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TechnipFMC plc Investor Presentation 2020
30370_iss_2020-11-09_5a001f21-cdc9-44b8-941b-2a7ea7446186.pdf
Investor Presentation
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TechnipFMC
ESG and TechnipFMC
5th Annual J.P. Morgan Energy Technology Tour
Doug Pferdehirt, Chairman and CEO
November 9, 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.
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ESG and TechnipFMC
Our corporate strategy and foundational beliefs drive our approach to ESG practices
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2018-2020 accomplishments
Environmental
Goal: Reduce our own carbon footprint
Goal: Reduce our clients' carbon footprint
Subsea 2.0™
Subsea 2.0™ product platform enables a 50% reduction in size, weight and part count compared to previous design of equipment.
Carbon Assessment Tool
Introduced to assess key contributors to carbon footprint and identify opportunities to minimize the carbon impact of building and operating a development.
Goal: Make our communities better
Social
Goal: Promote gender diversity and equality
Goal: Drive HSE to ensure a safe workplace
Governance
TechnipFMC
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Our environmental focus on carbon reduction
50 by 30
Targeting 50% reduction in Scope 1 and 2 emissions by 2030¹
Wind
Hydro
Hybrid / Biofuels
Utilization of renewable resources for internal energy consumption
¹Versus 2017 baseline
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ESG scorecard 2021-2023
Our commitments 2021-2023
Environmental
Our carbon footprint
- Targeting 50% reduction of CO₂ by 2030 (Scope 1 and 2)
- Establish Scope 3 reduction targets
Our clients' carbon footprint
- 33% of order intake linked to lower carbon intensity offerings
- Establish target reduction in carbon intensity for our clients' offerings – establish baseline in 2020
Waste management
- 10% of waste from our assets and projects is recycled and reused
- 10% reduction of water consumption
Social
Awareness and culture
- 100% of all senior managers trained in inclusive leadership learning
- Inclusion & Diversity lens applied to employee benefits and policies
Fair representation
- 45% of graduates hired are women
- 20% improvement in under-represented populations in senior management
Community
- Increase the number of global STEM initiatives by 20%
- Increase the number of employees engaged globally in volunteering by 20%
Governance
Leadership in HSE
- Continued implementation of SIF prevention projects, with goal of reaching 400 projects
- Industry advocate for IOGP Lifesaving Rules
Responsible business behavior
- Implement third-party risk management program, with focus on human rights due diligence and audits, on 100% of high-risk suppliers
- Yearly ethics and compliance training for all managerial levels
Board oversight
- Define remuneration of leadership and senior managers to include linkage to net carbon footprint
- Governance model established and reviewed with Board ESG committee
TechnipFMC
%
- Cumulative progress as % of 2023 commitment
- Updates provided at each Annual General Meeting
CONFIDENTIAL
Well positioned to capitalize on the Energy Transition
Our role and unique capabilities…
- Engineering
- Technology / Innovation
- Project Execution
- Integrator
- Infrastructure / Partnerships
…enable our approach…
- Lower carbon solutions
- Decarbonization initiatives
- Carbon-free energy opportunities
…to deliver real results today and tomorrow.
Carbon-advantaged solutions
- iProduction™
- Blue hydrogen / CCUS
- Subsea 2.0™ / iEPCI™
- Sustainable chemistry
- Subsea Studio
- LNG
- Subsea robotics
- Energy efficiency
Lower carbon, carbon-free opportunities
- Green hydrogen solutions
- Offshore floating wind
- Tidal / wave energy
- All-electric subsea field, renewables powered
TechnipFMC is an ideal partner to transition with our clients
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Roadmap to cleaner energy
IProduction™
Carbon-reduction technologies for surface markets.
