FTI - Earnings call transcript Q4 2024

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Operator

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the TechnipFMC Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Matt Seinsheimer, Senior Vice President of Investor Relations and Corporate Development. ahead. go Please

Matt Seinsheimer

Good TechnipFMC's Regina. good and morning, Thank Quarter afternoon XXXX to Fourth Earnings welcome you, and Conference Call.

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

to on cause statements risks materially they beliefs are these differ to current certain and actual business assumptions in these forward-looking by our and -- Although regarding uncertainties conditions, could that and results are based expressed implied those expectations, future developments from subject or statements.

cause any date the Known information, whether update forward-looking Exchange material recent or factors actual reliance Commission. caution you We are periodic date filings as place differ that which to are other hereof. our otherwise. and could future from results our wish revise most they We statements, to statements described with any on only XX-Q publicly of in to our no new projected of a not the our result and obligation the to Securities or speak of events forward-looking undue recent most XX-K, after as undertake results U.S. made,

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

Douglas Pferdehirt

Matt. year was our team. TechnipFMC our morning strong XXXX and success you fourth Thank quarterly am as Thank you, proud tremendous in Good another report to and year for quarter participating I for afternoon. good very earnings call. of full the results

company For billion. in $XX.X to billion the of driving inbound growth total backlog achieved we year-over-year $XX.X full year,

to than by in when in X.X Growth to year an to significant fourth nearly year. increased in direct the IEPCI, of of was These best growth XX% $XX.X characterized EBITDA billion. our orders growth. consecutive Subsea inbound with year and for revenue Services. the a commercial Total compared grew increase benefited to $X.X greater a book-to-bill also This awards. billion company representing $X.X strong X. from XX% Adjusted Subsea growth Subsea results level inbound improved billion, prior

Full to $XXX what shareholders, to XX% year the year. of $XXX double million returned we free cash which distributed prior flow we in grew nearly million

iEPCI commercial X.X architecture, product achievements, are and our unique TechnipFMC highlighting configurable created sustainable Subsea integrated fundamental are tools model our change and economics. to our Now Subsea to drive in we the

In year-over-year reaching iEPCI an high nearly XXXX, offshore across set diverse clients basins. grew XX% from came and of all-time orders a X

evident for model to continue which opportunities, from our was year. stems integrated expands strengthened Our during growing the ability this the market offering that

were example, offshore the first contract development and GranMorgu fourth For gas Suriname. the the we in quarter, from TotalEnergies oil awarded an project, iEPCI for

our Sparta were most Shell both During the in U.S. high-pressure utilize iEPCI Gulf. the the ] attractive awarded economically year, also XX,XXX and which projects we unlock will the [ BP developments, of in helping technology opportunities Caqueta for Paleogene the

ability to processing capture directly the stream of injection on in to market is the the limited into and for COX Hisep Brazil, including back done Our milestones first subsea with floor. in representing first all sea the the resources, X Petrobras Mero this utilize XXXX, energy the major not several to from traditional expand project achieved for iEPCI IEPCI to well reservoir, the

wind. Prismium's applications partnership We formalized importantly, storage offshore in and all our will new announced more partnership expertise subsea the for offshore Prismium Together, this that solutions. we United carbon subsea cabling for iEPCI also dynamic with industry's transportation And unique the combine for and system a Kingdom. electric combination leading floating first with the Endurance creates Northern

configurable X.X. product growth supported further Inbound in in was by our Subsea architecture, XXXX

additional capital manufacturing generate full ability benefits model, incremental the need of the capacity creating leverage Our to expenditures. configure-to-order for to allows us volume without significant product the

have fact, this for more product the demonstrated portfolio. to already double In output our manufacturing we capacity existing than ability from

the and of growth and It chain, outpacing of execution SSI. that engineering enhanced saw of our standardization year. surprise product by significantly are really total streamlining the the our focus and eliminating simplification, on to clear our orders to platform. supply in X improvement Subsea months. is And adoption industrialization, more versus we we than The standpoint, XX% delivery no further XXXX, Subsea continued can client where us With Subsea see X.X of tree from continuous benefits hours by X.X awards our the relentless prior lean X.X by using accelerate principles or iEPCI we up tree equipment Subsea

As part track of the projects than earlier a is of project every or process bold not. our is is focus our in allowing before. solve deliverable map fundamentally different every green challenges Across execute, and identify or management, approach visual our one teams to decision step SSI perspective, to on out from hundreds a journey, we red, much we on meaning it it have teams and made as every either identified TechnipFMC

and company, We operate on Adopting more It approach for Key that by help that just are and trust we not execution client-centric of then track for for on that things for company. organization manufacturing. transforming higher this require It greater transparency help. and this and was not customers methodology adopting seamless every drivers overnight. how sustainable that our cultural focus function use shift improvements. happen our fosters not a efforts a achieving returns robust our coordination our and did in and the throughout we deliver mindset is asking value the

steps benefited Technologies business. During the to proactive the taken the Surface year, we refocus from have

expect our provided performance of in actions our Solutions we the of of portfolio. the guidance our Americas And including drive the targeted actions, coming business, sale We further we Measurement and as are the improvements have to by for benefits optimization now year. evidenced capturing financial

