Victoria McCulloch

Victoria McCulloch questioned the material increase in Surface Technologies' margin due to operational efficiencies, how it met expectations, and the remaining potential. She also asked about customer discussions in a choppy macro environment and the shift of CapEx offshore.

Answer

Doug Pferdehirt, Chair and CEO, TechnipFMC, expressed pride in Surface Technologies' performance, attributing it to high-grading the portfolio and benefiting from international investments, expecting continued high-level operation. He noted that offshore customers smooth out near-term market choppiness due to prolific reserves, and TechnipFMC's iEPCI 2.0 and focus on cycle time reduction have restored customer confidence, leading to earlier engagement and direct awards.

Victoria McCulloch inquired about the material increase in Surface Technologies' margin over the past 12 months, how it compared to expectations, and the remaining potential for improvement. She also asked about customer discussions in a choppy macro environment, the shift of CapEx offshore, and how this benefits TechnipFMC's pricing.

Answer

Doug Pferdehirt, Chair and CEO, TechnipFMC, attributed Surface Technologies' strong performance to high-grading the portfolio, focusing on quality, and benefiting from its international presence (65% of business) and investments in Saudi Arabia and Abu Dhabi. He noted that offshore customers smooth out near-term macro choppiness due to prolific reserves, and TechnipFMC's iEPCI and Subsea 2.0 solutions have restored customer confidence, leading to earlier engagement and over 80% direct awards, which benefits project returns.

Victoria McCulloch inquired about TechnipFMC's strong subsea award intake, potential unannounced awards, and working capital expectations for the current year within the updated free cash flow guidance.

Answer

Chair and CEO Douglas Pferdehirt confirmed more unannounced awards are pending client approval, highlighting TechnipFMC's differentiated position due to direct awards. EVP and CFO Alf Melin noted an exceptional year for working capital performance in 2025 and guided for a neutral working capital position going forward.

Victoria McCulloch inquired about the subsea award intake, specifically if there were still unannounced awards from previous quarters, and asked for working capital expectations for the current year within the updated free cash flow guidance.

Answer

Doug Pferdehirt, Chair and CEO, confirmed that more unannounced awards are still pending, with disclosure timing governed by client approvals. He emphasized TechnipFMC's differentiated inbound and increasing direct awards. Alf Melin, EVP and CFO, stated that while 2025 had exceptional working capital performance, future guidance assumes a neutral working capital position.

Victoria McCulloch of RBC Capital Markets questioned how comments on cost deflation from an operator align with project upsizing and asked about the market potential for the new hybrid flexible pipe outside of Brazil.

Answer

CEO & Chair Douglas Pferdehirt clarified that with over 80% of its business being direct-awarded, TechnipFMC focuses on improving overall project returns by shortening cycle times, not on unit pricing. He explained that the new hybrid flexible pipe could be used in all existing flexible pipe markets and potentially expand the market by displacing rigid pipe, thanks to its lighter weight and lower installation costs.

Victoria McCulloch asked about the company's disciplined approach, likely referring to project bidding and selection, and what conclusions could be drawn from it.

Answer

CEO Douglas Pferdehirt affirmed the company maintains a very disciplined approach to winning work. He stated that clients respect this discipline because it results in projects being delivered on time and on budget, a level of execution certainty he claims they do not receive from the rest of the industry. This focus on disciplined, successful project delivery will remain a core part of their strategy.

Victoria McCulloch from RBC Capital Markets inquired about the impact of internal process industrialization on current financial results and questioned the company's strategy and bidding appetite in Brazil, given that not all projects align with its integrated model.

Answer

CEO Douglas Pferdehirt explained that the benefits of their 'Simplification, Standardization, and Industrialization' (SSI) initiative are ongoing and stem from applying lean principles across the entire organization, not just manufacturing. Regarding Brazil, he affirmed a strong commitment, highlighting local R&D and technology development. While stand-alone installation contracts are not a priority, the company continues to execute various projects and strategically bids on tenders, accounting for all commercial risks.

Victoria McCulloch asked for a reminder of the company's exposure to projects associated with the Hynet CCS cluster, specifically the Viridor and Uniper projects, and whether they are expected to reach FID this year.

Answer

CEO Arnaud Pieton clarified the company's involvement in the Teesside hub (Net Zero Teesside and H2Teesside) and confirmed involvement in the Hynet cluster projects with Uniper and Viridor. He stated that the timing for FID on H2Teesside could be this year or next, viewing a 2025 decision as an upside. He noted that the Uniper carbon capture project is very active, and a positive FID would demonstrate that Net Zero Teesside is a replicable model.

Victoria McCulloch inquired about Technip Energies' exposure to projects within the Hynet CCS cluster, specifically the Viridor and Uniper projects, and asked if they are expected to reach a final investment decision (FID) this year.

Answer

CEO Arnaud Pieton confirmed the company's involvement in both the Viridor and Uniper projects, noting similar timeframes. He highlighted that Uniper is very motivated to move forward, which would validate the replicability of the Net Zero Teesside model. Regarding the H2Teesside project with BP, he stated an FID could occur this year, which would be considered an upside, or in 2026, expressing no anxiety over the exact timing.

Victoria McCulloch questioned the margin implications of the company's CCS and decarbonization capabilities and asked if strategic development costs within the Technology, Products & Services (TPS) segment would continue to weigh on margins.

Answer

Executive Arnaud Pieton highlighted that CCS differentiation comes from their Canopy by T.EN technology, integration capabilities, and the ability to provide performance wraps on large-scale projects. Executive Bruno Vibert added that while Q1 TPS margin was impacted by investments in R&D, strategic initiatives, and tendering, the underlying gross margin improved. Both confirmed the company is on track to reach a double-digit EBIT margin for TPS in 2025.