Financial Overview. Olivier Dubois. Investor Presentation. President and CFO. Paris, October 17, New York, October 19, 2007

Transcription

1 Financial Overview Olivier Dubois President and CFO Investor Presentation Paris, October 17, New York, October 19, 2007

2 Current situation 2

3 Technip financial statements FULL YEAR FIRST SEMESTER in millions Change Change Revenue Subsea Onshore/Offshore 5,376 1,798 3,578 6,927 2,209 4,718 29% 23% 32% 3, ,183 3,619 1,182 2,437 14% 21% 12% Operating Income* Margin Ratio % % 44% % % 111% Subsea Margin Ratio % % 80% % % 105% Onshore/Offshore Margin Ratio % % 17% % % 139% Corporate (9) (22) (2) (10) Net Income Margin Ratio % % 114% % % 92% Profitability improved since 2006 but still behind best-in-class * Recurring activities 3

4 Project revenue & profit recognition NORTH SEA SUBSEA PROJECT LARGE EPC LSTK in millions in millions Revenue Gross Margin 1, Revenue Gross Margin Costs 400 Costs M1 M3 M5 M7 M9 M12 0 M1 M12 M24 M36 M42 PM & Eng. Procurement Installation PM & Engineering Procurement Construction Progressive margin recognition policy 4

5 Balance sheet as of June 30, 2007 in millions Permanent Resources Shareholders Equity 2,237 71% Bond Loan % Provision and Other Liabilities 265 8% TOTAL 3, % Total Non-Current Assets 3,352 Net Working Capital (200) Positive cash situation does not result from excess of permanent resources 5

6 Cash & cash equivalents as of June 30, 2007 Total: 2,352 M Down payments 10% Others including suppliers & subcontractors 28% 62% Customer milestone payments Cash situation results mainly from project payment conditions Customer milestone payments averaging 12% of backlog over the past 18 months 6

7 Down payments contribution to cash situation % 350 Down Payments* (M ) % 8% 10% Down Payments (% of total cash) Dec Dec Dec June 2007 % of backlog 2.0% 3.1% 1.9% 2.5% On average, down payments account for only 10% of total cash and 2.5% of backlog * Estimates based on outstanding bank guarantees 7

8 Return on Capital Employed SUBSEA ONSHORE/OFFSHORE** GROUP in millions H H H Non Current Assets 2,709 2,701 2, ,377 3,399 3,352 Working Capital and others (528) (601) (793) (1,769) (2,134) (2,024) (2,297) (2,735) (2,817) Capital Employed* 2,181 2,100 1,862 (1,101) (1,436) (1,327) 1, EBIT After Tax + share of income of associates (equity method) Net Return on Capital Employed (annual/annualized) 4% 7% 14% na na na 15% 38% 77% Subsea and Onshore/Offshore constitute two complementary business models * Based on the consolidated balance sheets without restatement of the goodwill already amortized. ** Corporate segment included in Onshore/Offshore 8

9 Financial targets

10 Subsea operating targets in millions 3,500 3,250 M Targeted Revenue 3,000 2,500 2,209 M Revenue from New Assets Revenue from Existing Assets 2,000 1, % (H1) 15.0% 15.5% 16.0% Operating Margin Ratio* 1, % 9.7% Revenue from June 30, 2007 Backlog f 2008e 2009e 2010e 2011e 2012e New assets will drive future growth of Subsea * Recurring activities 10

11 Onshore/Offshore operating targets in millions 6,000 5,000 4,718 M 5,500 M De-Risking Effect Targeted Revenue 4, % Operating Margin Ratio* 3, % 2,000 1, % 3.0% 3.5% (H1) 3.8% Revenue from June 30, 2007 Backlog** f 2008e 2009e 2010e 2011e 2012e Future revenue growth driven by de-risking initiatives Progressive margin improvement due to long backlog run-out * Recurring activities ** Including Khursanyah 11

12 Group financial targets 2010 and trends 2012 in millions 2006 H (e) CAGR (e) Revenue 6,927 3,619 8,500 5% 10,000 Operating Income* Margin Ratio % % 700 8% 20% % Net Income Margin Ratio % % 480 6% 24% EPS ( ) % Operating income from recurring activities growing four times faster than revenue * Recurring activities 12

