Technip Energies Nv

Hello and welcome to Technip Energy's financial results for the first half of 2025. On the call today, our CEO, Arnaud Piertan, will discuss our H1 performance and business highlights. This will be followed by our CFO, Bruno Weber, who will provide more details on our financials. Arnaud will then return for the outlook and conclusion 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 half results presentation. I am pleased to begin with the key highlights. We delivered significant growth of 15% in revenue and 13% in EBITDA compared to the prior year. We also generated robust free cash flows that exceeded 300 million euros. This strong outcome reflects the sustained momentum in our project delivery business, complemented by the successful execution of proprietary product installations within our TPS segment technology product and services. Our ongoing strategic focus on expanding our process technology and proprietary equipment portfolio will, over time, sustain these enhanced margins and reinforce our market leadership. Our consistent results despite a complex macroeconomic environment, reflect the quality and dedication of our teams, who excel at delivering across our portfolio. On the commercial front, momentum in the second quarter improved versus the first, most notably due to a major project delivery award for the world's largest low-carbon ammonia facility for CF industries in the US. This has contributed to our backlog, which at period end stood at 18 billion euros, equivalent to 2.6 times our 2024 revenues. This underpins the strength and sustainability of our business. Turning now to our execution, which remains our top priority for 2025 and the years ahead. Our project delivery portfolio continues to demonstrate strong performance. This includes our two LNG projects in Qatar, where, as per the recent communication by Qatar Energy, the first train for the North field expansion remains on track to come online by mid-2026. Alongside these achievements, we are diligently advancing a new wave of major projects, One notable example is a decarbonized power project, Net Zero Teesside, where detailed engineering is progressing well and initial site preparation activities are underway. In TPS, we have successfully completed the modification of Neste's existing renewables refinery in Rotterdam, enabling the production of up to half a million tons of sustainable aviation fuel per year. At the same time, we continue to make progress with excellent furnace deliveries across plants in Europe, the Middle East, and India. This is providing a boost to our TPS margins. In summary, this has been a quarter marked by solid execution across our portfolio. Let me now provide an update on technology and innovation and how we are strengthening our portfolio. At TEN, we are constantly scanning the horizon for promising ideas and early-stage technologies that can be implemented effectively. We achieve this by leveraging the strength of our people and laboratories and by partnering seamlessly across our innovation ecosystem, which spans startups, mature companies, and leading universities. One of our defining strengths is our ability to test and develop technologies, all the way from initial proof of concept in our labs through pilot programs, and ultimately to full-scale commercial implementation in industrial plants. This is exactly the path that we have been on with Shell for carbon capture. It has led to the signing of an exclusive global alliance to deliver post-combustion carbon capture solutions. Our shared ambition is to enable hard-to-abate industries to decarbonize more effectively and with greater certainty. Beyond our collaborative successes, TEN is also advancing its proprietary technology portfolio. A recent milestone is the successful commercialization of our low-emission cracking furnace technology for the ethylene industry, with our first award currently under execution for CP Chem in the US. In summary, our approach to technology and innovation is enabling development at scale and enhancing overall economics. really is part of the solution. Before passing over to Bruno, I would like to highlight the significant progress we have made in diversifying our order intake, both by market segment and geographic reach. From the outset, our strategy has been to extend our leadership into new markets. Today, I am really pleased to say this approach is delivering tangible results, bringing greater balance and resilience in our order book. In the past 18 months, we have witnessed robust growth in decarbonization-related orders, which now represent nearly 40% of our total order intake, equivalent to over €5 billion. These achievements include landmark contracts in the fields of blue molecules and carbon capture, such as the already mentioned Blue Point No. 1 ATR project in the U.S. and Net Zero Decide in the U.K. These major awards underscore 10 industry leaderships in these new markets and reinforce our role as a key enabler in the global transition towards affordable, scalable decarbonization. Geographic diversification has also been a hallmark of our recent awards. Approximately 70% of orders over the last 18 months have originated from regions beyond the Middle East, demonstrating our expanding footprint, notably in the Americas and the UK. And given the strength of our commercial pipeline and our competitive positioning, we anticipate that this balanced ordering tech profile will continue to be a defining feature of our growth going forward. I will now pass on to Bruno to discuss our financials.

Thanks, Arnaud. Good morning and good afternoon, everyone. Let me walk you through the highlights of our strong financial performance for the first half of 2025 on an adjusted IFRS basis. Our revenues increased by 15% year-over-year, reaching 3.6 billion, with growth driven by high activity on NLNG projects in Qatar and a new wave of projects that are ramping up. Recurring EBITDA rose by 13% to 319 million, with an associated margin of 8.7%. This was slightly down by 20 basis points year over year, reflecting a rebalancing in our project portfolio and higher corporate costs due to specific factors which I will come on to address. This was partially offset by TPS margin expansion. EPS grew by 3% year over year, with strength in EBITDA and financial income somewhat offset by higher non-recurring costs, largely relating to planned investment in redo. Again, I will address this later. Free cash flow conversion from EBITDA was very strong, at approximately 100%, and it drove nearly 35% growth in free cash flow year-over-year. This strength is illustrated in our net cash position, adjusted for project-associated cash, which has grown to more than 1.6 billion. In summary, we continue to deliver solid and consistent results in the first six months of the year. Turning to our segment reporting, starting with project delivery, revenues have increased significantly, rising 24% over the year to 2.7 billion, fueled by strong activity on LNG projects in Qatar and the acceleration of a new series of projects, such as Grand Morgue in Suriname and Rua SLMG in Abu Dhabi. EBITDA and EBIT metrics also increased materially, both growing in the mid to high teens. Margins experienced some contraction year over year, 50 basis points at the EBITDA line, which is primarily a function of portfolio rebalancing with a higher proportion of early phase projects, for which we recognized limited margin contribution. Based on scheduled activity and milestones in the second half, we continue to expect a full year performance to be in line with our guidance of around 8%. Finally, the backlog remains at a high level, despite an adverse foreign exchange impact, enriched by the major reward for blue point number one ATR, and providing excellent visibility. Moving to technology products and services, TPS revenues declined by 5% year-over-year due to a decrease in property equipment contributions, partially offset by robust volumes in consultancy services and studies. As stated during the Q1 results call, the macro environment has impacted short-term FID momentum, with some recovery anticipated in coming quarters. Recurring EBITDA and EBIT margins, however, reached new highs in the first half, with EBITDA margin increasing from 240 basis points year-over-year to 15.1%. This performance benefited from several factors, most notably the completion and delivery of ethylene furnaces in different geographies and, to a lesser extent, catalyst supply and PMC activities. The strength in TPS margin year-to-date support upgraded full-year guidance for the segment, which I will address shortly. Finally, while order intake has broadly kept pace with revenues so far this year, TPS backlog closed the period at 1.8 billion, down 9% year-to-date, with some impact from FX again and the absence of material product awards. We remain optimistic about our TPS business outlook with strong engagement