Earnings call transcript Q1 2023

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Operator

Thank you for holding, and welcome everyone to the TechnipFMC First Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. [Operator Instructions]. Thank you.

the Relations to and turn Vice Seinsheimer, now Investor President, Corporate will call Matt over Senior I Development. Mr. Seinsheimer, please go ahead.

Matt Seinsheimer

Good quarter call. Thank to Jack. morning afternoon, good you, and TechnipFMC first XXXX conference earnings and welcome

be Our news statements our financial release found today issued website. on earlier and can

like you to with I'd any made statements looking to call. this caution during respect forward

projected We undue to reliance actual you uncertainties and Although cause the and assumptions beliefs filings could which our current in are business They place results with materially described these recent conditions. expectations, wish to forward not as and Securities to that forward by other looking in hereof. from statements are any results statements. certain speak are from actual cause the those our Exchange could and to subject only future periodic to Non-material of U.S. our factors caution that or on Commission. results statements looking XX-K, developments differ on risks these based differ most XX-Q our regarding and date implied expressed

We or looking after new date publicly revise are update undertake result they a whether otherwise. events statements made, as information, the our of future no of obligation any to forward or

now Chief the Pferdehirt, Executive I Doug will and turn call Officer. Chair TechnipFMC’s to over

Douglas J. Pferdehirt

the earnings Thank made we you, as we quarter pleased participating I call. Matt. the performance quarter, first Good on morning our am in and the good February. for afternoon. Thank successfully in you in commitments with delivered solid

impacts. an adjusted when of adjusted was billion. Company with was in excluding EBITDA $XXX X% period revenue million margin the $X.X Company foreign exchange Total EBITDA Total

quarter. a bill received first to book in FID had were a as backlog as Subsea, the $XX.X well to billion. announced driving the growth orders included start year representing four X.X. of iEPCI Company billion $X.X sequential project we orders strong billion Total $X.X very the inbound in large awards to quarter with In inbound in This period the a of in that

accounted iEPCI in orders XX% than more for of the period.

services direct long is a leadership together our result our in and the awards. technology the our Subsea of customers standing Importantly, relationships, X.X all Subsea includes demonstrated totaled XX% which of client which capabilities model, and provide awards iEPCI other execution unique iEPCI, of of with commercial our confidence combination This TechnipFMC.

of of iEPCI high we for the strength we are the not Given that is today, the quality XXXX. QX the and in broader pursuing market, work quarterly confident the are peak inbound

which record post than to Subsea expect iFEED of $X inbound confidence project. outlook in activity, to provides phase further a billion record of orders direct for of award level enabled XXXX. We often This iEPCI the in for by our the continue to leads iEPCI a This for full-year. is more the

on change These execution have this capitalize creation the of we business. to differentiated the our the fundamentally period allow steps of integrated which operate Subsea the introduction TechnipFMC, the significant to successfully approach include that and bold growth. Since enable a ecosystem of model together our of iEPCI, development of formation will vessel X.X our to taken project us we way commercial

integrated recently early delivers then begins an project savings. cost solution in leading the Our We optimized This innovation and integration, with Brazil. the to model integrated delivered to client very of and in for time commercial degree allows highest iEPCI production. first iFEED. architecture the engagement acceleration first

times and focus our mitigation. have emphasized as shorter execution risk would opportunities people technology the that economically Karoon iEPCI not outcome those from underscores without as our on been rationale project client which Energy enabling and our to This has assets benefit differentiated Our model. feasible cycle well integration

configured utilizing the and addressing X.X a shortened subsea unique to by risk leveraging than for tree gives additional CTO utilizing have XX% capital order portfolio. cost and need complexity incremental when standard our configurations, pre-approved model. our us us still product more while during supply design suppliers to We've industrialize solutions been process. of our X.X expenditures. schedules Subsea also for reduced with strategy Delivery without allows This by reducing redefines the capacity manufacturing engineering the individual This chain sourcing and projects. manufacturing our requirements also Subsea eliminates

We the have our fleet support also through of vessel of made strategic our ecosystem. decisions in creation pipelay

This have us our Subsea extended sustainable opportunities, providing our iEPCI Saipem have fundamentally provide industry's collaboration. differentiation with the Company. of we efficiency have providing we TechnipFMC. pipelay re-shaped Here way vessel alliances do the iEPCI, X.X They comprehensive and business, all through the for capital that and while through changed greater solutions. our Allseas elements ecosystem and and suite transformational most are ecosystem real capabilities expands

In closing, in confident continued we market are strength.

