Technip Energies Nv

Hello and welcome to TechniAppendage's financial results for full year 2024. On the call today, our CEO, Arnaud Piertan, will discuss our full year performance and business highlights. This will be followed by our CFO, Bruno Weber, who will share more details on our financials. Then Arnaud will come back with the outlook and conclusion. We will then open for questions. Before we start, I would urge you to take note of the forward-looking statements on slide three. I will now pass the call over to Arnaud.

Thank you, Phil, and hello, everyone. Before diving into our results and 2024 highlights, I would like to remind you of who we are at Technip Energies and of our unparalleled value proposition. We are leaders in energy and decarbonization markets, prioritizing safety and innovation, and our 17,000 talents are the cornerstone of our success. We are a technology and engineering powerhouse focused on value creation, expanding and diversifying our portfolio. Our ambitious roadmap through 2028 underscores 10 growth credentials, over €8.6 billion in revenue, over €800 million EBITDA, and a free cash flow conversion between 70% to 85%. We are equipped with a strong balance sheet, generating significant and sustainable free cash flow. As we execute our growth strategy, prioritize capital allocation for dividend growth and value-enhancing investment, we will accelerate value creation for all our shareholders. Now let me remind you of our business models, which have complementary strengths and business cycles. Project delivery, PD, is cash-generative, negative capital employed, and de-risked, with a business cycle that brings several years of workload and cash flow visibility. PD is a portfolio of many types of projects and contractual schemes with rigorous active risk management. Therefore, project delivery at 10 represents a sound and robust baseload for cash generation, not just now, but for the foreseeable future. as you will see through our results presentation. Now on TPS technology products and services, our higher margin, faster growth segment. In many instances, TPS is the precursor to project delivery. It broadens our offering of proprietary solutions. It reinforces our differentiation through productization and technology scale-up, and it is the gateway to market with accelerated growth. For all these reasons, TPS is where our capital will be further deployed. Thanks to our success in PD and TPS and our balance sheet strength, we have the ability to venture and pioneer in adjacent business models. It's about generating recurring earnings and about longer-term value retention. In 2023, we started with Reju, a 10 company that could be a 2 billion euro revenue company by 2034, subject to investment decisions. Before highlighting our full year achievements, let's revisit the transformative milestones from our November Capital Markets Day. We demonstrated how our strategic choices are paying off and discussed the promising future of our expanding market landscape, with continued growth in energy and energy derivatives markets and faster double-digit growth in decarbonization and circularity. We also showcased a robust and diverse commercial pipeline valued at $75 billion through 2026. For the first time, we provided detailed financial guidance by business segment for 2025 and outlined an ambitious roadmap for 2028, ensuring consistency in free cash flow conversion in the 70% to 85% range. And we offered further insights on our strong balance sheet and our economic net cash position, which has since grown to more than 1.4 billion euros. Lastly, we unveiled our capital allocation framework, emphasizing our dual priorities, dividend growth and strategic technology-driven investments to enhance differentiation and accelerate value creation for our shareholders. Now turning to the highlights, Technip Energies delivered an outstanding 2024 performance for both revenue and earnings. This success is a testament to the ingenuity and commitment of our teams in their pursuit of excellence. Our operating results are stellar, boasting 14% growth in top line, with revenues exceeding the top end of our Q3 upgraded guidance range at close to 7 billion euros. This robust top line growth paired with excellence in execution, propelled a 13% increase in EBITDA to $608 million, translating to our highest ever levels of EBIT and earnings per share. 2024 was also a year of great commercial success, with more than $10 billion of order intake across our markets, including LNG and decarbonized power generation. orders significantly outpaced revenues for both business segments, driving our backlog to an all-time high, approaching $20 billion. Based on the strength of these results and confidence in our business outlook, we are proposing a near 50% increase in annual dividend, which Bruno will touch on in his remarks on capital allocation. Then is the company in motion? and these strong results provide a springboard for the next chapter of our growth story. Moving to operational highlights, we celebrated important milestones in the fourth quarter throughout our diverse portfolio of projects and TPAs. In project delivery, we achieved the pivotal ready-to-start milestone on the Tortue FPSO for BP in Senegal and Mauritania. I am immensely proud of the collaborative approach developed with BP and our project team, as well as our team's grit and unwavering determination to persevere on a project that faced many obstacles and find solutions to ultimately deliver successfully. Elsewhere in project delivery, we attained provisional acceptance on the middle refinery expansion, while in TPS, project one for INEOS achieved successful loadout of the modular ethylene furnace from Thailand, now en route to Belgium. Overall, these accomplishments underscore our solid progress as we continue to execute our portfolio. Turning to order intake, we achieved over $10 billion in 2024, marking our second consecutive year surpassing this milestone. A notable aspect of our 2024 intake is the breadth of awards across different markets and geographies. And with the two-year book-to-bill at 1.6%, Our growth trajectory is well supported. In LNG, we reinforced our leadership during 2024 with two electrified and low-emission plants in the Middle East. These projects define the next generation of LNG. We also position 10 to play a future role in the U.S. LNG market. A significant highlight in December was a major award for net zero T-side power in the U.K., the world's first gas-fired power station with carbon capture and storage. NZT was the largest contract awarded to TEN in 2024 and includes scope for both project delivery and TPS. This contract reinforces our leadership in carbon capture and benefits from a de-risked hybrid contractual structure with UK construction scope performed on a reimbursable model. turning to TPS, which achieved its highest ever annual order intake at €2.2 billion, benefiting from key technology and proprietary equipment orders in carbon capture and ethylene, as well as robust services activity in traditional and new markets. In summary, I am thrilled with our commercial success in 2024, reaching €10 billion across a diversified blend of markets and geographies and supporting our value growth proposition. Before passing on to Bruno, let me share some exciting updates on our sustainability journey, which is increasingly recognized by the market and leading rating agencies. Sustainability is deeply embedded in TEN's business strategy, with aspirations to achieve net zero emissions for Scope 102 by 2030 and Scope 3 by 2050. TEN has achieved a 41% reduction in scope 1 and 2 emissions when compared to 2021. And given this early success, we are raising our emissions reduction targets from 30% to 45% by 2025. Other highlights include growth in investment and an upskilling of our talents. as well as successful implementation of monitoring processes to enhance the sustainability across our supply chain. Moving forward, we will enhance our sustainability goals with a strong commitment to integrity, emphasizing further on robust governance and stakeholder engagement. I will now pass the call over to Bruno.

