TechnipFMC plc (FTI) is a global leader in the energy industry, providing cutting-edge technologies, systems, and services that are transforming the way oil and gas projects are delivered. The company's unique approach to integration and its commitment to innovation have positioned it as a true disruptor in the market, driving sustainable change and delivering significant value to its clients.
Business Overview and History
TechnipFMC was formed in January 2017 through the merger of FMC Technologies, Inc. and Technip S.A., two industry heavyweights. This merger combined the complementary work scopes of the subsea production system (SPS) with the subsea umbilicals, risers, and flowlines (SURF) and installation vessels, creating a new integrated commercial model called iEPCI. Prior to the merger, FMC Technologies, Inc. was a leading provider of technology solutions for the energy industry, while Technip S.A. was a major engineering and construction firm.
The combination of these two companies created a global powerhouse with unparalleled capabilities in the subsea, surface, and new energy markets. This integrated approach has been a game-changer for the industry, significantly reducing project timelines and costs while improving overall project economics.
One of the key milestones for TechnipFMC was the successful integration of the two legacy companies following the merger in 2017. This integration process involved aligning operations, processes, and corporate cultures to create a cohesive and efficient organization. The company also had to navigate the challenges of the global oil and gas industry downturn that occurred around the time of the merger.
In February 2021, TechnipFMC completed the separation of its Technip Energies business segment. This transaction created two independent, publicly traded companies - TechnipFMC and Technip Energies. The separation allowed TechnipFMC to focus on its core Subsea and Surface Technologies segments, which serve the oil and gas industry.
Throughout its history, TechnipFMC has been known for its innovative technologies and solutions. The company has continuously invested in research and development to enhance its product offerings and improve project execution for its customers. This commitment to innovation has been a key driver of the company's success in the energy industry.
Financial Performance and Key Metrics
TechnipFMC has consistently delivered strong financial results, with a track record of revenue growth and margin expansion. In the company's most recent fiscal year (2024), it reported total revenue of $9.08 billion, a 16% increase compared to the prior year. This growth was driven by the continued strength of the Subsea segment, which accounted for approximately 86% of total revenue.
The company's profitability has also been impressive, with adjusted EBITDA reaching nearly $1.4 billion in 2024, a 47% increase year-over-year. This translated to an adjusted EBITDA margin of 15.3%, a testament to the company's operational efficiency and the benefits of its integrated business model.
Financials
TechnipFMC's financial performance has been robust, with significant growth in both revenue and profitability. The company's total revenue of $9.08 billion in 2024 represents a 16% increase from the previous year. This growth was primarily driven by the strong performance of the Subsea segment, which accounted for 86% of total revenue.
Adjusted EBITDA for the company reached nearly $1.4 billion in 2024, marking a substantial 47% increase compared to the previous year. This resulted in an adjusted EBITDA margin of 15.3%, highlighting the company's operational efficiency and the benefits of its integrated business model.
Net income for 2024 was $842.9 million, reflecting the company's strong operational performance and improved market conditions. Operating cash flow for the year was $961.0 million, while free cash flow grew 45% to $679.4 million.
In the fourth quarter of 2024, TechnipFMC reported revenue of $2.37 billion, representing a year-over-year growth of 13.3%. Net income for the quarter was $224.7 million, with operating cash flow of $579.0 million and free cash flow of $453.0 million.
Liquidity
TechnipFMC's balance sheet remains robust, with a net cash position of $272 million as of the end of 2024. The company's debt-to-equity ratio stands at a healthy 0.03, indicating a conservative capital structure. Cash and cash equivalents totaled $1.16 billion as of December 31, 2024, providing ample liquidity for operations and investment opportunities.
The company also maintains a $1.25 billion credit facility, further bolstering its financial flexibility. TechnipFMC's current ratio of 1.12 and quick ratio of 0.90 demonstrate its ability to meet short-term obligations.
This strong financial position has allowed the company to increase its shareholder distributions, with a total of $486 million returned to shareholders in the form of dividends and share repurchases in 2024, nearly double the previous year's amount.
Segment Performance and Market Dynamics
Subsea Segment
The Subsea segment is the backbone of TechnipFMC's business, accounting for the majority of the company's revenue and profitability. In 2024, Subsea revenue grew 21.5% to $7.82 billion, driven by increased backlog and higher activity levels, particularly in Angola, the United States, Guyana, and Australia.
The Subsea segment's operating profit increased 75.3% to $953.1 million, primarily due to favorable activity mix and higher volume. The segment's operating margin expanded from 8.4% in 2023 to 12.2% in 2024, reflecting the benefits of the company's focus on operational excellence, manufacturing efficiency, and project execution.
TechnipFMC's order backlog in the Subsea segment stood at $13.52 billion as of the end of 2024, providing strong visibility into future revenue and earnings. The company's Subsea inbound orders increased to $10.4 billion in 2024, representing their fourth consecutive year with a book-to-bill ratio greater than one.
The offshore oil and gas industry has remained resilient, with operators continuing to invest in deepwater and ultra-deepwater projects. TechnipFMC's leading position in the iEPCI market, which now represents nearly one-third of the addressable subsea market, has positioned the company to capitalize on this trend.
A key strategic focus for the Subsea segment has been the development and deployment of the Subsea 2.0 configure-to-order product platform. This initiative aims to industrialize the Subsea business by using pre-engineered modular architectures to provide greater flexibility and efficiency in delivering subsea systems. The Subsea 2.0 approach has reduced lead times and production costs, helping to improve the economic viability of offshore projects.
