Technip Energies Stock

Good afternoon. This is the conference operator. Welcome, and thank you for joining the Technip Energies Half Year 2026 Financial Results and Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Phillip Lindsay, VP Head of Investor Relations. Please go ahead, sir.

Thank you, Eugenia. Hello, and welcome to Technip Energy's financial results for the first half of 2026.

On the call today, our CEO, Arnaud Pieton, will discuss our H1 performance and business highlights. This will be followed with a financial review by CFO, Bruno Vibert. Arnaud will then return to the outlook and conclusion before opening for questions.

Before we start, I would encourage you to take note of the forward-looking statements on Slide 3.

I'll now pass the call over to Arnaud.

Thank you, Phil, and welcome, everyone, to our first half results presentation, where I will begin with the key highlights.

Technip Energies' first half performance reflects a complex operating environment alongside clear evidence of our strong commercial positioning and longer-term outlook. Revenues were stable year-over-year at EUR 3.7 billion. However, EBITDA margins were impacted by operational challenges and higher costs mostly linked to the prolonged conflict in the Middle East, which I will cover in more detail shortly.

Ultimately, this led to recurring EBITDA being around 1/3 lower year-over-year. While this is clearly disappointing, we are actively managing the near-term situation by exercising our contractual rights towards cost recovery, maintaining discipline in execution and working towards an improved financial performance in the second half and further normalization in 2027.

Importantly, we continue to reinforce the fundamentals that support our longer-term growth with remarkable first half order intake of EUR 12.7 billion and a significantly expanded backlog to EUR 25 billion. In addition, we delivered enhanced capital returns to shareholders through the payment of our annual dividend and the completion of our EUR 150 million share buyback program.

Turning to our operations in the Middle East. We continue to prioritize safe execution, and I am pleased to report that all Technip Energies personnel are safe and well. I also want to recognize our teams and their families for their commitment and resilience through a difficult period.

Our projects remain fully mobilized with activity normalizing through the second quarter. We continue to work closely with customers to address logistical constraints with some improvement in the flow of required bulk materials and equipment by land and sea. However, logistical challenges persist today.

In parallel, commercial discussions are ongoing, and we are pursuing our contractual rights in relation to 7 disputed items. Therefore, reflecting the continuation of the conflict and its associated secondary impacts, we have taken a prudent assessment of the situation within our first half results.

While we expect cost recovery under strong contractual protections, the extent and timing of such recovery will depend on how the situation evolves and on ongoing commercial discussions. This has implications for our full year outlook and assuming no change to current operating conditions in the second half, we are reducing Project Delivery margin guidance. Bruno will address the guidance change in more detail shortly.

I would now like to turn to the strong commercial success that has taken our backlog to a new record high. On the commercial front, we achieved exceptional first half order intake of EUR 12.7 billion. This equates to a book-to-bill for the period of 3.4 with substantial year-over-year growth in Project Delivery. This drove group backlog up by more than 50% year-to-date to EUR 25 billion, which is equivalent to around 3x full year revenue, reinforcing our medium-term growth trajectory.

Given the scale of awards already secured, full year order intake is expected to be concentrated in the first half, notably in Project Delivery. Major second quarter awards include Commonwealth LNG, our first LNG project in the U.S., utilizing our SnapLNG modular solution as well as Coral Norte floating LNG in Mozambique, which demonstrates our leadership in floating liquefaction in deep waters and the value of purification.

Our diversification strategy is paying off, with around 75% of awards over the last 24 months originating outside of the Middle East. Overall, this brings greater balance and resilience to our backlog and provides Technip with excellent visibility through the end of the decade.

Before passing to Bruno, let me touch on how we are balancing value creation with shareholder returns. Since the creation of Technip Energies, we have been committed to rewarding shareholders through increased dividends, which have delivered compound annual growth of 22% with supplemental returns through share buyback programs.

For 2026, this will lead to total capital returns to shareholders of around EUR 300 million, equivalent to more than 50% of the free cash flow generated during 2025 and around 5% of our market cap. With our balance sheet in excellent shape and long-term growth story impact, we remain committed to delivering attractive returns to shareholders.

Turning to employee shareholding. We are very pleased with the successful conclusion of our ESOP 2026, our second global employee share ownership program since the creation of Technip Energies. The offering, which was 75% oversubscribed by close to 8,000 employees has led to a further material increase in employee ownership. 45% of our people are now shareholders in Technip Energies. And together, they own 3.5% of the stock, demonstrating their confidence in our strategy and long-term value creation.

I will now pass the call to Bruno to discuss our financials.

Thanks, Arnaud, and good afternoon, everyone. The first half showed 2 distinct dynamics. The Middle East situation affected reported profitability and required a prudent financial assessment, but the underlying strength of the business remains clear, strong order momentum, resilient cash conversion and a stronger balance sheet.

Let me take you through these key elements. Revenues were EUR 3.7 billion, marginally higher year-over-year, showcasing our ability to make progress despite headwinds related to the continuing conflict in the Middle East and foreign exchange movements. The conflict and its secondary effects have had material impacts on our Project Delivery segment, which I will address on the next slide.

As a result, group EBITDA was materially lower year-over-year at EUR 212 million. Despite the challenges, our free cash conversion, excluding working capital and provisions remained consistently high at 86%. Finally, we completed our EUR 150 million share buyback program by the end of the second quarter, and we successfully priced a EUR 500 million bond to be used for general corporate purposes. In summary, this was a challenging first half operationally. At the same time, our commercial momentum, cash performance and balance sheet strength continue to support confidence in the business.

Turning to Project Delivery. The financial effect of slower Middle East progress and associated disruption was a meaningful reduction in profitability despite broadly stable revenues. Segment revenue reached EUR 2.8 billion, up 1% year-over-year. Planned activity growth on LNG and decarbonization projects in the U.S. and Europe was largely offset by slower progress on Middle East projects, logistical challenges and foreign exchange movements, particularly the stronger euro against the U.S. dollar. At constant year-over-year exchange rates, revenues for the first half would have been about EUR 170 million higher.

Project Delivery profitability was lower due to the situation in the Middle East with 2 specific factors at play. First, certain disputed items, which we have provided for and where we are pursuing our contractual rights. And second, increased project costs for logistics, safety and business continuity with only partial recovery to date. As a result, adjusted recurring EBITDA for H1 declined by 45% year-over-year to EUR 118 million, and EBITDA margin was 4.3%, down 350 basis points compared to the last year.

I will address our expectations for full year and beyond with the guidance slide shortly. Importantly, while first half profitability was impacted by situational and largely transitory factors, our commercial performance was exceptional. PD backlog now stands at EUR 23.5 billion, the highest in the segment history, giving excellent visibility into future activity levels and supporting confidence in our medium-term trajectory.

Technology Products and Services, TPS, delivered a resilient performance with the margin quality we expect from this business. TPS revenues were 2% lower year-over-year. This reflected adverse foreign exchange and a lower contribution from ethylene furnaces, largely offset by strong activity in carbon capture products, the first revenue contribution from AM&C and solid volumes in consultancy, engineering services and studies. At constant exchange rates, revenues would have been flat year-over-year.

Recurring EBITDA margins were strong, rising to 15.4%, an improvement of 30 basis points year-over-year and fully offsetting the revenue decline to leave EBITDA in line with the prior year. Recurring EBITDA margin expansion was achieved despite the modest contraction in revenues, benefiting from delivery milestone on prop products, strong P&C volumes and the inclusion of AMC. TPS orders for the half totaled EUR 857 million, with material improvement in the second quarter related to the first and the prior year.

Secured work included an equipment package for ethylene project in the Middle East, complemented by a broad range of studies, services and PMC cutoffs. Looking ahead, we see positive award momentum for TPS. At period end, the TPS backlog was close to EUR 1.5 billion, in line with recent levels.

