TechnipFMC plc Q4 FY2025 earnings call

• 2025 was a year of strong performance with total company inbound $11.2 billion, backlog $16.6 billion, revenue $9.9 billion (+9%), adjusted EBITDA $1.8 billion (+33%), free cash flow $1.4 billion, shareholder distributions $1 billion. • Subsea orders in quarter $2.3 billion, full-year inbound $10.1 billion with iEPCI projects major contributor; backlog at $15.9 billion with legacy projects <10%; expect $10 billion inbound in current year. • Customers adopting portfolio approach to offshore development, benefiting TechnipFMC's iEPCI model and Subsea 2.0 solutions; Subsea Opportunities list up to $29 billion. • Acknowledged efforts of 22,000 employees; 2025 was milestone but more upside remains; committed to reducing cycle time. • Surface Technologies focused on high-grading portfolio, benefiting from international presence and local content investments.

Subsea: Revenue in the quarter was $2.2 billion, down 5% sequentially; adjusted EBITDA was $416 million, down 18% sequentially, with margin 18.9%; full-year Subsea revenue grew 11%, adjusted EBITDA margin up 340 basis points to 20.1%. Surface Technologies: Revenue in the quarter was $323 million, down 2% sequentially; adjusted EBITDA was $58 million, up 8% sequentially, with margin 18%, up 160 basis points from third quarter; full-year adjusted EBITDA margin improved 170 basis points to 16.7% with revenue essentially flat.

• Subsea: Updated guidance for 2026 with revenue $9.4 billion and adjusted EBITDA margin 21.5% midpoint; first quarter subsea revenue expected to increase low single digits sequentially, adjusted EBITDA margin to improve ~50 basis points. • Surface Technologies: Guiding to full-year revenue just over $1.2 billion and adjusted EBITDA margin 17.25% midpoint; first quarter revenue expected to decline ~10% from fourth quarter, margin ~16.5%. • Corporate: Guiding to full-year expense $120 million, ~$40 million in first quarter. • Free cash flow: Anticipate capital expenditures ~$340 million for full year, free cash flow range $1.3 billion - $1.45 billion, expect to return at least 70% to shareholders in 2026.

• Risks related to forward-looking statements, actual results could differ due to factors in SEC filings. • Competition from other companies potentially copying iEPCI or Subsea 2.0 models, though TechnipFMC believes its strategy is unique and took 4 years to develop.

Q: Elaborate on margin expansion potential from industrializing the SURF process.

A: Focus on expanding configure-to-order applications in water column, similar to Subsea 2.0 on seabed, with substantial opportunities.

Q: Visibility on further margin expansion Subsea.

A: Inbound at accretive level to backlog margin, focus on reduction of cycle time and certainty for clients.

Q: Renewed interest in greenfield developments.

A: Substantial greenfield developments with exploration done, new basins identified, opportunities global.

Q: SURF standardization process.

A: Working on it, committed to doing it right with more to come.

Q: Volume capacity within existing setup.

A: Subsea Opportunity list growing and accelerating, expect inbound growth in 2027 and beyond.

Q: Tiber and Kaskida portfolio approach benefits.

A: Continuity, visibility, and benefits to both bp and TechnipFMC in project returns.

Q: Subsea Services expectations.

A: Grow in line with top line, expected to be ~$2 billion.

Q: Surface Technologies margin increase.

A: Focus on high-grading portfolio, benefits from international presence and local content.

Q: Customer discussions in macro environment and pricing.

A: Customers confident due to prolific reserves and TechnipFMC's reduction of cycle time, focus on improving project returns not price.

Q: Portfolio approach content and adoption.

A: Architects of portfolio approach, benefits from being both architect and builder, not limited to select majors.

Q: Operator capital shift to offshore.

A: Early stages with long runway.

Q: Continued adoption of iEPCI and Subsea 2.0.

A: Both could go to 100% in applications, approach every opportunity as iEPCI 2.0 until proven otherwise.

Q: Subsea 1Q revenue guide.

A: Due to seasonality like vessel maintenance in North Sea.

Q: Portfolio approach sales funnel and order proportion.

A: Smaller portion now but customers responding well, 80% orders direct awarded with progression in revenue.

Q: Oil vs gas impact on subsea.

A: Gas equipment more complex and higher unit cost, beneficial for differentiation.

Q: Free cash flow conversion.

A: 2026 guidance implies 65% conversion midpoint, working capital a factor but focus on 2026 improvement.

Q: Risks of replication by competitors.

A: Difficult, TechnipFMC chose integration strategy, others could copy but strategy is unique