Technip Energies Nv

Good afternoon. This is the conference operator. Welcome and thank you for joining the Technip Energy's first quarter 2025 financial results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions by pressing star and one on your telephone keypad. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Philippe Lindsay, Head of Investor Relations. Please go ahead, sir.

Thank you, Sabrina. Hello and welcome to Technip Energy's financial results for the first quarter of 2025. On the call today, our CEO, Arnaud Piertan, will discuss our Q1 performance and business highlights. This will be followed by CFO Bruno Viver, who will provide more details on our financials. Arnaud will then come back to conclude before opening 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 welcome everyone to our first quarter earnings presentation. I will begin with the highlights of our strong performance. Technip Energies kicks off 2025 with significant year-over-year growth of plus 22% in revenues and plus 19% in EBITDA. This outstanding performance is reflective of the quality of order intake over the last two years and our team's relentless focus on execution. We confirm 2025 group guidance. which, I remind you, was provided five months ago in November 2024, with solid revenue growth and segment EBITDA margins unchanged. Project delivery posted robust year-over-year growth, plus 34% in revenues and plus 28% in EBITDA. PDD is long-cycle and is our largest business segment. And since, over the period, full year visibility has improved further, we raised 2025 guidance for this segment. Revenues for TPS technology products and services were slightly lower year over year by 5%, while EBITDA improved by plus 8% as we reached the tail end of some proprietary equipment deliveries. Given the uncertainty surrounding policies and macroeconomic environment, we are widened the revenue range for our shorter cycle segment while confirming continued EBITDA margin expansion. Commercially, the momentum remains solid with TPS posting a book to build above 1.0, demonstrating our ability to capitalize on demand for our services and solution offerings, and project delivery in April, winning a major contract in the U.S. for the world's largest blue ammonia plant. This prestigious award, combined with our active commercial pipeline, position us well for enhanced project delivery order intake in the coming quarters. Backlog at period end stood at €18.2 billion, equivalent to 2.7 times our 2024 revenues, underpinning the strength and sustainability of our business. Turning to our key priority for 2025, Execution. As we embark on 2025 with our highest-level backlog position, I wanted to reiterate our foremost priority, a sound and high-quality execution. This includes projects moving towards completion over the next several quarters, including Midor, Babco, and Energia Costa Azul for SEMPRA. In addition, following cumulative order intake of more than $20 billion for 2023 and 2024, we are diligently ramping up a new wave of major projects. These projects are well diversified by size, market, technology, and geography. Notable projects include Huwais LNG in the UAE, the top site for Grand Morgue FPSO in Suriname, and Net Zero T-Site in the UK. These projects will maturely contribute to the delivery of our 2028 financial framework. Simultaneously, we are progressing on performance-enhancing strategic initiatives, such as the implementation of our digital acceleration plan, poised to generate 100 million euros in annualized cost savings beyond 2028. We have launched more than 80 initiatives aimed at improving efficiency. These initiatives leverage our extensive project database, fostering greater certainty and predictability in execution. They include... faster feed study delivery, enhanced safety, and reinforced sharing of expertise across our organization. In short, the group remains focused on delivering a record high quality and good mix backlog while improving internal processes for greater operational efficiency. Now I want to touch upon the current macro environment and showcase how TEN will remain strong in any scenario. Recent months have seen increase in certainty surrounding trade policies and macroeconomic environment. The situation remains fluid and we are actively monitoring developments while working closely with our customers to provide visibility. In the last 18 months, we have expanded our approved vendor list, allowing us to offer clients greater flexibility in sourcing and execution schemes. This enables their projects to move forward with the assurance of TEN's unique delivery capabilities and financial strength. The global push towards a pragmatic yet ambitious decarbonization is seeing industries pursue affordable, sustainable developments. Despite policy uncertainties surrounding clean technology, Our customer engagements remain positive, and projects are materializing, as illustrated by the Blue Point number one project, which was awarded to Technip Energies in April. I will address this shortly. So regardless of the external environment, TEN's vitals are strong. We possess a world-class backlog that ensures extensive revenue coverage. We have a solid commercial pipeline providing upside to existing performance. We consistently generate strong, positive free cash flows, and we maintain a robust balance sheet, enabling us to return cash to shareholders and seize value-enhancing investment opportunities. In summary, Penn is a healthy and financially robust company with a clear pathway to continued sound performance and solid value creation. We stand resilient and ready to capitalize on any scenario that unfolds. So let's take a deeper look at our commercial pipeline, which shows opportunities exceeding 70 billion euros over the next two years. Our commercial pipeline remains robust, mirroring the prospects presented at our November 2024 CMD. These opportunities are well diversified by geography and market, reflecting our selective engagement policy, striving for quality, not volume. It is important to note that here are presenting our address market, which encompasses only the opportunities that we have chosen to pursue. The pace of our customer engagement is unwavering, and we continue to benefit from high interest across the board from traditional as well as new customers on all markets and offering. It's enabling us to further promote innovative design and solutions to make projects viable. Our pipeline is balanced, with no single geography accounting for more than 30% of the total, and prospects are well distributed across markets. Energy remains the largest element in our pipeline at over 40%, including significant LNG prospects. Decarbonization accounts for more than 30% of the total, equivalent to more than 22 billion of opportunities. This includes major prospects across blue molecules, sustainable fuels, and carbon capture. In summary, we have a solid commercial pipeline with high-quality prospects in both traditional and new markets. This provides significant value beyond our backlog, with orders starting to materialize from Q2 onwards. As an illustration, in April, we secured a groundbreaking contract in the U.S. for Bluepoint No. 1 ATR. This major award to be booked in Q2 and valued at over 1 billion euros, net to 10, aims to establish the world's largest low-carbon ammonia plant with a capacity of approximately 1.4 million tons per annum. Technip Energies will undertake the engineering, procurement, equipment, and module fabrication for this state-of-the-art production facility, leveraging our unrivaled expertise in modularization and delivering large-scale facilities that integrate cutting-edge technologies. The design of the project will enable more than 95% CO2 recovery with a low carbon ammonia earmarked for both traditional applications, such as fertilizers, and innovative uses, including co-combustion for power generation. In summary, A pivotal award for TEN, demonstrating our leading credential in blue molecules and reinforcing why Technip Energies is part of the solution in a global effort towards affordable decarbonization at scale. Now, before passing the call back to Bruno, let me provide an update on Reju, our material regeneration company, and its progress in building a circular Plexiles ecosystem to solve for post-consumer Plexiles waste. Since we last updated the market in November, Reju has been advancing on multiple fronts, including the technology, finalizing site selection for our first commercial-scale plant, and working towards securing vital feedstock and uptake agreements. The commissioning and certification of our demo plant in Frankfurt was successfully completed in the first quarter, and we are now producing. We anticipate the core technology to reach technology readiness level 7 by mid-year. In addition, in collaboration with IBM, we are establishing a digital product passport to certify the circularity, something that top brands are demanding and Reju will be providing. We have preselected the location for Regeneration Lab 1, the first industrial scale plant in Europe, and will soon reveal its location. as Reju has made significant strides in securing the essential feedstock for this first full-scale plant with several collaborations announced in Europe. Lastly, Reju has had substantial commercial interest following the initial production from our demo plant, marking a significant milestone in its evolution. I will now pass the call over to Bruno.

