Technip Energies Nv

Hello and welcome to Technip Energy's financial results for the first nine months of 2024. On the call today, our CEO, Arnaud Piertan, will provide an overview of our nine-month performance and business highlights. This will be followed by CFO Bruno Weber, who will share more details on our financial results. Then Arnaud will come back to conclude. We'll then open for questions. Before we start, I would encourage 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 to our results presentation for the first nine months of 2024, through which we have made tremendous progress in executing our business plan. Let me take you through some of the key highlights of our performance. We delivered robust revenue growth of 13% year-on-year, a testament to our backlog evolution, strategic initiatives, and market positioning. Volumes were notably strong in project delivery as large projects ramp up, whereas TPS revenues are running at an annualized rate of around $2 billion. As a result, we are upgrading our 2024 revenue guidance by 5% at the midpoint to a new range of $6.5 to $6.8 billion. This new range implies that full-year revenues will grow at a double-digit rate in 2024. and with a momentum expected to continue in 2025. EPS grew by 35%, benefiting from strength in revenues, higher financial income, as well as the absence of material one-off factors that impacted last year. Commercially, we secured our position on notable projects that enabled diversification and will serve to populate our backlog in 2025 and beyond. This includes our selection for a major LNG export terminal in the U.S., an important blue hydrogen feed in the U.K., and a green ammonia award for our RELI joint venture. I will provide more color on these later. Finally, with the completion of our share buyback program and planned cancellation of treasury shares, TEN will have returned more than €170 million in cash to shareholders during 2024 through dividends and buybacks equivalent to roughly 4.5% of our market cap and underlining our commitment to shareholder returns. Moving to operational highlights for the third quarter, where we continue to execute well across our portfolio of projects and TPS, as evidenced by our solid EBIT margins. In Qatar, both LNG projects, NFE and NFS, are progressing per plan. Notably, NFE has progressed towards peak mobilization with close to 45,000 workers at site. This activity will plateau at this high level through 2025. In SLN, a market where we enjoy clear leadership, we passed final performance acceptance test at Long Son in Vietnam. a project which integrates many of our proprietary licensed SLN technologies. Turning to TPS highlights, Reju, our textile-to-textile recycling company, opened its first commercial scale demonstration plant in Frankfurt, Germany. We completed the feed for the Arcadia eFuel project to utilize CO2 to produce sustainable aviation fuel, and the LaBarge carbon capture project in the U.S. continues to make good progress. These three themes, carbon capture, sustainable aviation fuel, and plastic circularity through redo, will feature as breakout sessions for in-person attendees at our upcoming Capital Markets Day. Overall, I am very pleased with our solid first nine months, and I am sincerely grateful to our teams for their continued dedication and professionalism.

Turning to commercial and other strategic highlights.

With a book-to-bill of around one, our order intake year-to-date is tracking in line with our revenue. On a full-year basis, we are very confident that orders will exceed revenue, notably due to awards likely to be booked in Q4, including one for the delivery of large modules for a major offshore project in the Americas. We also recently secured an important award for our green hydrogen power-to-extern venture, RELI. to provide services for one of the world's largest green ammonia plants for AM Green in India. In the third quarter specifically, we celebrated the technology first with an award for our proprietary low-emission cracking ethylene furnace for CP Chem in the U.S. This award showcases our ability to develop, scale, and commercialize technologies that assist in the decarbonization of hard-to-abate sectors. In addition, we secured our position on notable projects that enabled diversification and which served to populate our backlog in 2025 and beyond. This includes our selection by Lake Charles LNG for a major export terminal, as well as a Front End Engineering Design, or FEED, award for Rovuma LNG in Mozambique. Both highlight our continued leadership in modularized LNG trains. In addition, BP awarded TEN a feed for its H2 T-Side project, which is expected to be one of the UK's largest low-carbon hydrogen production facilities, fully integrated with the carbon capture technology. This reinforces our position in the UK's first decarbonized industrial cluster, where we have also been selected for the net zero T-Side power carbon capture project, pending final investment decisions. Our strategic focus and competitive edge in these areas really position us well for future successes and sustained growth. Finally, as part of our strategy to enhance workforce capabilities, this week we announced a small Bolton acquisition of process-centering businesses in Italy, bringing a talent pool of 70 people, the deal strengthens our early engagement and TPS activities across core and energy transition markets. I will now hand over to Bruno to present the financial highlights.

Thanks, Arnaud, and good afternoon, everyone. I'll begin with the highlights of our financial performance for the first nine months of the year. Revenues were 13% higher year-over-year, at 5 billion euros, benefiting from the ramp up of major projects as well as the steady growth in GPS, which delivered its highest ever quarterly revenue performance in Q3, with stable margins, recurring EBIT increased by 12% year-over-year to 357 million. Net profit is very strong, up 35% year-over-year to 280 million. benefiting from the operational performance, growth in net financial income, and the absence of one-off factors that impacted 2023. Turning to orders, adjusted order intake was $4.8 billion in the first nine months, broadly keeping track with revenues. As Arnaud mentioned earlier, our book-to-bill ratio is set to exceed one on a fuller basis. Pre-cash flow, excluding work in capital and provision, was solid at $360 million. In closing, gross cash was $3.5 billion, essentially in line with the year-end position. So in summary, we've delivered a strong performance across key metrics for the first nine months of 2024.