success customers' We our and our and our ability in reduce our in ability projects. are period simplification of to integrated successfully products services their to growth execute is confident result direct complexity our a confidence commercial the of this of deliver standardization and execution And as improved in risk. project

Our tangible improved journey our unique have for market today our It will business is benefits to changes reflects we the through am confident results these that changes visibility, continue improved insight. to market the Company. I enhanced not success predicated are recovery. and And commercial made on drive operational already providing

call to the our financial I Alf, results. discuss will now over to turn

Alf Melin

adjusted and operations was $X.X of was a foreign credits, million the billion. inbound EBITDA Surface $X.X excluding increased our billion. backlog $XX.X $XXX inbound Company Subsea the sequentially exchange was million. XX% in million. $X continuing $XXX orders $X quarter Total billion of the from with of Total Technologies Doug. Company impact Revenue in quarter, billion to gain Thanks excluding $X.X income million. of Adjusted charges were and When

Subsea, Pacific. operating Asia Brazil partially were Now higher Gulf we February. project increased results activity as billion our X% the to back results. the offset $X.X in activity In to quarter, of sequential Revenue turning fourth of similar lower and in suggested with by in Mexico,

factors. EBITDA seasonal Adjusted margin with by impacted increased modestly be of million $XXX to continued activity services to Our XX.X%. a

fourth was $XX million primarily million basis $XXX to the the was XXX backlog impacted international offset decreased international decrease due expectations. EBITDA XX.X% our from Adjusted by of revenue quarter. to savings. which ahead points timing Adjusted Technologies, activity, a X% activity, X% lower the conversion. was lower EBITDA margin cost primarily due approximately by of partially Revenue was down Surface In

expense Turning and interest full end to corporate our currently period, other million. was low and million Net the expense is the items was expense guide of $XX year in $XX trending to corporate expect I million $XX remaining to rest fairly million. distributed be the million. tax interest $XXX the quarter over of of $XXX evenly was lastly, to expense in And year. the the

million. driven resulted expenditures working of consumption million. the of a was cash This outflow $XXX related cash million to with flow $XXX project capital equivalents period were to by follows $XX typical of X.X in the $XXX the cash Capital shares and debt million of free of $XXX Cash repurchased million. the the timing million of milestones required by and also million. quarter, our operating In activities $XXX $XX ended in was consumption We pattern The payment incentives. million. Net amounting seasonal annual business, we quarter.

the thoughts second me provide some Lastly, on quarter. let

approximately basis growth improved typical to of expect backlog seasonal sequential of XXX as in revenue Subsea, points. margin the expansion from margins For approximately as well we XX% driving with benefit uplift

largely margin we our in points, to XX with which of Surface business. will driven For expect international basis be revenue similar the quarter approximately first a Technologies, by EBITDA sequential improvement

make distributions. like now in a would cash confidence conversion with and additional to XXXX I shareholder few our comments to guidance, respect

full million excluding Let our with me first outlook, to year speak when adjusted segments of our EBITDA quarter, and to momentum. on our foreign financial our $XXX as the by And objectives, In guidance. indicated expect delivered capitalize quarter we on second exchange.

revenue our anticipated full Subsea remainder When in of billion of guidance. Services $X.X with year, have at the of of full midpoint our our than Subsea, scheduled year by for XX% inbound supported for In execution combined the we outlook is coverage more XXXX. backlog the year

Technologies, the of we in anticipate modestly international much currently year to above come started plan continue all Surface from growth the markets, to today. which and our backlog we year in of sits In

confidence takeaway support our have which in is my the this Our as conversion. outlook confidence in serves second we for cash

the QX material the we the full quarter, my final to to stronger cash outflow into much to a capital. should typical In historical We see first guidance in move free committed Again, the following working we in leads flow commitment which we half. a shareholder our improvement before second our at saw which seasonal midpoint this the is year, for remain takeaway, million. patterns, And $XXX distributions. is

first anticipated outflow cash want that the on in execute we experienced repurchase even program. our I continue quarter, share to with highlight the to

bought now of the $XXX have XX% representing repurchase of nearly million our million total. authorization $XXX We back

investments attractive is today. We of make continue stock most that to one believe our can we the

activity to business our to providing We the improvements and expect distributions. have our support sustainable made structural buyback in future further profitability, we changes dividend drive that will continued

may Operator, now you questions. open line the for

Operator

with Morgan. Jayaram Arun Instructions]. J.P. [Operator Certainly.

is open. is TD Arun, Marc Cowen. with line Your line your Bianchi open.