Emirates differentiated affordability opportunity major and supply, United the our of In remain Middle positive company. This a energy. we the driven is on the with anticipate demand materializing, broadly, We Saudi growth the Kingdom security activity further growth More Arab the of and considerations. East, in for ramp-up outlook for growth Arabia. the also in in now anticipated we by represents

We economic by the capital and East broad today clients. preferred remain growing continue returns and with attracting offshore of regions In share access of seeing both much operators driven a of expansion deepwater this resources. flows, believe that with improved new investment and to we of the Middle to growing markets markets, both list are a will these an for development offshore

visibility inbound year, and guidance delivering And $XX.X This pipeline even confidence activity look confidence billion years us growing XXXX. ending of into beyond longer-term gives planning robust list billion of by of name greater visibility over that market on projects historical the of a We subsea we current in supported that the increased our will billion we opportunities secured us in end $XX the current we the the strong year, horizon. our X extend exceed of the decade. gives $XX years, through the of have remain past have beyond orders as X will the

for of create have The with and the which very in to stakeholders, this was industry we performance, company to In very are some improvement year closing, strategy our and momentum on am control. proud forward. this what multiple was we success external lay truly drive an our a a unique ready to that of built levers much display yet accomplished our of way the better year, continue groundwork less visible to within clearly we business ahead are for further I

of represent continues awards, combination growing of the and of direct to Subsea Services, total XXXX Our iEPCI quality an than in Subsea backlog. of XX% and business, our our more expanding inbound unique greater share even underpins to

journey actions our operates the changing and our organization and how our taken us for that will Importantly, simplify, standardize successfully the are further industrialize customers. we have gives confidence transformational execute on we to company

committed in least ambitious are a distributions our increasing growth cash to in of sharing XX% XXXX distributions at flow which at And XX%. for XXXX, with journey. was to finally, would milestone TechnipFMC shareholder growing result on more free our major flow cash of least in indeed we

I to the call Alf. over will now turn

Alf Melin

Thanks, in was $XX.X $X.X exchange period excluding when company And with by primarily a Doug. orders to quarter quarter $X the the was million total $X.X Inbound was foreign billion. million EBITDA loss Revenue at $XX ending driven restructuring, other million. impairment of billion, subsea related $XXX $X.X charges. billion. the billion of in backlog and

to Turning and by Africa, to following the versus segment and activity results. modestly Pacific was third in In Latin lower project was Subsea, in Gulf higher driven backlog from The America revenue of seasonally offset down the $XXX mix increase Adjusted completion up $X in billion the of U.S., million, with largely The Asia quarter. activity of sequential by the in a was primarily vessel-based the decrease executed third due basis quarter. period. from milestones and margin XXX activity was quarter. projects third points the the lower of XX.X%, EBITDA

points the Subsea For in XX% EBITDA international the markets, million $XXX Lower Adjusted versus project offset Middle XXX the the revenue third essentially versus was with the activity versus the North up particularly The was up the quarter. to adjusted the margin volumes project prior international full to improvement XX.X%. revenue by Subsea XXX markets, $XX EBITDA of points third Adjusted year, margin Surface year, North quarter. in X% activity increased in quarter. partially the was basis was prior in basis offset in up million, XX.X%, by Technologies, East. lower In versus higher grew unchanged America activity America. was EBITDA due

X% For Technologies the versus full year. revenue Surface decreased the year, prior

Measurement margin in to first the sale when XXX increased of XX%. basis points of quarter, revenue Solutions excluding the EBITDA closed Adjusted X%. impact However, business, the which increased the

the expense and expense tax income. was in from and release significantly $XX due $XX which and deferred value million. below benefit expense net corporate to million in interest items was a the from of future company's of of period. the $XX million. of allowances assessment of was projections million, was Turning quarter to a in plan valuation large its resulted positive Tax expense other carrying assets benefit Net tax Corporate $XX the the part

$XXX ended a for XX%. from in $XXX cash This We of activities $XXX cash Total capital million, and million in million period $XXX free with was of cash resulted million, equivalents cash year for free of flow quarter, operating bringing were was the Cash flow flow us shareholder full the net were conversion million. and million. $XXX $X.X the billion, year. and full million. distributions flow with position $XXX of the Free cash expenditures to $XX cash

credit January, are we upgrade, X In now investment positive the rating Moody's an all from company's a metrics investment With on rated following grade outlook by this we change. to with received upgrade agencies. the grade

to financial Moving our outlook.

fiscal year I will guidance our on current and the provided the for have in earnings first We additional color detailed quarter guidance our now provide release. outlook.

