Technip Energies Nv

Good afternoon. This is the conference operator. Welcome and thank you for joining the Technip Energy's full year 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 1 on your telephone. Should anyone in 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 Philippe Lindsay, Head of Investor Relations. Please go ahead, sir.

Thank you, Maria. Hello and welcome to Technip Energy's Financial Results for Full Year 2025. On the call today, our CEO, Arnaud Piertan, will discuss our full year performance and business highlights, This will be followed by CFO Bruno Bubert, who will discuss our financials. Arnaud will then return for the outlook and conclusion before opening the questions. Before we start, I encourage you to take note of the forward-looking statements on slide three. I'll now pass the call over to Arnaud.

Thank you, Phil, and a very warm welcome to our 2025 full-year results presentation. Before discussing the highlights, let me remind you of what truly sets Technip Energies apart. We are focused on delivering controlled quality growth underpinned by our robust selectivity-driven backlog and differentiated market positioning. We are frontrunners in energy and decarbonization, harnessing our distinct strength and driving transformation to unlock superior profitability. Our strong net cash balance sheet gives us real clout and we consistently convert most of our profits into free cash flow. And as we execute our business strategy, channeling capital into dividend growth and value enhancing investments, we are accelerating value creation for our shareholders. Turning to the highlights. 2025 was a year of successful delivery. We demonstrated strong execution across our global portfolio. We strategically positioned the company for sustained, profitable growth, and through some disciplined capital deployment, we enhanced our earnings quality, reinforcing the resilience and stability of our business model. In terms of headline figures, 2025 marks our strongest year yet, with revenue and recurring EBITDA both rising by 5% to reach new highs at $7.2 billion and $638 million, respectively. Both our business segments delivered year-over-year growth in EBITDA. With a robust performance for project delivery, and solid margin expansion in TPS to above 14%. Free cash flow excluding non-recurring items increased by 5%, reaching 578 million euros. And consistent with our capital allocation framework, we are proposing a dividend of 1 euro per share, up 18%, and a $150 million share buyback program. In summary, a solid 2025 that sets a strong foundation for us to achieve our growth objectives. Let me turn now to our execution, beginning with project delivery. Our portfolio continues to demonstrate the power of replication, modularization, digital tools, and we are executing with disciplined management of scope, cost, and risk. To provide perspective into the scale of our operations, at 10, our workforce now exceeds 18,000. Yet, we take on responsibility and care for more than 100,000 across our sites. In 2025 alone, we surpassed 320 million worked hours with zero fatalities. We strive to be the industry's reference on safety. Operationally, across our major projects, we achieved strong progress on LNG execution, including NFE and NFS in Qatar, advancement towards completion of key downstream and petrochemical assets, and solid early progress on decarbonization projects, including Net Zero Decide and Blue Point No. 1. This performance reflects the culture of operational discipline that defines Technip Energies. And as you know, excellence in execution is the cornerstone of our value proposition and a prerequisite to our continued commercial success. Staying on the execution theme, but now spotlighting TPS, an important component of our equity story. In 2025, TPS delivered solid EBDA margins, advancing by 140 basis points year-over-year to more than 14%. This improvement was driven by a strong performance in our product activities, including ethylene furnace deliveries. Furthermore, Catalyst's supply and strength in project management consultancy also contributed to this margin expansion. What this performance clearly demonstrates is the potential of TPS to drive margin accretion and improved quality of earnings for the group. 2025 was further distinguished with the completion of our first major acquisition. This transaction exemplifies our disciplined capital allocation strategy to enhance our technology and products offering. It extends TEN's capability across material science and the catalyst value chain and enhances our ability to deliver high-performance, process-critical solutions to our clients. With around 70% of its revenues tied to operating expenditure, AMNC materially expands our TPS offering across the asset lifecycle. In terms of financial impact, we closed the transaction on December 31st, and the cash outlay is reflected in our year-end balance sheet. As a result, TPS will benefit from a full-year contribution in 2026, which we anticipate exceeding €200 million in revenue with EBITDA margins of around 25%. In summary, AAM MC is immediately accretive and accelerates our TPS growth strategy. It benefits from positive long-term market trends and establishes a strong platform to unlock further value for our stakeholders.