line Your open. is

Marc Bianchi

kind increase thank the be second closeouts. quarter and can with ask second quarter, how some the I'm Hi, to curious from relative timing this lumpiness I year? of know just nice there you there quarter? here guidance some for first the in see wanted typical assume fourth down the then about in modest improvement And seasonality we you. Should remainder Subsea. reflected of I project and to

Alf Melin

question. you, Yes. Thank Mark, for the

due that that mentioned the higher And offshore and to as results performance certainly our margins the So expect out lead by the will season coming this be basis to XX% in in increase talked obviously significantly all, backlog. EBITDA And really continue and remarks, the to winter revenue seasonality, first Sea be margin. vessel North and primarily of QX prepared services the our uplift in improving points my affecting XXX to is also of about our up QX and is supported operations activity. we

overall, the it and seasonal as you see in quarter. to confident you yes, I a QX should question, stronger full and and then moderating expect see where we in you So, pattern your QX remain year, the fourth said, the normal

Marc Bianchi

Okay, great.

Subsea kind other the Brazil. relates look opportunities a news kind The the opportunities week I in in are third of some them Subsea about platform about I to at this and Brazil, start-ups some and saw one had of of delaying

potential kind interpret what you're of I'm looking there in to or a that's kind baked that is curious of should just So, in, how already the if we orders risk? for risk

Douglas J. Pferdehirt

Marc. Thanks,

as the it we as into that the baked we provide So, our of have we information kind soon and is outlook that certainly slide outlook in have industry. all for

but our assume you you a unknowns, Obviously, significant that. the there should stronger pull amount any to our in upon if can And at right clients net-net, yes, built there's are there a than and significant left early proven to work of the known a amount availability will one of are into a where in have delivery push a with always opportunities right it's now time why uplift now, we we're for right. short certainty proven our is client the Marc volume project So, a execution much they of seeing and is on the and a integrated model. reasons relying execution cycle competing and such greater work

things are So, really very brief. looking very,

Marc Bianchi

Great. will Thanks so Doug, back. it turn much,

Operator

Chase America. Mulvehill Bank of with

open. Your line is

Chase Mulvehill

Hi, good morning everybody.

So, margins I higher about first, along continue guess hear pricing orders peers, the to we and kind strong on obviously, and of strength side. from your

out of able So, little and of volatility even bit to if continue momentum you're about kind you're awards market, of seeing oil tenders in on pricing though talk could the a kind there recent. of you that pricing you've a recent little seen price push bit what to and

Douglas J. Pferdehirt

Chase. Sure, Good morning.

to value them to of improve the the really can to portion what talk know, project because project are there? your has by technology accelerating improving? of principally share pricing your drives the that relationships, Yes. greater returns. In we or show and XX% Yes. how you integrated model, commercial your we time we of to it that lead, economics work economic Is really your But it pricing company Yes. real? your Is don't create. it first we like customers you project Is -- a our talk momentum. awarded that we when which As a unique company economics, oil, we about direct I about that,

this very very positive, be again, built but this We speaking only to if supply built then company demand you're just company frankly resilient that So playing We to quite within the and a result be returns operate that. fundamentally company, deliver as we through changed and has the to cycle it the position sector way our and of positive trend, you're different. the price, and cycle.

to operating iEPCI, we seven X.X, for when years when ecosystem, in So, in like X.X, things talk about mode with up of this talk these to We've cases recovery integrated when that been are we a ecosystem. the not about that model it's talk from about place. recently Subsea the we in things are Subsea are all six more five Absolutely, the that? vessel the singular demonstrating, market trick. reliant the market vessel pricing and we are These upon with benefit ways we Do but or or for all years we the momentum. not some

much returns. a more a deliver business operating model through cycle attractive more built We've sustainable and much sustainable to

Chase Mulvehill

continued around on chain the and orders sense. order of strong get, that across the Subsea not for to because ability supply competitors continue makes all And supply the see board is across the questions the we that Appreciate your Right, you so color the only and that deliver momentum the to for There's on and always but for questions the the side. chain all industry. momentum there. we

tightness the that a Subsea chain on about Subsea could talk or impact supply your shipyard anything and anything you could -- could the side? little delay and PSOs, bit So, on if

Douglas J. Pferdehirt

Sure.

first address that equation. engage which chain So, which is you're our of right, will with, part as the I -- let that's such, in me supply answer but shipyards maybe the and we not

I'll didn't have to company was worried. be Subsea X.X, I'd here. specifically Company, our really, If speaking blunt I So be that real a really