Let's now review other key financial metrics and starting with the income statement. Corporate costs totaled EUR 42 million, including the impact of ESOP 2026, our employee share ownership program. Excluding these non-cash items of EUR 16 million, the underlying run rate for corporate cost is trending in line with the low end of guidance provided with our full year results.

Following the acquisition of AM&C, we completed the purchase price allocation exercise or PPA. The related fair value adjustments are now presented as separate line items on the face of the income statement. The impact is purely technical and noncash, and therefore, is excluded from the recurring performance of the business.

Net financial income was EUR 41 million, improving sequentially versus the second half of 2025, reflecting higher gross cash and the evolution of global interest rates.

One area where the quality of business remains particularly evident is the balance sheet. Gross cash increased to its highest ever position of EUR 4.8 billion, some EUR 1 billion higher than the year-end position and significantly in excess of the net contract liability of EUR 4.1 billion. And T.EN's economic net cash position is more than EUR 900 million, ensuring flexibility to invest in value-accretive opportunities and deliver shareholder returns. This remains a significant point of differentiation for Technip Energies.

Let's now focus on our cash flow performance for the half year period. Free cash flow conversion, excluding working capital and provisions remained robust at 86%. Actual free cash flow was EUR 183 million, reflecting the lower EBITDA trend. Looking forward, we anticipate maintaining the free cash flow conversion within the 70% to 85% range.

The substantial first half working capital inflow primarily reflects the receipt of customer advances associated with major awards during the period. This continues to demonstrate our cash discipline and the early cash conversion characteristic of Project Delivery.

On the financing side, the EUR 363 million net increase in debt reflects the bond offering, offset by a reduction in short-term commercial paper. Other financing items relate to shareholder returns, including the dividend payment and the completion of the share buyback. We closed the period with EUR 4.8 billion in cash and cash equivalents.

Turning to guidance. Our revised outlook reflects the impact of the Middle East situation while preserving our confidence in the medium-term quality of the portfolio. Our first half results and full year guidance include a prudent assessment of the continuing conflict, its associated disruption and secondary cost impact.

As mentioned, this includes an assessment of certain disputed items that remain subject to ongoing resolution processes and for which T.EN is pursuing its contractual rights and incremental costs for logistics, safety and business continuity. We assume that current operating conditions persist throughout the remainder of the year. While strong contractual protection support recovery, the quantum and timing will depend on the evolving situation and ongoing commercial discussions.

Accordingly, we are lowering product delivery margin guidance to 5% plus while maintaining the revenue outlook. This implies some sequential improvement in profitability for the second half, which could benefit further from the evolution of commercial discussions and processes. It is worth noting that some customers have already signed off on cost recovery, but these revenues are booked at cost and are therefore dilutive to Project Delivery margins.

For TPS, we are raising margin guidance by 50 basis points, also on unchanged revenues. Other changes relate to the effective tax rate now expected at 30% to 32% due to an unfavorable earnings mix, including negative taxable results in lower tax jurisdiction for which deferred tax assets could not be fully recognized and a corporate cost of EUR 65 million to EUR 70 million reflecting as of 2026.

In summary, the first half reflects a situation of profitability impact, not a deterioration in the fundamentals of the business. Our revised guidance is prudent, while the quality of the portfolio supports our expectation of a meaningful recovery in Project Delivery margins from 2027.

I'll now turn the call back to Arnaud.

Thank you, Bruno. And turning now to the improving longer-term growth outlook for Technip Energies. The ongoing crisis in the Middle East and repeated disruption around the Strait of Hormuz are reinforcing the importance of energy sovereignty, supply diversification and alternative export routes in global energy capital investments. Ultimately, building resilience in the global energy system will require more energy from a wider range of sources. We are in an era of energy addition.

GCC countries are increasingly focused on reducing reliance on the Strait of Hormuz by developing structural alternative supply routes, including fast-tracking pipelines and expanding export hubs via the Red Sea and the Gulf of Oman. Outside of the Middle East, oil and gas economies are planning capacity expansions, while energy importers continue to pursue low carbon and circularity solutions alongside reliable access to all forms of energy.

Against this backdrop, T.EN is seeing increased front-end engagement and demand for fast-track projects alongside an improving opportunity pipeline in LNG, offshore, energy derivatives and sustainable fuels. This should and will support order intake from 2027 through to the end of the decade and reinforce our growth momentum into the 2030s.

We acknowledge the setback that we are experiencing in Project Delivery in 2026. But as we have demonstrated before and supported by the strength of our contracts, we are concentrated on cost recovery. Our fundamentals remain strong. We have a substantial high-quality backlog supporting our growth outlook. We have significant financial strength and a material net cash position to close to EUR 1 billion. And this gives us the flexibility to deploy capital effectively and continue driving superior long-term outcomes for shareholders.

And as we move forward, we will stay focused on execution, mature our growing portfolio of FEED studies and selectively pursue an expanding opportunity set across energy markets, including LNG.

Our priorities are clear: to generate best-in-class Project Delivery margins, to deliver structural growth in TPS and to achieve adjacent business model success, including Reju and our new SAF joint venture with Airbus, Safran and Tereos.

So to conclude, while our first half results reflect a more complex operating environment, our response is clear. We are focused on disciplined execution, cost recovery and protecting performance in the second half and beyond. The entire organization around me is aligned behind our strategic priorities, improving the quality of our earnings, growing recurring revenues and continuing to expand margins over time.

At the same time, Technip Energies is a strong company with a high-quality backlog, a replenishing opportunity pipeline and the financial flexibility to support growth and shareholder returns. We are confident in our ability to convert this strength into sustainable long-term value.

With that, let's open the call for questions.

[Operator Instructions] The first question is from Sebastian Erskine with Rothschild & Co.

Just a clarification on the 2Q financial performance and the cut to guidance. Can you just quantify how much of the step down in profitability in PD was driven by the accrual of provisions versus kind of separately the actual incremental logistics, safety and kind of continuity costs that you incurred?

And then linked to that, sort of how conservative is that provision accrual? And what are the time lines on expected kind of cash out associated with that? Or is there a scenario in which you just reverse it back through the P&L if it proves too conservative?

Bruno will take that, Sebastian.

So as I mentioned, as we mentioned, the real change really is about Middle East. The rest of the portfolio in Project Delivery is absolutely delivering. So it's really about Middle East impact. The scale of the earnings mix and downgrade for the full year, I think, provides quite a good indication of the size of the incremental costs that are being incurred as well as the provisions.

From an incremental cost perspective, I think you could estimate or approximate something around EUR 30 million, EUR 40 million a quarter. And then, of course, if you take the full year impact because here, we've assumed that the current situation would go throughout the end of the year. And of course, the rest would be associated to the supplemental provisions we've taken.

Is it a worst-worst case scenario? No. But as you say, and you know us, we've been prudent. Are there scenarios where we can kind of improve from this position? Yes. Is this in this year? Potentially. Could it be continued in terms of next year? Yes. So I think this is what we wanted. We wanted to acknowledge the disruption that would be up to the end of the year as our scenario today that we present. And from now on, of course, we work very actively on the ongoing negotiation discussion to try to solve that and provide upside.

Super. That's very helpful, Bruno. And just a quick follow-up on the recoverability. Obviously, very helpful you provided that context. But maybe you can venture and give us sort of a best case scenario, what percentage of the impact that you think you'll ultimately be able to recover based on the early discussions and the protections that you have in your contracts?

Yes, Sebastian. So I'm going to paraphrase Bruno. We have been through this guidance absolutely nonspeculative and prudent. So as Bruno indicated, we have clients who have signed on the cost coverage and recovery. And that is already baked, I would say, in the guidance we are providing for the full year.

What we have not done is recognize cost recovery, including where we know we have the contractual protection that will allow for cost recovery. But for as long as, I would say, the mechanism is not primed and started, and therefore, we have landed on the principle of this recovery with the clients and that we've proven that the cash is flowing in, we have not yet recognize that recoverability and that cost recovery. So that's what I mean by we've been nonspeculative and prudent.