Let me now turn to the significant announcement made yesterday.

the award of North Feed West in Qatar. This major EPC contract builds on our feed engagement and incubancy in the NFE and NFS projects, which are under execution. As we embark on this next phase for NFW, we will deliver two state-of-the-art LNG trains, each of 8 million tons per year. The project will benefit from something we like very much. replication and consistency in train design, plus it will leverage construction synergies, ensuring efficiency and excellence in execution. The facility will also be complemented by a fully integrated carbon capture system. With this award, Technip Energies has 82 million tons per annum of LNG under construction globally. It further strengthens our medium-term visibility and solidifies our leadership in LNG. Before I hand over to Bruno, let me briefly reflect on our sustainability journey to 2025 and the launch of our new roadmap to 2030. Sustainability at 10 is a core element of our strategy, our culture, and our value proposition. And five years into our journey, we can be proud of our progress on many fronts, including the reduction in our Scope 1 and 2 emissions by 46%, our work on human rights, and a material gender diversity improvement in our organization. Looking ahead, our journey is evolving. We have enhanced our strategy and developed our 2030 Scorecard. It is more business-oriented. and further integrate sustainability as a core driver of value creation. This new scorecard, which features in the appendix of today's presentation, aims, in particular, at delivering impact through continued innovation. With that, let me now hand over to Bruno to walk you through the financial performance in more detail.

Thanks, Arnaud, and good afternoon, everyone. Technip Energy has delivered a year of strong execution and high-quality growth in 2025. Turning to the highlights, we achieved record revenues of $7.2 billion and a recurring EBITDA of $638 million, both metrics up about 5% year-over-year. The growth was driven by a notably strong performance from project delivery and robust margins in TPS. For reference, in Q4, in acknowledgement of the strong performance delivered, better than expected really, we recorded a supplemental $20 million expense for bonus payments to our employees, which was pretty much even split between business segments. This momentum translated into a 4% year-over-year increase in EPS, excluding non-recurring items, despite lower net financial income. Our strong operational performance also drove healthy free cash flow generation, with more than 91% conversion from EBITDA, excluding non-recurring items. These results provide a solid foundation for continued shareholder returns, which I will discuss later. After the completion of the AMNC transaction at the end of 2025, We maintain a strong balance sheet with net cash adjusted for project-related cash of approximately 1 billion euros, providing us with significant flexibility for capital allocation. In summary, our teams continue to execute well and deliver our leading financial performance. Turning to our segment reporting, I'll begin with project delivery, where strong growth continues. Revenues rose by 10% year-over-year to 5.4 billion, fueled by major projects in LNG, decarbonization, and offshore, which are advancing through high activity phases. Execution remains solid, as evidenced by EBITDA margins consistently in a tight range. Our backlog remains high quality and our margins best-in-class, with medium-term upside potential as we progress on the execution of our portfolio. Finally, with some major awards shifting right in 2025, project delivery backlog has declined by 18% year-over-year to 14.4 billion. However, as Arnaud will elaborate, our near-term award momentum is strong, and we anticipate an inflection that will reinforce our growth outlook.

Moving to technology products and services, TPS.

The clear highlight for TPS in 2025 was margin strength, with EBITDA margins up 140 basis points year-over-year to a new record of 14.3%. This was driven by strong performance in our proprietary product activities as well as favorable mix due to catalyst supply and project management consultancy. These margin gains more than offset a 9% revenue decline impacted by low cycle for chemical as well as foreign exchange. Finally, TPS achieved a book-to-bill of 0.84, as strength in services awards was more than offset by lower TNP awards. As a result of this and FX, TPS backlog fell to just over 1.5 billion. As a reminder, TPS backlog is typically understated by several hundred millions of euros as PMC work is booked only when called up by the customer. Additionally, the inclusion of MNC, while not a backlog business, provides predictable recurring revenues and is expected to generate over 200 million for TPS in 2026. In summary, a favorable mix, driving strong profitability for TPS, and we continue to advance the strategic shift towards higher-value technology solutions and scalable product platforms that enhance the resiliency and earnings power of the segment over the cycle. Turning to other key performance items, beginning with an income statement. Net financial income totaled $89 million, down $30 million from last year, reflecting the downward global trend in interest rates. The effective tax rate at 29.7% was consistent with the upper hand of our guidance. Net profit adjusted for non-recurring items edged higher year-over-year. Notably, we delivered a robust 19% return on equity, underscoring the strength of our earnings relative to equity. Moving to other balance sheet items, close debt rose to 1 billion, mainly as a result of commercial paper insurance to partially finance the MNC acquisition. Commercial paper market conditions were particularly favorable as we were closing the transaction, offering an attractive arbitrage versus prevailing rates on our cash investments. In December, we fully drew down on a 40 million facility from the European Investment Bank as part of the TechEU initiative. This loan supports our R&D in clean energy technologies, including the development of Reju. Finally, 10's economic net cash position, adjusted for project-associated cash, is circa $1 billion, ensuring flexibility to invest in value-accretive opportunities and deliver shareholder returns.

Now, let's take a closer look at our cash flows.

