TechnipFMC : Bernstein Strategic Decisions Conference presentation

Bernstein Strategic Decisions Conference

Catherine MacGregor, President Technip Energies September 24, 2020

Disclaimer

Forward-looking statements

This communication 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. Words such as "guidance," "confident," "believe," "expect," "anticipate," "plan," "intend," "foresee," "should," "would," "could," "may," "will," "likely," "predicated," "estimate," "outlook" and similar expressions are intended to identify forward-looking statements, which are generally not historical in nature.

Such forward-looking statements involve significant risks, uncertainties and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections, including the following known material factors: risks associated with disease outbreaks and other public health issues, including the coronavirus disease 2019 ("COVID-19"), their impact on the global economy and the business of our company, customers, suppliers and other partners, changes in, and the administration of, treaties, laws, and regulations, including in response to such issues and the potential for such issues to exacerbate other risks we face, including those related to the factors listed or referenced below; risks associated with our ability to consummate our proposed separation and spin-off; unanticipated changes relating to competitive factors in our industry; demand for our products and services, which is affected by changes in the price of, and demand for, crude oil and natural gas in domestic and international markets; our ability to develop and implement new technologies and services, as well as our ability to protect and maintain critical intellectual property assets; potential liabilities arising out of the installation or use of our products; cost overruns related to our fixed price contracts or capital asset construction projects that may affect revenues; our ability to timely deliver our backlog and its effect on our future sales, profitability, and our relationships with our customers; our reliance on subcontractors, suppliers and joint venture partners in the performance of our contracts; our ability to hire and retain key personnel; piracy risks for our maritime employees and assets; the potential impacts of seasonal and weather conditions; the cumulative loss of major contracts or alliances; U.S. and international laws and regulations, including existing or future environmental regulations, that may increase our costs, limit the demand for our products and services or restrict our operations; disruptions in the political, regulatory, economic and social conditions of the countries in which we conduct business; risks associated with The Depository Trust Company and Euroclear for clearance services for shares traded on the NYSE and Euronext Paris, respectively; the United Kingdom's withdrawal from the European Union; risks associated with being an English public limited company, including the need for "distributable profits", shareholder approval of certain capital structure decisions, and the risk that we may not be able to pay dividends or repurchase shares in accordance with our announced capital allocation plan; compliance with covenants under our debt instruments and conditions in the credit markets; downgrade in the ratings of our debt could restrict our ability to access the debt capital markets; the outcome of uninsured claims and litigation against us; the risks of currency exchange rate fluctuations associated with our international operations; risks related to our acquisition and divestiture activities; failure of our information technology infrastructure or any significant breach of security, including related to cyber attacks, and actual or perceived failure to comply with data security and privacy obligations; risks associated with tax liabilities, changes in U.S. federal or international tax laws or interpretations to which they are subject; and such other risk factors as set forth in our filings with the U.S. Securities and Exchange Commission and in our filings with the Autorité des marchés financiers or the U.K. Financial Conduct Authority.

We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any of our forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except to the extent required by law.

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TechnipFMC at a glance

1		2		3
Global leader for the energy		Stock exchange listings:		Operating segments:
industry		•	New York Stock Exchange		•	Subsea
		•	Euronext Paris		•	Technip Energies
					•	Surface Technologies

48		$13.4B		$1.2B
Countries with operating		Total company		Total company
presence		revenue1		adjusted EBITDA1,2

1. Trailing four quarters revenue and adjusted EBITDA as of June 30, 2020. Reconciliation of GAAP to Non-GAAP financial measures can be found in the appendix of the presentation. Source: Form 10-Q filed on July 31, 2020; Form 10-K filed on March 3, 2020; Form 10-Q filed on August 8, 2019.
2. Adjusted results exclude the impact of exceptional charges and credits from continuing operations.