Turning to our segment reporting, starting with project delivery.

Revenues are up significantly with growth of 17% year-over-year, to $3.5 billion as activity ramps up on the major NFS project in Qatar, while on-site construction activity on NFE is plateauing at peak levels, with good progress being made. Turning to profitability, where this quarter, for the first time, we're disclosing segment-recurring EBITDAs in order to provide the financial community with more granularity of our business performance and enable better comparisons in the markets. For project delivery, EBITDA margins for the first nine months are around 100 basis points above EBIT margins. This is a sensible proxy to consider for modeling moving forward. Assessing the performance year-to-date, EBITDA margins were 50 basis points lower year-over-year at 8.3%. Execution across the portfolio is consistently strong, with the differentiation versus last year, explained by portfolio rebalancing and higher volumes from earlier phase projects where less margin is recognized. Benefiting from the revenue growth, EBITDA in absolute terms increased double digits year-over-year. The trends for recurring EBIT are absolutely consistent with EBITDA. Finally, the backlog has grown by 2% since the beginning of the year to 14.2 billion, equivalent to 3.5 times 2023 segment revenues and providing excellent visibility. Given the strength of our commercial outlook for the next 12 to 18 months, we are confident that we will reinforce this backlog with high-quality projects, and this support sends very positive trajectories.

Turning to TPS, where business momentum remains strong.

TPS delivers solid financials with revenues up 3% year-over-year, resulting from growth in renewable fuels, decarbonization services, and PMC activities. Perturbed equipment volumes, notably for SELN projects, were broadly sustained at high level. Adjusted EBIT increased by 1%, mainly driven by this stronger activity. For the third quarter, adjusted EBIT margin was up 30 basis points, versus the first half of the year, bringing the year-to-date EBIT margin to 9.4%. Year-over-year, TPS EBIT margin reduced by 30 basis points, owing to the same trends highlighted in Q2. While segment growth margin improves year-over-year by close to 100 basis points, this was offset by investment for the long-term growth of TPS through strategic initiatives, increased R&D, and higher selling and tendering activity. Adjusted recurring EBDA margins increased year-over-year by 20 basis points to 12.8%, as this metric is not impacted by the amortization of our investment in labs and pilots, as well as the greater mix of services with associated iOS 16 impacts. Overall, this drove a 5% year-over-year growth in EBDA to $188 million. Finally, TPS backlogs closed the period at 1.7 million, down 7% year-to-date, owing to the absence of any material awards during Q3 and the relatively light book-to-bid. Business prospects for TPS remain positive, and the level of engagement is very robust. Accordingly, we are confident that the trend will improve in the coming quarters. Also, as a reminder, GPS backlog excludes a large proportion of the project management consultancy and long-term service agreements and is therefore understated by a few hundred million euros. Turning to our other key metrics and beginning with the income segment, we continue to maintain a robust discipline on corporate costs, which at 41 million are trending below the run rate for 2023 that was somewhat impacted by strategic projects and the employee share offering. While not on the slide, I want to address non-recurring expense of $16 million, which increased in the third quarter. Beyond our two operating segments and corporate, we've identified separately for transparency purposes some costs associated to development projects. These investments, notably for bridge room, are accordingly no longer allocated to the operating segment to provide you with better visibility. we will discuss more about our investments during the CME. The net financial income line is very strong and nearly 50% higher year-over-year, driven by higher global interest rates. Even if we are past the peak for global interest rates for now, we expect net financial income to exceed 100 million euros for the full year. Lastly, on the P&L, at 30.3%, The effective tax rate is impacted by a change in earnings mix, with reduced earnings contribution from lower-rate tax jurisdictions and more earnings derived in higher-tax-rate jurisdictions. Turning to balance sheets, where cash of $3.5 billion is significantly in excess of the net contract liability of $2.8 billion. At our capital market day on November 21st, we intend to provide more granularity on our balance sheet. Turning to cash flows, where the picture is largely consistent with prior trends, free cash flow, excluding working capital, was $360 million and consistently strong, supported by cash conversion from EBIT above 100%. This demonstrates continued strength in our operational execution and the tailwind of the net financial income. Capital expenditure at $56 million is materially higher year-over-year due to investments in the Reju demonstration plant and the lead recognition of our new offices in Houston, which will contribute significantly to our Scope 1 and 2 emission reduction targets. As expected, the working capital trend improved from the first half position, benefiting from initial payments from major awards in the third quarter. The trend in the fourth quarter on working capital is again expected to be neutral to slightly positive. Lastly, on shareholder returns, beyond the dividend we paid in the second quarter, we've now completed our 100 million shares buyback program. As indicated previously, we intend to control up to 70% of the shares acquired as part of this program, and when combined, TEN will have returned more than $170 million in cash to shareholders during 2024 through dividends and buyback. We end the period with $3.5 billion of cash and cash equivalents. Before passing back to Arnaud, let's revisit 2024 guidance. We are upgrading full-year revenue guidance from $6.1 to $6.6 billion previously to a new range of 6.5 to 6.8 billion. This upgraded guidance implies a 7% uplift to the low end of the range and a 5% increase at the middle of the range, and is underpinned by the strength of our revenue profile through the first nine months, plus the backlog we have scheduled for the fourth quarter. We are also confirming our margin guidance in the range of 7 to 7.5%, which, as our year-to-date performance indicates, is very much trending towards the middle of this range. As I discussed previously, owing to earnings mix and the likely impact of the French surtax, we increased our tax rate guidance to a new range of 29% to 33% for full year 2024 versus 26% to 30% previously. Clearly, at this point, the surtax has not been enacted into French law Therefore, in a scenario where the surtax is not introduced, we would expect to be at the bottom of the range or below 30%. Regardless, this does not impact our ability to comfortably increase EPS well into double digits. I now turn the call back to Arnaud for concluding remarks.