Free cash flow excluding working capital and provisions, reached 497 million, with cash conversion from recurring EBITDA at 78%. However, this is presented inclusive of non-recurring items. If we adjust for non-recurring items, which is the basis for our proposed dividend, cash conversion exceeds 90%. This reflects our asset-like business model, operational excellence, and strong financial income generated from our cash position. Working capital was a modest inflow of 22 million for the year. As I've highlighted before, working capital inflows can be uneven, but are broadly neutral over the long term, as we've demonstrated. Capital expenditure represented about 1% of our group revenues, totaling 89 million. Notable investments include the planned expansion of our Daesh facility in India and upgrades to our lab and office infrastructure. The integration of AMNC is not expected to materially change our capital intensity. Other items of note include $150 million in dividends distributed in the second quarter and the cash outlay associated with AMNC transactions. We close the year with more than $3.8 billion gross cash.

Before talking about capital allocation, let's review our guidance for 2026.

Project delivery revenues are expected to be between 6.3 to 6.7 billion, with an EBITDA margin of approximately 8%. For TPS, we anticipate revenues in the range of 2 to 2.2 billion, with an EBITDA margin of 14.5%. As a reminder, this guidance reflects a full contribution from the MNC acquisition. Other items, including effective tax rates and corporate costs, are consistent with the prior year. In addition, as we did for 2025, we have earmarked up to $50 million to invest into adjacent business models, including Reju. Reju continues to advance on maturing its technology, site selection, and building the full ecosystem. positioning it for a possible FID by year-end 2026. Looking beyond our 2028 financial framework, I'm happy to report that we are trending comfortably ahead in establishing TEN as an 800 million plus EBITDA company, an ambition we first declared at our 2024 Capital Markets Day. Before passing back to Arnaud, let me address our capital allocation priorities and shareholder returns. With $578 million in recurring free cash flow generation in 2025 and our balance sheet in excellent shape, we remain disciplined and focused on how we allocate capital. Our strategy is clear. First, we are committed to rewarding shareholders through dividends, distributing a minimum of 25% to 35% of recurring free cash flow. The proposed dividend today equates to a payout of circa 30%. Second, we prioritize value accretive investment. This means actively pursuing M&A to grow our TPS segment and looking at adjacent business models that can enhance our quality of earnings. Additionally, when it makes sense, we can and we will supplement these investments with share buyback as an additional means of returning capital to our shareholders. With the $150 million buyback program announced today, alongside the proposed dividend, we intend to return approximately $300 million to investors in 2026, equivalent to about 5% of our market cap. And together with our ongoing ability to deliver sustainable earnings growth, this underpins the highly attractive total returns we can offer to our shareholders. With that, I'll pass on to Arnaud to discuss the outlook.

Thank you, Bruno. Turning now to the outlook and how we see our markets evolving. The macro landscape remains complex, shaped by geopolitical shift and policy uncertainty. Yet, the underlying fundamentals across our markets are strong and resilient. Energy demand is rising, And plastics consumption is set to grow, while the lowering of carbon intensity, together with circularity and products' end-of-life responsibility, remain central themes. As electrification accelerates, grid stability becomes crucial. Natural gas plays an indispensable role here. No gas, no grid stability. And with no grid stability, no renewables scale up. The global energy system demands innovation and technical sophistication, qualities that TEN delivers. The investment cycle in gas and LNG will continue well into next decade, with focus shifting from oversupply concerns to risks of further future undersupply. A pragmatic decarbonization is essential. And affordability is needed to drive adoption of carbon capture, cleaner fuels, and other low-carbon solutions. Circularity solves for more sustainable solutions, but also for sovereignty through development of localized ecosystems. And as we prepare this future through REGIO and other industrial partnerships, TEN will selectively target opportunities in adjacent markets, including nuclear. In summary, TENS engineering expertise and project execution enable us to deliver sustainable and economically viable solutions at the scale required for today's and tomorrow's markets. Let's turn to our near-term commercial momentum, which is exceptionally strong. Beyond the Qatar and FW win already discussed, Our strength in enhanced replication is further illustrated by progression on Coral Norte floating LNG in Mozambique. Also, this month, we confirmed a substantial contract to develop a 100 kT plant to produce sustainable aviation fuel in the Netherlands for Sky Energy, further cementing our leadership in the sustainable fuels market. For TPS, we have a good line of sight for technology licensing and product awards in ethylene, hydrogen, and phosphates, and expect to be able to confirm details in the coming months. When we consider awards already confirmed this year in SAF and in LNG, plus prospects anticipated to materialize in the near term, including Commonwealth LNG, This yields an inflection of new awards exceeding €12 billion. This is equivalent to 75% of our year-end backlog. Beyond our near-term award potential, as shown in appendix, our global commercial pipeline remains strong and well-balanced, and we anticipate reaching our highest-ever annual order intake in 2026.

Let me now put this into context with respect to our backlog.