Thanks, Arnaud. Good afternoon, everyone. Let me take you through the standout points of our financial performance for the first quarter on an adjusted IFRS basis. Revenues were strong at 1.9 billion, up 22% year-over-year. EBITDA increased by 19% to 162 million. EBITDA margins were 30 basis points lower year-over-year at 8.7%, reflecting portfolio rebalancing in project delivery and higher corporate costs due to specific factors in the first quarter, which I will elaborate on shortly. Diluted EPS rose to $0.56 a share, an increase of 12% year-over-year, benefiting from higher EBITDA and net financial income, partially offset by accelerated investments in the development of regions. Free cash conversion from EBITDA, excluding working capital, was above trend at over 100%, leading to free cash flow generation of 179 million. Finally, in March, we successfully refinanced our 750 million revolving credit facility, extending its maturity to 2030 with two additional one-year extension options. This is in line with TEN's strategy of securing solid liquidity sources in the long term, with more favorable rates reflecting the bank's confidence in our credit quality. In summary, we executed a solid first quarter. Turning to our segment reporting, starting with project delivery, where growth was particularly strong. Revenues soared by 34% year-over-year, reaching $1.4 billion, driven by high activity on energy projects in Qatar and a ramp-up of recently awarded projects, including Grand Morgue, Ruwais, and Ezerotisite. Q1 adjusted recurring EBITDA increased by 28% year-over-year to $114 million. EBITDA margin at 8.1%, is absolutely consistent with the trajectory presented during our CMD in November and reflects a rebalancing in our project portfolio with a higher proportion of early phase projects for which we recognize limited margin contributions. As you would expect, the trend for recurring EBIT mirrors that of EBITDA. Finally, our backlog stands at a very sound $16.3 billion, equivalent to 3.3 times 2024 segment revenues, and providing strong visibility. The backlog in the quarter was adversely impacted by $231 million relating to FX. As Arnaud discussed earlier, The strength of our commercial pipeline gives us real confidence that we can reinforce this backlog with high-quality prospects that will further support our medium-term performance. Turning to technology, products, and services. TPS revenues were 5% lower year-over-year due to reduced contributions from proprietary equipment, which was partially offset by strong volumes of services and studies. The unsettled macro environment has also impacted short-term FID momentum for book-and-turn work. This theme is reflected in our revised guidance, which I will discuss shortly. Recurring EBITDA margins were, however, extremely robust, at 14.5%, a year-over-year improvement of 180 basis points. and driving EBITDA up by 8% to 65 million. Segment margins benefited from good execution on tail-end deliveries of proprietary equipment for ETLN contracts and a general improvement in consultancy and services profitability. While it may not be possible to sustain margins at these levels for the remainder of the year, the first quarter performance firmly underpins our full-year outlook. Turning to orders, CPS exceeded $470 million for the quarter. Secured work consisted largely of services work across a broad range of decarbonization studies, services, and PMC call-offs. While there were no large product awards in the quarter, we did benefit from process technology and catalyst supply awards in sustainable fuels and chemistry. This leaves the period end backlog for TPS at close to 2 billion, consistent with shorter cycle activity. Turning now to other key performance items with our financials, starting with the income statement. Corporate costs of 17 million into one were higher than the prior run rate due to supplemental French social charges on long-term incentive plans. The impact is specific to Q1, and we anticipate that corporate costs will normalize for the rest of the year, keeping our full year guidance unchanged. Global interest rates remain elevated, though they have softened somewhat in recent quarters. Consequently, we continue to benefit from solid levels of interest income. In Q1, net financial income was $26 million up materially year over year. the expected trend for the remainder of 2025 should provide a meaningful tailwind to our earnings. Lastly, on the P&L, at 28.8%, the effective tax rate is consistent with the 2025 guidance range. Moving to our balance sheet, which remains robust and a real differentiator for TEN, gross cash of $4 billion is significantly in excess of the net contract liability of $3.1 billion. Existing projects in backlog plus expected awards during 2025 and 2026 will further reinforce this differentiated capital structure. Finally, gross debt remains stable with over 87% long-term debt with maturity in 2028, a comfortable position.