Thank you, Bruno. So to conclude, we delivered a strong first nine-month performance. and we are raising full-year revenue guidance while delivering to our margin guidance. Supported by a year-to-date book-to-bill of one and our confidence in the award outlook for Q4, we expect orders to exceed revenues for the second consecutive year.

Beyond Q4, we are well positioned for notable prospects that will reinforce our backlog while supporting diversification by markets and geographies.

So finally, we are, and I am, very excited to deliver our Capital Markets Day on November 21st in London, during which we will update you on our strategy and financial objectives for 2025 through to the medium term. We will offer some new insights into our growth plans, investment priorities, and initiatives to enhance shareholder value. We do look forward. to engaging with our investor community and sharing more about our vision for TEN's bright future. With that, let's now open the line for questions.

Thank you. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one under touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Victoria McCullough, RBC. Please go ahead.

Good morning. Thanks very much for your time. A couple of questions from me this morning. So with the expected LMG supply glut appearing to come from 2028, what's your current view on the volume of unsanctioned projects? And maybe more interesting, what are your customers telling you in terms of the current timelines you expect these to go forward, or do you see the risk of potential delays in some of these? And secondly, on PPS, apologies if I missed this, it says that you said it's the highest quarterly revenue in three Qs. Should we expect to see that continuing into Q4? And we saw, obviously, a good margin recovery on a quarterly basis, or from one quarter to the next. Is this back on trend to the double-digit level, so to speak, that you're aiming for in 2025? versus the last quarter, or is the risk of seeing some additional investments coming in there? Thanks very much.

Thank you, Victoria. So I'll start with your first question on LNG and LNG supply. So our 2030 view for the LNG market is that the world will need 800 million tonnes per annum or so of LNG supply by 2030. As you probably know, there's about 500 million tons currently being produced, million tons per annum. So that's the existing capacity. You have a further 200 MTPA under construction, and we are building a very large chunk of that. About 40% of that is under construction with Technip Energies. And therefore, it's leaving a gap of about 100 million tons per annum that is needed to bridge from the current five, the 200 construction and what we expect being the 800 million needed by the world by then. So You know, the LNG market and our customers, they speak much better than I do about the LNG market, but a very good way to describe the LNG market is, in a sense, it's a market that is supply-led and not so much demand-led. So you may see an excess of LNG around 2027, 2028, and this could drive some of the LNG price or cost down. And therefore, it will attract more customers and more demand. And, you know, if you look back at the previous cycle, it always, I mean, they have the same, very similar attributes in the sense that you have actually, you know, excess supply, which calls for actually or attracts more demand. And therefore, the supply to demand gap is being filled. And thereafter, it triggers another wave of investment for more supply and so on and so forth. So I think we are in a third or fourth cycle of this kind. And therefore, we are, you know, based on what our customers and what we're hearing from our customers, you know, there's no anxiety on our side. We're quite optimistic about the LNG pipeline. We have quite a few prospects and feeds that are ongoing. We've been selected for late charts and that's beyond feed stage. We have been selected for a field in Burbuma in Mozambique for Bayexone. I mean, the pipeline continues to be rich in LNG for us going forward. So no anxiety, and I would say a lot of optimism from my end because I think the future is about renewable and gas, natural gas, and therefore LNG as part of being natural gas. It's to have enough dispatchable electricity and power for the world. Renewable alone is not satisfactory, so you need the combination of renewable and gas to make this power dispatchable. So we're very optimistic about the outlook for gas. at Technip Energies, and that's very much in line with what we're sensing from our customers who now have 20, 30, 40 years of experience into the energy market. And that's why they continue to announce projects, and they're looking at the world 2040, 2045, and are a bit less concerned by the immediate price of commodity in 2024. So it's a long-term game, and therefore we are very optimistic and positive about it. About TPS, well, I would say that we are almost a year ahead when we have a quarter that is closing at a run rate that would exceed 2 billion revenue. But that's the target we have provided for 2025. So we are very near this target already in 2024. The momentum will continue and we'll tell you more about that during our capital market today. But our outlook and our objective doesn't change. TPS at or above 2 billion for 2025 at a double-digit margin. That continues to be our objective and it will be confirmed during our capital market day.

