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TechnipFMC plc Investor Presentation 2020
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TechnipFMC Third Quarter 2020 Earnings Call Presentation
LONDON & PARIS & HOUSTON – (BUSINESS WIRE) – 21 October 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, 22 October 2020 to discuss the third quarter 2020 financial results and updated 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 the energy industry; delivering projects, products, technologies and services. With our proprietary technologies and production systems, integrated expertise, and comprehensive solutions, we are transforming our customers’ project economics.
Organized in three business segments — Subsea, Surface Technologies and Technip Energies — 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 customers in developing their energy resources and in their positioning to meet the energy transition challenge.
Each of our approximately 37,000 employees is driven by a steady commitment to clients and a culture of project execution, 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
Q3 2020 Earnings Call Presentation
October 22, 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 disease outbreaks and other public health issues, including the coronavirus disease 2019 (“COVID-19”), their impact on the global economy and the business of our company, customers, suppliers and other partners, changes in, and the administration of, treaties, laws, and regulations, including in response to such issues and the potential for such issues to exacerbate other risks we face, including those related to the factors listed or referenced below; risks associated with our ability to consummate our proposed separation and spin-off; 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; piracy risks for our maritime employees and assets; 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; 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
Q3 2020 Earnings Call Presentation
Q3 2020 Overview
Financial Results and Operational Highlights
Doug Pferdehirt, Chairman and Chief Executive Officer
Maryann Mannen, EVP and Chief Financial Officer
Arnaud Pieton, President and CEO-elect – Technip Energies
TechnipFMC
Strong third quarter results
4
TechnipFMC
Q3 2020 Earnings Call Presentation | 4
| ### Winning
$2.2B
Inbound orders
- 45% sequential growth in total Company inbound orders
- New project activity continues despite challenging environment | ### Executing
9.6%
Adjusted EBITDA^{1} margin
- Sequential improvement across all business segments
- Reflects stronger operational performance and greater benefit of cost savings | ### Transforming
100%
Targeted savings achieved
- Early achievement of $350+ million in run-rate savings
- Business model, innovative technologies and digital solutions to drive further gains |
| --- | --- | --- |
Reaffirming full year 2020 guidance
1Adjusted EBITDA is a non-GAAP measure. Adjusted EBITDA as presented excludes the impact of charges and credits from continuing operations as identified in the reconciliation of GAAP to non-GAAP financial schedules included in the appendix.
Resilient award activity
Q3 award highlights
- 6 projects announced globally; $2.8 billion aggregate contract value¹
- Middle East growth opportunities; leveraging international strength of Surface Technologies
- Subsea orders of $1.6 billion; confident in full-year order outlook of $4 billion
- Subsea front-end engineering activity trending above expectations; 50% focused on iFEED™
¹The Company is working with ANOPC to complete the remaining conditions precedent to enable project work to commence and will include the contract award in its inbound when all the requirements are fulfilled.
²Inbound order was included in the Company's first half 2020 results.