Starting with compared with guidance of This the our XXXX. at revenue now of of billion updating adjusted implies of year margin October. Subsea, when provided and EBITDA XX% adjusted growth we in XX.X% previous range. growth XX% of are midpoint full revenue the We EBITDA expect $X.X to

For to XX.X% improve modestly to anticipate seasonality, digits. the sequentially first fourth we normal to margin the revenue while adjusted from decline to the mid-single in low expected Subsea due reported EBITDA quarter. quarter, -- is

Moving to Surface Technologies.

represent the year. are the in adjusted This when EBITDA revenue midpoint to EBITDA prior adjusted XX.X% of would range. growth of with year $X.XXX to guidance full at margin billion guiding We compared the of mid-single-digit

fourth approximately EBITDA decline to For approximately an Surface to first XX.X%. revenue we the XX% when of results adjusted compared quarter, anticipate margin quarter Technologies with

of billion. anticipate to capital X.X% higher a of full company year approximately are year, for range X.X% our drive of is items free $XXX million flow taken expenditures cash our all to together, to guidance $XXX these $X million long-term the revenue. of total we below to expect Lastly, of When range we which full

in delivered on either to and our growth the ahead, anticipate XXXX drivers to what value looking each commitment free these among flow distributions. compared of further creation be team believe shareholder or of year. the meeting when XXXX, for in we closing, profitability in prior metrics we the And exceeding cash In key segment

of revenue digits single items. EBITDA midpoint high full $X.XX total increase guidance to improve year our the to adjusted company the to when approximately billion expect for We and taking

of We convert over expect free EBITDA to flow. cash XX% into adjusted

Said we this growth free into than distribute growth for XX%. XX% that another XX%, Operator, of at and year reiterate with XXXX, line expect cash EBITDA more in flow. in TechnipFMC, Growth adjusted than more least will in another translate now this exchange. I where excluding be shareholder to of flow open of XX% than we distributions growth questions. to you expect shareholder more strong the in And free foreign for may further to distributions now plan of way, cash we

Operator

Instructions] [Operator

Our line JPMorgan Securities. the first question with Jayaram will of come from Arun

Arun Jayaram

favorable mix us wondered sense drivers about and do pushing talk we Doug, boost range, to you 'XX Subsea. some give of margin this could in And as I if question, margin a my mentioned release wondered across to midpoint the think in first the the talk could about -- is of the but you At move of I can beyond? and performance, close multiple we Doug, kind the you're you in business where think journey. XX% the of now journey if between about you margins

Douglas Pferdehirt

milestone quite major a to in as monitor more Arun. with ourselves. have you, ambitious every And statement for call journey. a the ended X Thank we a now while Great we that question, continue

true seemed was. would model a the in fairness, that different like is maybe we're But than support today. And working for the industry margin that. company operating this XX% data certainly, in the when was So it in in probably the peak operating very and it a sector remember, -- past. that historical to And was

of X.X We chose in the that reaping configure highlighted script, in we're to TechnipFMC our fair Subsea margin why of have By in of by order from benefits that, journey and combination as real time. the to XXXX, started able progression have different customers And a we're today. cycle model, the benefit take the path. the integrated And iEPCI value the to showing that tangible that's to reduction extract we're that. experienced. we able our economic it doing

midpoint new expect being operating have model, higher backlog not classifying we operating not as this we in or clearly the a executed benefits this quality stated, see deliver margin as And to model. we to calling are continue peak a this it way. we're because or any margin really higher margins and we of

I new work, a would but hard and So took didn't Arun, all doing guess us and of it's It business. I these delivering now, better. we're on way of results It focused a just come easily. that's say lot behind

Arun Jayaram

Doug, attracted this a Great. attention. announcement has merger of obviously, Subsea the My earlier week lot Saipem follow-up, buy-side

your of and I if maybe was picture a wondering FTI FTI of specifics mention a times could that cetera. exploration, of Saipem what we've maybe getting business did honor the on fact, this Saipem agreement with going you give et us of forward, until with In on lot if agreement they're the in merger surf expiration. call. the your number been questions on to conference you But on go and go mentioned some their bigger Surf through thoughts was happens could implications of your

Douglas Pferdehirt

our Okay, TechnipFMC. talk do take sure. of Obviously, to really have to a here. we exciting at I the share a opportunity things merger. moment here But the about views proposed lot let's on appreciate

paths you X of Arun, of X in can there's strategic type take. look, transactions, these So

consolidation You of choose take can path consolidation. the Many can the take you or path the of path integration. to

of the or side industry this well. of on matter a the side What of of this? as the the recently result we More saw same. SPS equipment is As the fact,

and chose bigger the a thing. -- to sure, we does Indeed, the integration. It for but not it's that fundamentally was a company market but doing less path, the same through change the market I doesn't Clearly, the say travel different market way it which impact operates. the dynamic. very structure, does alter it path go would

time. significantly able cycle achieved sustainable we past. together believe an chose offering to Technip say, create Much in drive And news why FMC subsea we in So it in were company. to new is together real the good reducing was create risk, the change be economics and -- more to disruptive, the to never I could brought but improvement would put XXXX. this higher did by -- that that we we