When the flywheel has not started, then we have not baked on that recovery. As you can -- I mean, you know Technip Energies, you guys follow us and you've been following us for a long time now. We have the contractual protection. It's not our first crisis, if I may say, when we exited Russia, we took a hit, but we also told you that the fundamentals of the company would be protected, and they have been.

In this case, it's -- obviously, the situation is different, but we have the contractual protection -- but considering the progress of the discussions, which sometimes are about some very meaningful amounts and those discussions are taking place with customers who are maybe today a bit less predictable than they were in the past because of the consequences of the act of war and the conflict.

Our customers are, for some countries, struggling as well. So it's -- things are progressing a bit less fast than we would have loved, but it's progressing, and we are confident. But we've taken a nonspeculative approach and a prudent one. That being said, the majority of the cost is recoverable and should be recovered.

And I will -- and Sebastian, I will insist Bruno stated it. We are being extremely careful to make sure that the cost recovery or through the cost recovery, we don't appear as wanting to take advantage of a situation that is critical, including for our clients. So we ask them to cover our cost and that there's no supplemental margin on profit on top of that. So that's why it's somewhat dilutive to our performance.

The next question is from Richard Dawson with Berenberg.

Two, please. Has your experience to date with the Middle East conflict changed the way any of your future bids are being structured? So for example, are you tightening your contractual protections even further? Or are you reducing your risk appetite for those Middle Eastern projects at all?

And then secondly, I want to get your thoughts on what you mean by the current Middle East situation continuing into H2. I mean we've seen some further escalations recently in the area and the states are essentially shut. So what are your sort of underpinning expectations for H2?

Okay. So I'll start with answering your second question. So what do we mean by the situation persisting throughout the year? Well, you're right to mention that the Strait of Hormuz remains shut or mostly. But you should -- I mean, as you guys have noticed, we have managed to actually preserve the -- pretty much the top line, which means that we have found solution to bring equipment and material and bulk to our project sites to allow for the progress to happen.

During the call -- the Q1 call, I categorized the projects into 3 categories, those projects which are mostly well advanced like the NFE project in Qatar, which has all equipment on site to progress. The project early stage in engineering stage phase, and therefore, they are not affected at all because procurement has not started like NFW.

And you have the projects that are mid-stage, mid-life, if I may say, like NFS and Ruwais LNG to name 2 of them, one in Qatar, one in the UAE. Those are in need for a larger volume of parts and materials and equipment because we have tens of thousands of workers mobilized. And basically, we need to feed the working teams with enough equipment so that they can progress with the project and with the job.

So if I look at those projects that are actually in, I would say, mid-cycle of their life, we need to bring another 30, 35 vessels equivalent to the site, ideally through the Strait of Hormuz. But we know this is not an easy thing to achieve. Hence, why we have developed like others, alternative routes, and they are working full steam.

So what we mean by our assumption that the conditions remain the same? Well, we're assuming that we will be able to get a few ships through the Strait of Hormuz, but the vast majority would have to actually go through the alternative routes, which is land and trucking, which is less optimal because more expensive and it takes longer. But in Q2, we've had with the help and assistance of our clients, the opportunity to see 2, 3 vessels going through the Strait of Hormuz to carry critical equipment safely to the job site.

So we know it's possible. And we are, I would say, banking on the fact that we remain possible, but for a very small minority of vessels carrying equipment and goods. So that's what we mean. That means that inherently, there's always a bit of a risk because there is -- there are equipments which have no choice but to go through the Strait of Hormuz because they are too heavy, too large to go by road. And so sea freight is the only option.

We're hopeful because of the experience that we've built through the past quarter that we will have the solution and we'll be able to, in due course, cross the Strait with the assistance of our clients. Again, it's nothing we do alone, but always with the assistance of the country. But that's what we mean basically, a minority through the Strait of Hormuz and the majority through alternative routes, therefore, continuing to be exposed to the additional costs associated to the logistics. Bear in mind as well that the cost of the sea freight also has exploded since the start of the conflict.

In terms of the Middle East, the -- and the way we contract for future projects in the Middle East. Well, first of all, I would say that -- and I insisted on that in my opening remarks, the best, I would say, countermeasure to the situation is the diversification of geographies that we've embarked into over 2 years ago pretty much, which is paying off because, as I stated, about 75% of the new orders emanate from outside of the Middle East over the past 24 months.

Now this being said, we still value the business in the Middle East. There is no major change in the way we would contract except that maybe there will be shorter discussions around the -- sometimes you have debates around what is the probability of occurrence of the conflict in the region. Well, those debates are long gone. And therefore, the protections that we are seeking, which we have in the contracts such as NFE, NFS, NFW, we are well protected. Well, those protections will find their way into our contracts in, I would say, in an even easier manner.

The next question is from Kate O'Sullivan with Citi.

Firstly, could you provide some additional color on the physical damage you're seeing across your Middle Eastern projects? Specifically, you previously discussed the impact in Bahrain. Has there been any progress in assessing the extent of the damage? And do you now have greater visibility on the scope and timing of remediation?

And I think you've touched on it, but on commercial activity in the Middle East, just have you seen a change in pace of customer engagement and commercial discussions, perhaps how quickly would you expect that to rebound once we see some normalization?

So when it comes to the remediation work, yes, we have now a good assessment of what entails in Bahrain, but also in Qatar. Now we've not rushed into this remediation scope for several reasons. Well, in Bahrain, because it's still not totally safe to actually work and operate. So it's safer for the client and its own operations team to execute the work with our support, of course, on engineering and other things.

And when it comes to Qatar, where we've been part of the team assessing the situation. Then we are not part of the team for the coming phase for a very specific reason. We are already a lot going on in Qatar. We have not -- Technip Energies is not the company that built Train 4 and 6, which have been damaged. Therefore, we -- it was a bit less natural for us to engage beyond, I would say, the early phase where we assisted Qatar Energy with the assessment very naturally because we were on location.

But you can expect to see us probably compete in 2027 for, I would say, the bulk of the execution of the remediation, but that is a 2027 event and beyond. In the meantime, we felt that we had enough skin in the game in Qatar with NFE, NFS, NFW to not, I would say, enrich the pipeline there. But for 2027 and beyond, yes, we will be there and we will compete.

When it comes to the commercial activity in the Middle East, well, it is actually -- the pipeline is actually quite strong because as I indicated, there is a strong appetite by the countries in the Middle East to diversify their export routes and for anticipating away from that dependence on the Strait of Hormuz. So you have heard probably about the UAE and ADNOC never again initiative. And it is about lowering the dependency on the straight and building export terminals on the other side of the Strait of Hormuz, on the Oman side in Fujairah.

We are absolutely in the race for this project. It's competitive. So it's certainly not sole source. So I can't tell whether we'll be successful or not. But we have a few opportunities like that. And yes, they are fast track when compared to, I would say, a regular opportunity. They are not as fast track as, okay, well, here's an award in 2026, but 2026 will be for the FEED and the full award into 2027. But the ask for sure is to be able then to fast track the delivery. And I believe we are well positioned considering some of the modular options and all the infrastructure we are building in countries. So I believe we have strength to offer, but it's competitive. Let's see. But we are absolutely mobilized. Pace will be a differentiator.

The next question is from Henri Patricot with UBS.

A couple of questions first on 2026 outlook. So first, on the revenues, you mentioned that you've been able to preserve that revenue guidance for the year. I mean is there a scenario in which revenues would come in below that guidance now if, for instance, you don't get some of the shipments via Hormuz?

And then conversely, on the EBITDA margin, so you're talking about 5% plus. Can you give us a sense of what the upside could be if you made to get some of the discussions on this year? Could we get back to the previous range for the EBITDA margin for the year?

