Technip Energies N : First Half 2022 Financial Results

Technip Energies First Half 2022 Financial Results

Juillet 28, 2022

Robust H1 revenues; ongoing orderly exit of Arctic LNG 2 more than offset by 18% Y/Y growth in remainder of portfolio.

Adjusted Recurring EBIT margin of 6.3%; Adjusted net profit of €132m, up 31% Y/Y.

Raising 2022 Adj. Rec. EBIT margin outlook, excl. Arctic LNG 2, to at least 6.8% to reflect strong YTD performance. H1 Energy transition orders exceed €500m (excl. LNG) and expected to reach around €1 billion by year-end.

PARIS--(BUSINESSWIRE)--Jul. 28, 2022-- Regulatory News:

Technip Energies (Paris:TE) (the "Company"), a leading Engineering & Technology company for the energy transition, today announces its unaudited financial results for the first half 2022.

Arnaud Pieton, Chief Executive Officer of Technip Energies, commented:

"Our teams' resolute focus on project execution as well as effective customer and supply chain engagement, in the face of persistent external challenges, continues to yield strong results. This is best evidenced in the quarter by Coral FLNG achieving first gas in Mozambique, a delivery milestone that was in line with the original, pre-pandemic schedule. First half revenue growth was consistent with our full year financial framework and we expect our activity outside of Russia to demonstrate further growth in the second half. Strong execution of our quality backlog is driving profitability above our original guidance, leading to an increase in our full year margin outlook."

"Regarding Arctic LNG 2 in Russia, in line with the applicable sanctions, we continue to implement an orderly exit from the project. We have suspended the vast majority of the work, and the exit process will likely take several more months due to the contract terms and the inherent size of the project. As previously stated, we do not expect any negative net financial exposure due to our contractual rights and the balance sheet position of the project."

"In the second quarter, we were awarded key carbon capture projects, including the CCS facilities at Hafslund Oslo Celsio, the world's largest full-scalewaste-to-energy plant with CO2 capture. These awards demonstrate our leadership and the strength of our core expertise and technology

approach in a market with considerable medium-to-long-term growth prospects."

"The momentum in carbon capture also reflects a maturing of our broader energy transition pipeline. This conversion trend is confirmed by recent awards in the renewable fuels and clean hydrogen domains, which have generated more than €500 million of order intake in the first half. We are confident that award momentum will continue and we expect to reach around €1 billion of energy transition orders, excluding LNG, by the end of 2022. Furthermore, many of these awards will add to our backlog in Technology, Products & Services, thereby bolstering the medium-term growth outlook for our highest margin segment."

"Energy market fundamentals, notably for natural gas, LNG, and renewables remain robust, supporting our strategic offering and medium-term order outlook. Despite ongoing recessionary fears, a significant increase in energy infrastructure investment will be required to satisfy demand and meet energy independence goals. The transition to a low carbon energy system is requiring innovation, technology, and technical expertise, opening a new golden age for engineering, and Technip Energies will continue to play a leading role."

Key financials - Adjusted IFRS

(In € millions, except EPS)	H1 2022	H1 2021
Revenue(1)	3,267.0	3,243.2
Recurring EBIT(1)	204.4	204.5
Recurring EBIT Margin %	6.3%	6.3%
Net profit	131.5	100.3
Diluted earnings per share(2)	€0.74	€0.55
Order Intake	1,608.5	7,863.4
Backlog	13,439.8	17,473.4

Financial information is presented under Adjusted IFRS (see Appendix 8.0 for complete definition). Reconciliation of IFRS to non-IFRS financial measures are provided in Appendix 1.0, 2.0, 3.0.

1. H1 2022 Adjusted Revenue and Recurring EBIT included €816.6 million and €27.0 million respectively from Arctic LNG 2.
2. H1 2022 and H1 2021 diluted earnings per share have been calculated using the weighted average number of outstanding shares of 178,514,257 and 181,908,563 respectively.

Key financials - IFRS
(In € millions, except EPS)	H1 2022	H1 2021
Revenue	3,216.7	3,118.1

Net profit	119.3	112.4
Diluted earnings per share(1)	€0.67	€0.62

1. H1 2022 and H1 2021 diluted earnings per share have been calculated using the weighted average number of outstanding shares of 178,514,257 and 181,908,563 respectively.

FY 2022 Financial framework - Adjusted IFRS

Revenue	€5.0 - 5.5 billion
	(excludes contribution from Arctic LNG 2)
Recurring EBIT margin	At least 6.8% (previously: at least 6.5%)
	(excludes contribution from Arctic LNG 2)
Effective tax rate	28 - 32%

Financial information is presented under Adjusted IFRS (see Appendix 8.0 for complete definition). Reconciliation of IFRS to non-IFRS financial measures are provided in Appendix 1.0, 2.0, 3.0.