Turning now to our cash flow performance.

Free cash flow, excluding working capital, was very strong at 179 million, with conversion from EBITDA exceeding 100% in Q1. This performance reflects the strength of operational execution, the positive impact of interest income, and FX revaluation for hedging instruments in the quarter. We'd expect free cash flow conversion to remain within the 70% to 85% guidance range for the full year, likely, edging toward the upper end due to current interest rates. After positive inflows in Q4, working capital experienced a modest outflow this period, primarily due to the lack of large awards in the first quarter. As a reminder, working capital is lumpy due to the characteristics of our long-cycle project delivery segment. Despite a $72 million hit from FX, we closed the period with more than $4 billion of cash and cash equivalents. Before turning the call back to Arnaud, I will explain our updated 2025 guidance, which was initially shared during our Capital Market Day last November. Visibility for project delivery has improved year-to-date, and as a result, we raised the segment's revenue guidance from 5 to 5.4 billion to 5.2 to 5.6 billion. Project delivery EBITDA margin guidance is unchanged at 8%. In light of policy uncertainties and the macroeconomic environment, we widen the revenue range for technology products and services from 2.2 to 2.2 billion to 1.8 to 2.2 billion. While this reflects potential top-line headwinds in shorter cycle work, our margin outlook is confirmed and reinforced by our Q1 performance. When these changes are modeled at the group level, their net impact on both revenues and EBITDA is quite negligible. I now turn the call back to Arnaud. Thank you, Bruno.

To conclude, we delivered a strong first quarter performance, reaffirming our group guidance with solid revenue and EBITDA growth. We anticipate improved award momentum in project delivery starting from the second quarter with substantial opportunities materializing by year-end. And our financial health remains exceptionally strong, bolstered by our world-class backlog, balance sheet strength, and consistency in free cash generation. With that, let's open the call for questions.

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 on the touch-tone 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 Sebastian Erskine of Redburn Atlantic. Please go ahead.

Yeah, good afternoon, Arno, Bruno, Phil. Thanks for taking my questions. Just on the kind of the quarter and the divergent fortunes a bit between project delivery and technology products and services, you call that kind of macroeconomic weakness in the press release, and I kind of got into a bit of detail there. Can you highlight specifically any markets where you're seeing that weakness? Is it in pet chems, for example, which I guess remains challenged, particularly in We were expecting a bit of a step up there, but perhaps that's been deferred. And then I guess linked to that, TPS is short a cycle, but what's the read across ultimately to the larger scale EPC work? Are there any ultimate negative implications for project delivery going forward? And then secondly, just on US LNG, we've seen Woodside take FID on Louisiana LNG, but there have been kind of increasing concerns in the market relating to EPC cost inflation, tariffs and offtake take up. Are you still confident on that side of the chain? And I guess any comments on that market would be very helpful. Thanks very much.