An important attribute of Technip Energy's equity story is the clarity and confidence afforded by our multi-year backlog. This is not just our baseload. It is the foundation upon which we build sustainable free cash flow and are enablers for effective deployment of capital and the growth of TPS. It's what allows us to look to the future with certainty and ambition. We prioritize quality, not quantity. Through discipline and selectivity, we focus on opportunities where we bring differentiation. Project delivery is not a quarterly business. Lumpiness is inherent to this business and does not hinder our long-term progress. In fact, when we look beyond the quarterly fluctuations, we see a clear pattern of incremental growth in our backlog, reinforcing our long-term resilience. We are in a period of sustained structural demand for our capabilities. And with the strength of our near-term commercial pipeline, we are confident that 2026 will establish new highs with potential to reach 24 billion euros of backlog. This milestone will provide us with one of the most exciting execution pipelines in our history, firmly underpinning our growth trajectory. So to conclude, 2025 was a successful year of delivery marked by strong execution and excellent results. We delivered revenue and EBITDA growth. We achieved high free cash flow conversion and we completed our first major acquisition. We also positioned for important awards that will secure our growth trajectory for the coming years. And we are trending comfortably ahead in establishing Technip Energies as an 800 million plus EBITDA company. The confidence we have in our outlook is demonstrated through significantly enhanced shareholder returns, and we continue to build for the long term, supported by our robust net cash balance sheet. And with that, let's 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 on the telephone. To remove yourself from the question queue, please press star and 2. Please pick up the receiver when asking questions. Anyone with a question may press star and 1 at this time. The first question is from Richard Dawson of Burenburg.

Hi. Good afternoon, and thank you for taking my questions. I'm firstly on NFW, and congratulations on getting that award in yesterday. The timing of that award was maybe slightly earlier than we'd expected. So could you provide any color on what brought that forward and maybe any comments on the actual size of the order intake? And then secondly, on the buyback, should we read anything into the launch of that buyback and maybe your outlook on further value accretive investments? I appreciate you've just closed AM&C, but given your capital allocation priorities of dividends first, then accretive M&A, followed by a buyback if there are no M&A options, Is it fair to say that maybe there are a few M&A options out there, and hence you're launching this buyback? Thank you.

Hi, Richard. Thanks for the question, and good afternoon. So NFW, I'm happy that you're surprised by the timing of it. We are not totally surprised. As you know, we at Technip Energy like to be involved in the early engagement on feed stage, and so we were engaged there. And NFW, the timing of it, why now? Well, simply because as being the incumbent on NFE and NFS, and NFW being somewhat an addition to NFS, there was, I would say, a sweet spot for maximizing synergies with notably site utilization, storage areas, construction resources. So there was really a sweet spot for NFW to kick off, which was presented to our client, and the client was aware of that, and we worked jointly with them on converging towards taking advantage of the sweet spot for synergies between NFS and NFW. So this is exactly what has driven the award of NFW. As a reminder, maybe, those two additional megatrains of LNG were first announced by Qatar Energy's CEO, early 2024 at the time when they mentioned that Qatar would have had the ambition to go beyond 140 MTPA of LNG per year. So that's about NFW. On capital allocation, I would say no, there is no shortage. You should not read anything into the fact that we have decided to initiate, I would say, a reasonable amount of share buyback. When you look at Technip Energies, you are facing a company that is extremely financially healthy, that is capable of returning to shareholders through increased dividends. through a little bit of a reasonable amount of share buyback and through further capital allocation. So doing share buyback is not at all affecting our ability to invest, nor is it the reflection of a lack of M&A targets for technical energies. We have, on the contrary, quite a few on the radar screen. So I can't say much more, as you can imagine, for now. But we're excited about the opportunity set outside, so inorganically. But we also wanted to demonstrate that we are very confident in our future, and hence why we are combining this time a bit of buyback as well as an increased dividend by 18%. That's great to hear.

Thank you.

The next question is from Alejandra Magana of JP Morgan. Excuse me, Alejandra Magana, we drew our question. The next question is from Sebastian Erskiner of Child & Co.

Krelborn. Hi, team. Good afternoon, and congratulations on the announcement of the enhanced distribution. I'd like to start on the AM&C acquisition. So 200 million revenue contribution FY26, that would imply kind of TPS at 1.9 billion at the midpoint. So that's kind of in line with the commentary you gave at the third quarter. But on AMC specifically, can you give us a few questions? Can you give us an indication of the operational performance of that business in 2025? I think there'd been some concern in the market around catalyst technologies given the sale of that business under Johnson Maddy to Honeywell. There was some concern in that market. And potentially, any detail on the growth outlook? I think, Bruno, you mentioned that the growth of that business should be around a mid-single-digit revenue level per annum going forward. Is that still intact? Any color on that would be great.

