Technip Energies NV · EURONEXT:TE
Technip Energies NV — Investor Presentation (June 2021)
48 slides from Technip Energies NV's investor presentation, June 2021
Slide 1: Technip Energies Investor Relations Overview
Q2 2021 Technip Energies Investor Relations Overview
Slide 2: Disclaimer: Forward looking statements
Disclaimer Forward looking statements This document contains “forward-looking statements” as defined in Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. Forward-looking statements usually relate to
Slide 3: Technip Energies at a glance
Technip Energies at a glance Technip Energies – IR Overview 3
Slide 4: A leading E&T company for the Energy Transition
A leading E&T company for the Energy Transition Why invest in Technip Energies Strong positioning • Leadership1 in LNG, H2 & ethylene • Growing in blue and green H2, sustainable chemistry & CO2 management Relevant capabilities • Global project delivery partner – with local expertise, smart energy en
Slide 5: Forming Technip Energies
Forming Technip Energies Key transaction highlights January 7 January 28 February 16 February 23 February 26 March 30 April 26 Announce TechnipFMC First day of First day of FY 2020 Bpifrance2 resumption of Capital Markets trading on OTC1 trading in accelerated activities toward Day Results investmen
Slide 6: At a glance
At a glance TE Paris The Netherlands Euronext Paris listing ticker Headquarters Incorporated ADRs for US investors €6B1 Revenue A leading E&T2 company €17.8B3 Backlog for the Energy Transition 60+ BBB ~15,000 Years of operations Investment grade rating4 Employees in 34 countries Financial informatio
Slide 7: Our business
Our business A diversified provider of projects, technologies, products and services Projects Delivery Technology, Products & Services €5.0B1 revenue €1.1B1 revenue • Engineering and project management expertise • Process technologies and proprietary products • Technology integration on complex proj
Slide 8: Energy Transition is our business
Energy Transition is our business Strong track record in delivering sustainable products and solutions LNG Sustainable chemistry Strategic flexibility – 'architect mindset' meeting Onshore and offshore Biofuels, biochemicals, circular liquefaction economy customer needs from energy source to end-use
Slide 9: Proprietary technology and innovation platforms
Proprietary technology and innovation platforms A leading portfolio of process technologies; bringing external / internal energies together Incubating & Scale-up of Working with Intellectual property portfolio expansion developing breakthrough institutions on technologies technologies R&D + 3,000 +1
Slide 10: Our ESG pledge for a sustainable future
Our ESG pledge for a sustainable future Making a better tomorrow Energy transition is our business ESG Ambitions • Deliver low-carbon technologies, solutions and projects Today • Code of business conduct • Establish carbon footprint reduction targets for Scope 1, 2 & 3 Today • HSE and D&I policies •
Slide 11: Q1 2021 highlights
Q1 2021 highlights Technip Energies – IR Overview 11
Slide 12: Robust start to 2021; confirming full year guidance
Robust start to 2021; confirming full year guidance € 1.6bn 5.9% € 44m Adjusted Revenue EBIT margin1 Adjusted Net profit2 Q1 2021 Financial Highlights € 6.5bn € 18bn Adjusted Backlog3 € 2.5bn Order Intake Net cash Financial information is presented under an adjusted IFRS framework, which records Tec
Slide 13: A strengthened backlog
A strengthened backlog Providing strong medium-term revenue visibility Backlog by geography Backlog maturity in % per date of entry Asia Pacific Europe & Africa 2018 & earlier 10% 11% 19% 2020 & 28% Q1 2021 32% 2018 Q1 2021 9% 49% ~ €7bn 33% ~ €18bn Americas 7% 2019 40% 16% 18% Middle East 30% Russi
Slide 14: Projects Delivery
Projects Delivery Resilient performance, substantial backlog growth Revenue EBIT1 Backlog2 in € Million in € Million in € Billion +X% -1% -25% +27% • Stable revenues Y/Y; low contribution from major awards in Q420 and Q121 1,300 120 16.6 1,260 • Expected margin decline; lower project 1,252 101 1,250
Slide 15: Technology, Products & Services
Technology, Products & Services Solid Y/Y growth and margin improvement Revenue EBIT1 Backlog2 in € Million in € Million in € Million +X% +9% +132% +2% • Revenues benefit from growth in PMC and solid orders for Loading Systems 1200.0 1,151 1,176 305 30 300 280 26 1100.0 • Margin expansion; positive