Biofuels
Biofuel plants and advanced production technologies
Hydrogen
Proven capabilities and technologies for blue hydrogen
Investing and partnering for the transition to green hydrogen
All-Electric Subsea
Reduced infrastructure for lower carbon development
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iProduction™
Replicating the Subsea playbook to transform onshore production
- Proprietary technology and integrated ecosystem streamlines operations; reduces footprint, GHG emissions, capital costs, time to first oil
- Integrated offering operates under a single digital interface, including our digital twin technology; each site is monitored and controlled remotely
- TechnipFMC is the only provider to fully integrate the delivery process with people, products and services
- Reflects ongoing strategic shift from discrete product sales to fully integrated services for the global onshore production market
Global opportunity set may exceed $7 billion through 2030¹
>50%
Reduction in GHG emissions
>30%
Acceleration in time to first oil
>25%
Reduction in operator capital expenditures
¹Source: Rystad Energy; McKinsey & Company Energy Insights; TechnipFMC internal analysis
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Biofuels
The technology, know-how and experience to deliver biofuels projects
- Renewable alternative to fossil fuels; an advanced solution to meet stringent, medium-term climate targets
- TechnipFMC delivers a wide range of biofuel plants utilizing advanced proprietary and partnership-based technologies
- Partner of choice for Neste's NEXBTL projects
- Opportunities in expansions / revamps, refinery conversions and stand-alone projects
Global opportunity set may exceed $3 billion through 2030¹
Up to 90% / Reduction in GHG emissions²
3 / Reference areas include biodiesel³, biojetfuel, bioethanol
2 / World scale NEXBTL biofuel refineries delivered
¹Source: Neste projections for renewable diesel demand to exceed 20Mton by 2030 (Neste Capital Markets Day, March 2020); TechnipFMC internal analysis
²Neste's public information regarding NEXBTL renewable diesel; comparison with conventional fossil fuel
³Biodiesel references include traditional biodiesel and renewable diesel
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Hydrogen
Ready for the hydrogen wave
- Proprietary technologies and proven capabilities to engineer and deliver hydrogen plants
- Blue hydrogen is a cost-effective method to produce hydrogen while removing $\mathrm{CO}_{2}$; leader in CCUS enables robust blue hydrogen offering
- Positioning to be a leading technology and EPC supplier in green hydrogen; strategic partnership with McPhy to develop large-scale solutions
- Complete portfolio of services include feasibility studies, EPC projects and measurement; both greenfield and retro-fit opportunities
Structural growth with spend that may exceed $50 billion through 2030¹
270+
Plants using proprietary steam reforming technology
35%²
Market share leader in grey hydrogen
50+
References for hydrogen plants with $\mathrm{CO}_{2}$ capture
¹Source: IEA World Energy Outlook 2020 projected capacity additions of 18Mtpa by 2030; TechnipFMC internal analysis
²Market leader position based on installed base of hydrogen plants
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All-electric subsea production systems
Reducing infrastructure to create low carbon opportunities
- Infrastructure and installation time reduced with removal of hydraulic lines, simplified umbilicals and lighter assets
- Enables full field electrification of subsea production system, allowing for use of renewable power alternatives
- Ideal solution for long offsets from host facility, Subsea-to-Beach and unmanned fields
- Allows for more robust digital capabilities while significantly increasing access to field-specific data
Our vision of Subsea
Incremental tie-back opportunity may exceed $8 billion through 2030¹
10% / Reduction in capital expenditures
4X+ / Increase in subsea tie-back reach
100% / Fields unmanned through robotics, digital technologies
¹Source: Rystad Energy; McKinsey & Company Energy Insights: Global Energy Perspective, January 2020; TechnipFMC internal analysis
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Well positioned for the Energy Transition
Significant addressable market opportunities for TechnipFMC through 2030¹
| iProduction™ | Biofuels | Hydrogen | All-electric subsea |
|---|---|---|---|
| Integrating subsea technology to transform onshore production | The technology, know-how and experience to deliver biofuels projects | Structural growth opportunity – ready for the hydrogen wave | Reducing infrastructure to create lower carbon opportunities |
| Global opportunity may exceed $7 billion | Biodiesel opportunity may exceed $3 billion | Blue and green hydrogen opportunity may exceed $50 billion | Incremental tie-back opportunity may exceed $8 billion |
¹Addressable market represents the opportunity that is available to the industry
UN Sustainable Development Goals