Surface Technologies Segment The Surface Technologies segment, which includes the company's wellhead systems, pressure control products, and measurement solutions, generated revenue of $1.26 billion in 2024, a 9.1% decrease compared to the prior year. This decline was primarily due to lower activity in North America, Europe, and Latin America, as well as the divestiture of the Measurement Solutions business.
Despite the revenue decline, the Surface Technologies segment's operating profit increased 78.2% to $204.2 million, driven by the $71.3 million gain on the sale of Measurement Solutions and improved operational performance in the Middle East, Asia Pacific, and other international markets. The international markets, which now account for over 60% of Surface Technologies revenue, continue to be a key growth driver for the segment.
A strategic focus for the Surface Technologies segment has been expanding its presence and capabilities in international markets, particularly in the Middle East. The segment has benefited from increased activity in the United Arab Emirates and Saudi Arabia, where it has secured multi-year framework agreements with national oil companies. These international projects tend to have higher-specification equipment requirements and a greater emphasis on local content, playing to TechnipFMC's strengths.
The Surface Technologies segment has also made progress in developing integrated solutions, such as the iComplete pressure control system for the onshore unconventional stimulation market. This integrated offering, which combines flexible pipe, manifolds, and valve technologies, aims to improve safety, efficiency, and predictability for customers.
New Energy Initiatives
In addition to its core oil and gas business, TechnipFMC has been actively pursuing opportunities in the energy transition, with a focus on greenhouse gas (GHG) removal, offshore floating renewables, and hydrogen solutions. The company's expertise in project integration, subsea applications, and digital technologies has positioned it as a leader in these emerging markets.
In 2024, TechnipFMC was awarded several significant contracts that demonstrate its capabilities in the new energy space. These include an iEPCI contract for the Mero 3 HISEP project in Brazil, which will utilize subsea processing to capture carbon dioxide-rich dense gases and inject them back into the reservoir, as well as the industry's first all-electric iEPCI for carbon transportation and storage in the United Kingdom.
The company has also formed a strategic partnership with Prysmian, a leading provider of cabling solutions, to deliver an integrated solution for the offshore floating wind market. This partnership combines TechnipFMC's expertise in project integration and dynamic offshore applications with Prysmian's cabling expertise, creating a unique offering that can accelerate the development of this rapidly growing renewable energy sector.
Risks and Challenges
While TechnipFMC has demonstrated its ability to navigate the ups and downs of the energy industry, the company is not without its risks and challenges. The cyclical nature of the oil and gas market, with its fluctuating commodity prices and capital spending patterns, can impact the company's financial performance. Additionally, the industry's transition towards more sustainable energy sources presents both opportunities and risks for TechnipFMC, as it must balance its traditional oil and gas business with its new energy initiatives.
The company also faces competition from other integrated service providers, as well as specialized equipment and service suppliers. Maintaining its technological edge and ability to deliver innovative solutions will be crucial to the company's long-term success.
In 2023, TechnipFMC faced a significant legal issue when its subsidiary Technip UK Limited, along with Technip Energies SAS, reached a resolution with French authorities (Parquet National Financier) regarding historical projects in Equatorial Guinea, Ghana, and Angola. The resolution involved a public interest fine of €208.9 million, of which TechnipFMC is responsible for €179.45 million to be paid in installments through July 2024. The company fully cooperated with the investigation and was not required to retain a monitor.
Outlook and Guidance
TechnipFMC has provided a positive outlook for the current fiscal year (2025), with the company expecting continued strong performance in its Subsea segment and a return to growth in its Surface Technologies business. For the full year 2025, the company is guiding for Subsea revenue of $8.6 billion and an adjusted EBITDA margin of 19.5% at the midpoint of the range. In Surface Technologies, the company expects revenue of $1.275 billion and an adjusted EBITDA margin of 15.5%.
Total company revenue is expected to increase by high single digits in 2025, with adjusted EBITDA projected to improve to approximately $1.76 billion at the midpoint. The company anticipates converting over 50% of adjusted EBITDA into free cash flow, which is expected to range between $850 million and $1 billion for the year.
TechnipFMC's confidence in its future prospects is reflected in its plans to increase shareholder distributions, with the goal of returning at least 70% of free cash flow to shareholders in 2025, representing growth of more than 30% in shareholder distributions compared to the prior year.
The company also expects total capital expenditures of approximately $340 million for 2025, supporting its ongoing growth initiatives and operational improvements.
Human Capital and Global Presence
TechnipFMC has a global workforce of approximately 21,700 employees as of the end of 2024. The company focuses on talent development, training, and maintaining a diverse and inclusive workforce. This global footprint allows TechnipFMC to serve clients across various regions, including Latin America, Europe/Central Asia, North America, Africa, Asia Pacific, and the Middle East.
Industry Trends
The oil and gas equipment and services industry has seen a gradual recovery in activity levels, driven by increased capital spending by exploration and production companies. Industry analysts forecast a compound annual growth rate (CAGR) of 4-6% for the global subsea equipment market over the next 5 years. TechnipFMC's strong market position and innovative solutions position it well to capitalize on this growth trend.
Conclusion
TechnipFMC's unique integration capabilities, coupled with its relentless pursuit of innovation, have established the company as a leader in the energy industry. The company's iEPCI model and Subsea 2.0 configurable product platform have driven significant improvements in project economics, making it the partner of choice for many of the world's leading oil and gas operators.
As the energy landscape continues to evolve, TechnipFMC is well-positioned to capitalize on the growing demand for more sustainable solutions, with its investments in greenhouse gas removal, offshore floating renewables, and hydrogen technologies. With a strong financial foundation, a diversified portfolio of offerings, and a talented team of professionals, TechnipFMC is poised to deliver long-term value for its shareholders while navigating the challenges and opportunities in the evolving energy sector.