Thanks, Arnaud, and good afternoon, everyone. Turning to the highlights of our strong financial performance in 2024, our revenues increased by 14% year-over-year, reaching 6.9 billion euros, just above the top end of the upgraded guidance range from Q3. This growth was driven by both business segments with significant contributions from LNG Qatar projects and steady growth in TPS. Recurring EBIT increased by 11% to reach a new high of 496 million, benefiting from growth in revenue with margins comfortably within the guided range of 7 to 7.5%. EPS demonstrated a substantial 33% increase to 2.16 euro share due to strong operational performance, higher net financial income, and lower non-recurring items versus the prior year. Turning to orders, adjusted order intake was 10 billion for the second consecutive year, leading to healthy book-to-bill ratio of 1.5. This drove a 25% year-over-year increase in backlog, approaching 20 billion euros, equivalent to nearly three times 2024 revenues. Fueled by solid cash flow generation, Growth cash at year-end was $4.1 billion. In summary, the collective efforts and performance of our teams have resulted in an outstanding 2024 performance. Turning to our segment reporting and starting with project delivery, where our 2024 performance demonstrates a buildup of activities. Revenues are up a significant 19% year-over-year to $4.1 billion. thanks to activity growth on Qatar energy projects and offshore projects. Trends for segment EBITDA and EBIT are very similar. Both metrics increased by 12% year-over-year. And both saw a 50 basis point contraction in margin due to the rebalancing of our project portfolio with increased revenue contribution from early phase projects with limited margin recognition. Project delivery margins remain, however, best in class. Finally, backlog increased by 26% year-over-year, equivalent to 3.6 times the segment revenue for 2024, and benefiting from tier awards in decarbonized power generation, LNG, and offshore. As outlined during our Capital Market Day in November, we have a large and diversified commercial pipeline for 2025 and 2026, that supports award momentum.