And then secondly, I just wanted to check on 2027. You mentioned that we can expect a meaningful recovery in '27. Would there be a recovery towards the more normal level of margins that we see above 8%? Or would that be too early most likely?

So the 2026 outlook could be, I would say, affected on the top line if things were worsening, if I may say. But if things are kept the way they are, then I believe we've proven and we have now enough experience to demonstrate that we have ways to adjust to the situation and bring the equipment -- the necessary equipment on site and the rest. So -- and again, all that when it is going through the straight with the assistance of our clients.

So we decided to assume that it will remain the same for the rest of the year, the remainder of the year, no improvement, but no worsening. So therefore, we have our ways and with the majority will have to go by truck and through the road, we will find a way to bring the critical shipments that have to go through the Strait of Hormuz, a solution will be found and this will happen. So I would say we are very confident in our ability to maintain the 2026 outlook for top line.

When it comes to the bottom line, yes, we are north of 5%. I think I will refrain from giving a scale for the potential improvement because I want to remain prudent and nonspeculative. So if we had, for example, signed the recovery mechanism with the clients with whom we are under discussion at the moment, I probably would be able to give you that upside. Those discussions are ongoing. I believe signatures will happen in the weeks to come or within the quarter then only will we move out of, I would say, what could be speculative today in something that would be more certain.

So again, we have the protection, and we have the -- all the building blocks in the contracts. That's why those discussions are actually taking place. Otherwise, they would not be taking place. Just I prefer that they land before I give you a number on the cost recovery for those.

When it comes to 2027, well, there again, it's a little bit too early to give a 2027 guidance. Now if things were to normalize, then our portfolio is and does remain absolutely compatible with the EUR 800 million EBITDA trajectory that we've provided for as a framework for 2028. Pre-war and pre-conflict, we stated that we were slightly ahead of schedule on achieving that. So the building blocks are there, but it's probably a little bit wise for the time being to exercise caution on our margin assumptions for 2027.

There will be a recovery for sure, way above 5% for sure. Where is it going to be? Let's see, let's apply a little bit of caution. We need to see how we are exiting from this war. If the conflict -- we're exiting out of the conflict on the 31st of December, then 2027 will have a particular morphotype. If we exit from the conflict in September of 2026, then there's -- 2027 will look like something also different with certainly an exit rate from the 2026 year that would be more favorable towards 2027.

But the -- what is important to retain nonetheless, is that our portfolio continues to be absolutely compatible with the margin trajectory. The backlog integrity is absolutely not compromised and therefore, is of high quality, and it is capable of delivering our trajectory.

The next question is from Alejandra Magana with JPMorgan.

So you earlier indicated that the incremental logistics costs were, I think you said EUR 30 million to EUR 40 million per quarter. Under what circumstances could those costs move materially higher from here? Is there a risk of any inflation to those numbers?

So no, I think we have baked into our 2026 guidance, what I would consider a realistic and therefore, conservative view on the logistics cost both in terms of the cost of shipping sea freight, but also the incremental cost of having to go through longer transits and combining sea and land transportation. So we don't expect any increments there.

Very clear. And then could you expand on the nature of the disputed items? In other words, to what extent do they reflect a broader change in customer behavior across the region versus just project-specific contractual circumstances?

Well, the -- we're not going to break down all the details of the disputes or the discussions that we are having with our customers. This is not how we our policy and not how we behave. We preserve the discussions for conversations directly with our clients. What I would say is that our clients are helping and -- but they are also facing difficult times. Most of them have extended force majeure because they are unable to export. Therefore, it's -- sometimes it's -- things are a bit less easy for them as well.

Therefore, they are a bit less predictable, a bit less consistent in a sense. There could be a bit more -- we could -- sometimes we can see some more defensive behaviors. But that's because of the overall situation. So it's somewhat isolated, but we have to report the fact that it does exist, and we are absolutely fighting it. And when I say fighting it, it's -- I mean it in a positive way. We are defending our rights. And I think we've proven in the past that we were able to defend our positions and our contractual rights. So I will leave it at that.

The next question is from Guilherme Levy with Morgan Stanley.

A clarification first on your cost recovery mechanisms. How is the conversation going in the sense that are you defining a cost recovery mechanism that is going to be applicable for 2026 only? Or once that's in place, that will be applicable for as long as we have issues on flows through the straight, meaning if the situation for some reason extends into 2027, 2028, will you need to have conversations all over again? Or once that's done, then it's valid over the life of the contract?

And then secondly, you mentioned that some of the clients have already signed off on cost recovery. Can you share some color on how representative of the total that is if it's 10%, 20%, 30% of your total contracts in which customers have already signed off, that would be great.

Thank you for the question. So on the cost recovery mechanism, I would say that without the shadow of a doubt, once we've established a mechanism and the principles are established, they will be applicable for 2026 and beyond for as long as the situation persists. So there will be a lot of consistency in the cost recovery mechanism and the action once the agreements are signed.

Regarding the percentage, right now, the -- interestingly, it's -- I don't want to talk in a percentage of projects that have already signed. It's several of them. But interestingly, it's almost more about countries. So projects in a country for a customer are pretty much already all done and the mechanisms are in place. And there are 2, 3 countries where the conversation is still ongoing. But again, conversations ongoing means that we are having conversations and that it will eventually be resolved in the weeks or months to come. So -- and then there will be there would be a catch-up, if I may say.

But I want to insist again on the fact that we have been, and I need you to mark my words, nonspeculative and prudent, which means that even when the contract is in our favor in a sense and protects us, if the things are not signed, we've not baked the recovery -- future recovery in our guidance. So we're not betting on something that is not formalized yet. And that is maybe something that I would say differentiates us as Technip Energies today in this guidance.

The next question is from Bertrand Hodee with Kepler Cheuvreux.

Sorry to come back again on the Middle East I wanted just to really understand what you've assumed on a go-forward basis. So if I summarize, EUR 30 million to EUR 40 million of additional logistical cost on multiple countries, multiple contracts. You explained that with one country, the recovery mechanism has been signed on a go-forward basis. So can you give us out of those EUR 30 million to EUR 40 million additional logistical costs that will -- you have assumed will continue to incur Q3 and Q4, how much of that as you've been very prudent has been assumed as recover?

Bertrand, a very, very small minority.

Okay. So just linked to the countries that have agreed on recovery mechanism.

Absolutely. Maybe to share with everyone the reality of what is happening for Technip Energies in the life of the project. When comes the time for a discussion on cost recovery, it can be tempting as well to -- for us or the client to say, hey, since we're talking, let's try to settle other things as well that are actually not related to the war.

And therefore, those things are about change of scope and things that have been discussions that have been pending and triggering this conversation around the impact of the conflict is actually a catalyst to solving for something that is larger than just the war cost recovery or the cost recovery around the conflict between Iran and the U.S. -- and the closure of the Strait of Hormuz.

So that's why also some of the conversations are taking longer because they go beyond, I would say, the strict immediate scope of the cost recovery related to the closure of the Strait of Hormuz and the conflict.

Also, I must add that one particularity of Technip Energies is that in the Middle East, in Qatar and elsewhere, we have our own cost, but also we have under our responsibility across the region about north of 80,000 people, right, and workers who are under our responsibility. They are not our employees, but they are the employees of the construction companies we deploy in those countries.

But nonetheless, we are responsible for them. And we're also responsible for the cost claims related to those 80,000 workers and the companies which for most of them are our partners. So we also represent them in this cost recovery -- in those cost recovery discussions. And so it's not a monodimensional conversation that we are having, and that's why it can take a little bit longer. It's not only about solving the cost of a barge or a toy boat or God knows what, no. We are working onshore with tens of thousands of people that we are representing, and that's why it takes a little bit longer. But again, it will be resolved in the weeks to come.

Very reassuring in the weeks to come. And my second question is on...