13 Funds from operations in millions (e) Funds from Operations Subsea Onshore / Offshore Corporate (15) 1,720 1, (15) Changes in Working Capital Cash Flow from Operations 946 1,720 Strong cash generation from operations 13

14 Technip investment program in millions Other Development Capex 150 Fleet Development Capex Maintenance Capex

15 Free Cash Flow and dividends in millions (e) Cash Flow from Operations Capex Free Cash Flow before Dividends Ordinary Dividends* Other Return to Shareholders Free Cash Flow after Dividends Net Cash (Year end) 946 (157) 789 (142) (368) 279 1,540 1,720 (750) 970 (500) 470 1,885 Excluding acquisitions, net cash should remain well above 1 billion * Including 51 M downpayment on 2006 dividends 15

16 2010 financial targets: conclusion More balanced portfolio with higher Subsea content Double-digit revenue growth for Subsea Changed risk profile for Onshore and Offshore Major improvement of operating profitability 8% for the Group Sustained 16% margin for Subsea Restored margin for Onshore and Offshore at 6% Subsea ROCE above 15% Shareholders return through dividends and growth 16

17 T Safe Harbor his presentation contains both historical and forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, or statements of future expectations; within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended. These forward-looking statements are not based on historical facts, but rather reflect our current expectations concerning future results and events and generally may be identified by the use of forward-looking words such as believe, aim, expect, anticipate, intend, foresee, likely, should, planned, may, estimates, potential or other similar words. Similarly, statements that describe our objectives, plans or goals are or may be forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by these forward-looking statements. Risks that could cause actual results to differ materially from the results anticipated in the forward-looking statements include, among other things: our ability to successfully continue to originate and execute large services contracts, and construction and project risks generally; the level of production-related capital expenditure in the oil and gas industry as well as other industries; currency fluctuations; interest rate fluctuations; raw material (especially steel) as well as maritime freight price fluctuations; the timing of development of energy resources; armed conflict or political instability in the Arabian-Persian Gulf, Africa or other regions; the strength of competition; control of costs and expenses; the reduced availability of government-sponsored export financing; losses in one or more of our large contracts; U.S. legislation relating to investments in Iran or elsewhere where we seek to do business; changes in tax legislation, rules, regulation or enforcement; intensified price pressure by our competitors; severe weather conditions; our ability to successfully keep pace with technology changes; our ability to attract and retain qualified personnel; the evolution, interpretation and uniform application and enforcement of International Financial Reporting Standards (IFRS), according to which we prepare our financial statements as of January 1, 2006; political and social stability in developing countries; competition; supply chain bottlenecks; the ability of our subcontractors to attract skilled labor; the fact that our operations may cause the discharge of hazardous substances, leading to significant environmental remediation costs; our ability to manage and mitigate logistical challenges due to underdeveloped infrastructure in some countries where are performing projects; and our ability to remain compliant with the obligations imposed by Sarbanes-Oxley. Some of these risk factors are set forth and discussed in more detail in our Annual Report on Form 20-F as filed with the SEC on June 20, 2007, and as updated from time to time in our SEC filings. Should one of these known or unknown risks materialize, or should our underlying assumptions prove incorrect, our future results could be adversely affected, causing these results to differ materially from those expressed in our forward-looking statements. These factors are not necessarily all of the important factors that could cause our actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could have material adverse effects on our future results. The forward-looking statements included in this release are made only as of the date of this release. We cannot assure you that projected results or events will be achieved. We do not intend, and do not assume any obligation to update any industry information or forward looking information set forth in this release to reflect subsequent events or circumstances. Except as otherwise indicated, the financial information contained in this document has been prepared in accordance with IFRS, and certain elements would differ materially upon reconciliation to U.S. GAAP. **** This presentation does not constitute an offer or invitation to purchase any securities of Technip in the United States or any other jurisdiction. Securities may not be offered or sold in the United States absent registration or an exemption from registration. The information contained in this presentation may not be relied upon in deciding whether or not to acquire Technip securities. This presentation is being furnished to you solely for your information, and it may not be reproduced, redistributed or published, directly or indirectly, in whole or in part, to any other person. Non-compliance with these restrictions may result in the violation of legal restrictions of the United States or of other jurisdictions. 17

18 For more information, please contact: INVESTOR RELATIONS Xavier d Ouince Tel. +33 (0) xdouince@technip.com 18

19 Trading Technip ISIN FR