TechnipFMC Announces Fourth Quarter 2021 Results

• Subsea orders of $1 billion in the quarter, $5 billion for the full year
• Surface Technologies orders of $1.1 billion in the quarter, $1.8 billion for the full year
• Cash flow from operations of $483.5 million in the quarter, free cash flow of $423 million
• Cash and cash equivalents increased to $1.3 billion; net debt reduced to $677.5 million

NEWCASTLE & HOUSTON–(BUSINESS WIRE)–TechnipFMC plc (NYSE: FTI) today reported fourth quarter 2021 results.

Summary Financial Results from Continuing Operations – Fourth Quarter 2021

Reconciliation of U.S. GAAP to non-GAAP financial measures are provided in financial schedules.

	Three Months Ended			Change
(In millions, except per share amounts)	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020	Sequential	Year-over-Year
Revenue	$1,523.3	$1,579.4	$1,600.3	(3.6%)	(4.8%)
Income (loss)	$(127.2)	$(40.6)	$(75.5)	n/m	n/m
Diluted earnings (loss) per share	$(0.28)	$(0.09)	$(0.17)	n/m	n/m
Adjusted EBITDA	$130.3	$140.6	$119.0	(7.3%)	9.5%
Adjusted EBITDA margin	8.6%	8.9%	7.4%	(30 bps)	120 bps
Adjusted income (loss)	$(55.8)	$(25.0)	$(27.4)	n/m	n/m
Adjusted diluted earnings (loss) per share	$(0.12)	$(0.06)	$(0.06)	n/m	n/m
Inbound orders	$2,106.7	$1,365.9	$1,012.4	54.2%	108.1%
Backlog	$7,657.7	$7,002.4	$7,289.5	9.4%	5.1%

Total Company revenue in the fourth quarter was $1,523.3 million. Loss from continuing operations attributable to TechnipFMC was $127.2 million, or $0.28 per diluted share. These results included after-tax charges and credits totaling $71.4 million of expense, or $0.16 per share, which included the following (Exhibit 6):

• Impairment and other charges of $28.2 million;
• Restructuring and other charges of $13.6 million; and
• Loss from equity investment in Technip Energies of $29.6 million.

Adjusted loss from continuing operations was $55.8 million, or $0.12 per diluted share (Exhibit 6). Included in adjusted loss from continuing operations was a loss on early extinguishment of debt of $22.4 million.

Adjusted EBITDA, which excludes pre-tax charges and credits, was $130.3 million; adjusted EBITDA margin was 8.6 percent (Exhibit 8). Included in adjusted EBITDA was a foreign exchange gain of $4.6 million.

Summary Financial Results from Continuing Operations – Full Year 2021

Reconciliation of U.S. GAAP to non-GAAP financial measures are provided in financial schedules.

	Twelve Months Ended		Change
(In millions, except per share amounts)	Dec. 31, 2021	Dec. 31, 2020	Year-over-Year
Revenue	$6,403.5	$6,530.6	(1.9%)
Income (loss)	$87.8	$(3,552.6)	n/m
Diluted earnings (loss) per share	$0.19	$(7.92)	n/m
Adjusted EBITDA	$580.4	$397.2	46.1%
Adjusted EBITDA margin	9.1%	6.1%	300 bps
Adjusted income (loss)	$(121.3)	$(168.6)	n/m
Adjusted diluted earnings (loss) per share	$(0.27)	$(0.38)	n/m
Inbound orders	$6,754.2	$5,064.2	33.4%
Backlog	$7,657.7	$7,289.5	5.1%

Total Company revenue in the full year was $6,403.5 million. Income from continuing operations attributable to TechnipFMC was $87.8 million, or $0.19 per diluted share. These results included after-tax charges and credits totaling $209.1 million of credit, or $0.46 per share, which included the following (Exhibit 7):

• Impairment and other charges of $85.8 million;
• Restructuring and other charges of $27.3 million; and
• Income from equity investment in Technip Energies of $322.2 million.

Adjusted loss from continuing operations was $121.3 million, or $0.27 per diluted share (Exhibit 7). Included in adjusted loss from continuing operations was a loss on early extinguishment of debt of $61.9 million.

Adjusted EBITDA, which excludes pre-tax charges and credits, was $580.4 million; adjusted EBITDA margin was 9.1% (Exhibit 9). Included in adjusted EBITDA was a foreign exchange gain of $15.8 million.

