TechnipFMC plc — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a standalone fourth-quarter filing; the supplied text does not provide clear Q4-only financial results. Amounts below are in U.S. dollars.
Business context
TechnipFMC provides energy products, projects, and services through two segments: Subsea and Surface Technologies. Its business remains substantially tied to worldwide oil and natural gas exploration, production, and customer spending. Petrobras represented more than 16% of consolidated revenue in 2023.
Financial performance and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $7.824 billion | $6.700 billion |
| Gross profit / gross margin | $1.274 billion / 16.3% | $896.3 million / 13.4% |
| Income (loss) from continuing operations attributable to TechnipFMC | $56.2 million | $(61.9) million |
| Net income (loss) attributable to TechnipFMC | $56.2 million | $(107.2) million |
| Diluted EPS | $0.12 | $(0.24) |
| Operating cash flow from continuing operations | $693.0 million | $352.1 million |
| Free cash flow from continuing operations (non-GAAP) | $467.8 million | $194.2 million |
| Cash and cash equivalents | $951.7 million | $1.057 billion |
| Total debt | $1.067 billion | $1.367 billion |
| Net debt (company-defined non-GAAP) | $(115.6) million | $(309.5) million |
Negative net debt indicates cash was below total debt under the company’s presentation; at year-end 2023, cash was $115.6 million less than debt. The company reported $1.196 billion available under its $1.25 billion revolving credit facility, after letters of credit, and compliance with debt covenants. Current assets were $5.195 billion and current liabilities were $4.469 billion.
- Segments: Subsea revenue was $6.435 billion, up 17.8%, and operating profit was $543.6 million, with an 8.4% margin versus 5.8%. Surface Technologies revenue was $1.389 billion, up 12.1%, and operating profit was $114.6 million, with an 8.2% margin versus 4.7%.
- Orders and backlog: Inbound orders rose to $10.983 billion from $8.079 billion. Year-end backlog increased to $13.231 billion from $9.353 billion, largely reflecting Subsea growth.
- Tax and costs: The effective tax rate was 74.9%, versus 153.1% in 2022, and remained high relative to pretax income. A $126.5 million non-recurring legal settlement charge and $119.0 million net foreign-exchange loss weighed on 2023 results. Contract-estimate changes reduced gross profit by approximately $92.3 million, net.
Material changes versus FY2022
- Revenue rose 16.8%; gross profit increased $377.8 million, supported by higher Subsea volume and favorable activity mix, as well as improved Surface Technologies activity and performance.
- Net income attributable to the company returned to positive territory from a loss. However, the reported $56.2 million profit was affected by the legal charge, foreign-exchange losses, and a high tax burden.
- Operating cash flow nearly doubled and free cash flow more than doubled. Management attributed the improvement partly to timing of project milestones, vendor payments, derivatives, and tax payments.
- Total debt declined by about $299 million, including repayment of $270.2 million of 3.15% notes. Cash declined by $105.4 million.
- Subsea backlog grew to $12.164 billion from $8.132 billion; Surface Technologies backlog declined to $1.067 billion from $1.222 billion.
Outlook, risks, and unusual items
- Management described the 2024 market outlook as strong and anticipated a further step-up in targeted financial performance, but the supplied filing text does not provide clear numerical 2024 revenue, earnings, or cash-flow guidance.
- The company committed to return more than 60% of annual free cash flow to shareholders through at least 2025. It initiated quarterly dividends in 2023 and expanded its share repurchase authorization to $800 million; $305.3 million had been repurchased cumulatively through year-end 2023.
- Management cited growth opportunities in offshore and Middle East markets, subsea services, and energy-transition offerings. After the January 2024 Mero 3 HISEP award, the company said New Energy inbound orders exceeded $1 billion. These are forward-looking statements, not assured results.
- The Measurement Solutions business was classified as held for sale following a November 2023 agreement to sell it to One Equity Partners for $205 million cash, subject to adjustments; closing was expected by the end of Q1 2024.
- A French anti-corruption settlement resulted in a $126.5 million incremental charge in 2023. TechnipFMC’s outstanding share of the fine was €154.8 million, reported as $171.1 million in current liabilities at year-end, with installments due through July 2024. The settlement did not involve an admission of liability or guilt. The company said its U.S. and Brazilian enforcement obligations had been completed.
- Key risks include oil and gas price and spending volatility; fixed-price project cost overruns and delivery delays; reliance on suppliers, subcontractors, and joint ventures; customer concentration; foreign-exchange exposure; geopolitical and maritime disruption; cybersecurity; regulation and litigation; and uncertainty in new-energy markets. Management reported no known cybersecurity threat that had materially affected or was reasonably likely to materially affect the company.
Important facts for investors to verify
- Whether strong order intake and the $13.231 billion backlog convert to revenue and profit on schedule, and whether project cost estimates remain reliable.
- The timing and cash impact of the remaining French settlement installments and the status and proceeds of the Measurement Solutions sale.
- Underlying cash generation excluding working-capital and milestone timing effects, and the sustainability of free cash flow and shareholder distributions.
- Debt maturities, revolving-facility availability, and the meaning of the company’s negative net-debt presentation relative to cash and total debt.
- Exposure to Petrobras and other major customers, foreign-exchange movements, and the execution and commercial viability of New Energy projects.