Yes, there are 4 weeks in a month and 8 weeks in 2 months.

Yes. And then on the commercial momentum after, I would say, extraordinary H1 order intake, EUR 12.7 billion. We understand that you probably don't expect major Project Delivery award in H2. But looking into 2027, can you give us an update on the status of potentially 2 major projects, Rovuma LNG and Abadi LNG, where do we stand on those projects in terms of bidding, selection and so on?

Yes. Okay. Sure, absolutely. So Abadi, I would say that the momentum is really strong on that opportunity, which has been out there for quite some time now. But the very pleased to say that the momentum is real, both for the floating facility and the onshore facility, and we are part of the race. So always difficult to guess what the timing of the FID will be. All I can say is that as a result of the conflict, we have seen more than renewed momentum. It's actually confirmed momentum in anything that is about building more infrastructure outside of the Middle East for energy importers to be less dependent on the traditional supply routes.

So in Southeast Asia, they have gas and they are accelerating on the way to monetize that in a sense and have that as a source of supply for their respective countries. Indonesia, Malaysia, Australia and others. So the momentum there is real. And I was reading, maybe you read just like I have that Australia was looking and is looking into actually building a new refinery for the first time in a long, long time.

So that's a reality. For us, it's translating into an accelerated number of seed and feeds will naturally convert. So not all of them, but into -- as you know full well, into contract awards into late 2027 or into more likely 2028.

So this acceleration that we're observing at the moment, I think there will be some for 2027, but the majority for 2028, that would be my bet. But the volume is significant. And it's in the Middle East, but also outside of the Middle East where really there's a strong appetite for countries to lower their dependency on imports. When it comes to Rovuma, well, I believe this project is going to do a different party than Technip Energies.

The next question is from Mick Pickup with Barclays.

A lot of focus on the near term here, but the number that surprised me is that EUR 14 billion backlog schedule for 2028 plus. EUR 14 billion, the backlog not far out backlog. So is there anything different in the phasing of that? Because looking at that, it would suggest to me that, that greater than EUR 6 billion target you have for 2028 is already in hand.

Mick, I'll hand over to Bruno because I've done a lot of talking already.

I think, yes, certainly, the momentum, as Arnaud was saying, is strong. 2026 is somewhat of a specific year given what's happening in the Middle East. Now given that 75% of the recent backlog has been ex Middle East, I think the reliance on Middle East is less the case. But the ability to go towards medium term and being achieving EUR 800 million EBITDA company is certainly there.

Now it's as Arnaud said, it's a bit early to do a '27 guidance or to refresh the medium-term framework. We'll get to that relatively soon. But the fundamentals of having finishing a quarter where we had by far the highest level of backlog with that, of course, very good working capital, but that translates in the highest amount of cash that we had on the balance sheet that we are able to deliver. Of course, that's partly reflected in the contract.

But that gives us, yes, a very good confidence on the ability to move forward. So absolutely a very strong company with the strongest level of backlog that we've had and our ability to continue to grow the company beyond the management of this, let's say, short-term or near-term situation in Middle East.

And just the follow-up is on the -- obviously, the phasing of that backlog. You won EUR 13 billion year-to-date. Your execution for '27 has gone up EUR 1.6 billion, EUR 600 million of that was slippage you talked about in Q1. So I think there's only 1 billion out of EUR 13 billion in next year for contracts that have been signed in Q1 and early Q2 that you've known about for a long, long time.

I think when -- one of the projects we've signed in NFW, you see the evolution in the Middle East. So I think in terms of phasing also, we've been prudent. As we go out and the exit of the war, we will have, I think, a better visibility and beyond disruptions at logistics because the consequences of logistics, of course, go far a bit beyond just the region.

So I think we have the ability to continue to accelerate and step up. The backlog is absolutely in hand. How this can be phased and accelerated, I think we'll have a better view as we exit the war. As Arnaud said, the way we exit within H2, the war when I think the phasing will be a bit more firmed up.

We must remember, Mick, that the -- for example, the NFW project is actually in continuity to an extension of the NFS project. So if there is -- if NFS takes a bit longer because there's a bit if it takes -- if there's a bit of uncertainty with then we will run or rush a bit less faster into starting NFW. Again, there's no risk of cancellation or anything like that. It's not the point. But in the phasing, I think there could be -- the teams will transition from NFS into NFW, including the construction team. So there is an effect of that as well. If there's a bit of delay on NFS as a result of the conflict, for which, again, we will be covered, then the sequencing in NFW is somewhat impacted.

The last question is from Jean-Luc Romain with CIC CIB.

Not in the Middle East, as I think the subject has been almost. Rely got contracts, which is not a frequent thing recently. What do you see the momentum accelerating on hydrogen in Europe and elsewhere?

Yes, Rely got a contract of somewhat modest size, but we're happy that Rely got it. Well, listen, there's no real momentum accelerating in Green H2, it's rather stable. And one good indicator to track is the number of gigawatts of electrolyzers being ordered on a yearly basis, and they are -- it's fairly flat at around 3 gigawatts, I believe.

So it is flat. It is a market that does exist. There are pockets of geographies where it will accelerate. And my personal opinion is that we will see not in 2026, but towards the end of the decade, a significant acceleration in a country like India and then also in the Middle East. So it's really a long-term play. It's not something that will influence the shape of our earnings profile for Technip Energies in the couple of -- in the 2 years to come. But it's there, just it's slow to take off.

Gentlemen, do you perhaps have any closing comments?

Thank you. That concludes today's call. Please contact the IR team with any follow-up questions. Thank you, and goodbye.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Technip Energies First Quarter 2026 Financial Results Conference Call.

[Operator Instructions] At this time, I would like to turn the conference over to Phillip Lindsay, Head of Investor Relations. Please go ahead, sir.

Thank you, Maria. Hello, and welcome to Technip Energy's financial results for the first quarter of 2026. On the call today, our CEO, Arnaud Pieton, will discuss our Q1 performance and business highlights.

This will be followed by a financial review by CFO, Bruno Vibert. Arnaud will then return for the conclusion before we open for questions. Before we start, I encourage you to take note of the forward-looking statements on Slide 3. I will now pass the call over to Arnaud.

Thank you, Phillip, and a very warm welcome to our first quarter results presentation. Let me start by sharing the key highlights of our performance.

First, a comment on the situation in the Middle East. I want to reassure you that all our projects under construction are intact; no damage to the work, and no cancellation. And more importantly, everyone is safe. Of course, we have faced operational disruptions stemming from the conflict, but our first quarter results underscore the resilience of Technip Energies. Owing to the adaptability and unwavering commitment of our teams, we limited the revenue impact to just a 4% decline year-over-year, with EBITDA down 8%.

Importantly, our robust underlying cash generation continues to set us apart. Despite the challenges, we successfully converted nearly 90% of our EBITDA into free cash flow this quarter. This achievement reflects the quality and breadth of our order intake over the past few years and our focus on operational excellence. The situation in the Middle East remains fluid and is expected to affect our 2026 financial outlook. I will provide further details in the next slide, while Bruno will later discuss our new conditional guidance.

On the commercial front, the first quarter marks one of the strongest periods for order intake in our history, with more than EUR 6 billion of new awards. These significant wins reinforce our leadership in LNG and sustainable fuels, and we have driven our backlog to a new high of more than EUR 20 billion.

Let's now take a look at the operational, financial, and broader implications of the Middle East situation. First, we stand in solidarity with all those affected by the conflict. From its outset, Technip Energies implemented a comprehensive crisis management framework to safeguard our global workforce and protect our contractual positions. Some of our work sites experienced temporary stoppages followed by phased resumptions under enhanced safety protocols, working at all times in coordination with authorities and customers. Currently, our sites are nearing full mobilization.

While the situation in the Middle East remains fluid, we see two main channels of impact on our business.