Doug Pferdehirt, Chair and CEO of TechnipFMC, stated, “2021 was a breakout year for our Company. Full-year adjusted EBITDA was $580 million with a margin of 9.1 percent, a 300 basis point improvement on the prior year. Free cash flow from continuing operations was $523 million, and we significantly reduced net debt by nearly 70 percent from the prior year to $678 million.”

“We are confident that we have entered a multi-year upcycle for energy demand. TechnipFMC is well positioned for this activity growth given our leadership in both subsea and the Middle East. Total Company inbound orders grew an impressive 33 percent versus the prior year to $6.8 billion, with continued strength expected through at least 2025.”

Pferdehirt continued, “In Surface Technologies, full-year inbound orders increased nearly 70 percent to $1.8 billion, with orders outside North America more than doubling versus the prior year. In the fourth quarter, our surface business received its largest ever award, a multi-year contract from Abu Dhabi National Oil Company to provide wellheads, trees and associated services. We believe the Middle East represents one of our largest opportunities this decade.”

“In Subsea, full-year inbound orders of $5 billion increased 24 percent versus the prior year. The improved inbound orders also reflected continued strength in South America, particularly Brazil and Guyana. We also experienced further adoption of iEPCI™, with increased geographic expansion.”

“Our Subsea Opportunity list has expanded to a record level of more than $20 billion, providing increased visibility into the middle of the decade. The growth in part reflects the continued robust front-end activity. Our early engagement and client partnerships support our view that subsea tree awards for the total industry are likely to exceed 350 in the current year – a level not seen since 2013. For TechnipFMC, we anticipate subsea inbound order growth of up to 30 percent in 2022, with iEPCI™, direct awards and Subsea services approaching 75 percent of orders.”

Pferdehirt added, “The inflection for the energy market is here. Since 2015, offshore economics have materially improved, and subsea cycle-times have become significantly shorter. This has resulted in new subsea investments coming much earlier in the cycle and more in parallel with U.S. land markets. We believe these changes are fundamental and sustainable as a result of new business models and technology pioneered by our company.”

Pferdehirt continued, “While we are confident that oil and gas will remain an important part of the energy mix for an extended period of time, we are also committed to the energy transition. To address these evolving markets, we recently announced the formation of New Energy Ventures. This team will build upon the actions we have taken across multiple platforms and technologies that we believe could deliver $1 billion in inbound orders through 2025.”

“Our ability to successfully collaborate with key industry players is evidenced by several new strategic agreements and partnerships formed over the last year, some of which have already resulted in real project opportunities. These include a long-term strategic alliance with Talos Energy to develop and deliver the first technical and commercial solutions for carbon capture and storage projects in the Gulf of Mexico. We were also successful in securing an option in the ScotWind leasing round through our partnership, Magnora Offshore Wind.”

Pferdehirt concluded, “We are confident that the robust outlook combined with changes in our business model will translate into improved operational and financial performance. Our strong project execution and continued industrialization of our operations leave us well positioned to achieve improved profitability across the portfolio, including a near doubling of Subsea EBITDA by 2025. This, along with our emerging role in the energy transition, will allow us to thrive as the energy architect in both present and future energy markets.”

Operational and Financial Highlights

Subsea

Financial Highlights

Reconciliation of U.S. GAAP to non-GAAP financial measures are provided in financial schedules.

	Three Months Ended			Change
(In millions)	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020	Sequential	Year-over-Year
Revenue	$1,236.2	$1,312.1	$1,338.0	(5.8%)	(7.6%)
Operating profit	$8.5	$23.5	$(9.5)	(63.8%)	n/m
Adjusted EBITDA	$123.6	$146.5	$116.5	(15.6%)	6.1%
Adjusted EBITDA margin	10.0%	11.2%	8.7%	(120 bps)	130 bps
Inbound orders	$1,034.8	$1,116.0	$712.1	(7.3%)	45.3%
Backlog1,2,3	$6,533.0	$6,661.4	$6,876.0	(1.9%)	(5.0%)

Estimated Consolidated Backlog Scheduling (In millions)	Dec. 31, 2021
2022	$3,373
2023	$2,228
2024 and beyond	$932
Total	$6,533
1 Backlog in the period was increased by a foreign exchange impact of $68 million.
2 Backlog does not capture all revenue potential for Subsea Services.
3 Backlog does not include total Company non-consolidated backlog of $579 million.

