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TechnipFMC plc Investor Presentation 2020
30370_iss_2020-02-26_5cc45846-5342-4364-b4d5-23ebe53d6c4b.pdf
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TechnipFMC Fourth Quarter 2019 Earnings Call Presentation
LONDON & PARIS & HOUSTON – (BUSINESS WIRE) – 26 February 2020
TechnipFMC plc (“TechnipFMC”) (NYSE: FTI) (Paris: FTI) (ISIN: GB00BDSFG982) announces the availability of its Earnings Call Presentation in connection with its teleconference on Thursday, 27 February 2020 to discuss the fourth quarter 2019 financial results and outlook for 2020.
A copy of the Earnings Call Presentation can also be accessed on TechnipFMC’s website (www.technipfmc.com).
About TechnipFMC
TechnipFMC is a global leader in subsea, onshore/offshore, and surface projects. With our proprietary technologies and production systems, integrated expertise, and comprehensive solutions, we are transforming our clients’ project economics.
We are uniquely positioned to deliver greater efficiency across project lifecycles from concept to project delivery and beyond. Through innovative technologies and improved efficiencies, our offering unlocks new possibilities for our clients in developing their oil and gas resources.
Each of our more than 37,000 employees is driven by a steady commitment to clients and a culture of purposeful innovation, challenging industry conventions, and rethinking how the best results are achieved.
TechnipFMC utilizes its website www.TechnipFMC.com as a channel of distribution of material company information. To learn more about us and how we are enhancing the performance of the world’s energy industry, go to www.TechnipFMC.com and follow us on Twitter @TechnipFMC.
Contacts
Investor relations
Matt Seinsheimer
Vice President Investor Relations
Tel: +1 281 260 3665
Email: Matt Seinsheimer
Phillip Lindsay
Director Investor Relations Europe
Tel: +44 203 429 3929
Email: Phillip Lindsay
Media relations
Christophe Belorgeot
Senior Vice President Corporate Engagement
Tel: +33 1 47 78 39 92
Email: Christophe Belorgeot
Brooke Robertson
Public Relations Director
Tel: +1 281 591 4108
Email: Brooke Robertson
TechnipFMC
Q4 2019 Earnings Call Presentation
February 27, 2020
Disclaimer
Forward-looking statements
This communication contains “forward-looking statements” as defined in Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. Words such as “guidance,” “confident,” “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” “may,” “will,” “likely,” “predicated,” “estimate,” “outlook” and similar expressions are intended to identify forward-looking statements, which are generally not historical in nature.
Such forward-looking statements involve significant risks, uncertainties and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections, including the following known material factors: risks associated with our ability to consummate our proposed separation and spin-off, and our ability to achieve the intended benefits and synergies of the transaction; unanticipated changes relating to competitive factors in our industry; demand for our products and services, which is affected by changes in the price of, and demand for, crude oil and natural gas in domestic and international markets; our ability to develop and implement new technologies and services, as well as our ability to protect and maintain critical intellectual property assets; potential liabilities arising out of the installation or use of our products; cost overruns related to our fixed price contracts or capital asset construction projects that may affect revenues; our ability to timely deliver our backlog and its effect on our future sales, profitability, and our relationships with our customers; our reliance on subcontractors, suppliers and joint venture partners in the performance of our contracts; our ability to hire and retain key personnel; the potential impacts of seasonal and weather conditions; the cumulative loss of major contracts or alliances; U.S. and international laws and regulations, including existing or future environmental regulations, that may increase our costs, limit the demand for our products and services or restrict our operations; disruptions in the political, regulatory, economic and social conditions of the countries in which we conduct business; risks associated with The Depository Trust Company and Euroclear for clearance services for shares traded on the NYSE and Euronext Paris, respectively; the United Kingdom's withdrawal from the European Union; risks associated with being an English public limited company, including the need for “distributable profits”, shareholder approval of certain capital structure decisions, and the risk that we may not be able to pay dividends or repurchase shares in accordance with our announced capital allocation plan; compliance with covenants under our debt instruments and conditions in the credit markets; downgrade in the ratings of our debt could restrict our ability to access the debt capital markets; the outcome of uninsured claims and litigation against us; the risks of currency exchange rate fluctuations associated with our international operations; risks related to our acquisition and divestiture activities; failure of our information technology infrastructure or any significant breach of security, including related to cyber attacks, and actual or perceived failure to comply with data security and privacy obligations; risks associated with tax liabilities, changes in U.S. federal or international tax laws or interpretations to which they are subject; piracy risks for our maritime employees and assets; and such other risk factors as set forth in our filings with the U.S. Securities and Exchange Commission and in our filings with the Autorité des marchés financiers or the U.K. Financial Conduct Authority.
We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any of our forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except to the extent required by law.