Thank you, Seb, and I think we'll address the whole call with two questions. So let's start with the macro environment and its impact on TPS. So I will start, I mean, allow me to start with a statement here. First of all, you know, our ability to confirm guidance, which I remind was provided back in November last year, okay, in spite of what we've been going through in the past three, four months, is, I think, exceptional and reflective of the good performance of the company at Technip Energies. So, and it confirms as well that, you know, our strategy, the two segments, project delivery, long cycle, TPS, short cycle, so all that is very relevant in the current environment with the TPS, with the PD that is accelerating and the TPS that is you know, somewhat not really struggling because it's, I wouldn't call that a struggle, but not accelerating as it could have. So TPS is made of TNP, so technology and products, and services. On the services side, I want to reassure everyone maybe on the call, you know, we have seen no slowdown in a number of new studies that we have been signing and that have been progressing at Technip Energy. And as you know, TPS is very often the precursor to project delivery. So the fact that the studies on the studies part, things are not slowing down, I think it's very, very reassuring for what could be the future of project delivery going forward. So we're very, very confident for PD because we have a very large number of studies and we continue to sign new studies as part of the services part of TPS. Now, very concretely, Where have we not seen the acceleration in TPS? It's mostly in TNP, so technology and products. Yes, in ethylene, the next wave is being a little bit somewhat, but also in carbon capture, for example. So to take two concrete examples, Heidelberg in Canada, which is a large cement plant that is considering deploying carbon capture. Well, that one was postponed because of elections in Canada and not knowing whether it would be the more liberal or more conservative government that would be in the election. So that was, I would say, in the context of what we've experienced and what we are observing in the U.S., and North America in general, or in the world, well, a political party versus another can change, you know, a dynamic on some of the awards. Maybe for a different reason, but Calpine, you know, going through the takeover of the merger with Constellation, well, There as well, they are taking the time to go through progressing with the merger before taking FID on their carbon capture project. What is very encouraging is that you, like me, probably have read in the press that Exxon Mobil signed a large contract with Calpine for CO2 transportation and storage, so that agreement is related to the power generation plant from Calpine. So now I would say the dust is settling a little bit and I'm sure those projects will be materializing but they were supposed to materialize and we were hoping that they would materialize sooner into 2025. When we talk about carbon capture, just like it was the case for Net Zero Decide, and my answer is a bit long, but there is a very large TP content in those contracts. So technology and products, you know, this project would contribute largely to TNP. So that's where, you know, we've seen a little bit of lag, but if anything, it is absolutely confirming our strategy. and the strategy that we've set for the company, the two segments, and the fact that where we need to invest and continue to invest is to enrich the T and the P part of TPS so that we become less exposed to a form of seasonality, all those macro effects that we have been observing. But we continue to be extremely positive for the segment. It's probably just a matter of timing, and Idleburn and Calpine, I'm sure, will materialize during the year. In terms of US LNG, we continue actually our visibility has improved when compared to three or six months ago. The pipeline is, I would say, as qualitative and rich as ever. We benefit now from improved visibility, both for Commonwealth And probably just like me, you're reading the press and you've seen that Mubadala Energy has taken a stake into Commonwealth, that new off-takers are being announced. So the robustness of Commonwealth LNG is just being confirmed and increasing by the day. Lake Charles LNG, we are in the process, I mean, we are in the mix of the price verification campaign. It's progressing. We've received the formal notice from the client to proceed with it. As a reminder, it's a three to four month long paid campaign to revalidate the budget and the price of the Lake Charles LNG development. This is accelerating. We are in the mix of it. So, you know, all the building blocks are here for Technip Energies to thrive on US LNG. As a reminder, all those projects are fully modularized and will, you know, Technip Energies will not be exposed to tariffs. The risk on tariffs is something that will be on the customer side, but are taken by the client and not by Technip Energies.

Appreciate the call, Arnaud. Thanks very much.

The next question is from Bertrand O'Day of Kepler-Chevreux. Please go ahead.

Yes. Hello, everyone. Thank you for taking my question. Two, if I may. Can you give us an update on other large U.S. opportunities, i.e. Exxon, Baytown, Blue Hydrogen project? Where do you stand in terms of discussion with the client? And then I appreciated your comment on U.S. Commonwealth LNG. Yes, indeed, they are making good progress in off-take with also Mubadala. But are they concerned around potential, you know, tariffs that could impact the cost? And are you also engaged, like for Lake Charles, in a price verification process. Thank you.

