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TechnipFMC plc 8-K Report, Financial Results (Feb 22, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed February 22, 2024
Period End
February 22, 2024
Security
FTI
In the record · 2016–202610-K1210-Q308-K82

FTI filed 12 annual reports (10-K), 30 quarterly reports (10-Q) and 82 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Sep ’17Sep ’17
  2. Leadership change8-K · Apr ’20Apr ’20
  3. Material agreement8-K · May ’22May ’22
  4. Leadership change8-K · Jun ’26Jun ’26

01—Abstract

Summary

Summary of the 8-K filed February 22, 2024. Cited figures are marked; the original filing is the authoritative source.

TechnipFMC's Q4 2023 results, reported February 22, 2024, showed a strong close to a year of growth.

Quarterly revenue was $2,077.7 milliona, up 22.6% year over year, and GAAP income attributable to TechnipFMC was $53.0 million, or $0.12 per diluted share. Adjusted EBITDA was $218.7 million with a 10.5% margin, and adjusted diluted EPS was $0.14. Quarterly free cash flow of $629.6 million was strong, and net debt fell sharply to $115.6 million from $649.9 million in the prior quarter, aided by the maturity of the 2013 Private Placement Notes.

Sequentially, the quarter was softer: adjusted EBITDA declined 7.9% and quarterly inbound orders fell 28.6% to $1.53 billionb, with Subsea book-to-bill at 0.7x. For the full year, revenue rose 16.8% to $7.82 billion and adjusted EBITDA rose 26.8% to $819.6 million, or about 40% growth excluding foreign exchange losses of $119 million. Full-year Subsea inbound orders reached $9.7 billion, up 45%, pushing Subsea backlog above $12 billion and total backlog to $13.2 billion, up 41.5%.

Full-year GAAP income was only $56.2 millionc because of a $126.5 million non-recurring legal settlement with the French national prosecutor (PNF). Management raised its three-year Subsea order outlook through 2025 to $30 billion and guided 2024 Subsea adjusted EBITDA margin to 15.5-16.5%, implying roughly 40% Subsea EBITDA growth at the guidance midpoint.

Key watch items for investors include the sequential order slowdown in Q4, the Surface Technologies revenue guidance that includes the pending Measurement Solutions sale to One Equity Partners for $205 milliond, and the roughly $170 million legal settlement payment that is embedded in 2024 free cash flow guidance of $350-500 million. The post-quarter Mero 3 HISEP award from Petrobras, which exceeded $1 billion of inbound, is a notable subsequent event supporting the order outlook.

02—Key points

Key Highlights

  1. Q4 2023 revenue of $2,077.7M rose 22.6% year over year; Subsea revenue of $1,720.5M rose 28.2%.
  2. Full-year 2023 inbound orders of $10.98B rose 35.9%, with Subsea orders of $9.75B up 45%; ending backlog reached $13.23B, up 41.5%.
  3. Q4 adjusted EBITDA was $218.7M (10.5% margin), down 7.9% sequentially but up 80.9% year over year; excluding FX losses, adjusted EBITDA was $245.1M.
  4. Free cash flow was $629.6M in Q4 and $467.8M for the full year, well above the $194.2M generated in 2022.
  5. Net debt fell to $115.6M at year-end from $649.9M at September 30, 2023, and cash reached $951.7M after gross debt was reduced by $273.5M in the quarter.
  6. Full-year GAAP income of $56.2M ($0.12 per diluted share) was held down by a $126.5M non-recurring legal settlement; adjusted diluted EPS was $0.45.
  7. 2024 guidance calls for Subsea revenue of $7.2-7.6B with a 15.5-16.5% adjusted EBITDA margin, and Surface Technologies revenue of $1.2-1.35B with a 13-15% margin; free cash flow guidance is $350-500M, including about $170M for the legal settlement payment.

03—Questions

Frequently Asked Questions

  1. Why did quarterly adjusted EBITDA fall sequentially even though revenue grew?

    Subsea adjusted EBITDA dropped 12.5% sequentially to $225.5M, with margin down 200 basis points to 13.1%. Management attributed this to lower vessel-based activity from seasonal factors and to the mix of projects executed from backlog. Consolidated adjusted EBITDA also reflected a higher corporate expense of $32.9M excluding charges.

  2. What is driving the large gap between full-year GAAP and adjusted earnings?

    The main driver is a $126.5M non-recurring legal settlement charge tied to the resolution of all outstanding matters with the French national prosecutor's office, plus $20M of restructuring, impairment and other charges. Together these reduced GAAP diluted EPS to $0.12 from an adjusted $0.45.

  3. How much of the 2024 free cash flow guidance is affected by the legal settlement?

    The 2024 free cash flow guidance of $350-500M includes a payment of roughly $170M for the legal settlement. Excluding this payment, underlying free cash flow would be meaningfully higher, though the filing does not quantify that figure directly.

  4. What is the status of the Measurement Solutions divestiture and how does it affect the outlook?

    The Company agreed in November 2023 to sell Measurement Solutions to One Equity Partners for $205M in cash, and now expects closing by the end of the first quarter of 2024, subject to customary conditions. Surface Technologies guidance includes Measurement Solutions results for the first quarter of 2024, so the sale would affect reported segment figures after closing.

  5. Is the strong 2023 order momentum expected to continue?

    Management raised its three-year Subsea inbound outlook through 2025 by 20% to $30B, citing offshore and Middle East capital flows, technology demand, and subsea services. The Mero 3 HISEP iEPCI award from Petrobras, which exceeded $1B, was announced as a 2024 start. However, Q4 Subsea orders of $1.27B were down 30.5% sequentially, so order timing may be uneven.

04—Continue

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