• Revenue Growth: 13% year-over-year increase, reaching EUR 5 billion for the first nine months of 2024.
• 2024 Revenue Guidance: Upgraded by 5% at the midpoint to a range of EUR 6.5 billion to EUR 6.8 billion.
• EPS Growth: Increased by 35% year-over-year.
• Net Profit: EUR 280 million, up 35% year-over-year.
• Free Cash Flow: EUR 360 million, excluding working capital and provisions.
• Gross Cash: EUR 3.5 billion.
• Recurring EBIT: Increased by 12% year-over-year to EUR 257 million.
• Order Intake: EUR 4.8 billion for the first nine months.
• Project Delivery Revenue: Up 17% year-over-year to EUR 3.5 billion.
• EBIT Margins: Solid performance with margins around 100 basis points above EBIT margins for project delivery.
• Backlog: EUR 14.2 billion, up 2% since the beginning of the year.
• TPS Revenue: Up 3% year-over-year.
• Adjusted Recurring Margin: Increased by 20 basis points to 12.8% for TPS.
• Shareholder Returns: Over EUR 170 million returned through dividends and buybacks in 2024.
• Effective Tax Rate: Increased guidance to 29% to 33% for full year 2024.

• Warning! GuruFocus has detected 5 Warning Signs with THNPF.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Technip Energies NV (THNPF) reported robust revenue growth of 13% year-on-year, driven by strong project delivery and strategic initiatives.
• The company upgraded its 2024 revenue guidance by 5% at the midpoint, indicating a new range of EUR 6.5 billion to EUR 6.8 billion.
• EPS grew by 35%, benefiting from increased revenues and higher financial income.
• Technip Energies NV (THNPF) secured significant projects, including a major LNG export terminal in the US and a green ammonia plant in India, enhancing its backlog for 2025 and beyond.
• The completion of a share buyback program and planned cancellation of treasury shares returned over EUR 170 million to shareholders, demonstrating a commitment to shareholder returns.

Negative Points

• The adjusted order intake of EUR 4.8 billion in the first nine months was below expectations, tracking in line with revenues.
• The company's effective tax rate increased to a range of 29% to 33% due to changes in earnings mix and potential French tax impacts.
• Non-recurring expenses rose to EUR 60 million, attributed to development projects and new business ventures, impacting overall profitability.
• The TPS segment experienced a 7% year-to-date backlog decline due to the absence of significant awards in Q3.
• Concerns were raised about potential delays in LNG projects due to a forecasted supply glut around 2028, which could impact future project timelines.

Q & A Highlights

Q: With the expected LNG supply glut appearing to come from 2028, what's your current view on the volume of unsanctioned projects and potential delays? Also, should we expect TPS's highest quarterly revenue in Q3 to continue into Q4? A: Our 2030 view for the LNG market is that the world will need 800 million tons per annum. We are optimistic about the LNG pipeline, with ongoing projects and feeds. Regarding TPS, we are near our 2025 target already in 2024, and the momentum will continue. Our objective remains TPS at or above EUR 2 billion for 2025 at a double-digit margin. - Arnaud Pieton, CEO

Q: Could you share comments on engineer remuneration inflation rates and the provisions balance related to finalized contracts? A: We account for inflation in our project cost base, including labor rates and equipment costs. We have contingencies to cover any gaps between expected and actual inflation rates. Regarding provisions, there was almost no change versus Q2, and the trend is consistent with the portfolio's evolution. - Arnaud Pieton, CEO & Bruno Vibert, CFO

Q: On TPS, strong results this quarter, but we saw slowing order intake. Could you provide some color on any areas of slowdown or acceleration? Also, what other businesses will you allocate under non-recurring expenses? A: TPS had a soft order intake for the quarter, but we have a strong line of sight for Q4 with potential awards. We expect more products and technology orders, particularly in carbon capture. Non-recurring expenses include investments in new ventures like Reju, and we expect these to trend around high single digits. - Arnaud Pieton, CEO & Bruno Vibert, CFO

Q: Could you speak about the sensitivity of your commercial pipeline to a potential Trump presidency, particularly regarding the Inflation Reduction Act? A: The US is a key geography for us, and a Trump victory could lead to a faster lift of the LNG moratorium, unlocking opportunities. We are optimistic about the blue chain in the US, with ongoing projects like Exxon in Baytown. The US and UK could significantly diversify our portfolio in Q4 and 2025. - Arnaud Pieton, CEO

Q: Can you provide an order of magnitude for the size of the Lake Charles LNG project? A: Lake Charles is a significant project, with Technip Energies as the leader of the JV. The project is north of 16 million tons per annum, and its potential value is in the area of EUR 4 billion to EUR 5 billion. We will provide more details during the CMD if there's more progress. - Arnaud Pieton, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.