01—Abstract
Summary
Summary of the 10-K filed March 3, 2020. Cited figures are marked; the original filing is the authoritative source.
TechnipFMC plc's 2019 10-K filing details a challenging year marked by significant impairments, particularly in the Subsea and Surface Technologies segments, leading to a substantial net loss.
Despite these headwinds, the company reported revenue growth, driven by increased project activity in Subsea and resilience in its Onshore/Offshore segment, bolstered by demand for LNG facilities. The company is strategically repositioning itself, announcing plans to separate into two distinct entities: one focused on Subsea and Surface Technologies, and the other on Onshore/Offshore and other services. Key initiatives include the continued development of its integrated subsea offering (iEPCI™), which is gaining market traction, and a focus on cost optimization across its operations.
The company's backlog remains strong, providing visibility into future revenue. Investors should monitor the progress of the planned separation and the impact of ongoing market volatility in the oil and gas sector, particularly in relation to commodity prices and customer capital expenditure decisions.
02—Key points
Key Highlights
- Reported a net loss of $2.415 billion in 2019, significantly impacted by goodwill and asset impairment charges totaling $2.5 billion.
- Revenue increased by 6.8% to $13.41 billion in 2019, primarily driven by growth in the Subsea segment due to increased project activity and services, alongside stable performance in Onshore/Offshore and a modest increase in Surface Technologies.
- Announced a strategic plan to separate into two independent companies: TechnipFMC (Subsea and Surface Technologies) and Technip Energies (Onshore/Offshore and EPC services), expected to be completed in Q2 2020.
- The Subsea segment's operating loss improved year-over-year due to execution on a more competitively priced backlog, but remained negative at $(1.45) billion.
- The Onshore/Offshore segment showed strong operating profit growth of 16% to $960 million, benefiting from reduced costs and strong project execution, notably on the Yamal LNG project.
- The Surface Technologies segment experienced a significant operating loss of $(656) million, heavily impacted by a $686 million impairment charge.
- Total order backlog stood at a robust $24.25 billion at year-end 2019, up from $14.56 billion in 2018, indicating strong future revenue potential.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2019filed March 3, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $6.95B$12.55B | −44.6% |
| R&D Expenses | $149.50M$189.20M | −21.0% |
| SG&A Expenses | $795.70M$1.14B | −30.2% |
| Operating Expenses | $9.31B$13.47B | −30.9% |
| Operating Income | -$2.11B-$532.70M | −295.2% |
| Interest Expense | $134.90M$482.30M | −72.0% |
| Net Income | -$2.42B-$1.92B | −25.7% |
| EPS (Basic) | $-5.39$-4.20 | −28.3% |
| EPS (Diluted) | $-5.39$-4.20 | −28.3% |
| Shares Outstanding (Basic) | 448.00M458.00M | −2.2% |
| Shares Outstanding (Diluted) | 448.00M458.00M | −2.2% |
05—Questions
Frequently Asked Questions
What was TechnipFMC's financial performance in 2019?
TechnipFMC reported a net loss of $2.415 billion for 2019. This was largely due to significant impairment charges totaling $2.5 billion, primarily related to goodwill and long-lived assets in the Subsea and Surface Technologies segments. However, revenue increased by 6.8% to $13.41 billion, driven by increased activity in the Subsea segment and stable performance in Onshore/Offshore.
What major strategic changes are underway at TechnipFMC?
TechnipFMC announced its plan to separate into two independent, publicly traded companies. The proposed separation will create one company focused on Subsea and Surface Technologies, while the other will focus on Onshore/Offshore and related engineering and construction services. This separation is expected to enhance strategic focus and unlock value for shareholders.
How did the different business segments perform?
The Subsea segment saw revenue growth but reported a substantial operating loss, impacted by asset impairments. The Onshore/Offshore segment performed well, with increased operating profit driven by cost reductions and project execution. The Surface Technologies segment experienced a significant operating loss, heavily affected by impairment charges.
What is the company's outlook and backlog situation?
The company's backlog was strong at $24.25 billion at the end of 2019, indicating good future revenue visibility. Management expects continued demand for offshore and deepwater developments, and sees opportunities in natural gas monetization, refining, petrochemicals, and renewables. The company is focused on cost optimization and leveraging its integrated offerings to navigate the volatile energy market.
06—Continue