Technip Sets 2014 and 2015 Financial Outlook

Technip Sets 2014 and 2015 Financial Outlook

Technip has analyzed the key elements driving the financial performance of the Group and its Subsea and Onshore/Offshore segments for 2014 and 2015. As a result, and in line with the commitment with the third quarter results, the Company is therefore able to set out financial objectives covering this period.

The Group starts the period with a strong, profitable and diversified backlog of projects to execute across its two segments. They continue to see good near- and medium-term opportunities to win new projects. Focusing on Subsea, they expect 2014 revenue between €4.35 billion and €4.75 billion and, after a slow start in the first quarter 2014, a robust margin performance from the second quarter 2014 onwards. Technip targets, in particular, strong revenue growth on higher margins in 2015 for Subsea – revenue well above €5 billion and operating margins* between 15% and 17%.

I. Subsea 2014 and 2015

In 2014, the Company targets revenues between €4.35 billion and €4.75 billion.

Before a substantial improvement from the second quarter onwards, Subsea operating margins will be exceptionally low in the first quarter 2014 at around 5% on similar revenues to the first quarter 2013 reflecting the following elements:

– A very high proportion of revenues coming from multi-year projects on which the Group’s policy is not to recognize margin in early phases

– Additional time for accelerated vessel maintenance and enhancement program

– The tail of revenue from the zero-margin Gulf of Mexico projects

– Start-up of the Açu facility during the quarter as planned, with associated costs.

These elements will be much less important, already in the second quarter. The last three quarters of the year will all show substantially better margins, with normal seasonality. This enables the Company to set as a floor an operating margin of at least 12% for the year as a whole.

The margin performance from the second quarter 2014 onwards will prepare for strong growth in 2015. At this point, the Company targets 2015 Subsea revenue to be well above €5 billion and 2015 Subsea operating margins between 15% and 17%.

II. Onshore/Offshore 2014 and 2015

In 2014, the Company targets revenues of between €5.4 billion and €5.7 billion with operating margins between 6% and 7% on revenues. This is in line with the comments at the time of the third quarter 2013 statement and with the long-term goals. In 2015, they target continued modest growth in revenues and stability in margin levels.

There is a good balance across the Onshore/Offshore segment of early, mid and late stage projects in 2014 and 2015. The Company will continue to focus efforts on maintaining a diversified project portfolio, based increasingly on value-added engineering and technology. The outlook does not take into account any very major project awards at this time.

III. Group

Technip will continue to assess its capital expenditure program, and manage its cost base, in order to ensure they drive appropriate returns on the investments they have made. As usual, information will be provided with full year results on February 20, 2014.

Commenting on the outlook for 2014 and 2015, Thierry Pilenko, Technip’s Chairman and CEO, said: “The strong investments we have made in people, technology, assets and national content over the last few years has enabled Technip to broaden its market footprint, positioning us to provide to our customers better value-added earlier in their project life cycles. As a result, our backlog stands at a record level, is diversified and is profitable. Opportunities for new project awards near- and medium-term continue, as we see it at Technip, to be widespread. This enables us to set realistic and achievable objectives for revenue and profit over the coming two years.”

[mappress]

December 18, 2013