-- lot already a feeling customers us. our are and to be frankly would why quite be You you'd coming cracking it's

capital not I changed incremental way said supply without done chain. capacity for operate where have our Subsea just and remarks we we've my as the prepared X.X the capacity fundamentally that in same has we the throughput expenditure; incremental

be also have we we're very and our the intimate set exclusive been decades well, -- visibility for have the cases now, now with with of clients us us almost as to of a some activity of have just in not we demand as and more privileged type supply who of set a what just have certainty importantly, it very with what some on working So, an special basis, but have project they relationships chain where the three with months something engineering. take the an before. engineering is know you nine mean as of bespoke a with at can twelve place to selling will we which which asking product is to to Every starts that do exclusive they've build order or then I single is What If not supply Product order built that? them you're you them. chain, order. Company, time, every never demanding by our order single X.X,

This creates in of supply and I a not we're are seeing we're industry. prior more being is and to We've lots resilient ourselves issues. seen and cycles more why supply privileged the a seen much we're Subsea we constraints across it had think chain seeing the before lots quite What X.X. now broadly that frankly is that chain have, a

You affect mentioned Keep in at shipyards doesn't mind, PSO? Chase, brownfield. Absolutely.

long be greenfield item. CCUS lead on tends the So, is projects large on not that impact there's work. brownfield not that impact the obviously an greenfield to projects, that FPSO, on there's work, the that require But

So some last year-after-year-after-year their And we we'll really built billion in phenomenal that's And, been with where keep expanding have successful inbound of and far, years. projects, have as line we and of so. monitoring into that projections. quarter, moved you all know, project over very really they've of we've as the our our three sight next clients a footprint, been $XX doing working stated

Chase Mulvehill

over. have. That's I'll I it turn Perfect. all

Operator

Citigroup. with Gruber Scott

is line Your open.

Scott Gruber

Yes, good morning.

Douglas J. Pferdehirt

Good morning Scott.

Scott Gruber

about just perspective of that's this just should Morning. cycle on the I about what’s vessel vessel cadence versus out on work faster we given the improvement given improvement. it's time How of there. tieback cycle tieback curious your of cadence think the cycles? the ramping work past utilization shorter volume I'm imagine utilization and

Douglas J. Pferdehirt

and talk delivering more the about time what utilization We you about we shorter projects. benefit more we're cycle we're question, of the and less, regularly rate to projects. the day do also right? So, interesting And of able vessel a or company. you're not in with but the don't demand business again, is up, complete Scott, subsea picks talk

is the most our time. success That's and able on-budget mainly the success. client the deliver being what's our best the Subsea driving that's business cycle to economic, on-time shorter driven what's projects in delivering what's returns, to driving driving which That's the by success. them industry We’re is with and

we're month, How own maximize what so we So, at When every cycle time can projects. want we to is take is single That every beneficial boats, is short how don't week that of that? now you do out ensure, all counterintuitive. right looking day, is can you every Company. we cycle project the our

You're on day a rate basis.

You slow about We're very steady. quickly. about our be We're to projects done to client. successful want getting things delivering and

the point and much There's be This to as be some only been a we like there so have partners to delivery a created they Company. shorten cycle finite of in as hope is way vessel Saipem, at we the can vessel why our in time efficient we successful market side. brought iEPCI by Now, so market, that part that in the we can benefit can to -- being expand ecosystem on capital and the system the only continue we and future, Allseas continue capacity. is and and very for do where

open we're been way, the secret very, done So, And industry and kind by all and it's before. participants. has anyone. we're We open of never working with in welcome the very proud to and that's sauce would it any that something of club to and is the

Scott Gruber

some good a the conversion, mentioned change contracts I'm that you phase that, kind cash right obviously on good for on the probably into it the margins. for all projects the cycle, manner, fairly I forecast the seems curious cash no hear be color. (ph) is just cash installation great. progresses. I it conversion there getting That's change cycle signed question, because is cycle versus to ask curious in I free to is the [T&Cs] is I as just signing projects just or happening, just you're follow-up the the consistent? material this of of whether can change, year. the earlier the flow would in didn't faster of appreciate in all in any the imagine And, which on I'm perspective today

Douglas J. Pferdehirt

let back first And Scott. question. me Sure, to the circle

the wrong. something premise yes, ask But out wrong. put obviously the But you I with I question just it's didn't passionate answered that You agree well. I'm as quite it about.

