the in year we of of the what second share it to talk and see kind he’ll the I’m pass with half So of he’ll it’s actually because exciting quite CapEx happening kind are on about and Alf we and you beyond.

also intensity last You capital were hear correctly? the asking that about Was the new that question? the of Did energies. I

Marc Bianchi

That’s right. Yes.

Doug Pferdehirt

we significant Why feel as Okay. we is our as it we’re approach be traditional don’t to it technology upfront? without Look, energy investment. that can long is take provider. one as a in I provider, And a technology capital do

we what require mean and approach we’re question be do. out do. about CapEx. talk That’s we everything structures, structures the all that’s pass no, going going could install to But be it require the around unique go Are doesn’t going really Now might investment. vessels and mother engineer asset solutions to that Alf going to capital mother not some that to won’t that there the the we a we big build of to to capital-intensive to not base. all of are I’m specific way not

Alf Melin

thank the you of And half. it’s in half. first for first light is true No, that Yes. It on commenting question. the the first all,

the example, towards the the of timing dry as some of We some half. relation drove our half profile, versus drivers have typical some first an vessel planning CapEx more capital definitely the docks to around which second had is for with

our our awards. And half. project various service also to for We – have timing really driver the when tools second we various into support that’s and the the of need manufacturing tools key

You project we the look at and backlog that the awards coming have.

we to well for we’re the offshore are service activity those Brazil, where and business tooling that includes seeing drive also investing service that Brazil. tooling, both tooling support installation will as in service investing in are as in that We our higher – manufacturing backlogs, in

to normal I bit opportunity year. is million made first I should an comment going level. really the this we run this have And consider there new second in I still stand for that of little that come in the not initial anomaly below of remarks definitely, – the you also to a want emphasize $XXX half will we So the behind higher a a at that as maybe new rate for second to half be is to are half.

a you the the continue good ahead. think million as to $XXX use look indicator I moment can for as you

Marc Bianchi

Great. Thanks much, gentlemen. so

Operator

Kepler Bertrand Next Hodee from ahead. go Cheuvreux. of question is Please

Bertrand Hodee

Yes. Thank have you two, taking question. I for may. if my I

awarded, And Brazil. to be massive question opportunities. relates I could those Buzios one you also all probably do still the year-end. second but get on not before contract to list, very relates first of The believe them, contracts When the Brazil. available of some We strong see really obviously, I SURF list see a

fluid talked about your that when think for, flexible I riser fully new say, will do be COX will new would hybrid You’ve this qualified? – heavy content be fit solution solution you

Doug Pferdehirt

questions. for the much you very Thank Sure.

on in are months. it’s list to awards likely Brazil, be the opportunity SURF in projects the the XX Regarding yes, that sanctioned next

the not the we exact up where be are between but the end now just So to our no, a phases the of two timing would not awards looking it at Brazil we not see SURF of in Obviously, that’s those surprise. of to be be client surprised SURF some all would a would award, awarded, projects, those of tendering the but or of year. to potentially in award decide and

this confidential Petrobras. really HFP qualification, an is Regarding to and of important kind

rest the to the out of of are are we are I stop way. Petrobras us where very context. hand-in-hand we are because working maintain to the need to want the pleased step we I don’t HFP has progress But than Petrobras with process. Petrobras with quite and confidentiality there the is really the we in asked advanced pleased are anything with very And to and they actual So say schedule. around that the of Other say, making every qualification

Bertrand Hodee

Thank you. enough. fair Okay,

Operator

Syed Markets. ahead. go of Capital Next is Waqar from ATB Please question

Waqar Syed

Yes. Hi, I believe name. my that was

– for Just inbounds American you for Surface you America gave sequential The provide year-over-year North some and on in Doug, on growth comparisons inbound a context orders, comparisons. question Surface some business growth international? Could saw North you that International

Doug Pferdehirt

in I have QX. QX the less I international there say, Waqar. Subsea in from when talk International. exact QX our mind, America turn. to was Sure, in everything in North orders North falls in it’s but when numbers bear was about about And the do inbound business. me, book under But would order and international pronounced for the the backlog, and sequentially just clearly, increase we a and business QX Almost to don’t much almost rather talk a also, we – QX in front America we strong material of level orders, our exclusively