Hi, Sébastien. I'll take the question. So, yes, the deal for MNC was completed at the end of the year. and will start to contribute to our top line in TPS starting January. Actually, AMNC closed the year pretty much where we expected. You know, they have two main businesses, one on advanced leakers, you know, they're, you know, basically addressing, you know, hydrocracking and some also polyolefins market. Of course, you know, from a quarter, it's more product. So you can have, you know, one refill which may sleep by one month in one year and then it's transferred to the other year. But overall, I think the, you know, the momentum and market share of this business was absolutely where we expected. And of course, you know, the initial, you know, signals we have for the beginning of the year is exactly at this level. Now, of course, the teams have started. We've started to engage with our joint venture partners on Zeolist International, which is Shell. So this integration is working very well. We've also started to see how this business of MNC can create cross-selling synergies with our businesses because they have advanced materials expertise So that can complement to our process technology portfolio. And their client proximity, our client proximity are somewhat complementary. So the teams have started to engage on creating those bridges, which of course may take a bit longer than just one month or a couple of months to manifest or to have evidence in themselves. But we're quite confident that the trajectory we've given through the cycles will be absolutely there.

Sébastien, I will also add something. There is one key attribute to AMNC that one must not forget. It's the quality of their portfolio, and I would say the vitality of the portfolio, in a sense that about 35% of AMNC's portfolio is less than five years old. Therefore, you're talking about solutions that are not solutions of the past, but solutions of today and into the future. The field of applications for EMC solutions is one that is actually well into its time and well into what's needed for the years to come.

Super. Thank you very much for that. And if I can squeeze in a question unrelated, but Arnaud, you gave a very insightful interview in Upstream on the opportunities presented by FLNG and kind of other floating solutions in the EMC market. Can you maybe provide an update on that pipeline and when we might see some kind of related orders on FLNG? And of course, you have that partnership with SPM Offshore. So could we see you involved in some of the FPSOs that are up for tender in the coming years?

Yeah, there's an exciting set of opportunities for floating solutions, FPSOs or floating LNGs. So first of all, we are, and we announced a bit more clearly that we are progressing with Coral Norte at the moment for Yenai in Mozambique. We very much love, a little bit like for NFW, we love the Coral Norte floating LNG because it's a true replicate of Coral South. and I would say an enhanced replicate, to paraphrase our client, because it's not only a replication, but we'll be able to deliver it with a much shorter lead time than the first unit. So we like that. We have indications that there's interest for you know, maybe more than two FLNGs in Mozambique. And floating LNG in Africa on the east or the west coast seems to be gaining momentum. So it is a solution for some markets. And indeed, you know, our presence for delivering floating solutions, being a gas or into a you know, floating LNG or gas FPSOs or oil FPSOs, I think is enhanced by the associations that we have formed with SBM purely on FPSO and purely for Suriname at the moment. But as we, this project is progressing really well. And, you know, at 10, we like replication. So if we are all having good experience, and most importantly, if our customer has a good experience with SBM, this JV and this association that we formed, why not replicating it? I think that would be pretty powerful.

Thank you very much, Ono and Bruno. I'll hand it back now. Thank you.

The next question is from Henri Patricot of UBS.

I remind you to, in the interest of time, to take two questions to allow everybody. Thank you.

Yes, hello everyone. Thank you for the presentation. I'll stick to just two questions, please. The first one, following up on Qatar NFW, you mentioned your synergies with the existing projects. I was wondering if you have any comment on the margin on that project compared to the previous ones and the rest of the portfolio. I think you mentioned the medium-term upside potential to the margin. I'm wondering to what extent NFW plays a role here. And then secondly, still on the margin, but this time on TPS, so you're guiding to 2026 EBITDA margin, 14.5%. That's compared to last year, there was 14.3%, but you also mentioned AMNC at 25% margin. So that would imply a bit of a decline for the rest of the TPS business. Just wondering what's the drive of the lower TPS margin X AMNC in 26 and the outlook beyond that. Thank you.

Okay, I'll start with Qatar and then I know Bruno is burning to answer the TPS margin question. So Qatar NFW Right. Like I said, we like it very much because it is coming at the right timing and it provides a lot of synergies with NFE and NFS, mostly NFS. And it is a true replication of the NFS LNG train. So, you know, limited engineering. And it's a unique opportunity. And very rarely... In this industry, will you see basins or clients ready to invest this way? There's Qatar Energy onshore, on LNG, the way they are doing it. You will have Nexon Mobile in Guyana with a delivery model and an execution model that is a bit like a conveyor belt and therefore very successful because there is replication and replica. We always, in our industry, including at Technip Energies, have a tendency to underestimate the power of replication. And so, yeah, I mean, we are entering into NFW, starting the project with a level of margin at the start of the project that is absolutely in line with our margin trajectory at Technip Energies for the long term. But you can trust us with having expressed a different type of ambition to our project education teams. and in particular because it is replicated. So let's see what the future will will provide. As a reminder, we have a very nonlinear margin recognition at Technip Energy. So the first couple of years are about early works, if I may say, or early part of the project. It's going to be slightly diluted. You will only see the full breadth of NFW's margin contribution later. So, you know, into 2020, 8, 9, and 2030, that's where you will see the full contribution and I would say the full power of the replication. But again, this is a unique opportunity for TEN, a unique opportunity in the industry, and we are extremely excited to continue with Qatar Energy on this partnership. I think it will yield some very interesting results for us. Bruno on the TPS.