Look, And, as but it's -- interpreted inbound, and will that's a has our favorably to those that continue material contractual way. when is us. of the some very paid, terms, also quality And I one say important that broadly the the of it's how very cash we material can are material of it we flow curve in a cases we you in a And, will, commercial very favorable important -- about be in those closely talk terms. work to one one way changed clients. with on in if

securing Our it that ensure slots, also also clients the them the also it helps long them secure understand are if will, prepay, that It to of also life role. we helps them items certain through or inflationary project. you potential mitigate lead secure helps impacts by able

actually on all So, a of those both sides. reasons, for it's win-win

Scott Gruber

it appreciate back. all I'll the Got it. I turn Doug. color,

Operator

Arun Jayaram with Morgan. J.P.

line Your open. is

Arun Jayaram

and if had awards could iEPCI? I a benefits of book direct or think us issues I as projects. Services comes order wondering towards about some award help of more your your Subsea the technical few direct and were you ago. minutes Doug, XX% was morning. integrated of these more some awards Good margin

kind XX%, on to XX% of call about this believe the that to from up XXXX? of margins trying in Just I March it lens this Subsea think guided you've under year

Douglas J. Pferdehirt

good okay. to hear you're voice. Glad, and Arun, your Sure,

and years. which you've the to price basis just on to client go when clear, when So, relationships you be was you up don't XX% XXX just sensitivity awarded hammer growth all the understand the margin in it Why is XX% I gets on and mic for as exclusively indicated. that. Again, XXXX, us over points, can XX direct had

We take our with our are not advantage we we clients. of don't -- clients, work

is lasting built Company. we we what this of relationships we've model. with develop done. with treat you how integrated just this the respect. reputation You if that each enhanced That's other can And and further the That's only Company, that have

customer to we integrated early Yes. in have Now, Of that to is with case project? it the or Yes. in us engineering that front-end be ability a engaged direct true Do require that do. it don't showing Is the direct to course, we them prefer client award approach integrated prefer the our because unique true others we we're iFEED? the access a that the award? to

to expect course, in result direct of that would award. a So, we

day, At the I said we the end a of are Company. as earlier, projects

back else, the offshore quite the boats about mode or we’re or what behind about journey. we say about we made and our They're very Subsea that. for rest execution that successful had XX quite delivering projects knew let's And in making the That's or to trees all now not offshore model a what about multi-year we've projects offshore It's been We anything been unattractive offshore past acknowledged of we journey. are We're of attractive. kind We to We talking delivering in been was industry it. done things and going It's us. economics projects. X.X, made the it's the those while before Company. coming because addressed moves. of and a on with XXX% year all the now bold doing a very the iEPCI have the were successful

today. Absolutely. already are changed the these type the cyclicality going largely on industry. pricing that deliver enjoy basis We're a again at prior we looking back. of internal reliant not upon not that coming we and we're the the strong? market through we strategy back which prepared is in coming remain to back, the market margin expansion, when So, my is recovery. fundamentally believe are beginning said and betting not a uplift on to it's We as remarks, a to of on Do in the Company XXX betting of point But going the market we margin we're initiatives quarter not based

Arun Jayaram

I at And XX% just just Great. guide comparing this EBITDA for midpoint, Doug, your year clear. be was Subsea margin to

Douglas J. Pferdehirt

Understood.

Arun Jayaram

the word ecosystem call. follow-up, my quite vessel this Doug, I bit a Just on heard

So, what wondering that ecosystem years of some of is what Analyst advantage the FTI? could this, a Day -- you tangible if of maybe the that on on do of ecosystem you for highlighted think ago? benefits the at couple I was elaborate competitive And you your back

Douglas J. Pferdehirt

Yes.

you're Saipem right. recently, of and kind view So it initially competitors. other will, few if collaborate we've to more additional seen We collaborators added view again Why has or We building as fared It a by back of Allseas what together. we've it to it club, and don't announced Everybody capital, the years as any you hasn't industry. that way. to that? all with everybody We the others would the well. is welcome sectors capacity, done building others

M&A We consolidate approach, and chose to to have scale. and just do a consolidate, to take get we don't different to the we to took we approach have don't means

portion we We work collaboratively and and have result which market, as the now iEPCI the market having total with significant will a that openly of market. is others of and a

available total have those the So, to has market don't who iEPCI. shrunk

call in today. market and you the largely are now in see is roughly third the hours where total that a of that So, we our marketplace

that it's case would because iEPCI market. a the mutual of out with club marketplace vessels the the collaboratively with building use vessels -- millions that mutually we Now, and the to benefit that by capability we and multi-hundreds continue of and companies, we can we others benefit, those or grow today of this work that can similar continue we of market, to the grow in very vessels build exist dollars going iEPCI the to same in the access both have in

just because -- I have you utilization, have have to an rate have don't day think you're way to day bigger, asset-only have company, customers, for is think do and I rate more, Subsea when to thinking be We utilization you're attractive It's I the that all again have our think way, We be based or make way. based. most hydrocarbon project economics, renewable the about it investment we by most. it the don't energy that how about

Arun Jayaram

Doug. Thanks,

Operator

Societe Delaby Generale. with Guillaume

Your line is open.