X it ago. years was So

we are the pain, of all the beyond well game. are we and So enjoying

X continues time certainty. way success. is our to schedule that customers client client to drivers their be The and cycle creating are much we create success decisions the upon are Our very today. ensure based These on strategy reduce making focused

So of a working the focus creates for that to sustainable on way industry. if because continue to forward way we're and you will, a going this better new

Our more We're be or focus same to the with with asset-light. more is going to do less.

project times. do can As in we've we identified of cycle improve therefore, time, I The proven and and to about talked we in our the of the as our shortening by from terms has over a manufacturing a clients, more offering. because less cycle together of of reduction a with because capacity script as capacity XX% benefit And speak fleet economics, well integration and truly results or type direct to and you model. reduction awarded this company benefit business our therefore, for capital our and of spend the unique will, is this of if we themselves in

relationship the ecosystem. call mentioned are vessel with -- have what several we in operators, you vessel these Now and the we and other

The vessel us simply gives ecosystem optionality.

We different have multiple partners.

it architecture. not very available if optionality. of in to exclusive the our a access market us to The benefit open expanding ecosystem. market. to to ability iEPCI anyone and benefit that have portion to they a access an The total to. them gain will, We have address work gives our an they you would is partners otherwise We welcome is

we the greatest Our focus the on remains value This installation-only deliver is integrated much versus how very projects. iEPCI can contracts. or

going benefit that, create continue to believe to clients. greatest for do going and to we're it's the So we our

just ability to us we of working no in ecosystem, and to with there expectations maybe the others the change inbound and work impact multiyear have a over or to summarize continue the view of the proposed planning And any meet to our for interested does people to with impact and many in have would our not The to expect is We inbound us our future. on our horizon. merger company. in outlook XXXX

Arun Jayaram

helpful. super That's

Operator

will line next Citigroup. from the Gruber come question with Our of Scott

Scott Gruber

to about see your much leading cash have balance sheet it's target very could million -- level towards north think the which how managing think balance you Great put maybe how kind is is return now to cap is you cash basically to enough my on it the going cash, cash balance balance you million, this $XXX a more think you the see where which on around year, over XX%, think Yes. all million. return net How we'll you move sheet, that $XXX I to of cash question you take the the But and kind of on do you shareholders? sheet, of $XXX would cash about managing sheet? the there

Alf Melin

take Fair. one. I'll this

And maybe with So of of balance $XXX some a Xx well than clearly million ratings EBITDA. have all, we holding on debt our gross is our with X all sheet, noted, Most outlook below less we positive Moody's, also and now leverage first as is have us. numbers. who ratio agencies. investment-grade achieved we gross on Currently, recently

things of all sheet, the balance about of strength good really feel to So be makes our those us honest.

the you cash cash of to ahead, have have free strong million $XXX then XXXX. us performance flow the So cash of year. a we at we position net quarter here fourth that of flow pointed in generation out kind And also looking end strong drives

think debt down as we'll first the this take near interim, an about of debt mature. all, we So as term,

it are one. net care think, have our distribute in build And that our that small of have our flow small in position balance, then are a cash makes in clear obviously committing strength for what But we And of we okay? looking position. free XXXX. June, of to free very shareholders you a type to net will to we'll do we and not of being least cash of obviously, take we have at the outlook, So say cash XX% we the sense business, cash we when and a debt maturity flow

Scott Gruber

then the And to mix. color. revenue turning the Appreciate Great. Subsea

higher Subsea contribute? the from projects how the In roughly revenue of will contributors much mix? contribution here about that services Just And X.X margin terms 'XX, thinking would of impacting where stand? in the of kind kind

Douglas Pferdehirt

I'll Scott, Alf start additional add any then can color. and

talked for our the the on highlight of the So X.X, X.X. fact asking. of significant Subsea being Subsea the you quarter. thank orders coming was It over a XX% orders number of from of about We big

market it Technology convert in Malaysia some cadence Clearly, the exciting is, terms in the adoption Myself the making we've phase. X.X. point of into as are through or, as associated out, that see progress goes who we're the correctly manufacturing past inflection at Chief the execution been you that point as and you if of the through of and we in part revenue the terms backlog just looking and with Subsea Officer will,

the This in learning better at conversation. words, better. that really and original a driving to the in internal real-time potential company. going see of back things is doing from is further curve. the the overall full yet we've of a we're And confidence beginning getting performance It's to the the lot for Arun terms our In question what why other we have of it's

say, are as or associated well we've X/X neighborhood in of product our I know of configure-to-order with We stated. above today But in platform. that's Subsea going product orders that the would the X.X new activity family is on the manufacturing about

I'll that to add much our of results manufacturing many some -- the make open that it our I continues REIT So grow, additional efficiency will greater. grow. continue as And the the will even ALF to color. through think that And process

Alf Melin

maybe couple of a Just add comments.