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Strong foundational pillars

Balance sheetBacklogBusiness transformation

$6.8B		$20.6B		$350M+
Cash and Liquidity		Total Company backlog		Targeted savings

 Increased cash and liquidity by	 Resilient backlog in a difficult	 Drive real change to ensure we
$1.2B in the second quarter	environment	maintain market leadership
 Expect free cash flow to be	 $14.9 billion of backlog	 Targeted savings run-rate to be
positive in second half of year	scheduled for 2021 and beyond	achieved by year-end

Strong balance sheet and extensive backlog provide us the flexibility to accelerate our business transformation

Balance sheet and backlog figures are as of June 30, 2020. Targeted savings and free cash flow estimates are as of July 29, 2020.

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Confidence in 2020 outlook

Strong revenue coverage from backlog

Subsea - Revenue $5.3-5.6b; EBITDA margin* at least 8.5%

Subsea

SSS = Subsea Services

Guidance $5.3 - $5.6 billion

High

Low

2H SSS forecast

2H20

Scheduled

Backlog

$2.2B

1H20

Reported Revenue $2.6B

Technip Energies

Guidance $6.3 - $6.8 billion

High

Low

2H20

Scheduled

Backlog

$3.3B

1H20

Reported Revenue $3.1B

• Revenue guidance fully supported by backlog when including Subsea Services revenue forecast for remainder of 2020
• Adjusted EBITDA margin expected to benefit in 2H from higher operating efficiency due to reduced impact of COVID-19, projects reaching key milestones and benefits of cost reduction initiatives

Technip Energies - Revenue $6.3-6.8b; EBITDA margin* at least 10%

• Revenue guidance fully supported by backlog currently scheduled for execution in 2H 2020
• Adjusted EBITDA margin reflects strong contribution from Yamal LNG, which more than offsets growth in early stage projects (e.g., Arctic LNG 2)

Surface Technologies - Revenue $950-1,150m; EBITDA margin* at least 5.5%

• Revenue decline (YoY) moderated by favorable business mix outside of North America, which represents approximately 60% of segment
• Adjusted EBITDA margin expected to benefit from aggressive cost reduction activities; positive EBITDA forecast in North America for full year

*Our guidance measure of EBITDA margin (excluding amortization related impact of purchase price accounting, and other charges and credits) is a non-GAAP financial measure. We are unable to provide a reconciliation to a comparable GAAP measure on a forward-looking basis without unreasonable effort because of the unpredictability of the individual components of the most directly comparable GAAP financial measure and the variability of items excluded from such measure. Such information may have a significant, and potentially unpredictable, impact on our future financial results.

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Momentum drives positive free cash flow in second half

Full-year free cash flow1 guidance of $0 - $150 million

Free cash flow walk

(In millions USD)

$450			Positive 2H 2020
		Free Cash Flow
$350
$250						$0 to $150M
$150
$50
-$50						Full-year
					Guidance*
-$150
-$250
-$244M
		1H'20		2H'20e	FY2020e

Drivers of 2H 2020e improvement

(at midpoint of full-year guidance)

• Expect increase in total Company revenue, driven by backlog supported growth in Technip Energies
• Expect increase in total Company adjusted EBITDA, driven by improved operating efficiency in Subsea as COVID-19 impacts become more muted

1Free cash flow = cash flow from operations less capital expenditures; does not include estimated Yamal partner distributions (Mandatorily redeemable financial liability) of approximately $235 million for the full-year, which is included in cash from financing activities.

*Our guidance measure of free cash flow is a non-GAAP financial measure. We are unable to provide a reconciliation to a comparable GAAP measure on a forward-looking basis without unreasonable effort because of the unpredictability of the individual components of the most directly comparable GAAP financial measure and the variability of items excluded from such measure. Such information may have a significant, and potentially unpredictable, impact on our future financial results.

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Delivering real solutions for the energy transition

Meeting the rising global

demand for energy…

Energy paradox

…while decarbonizing

the global energy system

Lower carbon solutions

	•	LNG
	•	Biofuels / Biochemicals
	• CCUS and Blue hydrogen
	•	Circular economy
Core competencies and capabilities in
Decarbonization initiatives
engineering
•	Automation
technology and innovation
•	Electrification
project execution	•	Energy efficiency
•	Product enhancement solutions
enable our approach
	Carbon-free energy opportunities
	•	Green hydrogen
	•	Offshore wind innovation
	• Tidal / wave energy