Thank you, Bertrand. I will start with question number two. So on Commonwealth LNG, yes, we have engaged into a price verification because it's been a while since we've provided the price to Commonwealth. So that price verification, I would say, work is ongoing at the moment. The risk of tariffs, that's more a question for our clients, again, or the risk related to tariffs. I must say that from the beginning, Commonwealth had considered the risk on tariffs or risk emanating from tariffs in their financial model. That has been the case really from inception, and we've worked with them because our execution plan was based on, of course, modularization and yards, using yards in China. So they have baked into their budget a significant sum related to tariffs. Now, the question is, is this budget sufficient in the new environment? Well, I'm pretty sure that our customer is engaging with the U.S. administration to find what is the way to actually allow for the project to fly. I know for a fact that they are very active. And, you know, based on the most recent conversations, we have good indications that there is a possible way forward. And so, you know, we are mobilizing in the U.S. at the moment and ramping up our mobilization of resources in the U.S. because of signing CFI, because of the Commonwealth opportunity, because of Lake Charles LNG, which is going through this price verification and Of course, last but not least, because of Baytown Blue H2 for Exxon Mobil, where we remain shortlisted. So, I remind you, it's a competitive process. On Commonwealth, basically, it's to us. Lake Charles, it was signed in October last year. So, again, this is no longer a competitive process. But Baytown remains a competitive process, but the good news is we are part of the short list, and we continue to work with ExxonMobil on finding the right, I would say, commercial scheme to allow for the project to fly. But in the same way that we could find a solution with CFI, I'm pretty confident that we will find a solution with ExxonMobil.

Perfect. Thank you.

The next question is from Guillerme Levi of Morgan Stanley. Please go ahead.

Hi. Thank you for taking my questions. I have two, please. Maybe I missed that in the beginning, but could you just walk us through what has allowed you to increase the guidance for PG? Is it just acceleration of work that you thought you couldn't do back in November? And then the second one on the Argentina LNG projects, I think that these ones are are picking up a little bit in terms of speed now. Can you just provide us an update there? Which feeds are you working on? There seems to be various different FLNG units in the planning stage, so any sort of timeframes, any sort of crawler that you can provide. And also, is it fair to think that if that feed evolves into an EPC contract, is the idea to move ahead with modularized projects like you are doing in the US. Thank you.

Thank you, Gui. I'll start with Argentina LNG. For this project, we've teamed up with our good friends at JGC. We have a good track record of successful ventures together, Coral South, for example, and also Hue. We've associated ourselves with JGC. Of course, we are in the race for Argentina LNG, which can take one or many forms, but we intend to be part of the race. We are working with a customer on the I would say the various options on what this LNG development can take. It's becoming significant in size, hence why YPF is engaging with players like Technipan Energies and DGC because it's becoming really significant. And all I can say is that there is strong momentum and a very strong will by YPF and Argentina to move ahead with this strategy. So I expect those prospects to be very real and not just feed for feed. That's what I can say about Argentina LNG for now, or I'm prepared to say. And to answer your question, yes, we will absolutely deliver on, you know, the execution plan will be based on modularization for several reasons. The, you know, the total capacity of the resources locally in Argentina, but also time to market. So that's why we are proposing a modularized solution to YPF. In terms of product delivery, I will hand over to Bruno, but as a reminder, we provided the guidance, I'm going to repeat it, back in November last year. So it was very early. We confirmed it two months ago. Now we see more clearly the pace of the execution. So I don't know, Bruno, if you want to add anything, but it's really the increased visibility and the good progress that our teams are making on the site that allow us to revise the guidance up.

Oh, yes, absolutely, Arnaud, and good afternoon, Noguie. It was set in November. Since then, a few awards, which was not confirmed before that, you know, NZG, Bluepoint. So all these projects are, of course, not contributing a lot in terms of top line as they ramp up, but they start to contribute. So we started the year already with a good coverage. Execution is really on track and, as Arnaud mentioned, it's a key priority for us and this year would almost have been a year possible without any new backlog and just delivering the backlog would have been already keeping quite a few people busy. So really focusing on execution means ramping up. And yes, the visibility, especially with new awards that sometimes were more project delivery, you know, kind of scope versus... a mix of TPS and projects. It means also, yes, more acceleration in projects, meaning an acceleration in the guidance that we've updated now. And today, yes, we already are well covered in terms of guidance. The run rate of Q1 puts us well on track. But also more importantly, I think, you know, 2026 is also starting to be really well firmed up, plus the new opportunities in the pipeline that could contribute. So the positive trajectory of project, you know, to this 5 billion, to this 6 billion plus for 2028 is really on track. And all the building blocks are shaping up very nicely on that.

Understood. Thank you.

The next question is from Victoria McCulloch of RBC. Please go ahead.

