TechnipFMC plc

Thank you for holding and welcome everyone to the TechMeet FMC third quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, again, press the star one. Thank you. I would now like to turn the call over to Matt Seinsheimer. Senior Vice President of Investor Relations and Corporate Development. Mr. Seinzheimer, please go ahead.

Thank you, Jack. Good morning and good afternoon, and welcome to Technip FMC's third quarter 2022 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 U.S. Securities and Exchange Commission. 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, Technipa FMC's Chair and Chief Executive Officer.

Thank you, Matt. Good morning and good afternoon. Thank you for participating in our third quarter earnings call. Total company revenue in the period was $1.7 billion. Revenue was in line with the second quarter and our outlook, a solid achievement given the foreign exchange headwind experienced during the period. Total company adjusted EBITDA was $200 million, with a margin of 11.5, which excludes a foreign exchange loss. Both sub-C and surface technologies achieved sequential improvement in adjusted EBITDA margin in the quarter. Total company inbound orders were $1.9 billion. Sub-C inbound was $1.4 billion. with year-to-date orders now totaling $5.2 billion, exceeding the level achieved in all of last year. Project awards inbound in the period included Total Energy's Lapa Northeast development offshore Brazil, where we will install umbilicals and flexible pipe in a new configuration to further secure the production of the field. This award highlights the diversity of work scope and customer opportunity in the region. We also received a contract from Shell for the Jackdaw development. The project will use our pipe and pipe technology for the tieback from the new Jackdaw platform to Shell's existing shear water hub, supplying much needed gas to the region. Additionally, we received an award for the ExxonMobil gas to energy project in Guyana, which will be included in future inbound once the project receives FID and government approvals. This project will enable Guyana to shift a portion of its power generation to cleaner natural gas sourced from nearby offshore fields. Beyond our announced awards, inbound orders in the quarter reflected strong tieback activity in the Gulf of Mexico, the North Sea, and West Africa. During the quarter, we also renewed our technology alliance with Halliburton, where we have demonstrated strong collaboration since the creation of Technip FMC in 2017. The alliance accelerates the development and commercialization of new technologies that deliver integrated production solutions that span subsea and subsurface applications. An example of this is a digital technology Odyssey subsea fiber optic solution, which we first introduced in 2020 and has already been deployed in key subsea developments. The Alliance continues to develop innovative and disruptive technologies that can be used in all-electric subsea field development, subsea well intervention, and carbon capture and storage. Now looking ahead. We are confident that offshore will provide significant volumes of oil and gas with attractive returns that in many cases are amongst the most compelling opportunities available to our customers. Project economics have improved, driven by lower costs and accelerated time to first oil, providing solid support for continued development activity. This is supported by the fact that approximately 90% of estimated subsea capital expenditures through 2025 are based on break evens of less than $40 a barrel. Our subsea opportunity list remains at a record level. This strong project pipeline and the active dialogue with our large and expanded customer base give us continued confidence that our full-year subsidy orders will be up as much as 40% versus the prior year, with orders approaching $7 billion in 2022. And if we extend the outlook into 2023, we believe orders over the next five quarters will be at least $9 billion. Moving to surface technologies, inbound was strong at $449 million, representing a book to bill of 1.4. Importantly, inbound activity in the period benefited from the acceleration of orders from a RAMCO, a significant portion of which will result in revenue in future periods. The resulting growth in backlog also provides us with increased visibility for continued growth in our international revenue in 2023. Investment in oil and gas resources will continue, and we are confident that offshore and subsea will be critical enablers for the energy transition. Opportunities in greenhouse gas removal, hydrogen, and floating offshore renewables, including wind, wave, and tidal energy, are accelerating. We have made several announcements regarding strategic agreements and partnerships, and we have already achieved notable commercial wins. We have secured two tidal energy contracts in the UK through our partnership with Orbital Marine Power. The multi-turbine projects will be capable of delivering 7.2 megawatts of predictable tidal energy, positioning us as the leader in floating tidal energy. And we have signed the option to lease agreement for the Scott Wind N3 area through our partnership, Magnora Offshore Wind. The project scope would include the installation of 33 floating wind turbines, which when combined, can provide enough energy to power more than 600,000 homes in the United Kingdom. Our growing presence in commercial winds in these particular offshore renewable markets are creating new opportunities across an expanding list of potential partners and geographies. We are confident that as the energy transition accelerates, so too will the opportunity set for our company. In summary, we remain focused on meeting our commitments in 2022. And looking beyond the current year, We continue to see the potential for strong growth in EBITDA, cash flow, and returns, as evidenced by our stated objective to achieve more than $1 billion of subsea EBITDA by 2025. Further demonstrating our confidence in this outlook, we announced a new $400 million share buyback program in July. which we quickly put into action with the repurchase of $50 million of our shares in the quarter. We have also reaffirmed our commitment to a dividend, which we intend to initiate in the second half of 2023. This outlook is enabled by the fundamental changes we have made to our company and the continued strength in the markets we serve. The next leg of growth in oil and gas will be fueled by by offshore and the Middle East. The bold steps we took five years ago to create Technip FMC have resulted in a pure play technology company that is uniquely levered to both of these markets. Our portfolio of innovative products, solutions, and disruptive commercial models has further strengthened our leadership position. And we are now taking full advantage of the market growth that lies ahead. I will now turn the call over to El.