TechnipFMC Announces Fourth Quarter 2022 Results
TechnipFMC plc today reported fourth quarter 2022 results
Summary Financial Results from Continuing Operations – Full Year 2022
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. 31,2022 | Dec. 31,2021 | Year-over-Year |
| Revenue | $6,700.4 | $6,403.5 | 4.6% |
| Income (loss) | ($61.9) | $87.8 | n/m |
| Income (loss) margin | (0.9%) | 1.4% | n/m |
| Diluted earnings (loss) per share | $(0.14) | $0.19 | n/m |
| Adjusted EBITDA | $646.5 | $580.4 | 11.4% |
| Adjusted EBITDA margin | 9.6% | 9.1% | 50 bps |
| Adjusted income (loss) | $(12.6) | $(121.3) | n/m |
| Adjusted diluted earnings (loss) per share | $(0.03) | $(0.27) | n/m |
| Inbound orders | $8,079.1 | $6,754.2 | 19.6% |
| Ending backlog | $9,353.0 | $7,657.7 | 22.1% |
n/m – not meaningful
Total Company revenue in the full year was $6,700.4 million. Loss from continuing operations attributable to TechnipFMC was $61.9 million, or $0.14 per diluted share. These results included a loss on early extinguishment of debt of $29.8 million.
After-tax charges and credits totaled $49.3 million, or $0.11 per share, which included the following (Exhibit 7):
- Impairment and other charges of $4.7 million;
- Restructuring and other charges of $16.9 million; and
- Loss from equity investment in Technip Energies of $27.7 million.
Adjusted loss from continuing operations was $12.6 million, or $0.03 per diluted share (Exhibit 7). Included in adjusted loss from continuing operations was a loss on early extinguishment of debt of $29.8 million.
Adjusted EBITDA, which excludes pre-tax charges and credits, was $646.5 million; adjusted EBITDA margin was 9.6% (Exhibit 9).
Included in total Company results was a foreign exchange loss of $23.9 million, or $14.7 million after-tax. When excluding the impact of foreign exchange, loss from continuing operations was $47.2 million and adjusted EBITDA was $670.4 million.
Doug Pferdehirt, Chair and CEO of TechnipFMC, stated,
“We are in the midst of a multi-year growth cycle. Full-year inbound orders grew 20% versus 2021 to $8.1 billion, driven by Subsea inbound of $6.7 billion. This strong inbound resulted in 24% growth in Subsea backlog, helping drive total Company backlog to $9.4 billion at year-end.”
“Total Company adjusted EBITDA increased nearly 20% to $670 million versus the prior year, when excluding the impact of foreign exchange. Our results demonstrate further improvement in revenue and adjusted EBITDA margin in both operating segments and illustrate our strong commitment to deliver on our financial objectives.”
Pferdehirt continued, “In 2022, we materially improved our financial position. Cash provided by operating activities was $352 million, with free cash flow of $194 million. Gross debt declined by $638 million, a reduction of nearly one-third for the year.”
“These actions enabled us to accelerate the timeline for shareholder distributions by twelve months with the authorization of a $400 million share buyback program in July. We repurchased $100 million of our shares in 2022, representing just over 50% of our free cash flow generation. We also remain committed to a quarterly dividend, which we intend to initiate in the second half of this year.”
Pferdehirt added, “Looking beyond 2022, we remain confident in the strength of this upcycle and continue to believe that international markets will lead the next leg of expansion, driven by offshore and the Middle East. More than 90% of our revenue is generated outside of North America land, and we have leading positions that are geographically levered to these important growth markets.”
“Our Subsea Opportunities list, which highlights larger projects with the potential for award over the next 24 months, continues to represent a record level. This is a result of increased capital spending and an expanding customer base in all major offshore basins. We expect to see a material increase in the value of iEPCI™ awards in our 2023 inbound, leading to a record year for integrated project awards. We also forecast an increase in Subsea Services activity. Taken together, we expect our orders to exceed $8 billion in the year, of which 70% of inbound will come from direct awards, iEPCI™ and Subsea Services.”
“In Surface Technologies, we expect the majority of revenue growth to come from international markets, largely driven by the Middle East. We anticipate revenue growth outside North America of approximately 20%. In North America, we continue to take actions to eliminate underperforming locations and product lines across the region, which we expect will have a favorable impact on profitability.”
Pferdehirt continued, “At the midpoint of our guidance for 2023, we anticipate total Company revenue growth of approximately 12% to $7.5 billion, with adjusted EBITDA expected to increase to approximately $870 million. This outlook for improved performance also extends beyond the current year. We now expect $25 billion of Subsea inbound for our company from 2023 through 2025, driven by the strength of the offshore market, industry adoption of iEPCI™, and the increased contribution of Subsea 2.0™. We have updated our intermediate-term outlook to reflect this improved environment. When compared to 2022, our revised Subsea forecast for 2025 demonstrates a 650 basis point expansion in adjusted EBITDA margin to 18% and adjusted EBITDA of approximately $1.4 billion.”
Pferdehirt concluded, “We enter the year with a strong market outlook and a further step-up in our targeted financial performance. We expect our 2025 outlook will demonstrate significant progress on our path to much improved financial returns. Most importantly, it does not mark an end point, but rather a major milestone on a more ambitious journey ahead.”
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