Guillaume Delaby

on your alliance afternoon let's all-electric progress question, on Doug. completions of the basically, to or be say, potential I morning, One of a game competition take have regarding good that. Could not competitor, genuine your technologies changer So to those excited seem Halliburton, basically Yes. quite be like change competitor, the and regarding may, going a would infrastructure, mentioned One all-electric Good to partner the I your if forward? really Subsea

Douglas J. Pferdehirt

Guillaume, you. Thank you afternoon good Hi, for the much question. to very

short the is exciting an So, it is opportunity. absolutely answer

We the are brings And down-hole project. this Halliburton market safety work in valves. with this to on completions. Halliburton privileged specifically, leadership in subsurface all-electric case in

that itself you'd because you go electrify to throughput the if subsurface subsea we to have situation simplify, down-hole. hydraulic through to tree umbilical and us an subsea, sleeves run distribution. hydraulic bore and the allow still but important, That's competitors, down-hole the requires valve sleeves, have our safety valves still Halliburton's hydraulic really well like doesn't be still to to all-electric, We'd to able if will, or control have sliding

the really role. obviously got role leadership have on So, Halliburton this. worked Subsea. They've We the leadership in hard

the great So, market. and go when all-electric at out it's we combination look a

electric it's will, put think installed subsea the over do I subsea, -- that years then, installed Since ago, important into years to the TechnipFMC if though electrification XXX. electric ago, of we've you XX context. XX actuator. that first Guillaume,

way customers and designed want our -- So to which our giving or of go and choice our over they we that electric innovation either when our configurable X.X platform, be all-electric, and to continued we relentless to demonstrating hydraulic the platform launched leadership. technical

brownfield is the we've us now for times quite it will will And improve four be developments, host. in And the up-time for frankly, CCUS. performance. recently be more dramatically the up likely for subsea But most greenfield the radius also exciting all-electric past that only around case we've going base where cost most we and exciting tieback to cases in the total it's and the existing and because case talked opportunities, realize many increase opportunities to about talked system about

opportunity electrified. market exciting for an us is COX which platform for tree, is provides this injection our X.X on our and purpose And new. That's built COXfit

those So for excited. yes, we're of reasons, all very

Guillaume Delaby

And I succeed to Okay. that not get Great. some in think this stage. at numbers on I trying will

not you Thank going very I'll to over. So I'm try. turn much, Doug. it

Douglas J. Pferdehirt

Thank you.

Operator

Barclays. Anderson with David

Your line is open.

David Anderson

Doug. Hey, Thanks. Great.

queue. created Sorry, Question if late picture among five, It's massive and of today. competitors. into your out Is -- I by or reasons just market over that that. joined getting the of for a non- market. the a after? wondering -- this taken talk going capacity bigger structural why consolidation wondering some on that's there really of undergone this into seeing this higher Or was between seeing you if the side? years has your maybe is you being urgency I XX translating I'm now iEPCI about prices customers little could of kind change work we're a about sense you're one out are iEPCI integration, either Subsea of more

Douglas J. Pferdehirt

it's David. busy Sure, day. we morning know Good a and

thank So you the call. for joining

So completely agree.

As this very that a well matter think was was emphasized really I done. of recent a fact, there that publication

would descriptor -- it long I would call won't time. forget that. you our the And they they clearly think to because words. I that. don't anxious a want as as our I market has I been clients I me in is think thank for exact So strong say very the The that reflect won't -- very,

most about are quality about Absolutely. But concerned they Are capacity, they capacity? definitely. look, concerned

capacity. quality another about about So thing getting capacity, getting there's there's thing one

saying other being I'm past bespoke late. that that And to subsea are is fact else in many not as delivered industry cases kind of quality about capacity, in year run the of hurt saying to projects of using it has out anything this cycle one to the this the again, every start then just I'm anyone you people you is when in up having and manufacturing kind say leads