TechnipFMC
Q4 2019 Earnings Call Presentation
Q4 2019 Overview
Financial Results and Operational Highlights
Doug Pferdehirt, Chairman and Chief Executive Officer
Maryann Mannen, EVP and Chief Financial Officer
TechnipFMC
2019 Growth
- Total Company inbound orders of $22.7 billion, backlog of $24.3 billion
- Significant order growth, driven by LNG and acceleration of integrated Subsea awards
- Improved visibility, with $12.7 billion in backlog scheduled for execution beyond 2020
59% Inbound growth¹
>2x
Value¹ of scope
in iEPCI™ awards
>$8B
LNG
awards
67% Backlog growth¹
37%
Subsea
backlog growth¹
89%
Onshore/Offshore
backlog growth¹
¹2019 growth versus 2018
Q4 2019 Earnings Call Presentation | 4
TechnipFMC
Higher activity across all segments drives revenue growth
Total Company revenue
- Total Company revenue of $13.4 billion, representing 7% growth versus 2018
- Book-to-bill of 1.7x for the full year
Subsea
- Higher mix of integrated project (iEPCI™) activity
- 15% revenue growth in Subsea Services
- 14% revenue growth in Subsea
Onshore/Offshore
- Segment revenue inflected from 2018 trough
- Three quarters of sequential revenue growth
- Non-Yamal revenue growth exceeded 25%
Surface Technologies
- International revenues 50%+ of segment total
- 15%+ revenue growth outside North America
- 2% revenue growth despite North America decline
Q4 2019 Earnings Call Presentation | 5
2020 outlook and segment guidance¹
Subsea
- Continued strength in brownfield activity for small/mid-sized project FIDs; healthy outlook for greenfield project FIDs next 24 months (timing impacts 2020 order growth)
- Expect double-digit growth in services driven by digital monitoring, well intervention, and asset refurbishment
- Following normal seasonal impact in the first quarter, margin to improve due to project timing and increased asset utilization over remainder of year
Onshore/Offshore
- Natural gas a critical enabling fuel in the energy transition; additional LNG capacity required to meet growing demand
- Expect additional LNG projects to be sanctioned near-to-intermediate term
- Opportunity-rich downstream environment; leverage early engagement and process technologies in selective pursuit of refining, petrochemical, and biofuel projects
- Guidance includes the impacts that we can estimate at this time for the Coronavirus
Surface Technologies
- Anticipate double-digit growth in international markets driven by market activity; notable strength in the Middle East, Asia Pacific, and the North Sea
- Anticipate North America activity to decline 10% versus 2019; drilling and completions activity to improve in second half of 2020
2020 segment guidance is reflective of the new business perimeters related to the Company's announced separation. Businesses with ~$120 million of revenue in 2019, most of which was in Surface Technologies, are now included in Onshore/Offshore guidance for 2020.
- Revenue in a range of $6.2–6.5 billion
-
Adjusted EBITDA margin at least 11%
-
Revenue in a range of $7.5–7.8 billion
-
Adjusted EBITDA margin at least 10%
-
Revenue in a range of $1.4–1.6 billion
- Adjusted EBITDA margin at least 12%
¹Our guidance measures adjusted EBITDA margin (a non-GAAP financial measure) which excludes amortization related impact of purchase price accounting, and other charges and credits. We are unable to provide a reconciliation to a comparable GAAP measure on a forward-looking basis without unreasonable effort because of the unpredictability of the individual components of the most directly comparable GAAP financial measure and the variability of items excluded from such measure. Such information may have a significant, and potentially unpredictable, impact on our future financial results.