Subsea that we built So all, kind our backlog which of clear have on look build an it And track high-quality record. X.X, -- as increase noted, continue achieved enabler our success overall. business at our for you has to then iEPCI it's first we an in and becomes and have of success that share of the our

driving ability We we margin several periods. that the been this last on execute and we've have backlog, improvement consistently can the demonstrated over

prepared and helps And what including which at visual but business said industrialization earlier further potential is problem Doug our systems, of disability any us have his day, identification -- our management of starts now allow in the us it onboard you which And always also. even about end to what further. with execution secure by also then remarks enhanced the

So that industrialization, continuing meaning the meaning very, awards translating to the for the IEPCI, into to quality fit focused. where focused Subsea we actually right X.X very be our which -- we're more which and for onboard, would on are right services. and going more us be That's we're more

at reasons you expanding 'XX when look of growth you in our that for the look beyond, to or quality you inbound the that backlog going at these our are drives and So -- look strength continue whether backlog are us. the The results that ingredients margins drive mentioned. revenue in to of the

Saurabh Pant

It's great. rough of a it, service portion the for Do figure you have too?

Alf Melin

service about there volume? question Yes. Was a Yes. the

So.

Saurabh Pant

all. Service, first of

Alf Melin

Yes, the service revenue.

the $X.X will you around that, we we're with we if that overall And projecting the revenue or services take roughly Subsea. growth So XXXX. in service be business rest grow in a overall, line billion though, estimate the of business of

Saurabh Pant

I'll the all turn appreciate it I back. Great. color.

Operator

next question Anderson David Our of line comes Barclays. with from the

John Anderson

bigger just to you kind of offshore question. a kind want I of ask

offshore So mixed use next XX markets some XX play to we've over out in are months. the to seen expected

drillers hand, seem bit. On have new a getting the seeing pushed that suggesting to out X aren't be many we might projects tenders offshore be the that

we hand, expecting service development a improvement other the On 'XX companies market activity. to that be in are have offshore

installations you tell, Or as be backlog give seeing could your far similar be Do standpoint of what Just us standing as can you're will it of XXXX think here want step-up conversion. to from terms a you in kind today? if you and that? can in know

Douglas Pferdehirt

on to of of other terms Thank in the couple you, impact talked David, and that's drillers. happening the of this we've some a calls the about

I said things at stand in a this by point I these I've specific. think before, company And more widely and many I view industry-specific, time. accepted for think not are They're As that's that.

of of been already and significant backlog, a going 'XX what to addition significant look, 'XX right see strength covering of be will of the that we have to the that, So significant. is which is in on your activity, amount now. now question. I've tendering we is -- obviously, amount the most largely on a But the road

X.X it's these capacity. looking either with that are well meeting go projects and associated this or very our frame. for significant get projects the X.X wanting want on think weeks, and clients a beyond to they're they all that want our secure IEPCI, XXXX I high-quality are is to X.X time almost They been commitment and

So horizon. no, to that David, But me any million numbers the no be We reaching going I think 'XX think plateau a significant put won't see -- if be this to -- don't of -- more XXXX 'XX I there's what not a you going a ask it's versus do year. I stage. clearly, at on is to we're

John Anderson

of kind what out you That little a color was that the my of question was was can actually you're seeing follow-up on tendering curious if maybe around there. activity. I just kind provide of

of to on to the of a the I the off You starting know some more but said on see exploration about side the projects list happening. that lot gas were of gas develop. projects, there's a to pushed growing Are demand? of talking continue you assume sort side Maybe business? side I name

keep 'XX. in there, of Can annually. go don't do color bit want can you you maybe a conversations terms just I know to Is kind you number you start a orders? if to of more beyond think you And these but and add $XX billion that mean more those of where seeing consistently think it's going little we're I

Douglas Pferdehirt

a break of couple it ways. let's different David, So down

continue this to to see be tendering remain Gulf, some U.S. quite it seeing mature going strong. drivers it the be think continues markets. the Brazil good be the the year. not any North I We're of Sea, those, to pullback any in activity you're again

of would I well. surprised back Africa parts to example an upside. the as will mature West I that, basins use possibly think and Asia actually be some we're coming people of of the as

award And activity, maintain will actually, will is look tendering to of within do everything and Paleogene if to amount you is clients' existing then and we as our being I'm horizons the when there new honest, confidence the basins, we to at humbling, company -- direct it's can activity, spectacular, some well. continue it the more the of our

category. I in same put would the Guyana,

So announced to we start had that look award of we the emerging then when in quarter. in you past basins, at the some just Suriname the obviously,

potential activity We are Suriname. other tendering in seeing

You're tendering to return tendering to activity in in of happen Mozambique beginning Namibia, terms see activity.

host extremely solid already been So base And -- brownfield returns then installed basins actually as well. in the important that quite we these been a it's really having capital leverage there area forget so attractive always expenditure facility, strong buybacks largest the the it's for where that very in the well. to or finally, has underlying is us that already activity don't the and as emerging that of core and are projects allows that on spent, business

look not cliff. what no clear. It's be does In of terms is it a let plateau. me beyond like there clear, And me XXXX, be let

We towards a continue the the backlog. very expect about we are build to talking projects healthy again would well end and decade to of