you they're that that with what exemplary, they're order seeing schedule. projects can't of that do and we the on Well, rate there's and the and ahead work delivering just goes eliminated model two seeing through because either they're but from experiencing what iEPCI major lot on think our these iEPCI of is us interfaces thousands that we're integrating And repeat it's behind a you scenes that and relationship. when not a have packages, obvious thousands about the is

to and than only you it engineering and And to give confidence able they created maybe a ever. that than ever. It's the do more more is not now your can that's can relationship customers You why they but consummated now need it's realize we then effort our that serious do do technical be anxiety, that. TechnipFMC,

customer you're supply pay problem. to doesn't talk about still more was build orders. variation don't the Chase as We trust, doesn't orders. because And and past, problem. the talk just for me supply to we loses. And chains industry, going by build question earlier asked matter around doesn't chain, it in orders. important bottleneck an is about orders a or the having if it that model you're would as terrible a my I'm it doesn't Variation build the customer variation The means, the terrible, bottleneck, confidence, it the That's repeat it's

that way way the that changed structurally operating. the is it we're think mean I and really, our customers is this So

David Anderson

there to we XX flexibility? have business on the coming at over years. does in next to based or own just and trying that months, of reach your curious of next you and your close change capacity orders three full definition give about capacity you you Subsea to Great. XX sort X.X what could more over the and the I'm have Follow-up just trends looking

Douglas J. Pferdehirt

you, Thank David.

single realizing, of learning, We are are the say, I benefits guess I we day. X.X Subsea should every

possible our and of efficiency spending efficiency or item the thought we're the Just ability environment. configured the codes to order, be a bid able that exciting the our real can go doing Chain. redeploy meaning the to Supply engineering than engineering Subsea from of with the coming to Manufacturing I X.X, And architecture I just technical into capacity, product up Subsea learning getting Head of document night, new Engineering, more and engineers plants demonstrated with last was of we're relentless numbers to-date was and ourselves changing not the capacity doing that like mean time we of and we're Research of out

on as supply iEPCI about concern We've chain manufacturing have that the the vessel get and less more certainly are importantly we to excited and about as learning as capacity ever we projects engineers go on not we just our are been. out we're our yes affecting talked side, and is no we of they've mean, ecosystem. before I as continue the the and

frankly business come give quite that So this in together the that two before. scalability to us never existed

run going X.X you mentioned? which don't get vessel constraints into and others, have well you and to you don't company if And you collaborate and then ecosystem, with you're an not capacity integrated scalability the and that you concerns access you're a have means not via

David Anderson

sort of kind is I guess. your So capacity of number changing,

not limits is really the other really are for and but of words, the don't growing obviously adding anyway. you're more upper know out roofline, you're you of guess, number don't kind this, capacity You you in I necessarily squeezing what know adding

Douglas J. Pferdehirt

That's see CapEx our up. growth number exactly but you That's right. going our why yet don't up, going

David Anderson

Appreciate it. Thanks. Thanks, Great. Doug.

Operator

Benchmark. question line Hallead will the final from Our Kurt of come with

open. is line Your

Kurt Hallead

Hey, getting good in. me morning. for Thanks

Douglas J. Pferdehirt

your to Kurt. hear voice, Good

Kurt Hallead

Excellent. Doug, it's always a color. great

of subsea, of here curious right, iEPCI of first and of market you addressable business kind total that you now is kind the potentially on your I'm XX% So referenced talked iEPCI. XX% broadly being about

know my right? business. say not context this, way of the the would specific So you that is your business what to we that there that. do question limit necessarily do is that can iEPCI want percentage all in I a represent like But customers to And to

longer on do kind of available of curious some but question, think focus capacity So that Or iEPCI, kind of the term is to this keep not give now your customers work some you are other vision? a see an you how kind to into just to just of you opportunity fit on going it share to evolving. you do that may

Douglas J. Pferdehirt

strategic an I the question, the it's -- to go customer I definition, We A returns, could if do. your know good fair XXX%. if should the we Kurt. project quite business say -- projects interesting most frankly generate deliver best iEPCI economical for in If greatest investment to and to the that what and But and if, are then go by and mean, question our make subsea economic to assumption we it works. is

it customers repeat we're customers. We every quarters customer quarter announcing new announced Our many, almost know many and works. a

rapidly. So expanding it's

successfully necessarily there a in first or I geography. terms client the just upper don't very of very We believe delivering a a limit in iEPCI Brazil. talked is about project

than more believe go integrated. But So adopt quite that I I frankly, think the it's Subsea over ourselves others. quickly some time, industry, just will not