Sure. Thanks, Arnaud. Good afternoon, Henry. So on TPS, it's true that we ended the year at 14.3% at a quite high position. Quite high, and we were, of course, very happy about that. Even that, as I said in my prepared remark in Q4, we made some provisions because of this, you know, very good performance of the year. for increased payout and bonuses to our employees, which impacted Q4. So to some extent, Q4 would have been even higher without that. But when we started the year, we were at 13.5% as a guidance for TPS. And 14.5% was actually the target for 2028 in our medium-term outlook. What happened in 2025 was really a good performance for Thailand project of property equipment, like furnaces, furnace islands, and the delivery of that with slightly lesser revenues. Now, for the organic portfolio, what we expected, as new awards will come, and some of them were unnamed but highlighted and flagged by Arnaud in the prepared remarks, We would expect a bit of a normalization of this portfolio, not maybe going back to 13.5% EBITDA, but with somewhat of a normalization before being able to step up again. So you have a bit of a normalization, which was to be expected from the TPS portfolio. That's then you add on the accretive part of EBITDA. AMNC, and basically that puts us around 14.5 as a guidance. Of course, then we'll want to accelerate and continue to step up as the full of the portfolio will continue to deliver. But at 14.5, we're already ahead and already at the previously mentioned 2028 kind of target. That's it.

Thank you.

The next question is from Victoria McCulloch of RBC.

Victoria McCulloch. Hi, can you hear me?

Your line is open, yes.

Yeah, you can hear me, thanks very much. Sorry, I'm having a few problems with my line today. Can we just focus for a second on the commercial pipeline? Can you give us some colour as to, of that $70 billion, How has decarbonisation as a percentage of the commercial pipeline changed maybe over the last 12 months? We've seen calls for EU carbon market to be suspended. The latest of these has been from Italy today, which feels like a stark difference, I guess, to a couple of years ago. How have the conversations with your customers within this decarbonisation portion of commercial pipeline, how have they been evolving over the last six months as the sentiment in the sector has changed significantly. Thanks very much.

Hi, Victoria. It's a very interesting topic. And I would say the past year has been a clear reminder that there will be no so-called energy transition or no decarbonization that is not an affordable one. And it needs to be a market-driven transition. And unfortunately, there are, I would say, areas and spaces and also domains in terms of being carbon capture, sometimes SAF, sometimes low-carbon molecules such as the blue ammonia, etc., where things have slowed down for the lack of takers. So it's obviously disappointing that those projects could not find a path forward in the near term, ultimately due to the challenges with off-take and policy. And those projects, they need stable policies. They don't need moving goalposts. They also need a carbon price that is adapted to creating a market One project alone is not sufficient to create a market. So I think there has been a bit of realization that we've reached the end of the fairy tale when it comes to some of those domains. But, you know, I'm going to look at the glass half full rather than half empty. There are areas and there are pockets of opportunities where those projects are viable. You know, in Spain, Southern Europe, in India, some in the Middle East. We just signed a SAF project in the Netherlands. And we, Technip Energies, we invested, you know, when we were created five years ago, we invested into carbon capture, SAF, circularity, and other blue molecules. But we also did that, and green actually as well, green hydrogen, but we did that in a, you know, without deploying too much capital. And so I am personally not so disappointed about the way the market is where, you know, because we as TEN, we are present when those projects are happening. We are executing the launch green ammonia project in India. We are on SAF in Europe and elsewhere. We are on carbon capture in the U.S. and northern Europe. So the important for us is to be present and to be winning in those spaces, and we are. the only, I would say, space for slight disappointment is that, yeah, we would have loved for the volume to be greater, but where it's happening, you will find technique energies, and that's the most important. And all this is happening while the rest of the business, the core business, like LNG, like everything around gas, continues to thrive and continues to grow and continues to decarbonize. Because let's not forget that our clients in the more traditional space are looking at solutions to lower the carbon intensity of their products. That's why you see large carbon capture being deployed on all LNG facilities in Qatar. But not only, that's why you see LNG facilities being electrified on Ruways in UAE by ADNOC, powered by nuclear electricity, therefore decarbonized electricity. Same story for total energies in Oman for LNG as a shipping fuel facility. where associated solar plants are being built. I think the train towards lowering the carbon intensity of the product has left the station. We're on board that train and it's fantastic. What is a bit slower than one could have dreamed, it's really some of the blue molecules around that space Yeah, it's much slower. But the important is that to remember that the rest has not disappeared. It continues to grow. And that technical energy is present where the blue or the green or the carbon capture or the sustainable aviation fuel is happening. And that plays to the strength of the portfolio.