T
TechnipFMC
Q3 2020 Earnings Call Presentation
Accelerating our digital transformation
Creating value for our clients and TechnipFMC throughout the project lifecycle
Subsea Studio™
- Transforming conventional concept, FEED and tendering phases into ultra-fast digital field development
- Built using open digital architecture and fully integrated with our suite of latest products and technologies
70% / FEED studies hosted on platform
Up to 50% / Reduction in FEED cycle
iComplete™
- Integrated completions pad provides simplification and greater efficiency, with digital automation and controls
- Digital integration enables operators to make evidenced-based decision throughout the process
50% / Fewer components
30% / Reduction in operating expenditures
TechnipFMC
Q3 2020 Earnings Call Presentation | 6
Business transformation
Leadership – Seasoned professional
- Arnaud Pieton appointed President and CEO-elect of Technip Energies
- Member of Executive Leadership Team since formation of TechnipFMC
- Aligned on business strategy; committed to realizing a successful future for Technip Energies
22 years of industry experience
15+ years with TechnipFMC; ELT member since merger
Most recently served as President Subsea
McPhy
Driving clean energy forward
Energy Transition – Green hydrogen
- Strategic collaboration and equity investment with McPhy to accelerate development of green hydrogen
- McPhy is a Paris-listed leading manufacturer and supplier of green hydrogen production and distribution equipment
- Developing large scale and competitive green hydrogen solutions through joint technology development and project implementation
TechnipFMC
Q3 2020 Earnings Call Presentation
Q3 2020 Company results
Key highlights
- Cash flow from operations of $168 million, free cash flow of $95 million in the quarter
- Achieved full-year targeted run-rate savings of more than $350 million, ahead of schedule
- Adjusted EBITDA improved sequentially across all segments, driven by strong project execution and cost reduction activities
Revenue of $3.3 billion
Adjusted EBITDA of $321 million
Free cash flow of $95 million
Backlog of $19.6 billion
Q3 2020 EPS walk
| $ millions | $ / share | |
|---|---|---|
| GAAP net income, as reported | $ (3.9) | $ (0.01) |
| Charges and credits, after-tax | $ 76.1 | $ 0.17 |
| Adjusted net income, as reported | $ 72.2 | $ 0.16 |
| Other items impacting results: | ||
| Foreign exchange (F/X) gains, after-tax | $ (7.0) | $ (0.02) |
| Increased liability payable to JV partners (MRL¹) | $ 61.9 | $ 0.14 |
| Company does not provide guidance for F/X or MRL which together unfavorably impacted results by $0.12 per share |
¹ MRL = Mandatorily redeemable financial liability
TechnipFMC
Q3 2020 Earnings Call Presentation | 8
Q3 2020 Segment results
Subsea
Technip Energies
Surface Technologies
Operational highlights
- Revenue increased 12%: driven by continued strong execution of our backlog; project activity was most significant in the United States, Norway and Africa
- Adjusted EBITDA margin decreased 70 bps to 9.7%: higher activity and the benefits of our cost reduction initiatives were partially offset by the COVID-19 related inefficiencies
- Inbound orders of $1.6 billion; book-to-bill of 1.1; period-end backlog at $7.2 billion
Operational highlights
- Revenue increased 1%: benefited from the continued ramp-up of Arctic LNG 2 and higher activity on downstream projects, offsetting the anticipated decline in revenue from Yamal LNG
- Adjusted EBITDA margin decreased 820 bps to 10.9%: reduced contribution from Yamal LNG and lower margin realization on early phase projects, including Arctic LNG 2
- Inbound orders of $413 million; book-to-bill of 0.3; period-end backlog at $12.1 billion
Operational highlights
- Revenue decreased 43%: sharp reduction in operator activity in North America; revenue outside of North America displayed resilience, with a more modest decline
- Adjusted EBITDA margin decreased 350 bps to 7.7%: lower activity in North America driven by decline in rig count and completions-related activity, partially offset by cost reduction actions
- Inbound orders of $208 million; book-to-bill of 0.9; period-end backlog at $369 million
TechnipFMC
Q3 2020 Earnings Call Presentation | 9
Q3 2020 cash flow
Q3 2020 Items of note
- Positive free cash flow of $95 million
- Increased $283 million sequentially; maintain full-year guidance of neutral to $150 million
- Capital expenditures of $73 million
- Decreased $21 million sequentially; maintain full-year guidance of $300 million
- Net cash increased $81 million
- Increased net cash position to $384 million sequentially; includes significant debt reduction
Q3 2020 Cash flow walk
Q3 2020 Earnings Call Presentation | 10
Summary
- Strong operational results – all segments delivered sequential improvement in adjusted EBITDA margin
- Total Company inbound orders of $2.2 billion – sequential growth in Subsea backlog
- Achieved targeted run-rate savings of more than $350 million – ahead of schedule
- Significant debt reduction – focused on balance sheet management
- Operational momentum continues – expect further sequential improvement in net cash
TechnipFMC
Q3 2020 Earnings Call Presentation | 11
Appendix
TechnipFMC
Subsea opportunities in the next 24 months¹
PROJECT UPDATES
¹ October 2020 update; project value ranges reflect potential subsea scope
* Value of remaining scope is less than $250M
TechnipFMC
Q3 2020 Earnings Call Presentation | 13
2020 Full-year financial guidance¹ Updated October 21, 2020
| Subsea | Technip Energies | Surface Technologies |
|---|---|---|
| Revenue in a range of $5.3–5.6 billion | ||
| EBITDA margin at least 8.5% | ||
| (excluding charges and credits) | Revenue in a range of $6.3–6.8 billion | |
| EBITDA margin at least 10% | ||
| (excluding charges and credits) | Revenue in a range of $950–1,150 million | |
| EBITDA margin at least 5.5% | ||
| (excluding charges and credits) |
2020 segment guidance is reflective of new business perimeters previously announced in 2019. Businesses with ~$120 million of revenue in 2019, most of which was in Surface Technologies, are now included in Technip Energies guidance for 2020.
