10-QPeriod: Q1 FY2023

TechnipFMC plc Quarterly Report for Q1 Ended Mar 31, 2023

Filed April 27, 2023For Securities:FTI

Summary

TechnipFMC plc (FTI) reported a net income of $0.4 million for the first quarter of 2023, a significant improvement from a net loss of $61.7 million in the same period of 2022. Total revenue increased by 10.4% to $1.72 billion, driven by growth in both the Subsea and Surface Technologies segments. Subsea revenue rose 7.6% due to higher project activity, while Surface Technologies revenue saw a 23.7% increase, fueled by rising operator activity in North America and the Middle East. The company's gross profit margin improved to 12.9% from 11.9% year-over-year, reflecting better margins in backlog and increased service activity. Operating profit also saw a healthy increase across both segments. Despite a cash outflow from operating activities of $386.2 million, primarily due to timing differences, the company's financial position remains robust with a significant order backlog of $10.6 billion. Management remains confident in the multi-year growth cycle for energy demand and TechnipFMC's positioning to capitalize on opportunities in both conventional energy and the energy transition.

Financial Highlights

46 data points
Beta

Revenue

$1.72B

Net Income

$400K

0.0% Net Margin

EPS (Diluted)

$0.00

Total Assets

$9.58B

Cash & Equivalents

$522.30M

Free Cash Flow

-$443.50M

Financial Statements
Beta
Revenue$1.72B
R&D Expenses$15.40M
SG&A Expenses$153.90M
Operating Expenses$1.67B
Operating Income$89.20M
Interest Expense$27.00M
Net Income$400K
Shares Outstanding (Basic)442.10M
Shares Outstanding (Diluted)455.00M

Key Highlights

  • 1Net income turned positive at $0.4 million in Q1 2023, compared to a net loss of $61.7 million in Q1 2022.
  • 2Total revenue increased by 10.4% year-over-year to $1.72 billion, driven by strong performance in both Subsea and Surface Technologies segments.
  • 3Subsea segment revenue grew 7.6% due to increased project activity, while Surface Technologies segment revenue jumped 23.7% on higher operator activity.
  • 4Gross profit margin improved to 12.9% from 11.9% in the prior year, benefiting from better backlog margins and increased services activity.
  • 5Order backlog remains strong at $10.6 billion as of March 31, 2023, with Subsea backlog increasing significantly.
  • 6The company repurchased $50.0 million of its ordinary shares during the quarter under its authorized share repurchase program.
  • 7TechnipFMC is actively involved in the energy transition, focusing on greenhouse gas removal, offshore floating renewables, and hydrogen initiatives.

Frequently Asked Questions

The primary driver for the revenue increase was a combination of higher project activity in the Subsea segment and increased operator activity in North America and the Middle East within the Surface Technologies segment. This led to a 10.4% increase in total revenue to $1.72 billion.

Profitability has improved significantly, with net income swinging from a loss of $61.7 million in Q1 2022 to a profit of $0.4 million in Q1 2023. This improvement is attributed to a higher gross profit margin (12.9% vs. 11.9%), driven by better margins in backlog and increased services activity, along with revenue growth.

TechnipFMC sees a constructive outlook driven by a multi-year growth cycle in energy demand. The Subsea segment is benefiting from improved offshore economics and increased investment in conventional energy, with strong order momentum and an expectation to exceed $8 billion in inbound orders for the full year. The Surface Technologies segment is influenced by global drilling activity, with international markets, particularly the Middle East, showing strong potential. The company is also actively pursuing opportunities in the energy transition, positioning itself for growth in renewables and hydrogen.

The company's net debt position improved to a negative $868.4 million as of March 31, 2023, indicating more cash than debt. They have significant availability under their revolving credit facility, totaling $954.6 million as of March 31, 2023. Management is committed to maintaining a strong balance sheet and sustainable leverage, with estimated capital expenditures for 2023 around $250 million.