Super. Thanks very much for the call. I appreciate it.

The next question is from Guilherme Levy with Morgan Stanley. Please go ahead.

Hi. Good afternoon. Thank you for taking my questions. I have two, if I may. The first one, could you share some comments with us in terms of engineer remuneration inflation rates? I know that, of course, the company can change the graphical mix, so not necessarily it will fuel the inflation in terms of margins, but if you could perhaps share a spoiler in terms of what you're seeing on a similar country basis. And then the second one, I know that we don't get the full financial statements in this quarter. We just get them on a half-year basis. But on your provisions balance, could you say a few words on the contingencies related to finalized contracts? That deadline in the beginning of the year was at 1.70 and that declined recently. to 90 in the first half. So if you could share some thoughts there on what happened in terms of that balance in the third quarter, that would be great. Thank you.

Thank you, Guy. I know Bruno is burning to take your second question, so I'll ask him. I mean, he's going to take it first, and then I'll answer your first one.

Sure. Good afternoon, Guy. Delighted that our Alpire releases are well-read, so there is a a request for more even at quarters. So as always, it's a portfolio that matters. And from one quarter to the next, you can have different parts of the portfolio that are providing differently. To go back to specifically your question, the impact, if you had the same pro forma disclosure Q3 versus Q2, you would see a much less meaningful variation on this line versus Q2. So almost a very small change versus Q2. So it was really from the rest of the portfolio that was the drivers.

And on inflation and the impact on the business, so as you know, because you know us well and you're following us, our project's cost base, or in our projects cost base, we account for inflation. So being for hourly rates, equipment costs, etc., when we are facing projects that are going to last for three to up to eight years for some of them, we take no chances. We bake into our price in the cost base of our projects a percentage dedicated to inflation on a yearly basis. It could be 3-4% per year. If inflation is above what is included in our cost base, well, we may have a little bit of an exposure, but we're only talking about the gap between what is baked into our cost base and the actual inflation rate. And if the inflation rate is a bit lower, then we have an upside. And if it's not an upside, but on the contrary, an exposure, we have also contingencies and technical contingencies to cover for that. As you know, we are extremely cautious in our execution in a sense that we do not speculate. So on cost of equipment, material, bulk, copper, cables, and the rest, we have a very high coverage on our, I would say, tenders and prospects when we submit a price to our customers. I would say 80%, 85% of our cost base is backed by firm offers. with the validity that is necessary for us to be protected. Which means that when a contract is awarded, and I will repeat what I've repeated several times, we do not speculate on when to place the order. If we have a firm price, we go place the PO and we secure our execution. We don't speculate hoping for better prices later on or God knows what. We're not in the business of speculating, we're in the business of delivering projects And our practice, our disciplined approach, protects us from, I would say, the artifacts that you will see, inflation and whatnot. And this is how the portfolio continues to give and continues to deliver the results that we are delivering quarter after quarter. The attribute of the project delivery business within Technip Energies is one that is, I would say, providing a very solid base load to the company with a very strong cash generation. And what is important is that the portfolio continues to give and that we manage this portfolio in the way that it is predictable and delivers results to you and our shareholders. No speculation, a very, I would say, good level of protection. When we cannot get the right protection, as you know, we go open book, and therefore we pay the actual price, you know, fully reimbursable or open book. None of our projects are truly fully lump sums. As you know, it's a blend, the importance being the level of protections and the predictability we can deliver.

Thank you.

The next question is from Kate O'Sullivan, Citi. Please go ahead.

Hello. Thanks for taking my questions. Firstly, on TPS, strong results this quarter, but we did see slowing order intake. So just based on the pipeline you have and the discussions you're having with customers, could you provide some color on any areas you have noticed a slowdown or indeed an acceleration? And second question on the accounts, you had a step up in non-recurring expenses this quarter, attributed the setup of new business ventures. I think you mentioned resue costs are allocated here. Which other businesses will you allocate under this line and how do you expect these to trend over the coming quarters? Thank you very much.

