10-QPeriod: Q3 FY2024

TechnipFMC plc Quarterly Report for Q3 Ended Sep 30, 2024

Filed October 24, 2024For Securities:FTI

Summary

TechnipFMC plc reported a strong third quarter and first nine months of 2024, with significant year-over-year revenue and net income growth. Total revenue for the third quarter increased by 14.2% to $2.35 billion, and for the first nine months, it rose 16.9% to $6.72 billion. This growth was primarily driven by the Subsea segment, which saw substantial revenue and operating profit increases due to strong backlog conversion and favorable project mix, including significant contributions from iEPCI projects. The company's net income attributable to TechnipFMC plc for the third quarter surged to $274.6 million from $90.0 million in the prior year, while for the nine-month period, net income reached $618.2 million, a dramatic increase from $3.2 million in 2023. This profitability improvement was bolstered by the gain on the disposal of the Measurement Solutions business and a significant release of a valuation allowance on U.S. deferred tax assets. Looking ahead, TechnipFMC anticipates continued strength in the energy market, with a strategic focus on offshore and Middle East opportunities, driven by evolving market trends such as shifting capital flows and the increasing role of new technologies. The company maintains a robust order backlog, particularly in its Subsea segment, providing good visibility for future revenue and profitability. Furthermore, TechnipFMC continues its commitment to shareholder returns through dividends and substantial share repurchase programs.

Financial Highlights

47 data points
Beta

Revenue

$2.35B

Net Income

$274.60M

11.7% Net Margin

EPS (Diluted)

$0.63

Total Assets

$9.72B

Free Cash Flow

$225.30M

Financial Statements
Beta
Revenue$2.35B
R&D Expenses$15.40M
SG&A Expenses$187.40M
Operating Expenses$2.06B
Operating Income$322.50M
Net Income$274.60M
EPS (Basic)$0.64
EPS (Diluted)$0.63
Shares Outstanding (Basic)428.30M
Shares Outstanding (Diluted)438.80M

Key Highlights

  • 1Revenue increased by 14.2% to $2.35 billion in Q3 2024 and by 16.9% to $6.72 billion in the first nine months of 2024, year-over-year.
  • 2Net income attributable to TechnipFMC plc for Q3 2024 was $274.6 million, a significant increase from $90.0 million in Q3 2023.
  • 3Nine-month net income attributable to TechnipFMC plc reached $618.2 million, a substantial improvement from $3.2 million in the prior year.
  • 4Subsea segment revenue grew significantly, driven by strong backlog conversion and iEPCI projects, with operating profit also showing strong increases.
  • 5Surface Technologies segment revenue saw a modest decrease due to divestitures and market conditions, but operating profit improved slightly.
  • 6The company reported a substantial order backlog of $14.7 billion as of September 30, 2024, providing strong future revenue visibility.
  • 7TechnipFMC received a credit rating upgrade to investment grade from S&P and Fitch, enhancing its financial flexibility.

Frequently Asked Questions

The primary drivers for revenue and profit growth are the strong performance of the Subsea segment, fueled by increasing energy demand, upstream spending, and successful conversion of a robust backlog, particularly through iEPCI projects. Favorable activity mix and higher volumes in Subsea have significantly boosted profitability. Additionally, the nine-month results benefited from a gain on the disposal of the Measurement Solutions business and a significant release of a valuation allowance on U.S. deferred tax assets, which positively impacted net income.

The Subsea segment is outperforming the Surface Technologies segment. Subsea revenue increased by 22.4% in the first nine months of 2024, with operating profit growing by 81.7%. In contrast, Surface Technologies revenue decreased by 8.5% over the same period, though its operating profit saw a substantial increase of 106.0% year-over-year, largely due to the gain on the sale of the Measurement Solutions business and improved operating performance in international markets.

The outlook is positive, supported by a strong order backlog of $14.7 billion as of September 30, 2024, especially in the Subsea segment. Management sees continued strength in the global energy market, driven by resilience, growing energy demand, and geopolitical factors supporting energy security. Key trends include a shift in capital flows to offshore and Middle East markets, the increasing role of new technologies, and growth in subsea services. The company expects to leverage these trends to drive future growth.

TechnipFMC is committed to maintaining a strong balance sheet with sufficient liquidity. Net debt was $129.2 million as of September 30, 2024. The company has a $1.25 billion revolving credit facility with no outstanding letters of credit as of the reporting date. Recent upgrades to investment grade ratings from S&P and Fitch provide enhanced financial flexibility, have led to the release of collateral, and removed certain restrictive covenants, which is a positive development for the company's capital structure and access to capital.