TechnipFMC
- Corporate expense, net $130 – 150 million
- Net interest expense $80 – 90 million
(excluding the impact of revaluation of partners’ mandatorily redeemable financial liability) - Tax provision, as reported $80 – 90 million
- Capital expenditures approximately $300 million
- Free cash flow $0 – 150 million
(cash flow from operations less capital expenditures)
All segment guidance assumes no further material degradation from COVID-19 related impacts
¹Our guidance measures EBITDA margin (excluding amortization related impact of purchase price accounting, and other charges and credits), corporate expense, net, net interest expense (excluding the impact of revaluation of partners’ mandatorily redeemable financial liability), and free cash flow 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
Q3 2020 Earnings Call Presentation | 14
TechnipFMC liquidity (as of September 30, 2020)
Summary
Table 1
| Item | Amount |
|---|---|
| 1. Product | $1,280 |
| 2. Product | $1,280 |
| 3. Product | $1,280 |
| 4. Product | $1,280 |
| 5. Product | $1,280 |
| 6. Product | $1,280 |
| 7. Product | $1,280 |
| 8. Product | $1,280 |
| 9. Product | $1,280 |
| 10. Product | $1,280 |
Table 2
| Item | Amount |
|---|---|
| 1. Product | $2,580 |
| 2. Product | $2,580 |
| 3. Product | $2,580 |
| 4. Product | $2,580 |
| 5. Product | $2,580 |
| 6. Product | $2,580 |
| 7. Product | $2,580 |
| 8. Product | $2,580 |
Table 3
| Item | Amount |
|---|---|
| 1. Product | $2,580 |
| 2. Product | $2,580 |
| 3. Product | $2,580 |
| 4. Product | $2,580 |
| 5. Product | $2,580 |
| 6. Product | $2,580 |
Table 4
| Item | Amount |
|---|---|
| 1. Product | $2,580 |
| 2. Product | $2,580 |
| 3. Product | $2,580 |
| 4. Product | $2,580 |
TechnipFMC
Q3 2020 Earnings Call Presentation | 15
Financial disclosures – Yamal LNG
Project disclosure data
TechnipFMC plc and Consolidated Subsidiaries
Business Segment Data for Yamal LNG Joint Venture
(In millions, unaudited)
| September 30, 2020 | June 30, 2020 | |
|---|---|---|
| Contract liabilities | $ 963.8 | $ 1,096.9 |
| Mandatorily redeemable financial liability | 281.7 | 219.8 |
| Three Months Ended | Three Months Ended | |
| September 30, 2020 | June 30, 2020 | |
| Cash required by operating activities | $ (17.2) | $ (20.7) |
| Settlements of mandatorily redeemable financial liability | - | (131.1) |
Source: Q3 2020 earnings release schedules (Exhibit 7)
Additional items of note
- Expect Yamal LNG revenue contribution of $400 – 500 million in 2020
Contract liabilities structure
Reduction in contract liabilities: $133m
June 30, 2020 to September 30, 2020
Payments to Vendors or JV partners
| Vendor (cost) | Joint Venture (profit) |
|---|---|
Continued strong execution will reduce project cost, increasing Joint Venture profit
| 50%
TechnipFMC
(remains with FTI) | 50%
JV partners
(included in MRL) |
| --- | --- |
Q3 2020 Earnings Call Presentation | 16
TechnipFMC
Backlog visibility
