France: Technip’s Performance in Line with Objectives, CEO Says

France: Technip's Performance in Line with Objectives, Says CEO

Technip’s Board of Directors on February 19, 2013, approved the audited full year 2012 consolidated financial statements.

Operating income of the company was €235 million in fourth quarter 2012, including €3 million of acquisition costs, versus €197 million a year ago.

Financial result in fourth quarter 2012 included a €9 million negative impact from changes in foreign exchange rates and fair market value of hedging instruments, compared with a €16 million positive impact in fourth quarter 2011.

During fourth quarter 2012, Technip’s order intake was €2,975 million.

Thierry Pilenko, Chairman and CEO, commented: “Technip’s performance was in line with our objectives throughout 2012, including the fourth quarter. Full year group revenue grew by 20% and operating profit by 16%, giving an operating margin again stable at 10%. Our backlog grew to €14 billion, whilst remaining diversified by geography, market segment and project type, which we hold to be a critical success factor in our industry. The projects we delivered and won in 2012 reflect our focus on offering our clients differentiating technologies, and on securing involvement in projects early in their life-cycle. To support our growth, we have invested in talent worldwide – Technip now employs 36,500 people compared to 31,000 a year ago – and in new assets, acquisitions and alliances.

Subsea operating margin in 2012 was in line with our objective, at 15% on revenue, which grew ahead of plan by 36%. The Global Industries integration progressed well, and we were able to win many important projects for the two “G” vessels for 2013 and beyond. Overall, this acquisition is delivering what we expected. The alliance with Heerema confirms our leadership in the Subsea market worldwide, giving our clients access to the broadest range of skills from upstream engineering to all types of pipelay and construction assets. Our investments in assets and flexible pipe technology give us a strong position, for example, in deepwater developments in areas such as Brazil.

Onshore/Offshore operating margin was at the top end of our expectations at 7%. We were able to convert early stage involvement in projects at FEED and conceptual phases into larger EPC scopes in places such as the Middle East, Latin America and Eastern Europe.

We completed the acquisition of Stone and Webster Process Technologies in August giving us a foothold in the North American downstream market and have since formed a worldwide unit focusing on onshore technologies. We have also strengthened our position in new areas such as Floating LNG, where we confirmed key relationships with major clients.

Furthermore, we have pursued the development of Technip into a more diversified and international group, including at Board level with the appointments made in 2012 and those to be proposed at our next AGM. Upon their ratification, our twelve-member Board will comprise five women and seven men, from seven different nationalities, and reflecting key markets.

Technip starts 2013 with a substantial, profitable backlog of business to execute. We believe our markets, whilst competitive and never immune to general economic conditions, remain robust and growing. Our clients continue to focus on replacing and raising production from increasingly challenging areas and reservoirs. They seek long-term relationships with contractors that are capable of developing and deploying the right technologies and who can embrace national content and local execution. Upstream investments should grow at a double digit rate and several very large oil and gas offshore developments should be sanctioned in the next couple of years. Downstream will be particularly active in petrochemicals, notably in North America.

We will continue to be selective about the projects we take on so as to ensure reliable execution and delivery to both clients and shareholders. We will pursue our capex program, with a focus on delivering our current commitments.

On this basis, we expect to grow revenue and profit at Technip again in 2013 in both our segments. We expect full year operating margins of around 15% in Subsea. This target reflects on the one hand our robust, growing Subsea backlog, but also the dilutive effect of the revenue contribution from recently-won multiyear projects and the substantial start-up costs for both new vessels and manufacturing plants. We target Onshore/Offshore operating margins in line with our long-term expectations at 6 to 7%. Accordingly, confident in our strategy, our backlog, and our potential for profitable growth, we propose to Technip’s General Shareholders’ Meeting an increase of 10 eurocents in the dividend, to €1.68 per share, in line with our practice of regularly increasing the payout to shareholders.”

Full Results

February 21, 2013; Image: Technip