TechnipFMC ((FTI)) has held its Q1 earnings call. Read on for the main highlights of the call.
TechnipFMC’s recent earnings call reflected a positive sentiment, underscored by strong financial performance and strategic growth initiatives. The company reported significant growth in adjusted EBITDA and free cash flow, buoyed by robust subsea orders and strategic alliances. Despite facing some revenue declines in specific segments due to seasonal and regional factors, the overall outlook remains optimistic, with increased shareholder returns and confidence in future growth.
Strong Financial Performance
TechnipFMC reported a total company revenue of $2.2 billion and an adjusted EBITDA of $356 million, marking a 38% increase from the previous year with a margin of 15.9%. The company also achieved a free cash flow of $380 million, a significant accomplishment despite typical seasonal challenges.
Subsea Segment Success
The subsea segment saw first-quarter inbound orders totaling $2.8 billion, with a book-to-bill ratio of 1.4. Orders have consistently exceeded revenue in eight of the last nine quarters, indicating strong demand for iEPCI and Subsea 2.0 technologies.
Strategic Alliances and Growth Opportunities
TechnipFMC announced a strategic alliance with Cairn Oil and Gas for deepwater developments offshore India, highlighting over $26 billion in subsea opportunities, representing a 20% growth over the last year.
Limited Exposure to Commodity Prices and Tariffs
The company emphasized its limited exposure to U.S. land market volatility and potential tariffs, estimating an impact of less than $20 million on adjusted EBITDA for the full year.
Positive Outlook and Shareholder Returns
TechnipFMC reiterated its full-year guidance for adjusted EBITDA of approximately $1.76 billion and increased its free cash flow expectations to $1 billion to $1.15 billion. The company remains committed to returning at least 70% of free cash flow to shareholders.
Subsea Revenue Decline
Subsea revenue of $1.9 billion decreased by 5% compared to the fourth quarter, driven by lower activity in Africa, the North Sea, and reduced services activity due to seasonality.
Surface Technologies Revenue Decrease
Revenue in Surface Technologies was $297 million, a decrease of 7% from the fourth quarter, due to project timing in the Middle East and lower activity in Africa and Asia Pacific.
Forward-Looking Guidance
TechnipFMC remains confident in achieving its 2025 guidance of over $10 billion in subsea inbound orders and adjusted EBITDA of approximately $1.76 billion. The company also raised its full-year free cash flow expectations to a range of $1 billion to $1.15 billion, citing strong operating performance and structural improvements in its business model.
In conclusion, TechnipFMC’s earnings call highlighted a strong financial performance and strategic initiatives that position the company for future growth. Despite some challenges in specific segments, the overall sentiment remains positive, with a focus on increasing shareholder returns and leveraging growth opportunities in the subsea market.