| Subsea^{1} | 3Q 2020 Inbound orders: $1,607 million | ||
|---|---|---|---|
| $7.2 billion | |||
| $1.1 billion | $3.4 billion | $2.7 billion | |
| 2020 | 2021 | 2022 & beyond | |
| ^{1} Backlog does not capture all revenue potential for subsea services. | |||
| Technip Energies | 3Q 2020 Inbound orders: $413 million | ||
| $12.1 billion | |||
| $1.6 billion | $5.8 billion | $4.7 billion | |
| 2020 | 2021 | 2022 & beyond | |
| Surface Technologies | 3Q 2020 Inbound orders: $208 million | ||
| $369 million | |||
| $369 million | |||
| 2020 & 2021 | |||
| Non-consolidated Backlog^{2} | |||
| --- | --- | ||
| Subsea | |||
| 2020^{3} | $36 million | ||
| 2021 | $129 million | ||
| 2022+ | $509 million | ||
| $674 million | |||
| Technip Energies | |||
| 2020^{3} | $146 million | ||
| 2021 | $828 million | ||
| 2022+ | $1,025 million | ||
| $1,999 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} 3 months. |
TechnipFMC
Q3 2020 Earnings Call Presentation | 17
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 |
| RCF | Revolving credit facility |
| ROIC | Return on Invested Capital |
| ROV | Remotely Operated Vehicles |
| ROW | Rest of World |
TechnipFMC
Q3 2020 Earnings Call Presentation | 18
Select financial data
| Revenue | September 30, 2020 | June 30, 2020 | Three Months Ended March 31, 2020 | December 31, 2019 | September 30, 2019 |
|---|---|---|---|---|---|
| Subsea | $ 1,501.8 | $ 1,378.5 | $ 1,253.1 | $ 1,486.8 | $ 1,342.2 |
| Technip Energies | $ 1,608.2 | $ 1,538.3 | $ 1,547.7 | $ 1,832.4 | $ 1,596.3 |
| Surface Technologies | $ 225.7 | $ 241.7 | $ 329.5 | $ 407.6 | $ 396.6 |
| Corporate and Other | $ - | $ - | $ - | $ - | $ - |
| Total | $ 3,335.7 | $ 3,158.5 | $ 3,130.3 | $ 3,726.8 | $ 3,335.1 |
| Adjusted EBITDA | September 30, 2020 | June 30, 2020 | Three Months Ended March 31, 2020 | December 31, 2019 | September 30, 2019 |
| Subsea | $ 146.0 | $ 99.6 | $ 104.8 | $ 185.0 | $ 139.1 |
| Technip Energies | $ 174.5 | $ 162.6 | $ 167.1 | $ 259.7 | $ 304.2 |
| Surface Technologies | $ 17.3 | $ 8.3 | $ 24.5 | $ 55.9 | $ 44.4 |
| Corporate and Other | $ (16.6) | $ (29.4) | $ (76.2) | $ (96.2) | $ (108.5) |
| Total | $ 321.2 | $ 241.1 | $ 220.2 | $ 404.4 | $ 379.2 |
| Adjusted EBITDA Margin | September 30, 2020 | June 30, 2020 | Three Months Ended March 31, 2020 | December 31, 2019 | September 30, 2019 |
| Subsea | 9.7% | 7.2% | 8.4% | 12.4% | 10.4% |
| Technip Energies | 10.9% | 10.6% | 10.8% | 14.2% | 19.1% |
| Surface Technologies | 7.7% | 3.4% | 7.4% | 13.7% | 11.2% |
| Corporate and Other | |||||
| Total | 9.6% | 7.6% | 7.0% | 10.9% | 11.4% |
| Inbound Orders (1) | September 30, 2020 | June 30, 2020 | Three Months Ended March 31, 2020 | December 31, 2019 | September 30, 2019 |
| --- | --- | --- | --- | --- | --- |
| Subsea | $ 1,607.1 | $ 511.7 | $ 1,172.1 | $ 1,172.3 | $ 1,509.9 |
| Technip Energies | $ 412.8 | $ 835.8 | $ 560.6 | $ 1,114.5 | $ 696.0 |