TechnipFMC
Q4 2019 Earnings Call Presentation | 6
2020® Beyond
| TechnipFMC | |
|---|---|
| Subsea | Surface Technologies |
| Leading | |
| - Maintaining market leadership position in Subsea | |
| - Maximizing flexibility to deliver integrated solutions (iEPCI™) | |
| - Aligning our assets with the right strategic partners and geographies | Transforming |
| - Leveraging strong international franchise for further growth | |
| - Customer focus on efficiency, footprint and emissions | |
| - Optimizing North American services and operating geographies | |
| Technip Energies | |
| --- | --- |
| Subsea | Surface Technologies |
| Leading | |
| - Maintaining market leadership position in Subsea | |
| - Maximizing flexibility to deliver integrated solutions (iEPCI™) | |
| - Aligning our assets with the right strategic partners and geographies | Transforming |
| - New growth cycle underpinned by strength in backlog | |
| - Maintaining intense focus on execution | |
| - Selecting projects that provide the best opportunity for success for customer and TechnipFMC |
Proactively taking actions to better position ourselves for 2020 and beyond
TechnipFMC
Q4 2019 Earnings Call Presentation | 7
Technip Energies
- A leading E&C player, poised to capitalize on the global energy transition
- Transaction remains on-track for completion in second quarter of 2020
- Technip Energies to host Capital Markets Day ahead of transaction
Reshaping
our
future
TechnipFMC
- A fully-integrated technology and services provider, continuing to drive energy development
- Further optimization to strengthen our leadership position in Subsea
- Leverage leading Surface Technologies position to capitalize on international market growth as we transform our North American business
TechnipFMC
Q4 2019 Earnings Call Presentation | 8
Revenue of $3.7 billion
Adjusted EBITDA of $404 million
Backlog of $24.3 billion
Operating cash flow of $559 million
Q4 2019 EPS walk
| $ millions | $ / Share | |
|---|---|---|
| GAAP Net income, as reported | $ (2,414.0) | $ (5.40) |
| Charges and credits, after-tax | $ 2,429.1 | $ 5.43 |
| Adjusted Net Income, as reported | $ 15.1 | $ 0.03 |
| Other items impacting results: | ||
| Foreign exchange (F/X) losses, after-tax | $ 56.5 | $ 0.13 |
| Increased liability payable to joint venture partners (MRL¹) | $ 99.1 | $ 0.22 |
Items of note
- Company does not provide guidance for F/X or MRL; if these expenses were excluded, adjusted net income would have been $0.38 per diluted share
- F/X impact largely driven by the significant devaluation of the Angolan Kwanza
- Company fully remediated all previously disclosed material weaknesses
¹MRL = Mandatorily redeemable financial liability
Q4 2019 Earnings Call Presentation | 9
Q4 2019 Segment results
Subsea
Operational highlights
- Revenue increased 21%: double-digit growth in both project and service activities
- Adjusted EBITDA margin increased 40 bps to 12.4%: cost reduction activities and project completions offset the impact of more competitively priced backlog
- Inbound orders of $1.2 billion; book-to-bill of 0.8; period-end backlog at $8.5 billion
Onshore/Offshore
Operational highlights
- Revenue increased 10%: higher activity in Europe, Asia and North America as well as our Process Technology group, partially offset by lower activity on the Yamal LNG project
- Adjusted EBITDA margin increased 120 bps to 14.2%: benefited from strength in execution across the portfolio, particularly Yamal LNG
- Inbound orders of $1.1 billion; book-to-bill of 0.6; period-end backlog at $15.3 billion
Surface Technologies
Operational highlights
- Revenue decreased 2%: lower completions related activity in North America, largely offset by revenue growth in international markets
- Adjusted EBITDA margin decreased 190 bps to 13.7%: further declines in volume and pricing in North America, partially offset by cost reduction activities
- Inbound orders of $432 million; book-to-bill of 1.1; period-end backlog at $473 million
Q4 2019 Earnings Call Presentation | 10
Strong Q4 operating cash flow drives solid full year result
Operating cash flow
Items of note
Q4 2019
- Operating cash flow of $559 million
- Benefited from timing differences between project milestone and vendor payments
- Yamal JV partner payments of $119 million
FY 2019
- Operating cash flow of $849 million
- Shareholder distributions of $326 million
- $233 million dividends, $93 million share repurchase
Q4 2019 Cash flow walk
Q4 2019 Earnings Call Presentation | 11
2020 Financial guidance
2020 Revenue coverage from backlog
Subsea (at midpoint of guidance range)
Onshore/Offshore (at midpoint of guidance range)
- Subsea revenue coverage driven by:
- Backlog scheduled for 2020 execution is ~71% at revenue midpoint