Hi, Kate. So, yeah, TPS, a bit of a soft order intake for the quarter. And you've noticed a backlog that is a bit lower than what it has been in the past quarters. But, you know, very strong momentum. And we have actually a very good line of sight for Q4 for potential, I mean, likely awards that will be dominated by, I would say, products and technology, and therefore really accretive, and a bit less services, therefore a bit less, you know, man-hour based. So we've had a wave of quarters, I mean, two, three quarters that were marked by more services awards and less product or proprietary product awards. In Q4, this could be reversed. We have, you know, in the domain of carbon capture, for example, some very good leads. So we expect the portfolio to, again, be tainted a little bit more by more products and technology and a bit less services. It doesn't mean that services would slow down in absolute term, but in relative term, it would be more T and P and a bit less services, again, on a percentage basis. We see a very strong momentum in the blue chain, so blue ammonia, blue hydrogen, and carbon capture. There's really a very strong momentum at the moment. Maybe a bit of a slowdown in what might be energy derivatives that are more or less needed at a time where there is a bit of a slowdown on the macro environment. The portfolio continues to deliver. The position that we've taken in the new market in particular is really generating a lot of demand. There's need for more energy. There's also need for less emissions. We are being asked to contribute and to do a lot of studies related to decarbonization and reduction of emissions. All in all, momentum continues to be strong. Q4, you should see a recovery in the backlog because it will be populated or colored by more products and technology. And when you say more products, all of a sudden you have more volume per order because when we sell a proprietary product, the orders are in the several tens of millions or in the hundreds of millions per order, and therefore you bring immediately more volume and also a more longer cycle aspect to the order within TPS. We're feeling pretty good about it. It's just a matter of time, and NQ4 should be providing the evidence of what I'm describing here. Your second question, Maybe Bruno will take it.

Yes, good afternoon, Kate. So on non-recurring, which was indeed a bit of a step up versus the previous quarters, not the full amount was associated to Redzoo others, but let's say a high single digit for mainly Redzoo and then other initiatives for other markets, but that are not as mature, so maybe a bit too early to name them out. At the CND, we will provide beyond 2024 what can that look like. We are very excited, for instance, about Reju. Recently, they announced that they had concluded with Waste Management and Goodwill in the U.S. some agreements that can be a source for feedstock, which is the base for PET recycling, as you know. And all this work and all the team which is gathered to create this ecosystem is beyond the GPS, is beyond project delivery. This is why we've decided for the transparency of approaches to highlight it. It's not corporate, so to highlight it there. The team is picking up pace, doing a lot of work. For Q4, you know, you could expect something around a single digit. in terms of expenses, but for beyond, that depends on progress, and that's something we would share more at UCMD.

Thank you very much.

The next question is from Jean-Luc Romaine, CIC Market Solutions. Please go ahead.

Good afternoon. My question relates to LNG technologies. ExxonMobil has chosen technology by chart industries to develop their Mozambique project. I was wondering if your own SnapLNG technology was competing for this or not, and what are the prospects for SnapLNG?

Thank you, Jean-Luc. We worked alongside Exxon significantly in preparing for the Rovuma feed, as you may imagine. Our own SNAP LNG solution was put on the table and considered. Now the size of the LNG train by SNAP LNG is much higher than the individual size of the trains that will be. eventually built for Rovuma. SNAP is north of 2 MTPA, it's 2 to 4 million tonnes per annum per train. The trains that Exxon are contemplating as part of Rovuma LNG are below 2 million tonnes per annum. not totally, I mean, we played with it, the size of the modules, whether it was suitable for the geography, the site conditions, etc., and the SNAP LNG as designed probably was a bit too large to be accommodated on the specific site for Rovuma. And that's fine. We know the charts technology, we've integrated it in the past, so we are We're very happy to be in this FIT competition. It's a prospect that really fits really squarely within the strength and the sweet spot of Technip Energies. It's all about modularization, so things that we know how to do really, really well, and therefore very happy to be part of the race. As for SNAP, it continues to be, I would say, a prospect for... North America and where all the conversations we are having, as you know, are on the basis of modular trains. And, yeah, so we continue to have a couple of prospects in North America, which outcome is dependent on the list of the LNG moratorium in the U.S. But one important point for me about Snap LNG is whether or not we are having extreme successes or whether we are selling one Snap every two years. The important is that the fact that we invested into Snap and that we designed it and it was a pre-investment, it's becoming, I would say, an entry point for conversation with customers. So they are coming to us because we have it. Therefore, it triggers conversations about the various versions of modularized facility that we can design, we can envisage, et cetera. So, you know, there are byproducts of this investment. You know, for us, it was about... a 10 million euro investment to complete the pre-design of this Snap LNG. And the byproducts are the things you don't see, which are because we have it, therefore customers come to us for discussions and whether or not they adopt it in full, but it's not that important because it allows us for a different type of interaction and early engagement. And the fact that we are involved in all the energy prospects that are modularized is also the result of this pre-investment.

Thank you very much.

The next question is from Richard Dawson, Berenberg. Please go ahead.