Hi there, thanks very much for the questions, just one remaining for me. Could you provide a reminder of your exposure to projects that are associated with a high net CCS cluster? I think from memory there's two feed studies that you have ongoing. Do you expect these to reach FID stage this year? based on your customer's current commentary. Thanks very much.

We are exposed to, yeah, we have Net Zero T-Side, I mean, the T-Side Hub. So Net Zero T-Side. the power plant that we are executing now, and we are also executing the feed for H2T side, a large blue hydrogen facility. The feed is ongoing, and we are very active discussing and engaging with BP on firming up the budget and bringing the project to a price point that is valuable. And thank you for your question. You're allowing me to state something and repeat something that is extremely important. In all those projects, being carbon capture, blue hydrogen, blue ammonia, what is key, you're going to tell me, like for any project, but even more so for those, it is very much about winning the affordability battle. And that's our duty as as a leading engineering and technology powerhouse to bring solutions to our customers so that their budget matches the economics and therefore the project, including those that are the most, I would say, progressive in terms of the themes that they are deploying, can fly. And I think that's why you come to Technip Energies. That's exactly what is happening with BP on H2T side. And as for the FID, yes, It could be this year, it could be next year. You're not feeling or sensing, I hope, any form of anxiety in my voice. Whether it's on this side of the 31st of December or on the next side of the 31st of December, it doesn't matter too much. It's more a question for BP, but certainly for us, if it was to come this year, we would consider it on another side. So it's not really part of the budget, but it could still happen this year, in which case it would be an upside. If not, it's a 2026 event.

Thanks, that was really helpful. The ones I was thinking of was the ones associated with the Liverpool Bay and the High Net. It was more the Virador and the Uniper. Do you view them in the same way in terms of timescales?

So, yes, sorry for that. I missed your question. So we are on both and similar timeframes. And Uniper, it's about carbon capture. And it's very active. And we have a customer that really wants to move forward with its carbon capture project to replicate, I would say, net zero decide. And we're obviously extremely motivated because if Uniper moves and goes ahead with FID, then we would have demonstrated that net zero design is not a one-off.

Super. Thanks very much. The next question is from Jean-Luc Romain of CIC Market Solutions. Please go ahead.

Good afternoon. I would like to come back on the contract you announced yesterday or just the day before in Qatar regarding, I think, compression of gas. Is this contract kind of complicated? prerequisite for Qatar Gas to advance on both Northfield West and maybe on Qatar Gas 234 deep bottlenecking?

For NF, I can't recall whether there's a connection with NFW. But for the other two, yes, certainly it's part of their broad development, so yes. And as a reminder, this contract that we've announced is a pure service contract. We're not in charge of delivering any of the physical infrastructure, but we are in charge of executing and delivering all of the engineering and detailed engineering for our partner.

Thank you.

The next question is from Richard Dawson of Burenburg. Please go ahead.

Hi, good afternoon, and thank you for taking my questions. It was referenced in the press release that there are further project completions to come over the next several quarters. Are there maybe some project contingencies with these which could maybe support margins across the year, or are they mostly offset by the ramp-up still going on in Qatar? And then secondly, just on the commercial pipeline, slightly lower at just over $70 billion compared to where it was at Q4. Could you outline maybe in a bit more detail where you see some of those reductions? Is any of this due to project cancellations or delays or anything we should be worried about? Thank you.

Thank you, Richard. I'll start with question number two and then hand over to Bruno for the first one. The commercial pipeline remains extremely rich and has really good quality for Technip Energies. So what is not included in the 70 billion that we are discussing today is, for example, CFI. So CFI was in the 75 that we declared during CMD. Net zero T-side also was part of the 75. So now we've lowered it down, you know, because it's been just a few months since we've, I mean, literally three, four months since we've announced Net Zero Decide and less than a month since we've announced CFI. So for this call, we decided to set the bar at $70 billion. from 75, but happy to report that basically net zero T-side plus CFI is not very far from the five that will bridge the gap between 70 and 75 billion. The quality of the pipeline, because I want to insist on the quality of it, and this pipeline really is about what we are pursuing. It's not the total size of what we could be pursuing, but it's really where our attention is because the projects or the prospects are compatible with, I would say, our selectivity for project delivery. And it's very rich. We've discussed about a few of them already in LNG, in the U.S., outside of the U.S., But beyond that, we are very positive about the opportunity set for Technip Energies for the 24 months to come. Bruno, on the first one, maybe?