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Key takeaways

• Strong balance sheet, extensive backlog provide flexibility to accelerate business and digital transformation
• Cost reduction, backlog visibility and resilient execution provide confidence in 2020 guidance
• Operational momentum expected to drive significant improvement in second half cash generation
• Core competencies and capabilities will enable the delivery of real solutions for the energy transition
• Remain committed to separation into two diversified pure-plays; strategic rationale unchanged

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Appendix

Select financial data

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Select financial data

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Select financial data

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Select financial data

							Three Months Ended														Three Months Ended
Revenue		June 30, 2020			March 31, 2020		December 31, 2019		September 30, 2019			June 30, 2019	Inbound Orders (1)		June 30, 2020			March 31, 2020		December 31, 2019		September 30, 2019			June 30, 2019
Subsea	$	1,378.5	$	1,253.1	$	1,486.8	$	1,342.2	$	1,508.7	Subsea	$	511.7	$	1,172.1	$	1,172.3	$	1,509.9	$	2,632.7
Onshore/Offshore	$	1,538.3	$	1,547.7	$	1,832.4	$	1,596.3	$	1,505.0	Onshore/Offshore	$	835.8	$	560.6	$	1,114.5	$	696.0	$	8,131.2
Surface Technologies	$	241.7	$	329.5	$	407.6	$	396.6	$	420.5	Surface Technologies	$	187.1	$	366.3	$	431.6	$	404.7	$	415.7
Corporate and Other	$	-	$	-	$	-	$	-	$	-	Corporate and Other
Total	$	3,158.5	$	3,130.3	$	3,726.8	$	3,335.1	$	3,434.2	Total	$	1,534.6	$	2,099.0	$	2,718.4	$	2,610.6	$	11,179.6
							Three Months Ended															Period Ended
Adjusted EBITDA		June 30, 2020			March 31, 2020		December 31, 2019		September 30, 2019			June 30, 2019	Order Backlog (2)		June 30, 2020			March 31, 2020		December 31, 2019		September 30, 2019			June 30, 2019
Subsea	$	99.6	$	104.8	$	185.0	$	139.1	$	186.2	Subsea	$	7,085.3	$	7,773.5	$	8,479.8	$	8,655.8	$	8,747.0
Onshore/Offshore	$	162.6	$	167.1	$	259.7	$	304.2	$	281.9	Onshore/Offshore	$	13,132.6	$	13,766.6	$	15,298.1	$	15,030.8	$	16,608.3
Surface Technologies	$	8.3	$	24.5	$	55.9	$	44.4	$	46.7	Surface Technologies	$	385.9	$	422.0	$	473.2	$	428.7	$	426.6
Corporate and Other	$	(29.4)	$	(76.2)	$	(96.2)	$	(108.5)	$	(64.8)	Corporate and Other
Total	$	241.1	$	220.2	$	404.4	$	379.2	$	450.0	Total	$	20,603.8	$	21,962.1	$	24,251.1	$	24,115.3	$	25,781.9
							Three Months Ended														Three Months Ended
Adjusted EBITDA Margin		June 30, 2020			March 31, 2020		December 31, 2019		September 30, 2019			June 30, 2019	Book-to-Bill (3)		June 30, 2020			March 31, 2020		December 31, 2019		September 30, 2019			June 30, 2019
Subsea		7.2%			8.4%			12.4%			10.4%			12.3%	Subsea		0.4			0.9			0.8			1.1			1.7
Onshore/Offshore		10.6%			10.8%			14.2%			19.1%			18.7%	Onshore/Offshore		0.5			0.4			0.6			0.4			5.4
Surface Technologies		3.4%			7.4%			13.7%			11.2%			11.1%	Surface Technologies		0.8			1.1			1.1			1.0			1.0
Corporate and Other															Corporate and Other
Total		7.6%			7.0%			10.9%			11.4%			13.1%	Total		0.5			0.7			0.7			0.8			3.3

(1) Inbound orders represent the estimated sales value of confirmed customer orders received during the reporting period.

(2) Order backlog is calculated as the estimated sales value of unfilled, confirmed customer orders at the reporting date.

(3) Book-to-bill is calculated as inbound orders divided by revenue.

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