| Surface Technologies | $ 207.5 | $ 187.1 | $ 366.3 | $ 431.6 | $ 404.7 |
| Corporate and Other | |||||
| Total | $ 2,227.4 | $ 1,534.6 | $ 2,099.0 | $ 2,718.4 | $ 2,610.6 |
| Order Backlog (2) | September 30, 2020 | June 30, 2020 | Period Ended March 31, 2020 | December 31, 2019 | September 30, 2019 |
| Subsea | $ 7,218.0 | $ 7,085.3 | $ 7,773.5 | $ 8,479.8 | $ 8,655.8 |
| Technip Energies | $ 12,059.2 | $ 13,132.6 | $ 13,766.6 | $ 15,298.1 | $ 15,030.8 |
| Surface Technologies | $ 368.9 | $ 385.9 | $ 422.0 | $ 473.2 | $ 428.7 |
| Corporate and Other | |||||
| Total | $ 19,646.1 | $ 20,603.8 | $ 21,962.1 | $ 24,251.1 | $ 24,115.3 |
| Book-to-Bill (3) | September 30, 2020 | June 30, 2020 | Three Months Ended March 31, 2020 | December 31, 2019 | September 30, 2019 |
| Subsea | 1.1 | 0.4 | 0.9 | 0.8 | 1.1 |
| Technip Energies | 0.3 | 0.5 | 0.4 | 0.6 | 0.4 |
| Surface Technologies | 0.9 | 0.8 | 1.1 | 1.1 | 1.0 |
| Corporate and Other | |||||
| Total | 0.7 | 0.5 | 0.7 | 0.7 | 0.8 |
(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.
Q3 2020 Earnings Call Presentation | 19
TechnipFMC
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
RECONCILIATION OF CORPORATE EXPENSE, FOREIGN EXCHANGE
(In millions)
| 2020 | |||||
|---|---|---|---|---|---|
| 3 Months Ended March 31 | 3 Months Ended June 30 | 3 Months Ended September 30 | 3 Months Ended December 31 | 12 Months Ended December 31 | |
| Corporate expense, reported | $ 68.9 | $ 29.1 | $ 27.7 | ||
| Less charges and (credits) | 30.7 | 1.9 | 3.8 | ||
| Corporate expense, adjusted | $ 38.2 | $ 27.2 | $ 23.9 | ||
| Foreign exchange losses (gains) | $ 43.3 | $ 5.8 | $ (5.6) | ||
| 2019 | |||||
| 3 Months Ended March 31 | 3 Months Ended June 30 | 3 Months Ended September 30 | 3 Months Ended December 31 | 12 Months Ended December 31 | |
| Corporate expense, reported | $ 82.0 | $ 120.9 | $ 75.6 | $ 114.8 | $ 393.4 |
| Less charges and (credits) | 21.0 | 69.5 | 18.2 | 75.8 | 184.5 |
| Corporate expense, adjusted | $ 61.0 | $ 51.4 | $ 57.4 | $ 39.0 | $ 208.9 |
| Foreign exchange losses (gains) | $ 11.6 | $ 18.0 | $ 53.2 | $ 64.1 | $ 146.9 |
Q3 2020 Earnings Call Presentation | 20
TechnipFMC
Exhibit 6
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
CASH AND CASH EQUIVALENTS
(In billions, unaudited)
Held by joint ventures
Operating cash and cash equivalents
Total cash and cash equivalents
| September 30, 2020 |
|---|
| $ 3.1 |
| 1.1 |
| $ 4.2 |
Q3 2020 Earnings Call Presentation | 21
TechnipFMC
Exhibit 8
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, unaudited)
Charges and Credits
In addition to financial results determined in accordance with U.S. generally accepted accounting principles (GAAP), the third quarter 2020 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 2019 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 EndedSeptember 30, 2020 | |||||||
|---|---|---|---|---|---|---|---|