Conference call information

Technip Energies will host its H1 2022 results conference call and webcast on Thursday, July 28, 2022 at 13:00 CET. Dial-in details:

France: [phone]

United Kingdom: [phone]

United States: [phone]

Conference Code: 990801

The event will be webcast simultaneously and can be accessed at: https://edge.media-server.com/mmc/p/av5eu4kx

About Technip Energies

Technip Energies is a leading Engineering & Technology company for the energy transition, with leadership positions in LNG, hydrogen and ethylene as well as growing market positions in blue and green hydrogen, sustainable chemistry and CO2 management. The Company benefits from its robust project delivery model supported by an extensive technology, products and services offering.

Operating in 34 countries, our 15,000 people are fully committed to bringing our clients' innovative projects to life, breaking boundaries to accelerate the energy transition for a better tomorrow.

Technip Energies is listed on Euronext Paris with American depositary receipts ("ADRs") traded over-the-counter inthe United States.

Operational and financial review

Order Intake, Backlog and Backlog Scheduling

Adjusted order intake for H1 2022 of €1,608.5 million, equivalent to a book-to-bill of 0.5. Orders in the second quarter included a large EPC contract by Hafslund Oslo Celsio for a world-first carbon capture and storage project at a waste-to-energy plant in Norway, a contract for carbon capture & storage expansion at ExxonMobil's LaBarge facility in the USA, a pre-FID contract for project design and delivery for Texas LNG in the USA as well as other studies, services contracts and smaller projects. The first quarter included a significant EPCC contract by PETRONAS Chemicals Fertilizer Kedah for a new melamine plant with minimized CO2 footprint, and a FEED for Equinor' floating offshore wind Firefly project in South Korea. Book-to-bill on a

trailing 12 month basis is 0.5.

During H1 2022, approximately €2.0 billion relating to Arctic LNG 2 was removed from total company adjusted backlog, which results from sanctioned work that has been suspended, and is in line with our ongoing orderly exit discussions. This was a significant factor in adjusted backlog decreasing by 23% year-over-year to €13,439.8 million.

(In € millions)	H1 2022	H1 2021
Adjusted Order Intake	1,608.5	7,863.4
Project Delivery	1,033.9	7,196.2
Technology, Products & Services	574.6	667.3
Adjusted Backlog	13,439.8	17,473.4
Project Delivery	12,275.5	16,273.1
Technology, Products & Services	1,164.2	1,200.3

Reconciliation of IFRS to non-IFRS financial measures are provided in Appendix 6.0 and 7.0. Adjusted Backlog at June 30, 2022, benefited from a foreign exchange impact of €600.0 million.

Adjusted Backlog at June 30, 2022 reflects the removal of €1,962.4 million relating to Arctic LNG 2. €846.6 million associated to Arctic LNG 2 remained in backlog at June 30, 2022.

Adjusted backlog excluding the proportion related to Arctic LNG 2 amounted to €12,593.2 million as of June 30, 2022. The table below provides estimated backlog scheduling as of June 30, 2022.

(In € millions)	2022 (6 M) FY 2023 FY 2024+
Adjusted Backlog excluding Arctic LNG 2	2,818.1 3,923.4 5,851.7

Company Financial Performance
Adjusted Statement of Income
(In € millions, except %)	H1 2022 H1 2021 % Change
Adjusted revenue	3,267.0	3,243.2	1%
Adjusted EBITDA	255.3	260.6	(2%)
Adjusted recurring EBIT	204.4	204.5	- %
Non-recurring items	(1.9)	(30.6)	(94%)
EBIT	202.5	173.9	16%
Financial income (expense), net	(9.7)	(12.0)	(19%)
Profit (loss) before income tax	192.8	161.9	19%
Income tax (expense)/profit	(59.2)	(54.6)	8%
Net profit (loss)	133.6	107.3	25%
Net profit (loss) attributable to non-controlling interests	(2.1)	(7.0)	(70%)
Net profit (loss) attributable to Technip Energies Group	131.5	100.3	31%

Business highlights
Project Delivery - Adjusted IFRS
(In € millions, except % and bps)	H1 2022	H1 2021	% Change
Revenue	2,623.9	2,622.8	- %
Recurring EBIT	167.2	167.4	- %
Recurring EBIT Margin %	6.4%	6.4%	- %

Financial information is presented under Adjusted IFRS (see Appendix 8.0 for complete definition).

H1 2022 Adjusted Revenue was stable year-over-year at €2.6 billion. Revenues included significantly lower activity on Arctic LNG 2, which contributed €816.6 million of revenue compared to €1,168.0 million in H1 2021. Revenues excluding Arctic LNG 2 increased year-over-year by 24.2% due to the ramp-up of recently awarded LNG and downstream projects.

