TechnipFMC: Q4 TAKE THREE

In FY2024, TechnipFMC’s inbound orders increased following higher iEPCI subsea awards. Its revenues nearly stagnated in Q4 compared to Q3, but operating income varied between the segments. The company’s cash flows, however, increased significantly in FY2024 as it kept repurchasing shares.

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Orders And Key Projects: In FY2024, TechnipFMC's (FTI) Subsea segment inbound orders increased by 7% to $10.4 billion. In Q4, the subsea book-to-bill ratio increased to 1.3x from 1.2x a quarter earlier. The value of iEPCI (integrated Engineering, Procurement, Construction, and Installation) awards grew by nearly 25% in 2024, with Subsea 2.0 tree inbound orders increasing by 50% from 2023. Its management expects “growth in demand” with an “increased visibility into the pipeline of longer-term opportunities.”

Some key Q4 Subsea project awards include the TotalEnergies GranMorgu iEPCI project in Suriname and the Shell Bonga North project in Nigeria. It also announced a floating offshore wind collaboration agreement with Prysmian for a complete water column solution from the seabed to the ocean surface.

Segment Results Varied In Q4 : Quarter-over-quarter, revenues in the company's Subsea operating segment rose slightly in Q4. The top line in the Surface Technologies segment decreased moderately by 0.3%. Operating income in the Subsea segment declined by 20% in Q4, due primarily to lower vessel-based activity and an increased share of low-margin projects. Operating income in the Surface Technologies segment increased by 8% following robust project activity in international markets, although decreased activity in North America partially offset the growth.

Cash Flows Increased and Shares Repurchased : FTI's cash flow from operations increased by 39% in FY2024 from a year ago. As a result, its FCF increased by 45% in FY2024. Debt-to-equity (0.28x), as of December 31, also showed an improvement from FY2023. During Q4, it repurchased 2.4 million shares.

Thanks for reading the FTI take three, designed to give you three critical takeaways from FTI's earnings report. Soon, we will present a second update on HAL earnings highlighting its current strategy, news, and notes we extracted from our deeper dive.

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