TechnipFMC plc

Thank you for holding and welcome everyone to the TechNeep FMC first quarter 2023 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 will now turn the call over to Matt Seinsheimer. Senior Vice President, Investor Relations and Corporate Development. Mr. Seintheimer, please go ahead.

Thank you, Jack. Good morning and good afternoon, and welcome to Technip FMC's first quarter 2023 earnings conference call. Our news release and financial statements issued earlier today 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-K, 10Q, 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 Ferdihurt, Technip FMC's Chair and Chief Executive Officer.

Thank you, Matt. Good morning and good afternoon. Thank you for participating in our first quarter earnings call. I am pleased with the solid performance in the quarter as we successfully delivered on the commitments we made in February. Total company revenue in the period was $1.7 billion. Total company adjusted EBITDA was $155 million, with an adjusted EBITDA margin of 9% when excluding foreign exchange impacts. Total company inbound orders in the quarter were $2.9 billion, driving sequential growth and backlog to $10.6 billion. In sub-C, we had a very strong start to the year, with inbound orders of $2.5 billion, representing a book-to-bill of 1.8. This included four announced awards in the period, as well as a large IEPCI project that received FID in the first quarter. IEPCI accounted for more than 50% of orders in the period. Importantly, the combination of IEPCI, subsea services, and all other direct awards totaled 70% of awards. This is a result of our unique commercial model, IEPCI, our demonstrated technology leadership, which includes Subsea 2.0, and our long-standing client relationships, which together provide our customers with confidence in the execution capabilities of Technip FMC. Given the high quality of the work we are pursuing today and the strength of the broader market, we are confident that Q1 is not the quarterly peak for IEPCI inbound in 2023. We continue to expect IEPCI to post record inbound in 2023. This is enabled by a record level of iFeed activity which often leads to a direct award for the IEPCI phase of the project. This provides further confidence in our outlook for subsea orders of more than $8 billion for the full year. Since the creation of Technip FMC, we have taken bold steps to fundamentally change the way we operate our business. These include the introduction of our integrated commercial model, IEPCI, the development of Subsea 2.0, and the formation of our vessel ecosystem, which together enable a differentiated approach to project execution that will allow us to successfully capitalize on this period of significant growth. Our integrated commercial model begins with iFEED, This early client engagement allows for the highest degree of integration, innovation, and cost savings. IAPCI then delivers the optimized architecture and solution, leading to an acceleration in time to first production. We recently delivered the very first integrated project in Brazil. Our client, Karun Energy, has emphasized that the project would not have been economically feasible without our IEPCI execution model. This differentiated outcome underscores our rationale to focus our people and assets on those opportunities which benefit from integration and technology, enabling shorter cycle times as well as risk mitigation. We've also reduced complexity and cost with our subsea 2.0 product portfolio. Delivery schedules for a subsea tree have been shortened more than 50% when utilizing subsea 2.0 by leveraging our configure to order model. CTO allows us to industrialize our solutions while still addressing the unique requirements of individual projects. This gives us incremental manufacturing capacity without the need for additional capital expenditures. This also eliminates design engineering and redefines our sourcing strategy by utilizing pre-approved suppliers and standard configurations, reducing supply chain risk during the manufacturing process. We have also made strategic decisions in support of our fleet through the creation of our pipe lay vessel ecosystem. Here we have extended our capabilities through alliances with Allseas and Saipan, providing us the industry's most comprehensive suite of pipe lay solutions. This ecosystem expands our IEPCI opportunities while providing greater capital efficiency through collaboration.