| Net income attributable to TechnipFMC plc | Net income (loss) attributable to non-controlling interests | Provision for income taxes | Net interest expense | Income before net interest expense and income taxes (Operating profit) | Depreciation and amortization | Earnings before net interest expense, income taxes, depreciation and amortization (EBITDA) | |
| $ (3.9) | $ 10.3 | $ 22.5 | $ 91.8 | $ 120.7 | $ 108.5 | $ 229.2 | |
| TechnipFMC plc, as reported | |||||||
| Charges and (credits): | |||||||
| Impairment and other charges | 26.0 | — | 5.3 | — | 31.3 | — | 31.3 |
| Restructuring and other charges | 21.6 | — | 2.7 | — | 24.3 | — | 24.3 |
| Direct COVID-19 expenses | 28.5 | — | 7.9 | — | 36.4 | — | 36.4 |
| Adjusted financial measures | $ 72.2 | $ 10.3 | $ 38.4 | $ 91.8 | $ 212.7 | $ 108.5 | $ 321.2 |
| Diluted earnings (loss) per share attributable to TechnipFMC plc, as reported | $ (0.01) | ||||||
| Adjusted diluted earnings per share attributable to TechnipFMC plc | $ 0.16 |
Q3 2020 Earnings Call Presentation
Exhibit 8
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, unaudited)
Charges and Credits
In addition to financial results determined in accordance with U.S. generally accepted accounting principles (GAAP), the third quarter 2020 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 2019 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 EndedSeptember 30, 2019 | |||||||
|---|---|---|---|---|---|---|---|
| September 30, 2019 | |||||||
| Net loss attributable to TechnipFMC plc | Net income (loss) attributable to non-controlling interests | Provision (benefit) for income taxes | Net interest expense | Income 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 | $ (119.1) | $ 3.8 | $ 81.1 | $ 116.5 | $ 82.3 | $ 141.6 | $ 223.9 |
| Charges and (credits): | |||||||
| Impairment and other charges | 126.1 | — | 0.2 | — | 126.3 | — | 126.3 |
| Restructuring and other charges | 12.3 | — | 1.7 | — | 14.0 | — | 14.0 |
| Business combination transaction and integration costs | 6.1 | — | 0.1 | — | 6.2 | — | 6.2 |
| Separation costs | 7.5 | — | 1.9 | 9.4 | — | 9.4 | |
| Legal provision, net | (0.6) | — | — | — | (0.6) | — | (0.6) |
| Purchase price accounting adjustment | 6.5 | — | 2.0 | — | 8.5 | (8.5) | — |
| Valuation allowance | 15.0 | — | (15.0) | — | — | — | — |
| Adjusted financial measures | $ 53.8 | $ 3.8 | $ 72.0 | $ 116.5 | $ 246.1 | $ 133.1 | $ 379.7 |
| Diluted earnings (loss) per share attributable to TechnipFMC plc, as reported | $ (0.27) | ||||||
| Adjusted diluted earnings per share attributable to TechnipFMC plc | $ 0.12 |
TechnipFMC
Q3 2020 Earnings Call Presentation
Exhibit 10
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, unaudited)
| Three Months EndedSeptember 30, 2020 | ||||||
|---|---|---|---|---|---|---|
| Subsea | Technip Energies | Surface Technologies | Corporate Expense | Foreign Exchange, net | Total | |
| Revenue | $ 1,501.8 | $ 1,608.2 | $ 225.7 | $ — | $ — | $ 3,335.7 |
