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TechnipFMC plc 8-K Report, Financial Results (Apr 25, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed April 25, 2024
Period End
April 25, 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 April 25, 2024. Cited figures are marked; the original filing is the authoritative source.

TechnipFMC reported first quarter 2024 revenue of $2,042.0 milliona, down 1.7% sequentially but up 18.9% year over year.

GAAP net income attributable to the company was $157.1 millionb, or $0.35 per diluted share, which includes a $75.2 million pre-tax gain on the sale of the Measurement Solutions business. Excluding charges and credits, adjusted net income was $97.6 million, or $0.22 per diluted share, and adjusted EBITDA was $252.6 million (12.4% margin). Excluding a $4.5 million foreign exchange loss, adjusted EBITDA was $257.1 million.

Orders and backlog were the standout metrics. Total inbound orders were $2,774.4 millionc, and backlog rose 2.0% sequentially to a record $13,492.5 million. Subsea inbound of $2.4 billion produced a 1.4x segment book-to-bill, driven by three iEPCI awards (Petrobras Mero 3, Shell Sparta, and the Northern Endurance Partnership all-electric project, the last of which is subject to final investment decision and regulatory approvals).

Subsea adjusted EBITDA margin expanded 90 basis points sequentially to 14.0%, while Surface Technologies revenue fell 14.0% after the divestiture. Cash generation was weak in the quarter. Free cash flow was negative $178.7 million, and net debt increased to $327.0 milliond from $115.6 million at year-end, partly reflecting $150.1 million of share repurchases and $21.7 million of dividends.

Management reiterated full-year 2024 guidance, including free cash flow of $350-500 million, and raised its expected 2024 shareholder distributions to grow at least 70% versus 2023. S&P upgraded the company to investment grade (BBB-) in March.

02—Key points

Key Highlights

  1. Revenue of $2,042.0M (-1.7% QoQ, +18.9% YoY); adjusted EBITDA of $252.6M, a 12.4% margin, or $257.1M excluding FX.
  2. GAAP EPS of $0.35 included a $75.2M pre-tax gain on the Measurement Solutions divestiture; adjusted EPS was $0.22.
  3. Total inbound orders of $2.77B and record backlog of $13.49B (+2.0% QoQ, +27.2% YoY); Subsea book-to-bill was 1.4x.
  4. Subsea adjusted EBITDA margin rose to 14.0% (+90 bps QoQ) on strong execution and a better earnings mix from backlog.
  5. Free cash flow was negative $178.7M, with net debt rising to $327.0M, partly due to $171.8M of shareholder distributions.
  6. S&P upgraded TechnipFMC to investment grade (BBB-) on March 7, 2024.
  7. Full-year 2024 guidance was unchanged; shareholder distributions are now expected to grow at least 70% versus 2023.

03—Questions

Frequently Asked Questions

  1. Is the quarter's GAAP earnings growth representative of underlying performance?

    Not entirely. GAAP net income of $157.1M includes a $75.2M pre-tax gain on the Measurement Solutions sale and $5.0M of restructuring and other charges. Adjusted net income of $97.6M ($0.22 per diluted share) better reflects underlying results, though it still rose sharply from $1.0M a year earlier. Surface Technologies' 33.7% operating margin is also inflated by the gain.

  2. Why was free cash flow negative, and should investors be concerned?

    Free cash flow was negative $178.7M, driven by cash required by operating activities of $126.7M and $52.0M of capex. Working capital consumed $391.0M, which is typical for early-year seasonality in project businesses. Management kept full-year 2024 free cash flow guidance at $350-500M, which includes about $170M of legal settlement payments.

  3. How strong is the order book, and does it support future revenue?

    Backlog reached a record $13.49B, and Subsea backlog of $12.46B includes $4.3B scheduled for the remainder of 2024, $3.9B for 2025, and $4.3B for 2026 and beyond. Subsea inbound of $2.4B produced a 1.4x book-to-bill. Backlog excludes $239M of non-consolidated backlog and does not capture all Subsea Services revenue potential. The $378M foreign exchange impact on backlog also reduced the reported figure.

  4. What does the Measurement Solutions divestiture mean for the business going forward?

    The sale closed on March 11, 2024, for proceeds of $186.1M and produced a $75.2M gain. Most of the proceeds were used for share repurchases. The divestiture reduced Surface Technologies revenue this quarter, and Surface Technologies' 2024 guidance ($1.2-1.35B revenue) still includes results from before the sale closed.

04—Continue

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