H1 2022 Adjusted Recurring EBIT was stable at €167.2 million, despite a significantly lower contribution from Arctic LNG 2 of €27.0 million, compared to €40.9 million in H1 2021. Excluding the contribution from Arctic LNG 2, Adjusted Recurring EBIT was €140.2 million, representing year-over-year growth of 10.8%. H1 2022 Adjusted Recurring EBIT margin was in line with the prior year at 6.4% due to solid execution, including a strong contribution from downstream and LNG projects in the latter stages of completion. This was partially offset by earlier stage LNG projects as well as the dilutive impact of Arctic LNG 2. Adjusted Recurring EBIT margin excluding the contribution from Arctic LNG 2 was 7.8%.

Q2 2022 Key operational milestones

(Please refer to Q1 2022 press release for first quarter milestones)

Qatar Energy North Field Expansion (Qatar)

Main civil works started in all areas.

Eni Coral Sul FLNG (Mozambique)

Successful introduction of gas into the FLNG vessel; on track to deliver first LNG cargo in H2 2022.

Energean Karish Gas Development (Israel)

FPSO arrived on site, 90km offshore Israel.

MIDOR Refinery Expansion Project (Egypt)

Safe and on schedule achievement of ready for start-up of naphtha block after execution of major shutdown works.

Bapco Refinery expansion (Bahrain)

33 million manhours without LTI (lost time injury).

Assiut hydrocracking complex (Egypt)

Construction started and all main process unit areas have been handed over to our teams and partners.

Long Son Olefins plant (Vietnam)

Pre-commissioning and commissioning activities in progress overlapping construction works completion phase.

Q2 2022 Key commercial highlights

(Please refer to Q1 2022 press release for first quarter highlights)

Texas LNG (USA)

Awarded a Pre-FID (Final Investment Decision) Engineering contract. Through a joint venture with Samsung Engineering, Technip Energies has been appointed lead project contractor charged with project design and delivery. The proposed 4.0 Mtpa (million tons per annum) LNG export facility site is strategically located on the Port of Brownsville's deep-water ship channel in close proximity to the Gulf of Mexico. The Texas LNG project will utilize Technip Energies' SnapLNG™ solution, which combines a compact modular design concept for mid-scale trains with standardized components and technology. Developed in collaboration with Air Products, the system benefits from speed to market, with greater certainty around both costs and schedule, and best available process technology, refrigerant compression and digitalization. As a result, this solution offers lower emissions and is particularly suited for low-to-zero carbon footprint LNG and phased developments.

Hafslund Oslo Celsio carbon capture and storage project (Norway)

Awarded a large* Engineering, Procurement, Construction (EPC) contract by Hafslund Oslo Celsio, the largest supplier of district heating in Norway, for a world-first carbon capture and storage (CCS) project at the waste to energy plant located in Oslo, Norway. The project will be the first full-scalewaste-to-energy plant in the world with CO2 capture. 400,000 tons per year of CO2 will be captured, which is the equivalent of the emissions from around 200,000 cars and will reduce Oslo's emissions by 17%. As part of the Longship project, the CO2 will then be liquified and exported to Northern Lights which is the first cross-border,open-source CO2 transport and storage infrastructure network. The Carbon Capture plant will use the Shell CANSOLV® CO 2 Capture System, a state-of-the-art amine based technology for the capture of CO2 from the flue gas.

* Note: A "large" award forTechnip Energies is a contract award representing between €250 million and €500 million of revenue.

Technology, Products & Services (TPS) - Adjusted IFRS

(In € millions, except % and bps)	H1 2022	H1 2021	Change
Revenue	643.0	620.5	4%
Recurring EBIT	60.0	54.7	10%
Recurring EBIT Margin %	9.3%	8.8%	50 bps

Financial information is presented under Adjusted IFRS (see Appendix 8.0 for complete definition).

H1 2022 Adjusted Revenue increased year-over-year by 4% to €643.0 million, driven by growth in demand for Process Technology activity including licensing and proprietary equipment (notably for ethylene, and biochemicals, including EPICEROL® ) and sustained engineering services and Project Management and Consultancy activity.

H1 2022 Adjusted Recurring EBIT increased year-over-yearby 10% to €60.0 million. H1 2022 Adjusted Recurring EBIT margin increased year-over-yearby 50 basis points to 9.3%, benefiting from Process Technology licensing and proprietary equipment activity (notably in Sustainable Chemistry) and higher activity levels for advisory services performed by Genesis. This growth was achieved despite higher selling and tendering activity in growth markets.

Q2 2022 Key operational milestones

(Please refer to Q1 2022 press release for first quarter milestones)

NESTE Renewable Fuels Expansion (Singapore)

Pre-commissioning activities ongoing while majority of piping installation has been completed. Electrical and instrumentation works ongoing.