the the a is competitor. integrated going. in where future, like that's that would iEPCI So I if mean have be market logical we'll fully

those situations you'll a don't X.X. would awards the or three. of technical why valuably, outcome. to your often on no, rate reason us. any To to point meantime, and returns all feeds Subsea and clients? see it's to when If we vessel very will with alliance just engineering us a we limit and best our it's partners -- our of adoption capability not or to less want our iEPCI integrated resources, but application the in a combination honest announce And go day for of been I X.X. bid certain Subsea lead awards, that iEPCI certain I those there projects, on of pursue in for right lead direct we most vessel, of But direct will something the we've So it's and conditions, our they for very we see on general, that growth yes, economic clear iEPCI be prioritize matter rate manufacturing, guess that to that of In the Subsea out are attractive for the and the

Kurt Hallead

Great. Awesome.

have I on question follow-up surface. is Now

the So as is of coming times all growth in past, the from many referenced international. you've

You have Middle the very strong East market. exposure in

at you similar you surface well, success as opportunity kind award that look how you've an with that had here curious direct business. think can I'm So a become as in business in of business the you see business, Do you a Subsea that your where Subsea surface about that? have to as look the curious customers to level of intimacy of that you establish

Douglas J. Pferdehirt

thank question. bringing up great surface our just Arabia. for bringing to the Saudi Both thank you are Kurt, I important Company. from and got up And Middle for East. back you

our XX%. our bulk from as We offshore Just of comes level, principally at That's international. a revenue drive the everyone international XX% high and of reminding the business. East Middle define

a the market. And XX product indeed project competitors a North commoditized, America similar because based from and direct in the hence business more whereas business, surface indeed it's benefits a become of product international benefits America award, is has plus based business that from North

and to very to different you customers of is the there's tends is larger only of It countries, relationship in which countries, and will backlog built there's Internationally, project. we business orders, be lead tends our East exemplary. playing in our a two why activity In field. Middle us, orders, most tell longer international up with have the some I three It be us. It's the

Kurt Hallead

your much capital. going allocation. Awesome. But seems reference put to of value more repurchase you're where the under the on In very squeeze in just context to find the be that capital one you to stock be share and

table in past think still on your that Is revisit the point. the that for some you indicated at you dividend I would this policy year?

Alf Melin

Yes, that's correct.

of accelerate the achieved in spent sheet as on buyback successfully our So last program. $XXX we've deleveraging authorized first this share overall we and XX.X% to remarks, said program. distributions of committed the able shareholder this all, we're I year of to our very prepared remain We million balance initiation based

quarter's still shareholders. of believe as appropriate dividend. really share remain our and commitment we you'll believe And undervalued that I to clearly, demonstrate financial to our results have strengthen, our seen And our program. us shares in it also we remain believe and activity buyback this a to further you our see continue from initiate really To course active it's

that of more So year. about you'll the in second hear half this

Kurt Hallead

Appreciate color. that for it. Thanks Okay.

Operator

Hodee one with final question Cheuvreux. from Bertrand We Kepler have

Your line open. is

Bertrand Hodee

my taking for Good afternoon you thank everyone. question. Yes,

backlog had Back if the have on and year TechnipFMC and remaining straightforward be renegotiate is energies or status on XXXX, the this do So the the $X were another restart update you contract, – to will question on Doug, Can Mozambique. this won project and terms some you a Subsea. is total to the I plus in contract? a portion billion restart

Douglas J. Pferdehirt

Hi. Good afternoon, you for the Thank Bertrand. question.

on potentially largely to call, I in more awarded worked was at that actually one Subsea ever important and largest have larger the we've portion previously on iEPCI an that future. the that ones project the award, may the actually Indeed, time as that point. and was a you Subsequently, recall, is have the of done. very we the as received mentioned large project, But equipment tirelessly contract

equipment opportunity restart of installation etcetera. left from them when forward. really opportunity project. the the But and the of that [Indiscernible] is of the we presents excited if Out move is what So that be comment the on to to that timing going let itself, and respect organization, and of I'm the tie-ins will TotalEnergies

Bertrand Hodee

you. Thank Okay.

Operator

I remarks. turn for call closing the over Seinsheimer back will Matt now to

Matt Seinsheimer

PM website call. Thank replay be you, quarter will our on approximately the first of A This call British at X our conference beginning summertime available concludes Jack. today.

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

Operator

concludes call. We today's participation. for you thank This your

You may now disconnect.

TechnipFMC (FTI) 27 Mar 232023 Q1 Earnings call transcript