Hi, good afternoon, and thank you for taking my question. My first question is on project delivery, where it was a pretty strong quarter, both on the top line and with margins, sort of delivered above your median term framework. Could you speak a bit more about what drove this? And looking forward as NFE and NFS contributions continue to ramp up, how should we think about PD revenue sort of into next year and particularly on the margin level? And then my second question is on tax. And with an increase in the effective tax rate for this year and the potential surcharge in France, could you provide some details just on your pre-tax income and specifically what portion of your profit before tax is actually subject to tax in France and presumably some of the profits taxed in countries where the projects are actually located and subject to tax treaties, et cetera. Thank you.

Hey, Richard. So for project delivery, You may recall a couple of years ago, of course, we reached a bit of a trough in our product delivery top line revenue as a result of pulling out of Russia and pulling out of the Arctic Energy 2 project, which we had to replace in the backlog and therefore replenish the backlog, but also, I would say, start again on a positive momentum in terms of the growth of our revenue. So the good news is that, as I would say promised and as we indicated, 2024 is showing progression on the revenue when compared to 2023 for project delivery, and it's a significant progression of the top line. And we'll share more about that during our capital market today, but expect to see, and that's what I was trying to convey in my prepared remarks. We expect to continue to see some growth in project delivery in 2025 in terms of revenue as the portfolio continues to mature. Of course, we will onboard new projects, but NFE and NFS will be stronger contributors. I'm going to point again to NFS, and we have reached the peak mobilization. I repeat, 45,000 people on site. We will be at this plateau for or throughout 2025. So there's a significant level of progress that will be achieved in Q4 this year and throughout 2025 on those larger LNG projects in Qatar. After that, in terms of the performance for 2025 on project delivery, I would say just join us for the CMD. We'll provide you more granularity. I think it will be premature for me to give you all that three weeks ahead of our capital markets day. So I'm sure you'll join us and you'll have all the answers to your questions. Bruno, maybe on tax?

Yes. Hi, Richard. So on taxes, as you know, we are not doing a lot of work for projects in France, projects that are infrastructure located in France. But we have a French operating center, which is quite large and has a lot of value. So for any project, usually you would have tax, which is borne in countries where the infrastructure is. plus where the execution centers are operating, where you have some added value. So this is why the surplus tax can have an impact on technical energies, given there is some tax base in France with the operating center providing higher value services for a lot of different projects. Now, of course, Tax law is not enacted yet, so it's quite speculative at this point. We're following. But as we've revised the guidance, we've included what could be the scenario. So if enacted, it will have a limited impact, still a few basis points of effective tax rate. If it's not enacted, then that's why we would remain in the low range which was provided, which is just below 30 for a full year basis. So to be monitored, if it may have a small impact, and the tax guidance which was slightly updated, but not major.

That's great. Thank you for the cover.

The next question is from Guillaume de Labille, Bernstein. Please go ahead.

Yes. Good afternoon, Arnaud and Bruno. One question, if I may. Globally, when I look at the title of the presentation, Arnaud, when I'm listening to you, I have the impression that the way you are communicating is changing a little bit, that you may be more optimistic for 2025. So I know it's too early to provide a guidance or whatever, but if I understand you correctly, you expect some revenue growth in 2025 and probably as well some EBIT growth. So that's my first question, and then I will have a related question.

Good afternoon, Guillaume. I'm very happy today because it's my birthday, first of all, so I'm happy to share that with you. Yeah, I mean, I think the Technip Energy is on a trajectory that is a growth trajectory, so I'm not going to disclose too much because the CMD is just three weeks away. But, yeah, I expect to see growth in 2025, top and bottom, as a minimum, because there's top-line growth. Mechanically, we have bottom-line growth. And also because the – The outlook, irrespective of the macro, actually, or the current macro environment, but there are some macro trends, long-term trends that continue to support our business. And the strategic choices that we've made and where we've placed our bets and our investments, clearly, it's in areas that are very needed. going forward. It's more molecules, less emissions, a lot of decarbonization, while having to continue to supply and provide energy. I'm coming back to what I said a bit earlier, which the winning combination for us and for me, and I'm not the only one, is really a combination of renewable electricity plus gas so as to make the electricity dispatchable and so gas is needed and as you know we are heavily invested into gas and we see globally a positive outlook and some of the choices we are making and investments we've made and Riju is an example and we'll talk about Riju during the CMD so too early to say but there's traction and and it's opening new opportunities for Technip Energies in terms of alternative business models and ways of making an earning. So all in all, you know, it's very positive momentum and time for Technip Energies. Our headcount is growing. You'll hear from us during the CMD about that. And, yeah, there's no – we're not struggling with keeping our people busy.