First, project execution, where progress has been affected by site disruptions and logistical challenges, deferring revenue into later periods.

Second, incremental costs are being incurred for safety and business continuity. While we expect cost recovery through strong contractual protections, the exact timing and extent are dependent upon the evolution of the conflict and the progress of commercial discussions.

For these reasons and assuming the situation in the Middle East normalizes by the end of the second quarter, we have recalibrated our backlog schedule and estimate that around EUR 500 million to EUR 600 million in revenue will be deferred beyond 2026, while the impact on projects' margin should be substantially mitigated.

A supply shock of this magnitude reinforces 3 structural trends we are already seeing in our markets - diversification of supply routes, diversification of energy sources, and a greater premium on security of supply.

In practical terms, energy security drives stronger investment in energy infrastructure and new energies. It translates into more upstream investment, additional LNG capacity, and increasingly floating LNG solutions to accelerate time to market. It also elevates the value of resilience through circularity, regionalization of supplies, and solutions that improve sovereignty and supply certainty. In this environment, Technip Energies has a critical role to play, helping customers progress energy security while continuing to deliver decarbonization.

In addition, T.EN will also very likely be active on Middle East asset reconstruction given our pertinence in the region and our proximity to customers. Supported by the continued execution of our strategy, our financial strength, and our global presence, Technip Energies is exceptionally well-positioned to navigate the current uncertainty and to thrive in the years ahead.

Now let's look at our near-term commercial momentum with 2026 off to a strong start. We achieved considerable commercial success in the first quarter with more than EUR 6 billion of awards, exceeding our total order intake for the whole of 2025. Key wins included an award for Europe's first greenfield sustainable aviation fuel plant for SkyNRG in the Netherlands, further confirming our leadership in SAF, where we have delivered around 60% of the global capacity.

And in LNG, we reinforced our position through two additional megatrends for Qatar Energy's North Field West project, a further tranche of work to advance Coral Norte FLNG in Mozambique, and a substantial limited notice to proceed with Commonwealth LNG in the U.S.

These awards have materially strengthened our backlog to a new high of more than EUR 20 billion, reinforcing our medium-term growth outlook. And furthermore, our near-term commercial pipeline remains buoyant. We anticipate an additional EUR 6 billion of new orders in the coming months, further diversifying our exposure outside of the Middle East and with potential to drive our media backlog to above EUR 24 billion, some 50% higher versus the start of the year.

In summary, our selectivity-built backlog continues to strengthen with high-quality new awards underpinning our growth outlook beyond 2026.

Before passing to Bruno, let me give you now an update on Reju's progress in building a circular textiles ecosystem. Reju combines the agility of a start-up with Technip Energies' resources and execution capabilities to convert the challenge of post-consumer waste into an economically viable venture.

Since our last market update a year ago, Reju has progressed across the key work streams required to move from concept to execution, technology maturation, site selection, funding and working towards securing vital pathways for feedstock and uptake. Reju's development is also supported by a more constructive regulatory backdrop, notably through Europe's extended producer responsibility or ETR, framework.

For many months, we have been producing at Regeneration Hub Zero, our demo plant in Frankfurt. The product, Reju polyester and Reju yarn has been provided in tons to leading brands for testing and validation. And we are putting in place certification to confirm end-to-end traceability from textile waste to Reju polyester.

We have preselected three sites, two in Europe and one in the U.S. for what would be industrial scale facilities. Importantly, in March, Reju was awarded EUR 135 million in Dutch NIKI funding for its first plant, an important external validation of the technology and our team. The grant is a meaningful step on the path to a final investment decision potentially later this year or early 2027.

As we move forward, we remain disciplined. Key priorities include finalizing long-term feedstock agreements to derisk input supply and securing multiyear offtake agreements for Reju rPET. Finally, we are focused on ensuring the business model. It needs to deliver accretive financial returns, and it needs to enhance Technip Energies' quality of earnings over time. I will now pass the call over to Bruno.

Thanks, Arnaud. Good afternoon, everyone. Let me take you through the standpoints of our financial performance for the first quarter presented on an adjusted IFRS basis. Revenues were EUR 1.8 billion, down 4% year-over-year, showcasing our ability to remain resilient amid foreign exchange headwinds and ongoing conflict in the Middle East. Lower revenues, together with additional costs incurred for safety and business continuity in the Middle East, resulted in EBITDA falling by 8% to EUR 149 million.

EBITDA margins declined by 40 basis points compared to last year, reflecting the challenges described and an absence of notable milestones in the broader portfolio. Diluted EPS came in at EUR 0.48, a decrease of 14% year-over-year, primarily driven by the EBITDA trend, lower net financial income and increased nonrecurring items, particularly those related to the positive development of Reju. Free cash conversion from EBITDA, excluding working capital and provisions, stood out at a robust 89%, which is especially impressive given the operational disruption we faced in the Middle East.

Finally, on the commercial front, we secured more than EUR 6 billion in new awards. This achievement positions us for what should be our strongest year ever for order intake. In summary, I want to commend our teams for delivering a resilient first quarter in testing circumstances.

So, let's turn now to our segment reporting, beginning with Project Delivery. Revenue for the segment reached EUR 1.4 billion, representing a 4% decline year-over-year. While we saw planned growth in LNG and decarbonization projects in the U.S. and Europe, this was offset by two main factors.

First, foreign exchange, where a significant strengthening of the euro against the U.S. dollar, reaching EUR 1.17 this quarter compared to 1.05 in Q1 last year, created a substantial headwind.

Second, Middle East. As a direct result of the conflict, project execution in the Middle East experienced local logistical challenges and site disruptions impacting our progress.

Combined, those two factors constitute a revenue headwind for the quarter of around EUR 200 million. Adjusted recurring EBITDA for Q1 reduced by 80% year-over-year, landing at EUR 94 million. EBITDA margin was 7%, down 110 basis points compared to last year, largely due to additional safety and business continuity costs associated with Middle East projects. The remainder of our portfolio performed on plan, albeit without any meaningful project milestones.

Finally, our backlog stands at a robust EUR 18.7 billion, equivalent to 3.5x 2025 segment revenues, providing excellent visibility going forward. As Arnaud outlined earlier, our commercial pipeline positions us well to reinforce this backlog with high-quality prospects to support our medium-term performance.

Now, let's focus on Technology Products and Services. TPS revenues were 2% lower year-over-year, mainly due to foreign exchange headwinds and reduced contribution from ethylene equipment. However, this was partially offset by strong progress on the CO2 absorber for the Net Zero Teesside, solid services volumes and an initial contribution from AM&C. At constant exchange rates, revenues would have shown modest year-over-year growth.

Recurring EBITDA margins were extremely robust, rising to 15.3%, an improvement of 80 basis points year-over-year and driving EBITDA up 4% to EUR 68 million. Segment margins were enhanced by strong execution on proprietary product contracts, improved profitability in consultancy and services, and the contribution from AM&C. As we expect the quarterly run rate in revenue to pick up in the balance of the year, margins may normalize closer to our full year guidance.

TPS orders for the quarter totaled EUR 353 million. Secured work was primarily services based, covering a broad range of studies, services and PMC call-offs as well as the contract to provide our reformer technology to a hydrogen project in Africa.

Looking ahead, we see positive award momentum for services, products and our equipment. At period end, the TPS backlog was close to EUR 1.5 billion, in line with recent trends.

Let's now review other key financial metrics, starting with the income statement. Corporate costs totaled EUR 13 million, marking a significant reduction year-over-year. This figure aligns closely with our underlying corporate cost run rate.

Just as a reminder, Q1 2025 included additional French social charges relating to long-term incentive plans. As a point of note, there is no impact of ESOP 2026, our employee share ownership program in Q1 2026. However, once implemented, this non-cash item will, on the face of the P&L, increase full year corporate costs, potentially pushing them to the upper end or even above our guidance range.