| Operating profit (loss), as reported (pre-tax) | $ 20.3 | $ 129.5 | $ (7.0) | $ (27.7) | $ 5.6 | $ 120.7 |
| Charges and (credits): | ||||||
| Impairment and other charges | 17.6 | 5.7 | 5.4 | 2.6 | — | 31.3 |
| Restructuring and other charges | 7.1 | 15.1 | 0.9 | 1.2 | — | 24.3 |
| Direct COVID-19 expenses | 18.7 | 15.3 | 2.4 | — | — | 36.4 |
| Subtotal | 43.4 | 36.1 | 8.7 | 3.8 | — | 92.0 |
| Adjusted Operating profit (loss) | 63.7 | 165.6 | 1.7 | (23.9) | 5.6 | 212.7 |
| Adjusted Depreciation and amortization | 82.3 | 8.9 | 15.6 | 1.7 | — | 108.5 |
| Adjusted EBITDA | $ 146.0 | $ 174.5 | $ 17.3 | $ (22.2) | $ 5.6 | $ 321.2 |
| Operating profit margin, as reported | 1.4% | 8.1% | -3.1% | 3.6% | ||
| Adjusted Operating profit margin | 4.2% | 10.3% | 0.8% | 6.4% | ||
| Adjusted EBITDA margin | 9.7% | 10.9% | 7.7% | 9.6% |
T
TechnipFMC
Q3 2020 Earnings Call Presentation
Exhibit 10
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, unaudited)
| Three Months EndedSeptember 30, 2019 | ||||||
|---|---|---|---|---|---|---|
| Subsea | Technip Energies | Surface Technologies | Corporate Expense | Foreign Exchange, net | Total | |
| Revenue | $ 1,342.2 | $ 1,596.3 | $ 396.6 | $ — | $ — | $ 3,335.1 |
| Operating profit (loss), as reported (pre-tax) | $ (79.6) | $ 284.6 | $ 6.1 | $ (75.6) | $ (53.2) | $ 82.3 |
| Charges and (credits): | ||||||
| Impairment and other charges | 126.3 | — | — | — | — | 126.3 |
| Restructuring and other charges | 4.9 | 5.2 | 0.7 | 3.2 | — | 14.0 |
| Business combination transaction and integration costs | — | — | — | 6.2 | — | 6.2 |
| Separation costs | — | — | — | 9.4 | — | 9.4 |
| Legal provision, net | — | — | — | (0.6) | — | (0.6) |
| Purchase price accounting adjustments - amortization related | 8.5 | — | — | — | — | 8.5 |
| Subtotal | 139.7 | 5.2 | 0.7 | 18.2 | — | 163.8 |
| Adjusted Operating profit (loss) | 60.1 | 289.8 | 6.8 | (57.4) | (53.2) | 246.1 |
| Adjusted Depreciation and amortization | 79.0 | 14.4 | 37.6 | 2.1 | — | 133.1 |
| Adjusted EBITDA | $ 139.1 | $ 304.2 | $ 44.4 | $ (55.3) | $ (53.2) | $ 379.2 |
| Operating profit margin, as reported | -5.9% | 17.8% | 1.5% | 2.5% | ||
| Adjusted Operating profit margin | 4.5% | 18.2% | 1.7% | 7.4% | ||
| Adjusted EBITDA margin | 10.4% | 19.1% | 11.2% | 11.4% |
Q3 2020 Earnings Call Presentation | 25
TechnipFMC
Exhibit 12
TECHNIPFMC PLC AND CONSOLIDATED SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, unaudited)
| September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | |
|---|---|---|---|---|
| Cash and cash equivalents | $ 4,244.0 | $ 4,809.5 | $ 4,999.4 | $ 5,190.2 |
| Short-term debt and current portion of long-term debt | (612.2) | (524.1) | (586.7) | (495.4) |
| Long-term debt, less current portion | (3,248.0) | (3,982.9) | (3,823.9) | (3,980.0) |
| Net cash | $ 383.8 | $ 302.5 | $ 588.8 | $ 714.8 |
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
Q3 2020 Earnings Call Presentation | 26
TechnipFMC