Operator

the from Wilson comes Mark of line with Jefferies. question next Our

Mark Wilson

and behind project these Could pricing? before, or of projects indeed, the reasons the now $X the shows the simple really depth your or required the shown the Is getting billion highest think that That's complexity it first sizes of figures it of larger? double equipment large I Doug, to, is question. the $XX Doug, million. in own opportunity number global you've you slide speak ever awards, over

anything for to is the year, is to And this I then cycle also competition. confirm about Those spoke a believe and to quicker there's questions. second are time I be whether the to the to year clients. deliver earlier on case like you you able spoke X important so that? update how still than that equipment your being just And

Douglas Pferdehirt

Mark. afternoon, Good

do take observation, The let's also some there's I that's commitment clients, have good for mean, offshore bit our big an of the execution observed. these of Obviously, got from first It's but time. economic a from first. carry So We away the we we quality opportunities an on about focusing talked what's driving rock of X other is of it. the they one we've upfront industry, because obviously do this it, not kind element truly started phenomenal. projects risk. a require little a that as and lot and

I the the at is towards in why the seeing we clients get reservoir a quality can rock, and are projects the And that highest deliver also the migrating towards of or only we'll because have budget, they and many size reduced back believe offshore on reason these of the are are. that these on our demonstrate back towards offering quality cycle migrating so they're projects are large highest you're been which your larger these to and time. to to not able projects many but very consistently question, second part time cases, the we

what expect about it's looking us to That's from that's we scheduled and they're So been delivering at. what them. they that's have what security

not really want have company, rock, is the makes of which multiple these this you. of confident deliver that they but confidence. be working earlier, don't company, the we high just that's in So can the on level quality attractive And happen confidence companies, they about for projects talked a is a returns to doesn't that the projects with awards the XX% direct obviously them they're with why that a very if company a

year, in time X done absolutely, cycle not Mark. of yet. terms But we're In

are We with will continue we done our not as journey.

and pursuit the is absolutely shorten invest every for cycle to within reduce scale. that our continue on decision knowledge, make, the us. X.X our continue X.X experience, have don't others we invest We as everybody We now We're execution. we world, to behind we the would the and we expect So we're all make is lifting time. world the to heavy and of Every the time fully in of investment focused company. in cycle relentless

Mark Wilson

comments, over. Appreciate hand Doug. it the I'll

Operator

comes the with next question line Cowen. Bianchi of Our Marc TD from

Marc Bianchi

I first outlook want surface to ask about the here.

So looks for quarter, bit know I to revenue sharp first fourth reflects need more year pronounced a then from to snapback. but typically here it and I what quarter, to seasonally it's get a assume the the for pretty like down

sort of us you through how just could walk you see unfolding? maybe So that

Alf Melin

for than other Yes, also in correct average but is your not Yes. weaker QX certainly, on the weaker Thank observation QX you than that question. quarter. only is any

so you of if quarter, things. So the two at that it's dynamics look really

project a Middle to particular world in America. outlook of And little we've a bit in and seen in about think weakness You the timing activity North is uncertain in aspect East. the there really of then and rest the and service the

have East. the as So we markets continue year, Middle in through we to particular, to international clearly, we go stronger anticipate a

a to So our throughput the you Middle think And or in about capabilities further East North revenue we the up about there. Middle about maybe think headwind maybe country year, revenue ramp as growth, production and think in improve the in the we similar continue in think about for the single-digit the America of growth high East being will volume offsetting decline. revenue

that go will the things revenue the as America. go from margins as have those helping noted help even profitability North our And as through been year, past footprint, expand only our the year's have but through also, now the you and we is prior year, activities sustain in not year. American you also may also you So margins us North this and rationalizing in

Marc Bianchi

it. it. Got Got

next this as it's the for guidance about XX% looking increase Maybe CapEx and think is what like is guided The for Alf Okay. it probably revenues up 'XX year X% in saw about at the midpoint. one you a we I like, looks from well.

more of how is CapEx So suggests but you that intensity, a maybe bit it through kind sort about and talk beyond. think could going capital of where to

Alf Melin

Yes. Yes.

way. make simple I'll this fairly one So in

year have going than bit our on year there of on an with little very really this it, with now. that will But -- you program different embarked the is that's first And year-over-year year for is some anything company. call of have program. majority first actually the actually we driving more embarked such all, a upgrade there substantial We we And where So that isn't CapEx business. increase. the a ago associated our upgrade ERP

that within even that commitment won't us to with want will program cycles. revenue, tailing So the this, that be are so still made maintaining long also we capital in term. really all that expenditure just that below payer note our have long-term so continue can for guidance in of the same And 'XX, -- but of we'll I X.X% actually off accommodate we 'XX. to X.X% be with through It start it it's in something

Marc Bianchi

it. Got

flowing Or is on of current Okay. that, and is there EBITDA to D&A? next any impact margin the year through it just all period ultimately, And kind and then CapEx from this? in