Slide 16: Solid foundation for future returns
Solid foundation for future returns Balance sheet strength and focus on costs Corporate costs €10 million Slightly below anticipated quarterly run-rate Other P&L Effective tax rate 33.7% In line with full year guidance items Non-recurring items €27 million Largely associated with Spin-off Net cash €
Slide 17: Strong cashflow generation
Strong cashflow generation Cashflow bridge in € Million • Bridge reflects impact of Separation and Distribution Agreement1 • Cash from operations benefit from project working capital inflows • Free cash flow2: €272 million; low capex reflects asset light business model Financial information is prese
Slide 18: Outlook
Outlook Technip Energies – IR Overview 18
Slide 19: Significant and diversified market opportunity set
Significant and diversified market opportunity set Leveraging capabilities to meet customer needs and energy transition challenges Annual addressable Mid-term trend1 market1 KEY DRIVERS Traditional markets 1-5% BASE LNG, downstream2 and >€70B CAGR Global need to reduce offshore CO2 emissions GDP gro
Slide 20: Rising to the decarbonization challenge
Rising to the decarbonization challenge Growth market solutions for traditional markets Strongly influencing Fueling Traditional markets Growth markets • LNG, downstream & Accelerating • Blue hydrogen, CO2 management, petrochemical Sustainable Chemistry decarbonization • Key solutions: hydrogen, CCS
Slide 21: Positioning in Energy Transition
Positioning in Energy Transition Strong engagement in major growth markets Energy Transition contracts1 Energy Transition contracts Energy Transition contracts secured 2020 – Q1 2021 by project phase, 2020 – Q1 2021 By end market, 2020 – Q1 2021 EPC phase Sustainable LNG 20% Chemistry 23% >100 32% C
Slide 22: 2021 Guidance
2021 Guidance Confidence in our outlook Effective Revenues EBIT margin1 tax rate €6.5 - 7.0bn 5.5% - 6.0% 30 - 35% (exc. one-off cost of €30m) Financial information is presented under an adjusted IFRS framework, which records Technip Energies’ proportionate share of equity affiliates and restates th
Slide 23: A clear path to increased profitability
A clear path to increased profitability Investment focused on growth while improving margins Medium-term margin potential Cost optimization Project maturity, execution & risk mitigation 20% lower SG&A despite Technology & higher absolute R&D spend Mix effect Cost optimization 10% 15% 5.9% 2020 EBIT1
Slide 24: Capital allocation focused on strong balance sheet
Capital allocation focused on strong balance sheet Consistency in financial performance drives high returns on invested capital Sustainable high ROIC1 20 18 16 14 12 10 8 13% 12-15% 6 12% 4 2 0 2019A 2020A 2021E Balanced capital Consistent dividend policy allocation • Asset light, low capital Subjec
Slide 25: Appendix
Appendix Technip Energies – IR Overview 25
Slide 26: Accountability at CEO and Board-level
Accountability at CEO and Board-level Aligning ESG performance with management compensation 9 Leadership team remuneration metrics • Board Continuity – 5 non-executive directors joined from Individual Restricted TechnipFMC Board targets Stock • Independent non- Directors executive Chairman Joseph Ri
Slide 27: Peers landscape
Peers landscape Projects Delivery Technology, Products & Services E&C players Engineering consultancy LNG Technology portfolio Energy transition pure players Technip Energies – IR Overview 27
Slide 28: Backlog schedule
Backlog schedule €17,805m Total Backlog €5,129m €5,776m 2021 (9M) €6,900m 2022 2023+ Backlog as of Q1 2021, comprises secured & confirmed orders from customers which will generate future revenues with a high probability. Technip Energies – IR Overview 28
Slide 29: Disciplined commercial approach
Disciplined commercial approach Project selectivity - key to delivering solid operational and financial performance Early Known Known Technologies2 Engagement1 partners geography NOVATEK - ARCTIC LNG 2 BAPCO - BMP REFINERY MIDOR - REFINERY EXPANSION BP - TORTUE FPSO LONG SON PETROCHEMICALS Risk ENI
Slide 30: Delivering industry leading performance
Delivering industry leading performance Selectivity and execution driving robust margins Revenue EBIT1 Backlog2 in € Billion in € Million in € Billion 6.0 470 8.0% 18.0 1.2 1.1 420 7.1% 16.0 7.0% 1.0 5.0 1.2 370 5.9% 14.0 6.4% 6.0% 320 1.1 4.0 12.0 1.1 5.0% 270 10.0 3.0 220 4.0% 8.0 16.6 5.0 393 15.