That's great. Thanks very much for that color. And just as a follow-up, when we go on for Bruno, could you give us some color in what you expect working capital movements to look like through the year? Thanks very much.

Sure. Hi, Victoria. So working capital, first I'll start maybe with year-end because we had a bit of unusual working capital swings. a bit more, if you look at our balance sheet, a bit more accounts receivable because we had, you know, 100, 150 million plus of invoices which were supposed to be paid just at the tail end and which were instead received on the very, very early Jan so that, you know, the lumpiness of having one invoice and a few days can present and also from an accounts payable site has increased We migrated in ERP for our largest operations, notably France, Middle East, and so on. We decided to anticipate some payments to subcontractors and suppliers so that projects would go ahead despite any issues of ERP migration and as you ramp up. So you should expect these kind of accounts, payables, or working capital to unwind. Then you will have the more traditional aspect. of working capital, which means a new generation of projects, so NFW with the advance payment and the first milestones being reached, plus all the rest of the projects that may constitute the 12 billion plus order intake. that Arnaud highlighted in the slides, this will positively contribute in terms of working capital. It will be dilutive from a P&L and bottom line perspective, but it will be accretive from a cash flow and working capital perspective. then you will have the more tail-end projects for which you may have a bit of an unwind. But I think with the momentum of the portfolio, you should expect somewhat of a positive movement on working cap overall because that's of the portfolio plus the reversal of the somewhat specific end-of-the-year 25 situation.

Thank you. The next question is from Jean-Luc Romaine of CIC CIB.

Jean-Luc Romaine Good afternoon. I have two questions on LNG. The first is in the NFW contract you announced yesterday, is there a TPS component, for instance, for part of the carbon capture? Incoming orders, I noticed there's nothing about Rovuma LNG. Is this a decision that ExxonMobil plans to take later in the year or maybe next year?

Thank you, Jean-Luc. So first on NFW, short answer, no, there is no TPS content into NFW. In this case, the carbon capture is pre-combustion and not post-combustion. We own and we deploy solutions that are part of TPS in the post-combustion world. That's why that is what is deployed on net zero T side and other applications. But pre-combustion, we deploy someone else's solution as we have done it for now many years. And so we master that one. We know how to scale it up, but it's not technique energies and therefore it doesn't provide for a TPS solution. content through NFW. So Rovuma, as you would have seen in the news flow, there is quite a positive momentum on this one, and we're very happy about that. We know the lifting of the force majeure on total energy is Mozambique energy. This is a positive development, and we see increased momentum on Rovuma prospect from our conversations. So, as always, a reminder, we do not control the timing of the FID. That's very much in Exxon's hands. This Rovuma project is absolutely very high on our radar screen, but it is competitive. And it is worth noting that we've been engaged on Rovuma for several years already. As you know, we've done the feed. and we've been engaged with Exxon assessing the project from different solutions and development perspectives, and this project will be modular, which is, as you know, our preferred solution. So, FID 2026 or 2027, let's see. Lots of engagement, lots of interest, and a very good momentum, but it is competitive. Therefore, we're going to remain cautious with our comments, but It's a project with attributes and characteristics that are extremely interesting and attractive for us. And yeah, we intend to be a fierce competitor on this race.

Thank you very much.

The next question is from Bertrand Odet of Kepler-Chevreux.

Yes. Hello. Thanks for taking my question. I have two. The first one is on your prospect in TPS regarding either carbon capture or ethylene, especially ethylene in the Middle East. Do you see more momentum here? And then the second question, I was doing some very rough math, 16 billion euro backlog end of year 25, your projection 24 billion H126. looks to me that you are, if you achieve that, you will be already above 12 billion euros of other intake for H1, or am I doing any mistake here?

Hello Bertrand, I mean you rarely do mistakes, but we would like to have a bit of a cautious approach as always, and you know, on our communication we are providing a I would say, a number that is about what has been announced or what is known and what is supposed to be awarded in the very near term. So it's a very short, I would say, window that we are projecting. Of course, then there's the rest of the year, you know, H2 in particular, with some opportunities. So the... We always, you know, like I said, lumpiness is part of our life. And whether a project is awarded on the left side or the right side of the 31st of December, it doesn't change much for Technip Energies, except, of course, that it does change. It can change drastically the shape and form of an order intake for a year. But, yeah, the potential is the one you're describing. let's see if it realizes, but there is a, it's a realistic scenario, but we've seen last year, you know, a few things pushing to the right, and so, and it wouldn't be the first time. So that's why we decided to report on, I would say, what is a shorter window, and we don't guide on order intake, as you know, and also, just a reminder for everyone on the call, we don't reward on order intake. That's because we want the right orders to make it to our portfolio. We don't want a raise to volume. We want a raise on quality. In terms of the prospects for TPS, yeah, we do have, and I believe on the slide we decided to call them undisclosed prospects, but we are very clear. If they are on the slide, it's because we have a very clear line of sight for them. in particular in ethylene and phosphates and others. So there's a bit of a restart on that front, and that should provide for a positive momentum ahead.