Alf Melin

a little of is operating going of corporate guidance, through bucket of most biggest is expense CapEx. our within it, bit There an the expense that contained is actually expenditure but our

Operator

] Benchmark. line Our Holland the [ of next with from question comes Kurt

Unknown Analyst

of helping for us you thanks kind your in Doug, insight that varying conversations and what all see your see So customer base. with

guess to I guess, question and pretty XXX%, X.X. of Subsea can you that Look, could you there's my increase So insight I I'd inbound some but percentage a get that. the I think is to limit in land. also like and that your to go see imagine on your XX% ultimately probably to that seen iEPCI remarkable you've have But perspective being theoretically, where

Douglas Pferdehirt

which percentage going focus X the Sure. And terms of to you in are kind of awards, X And the all thank of to percentage for and direct new our of be our business said and was again, percentage and was important there because, strategy. if great on our things drivers benchmarks always It question, strategy XXXX. the of the Subsea to observation very in of we iEPCI, X.X successful.

down XX% that company. from of model operating responsibility new applied our was and that model a new inbound, We're a scope that Let's our that provide of any to break before. IPCI amount had the take over level It of takes that's customers substantial. to at a been this very first. trust never I and -- hand high commercial

choose the and same. lifting X all was those or and so but it it, We things, of X take distraction, X get including humbled TechnipFMC. honored years again, Obviously, here, and with to into the deeply all behind years integration to important, as they do are us we're there that can heavy well the merger

reaching not representing for inbound, the integrated X were only iEPCI almost in look XX% mix XXXX. new But in We frontiers. the had we that was of IEPCI the projects you at The that the awards XXX% of market important. had, if

very We exciting. So X. that was had

So will, if you about think that.

we're and with here We've instance, X go frontiers existing iEPCI operated have never in emerging You frontier. before, for to We within new going Paleogene. model. a this basins, the had

Northern so in the We partnership the project in project, Petrobras go our and where of the -- had mature we it our Endurance no of or does to that? project just in proven model it continues model X of CCS had the be Hisep gas within and not a so from is becoming the then basins X growth traditional Mero nontraditional choice really and for There's developments, actually mature XX%. then -- Why basins traditional because X it's really limit. for it's oil BP markets, Because the reason that, choice. becomes success customers that -- and

flexible I product Brazil from the example happens pipe. think of We pipe. activity, there of provide customer as product. procures either will always This flexible the the separate level installation because with be some in the an

pipe pipe, We or also our pipe use have vessels for flexible flexible they vessels on in flexible but long-term a charter installed those from that our that competitors.

-- operate those but the that, future, separate the way they packages. they work that's today. X perhaps So in won't do they

total an the upper there's to limit, think do will, you I if iEPCI. for So market

of growth to X.X was X.X. up of more. Again, our it was that XX%, significance Subsea the but order year-on-year, up tremendous the percentage which tree even overall Moving Subsea is was

of So phenomenal. that. on absolutely drives can manufacturing that the drives speculate just you performance That's the future the company. cadence. That

have cycle time of It of goes the back terms able time and our to in significant we that advantage question to on terms cycle maintain delivery. be in Mark's to ability

XXX%, maybe be with will X.X it a the my above get could get XX% do but And Subsea to debate. we the well think of I okay, given into a I mark. I couldn't it own on that haven't but here, couldn't now shy ambition, -- is it why team So that bit XX%? clearly up

So exciting for the very company.

Operator

comes from Victoria question next with the of RBC. McCulloch Our line

Victoria McCulloch

active results color you're how the financial integrated I could strategy slightly already are Could market another of standardization you industrializing you And in your When have Brazil ask, XX opportunities a business. bidding seeing? doesn't Brazil not same actions about you the if follow-on, what Firstly, all in these projects and talked and reflected in to in to next in -- comments. you about the initial attractive topic. in as the of as you but seeing this appetite talk meet that desire internal maybe to much these of spoke the and months? your Can different maintain you're provide processes. some your sort degree

Douglas Pferdehirt

have Well, on want you are to Victoria, excited to I call. very to thank the We're you, call. questions you and important. our welcome Both

them time. at X a So cover let's

In and in our but script. that This some do to and standardization companies as -- lean, or emphasize we highlight we're the do to industrialization, on of the they lean manufacturing. many our tried focus internal is simplification, of in do across we terms initiatives, lean What organization. trying

other our function the in beyond has and benefits understood become takes managing same time. of organization in business company. Few Lean. manufacturing, as a belt mindset the take we're and not journey big work. is as it we've We and also the just some now -- a a within for it real take that's fully indoctrinated And but We've it but every manufacturing black people the Alf finance beyond sold seen a this to on people mindset manufacturing. We've He the the is doing very change every now manufacturing the work, difference. the well much companies portfolio. other

a like In journey not don't okay behaviors. to about my It's schedule. or managers to words, client has problem -- to financially any before live has had -- it's problem if a problems. be any talk to enough, can because I've it problems impact. see we myself, any been other our okay we most this impact We real red. for that we red. enjoy We on stay correct myself. early change see impact --

proud technology traditional comfortable it say the early, organization in everybody largest in very continue in the but the development, we to those on -- -- have bring are terms developed local of vessels Subsea content to getting most significant help. products in just new call to feel not So Brazil. -- anything and to bring chain. forward and We was Brazil, or technology X.X we pull ask for it's help

the We R&D address so. a with industry have continue challenges corrosion do developing we're of and to the we that a cracking brand-new close generation stress will Today, will flexible pipe in very Petrobras, Brazil. of relationship

is completions qualification We in done to a have what will pipe and a on in Brazil back the the of rigid reverting from are towards that flexible are will, type working type that future, significant and work pipe you impact of the market if today.