Yes. And again, just as a small compliment to Arnaud, at the CMD, it was from Q3 through the end of 2026, so basically it was nine quarters, and here we say it's eight quarters, two years, all forward. So if you take one quarter difference, I think the math will show that the opportunity has not shrunk in any way. In terms of sequence, yes, we have some projects that are, you know, kind of reaching completion stage. Thailand and some projects that were impacted by COVID in terms of execution. So I think a few of the teams are quite happy to be able to complete those projects after a lot of work. But as you see in the ramp-up of revenue, I think the ramp-up of the early stage projects has been more meaningful than actually the Thailand projects. So that's why you've seen the normalization, which we call in the guidance, it's towards having EBIT for 2025 around 7%, meaning around 8% in EBITDA for the year. And then, as we're able to execute from this, let's say, basis of a new portfolio, a new generation of projects, plus the self-help and the initial impact of pricing power plus the work we do on the digital acceleration plan to reach, you know, 50 basis point improvement by 2028 plus. So I think this is all shaping up nicely because of backlog quality. Short term, the ramp up is more than upsetting the completion, really, of projects and the normalization. But as we progress in the years to come, then the possibility to step up amongst the three factors which I just called and which we expressed, also explained, during the CMD.

That's clear. Thank you very much.

The next question is from Guillaume Delaby of Bernstein. Please go ahead.

two questions if i may i would like to come back to tps and maybe to try to isolate q1 2025 with the rest of the year so when i look at q1 2025 it is paradoxically we can see the bottle half full please do not laugh i'm very serious because i understand that there are There is an important proportion of services within Q1. There is those TEL products also. So it probably suggests that going forward, the TPS margin going forward, when there will be a higher proportion of technology and products, could go far above Q1. your 14.5% guidance for 2028. So this is, I would like you to react on that. And before that, I would like now to look at the bottle rather half empty. So I understand that starting now, or basically starting in Q2, there is a slowdown in technology and products, services, are still there, but since services are typically early cycle indicators, should we be frightened by a possible slowdown in services? I hope my two questions have been clear.

I have a strange voice, but... Yeah, Guillaume, good afternoon, and yes, the two questions are clear. It looks like Bruno is burning to answer question number two. So I'll take number one and hand over to Bruno so that we share the answer. And I'd like to talk about the bottle half full rather than half empty. So TPS, you summarized the situation well in terms of the bottle being half full through Q1. I want to reiterate what I stated in my opening remarks. The situation today, which is super robust at Technip Energy, looking at the bottom line results that we are delivering, really confirms our strategy, the one of the two segments, and the acceleration that continues to be needed for TPS, notably in TNP. Okay, so we indicated that our strategy is to enrich the technology and product portfolio, and that's where we will deploy, I would say, our cash when investment and value-accredited investment opportunities are arising, and that's where we're concentrating. So clearly, the more TNP-rich we are, the less subject to a form of seasonality we will be going forward. It's no secret that the level of margin is higher for T&P than it is for services. So the more we will be T&P rich, the more we will have the opportunity to deliver stronger margin results within TPS or for TPS. We declared that 14.5% for 2028. That's already a bump up. Now, the potential, I would say, is certainly greater if we manage, and again, if we manage, and that's a work in progress, to see and to have our solutions adopted by the market. The carbon capture first step last quarter, or Q4 2024 with net zero decide, was already a first step. There's a large T&P content in that contract. I mentioned about Heidelberg and Calpine. We were hoping those would materialize earlier in 2025. It's not the case. There's a bit of a delay, so the opportunity is not disappearing. But there again, if that is happening, then the cancel of a canopy by 10 is being adopted. It's going to bring volume in a season where there's a bit less SEDN on the other end. We need to continue to enrich the T&P portfolio, and if this is successful, then we can really discuss about the TPS performance and bottom line for 2028, including top line, actually.

