TechnipFMC plc

Ladies and gentlemen, thank you for standing by and welcome to the Technique FMC third quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please limit questions to one question and one follow-up. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Matt Seinzheimer. Thank you. Please go ahead.

Thank you, Lisa. Good morning and good afternoon, and welcome to Technip FMC's third quarter 2020 earnings conference call. Our news release and financial statements issued yesterday can be found on our website. I'd like to caution you with respect to any forward-looking statements made during this call. Although these forward-looking statements are based on our current expectations, beliefs, and assumptions regarding future developments and business conditions, they are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by these statements. Known material factors that could cause our actual results to differ from our projected results are described in our most recent 10 , most recent 10 , and other periodic filings with the US Securities and Exchange Commission, the French AMF, and the UK Financial Conduct Authority. We wish to 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. I will now turn the call over to Doug Ferdihart, Technip FMC's Chairman and Chief Executive Officer.

Thank you, Matt. Good afternoon and good morning. Thank you for participating in our third quarter earning call. On the call with me today are Marianne Manin, Chief Financial Officer, and Arnaud Piaton, President and CEO elect of Technip Energies. We delivered solid operational results in the third quarter. just months after the start of one of the most challenging periods the global community has ever faced. I want to once again thank our entire workforce for the resilience and dedication that they have shown throughout these unprecedented times. Our success is evident in our ability to continue winning, to continue executing, and to continue accelerating our business transformation while remaining steadfast in our focus on health and safety. In the quarter, inbound orders exceeded $2.2 billion, largely driven by subsea. This was our strongest quarter thus far in 2020 and represented a sequential increase of 45%. Our strong results stem from the success of working collaboratively with our clients, where our innovative solutions, demonstrated excellence in execution, and financial health provide our customers with confidence to move forward projects during such challenging times. Total company adjusted EBITDA was $321 million with a margin of 9.6%. Importantly, all three segments showed sequential margin improvement as the execution momentum continued across the portfolio. And looking at our business transformation, we continue to accelerate our cost reduction efforts and have already achieved the full targeted run rate savings of more than $350 million. As we leverage our new business models, innovative technologies, and digital solutions, we will continue to drive further cost reduction and efficiency gains across the organization. Taken together, our inbound orders, our operational results, and our cost reduction initiatives provide us the confidence to reaffirm our full year guidance for 2020. As our clients continue to reprioritize their portfolio of investments, we have seen an improvement in our award activity, having announced six projects globally since July, totaling $2.8 billion in aggregate contract value. While most of these projects are already in our backlog, the EPC contract for the Asut Hydrocracking Complex, a Technip Energies award that exceeds $1 billion, is anticipated to be inbound in the fourth quarter. We also announced an award from Shell for the revamp of their Mordike plant where we will provide proprietary equipment and related services for eight ethylene furnaces. This award further demonstrates our leadership in ethylene technology and helps drive a reduction in CO2 emissions. In addition, our LNG opportunity set remains strong as we have been awarded two major projects which will inbound upon FID by the client. For one of these projects, Sempras Energia Coastal Azul, the client has indicated a likely FID by year end. And we are actively tendering a major project in Qatar. A prospect with good momentum is evidenced by recent award announcements for several project work scopes. While we believe Technipe FMC is well positioned for this opportunity, The EPC contract is being competitively tendered. In surface technologies, we continue to leverage the strength and resilience of our leading international franchise with two important growth opportunities captured in the quarter, both in the Middle East. In Kuwait, we received an award for high-pressure gas equipment and in-country services. And in Oman, we secured a five-year frame agreement with Petrogas an operator that has significant drilling plans in the country. We believe these awards provide us the opportunity to further expand our market share across the region. And in Subsea, we were awarded our latest IEPCI project with Shell in Malaysia. It incorporates our Subsea 2.0 technology as well as a diverse set of other projects in some of the most active basins in the world. In Brazil, the Petrobras Merrill 2 project, in Norway, the Breidelblick project for Equinor, and the ExxonMobil Pyra project in Guyana. 