Technip Energies Nv

Hello to everyone, and welcome to Technip Energy's first quarter 2023 financial results. On the call today, our CEO, Arnaud Piertan, and our CFO, Bruno Weber, will present our business and financial highlights, as well as the outlook. And this will be followed by a Q&A session. Before we start, I would urge you to take note of the forward-looking statements on slide two. I will now pass the call over to Arnaud.

Thank you, Phil, and welcome, everyone. Welcome to our financial results presentation for the first quarter, where we have delivered solid operational progress that puts us firmly on track to deliver our full-year objectives. Revenues of €1.4 billion are in line with our expectations and reflect continued strong momentum in TPS and lower project delivery activity resulting from the maturity of the portfolio and our ongoing exit from Russia. Our execution remained strong, and we delivered 100 basis points of margin improvement year over year. We also benefited from sustained commercial strength in technology, products, and services with awards in ethylene, renewable fuels, and carbon capture. This builds on the very strong momentum established in 2022. In addition, we are executing our strategy to prepare our future core, and I am delighted to announce the creation of Rely, a new company to drive green hydrogen industrialization through standardized and integrated solutions. I will return to this later in my presentation. Finally, orders of $713 million were broadly in line with our expectations for the quarter, leaving period and backlog at $12 billion, equivalent to approximately two times our expected revenue for 2023. Turning to our execution, I am pleased to report that we continue to make strong progress delivering important milestones, de-risking execution, and completing projects. Margins remain at robust levels, demonstrating the strength of our delivery and a favorable mix, including the growing contribution from TPS. Overall, a very solid start to 2023, and I want to express my deep gratitude to our teams that continue to drive our leading performance. Now let's take a look at recent awards, market trends, and partnerships. As previously communicated, momentum in ethylene markets has continued into 2023, and we have secured a significant contract to supply proprietary cracking furnaces for a mega plant in Qatar, as well as important technology award for a low-carbon plant in China. Also in China, we secured a reference award for low-carbon LNG with an engineering design and key equipment supply contract for a liquefaction unit to be fully electrically driven. This highlights the market trend towards modularized and electrified mid-scale LNG. Our carbon capture presence in the U.S. continues to expand with an important feed for Calpine at their Baytown Energy Center. This unit will be designed to capture two MTPA of CO2 equivalent to 95% of plant emission. And this award is further evidence of the strength of our solutions for carbon capture, which we continue to invest in. In clean fuels, we were awarded several front-end studies, including the latest with Lanzatec, for what would be the UK's largest sustainable aviation fuel production facility. This plant... will utilize our proprietary Hummingbird technology, a vital technology brick in the production of SAFs. Hummingbird is also the focus of R&D investment for us. I do look forward to talking with you in the future about the product launch based on this technology. Finally, for Blue Hydrogen, we have announced an important partnership with Casale to jointly license ATR technology as well as providing front-end services, proprietary equipment, and entire plants. With a potential carbon capture rate of up to 99%, this technology complements 10 proprietary SMR-based solutions to give us the most comprehensive suite of blue hydrogen solutions in the market today. And as I will discuss later in my outlook, this will be complemented by a leading Green H2 offering. I will now pass over to Bruno to discuss financial highlights.

Thank you, Arnaud, and good afternoon, everyone. Turning to the highlights of our financial performance for the first quarter, adjusted revenues were down 13% year-over-year to $1.4 billion, impacted by the maturity of the project delivery portfolio and the ongoing exit from the Arctic LNG2 contract, partially offset by very strong TPS growth of more than 35%. Adjusted recurring EBIT was exactly flat year-over-year, despite the lower revenues, owing to strength in margins, which increased by 100 basis points year-over-year to 7.6%, and benefiting from strong product execution and growth in TPS. Adjusted diluted EPS grew by 10% year-over-year, benefiting from the strong operational performance and higher interest income. Adjusted order intake was $713 million, slightly higher year-over-year, thanks to sustained momentum in CPS order. Net cash at Périmènes was $2.8 billion. In summary, thanks to the performance of our teams in Q1, we are firmly on track to meet full-year guidance.