Subsea reported fourth quarter revenue of $1,236.2 million, a decrease of 5.8 percent from the third quarter. Revenue decreased sequentially primarily due to reduced project activity in Africa and Australia and the seasonal impact on services activity, particularly in the North Sea.

Subsea reported an operating profit of $8.5 million. Operating results decreased sequentially due to lower project and services activity, partially offset by a reduction in impairment, restructuring and other charges.

Subsea reported adjusted EBITDA of $123.6 million. Adjusted EBITDA decreased 15.6 percent when compared to the third quarter, due to reduced project activity and the seasonal decline in services. Adjusted EBITDA margin decreased 120 basis points to 10 percent.

Subsea inbound orders were $1,034.8 million for the quarter. Book-to-bill in the period was 0.8. The following awards were included in the period:

• TechnipFMC awarded long-term contract by Petrobras (Brazil)
  
  Substantial* long-term charter and services contract from Petrobras for the pipelay support vessel Coral do Atlântico. The Brazilian-registered vessel has been secured on a three-year contract, with an option to extend. Operations offshore Brazil are expected to begin in the second quarter of 2022. Coral do Atlântico is an important component of the Company’s leading flexible pipe ecosystem in Brazil and will mainly be deployed in ultra-deepwater of up to 3,000 meters.
  
  *A “substantial” contract is between $250 million and $500 million.

• ExxonMobil Yellowtail Project (Guyana)
  
  Large* contract by Exxon Mobil Corporation affiliate, Esso Exploration and Production Guyana Limited, to supply the subsea production system for the Yellowtail development. Subject to government approvals and final project sanction, TechnipFMC will provide project management, engineering, manufacturing and testing capabilities to deliver the overall subsea production system. The scope of the project includes 51 enhanced vertical deepwater trees (EVDT) and associated tooling, as well as 12 manifolds and associated controls and tie-in equipment.
  
  *A “large” contract is between $500 million and $1 billion; the full contract award will not be included in inbound orders until the project receives final investment decision and government approvals.

• Petrobras Flexible Pipe Frame Agreements (Brazil)
  
  Three frame agreements by Petrobras that reaffirm the Company’s leadership position in Brazil’s flexible pipe market – the industry’s largest and most established market. Altogether, the frame agreements form a large* contract for TechnipFMC. The contracts were awarded as part of Petrobras’s drive to increase oil recovery in its brownfield developments, mainly in post-salt fields offshore Brazil. The frame agreements cover the manufacture of more than 500 kilometers of flexible pipe over the next four years, as well as services. This brings the Company’s total contracted volumes in the current year with Petrobras to around 600 kilometers.
  
  *A “large” contract is between $500 million and $1 billion; a portion of this award will be inbound in future periods.

Subsequent to the period, the following awards were announced and will be included in first quarter 2022 results:

• Equinor Smørbukk Nord iEPCI™ Project (Norway)
  
  An integrated Engineering, Procurement, Construction and Installation (iEPCI™) contract for Equinor’s Smørbukk Nord development. The contract covers a high-pressure, high-temperature subsea production system and associated equipment for a brownfield tieback in the Åsgard field in the Norwegian Continental Shelf, where TechnipFMC has a large installed base. The award follows front end engineering and design work on the project in 2021. The installation campaign will use TechnipFMC’s battery hybrid vessel, which will reduce greenhouse gas emissions through reduced fuel consumption.

• Petrobras Búzios 6 Field Project (Brazil)
  
  Large* subsea Engineering, Procurement, Construction and Installation (EPCI) contract by Petrobras for its Búzios 6 field (module 7), a greenfield development in the pre-salt area. The contract covers flexible and rigid pipe, umbilicals, pipeline end terminals, rigid jumpers, umbilical termination assemblies and a mooring system. The flexible pipe, umbilicals and subsea structures, as well as some of the rigid pipe, will be manufactured in Brazil using skills and competencies the Company has developed in-country, while minimizing the carbon footprint associated with transportation and installation. The project will also utilize our established and qualified Brazilian supply chain.
  
  *A “large” contract is between $500 million and $1 billion.

Partnership and Alliance Highlights

• Acquisition of Magma Global to Accelerate Development of Breakthrough Composite Pipe Technologies for Conventional Energy and CO2 Applications
  
  TechnipFMC completed the acquisition of the outstanding shares of Magma Global (Magma), the leading provider of composite pipe technology to support the Energy Transition. TechnipFMC originally acquired an interest in Magma in 2018, combining its strong history in flexible pipe technology with Magma’s advanced composite capabilities to develop a disruptive composite pipe solution for the traditional and new energy industries.