-
Services revenue >$1 billion expected; minimal amount in backlog
-
Onshore/Offshore revenue coverage driven by:
- Backlog scheduled for 2020 execution is ~86% at revenue midpoint
- Anticipate $400-500 million in revenue from Yamal LNG
2020 Corporate guidance
- Corporate expense, net $180 – 190 million for the full year (excluding the impact of foreign currency fluctuations)
- Net interest expense $80 – 90 million for the full year (excluding the impact of revaluation of partners' mandatorily redeemable financial liability)
- Tax rate 28 – 32% for the full year
- Capital expenditures approximately $450 million for the full year
- Cash flow from operating activities to exceed $1 billion for the full year
Additional items of note
- 2020 segment guidance is reflective of the new business perimeters related to the Company's announced separation
- Businesses with ~$120 million of revenue in 2019, most of which was in Surface Technologies, are now included in Onshore/Offshore guidance for 2020
TechnipFMC
Q4 2019 Earnings Call Presentation | 12
Highlights
- Subsea revenue benefited from increased activity; accelerated adoption of new technologies and iEPCI™
- Onshore/Offshore delivered third quarter of sequential revenue growth; clear inflection from 2018 trough
-
Generated $559 million in operating cash flow; $849 million in 2019, positive in all four quarters
-
Strong revenue coverage for both Onshore/Offshore and Subsea with more than $24 billion of secured backlog
- Taking action in support of our focus on market leadership and continued business transformation
- Expect operating cash flow to improve versus 2019; anticipate exceeding $1 billion in 2020
Key takeaways
Q4 2019 Earnings Call Presentation | 13
TechnipFMC
Appendix
TechnipFMC
Glossary
| Term | Definition |
|---|---|
| Bcm | Billion Cubic Meters per Annum |
| CAGR | Compound Annual Growth Rate |
| E&C | Engineering and Construction |
| FID | Final Investment Decision |
| FLNG | Floating LNG |
| F/X | Foreign exchange |
| GOM | Gulf of Mexico |
| HP/HT | High Pressure / High Temperature |
| HSE | Health, Safety and Environment |
| iEPCI™ | Integrated Engineering, Procurement, Construction and Installation |
| iFEED™ | Integrated Front End Engineering and Design |
| iLOF™ | Integrated Life of Field |
| LNG | Liquefied Natural Gas |
| Term | Definition |
| --- | --- |
| MMb/d | Million Barrels per Day |
| MRL | Mandatorily redeemable financial liability |
| Mtpa | Million Metric Tonnes per Annum |
| NAM | North America |
| ROIC | Return on Invested Capital |
| ROV | Remotely Operated Vehicles |
| ROW | Rest of World |
TechnipFMC
Q4 2019 Earnings Call Presentation | 15
2020 Financial guidance¹
| Subsea | Onshore/Offshore | Surface Technologies |
|---|---|---|
| • Revenue in a range of $6.2–6.5 billion | ||
| • EBITDA margin at least 11% | ||
| (excluding charges and credits) | • Revenue in a range of 7.5–7.8 billion | |
| • EBITDA margin at least 10% | ||
| (excluding charges and credits) | • Revenue in a range of $1.4–1.6 billion | |
| • EBITDA margin at least 12% | ||
| (excluding charges and credits) |
2020 segment guidance is reflective of the new business perimeters related to the Company's announced separation. Businesses with ~$120 million of revenue in 2019, most of which was in Surface Technologies, are now included in Onshore/Offshore guidance for 2020.
| TechnipFMC |
| --- |
| • Corporate expense, net $180 – 190 million for the full year (excluding the impact of foreign currency fluctuations)
• Net interest expense $80 – 90 million for the full year (excluding the impact of revaluation of partners’ mandatorily redeemable financial liability)
• Tax rate 28 – 32% for the full year
• Capital expenditures approximately $450 million for the full year
• Cash flow from operating activities to exceed $1 billion for the full year |
¹Our guidance measures EBITDA margin (excluding amortization related impact of purchase price accounting, and other charges and credits), corporate expense, net (excluding the impact of foreign currency fluctuations), net interest expense (excluding the impact of revaluation of partners’ mandatorily redeemable financial liability), and tax rate are non-GAAP financial measures. We are unable to provide a reconciliation to a comparable GAAP measure on a forward-looking basis without unreasonable effort because of the unpredictability of the individual components of the most directly comparable GAAP financial measure and the variability of items excluded from such measure. Such information may have a significant, and potentially unpredictable, impact on our future financial results.
TechnipFMC
Q4 2019 Earnings Call Presentation | 16
4Q19 Updates: Subsea opportunities in the next 24 months¹