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Offshore is the next frontier in the Energy Transition
TechnipFMC's subsea expertise and ecosystem position us well for the next frontier
- Offshore and subsea will provide significant opportunities in the Energy Transition
- Offshore technologies will require further innovation and greater collaboration to meet decarbonization goals
- Our core competencies and integration capabilities can transform new technologies into commercially viable alternatives
Core competencies throughout the water column
| Automation and Control | EPCI Execution |
|---|---|
| Digital and Robotics | Subsea Infrastructure |
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Deep Purple™ – Redefining subsea energy
Integrating renewables and hydrogen storage to deliver new energy resources
- Collaboration with clients and partners to make renewables more commercially viable offshore
- Utilize hydrogen fuel cells to store excess power generated from wind and wave resources
- Well positioned in Subsea segment to leverage infrastructure and serve as system integrator
TechnipEMC
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Our commitment – Driving change in ‘S’
Workforce of the future
- Thousands of girls in India are learning about science, technology, engineering and mathematics (STEM) with the help of TechnipFMC
- A series of initiatives have helped 14,000 girls from lower-income families as we look to advance gender diversity
- Our flagship India corporate social responsibility (CSR) team won the country's prestigious National CSR Award in October 2019
Volunteer – supporting communities
- TechnipFMC teamed up with a local NGO to continue its fight against plastic waste with a beach cleanup in Malaysia
- The cleanup consisted of 300 employees and families coming together to remove micro-waste totaling 217 kilograms
- Region implemented ‘Say No to Single Use Plastic’ campaign putting a ban to single-use plastic at our offices and facilities
UN Sustainable Development Goals N°1
3
2020-2024
4
2024-21
5
2024-2025
6
2024-2025
7
2024-2025
8
2024-2025
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2024-2025
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2024-2025
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2024-2025
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2024-2025
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10
2020-2024
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2020-2024
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2020-2024
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2020-2024
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2020-2024
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2020-2024
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Our commitment – Driving change in ‘G’
Strong safety culture
- Our response to an outbreak of COVID-19 aboard a vessel earned our company great recognition from our client Royal Dutch Shell
- Our protocols include systematic testing and/or quarantine pre-boarding, allowing for a consistently safe working environment
- Our approach has been recognized by customers as unique amongst our peers, with actions to replicate and adopt going forward
'Raise the bar' on worker welfare
- TechnipFMC serves on the Board of Building Responsibly, a group of leading E&C companies working to promote workers' rights and welfare
- Launched in February 2017, Building Responsibly member companies now represent over 1,000,000 direct employees across the globe
- We are advancing efforts to address human rights risks by incorporating our requirements at the project level and throughout the supply chain
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Driving sustainable change, delivering real opportunity
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Meeting our commitments
Positive impact on our Company, industry and communities
Driving sustainable change
50% reduction in CO₂ equivalent emissions by 2030
Delivering real opportunity
Play a material role in the energy transition today
Glossary
| Term | Definition |
|---|---|
| Bcm | Billion Cubic Meters per Annum |
| CCUS | Carbon Capture, Utilization and Storage |
| E&C | Engineering and Construction |
| ESG | Environmental, Social and Corporate Governance |
| FLNG | Floating LNG |
| GHG | Greenhouse Gas |
| HSE | Health, Safety and Environment |
| iEPCI™ | Integrated Engineering, Procurement, Construction and Installation |
| iFEED™ | Integrated Front End Engineering and Design |
| Term | Definition |
| --- | --- |
| iLOF™ | Integrated Life of Field |
| IOGP | International Association of Oil & Gas Producers |
| LNG | Liquefied Natural Gas |
| MMb/d | Million Barrels per Day |
| Mtpa | Million Metric Tonnes per Annum |
| NAM | North America |
| NGO | Non-Governmental Organization |
| ROV | Remotely Operated Vehicles |
| SIF | Serious injuries and fatalities |
| STEM | Science, Technology, Engineering and Mathematics |
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TechnipFMC