Net financial income remains healthy at EUR 21 million, albeit with a downward trend year-over-year because of lower global interest rates. Lastly, on the P&L, at 28.3%, the effective tax rate is consistent with the 2026 guidance range.

Turning to our balance sheet. Our financial position remains exceptionally strong, a true point of differentiation for T.EN. Gross cash reached EUR 4.2 billion and is significantly in excess of the net contract liability of EUR 3.6 billion. The combination of projects already in backlog and anticipated awards through 2026 and beyond will further reinforce this robust capital structure.

Finally, gross debt has decreased compared to year-end levels, following a period of normalization after the AMC acquisition last December. Let's now focus on our cash flow performance for the quarter. Free cash flow, excluding working capital and provisions, reached EUR 132 million with a solid 89% conversion from EBITDA. This result underscores our strong operational execution and the benefit of positive net financial income.

Looking forward, we anticipate maintaining free cash flow conversion within the 70% to 85% range. In terms of working capital, we saw a significant inflow of EUR 273 million as customer payments were received, and the reversal of some specific factors from the prior quarter. It's worth noting that working capital remains uneven, largely due to the nature of our long-cycle project delivery segment.

On the financing side, we repaid EUR 75 million in short-term debt and have initiated our EUR 150 million 2026 share repurchase program. We closed the period with EUR 4.2 billion in cash and cash equivalents, our highest position since company's inception. Before handing the call back to Arnaud, I'd like to outline our new conditional segment guidance.

For context, this conditional guidance incorporates the year-to-date operational performance, factoring in the latest insight from April and assumes the conditions in the Middle East will normalize by the end of the second quarter.

As Arnaud has mentioned, despite the world disruption to normal workflows and productivity, our projects in the region are progressing. At present, all projects have enough work fronts to maintain near-term momentum. Some sites have all the resources required for this to continue through to completion, while others depend more on the timely arrival of both materials and equipment typically shipped through the Strait of Hormuz.

Within this conditional guidance, we assume the strait will fully reopen by the end of Q2, although we can take advantage of alternative logistic solutions for many projects. Its extended closure remains a primary risk to efficient project execution as not all equipment are truckable.

Given these assumptions, our updated expectations is for project delivery revenues to be within a range of EUR 5.7 billion to EUR 6.3 billion, which even at the low end, still indicates the year-over-year growth. Thanks to strong contractual protection, the impact on project margins should be substantially mitigated. We may, however, incur incremental costs for safety, business continuity and the outcome of commercial negotiation.

Therefore, we now anticipate EBITDA margins being in the range of 6.5% to 7.5%. At this early stage, we've taken a relatively conservative stance in this projection, notably in terms of contingencies. Technology Products and Services is comparatively insulated from situation in the Middle East, though some consulting and services contracts in the region may be affected.

Accordingly, we are widening the revenue range to EUR 1.9 billion to EUR 2.2 billion, lowering the bottom end while retaining the top end. Our margin expectation for TPS is unchanged, bolstered by a strong first quarter. All other guidance items are unchanged.

Looking beyond 2026, based on the quality of our backlog, our contractual discipline and our commercial opportunity set, our medium-term trajectory remains firmly intact, and we expect a meaningful recovery in the coming years.

I'll now turn the call back to Arnaud.

Thank you, Bruno. So, to conclude, we delivered resilient first quarter revenue and EBITDA despite operational disruption linked to the Middle East conflict. And we've maintained robust cash generation. Commercially, we had an excellent quarter, securing more than EUR 6 billion of awards that strengthened our backlog to record levels and reinforced our outlook.

And looking ahead, Technip Energies is uniquely positioned to serve both oil and gas-based economies as well as energy importing regions that are shifting towards lower carbon systems.

Our priorities are clear: execute safely and reliably while protecting margins through disciplined project and contract management, continue to build a diversified pipeline that supports sustainable growth, and deliver on our strategy to enrich and grow our TPS portfolio, deploying capital to enhance our differentiation and quality of earnings.

Before closing, a final point. Since inception, Technip Energies has successfully navigated through numerous challenges and crises, always demonstrating tenacity and resilience. Each time, we have emerged stronger and more united. Today, we are approaching the current situation with the same determination and forward-looking spirit while actively preparing the group for the future and the opportunities that lie ahead.

With that, we can now open for questions.

Thank you. The first question is from Sebastian Erskine of Rothschild & Co Redburn.

We've seen kind of third-party estimates for the repair and restoration costs for energy-linked infrastructure in the Middle East could as high as EUR 58 billion. And clearly, you are the incumbent in Qatar for their LNG infrastructure, and you're also heavily involved elsewhere in the region, including in Bahrain and the UAE. Can you maybe give us any indication of your preliminary discussions with the NOCs in the region, kind of regarding their thoughts on critical repair work? And any indication of the kind of potential scale or what that might look like over the coming kind of 12 to 18 months?

Yes, thank you. So, I won't comment on the total scale of the repair work and scope that is ahead to come in the Middle East. But certainly, and you're right to point out to the fact that we are incumbent in many of those infrastructures, and we have a strong presence, of course, in Qatar and beyond. I may actually come back to the situation in Bahrain.

So, at the moment, it is very important in those, I would say, times to stand by our clients' side, which is what we are doing and to propose solutions to the challenge that they are facing for a swift recovery and repair of some of the damaged infrastructure. So, as I pointed out a bit earlier, we, as Technip Energies have not suffered any damage to our ongoing work. So, in this case, it is the infrastructure that has been targeted was more finished and completed infrastructure, which maybe sometimes was live and operating. It was probably for the DME a better target than work under construction. So, it is about standing by our clients. And it is a real opportunity for Technip Energies.

It is a little bit early to tell you about the size of the opportunity. It is meaningful, but we will also find a contractual mechanism with our client that is, I would say, reflective of the situation. In other words, let's provide what is quality work and let's not go chase for volume. There are circumstances where it will be easier to achieve, I would say, the type of pace and cadence that we need for the repairs is jointly with our customers, we suggest that they proceed with early procurement while we focus on engineering and assessment of the damage.

So, it might not translate into, I can't remember which number you use, tens of billions of EPC opportunities, but it will translate into, I would say, real services opportunities and reconstruction opportunities, which might be lump sum or not. So, the size is yet to be confirmed down the road. And what is important is that I signal and I will make a point here, it is important to be by our client side, and we will absolutely not take advantage of the situation.

Very clear. And my second question is, we know that you have a strong record on risk management and a conservative approach to accounting. Can you share whether you took any provisions related to the Middle East conflict in the first quarter and whether we might expect you to take kind of more going forward that would impact the EBITDA margin?

Well, let me help you. I mean, maybe everyone on the call understand a bit the circumstances behind the conditional framework. And my answer will be a little bit long, but I'm sure I will probably answer some of the questions that are coming ahead.

So, we have established key assumptions for this conditional guidance, which are that the conflict resolves and the Strait of Hormuz is reopened by the end of the second quarter. And also, that there are no material secondary effects to the situation.

I will repeat what I stated, nothing is canceled. No project is suspended. And when we talk about a change of guidance for the top line between EUR 500 million to EUR 600 million, it is all about deferral of revenue. It's not canceled revenue. So those are not missed sales.

Those are sales that have been secured and are secured and for which the revenue will be recognized later down the road. It does equate to about 10% of our expected project delivery revenues for the year. So, I think we've done together with our clients, a good job mitigating the impact of this conflict and war.

I would characterize our projects into four buckets. The projects that are, I would say, mature, where procurement campaigns are complete and all equipment has been delivered. Here, the disruption actually affected operations in March and April, but the impact should be less in the coming months, but we've taken a conservative view nonetheless. And the impact would be less because we have all equipment to progress with the work front and to keep the teams and the tens of thousands of workers busy.