Thank you very much, and congrats again for this new win in Qatar that assembled more of partnerships than anything else. Thank you. It is. Thank you.

The next question is from Paul Redman of BNP Paribas Exxon.

Hi, guys. Thank you very much for your time. My first one is just going back to TPS quickly. I just wanted to ask what gives you the confidence to guide to 2 to 2.2 billion euros of revenue in 26? The reason I ask is when I look back at last year, you had 1.3 billion euros of buyback into backlogging for 2025, and you guided to 2 to 2.2 billion euros. This year it looks like you've only got 1 billion euros in the background at the moment. And then secondly, just to touch on NFE, just to touch on timing for when you expect startup, interval between trains, yeah, kind of how is that project progressing? Thank you.

Hey, Paul. I'll start with NFE and then I'll hand over to our TPS expert because Bruno has been diving on TPS quite a bit recently. So NFE, I was on site just earlier this month on NFE and on NFS, and I'm just happy to report that the project is progressing well with the first train being in a pre-commissioning and commissioning phase. So construction on the first of the four NFE LNG trains is actually, you know, Mostly completed and we are progressing per plan on the ramp up of, you know, when you start up a plant, you need to put everything under pressure, pressure test everything, everything that makes a pre-commissioning and commissioning activity. A reminder as well of the fact that in order to start up the first train on NFE, we needed to have all of the utilities up and running. So the utilities for the totality of the four trains, right? So I would say that the level of effort to reach train one readiness is much higher than what has to be achieved for train two, three, and four readiness. And the fact that we are in pre-commissioning and commissioning mode should signal to you that all the utilities are actually up and running and that we are capable of bringing gradually the first train on stream. And that construction is broadly over there. And I could see it in my own eyes just earlier this month. I would say let's not believe everything that we can read in the press. If the client was unhappy, I think we would have heard about it and probably we would not have been awarded the NFW. We stay very close to them. And for any... commissioning and pre-commissioning of that scale. It's an activity that is happening hand-in-hand with the client and the client's operations team to bring such a large facility on stream. It's not only with Technip Energy. It's hand-in-hand. It's a teamwork with the client's team. So there is really no reason to doubt the timing that you have heard from our clients.

So on the TPS momentum and backlog versus projected revenues, first, of course, as I said, AMNC will be consolidated from Jan 1. It's not a backlog business that will contribute, despite that it's not really part of the backlog at the end of the year. So, of course, that's the first element. Second, as I also said, you always have... some PMC work, which was quite successful over the last couple of years, which are not recognized in backlog, but as the services are called off, then they're delivered, so they are absolutely representing a kind of a book-and-burn element. But third, and maybe most importantly, last year we were having some tail-end delivery of property equipment, so more technologies and products, backlog, which pretty much have been completed during the year and have, you know, represented a bit of a boost to the bottom line, as I said before. Now, this is a bit of the reverse this year, and as mentioned by Arnaud to Bertrand's question, we've, you know, we have a clear line of fight in more, you know, meaningful awards in SELN, in hydrogen, and, for instance, foresight projects, which were not in the backlog of revenues in the prior years, that should complement. So that should give us some contribution this year, although not in the backlog. So that's why it's not exactly easy to compare last year's momentum with this year's momentum.

Well, you know, Paul, it's good because we will be adding product content into the TPS backlog. And that's like putting more volume and also provides a bit of longer cycle content into a short cycle business.

Thank you both.

The last question is from Jamie Franklin of Jefferies.

Hi there, guys. Thanks for taking my questions. So first, just on project delivery revenues, I know you typically don't give any quarterly guidance, but given the significant step change in revenues through 2026, could you help us think about the phasing this year? Should we assume kind of a slow ramp up and more of a back off waiting or is it more evenly split than that? And then, obviously, projects revenues are very well covered by backlog already. And you talked to the 12 billion near-term order intake potential. In terms of NFW, how should we think about the revenue phasing for that particular contract? Could there be much of a contribution in 2026? Thank you.

Oh, hi, Jimmy. So I can start and I'll make a comment. So, yeah, in terms of, you know, there will be a ramp-up and you would have, you know, you could have some cut-off and milestones and so on, but you would expect some ramp-up during the year. Now, it's true also, to your point, that NFW won't have a major contribution this year because it's, you know, early phase. It's going to be this year early phase. Since it's a replication, The detailed engineering and so on is, to some extent, already done. So that's why you would have a bit of a low start for NFW in terms of P&L contribution, and then you will ramp up as the orders are placed to the market. So for the ramp-up of revenue for project delivery, I think it would be fair to have a bit of a gradual step-up as we go throughout the year.

Okay, thank you.

Gentlemen, I turn the call 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.

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