  Magma’s technology enables the manufacture of Thermoplastic Composite Pipe (TCP) using Polyether Ether Ketone (PEEK) polymer, which is highly resistive to corrosive compounds, such as CO2. When combined with TechnipFMC’s flexible pipe technology, this forms a Hybrid Flexible Pipe (HFP) that will be deployed in the Brazilian pre-salt fields. Manufactured by a fully automated robotic system, PEEK TCP will also be a critical enabler for both the carbon and hydrogen transportation and storage markets, and particularly offshore applications.

• TechnipFMC and Saipem Announce SURF Commercial Agreement
  
  TechnipFMC and Saipem announced the two companies have entered into a global commercial agreement that will allow them to identify projects worldwide that could be jointly executed for the benefit of clients. The commercial agreement will pursue specific Subsea Umbilicals, Risers and Flowlines (SURF) projects where the combination of the companies’ complementary world-class assets, technologies, products and competencies improves project economics and de-risks the overall project development for the benefit of all stakeholders. The collaboration will have access to a broad range of SURF products and installation methods, providing greater operational flexibility and optimized execution strategies under EPCI (Engineering, Procurement, Construction and Installation) and iEPCI™ (integrated Engineering, Procurement, Construction and Installation) project execution models.

Energy Transition Highlights

• Strategic Alliance with Talos Energy to Provide Carbon Capture and Storage
  
  Subsequent to the third quarter, TechnipFMC and Talos Energy entered into a long-term strategic alliance to develop and deliver technical and commercial solutions to Carbon Capture and Storage (CCS) projects along the United States Gulf Coast. The alliance combines Talos’s offshore operational strength and sub-surface expertise with TechnipFMC’s extended history in subsea engineering, system integration and automation and control.

  Cultivated through a shared vision to responsibly deliver CCS solutions that will help to reduce the global carbon footprint, this innovative partnership will accelerate offshore CCS adoption with reliable, specialized systems. Under the alliance, the companies will collaborate to progress CCS opportunities through the full lifecycle of storage site characterization, front-end engineering and design (FEED), and first injection through life of field operations. This further advances the companies’ leadership in the emerging Gulf Coast CCS market, building on Talos’s recent successful award as the operator of the only major offshore carbon sequestration hub in the United States.

• Strategic Investment and Collaboration with Orbital Marine Power to Accelerate Tidal Energy
  
  TechnipFMC signed a Memorandum of Understanding with Orbital Marine Power (Orbital), a pioneer of tidal energy technology, to jointly collaborate in tidal energy to accelerate the global commercialization of Orbital’s technology and deliver the first commercial scale floating tidal field. Orbital’s unique floating turbine, the most powerful in the world to date, can harness underwater currents generated by tides, which can then be converted into electricity and exported to shore. Because of its predictability, tidal energy offers a reliable and consistent form of renewable energy. Tidal energy has the ability to make a cost-effective contribution to net zero transitions around the world at a utility scale. When combined with TechnipFMC’s integrated approach, industrialization capabilities and project management expertise, Orbital’s technology can be scaled-up to meet the increasing demand for renewable energy and significantly lower the cost of delivering tidal energy.

• Magnora Offshore Wind Successful in ScotWind Leasing Round Application
  
  TechnipFMC and Magnora ASA (Magnora) announced that their partnership, Magnora Offshore Wind AS, has been offered the opportunity to enter into an Option Agreement for the N3 area by the Crown Estate Scotland in the ScotWind leasing round. The planned development will have a total capacity of approximately 500 megawatts (MW), which could power more than 600,000 homes in the United Kingdom. The N3 area is situated in the north-western part of Scotland, 40 kilometers offshore Western Isles. The planned wind farm will cover an area of approximately 100 square kilometers in water depths of 106 to 125 meters, and the concept base for the application is 33 semi-submersible floating wind turbines of 15 MW capacity. The ambition is to achieve Consent in 2026, Final Investment Decision in 2028, and start production in 2030, contributing to achieving Scotland’s Net Zero targets, Pathway to 2030.

Surface Technologies

Financial Highlights

Reconciliation of U.S. GAAP to non-GAAP financial measures are provided in financial schedules.

