Technipfmc Plc · NYSE:FTI
Technipfmc — Investor Day (2017)
18 slides from Technipfmc's investor day presentation, 2017
Slide 1: 2017 Analyst Day: Real change creates value
2017 Analyst Day Real change creates value Maryann Mannen, EVP and Chief Financial Officer
Slide 2: Disclaimer
Disclaimer Forward-looking statements We would like to caution you with respect to any “forward-looking statements” made in this commentary as defined in Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amen
Slide 3: Financial strategy – delivering on plan
Financial strategy – delivering on plan Solid operational Investment grade Merger synergies EBITDA performance balance sheet meaningful contribution despite revenue decline $3.3b net cash to sustained ROIC improvement Quarterly dividend Share repurchase Initial 2018 outlook initiated at ~2% yield $5
Slide 4: Financial framework – our approach to value creation
Financial framework – our approach to value creation Differentiated Solid Strong Disciplined Business Strategy Operating Results Balance Sheet Capital Allocation 1 Growth Cash Flow Cash Generation 2 Unique Integrated Dividend Offering Effective Tax Investment Structure Grade 3 Share Buyback Analyst
Slide 5: Solid operational performance – strong cash flow generation
Solid operational performance – strong cash flow generation Cash flow from operations1 Working capital2 changes, ex. cash (excluding changes in operating assets and liabilities) 2016 Sep-17 $b 1.9 $b 2.0 2016 9M17 1.5 -3.3 1.0 Capital expenditures3 $b 0.42 0.5 0.17 0.0 2007 2008 2009 2010 2011 2012
Slide 6: Optimizing the tax structure
Optimizing the tax structure Targeting 300 bps reduction in effective tax rate Tax structure to yield significant benefits over time • Generate incremental cash flow as a result of lower effective tax rate • Repatriate cash at more favorable cost • Fund shareholder distributions in a more tax-effici
Slide 7: Strong balance sheet – stability through business cycle
Strong balance sheet – stability through business cycle As of $m, unaudited Sep 30, 2017 Yamal LNG joint venture Cash and cash equivalents $ 6,896.1 • Fully consolidated on balance sheet – both assets and liabilities Total Debt: • Cash and cash equivalents include Short-term debt and current portion
Slide 8: Capital structure – reflects needs of our business mix
Capital structure – reflects needs of our business mix Total Capital1 Leverage2 = Total Debt / Total Capital 34% 20% - 25% Goodwill 21% Goodwill 2007-2016 Sep-17 2007-2016 Sep-17 Target Average Average • Post merger leverage of ~21% driven by step-up in goodwill due to merger accounting • Intent to
Slide 9: Shareholder returns – commitment to return capital
Shareholder returns – commitment to return capital Total Shareholder Yield1 • Committed to return capital through 4.8% dividends and share buybacks 4.3% 4.0% 1.6% Share • Quarterly cash dividend $0.13/share; Buyback 3.2% 3.1% 2.4% Yield sustainable through cycle, potential to grow 1.0% 2.0% 1.7% • $
Slide 10: Merger synergies – target increased to $450m
Merger synergies – target increased to $450m Delivering ahead of plan Date Allocation by reporting segment $450m 2019 target exit run rate $400m 2018 target exit run rate 50% $200m 2017 target exit run rate 25% Executed Nov YTD Achieved 0% Run Rate Cost Synergies Analyst Day 10
Slide 11: Merger benefits – to deliver sustained ROIC improvement
Merger benefits – to deliver sustained ROIC improvement ROIC impact • Multiple value drivers to expand Cost return on invested capital synergies 170 to 180 bps • Executing towards >300 bps Tax improvement by end of 2019 synergies 50 to 55 bps • Market environment a near-term Capital headwind allocat
Slide 12: Management compensation – aligned with shareholder goals
Management compensation – aligned with shareholder goals Both short-term and long-term elements of management compensation provide alignment Annual Based on working capital days, EBITDA, synergy targets Incentive Annual Incentive 15% All Other 25% Based on achievement of challenging performance Long
Slide 13: Capital allocation – focused on increasing shareholder return
Capital allocation – focused on increasing shareholder return Strong Disciplined Balance Sheet Capital Allocation • Investment grade balance sheet – flexibility to support growth and drive value 1 Growth • Invest in attractive organic growth Cash opportunities, value creating acquisitions 2 Dividend
Slide 14: TechnipFMC – real change creates value
TechnipFMC – real change creates value 2018e Adjusted EBITDA1 Mix • Industry leader with unique, differentiated business model • New commercial model penetration • EBITDA mix weighted to higher multiple / margin businesses Onshore/ • Synergy target increased to $450m run rate Offshore 34% • Balance
Slide 15: Thank you
» TechnipFMC Thank you
Slide 16: Appendix
Appendix 16
Slide 17: 2017 Guidance
2017 Guidance *Items updated October 25, 2017 Subsea Onshore/Offshore* Surface Technologies* Revenue at least $6.1b Revenue at least $7.7b Revenue at least $1.3b EBITDA margin1 at least 17% (excluding EBITDA margin1 at least 9.5% EBITDA margin1 at least 16.5% amortization related impact
Slide 18: 2018 Preliminary segment guidance
2018 Preliminary segment guidance Issued as of October 25, 2017 Subsea Onshore/Offshore Surface Technologies Revenue in a range of $5.0-5.3b Revenue in a range of $5.3-5.7b Revenue in a range of $1.5-1.6b EBITDA margin1 at least 14% EBITDA margin1 at least 9.5% EBITDA margin1 at least 17