that's sure company the the were what challenges the contractor. the we in from we That priority And thoroughly contract might there versus and the way said, make we recent saying tender. be a always we The was identified commercially, a that, referring analyzed There associated we be projects tender. We pipe iEPCI. through had by contract. to being for understand stand-alone you to the being installation that did. a believe realized greatest the challenges recent wanted shifted We create we were terms stand-alone several what to We actually understood a with today. I will to accounted not contracts. on installation type rigid and that that challenges scope of and and to the will we is have tender. us, for are market executing Petrobras are those sure of was and for that, we be any some today explain -- or risks value that

Petrobras Going -- are we today. work forward, for with traditional pipe are rigid installation we performing performing

others of subsea CCS we subsea to Brazil also our in projects, them. regards Petrobras IEPCI We for terms we're project developed processing technology doing in doing for projects iEPCI in and that are high the with jointly set also

Brazil. maybe about So lot long to but say answer, a a

market. about thinking You may rigid have to rigid pipe pipe install also read the vessel that putting Petrobras is their own in

by a decision that's think I Petrobras. brilliant

certainly I think decision. the right would I was I pursue that. them, If it's

Victoria McCulloch

deep forward dive deeper Brazil even to Doug. point. Look at some an

Operator

the with come will of Ati question Our final Sachs. Goldman line Modak from

Ati Modak

But conversion over flow like the how provide over of conversion see can see as about some curious the color improvement comes a cash business potential I'm improvement flow is you free on free the you ERP for could potential directional off. Doug, CapEx time. It time? cash sounded the there

Douglas Pferdehirt

Ati. Sure, Thank you for much question. very the

out to I target the along right, just years, several we've objectives. put we continue that new and a those where demonstrated on think improvement over past make -- we that,

I and think it color. we're expectation, some not I'll operating of is that Alf if additional add the the company to the and to unreasonable you it look and at pass the fundamentals way company, business the an

Alf Melin

mechanical more Yes, this. little bit just maybe on a

profitability obviously, you hear higher. will our commitment to driving So

So any more cash as higher, the will be line. we earnings as free obviously will to the drop for we flow be drive improvement earnings that foundation down the

long-term basis, operate target of the on growth. working We even business a a continue in face largely neutral to our in of capital being on

So interest the at corporate that's term. long to for the the growing any But another rate same expense other be the items really, such EBITDA come in items, other down clearly we or factor then have as don't important to expand. cash you expect CapEx to even way in flow statements as expense, would

free cash with from to dropping conversion conversion and really incrementally flow down drive can is cash So EBITDA an or free the EBITDA. opportunity flow

Ati Modak

years. that for you difficult years? into that around gave next But how more guess, those with a Any That's tendering are to ones one, the conversations us color us out guys lot bit going order on for of super color can I'm plays provide the expectations I that? helpful. order customers, little the then few you regional and the a and just And curious the last expectations the over how are track

Douglas Pferdehirt

Referencing the NOCs?

Ati Modak

have are here there that be are and a that potential. there think fields smaller I could players out that few might farmed

Douglas Pferdehirt

when average and Actually, In come quarter, XX Understood, Ati.Thank no about for normally not than has about than XX it's of is more Well, for XX years. an anywhere on clients. we many XX. any customer clarifying. particular an Understood. between clients, from expanding revenue base, many, that talk this historically, our -- more you now different

us take within or So competency $X company who within place trust able it developments actually, plus their their are delivering their seeing because for start, may we we're opportunities be regional offshore remember, not but to to on a have just They to an in smaller or company great such billion project, the subsea subsea those independent infrastructure companies develop as offshore. architect. clients

phase, from the missing the capabilities the everything. can of of architectural the installation field. at engineering products we final our the There's So terms from we're the manufacturing and portfolio and nothing subsea or go all commissioning in a way provide starting and to

client very part a we're excited portfolio that our and have about, iEPCI is X.X. of very that's So exclusively relationships and we almost direct award strong

Operator

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

Matt Seinsheimer

Thank you. of A at the concludes replay X website conference on will be beginning our approximately This call available our p.m. call.

New Time. York

any Thank If now the the end Investor you team. further free contact Relations feel may Thanks please to questions, call. have you. you

Operator

for all joining you Thank call. today's

disconnect. may You now

TechnipFMC (FTI) 27 Feb 252024 Q4 Earnings call transcript