PROJECT UPDATES
¹February 2020 update; project value ranges reflect potential subsea scope
*Value of remaining scope is less than $250M following partial project award
Q4 2019 Earnings Call Presentation | 17
TechnipFMC
Financial disclosures – Yamal LNG
Project disclosure data
TechnipFMC plc and Consolidated Subsidiaries
Business Segment Data for Yamal LNG Joint Venture
(In millions, unaudited)
| December 31, 2019 | September 30, 2019 | |
|---|---|---|
| Contract liabilities | $ 1,268.7 | $ 1,437.3 |
| Mandatorily redeemable financial liability | 268.8 | 288.8 |
| Three Months Ended | Three Months Ended | |
| December 31, 2019 | September 30, 2019 | |
| Cash required by operating activities | $ 68.2 | $ 9.1 |
| Settlements of mandatorily redeemable financial liability | (119.1) | (223.1) |
Source: Q4 2019 earnings release schedules (Exhibit 6)
Contract liabilities structure
Reduction in contract liabilities: $169m
September 30, 2019 to December 31, 2019
Payments to Vendors or JV partners
| Vendor (cost) | Joint Venture (profit) |
|---|---|
Continued strong execution will reduce project cost, increasing Joint Venture profit
| 50% | 50% |
|---|---|
| TechnipFMC (remains with FTI) | JV partners (included in MRL) |
Q4 2019 Earnings Call Presentation | 18
TechnipFMC
Backlog visibility
| Subsea^{1} | 4Q 2019 Inbound orders: $1,172 million | ||
|---|---|---|---|
| $8.5 billion | |||
| $4.5 billion | $2.5 billion | $1.5 billion | |
| 2020 | 2021 | 2022 & beyond | |
| ^{1} Backlog does not capture all revenue potential for subsea services. | |||
| Onshore/Offshore | 4Q 2019 Inbound orders: $1,115 million | ||
| $15.3 billion | |||
| $6.6 billion | $5.1 billion | $3.6 billion | |
| 2020 | 2021 | 2022 & beyond | |
| Surface Technologies | 4Q 2019 Inbound orders: $432 million | ||
| $473 million | |||
| $473 million | |||
| 2020 & 2021 | |||
| Non-consolidated Backlog^{2} | |||
| --- | --- | ||
| Subsea | |||
| 2020^{3} | $138 million | ||
| 2021 | $136 million | ||
| 2022+ | $525 million | ||
| $799 million | |||
| Onshore/Offshore | |||
| 2020^{3} | $893 million | ||
| 2021 | $874 million | ||
| 2022+ | $1,209 million | ||
| $2,976 million | |||
| ^{2} Non-consolidated backlog represents our proportional share of backlog relating to joint venture work where we do not have a majority interest in the joint venture. | |||
| ^{3} 12 months. |
Q4 2019 Earnings Call Presentation | 19
TechnipFMC
Inbound orders reconciliation
| TechnipFMC Inbound Orders | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| in $ millions, unaudited | ||||||||||||||||||||||
| Inbound Orders | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | |
| Exchange rate | 1.37 | 1.37 | 1.33 | 1.25 | 1.13 | 1.11 | 1.11 | 1.10 | 1.10 | 1.13 | 1.12 | 1.08 | ||||||||||
| Technip Subsea¹ | 2,818 | 3,070 | 1,686 | 1,587 | 1,163 | 987 | 590 | 713 | 493 | 852 | 542 | 505 | ||||||||||
| FMC Technologies Subsea² | 1,919 | 850 | 1,072 | 1,706 | 552 | 1,012 | 1,049 | 490 | 346 | 334 | 401 | 570 | ||||||||||
| Subsea³ | 4,737 | 3,920 | 2,759 | 3,293 | 1,715 | 1,999 | 1,639 | 1,203 | 839 | 1,186 | 943 | 1,074 | 666 | 1,773 | 980 | 1,725 | 1,228 | 1,516 | 1,554 | 881 | 2,678 | 2,633 |
| Onshore/Offshore⁴ | 991 | 6,636 | 1,246 | 2,444 | 527 | 683 | 1,353 | 2,363 | 533 | 823 | 1,147 | 1,180 | 682 | 1,104 | 1,153 | 874 | 1,850 | 2,301 | 1,666 | 1,609 | 3,139 | 8,131 |
| Surface Technologies⁵ | 669 | 610 | 678 | 588 | 422 | 419 | 480 | 348 | 332 | 205 | 298 | 233 | 242 | 276 | 329 | 393 | 410 | 415 | 427 | 435 | 368 | 416 |
| Eliminations | (7) | (3) | 4 | (5) | (5) | (3) | (4) | (7) | (1) | (7) | (9) | |||||||||||
| Total Company⁶ | 6,397 | 11,159 | 4,680 | 6,328 | 2,660 | 3,096 | 3,469 | 3,910 | 1,697 | 2,213 | 2,381 | 2,478 | 1,590 | 3,153 | 2,462 | 2,992 | 3,487 | 4,232 | 3,647 | 2,925 | 6,185 | 11,180 |
¹ Order intake for Subsea business segment as reported by Technip S.A. Translated from Euros to U.S. dollars using a quarterly average exchange rate that is specified in the table above.
² Inbound orders for Subsea Technologies business segment as reported by FMC Technologies, Inc.
³ Represents the combination of subsea order intake for the legacy companies for years 2014 through 2016; (Technip Subsea + FMC Technologies Subsea).
⁴ Order intake for Onshore/Offshore business segment as reported by Technip S.A. for years 2014 through 2016 Translated from Euros to U.S. dollars using a quarterly average exchange rate that is specified in the table above.
⁵ Combined inbound orders for Surface Technologies and Energy Infrastructure business segments as reported by FMC Technologies, Inc. for years 2014 through 2016.
⁶ Sum of "Subsea" + "Onshore/Offshore" + "Surface Technologies" for years 2014 through 2016.