And maybe a quick follow-up. The big surprise this morning was the margin on project delivery, which I think is somewhat a surprise given the fact that your backlog is still relatively young. I understand from your comments during the call that the current level of operation at NFE is likely to continue in 2025. This probably suggests that NFE is going to be an important building block of your margin in 2025. You can just say correct. So if it is correct, then there will be room for other people to ask questions.

Yeah, okay. Bruno is a man of few words on me, so Bruno will answer.

NFC absolutely will be, you know, an important block, top line and, of course, bottom line, progressing per plan. In terms of, you know, portfolio, as always, when we reach critical milestones like final acceptance, provisional acceptance, or some project which has happened in Q3, this de-risks and can have an impact. We've had some good contributions from some of these projects. The trend for more Projects at the early phase, which are dilutive by design, as top-line growth within projects will continue to drive up. But the quality of the backlog plus the portfolio, which will evolve, will become also a bit more blended. So the trajectory is there. Growth of top-line, consistency in delivery, which supports a long-term, let's say, margin, and growth in absolute terms, as Arnaud just highlighted. Thank you very much, and happy birthday, Arnaud.

Thank you.

The next question is from Sebastian Erskine at Redburn Atlantic. Please go ahead.

Hi there. Good afternoon. And thanks for taking my questions. And obviously, you know, very, very robust set of results. Two for me, if I may. The first one, I appreciate some color on, in your view, the sensitivity of your kind of pipeline to a potential Trump presidency, particularly risks on the Inflation Reduction Act. I'm kind of thinking a little bit about the Exxon based on low carbon hydrogen project where you're doing research. some feed work on the Section 45 clean hydrogen tax credits. And then secondly, on the order outlook into 4Q, I know it's been asked a bit before, but just some color on sort of nearer-term projects you might see coming through, an update maybe on Corral Norte, and then obviously on the Suriname FPSO, where you are doing some work alongside SBN offshore. That would be really appreciated. Thank you.

Hey, Sebastian. All right, so... color on post-elections. All I can say, because I'm not going to speculate, is that there's something that we stated in our prepared remarks, in mine certainly, about diversification in the portfolio for Q4 2024 and throughout 2020. The U.S. is a geography where you will see us play. Two years ago, we signed NFS in Qatar. We have today a presence in the Middle East that is significant. And it takes time for a company like Technimed Energies to completely, I mean, to properly, you know, build some diversification into geographical diversification into the portfolio. So we have taken the decision, together with our board of directors, of course, to rebalance the portfolio. It's something that we, a decision we have taken a year and a half ago. And therefore, it's influencing the type of project and the projects we are chasing and where we are chasing them. So the U.S. is obviously an important territory for that. We have, you know, about Lake Charles LNG. We are still, you know, in the race for another, you know, with another developer in the U.S. Obviously, if Trump wins the election, we can expect that the moratorium on LNG will be lifted, you know, maybe faster than if it's the current administration winning. Now, the current administration winning doesn't mean that the LNG moratorium won't be lifted. Some are of the opinion that it will take a bit longer, but it will be lifted nonetheless. But if it was to be a Trump victory, so for sure, I believe we will see a faster lift of the LNG. of the moratorium, and therefore it will unlock a pipeline of opportunities, and we don't need 10 of them. For us, one or two is plenty in the U.S., and we have them. You know about them, and we've been selected, and therefore it could color and come into our backlog and put a large U.S. content into it. In addition to that, and the IRA and the rest. I'm very positive about the blue chain, so blue ammonia, blue hydrogen in the US in particular. You know about our involvement for Exxon in Baytown. I've just been awarded, but we may talk about that during the CMD, a pretty large feed for another U.S. customer in the U.S., again, for the blue molecule at feed stage. But all those are signs that we're going from pre-feed to feed, and that the combination of gas plus carbon capture in a country that is taking a very pragmatic approach to incentives for decarbonized solutions Yeah, all that makes of the U.S. a very credible play for technical energies and happy to report that we are playing. And this comes on top of other things that we will do there, such as pure carbon capture projects, et cetera. So clearly, the U.S. and the U.K., because you know about net zero T-side, H2 T-side, et cetera, this could contribute to a very, I would say, significant diversification and enrichment of our portfolio in Q4 and also within 2025. Thank you very much. Yeah. Okay, just the last one on Q4. I think you've listed the prospects. It's just a matter of... us being allowed to declare the contract and the FIDs being declared by the customers. Coral Norte is very much a question for ENI, but is it on this side of the 31st of December or just on the other side? It won't change much for us. At the end of the day, it will be a project and we'll be happy to enjoy it. So that's where we're not totally a quarterly business, but we nonetheless expect a very strong inbound in Q4. Many thanks.

Look forward to the CMD. Thank you. Thank you.

The next question is from Bertrand Audet, Kepler-Chevreux. Please go ahead.