Bruno. Yes, thanks, Arnaud. Hi, Guillaume, and thanks for not... Well, for highlighting first the highest ever EBIT or EBITDA performance of TPS in a quarter, and not because this being at the level of the 2028 target, asking us already, okay, what is our new target? Because it seems too easy to achieve if we're already doing it in Q1. But I'll address the bottle has empty part of your question. Two things on services. As Arnaud mentioned, the amount of work and demand for services, early studies, across markets, across geographies, remains very, very strong. So if you take it as first, you know, in terms of workload, and then in terms of sign for the early, basically, manifestation of future projects, this remains absolutely on par with what we've had in the recent quarters or plus. Now, on top of that, I would say a couple of things. In terms of workload also, and Arnaud was also touching upon it, You know, in terms of geographies like the US, we're also getting ready to wave of execution and executing on large projects. So that's why we, you know, with the balance and portfolio between projects and TPS that we have, we, you know, we're also selective in what we address and want to make sure that the teams are properly, you know, staffed on projects and not also to chase just, let's say, top line of services, but to make sure that we assign resources to projects, to start up those projects correctly, and so that we hit the ground running when the projects are ordered through LNTP or limited notice or full notice. to proceed. So in terms of, you know, workload and center, it's also a fact that, yes, sometimes we'd rather focus on good product execution versus chasing just a bit more studies because the demand remains high. And then for the TP component, again, I think I will have mentioned a few things. Part of, you know, the small dip in terms of, you know, reduction of top line versus last year in terms of TPS really comes from a lesser contribution from the EP projects that were signed in 2022, first part of 2023. Since then, of course, we've all seen less you know, orders, and that's at the back of a lower cycle for the whole chemical or petrochemical industry. So that means a lesser contribution from a top line. Of course, then these are larger projects, so as they are completed, they have a bit of the same characteristic as the project on the tail end, which they become accretive. So you also evidence here the upside for some of these projects and Yes, the benefit of having more TP. Plus, again, a few, you know, specific, distinct opportunities where you would have had a bit more TP component. These were not the first ones to get out of the gate in 2025 for totally kind of different reasons. But that's okay. The trajectory is there. Whatever the small dip in revenue, we always expected to have a bit of a plateau while the new offering in TP around SAF using Hemingbird, carbon capture using Canopy, Rely using the Clear 100+, plant as a product design that we've put together over one year with our partner John Cochrane. All these are potentially contributing more and more as we head into the next quarters. So, still very positive momentum, although, yes, short-term, less contribution from detail and property equipment, notably in Etihad.

And I want to thank you, Bruno. You know, we are widening the range for TPS, okay? There is still a scenario in 2025 where we fall within the original guidance, but considering what we've seen and some of the macro movements, and I come back, for example, to the delays in some of the carbon capture decisions that are related to geopolitical events and political choices, we just felt it was cautious to widen the range just in case.

Yeah, it makes sense. I turn it over. Thank you very much.

The next question is from Jamie Franklin of Jefferies. Please go ahead.

Oh, hi there. Thanks for taking my question. So just one question left for me, which is I wanted to come back on project delivery revenue. Wondering if you can help us think about the profile of project delivery revenue through the remainder of the year. One queue is quite often a low revenue quarter, but even if we just run rate at this level for the remainder of the year, we already get to the top end of your increased guidance range. So are there any specific reasons to expect a decline in projects delivery revenue in any specific quarter? Thank you.

Hi, Jamie. Thanks for the question. Well, projects, you don't typically have a lot of seasonality. It's really project by project and kind of planning and schedule kind of driven. Now, I would say we started the year with, you know, at 1.4 with quite a good run rate, which is also a good startup of the projects like Suriname, which... We started to work a few months or quarters ago. I would say, you know, some work in the Middle East is ongoing. And with high temperature and a lot of construction focus in the Middle East, as we hit the summer period, it's not always a period where you can have the highest progress. Of course, it's all factored in because, you know, you have a summer in the Middle East. every year, and it's going to be warm every year. But in terms of workers, we go to night shift, focus on HSE during night shift is even more a top priority. So sometimes we do see a bit less progress on a weekly basis with night shift versus what we would have using a day shift. But for the safety and the well-being of the people outside, of course, it's impossible to do otherwise. Plus, you know, black flags where we would stop above certain levels, which is all factored in the contract. So that's why you would expect, given the construction focus, Plus, of course, notably Qatar, plus also Abu Dhabi, a few projects in the Middle East where summer you may have a bit less of a progress, so a bit of seasonality, which is a bit of an exception, but still sometimes.

Okay, that's very clear. Thank you.

Sorry, the last question is from Daniel Thompson of BNP Paribas Exxon. Please go ahead.

Hi, good afternoon. Thanks for squeezing me in. Just one on the U.S. decarbonized power market primarily for data centers. I know it's not a core part of your medium-term plans that you presented before, If you did mention on the last call, you were scouting for potential joint offering with contributors to data centers like the equipment providers, maybe to offer turbines and CO2 capture in a bundled solution. So I just wanted to have those conversations matured at all over the last quarter, or are they still very much in the exploration stage? And from what you've seen, is this a market worth pursuing? Thank you.

The short answer is yes, the conversations are progressing, so it's more than a wishful thinking. I think who can provide such a bundled offering could be a clear winner in this market. The work is ongoing with the equipment provider. I will not say, you know, too much more than that on this call. Premature to tell you where it's going to land, but market assessment is ongoing. Technological assessment and concept development is ongoing with with equipment providers, and we benefit from a technology that is probably one of the most mature and the most proven, so obviously it's generating interest. Let's see, but clearly a strong potential for the future, so it's a bit more, or certainly more than just being aspirational. We now need to come up with a solution and an offering that makes sense in the U.S. and elsewhere.

All right, that's helpful. Thank you.

Mr. Lindsday, there are no more questions registered at this time. Back to you for any closing remarks you may have.

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

Thank you and goodbye.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.