TechnipFMC
Q4 2019 Earnings Call Presentation | 20
Select financial data
| Revenue | Three Months Ended | ||||
|---|---|---|---|---|---|
| December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |
| Subsea | $ 1,486.8 | $ 1,342.2 | $ 1,508.7 | $ 1,185.3 | $ 1,233.3 |
| Onshore/Offshore | $ 1,832.4 | $ 1,596.3 | $ 1,505.0 | $ 1,335.1 | $ 1,672.4 |
| Surface Technologies | $ 407.6 | $ 396.6 | $ 420.5 | $ 392.6 | $ 417.3 |
| Corporate and Other | $ - | $ - | $ - | $ - | |
| Total | $ 3,726.8 | $ 3,335.1 | $ 3,434.2 | $ 2,913.0 | $ 3,323.0 |
| Adjusted EBITDA | Three Months Ended | ||||
| December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |
| Subsea | $ 185.0 | $ 139.1 | $ 186.2 | $ 139.7 | $ 148.5 |
| Onshore/Offshore | $ 259.7 | $ 304.2 | $ 281.9 | $ 194.8 | $ 217.2 |
| Surface Technologies | $ 55.9 | $ 44.4 | $ 46.7 | $ 30.1 | $ 64.9 |
| Corporate and Other | $ (96.2) | $ (108.5) | $ (64.8) | $ (68.8) | $ (88.2) |
| Total | $ 404.4 | $ 379.2 | $ 450.0 | $ 295.8 | $ 342.4 |
| Adjusted EBITDA Margin | Three Months Ended | ||||
| December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |
| Subsea | 12.4% | 10.4% | 12.3% | 11.8% | 12.0% |
| Onshore/Offshore | 14.2% | 19.1% | 18.7% | 14.6% | 13.0% |
| Surface Technologies | 13.7% | 11.2% | 11.1% | 7.7% | 15.6% |
| Corporate and Other | |||||
| Total | 10.9% | 11.4% | 13.1% | 10.2% | 10.3% |
| Inbound Orders (1) | Three Months Ended | ||||
| --- | --- | --- | --- | --- | --- |
| December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |
| Subsea | $ 1,172.3 | $ 1,509.9 | $ 2,632.7 | $ 2,677.6 | $ 880.6 |
| Onshore/Offshore | $ 1,114.5 | $ 696.0 | $ 8,131.2 | $ 3,138.9 | $ 1,609.4 |
| Surface Technologies | $ 431.6 | $ 404.7 | $ 415.7 | $ 368.0 | $ 435.1 |
| Corporate and Other | |||||
| Total | $ 2,718.4 | $ 2,610.6 | $ 11,179.6 | $ 6,184.5 | $ 2,925.1 |
| Order Backlog (2) | Three Months Ended | ||||
| December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |
| Subsea | $ 8,479.8 | $ 8,655.8 | $ 8,747.0 | $ 7,477.3 | $ 5,999.6 |
| Onshore/Offshore | $ 15,298.1 | $ 15,030.8 | $ 16,608.3 | $ 9,862.7 | $ 8,090.5 |
| Surface Technologies | $ 473.2 | $ 428.7 | $ 426.6 | $ 437.6 | $ 469.9 |
| Corporate and Other | |||||
| Total | $ 24,251.1 | $ 24,115.3 | $ 25,781.9 | $ 17,777.6 | $ 14,560.0 |
| Book-to-Bill (3) | Three Months Ended | ||||
| December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |
| Subsea | 0.8 | 1.1 | 1.7 | 2.3 | 0.7 |
| Onshore/Offshore | 0.6 | 0.4 | 5.4 | 2.4 | 1.0 |
| Surface Technologies | 1.1 | 1.0 | 1.0 | 0.9 | 1.0 |
| Corporate and Other | |||||
| Total | 0.7 | 0.8 | 3.3 | 2.1 | 0.9 |
(1) Inbound orders represent the estimated sales value of confirmed customer orders received during the reporting period.
(2) Order backlog is calculated as the estimated sales value of unfilled, confirmed customer orders at the reporting date.
(3) Book-to-bill is calculated as inbound orders divided by revenue.
Q4 2019 Earnings Call Presentation | 21
Exhibit 7
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, uncredited)
Charges and Credits
In addition to financial results determined in accordance with U.S. generally accepted accounting principles (GAAP), the fourth quarter 2019 Earnings Release also includes non-GAAP financial measures (as defined in Item 10 of Regulation S-K of the Securities Exchange Act of 1934, as amended) and describes performance on a year-over-year basis against 2018 results and measures. Net income, excluding charges and credits, as well as measures derived from it (including Diluted EPS, excluding charges and credits; Income before net interest expense and taxes, excluding charges and credits ("Adjusted Operating profit"); Depreciation and amortization, excluding charges and credits; Earnings before net interest expense, income taxes, depreciation and amortization, excluding charges and credits ("Adjusted EBITDA"); and net cash) are non-GAAP financial measures. Management believes that the exclusion of charges and credits from these financial measures enables investors and management to more effectively evaluate TechnipFMC's operations and consolidated results of operations period-over-period, and to identify operating trends that could otherwise be masked or misleading to both investors and management by the excluded items. These measures are also used by management as performance measures in determining certain incentive compensation. The foregoing non-GAAP financial measures should be considered by investors in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. The following is a reconciliation of the most comparable financial measures under GAAP to the non-GAAP financial measures.