50% of these projects were the result of a direct award to our company due to our unique capabilities, our competitiveness, and our technology leadership. These awards clearly demonstrate the resilience of strategic offshore basins where through cycle economics are highly competitive within our clients investment portfolios. We remain on track to secure approximately $4 billion of subsea inbound for the full year. Looking ahead, we see a healthy set of subsea opportunities and we continue to grow our proprietary market opportunities by focusing on long-term strategic relationships with our partners to optimize project economics and returns, utilizing our unique and proven iFEED, IEPCI, and ILOF capabilities. Therefore, I am pleased to announce another exclusive alliance with an operator in the UK North Sea, leveraging our integrated subsea business model, IEPCI, to support and optimize future development opportunities from the early concept phase through production and life of field services. Additionally, our front-end engineering teams remain very active. In fact, we have seen an acceleration in study awards in recent months, with double-digit growth now expected above our prior expectation. And half of our study todays are integrated, which leverage the benefits of our digital subsea studio offering and positions us well for future IEPCI awards. Digital is another key enabler of our business transformation, and our digital strategy is focused on three pillars. Becoming a data center company, developing intelligent products and assets, and driving towards autonomous operations. Subsea Studio and our recently introduced iComplete offering are two solutions that exemplify these pillars and further expand our leadership position. Let me start with Subsea Studio. This solution is transforming the conventional concept, feed, and tendering phases of Subsea projects. Working with our clients, we are now able to develop ultra-fast digital field architectures that bring together decades of engineering knowledge with artificial intelligence and machine learning to optimize product configurations, accelerate execution, and maximize value. Subsea Studio has an open architecture that allows integration with other engineering and manufacturing systems, eliminating the need for multiple handoffs and resulting in as much as a 50% reduction in the time required for front-end engineering. And we are extending the platform beyond subsea system design to incorporate the execution and field management phases of a project. Once fully implemented, we'll have a complete digital thread from concept design all the way through to the life of the field. And we are taking our learnings in subsea and applying those on land. iComplete is a revolutionary approach to shale completions. And we're the only company to focus on making a completions pad that is truly integrated, efficient, and simplified with digital automation and control. iComplete has 50% fewer components and reduces operating expenditures by 30%. The integrated system also removes 80% of connections across the well site, improving efficiency while reducing risk. Digital integration is a key element of the iComplete package. All of the data gathered at the site is available in real time. It is actionable information that enables operators to make evidence-based decisions at every step of the process. And when combined with the automation features, it reduces personnel required on site by up to two-thirds. iComplete is experiencing broad market acceptance with awards secured from operators in all major U.S. basins, leading to increased market share. Earlier this month, we announced that Arnaud Piaton will assume the role of President and CEO-elect of Technip Energies, and I would like to welcome him to the call with us today. Arnaud has been with the company for over 15 years, and a valued member of our executive leadership team since the formation of Technip FMC. He has extensive project-related experience, and he most recently led our subsea business, taking it to new levels of commercial and technological success. Simply put, he is a seasoned professional and an integral part of the foundation of the company we know today. While Arnaud will undoubtedly bring new energy and new ideas to his new role, he and I are fully aligned on business strategy and committed to realizing a successful future for Technip Energies. And what an exciting start to his new role. Just last week, we announced the strategic partnership and investment in the green hydrogen arena with McPhee, a leading manufacturer of equipment used in the production and distribution of green hydrogen. We are already a leader in hydrogen today, and with McPhee, we will leverage our established brand and customer relationships, as well as our core competencies in engineering, technology integration, and project execution to develop large-scale and competitive green hydrogen solutions from production all the way to liquefaction, storage, and distribution. We are also joined by Chart Industries, whose expertise in equipment development is complementary to our process technology and project capabilities. We firmly believe that both innovative technologies and partner collaboration will be needed for the world to achieve net zero carbon targets. And this collaboration between McPhee, Chart Industries, and ourselves stands as a real example of the many ways in which Technip FMC will play a material role in the energy transition. I will now turn the call over to Mary Ann to discuss our financial results in more detail.