Yes. Hello, Arnaud. Hello, Bruno. So a question related to order intake was $4.8 billion first nine months. Last time we spoke, Arnaud, it was at our autumn conference, and you pointed for a potential €4 billion for H2. Is it still valid, or do you see some risk, like you mentioned, Corel Norte sliding into 2025? And then the second question is on Lake Charles. So it's a very large LNG project. FID is still pending, but can you give us an order of magnitude of the size of the project Technip Energy shares? Because it's a bit difficult to gauge the size given the value scopes and the framework around around this project, but is it, you know, is it a four to five billion potential billion dollar project, Technip Energy share, or is it lower or higher than that potential?

Thank you, Bertrand. So I'll start with Lake Charles.

So Lake Charles, you know, we are, Technip Energy is a leader. of the GV, and we have KBR as a partner. The project, I must qualify the fact that this project in the U.S. is highly modularized, and I need to repeat that we will not be taking any form of lump sum risk in the U.S., so there's a very large part of the project that would be reimbursable. and therefore totally de-risked. We're not taking any lump sum turnkey risk in the U.S., including in LNG. Okay, the size of the project, it's north of 16 million tons per annum. You know the market really well, Bertrand, so the potential value of this contract, if it reaches FID, you will be... Definitely in the areas that you've mentioned, if not a little bit above that, we can provide more granularity maybe during the CMD if there's more progress on that one. But it would be a significant order considering the size of the project, 16 million tons per annum. to launch trains similar to Qatar, et cetera. But we are a 50-50 JV partner in this. As for H2 2024, yeah, no change to the potential. So we are not controlling FIDs, and we are in the hands of our clients for that. We have several prospects, and we mentioned one in our prepared remarks without mentioning it, but the delivery of large modules for projects in Suriname, you would have guessed what I'm talking about. And this is a significant order. You add to that the orders that we would naturally book for PPS on a regular, I mean, average run rate basis. And we have a few other things to, you know, which could be announced. So, yeah, that's, you know, confirming what I said at your conference.

Thank you.

The next question is from Daniel Thompson at BNP Paribas Exane. Please go ahead.

Hi, good afternoon, and happy birthday, Arno. Thank you. Yeah, just two quick ones, hopefully not, hopefully quite straightforward. So we've spoken a lot today about de-risked execution in the US, which I think it's a very important point given how many projects there are looking to take FID over the next year or two. On the modular approach, could you just remind us where the modules are fabricated for technique energies and if there is any sort of threat in terms of tariffs that may come up under a certain administration, or would any cost related to that be borne or be reimbursable? And then secondly, Sun Qatar, Northfield East, can you tell us how close you are to completion on the first train? Thank you.

Okay, yeah, thanks. So on the... I will not answer your second question, because that's a question that you can ask our customers, and obviously I have a good indication of how close we are to completion, but the project is on track, it's progressing well, and it's something that we signed in 2021, so I won't say more. As for the modules, well, you know, we have a history of building modules of various sizes in countries like Indonesia, China, Middle East, et cetera. So the yards that we are, you know, Southeast Asia, like Malaysia as well, The yards we are dealing with include China, but I will qualify my comment. On the execution plans, we are basically preparing for our customers two execution plans, one which includes China and one which doesn't include China, and we have alternatives. for module fabrications in other yards than China. So as you can imagine, We as a company, we will not take the Chinese risk. So this is something if a client elects to go for China, then it would be his choice and we will support it. But we will enter into the contract with the right level of protections as a company. So no risk taking by technical energies or no exposure to sanctions. If China is selected for the right reasons, then we'll support it. But of course, this is a risk that has to be supported by our customer. And I would say a decision that will be taken jointly with the customer. to go for one execution plan versus another one. But in the meantime, we've been more than scouting. We've been visiting, signing agreements, and getting comfortable with alternatives. They are obviously mostly in Asia and also in the BDD. So we are prepared for both eventualities.

Perfect. That's very helpful, Kalle. Thank you. Thank you.

The next question is from Mick Pickup, Barclays. Please go ahead.

Good afternoon, gents. Happy birthday. I've just looked up your age, and you've made me feel a bit older. Can I just ask about the bolt-ons, please, if I may? Expertise in process engineering and piping design. I would suggest they're core skills of the company. So what do they bring, or is that just a shortness you're addressing?

Well, we're growing headcount in the company, Mick, I would say, and we'll provide details during the CMD about that. But, you know, it's been growing significantly. What this small Bolton is contributing is something that we can never have enough of. Our PhD is an expert related to molecule and process technology, basically. So it's chemistry. And if there's something that is on very, very high demand in our industry today, our experts in process technology and molecule transformation. So that's what we've acquired. That's this expertise. Of course, it goes beyond because they were and are doing engineering for our customers. So there is piping, et cetera. But the core that we're buying is a competency that is a rare commodity. its process technology and molecule.

Thank you. Cheers.

Cheers. That concludes... Sorry, Jesus.

That was the last question. I turn the conference back to you for any closing remarks.

That concludes today's call. Please contact the IR team with any follow-up questions. Thank you and goodbye.