| | Three Months Ended
December 31, 2019 | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | Net income (loss)
attributable to
TechnipFMC plc | Net income (loss)
attributable to
noncontrolling
interests | Provision for
income taxes | Net interest
expense | Income (loss)
before net
interest expense
and income taxes
(Operating
profit) | Depreciation
and
amortization | Earnings before
net interest
expense, income
taxes,
depreciation and
amortization
(EBITDA) |
| TechnipFMC plc, as reported | $ (2,414.0) | $ (16.3) | $ 170.8 | $ 106.0 | $ (2,144.5) | $ 111.1 | $ (2,013.4) |
| Charges and (credits): | | | | | | | |
| Impairment and other charges | 2,268.6 | — | 88.0 | — | 2,356.6 | — | 2,356.6 |
| Restructuring and other charges | (1.1) | — | (0.4) | — | (1.5) | — | (1.5) |
| Separation costs | 47.1 | — | 15.6 | — | 62.7 | — | 62.7 |
| Purchase price accounting adjustment | 6.5 | — | 2.0 | — | 8.5 | (8.5) | — |
| Valuation allowance | 108.0 | — | (108.0) | — | — | — | — |
| Adjusted financial measures | $ 15.1 | $ (16.3) | $ 177.0 | $ 106.0 | $ 281.8 | $ 122.6 | $ 404.4 |
| Diluted earnings (loss) per share attributable to
TechnipFMC plc, as reported | $ (5.40) | | | | | | |
| Adjusted diluted earnings per share attributable to
TechnipFMC plc | $ 0.03 | | | | | | |
Q4 2019 Earnings Call Presentation | 22
Exhibit 7
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, uncredited)
Charges and Credits
In addition to financial results determined in accordance with U.S. generally accepted accounting principles (GAAP), the fourth quarter 2019 Earnings Release also includes non-GAAP financial measures (as defined in Item 10 of Regulation S-K of the Securities Exchange Act of 1934, as amended) and describes performance on a year-over-year basis against 2018 results and measures. Net income, excluding charges and credits, as well as measures derived from it (including Diluted EPS, excluding charges and credits; Income before net interest expense and taxes, excluding charges and credits ("Adjusted Operating profit"); Depreciation and amortization, excluding charges and credits; Earnings before net interest expense, income taxes, depreciation and amortization, excluding charges and credits ("Adjusted EBITDA"); and net cash) are non-GAAP financial measures. Management believes that the exclusion of charges and credits from these financial measures enables investors and management to more effectively evaluate TechnipFMC's operations and consolidated results of operations period-over-period, and to identify operating trends that could otherwise be masked or misleading to both investors and management by the excluded items. These measures are also used by management as performance measures in determining certain incentive compensation. The foregoing non-GAAP financial measures should be considered by investors in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. The following is a reconciliation of the most comparable financial measures under GAAP to the non-GAAP financial measures.
| TechnipFMC plc, as reported | Three Months Ended
December 31, 2018 | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | Net income (loss)
attributable to
TechnipFMC plc | Net income (loss)
attributable to
noncontrolling
interests | Provision for
income taxes | Net interest
expense | Income (loss)
before net
interest expense
and income taxes
(Operating
profit) | Depreciation
and
amortization | Earnings before
net interest
expense, income
taxes,
depreciation and
amortization
(EBITDA) |
| Charges and (credits): | | | | | | | |
| Impairment and other charges | 1,688.8 | — | 89.7 | — | 1,778.5 | — | 1,778.5 |
| Restructuring and other severance charges | 11.6 | — | 8.5 | — | 20.1 | — | 20.1 |
| Business combination transaction and integration
costs | 8.7 | — | 6.9 | — | 15.6 | — | 15.6 |
| Legal provision | 280.0 | — | — | — | 280.0 | — | 280.0 |
| Purchase price accounting adjustment | 17.0 | — | 5.2 | — | 22.2 | (24.0) | (1.8) |
| Tax reform | 11.8 | — | (11.8) | — | — | — | — |
| Valuation allowance | 202.4 | — | (202.4) | — | — | — | — |
| Adjusted financial measures | $ (39.0) | $ 12.8 | $ 138.1 | $ 116.6 | $ 228.5 | $ 113.9 | $ 342.4 |
| Diluted earnings per share attributable to TechnipFMC
plc, as reported | $ (5.00) | | | | | | |
