Technip Energies NV ((FR:TE)) has held its Q4 earnings call. Read on for the main highlights of the call.
Technip Energies NV’s recent earnings call highlighted a strong performance in 2024, characterized by significant growth in revenue, earnings, and order intake. The company demonstrated a robust backlog and proposed a substantial dividend increase, signaling confidence in its future prospects. While challenges in project margins and resource allocation were noted, the overall sentiment was positive, with the benefits clearly outweighing the drawbacks.
Record Revenue and Earnings Growth
Technip Energies reported an impressive 14% increase in revenue, reaching nearly €7 billion, alongside a 13% rise in EBITDA to €608 million. This outstanding performance underscores the company’s ability to capitalize on market opportunities and drive financial growth.
Significant Order Intake and Backlog
The company achieved over €10 billion in order intake for the second consecutive year, pushing its backlog to an unprecedented level of nearly €20 billion. This record-breaking backlog highlights Technip Energies’ strong market position and future revenue potential.
Dividend Increase
Reflecting its strong performance and optimistic business outlook, Technip Energies proposed a nearly 50% increase in its annual dividend. This move demonstrates the company’s commitment to returning value to shareholders and confidence in sustained growth.
Sustainability Achievements
Technip Energies made significant strides in sustainability, achieving a 41% reduction in Scope 1 and 2 emissions compared to 2021. The company also raised its emissions reduction targets from 30% to 45% by 2025, showcasing its dedication to environmental responsibility.
Project Margin Contraction
Despite the positive financial results, the company experienced a 50 basis point contraction in both segment EBITDA and EBIT margins. This was attributed to a rebalancing of the project portfolio, with increased revenue from early-phase projects that offer limited margin recognition.
Challenges in Resource Allocation
The company faces challenges in resource allocation, particularly in the UK, where construction resource limits pose concerns for upcoming projects like H2Teesside and potential new contracts. Addressing these challenges will be crucial for maintaining project timelines and efficiency.
Forward-Looking Guidance
Technip Energies provided detailed guidance for future performance, projecting over €8.6 billion in revenue and an EBITDA exceeding €800 million. The company expects Project Delivery revenues between €5 billion and €5.4 billion with an EBITDA margin of around 8% for 2025, and TPS revenues ranging from €2 billion to €2.2 billion with an EBITDA margin of 13.5%. Looking ahead to 2028, they forecast Project Delivery revenues to exceed €6 billion with an EBITDA margin of 8.5%, while TPS revenues are projected to grow to more than €2.6 billion with an EBITDA margin of 14.5%.
In summary, Technip Energies NV’s earnings call painted a picture of robust growth and strategic foresight. The company showcased impressive financial results, a strong order backlog, and a commitment to sustainability, while also acknowledging challenges in project margins and resource allocation. The forward-looking guidance suggests continued growth and profitability, reinforcing the positive sentiment expressed during the call.