Waqar Syed

second same Okay. as in And half of on carry in sequential momentum then the second quarter the momentum of you’ve seen that well? see terms you growth, into do the kind

Doug Pferdehirt

steady North most of forecasting we market in versus – But and are difficult a North terms least cyclical somewhat a somewhat forecast our of the a East most QX. is comment on portion Most early of the expect business. to we QX typically particularly the those orders a that international, based QX. we to quarter. to Too in incremental but in year-end levels. and in, tend Africa see again, orders small And always progression. would of America large into of and very third For North come remains continued There upon couple the inventory expect orders – the geographies, in do of progression America, we QX Middle at

Waqar Syed

Okay.

to Just the question one to able final – can you extent you’re that answer.

of above of bill For next next in to billion X? revenue year to given opportunity be about Subsea Do your well outlook for set. book you $XX this see the opportunity year,

Doug Pferdehirt

excited is the I’m say year this to book-to-bill So X year-to-date.

yes. XXXX important to in book-to-bill The be answer see emphasized think the just in note. make recognized, I I Do would sure XXXX? probably scenario. versus and that’s that to position should earlier unique discussion, that’s a on the that have So we’re that improving in I in

Waqar Syed

appreciate you I color. Okay, that thank much. very

Operator

last ahead. Please will question line come the our of go And from [indiscernible].

Unidentified Analyst

Maybe about you can you taking think my longer flow term speak question. free for we thank how about Hi, should business? cash from

Doug Pferdehirt

Sure.

I that think will question. Alf take

Alf Melin

term cash the about asked You flow? longer

Unidentified Analyst

Yes.

Alf Melin

Yes.

not business let a would But So We due cash in me reflective item I projects flow in you It’s somewhat I of this long-term take envisioned. soft carrying. the the that variability typically commented had longer that in on I happen we of performance my as see remarks, free just quarter-to-quarter a quarter. also a do Brazil. obviously, representative we to on if start. we’re quarter. a have some it specific obviously one the as from Subsea what clearly, And XXXX mentioned to not being term, quarter

the to are help I part an what and reduce that there all definitely need things that as couple saying interest been think forward. debt item interest committed obvious of where first differently reduction. expense expense a has manage and is to to would expect are we its we’ve we of we along we been go That

I here a we we for to have a and seeing. this to overall. then ratio And think optimize upturn have also mean expense review about and significantly talking tax relative of lastly, position better flow the that been our get the some I in course, in room prospects tax Subsea lot of we’re particular, cash

and profile are clearly EBITDA we So a of go portion into cash forward. as a growing we that larger continue convert to profitability to expecting see

Unidentified Analyst

can So flow back levels what go about us think think term XXXX I should to longer you a cash way margins. that? XXXX, maybe help we how or about free if is in guess like there Can we saw we

Alf Melin

XXXX also wouldn’t I different we to a back time. that bit go little business at ‘XX and were

So this time. on ratios I specific overall, any at comment wouldn’t

that we debt will net our will be as time. cash this also come with back we flow on other get more structures, in We to cetera, free will topic a Investor Day into and et at definitely happens information November. that And relative

Unidentified Analyst

about driven the And we like just maybe CapEx, more require is thinking million it the maybe I $XXX – in more am can trees services? about services? think that Because question, Subsea Subsea think I much it by am squeeze you that last business us of wouldn’t I by when can driven CapEx. if naive Subsea help one Is in

Doug Pferdehirt

fleet. Combination of the in Subsea services

Unidentified Analyst

really helpful. my for you questions. Thank much That’s Okay. so taking

Operator

for remarks. I would call like ahead. the any you. now closing back turn Seinsheimer over Thank to go Please to Matt

Matt Seinsheimer

be beginning replay X:XX you. available concludes second our of Time call the A Summer British today. call. This Thank conference our on will p.m. quarter website approximately at

team. any reach Thanks have feel the you to free If further us. end to the you Relations Investor Liz, please for may call. out questions, joining

Operator

concludes today’s you conference This call. Thank for participating.

disconnect. now may You

TechnipFMC (FTI) 22 Jul 212021 Q2 Earnings call transcript