| Adjusted diluted earnings per share attributable to
TechnipFMC plc | $ (0.09) | | | | | | |
Q4 2019 Earnings Call Presentation | 23
Exhibit 9
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, unaudited)
| Three Months EndedDecember 31, 2019 | |||||
|---|---|---|---|---|---|
| Subsea | Onshore/Offshore | Surface Technologies | Corporate and Other | Total | |
| Revenue | $ 1,486.8 | $ 1,832.4 | $ 407.6 | $ — | $ 3,726.8 |
| Operating profit (loss), as reported (pre-tax) | $ (1,512.7) | $ 245.3 | $ (698.2) | $ (178.9) | $ (2,144.5) |
| Charges and (credits): | |||||
| Impairment and other charges* | 1,671.7 | — | 684.9 | — | 2,356.6 |
| Restructuring and other charges* | (57.5) | 5.9 | 37.0 | 13.1 | (1.5) |
| Separation costs | — | — | — | 62.7 | 62.7 |
| Purchase price accounting adjustments | 8.5 | — | — | — | 8.5 |
| Subtotal | 1,622.7 | 5.9 | 721.9 | 75.8 | 2,426.3 |
| Adjusted Operating profit (loss) | 110.0 | 251.2 | 23.7 | (103.1) | 281.8 |
| Adjusted Depreciation and amortization | 75.0 | 8.5 | 32.2 | 6.9 | 122.6 |
| Adjusted EBITDA | $ 185.0 | $ 259.7 | $ 55.9 | $ (96.2) | $ 404.4 |
| Operating profit margin, as reported | -101.7% | 13.4% | -171.3% | -57.5% | |
| Adjusted Operating profit margin | 7.4% | 13.7% | 5.8% | 7.6% | |
| Adjusted EBITDA margin | 12.4% | 14.2% | 13.7% | 10.9% |
*On December 30, 2019, the Company completed the acquisition of the remaining 50 percent of Technip Odebrecht PLSV CV, which resulted in a net loss of $0.9 million that was recorded in the Subsea segment. The net loss comprises an impairment charge of $84.2 million included within impairment and other charges and a bargain purchase gain of $83.3 million included within restructuring and other charges.
Q4 2019 Earnings Call Presentation | 24
TechnipFMC
Exhibit 9
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, unaudited)
| Three Months EndedDecember 31, 2018 | |||||
|---|---|---|---|---|---|
| Subsea | Onshore/Offshore | Surface Technologies | Corporate and Other | Total | |
| Revenue | $ 1,233.3 | $ 1,672.4 | $ 417.3 | $ — | $ 3,323.0 |
| Operating profit (loss), as reported (pre-tax) | $ (1,739.5) | $ 206.4 | $ 38.8 | $ (393.6) | $ (1,887.9) |
| Charges and (credits): | |||||
| Impairment and other charges* | 1,775.6 | — | 2.9 | — | 1,778.5 |
| Restructuring and other severance charges | 7.2 | 2.4 | 2.9 | 7.6 | 20.1 |
| Business combination transaction and integration costs | — | — | — | 15.6 | 15.6 |
| Legal provision | — | — | — | 280.0 | 280.0 |
| Purchase price accounting adjustments - non-amortization related | (3.3) | — | 1.4 | 0.1 | (1.8) |
| Purchase price accounting adjustments - amortization related | 23.6 | — | 0.4 | — | 24.0 |
| Subtotal | 1,803.1 | 2.4 | 7.6 | 303.3 | 2,116.4 |
| Adjusted Operating profit (loss) | 63.6 | 208.8 | 46.4 | (90.3) | 228.5 |
| Adjusted Depreciation and amortization | 84.9 | 8.4 | 18.5 | 2.1 | 113.9 |
| Adjusted EBITDA | $ 148.5 | $ 217.2 | $ 64.9 | $ (88.2) | $ 342.4 |
| Operating profit margin, as reported | -141.0% | 12.3% | 9.3% | -56.8% | |
| Adjusted Operating profit margin | 5.2% | 12.5% | 11.1% | 6.9% | |
| Adjusted EBITDA margin | 12.0% | 13.0% | 15.6% | 10.3% |
T
TechnipFMC
Q4 2019 Earnings Call Presentation
Exhibit 12
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, unaudited)
| December 31, 2019 | December 31, 2018 | |
|---|---|---|
| Cash and cash equivalents | $ 5,190.2 | $ 5,540.0 |
| Short-term debt and current portion of long-term debt | (495.4) | (67.4) |
| Long-term debt, less current portion | (3,980.0) | (4,124.3) |
| Net cash | $ 714.8 | $ 1,348.3 |
Net (debt) cash, is a non-GAAP financial measure reflecting cash and cash equivalents, net of debt. Management uses this non-GAAP financial measure to evaluate our capital structure and financial leverage. We believe net debt, or net cash, is a meaningful financial measure that may assist investors in understanding our financial condition and recognizing underlying trends in our capital structure. Net (debt) cash should not be considered an alternative to, or more meaningful than, cash and cash equivalents as determined in accordance with U.S. GAAP or as an indicator of our operating performance or liquidity.
TechnipFMC
Q4 2019 Earnings Call Presentation | 26
TechnipFMC