Slide 31: Financial principles – gross margin recognition
Financial principles – gross margin recognition A prudent approach to gross margin recognition Recognition on a typical project Key drivers • Non-linear margin recognition; conservative recognition in early stages of a project Gross margin recognition • Gross margin recognition subject to: • Project
Slide 32: Financial principles - project cash flow curve
Financial principles - project cash flow curve Key business objective - a positive cash position through project lifecycle Typical project cash flows Key drivers • Bidding principle - net cash flow positive throughout the project lifecycle Cash flows • Project execution with a resolute cash manageme
Slide 33: Cash flow conversion of earnings through NCL
Cash flow conversion of earnings through NCL Net contract liability includes future earnings already cashed-in Net contract liability (NCL) Yamal illustration As of March 31, 2021 Yamal contract liabilities Reduction in contract liabilities: €37 million 12% December 31, 2020 to March 31, 2021 €2.7 P
Slide 34: Capital structure at Q1 2021
Capital structure at Q1 2021 Strong liquidity Significant net cash in € Million in € Million Commercial Paper 3,500 & Other 108 98 3,000 3,199 750 620 3,851 2,500 Bridge to Bond 2,471 3,199 2,000 1,500 1,000 Cash RCF Outstanding Liquidity, net Cash Gross Debt Net Cash Commercial Paper & Other • €3.9
Slide 35: Base - pioneer downstream and gas evolution
Base - pioneer downstream and gas evolution Highly competitive offering to address significant market opportunity LNG & gas Offshore Downstream monetization T EE P S T EE P S T EE P S • A world leader in LNG • A world leader in • A world leader in €10-15B and GTL1 €10-15B Floating LNG2 €40-45B ethyl
Slide 36: An LNG leader and pioneer with 50+ year track record
An LNG leader and pioneer with 50+ year track record An onshore & floating LNG leader Pioneering LNG innovations 105 Mtpa Onshore Global production delivered Low-to-zero carbon LNG modularization >20% Of operating LNG capacity1 Mid-scale LNG Floating LNG 7.8 Mtpa World’s largest LNG trains delivered
Slide 37: Low-to-zero carbon LNG
Low-to-zero carbon LNG Providing cleaner solutions for brownfield and greenfield LNG projects Our solutions CO2 from • Compression of CO2 feedstock • Dehydration of CO2 75% CO2 from • Increase process & power generation efficiency of emissions occur • Fuel gas decarbonization through H2 substitution
Slide 38: Extensive offshore expertise and track record
Extensive offshore expertise and track record Bridging customer needs for decarbonized, economical offshore solutions Leader in offshore LNG Lay out & modularization • Pioneer and leader in FLNG and near-shore LNG • Optimizing economics through megamoduleTM concept Upstream process 50+ years of HSE
Slide 39: A diversified and innovative downstream offering
A diversified and innovative downstream offering Creating value across the downstream value chain Differentiated offering >40% ethylene licensing market share1 Emission reductions Digitally-enabled through efficiency process monitoring, >45 grassroot ethylene plants gains and beyond lifecycle servic
Slide 40: Growth - accelerate the energy transition
Growth - accelerate the energy transition Unlocking the energy chains of tomorrow Hydrogen Sustainable chemistry CO2 management T EE P T EE P T EE P • A world leader1 with • Key proprietary • >50 references for CO2 €5-10B >270 plants delivered €5-10B technologies in €1-5B removal solutions Annual (>
Slide 41: A hydrogen leader ready to tackle new megatrend
A hydrogen leader ready to tackle new megatrend From refinery commodity to energy transition enabler 600 Mtpa Blue: ~15% CAGR 500 Green: ~20% CAGR 400 €90B 300 CAPEX2 200 100 - 2020 2025 2030 2035 2040 2045 2050 50 years of core Proprietary steam #1 in hydrogen1 Extensive Global alliances competence
Slide 42: Positioning in growth markets
Positioning in growth markets Sustainable Chemistry Bio-fuels Bio-chemistry Circular economy • Technology integration • Technology integration • Technology development Intimate understanding of Neste’s UPM Biochemicals; Europe’s IBM and Under Armour JV NEXBTL largest biorefinery for PET2 • Technolog
Slide 43: CO2 management throughout project lifecycle
CO2 management throughout project lifecycle Delivering innovative solutions to fulfill customer low-carbon ambitions Gen-CATTM – proprietary carbon assessment tool Digital Early Technology • Assessment of direct / indirect emissions throughout engagement advisory entire project lifecycle services •
Slide 44: Upside - leverage capabilities to expand opportunity set
Upside - leverage capabilities to expand opportunity set Bring core capabilities to attractive new markets Services Energy transition Industries T EE S T EE P S T EE P S • Advisory & consulting • Offshore wind • Life sciences €5-10B €1-5B €5-10B Annual • Project Management Annual • Offshore hydrogen
Slide 45: Positioning in offshore electron to hydrogen
Positioning in offshore electron to hydrogen Bridging offshore wind and hydrogen transformation to unlock new possibilities Integration capabilities – from electron to Hydrogen as a clean energy carrier hydrogen molecule, and offshore to onshore Differentiated design and execution capabilities Ensur
Slide 46: Enhance our high value services to customers
Enhance our high value services to customers Display our unique capabilities through advisory and project management consulting Advisory services Project Management Consultancy (PMC) Support customers to achieve De-risk execution from investment and safety goals technology selection to delivery Prop
Slide 47: Stock information and ADR
Stock information and ADR Stock ADR program Listed on Euronext Paris / SBF 120 index Ticker code: TE / ISIN code: NL0014559478 Exchange: Over-the-Counter Free float: 90.1 million / Outstanding shares: 179.8 million Ratio: 1 ADR : 1 ORD Market Cap at March 31, 2021: €2.3 billion Volume Share price €
Slide 48: Investor Relations
Investor Relations Phillip Lindsay Vice President, Investor Relations Tel: +44 20 3429 3929 [email protected]