Deepak Phenolics - Iso-propyl Alcohol (IPA) plant (India)

Our Badger technology is used for Deepak Phenolics' second IPA plant in Dahej, India.

Northern Lights CO2 Transport and Storage Project (Norway)

Loading Systems achieves successful Factory Acceptance Tests on the world's first 3 loading arms for the Liquefied CO 2 storage project.

OMV EARTH Revamp (Austria)

Installation of our EARTH® technology in a large-scale hydrogen plant at site at Schwechat.

LFB Arras (France)

First phase of high-profile plasma fractionation pharmaceutical project is nearing completion, with the second phase underway. Combined, both phases represent 2.5 million direct manhours on site.

Q2 2022 Key commercial highlights

(Please refer to Q1 2022 press release for first quarter highlights)

OCIKUMHO 100 KTA EPICEROL® plant (Malaysia)

License agreement for a 100 kilotons per annum (kta) EPICEROL® plant for the production of epichlorohydrin (ECH) from glycerine. Using a bio-based raw material, OCIKUMHO's unit will be integrated into a new processing complex using electricity made by hydro power, in Sarawak, Malaysia to serve the growing ECH market. OCIKUMHO will be the first to manufacture epichlorohydrin in Malaysia.

IVERSON efuels green ammonia production project (Norway)

Selected to perform the engineering design of a complete green ammonia plant at Sauda, Rogaland, Norway. Phase 1 of the project includes a green ammonia plant including utilities, offsites and electrical substation connected to the existing power grid, and pipeline, ammonia storage and offloading system. The planned green ammonia production will be used as fuel for the maritime sector. The Iverson project will have an initial electrolysis capacity of 300 megawatts to produce 600 metric tons of green ammonia per day. IVERSON eFuels AS targets with a significant scale up production in the future. IVERSON eFuels AS is Special Purpose Vehicle between CIP, Hy2gen and Trafigura.

ExxonMobil LaBarge carbon capture & storage facility (USA)

In Consortium with Saulsbury Industries, Technip Energies has been awarded a contract for the Engineering, Procurement and Construction (EPC) to expand the carbon capture and storage (CCS) at ExxonMobil's LaBarge, Wyoming facility. The LaBarge plant has already captured more CO2 than any other facility in the world. The plant has capacity to capture more than 6 million metric tons per year, and this expansion project will enable the capture of more than one million additional metric tons of CO2 per year. The expansion will consist of a modification of the existing gas treatment facility to increase the carbon capture capacity and the installation of pipeline to transport the CO2 to the reservoir where it will be stored. Technip Energies will be responsible for the engineering and procurement services, while Saulsbury Industries will perform construction and the pipeline installation.

Viridian Lithium - lithium refining and conversion project (France)

Bankable Feasibility Study (BFS) contract for construction of the first lithium refining and conversion plant in Europe. Located in Lauterbourg, France, the plant will produce up to 100,000 tons of Battery Grade lithium chemicals per year - which is the equivalent capacity to power two million electric vehicles - to enable a secure and sustainable battery supply chain for the transition to electric mobility. The contract consists of a BFS and preferential rights on the construction of the plant and its three foreseen extensions.

Strategic collaboration with Equinor to accelerate floating offshore wind development

The two companies aim to develop floating wind steel SEMI substructures that accelerates technology development for floating offshore wind, ensures cost reductions and develops local value opportunities. The collaboration builds on the two companies' joint ambition to drive industrialization of floating offshore wind. By teaming up at an early design phase of a floating wind farm project, the two parties seek to unlock value from integration and maximum use of fabrication capacities.

Commercial launch of GO.H₂ by T.EN™ - a full suite of flexible solutions for offshore green hydrogen production

This suite of solutions - based on renewable power sources such as wind and solar - is flexible with building blocks tailored to meet clients' needs depending on substructures, hydrogen products and derivatives produced, functionality and locations. The offshore facility can be a fixed structure or a floater. The green hydrogen is produced using a sea water desalination unit, followed by electrolysis and exported to shore by a transport pipeline or offloaded on a carrier vessel. For harsher environments, the substructure can be a spar or a semi-submersible. For high capacities and further from shore, the hydrogen is converted by adding an ammonia or a Liquid Organic Hydrogen Carrier (LOHC) unit and transferred to a floating storage and offloading vessel. By adding hydrogen storage and fuel cells, the facility ensures a stable and continuous power supply for electrified oil and gas facilities powered by wind turbines. For smaller capacities, the systems can be located on the floating offshore wind substructure or on the substation. Intermittency management is addressed from design phase through adequate system architecture and technology bricks, power and hydrogen storage and control strategies. In operations, an energy management system (EMS) enables online production optimization through predictive control models.