	Three Months Ended			Change
(In millions)	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020	Sequential	Year-over-Year
Revenue	$287.1	$267.3	$262.3	7.4%	9.5%
Operating profit	$8.8	$12.1	$15.1	(27.3%)	(41.7%)
Adjusted EBITDA	$28.9	$28.4	$30.9	1.8%	(6.5%)
Adjusted EBITDA margin	10.1%	10.6%	11.8%	(50 bps)	(170 bps)
Inbound orders	$1,071.9	$249.9	$300.3	328.9%	256.9%
Backlog	$1,124.7	$341.0	$413.5	229.8%	172.0%

Surface Technologies reported fourth quarter revenue of $287.1 million, an increase of 7.4 percent from the third quarter. Revenue increased sequentially due to higher activity both internationally and in North America.

Surface Technologies reported operating profit of $8.8 million. Sequentially, operating profit decreased primarily due to restructuring, impairment and other charges of $3.8 million. Results benefited from continued improvement in North America operating performance, partially offset by investment in new international manufacturing capacity.

Surface Technologies reported adjusted EBITDA of $28.9 million. Adjusted EBITDA increased 1.8 percent when compared to the third quarter. Results benefited from continued improvement in North America operating performance, partially offset by investment in new international manufacturing capacity. Adjusted EBITDA margin decreased 50 basis points to 10.1 percent.

Inbound orders for the quarter were $1,071.9 million, an increase of 328.9 percent sequentially. Book-to-bill was 3.7 in the period. Inbound growth was driven by a multi-year framework agreement from Abu Dhabi National Oil Company. Backlog ended the period at $1,124.7 million.

The following award was included in the period:

• Abu Dhabi National Oil Company Multi-Year Framework Agreement (Abu Dhabi)
  
  TechnipFMC, through Gulf Automation Services and Oilfield Supplies LLC, has been awarded a major* 10-year framework agreement for wellheads, trees and associated services by the Abu Dhabi National Oil Company (ADNOC). Under the framework agreement, TechnipFMC will further grow in-country talent and expand existing manufacturing, assembly and test capabilities in Abu Dhabi in order to deliver the Company’s complete portfolio of surface wellheads and trees locally.
  
  *A “major” contract is over $1 billion; a portion of this award will be inbound in future periods.

Energy Transition Highlights

• TechnipFMC and PETRONAS to Commercialize Gas Processing Technology
  
  TechnipFMC and PETRONAS Technology Ventures Sdn Bhd (PTVSB), a subsidiary of PETRONAS, entered into an agreement to commercialize a unique natural gas processing membrane which reduces greenhouse gas (GHG) emissions. Through the technology commercialization agreement, TechnipFMC will utilize and integrate the membrane technology licensed from PETRONAS as part of its production portfolio in projects worldwide, outside China. The technology, which removes carbon dioxide and hydrogen sulfide by using wetted membranes, is 30 percent more efficient than existing gas treatment processes and can reduce GHG emissions by significant amounts. The membrane has potential applications in both offshore and onshore hydrocarbon production environments.

• TechnipFMC and Storengy Sign Memorandum of Understanding to Develop Hydrogen Storage and Utilization System
  
  TechnipFMC and Storengy, an ENGIE subsidiary, have signed a Memorandum of Understanding for the development of a ready-to-scale-up solution for the storage and utilization of hydrogen as part of the HyPSTER Project. The HyPSTER Project is a flagship development of renewable hydrogen underground storage in Europe. The project will test industrial-scale green hydrogen production and storage in salt caverns, as well as the ability to technically and economically duplicate this approach in sites across Europe. The project comprises a 1 megawatt electrolyser proton exchange membrane, a compressor for the production platform and dispensing solutions for the surface facility. TechnipFMC will provide surface wellheads and expertise in system integration for the project.

Corporate and Other Items (three months ended, December 31, 2021)

Corporate expense was $29.7 million. Excluding charges and credits totaling $2.2 million of expense, corporate expense was $27.5 million.

Foreign exchange gain was $4.6 million.

Net interest expense was $34.3 million.

The provision for income taxes was $39.4 million.

Total depreciation and amortization was $95.7 million.

Cash provided by operating activities from continuing operations was $483.5 million.

Contacts

Investor relations
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Email: Matt Seinsheimer

James Davis

Senior Manager, Investor Relations

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Email: James Davis

Media relations
Nicola Cameron

Vice President, Corporate Communications

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Director, Public Relations

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Email: Catie Tuley

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