10-KPeriod: FY2020

TechnipFMC plc Annual Report, Year Ended Dec 31, 2020

Filed March 5, 2021For Securities:FTI

Summary

TechnipFMC plc's (FTI) 2020 10-K filing details a challenging year marked by significant financial impacts from the COVID-19 pandemic, leading to substantial impairment charges and a net loss. The company completed the spin-off of its Technip Energies segment in February 2021, reshaping its business structure to focus on two core segments: Subsea and Surface Technologies. This strategic separation is aimed at allowing both entities to pursue distinct market opportunities and unlock value. Despite the downturn and impairments, the company highlights ongoing R&D, technological advancements like its iEPCI™ and Subsea 2.0™ platforms, and a strategic focus on operational efficiency and cost reduction to navigate the volatile energy market. The company is positioned to benefit from a projected rise in long-term energy demand, with a focus on deepwater developments and natural gas. The Subsea segment is expected to see growth driven by inbound orders and direct awards, while Surface Technologies is looking to gain traction with integrated solutions like iComplete™ and iProduction™. The company's financial strategy emphasizes maintaining a strong balance sheet and liquidity through disciplined capital expenditure and debt management, particularly in light of the ongoing energy transition.

Financial Highlights

55 data points
Beta

Revenue

$6.53B

Net Income

-$3.29B

-50.3% Net Margin

EPS (Diluted)

$-7.33

Total Assets

$19.69B

Cash & Equivalents

$1.27B

Free Cash Flow

$400.80M

Financial Statements
Beta
Revenue$6.53B
R&D Expenses$75.30M
SG&A Expenses$724.10M
Operating Expenses$10.04B
Operating Income-$3.24B
Interest Expense$134.10M
Net Income-$3.29B
EPS (Basic)$-7.33
EPS (Diluted)$-7.33
Shares Outstanding (Basic)448.70M
Shares Outstanding (Diluted)448.70M

Key Highlights

  • 1Completion of the Technip Energies spin-off in February 2021, resulting in two focused pure-play companies: TechnipFMC (Subsea and Surface Technologies) and Technip Energies.
  • 2Significant impairment charges recorded in 2020 ($3.08 billion in goodwill and $204 million in long-lived assets) primarily due to the impact of COVID-19 and low commodity prices.
  • 3Total revenue decreased slightly to $13.05 billion in 2020 from $13.41 billion in 2019, reflecting reduced industry activity.
  • 4Subsea segment revenue saw a slight decrease, while Technip Energies revenue increased due to project ramp-ups, though Surface Technologies revenue declined significantly due to reduced North American activity.
  • 5Despite a challenging year, the company maintained a strong order backlog of $21.39 billion as of December 31, 2020, providing visibility for future revenue.
  • 6TechnipFMC continues to emphasize technological innovation with platforms like iEPCI™, iFEED™, and Subsea 2.0™, aiming to improve project economics and reduce carbon intensity.
  • 7The company is actively managing its financial position, including debt repayment and liquidity preservation, while preparing for future growth opportunities in the evolving energy landscape.

Frequently Asked Questions

The most significant event was the severe downturn in the energy market, exacerbated by the COVID-19 pandemic, which led to reduced oil and gas demand, lower commodity prices, and subsequent substantial impairment charges totaling $3.29 billion for goodwill and long-lived assets. This significantly impacted the company's net loss for the year.

The spin-off effectively separated TechnipFMC into two distinct, more focused entities: TechnipFMC, concentrating on Subsea and Surface Technologies for hydrocarbon production, and Technip Energies, focusing on downstream engineering, procurement, and construction (EPC) projects. This aims to allow each company to better pursue its specific market opportunities, optimize capital allocation, and enhance shareholder value through differentiated business models.

Overall revenue slightly decreased in 2020. The Subsea segment experienced a minor revenue decline due to COVID-19 operational challenges. Technip Energies saw revenue growth driven by specific large projects and downstream activity, while the Surface Technologies segment faced a significant revenue decrease due to reduced drilling and completion activity, particularly in North America.

TechnipFMC anticipates a recovery in the Subsea market, driven by improved economic outlook and higher oil prices, with expected inbound orders to meet or exceed 2020 levels, particularly from Brazil and other regions. For Surface Technologies, the company expects revenue to be flat to modestly down in North America, but forecasts outperformance driven by integrated solutions like iComplete™, with international markets, especially the Middle East and Asia Pacific, expected to provide growth opportunities.

The company is focused on maintaining a strong balance sheet and liquidity. This includes disciplined capital expenditure, debt repayment, and cash preservation initiatives. Subsequent to the spin-off, TechnipFMC intends to further reduce its net leverage by strategically selling its stake in Technip Energies.