You have on the other end of the spectrum, early-stage projects that are absolutely not affected. They are in engineering phase and workforce not yet mobilized on site, and we are really just starting with engineering and procurement. So very little impact on those early-stage projects as for the mature projects.

There's a third category, the mid-cycle projects where procurement is largely complete. All POs have been placed, if I may say, but not everything has yet been delivered to site. A large quantity has been delivered, sometimes north of 65%, 70%, but we are still expecting some deliveries to site. That's where the logistic constraints are more challenging because we have already highly mobilized the workforce, the construction workforce. And there may be a risk of work front drying up if we are unable to unlock the alternative logistics route.

So here, we have assumed a continued level of disruption all the way through the end of Q2. Let me nonetheless reassure you, we have alternative routes that have been identified. Those routes are being developed in conjunction with our clients, and this is where, the working side-by-side with your clients is important because the alternative to the usual logistical route can be also more costly because they take longer, you have more marshalling.

So, they are source of additional cost. And so, the choice of going for the normal route to the alternative is one that is made, its decisions that are taken jointly with our customers because, of course, we want to be assured of cost coverage.

And then the third or fourth, I would say, category of projects, and we only have one, and you mentioned Bahrain a bit earlier. Well, there's one project that has suffered permanent damage, but it's, the project was no longer under construction. We were actually handing over the facility to the client. And this one, there would be, there's no immediate progress. It's about assessing the situation and assessing how to actually allow the repairs and the client to resume with the work.

So, in that context, we have taken, I would say, a fairly conservative approach. You know Technip Energies, you're starting to know us, Bruno and myself. In these circumstances, it's a bit like the and for the lack of a better comparison, but it is mostly protecting the populations. But from time to time, you will have weapons going through the Iron Dome, I mean, despite the two or three layers of protection that it provides.

And so, we have decided conservatively to assume that there will be some, I would say, costs associated with the situation coming our way, maybe falling into what I would call a bit of a gray area and that we would have to cover. Some of those costs you heard from Bruno were actually about doing the right thing. It was about keeping our people safe and comfortable, extra rotation, some repatriation and anti-safety measures, et cetera.

So, we've taken a conservative approach, but within the assumptions that are set. So, conflict resolved by the end of Q2 or somewhat and no material secondary effects. So yes, a bit of conservatism built into our decision to revise the number for the year.

And a very important note, okay, all the costs that we've incurred and for which there might be, at the moment, uncertainty in terms of cost recovery, well, they will form part of future conversations or ongoing conversations with our clients for recovery. But importantly, those costs incurred during this phase are not directly contributing to projects progress. And therefore, we have decided to treat them outside of the usual projects cost.

So, you may want to think about them as nonrecurring items, if I may say. And we've decided to do so in order to preserve the future project margins, okay? So, in other words, if you want to oversimplify, we've not tapped into the future in order to address and look good in the short term. We've decided to show the situation the way it is and the way we're experiencing it.

The next question is from Alejandra Magana of JPMorgan.

On the new conditional 2026 guidance, does this revised range already reflect the full set of mitigation options currently available such as alternative logistics routes? And if this disruption extends beyond the end of 2Q, how should we think about the incremental impact versus what is already embedded in the full year guidance? Would it be broadly linear? Or could it become more or less severe over time?

Yes, the new conditional guidance does include and does take into consideration the remediation routes that are being considered. If the situation expands beyond extends, sorry, beyond the end of Q2, well, the impact should be, I would say, we'll see. It really depends. But like I said, the early-stage projects and mature projects, assuming there's no more bombing and bombarding, then the mature projects will progress naturally because those, as I explained a bit earlier, those have everything they need with all the work fronts to progress all the way to completion.

So, there will be no impact. So, if there is still disruption because of the Strait of Hormuz or not being reopened or not being partially reopened, then only the mid-cycle projects will be affected. But we would have to, it's a little bit too early to assess to what extent because of it depends on the efficiency of the alternative routes that we are implementing at the moment. So, we are still finding out the efficiency of the backup solutions. They look promising. But if it expands beyond Q2, then conceptually, you have to imagine that only the mid-cycle projects would be affected, the others likely not.

That's very clear. And switching gears on TPS, you've previously discussed some normalization in margins ex AM&C in 2026. Given the 1Q strength and the drivers you highlighted, including improved consulting profitability, could you help us think about how the underlying margin is tracking versus your prior expectations? And was the quarter's strength mainly organic? Or was AM&C also ahead of plan?

Yes, absolutely, and Bruno will take this one.

Thanks, Arnaud. So TPS from a top line was a bit soft. And as I said in my prepared remarks, we would expect to pick up in the coming quarters, including AM&C. I think AM&C had, it was partially planned plus let's say, relatively slow first quarter because of different reasons. Most of the refineries and PetChem assets outside the Middle East were running at 100%, so not the time to refill catalyst and so on. So, you would expect Q2, Q3 to ramp up, including for AM&C. So, we should expect a pickup in revenues in the quarters to come.

And that will also be accompanied as some of these revenue step up with a bit of a normalization. So, I think the trend is looking good. The quality of the services, the differentiation, the technology portfolio and the licensing, I think a lot of focus has been brought on that. So, as revenues increase, we haven't changed the guidance, and we see a bit of a normalization. But you should still see a good momentum on the bottom line as the pickup, as you see a pickup in the top line.

The next question is from Richard Dawson of Berenberg.

Two from me, please. How should we think about this EUR 500 million to EUR 600 million of deferred revenue from this year? And how does that impact project execution? So, when you look to next year, do you think some of this, those project timetables could be accelerated to sort of deliver some of that revenue on top of what was already expected for 2027?

And then secondly, on the repair and reconstruction work, how would this additional work fit around your existing backlog commitments? I mean I appreciate you've got a very big backlog in Qatar. So, do you have the capacity to do it all, so the reconstruction plus the expansion works for the North Field projects?

So, starting with your second question. Yes, we do have the capacity to support Qatar Energy in their repair effort for the train #4 and #6, which has been touched or damaged. To that effect, we mobilized a dedicated team. It has been in agreement with our clients. It's been decided that it was extremely important to them, to not tap into the resource pool made available on NFE and NFS and as we are also mobilizing on NFW for the repair work. So, we have a dedicated repair team that is separated from the NFE, NFS and NFW teams. And the scope that will be secured through the repair work will come in addition to the scope that is already secured.

And as you rightly pointed out, because we have quite a bit of work in Qatar already, it may be that there we favor other contracting schemes than the traditional ones, which historically have been more towards the lump sum turnkey. In this case, we may be more towards form of PMC and services and reimbursable and EPCM.

So that is still under discussion, but we will, the answer to your question is dedicated team. Yes, we have the capacity to handle. And three, the contracting scheme may be a little bit different in order to address, I would say, the level of exposure we already have in country. But the important thing, and I repeat what I said earlier, is to be by our client side and to be a force of proposition and solution seeking and solution finding, and there's quite a good dynamic from what I can observe, and a lot of reactivity and the pace is actually quite strong on this one.

So now about the EUR 500 million to EUR 600 million shifting from 2026 revenue into subsequent years. Well, part you will see coming maybe as an addition to 2027, but part also will go probably into beyond 2027 because when you have, you take a project like NFE, for example, well, the trains that were supposed to be delivered that were imminently being delivered, well, they shifted a little bit to the right. And we are working with our client to actually see what can be done for accelerating the delivery of those and also mitigating the impact on the subsequent trains. So, it's not, it won't be an automatic adder to 2027. You may have some, I would say, spilling over 2028 as well to some extent.

What I can describe nonetheless, from what is happening on the field is a strong appetite by our client to, I would say, accelerate and secure the delivery of the trains at the soonest. And so, the motivation and the engagement by the teams and our clients' team is super strong to execute with pace while executing safely. But there will be, yes, some spillover in '27 and maybe a bit of leftover into '28. That's what I can picture at the moment.

The next question is from Matt Smith, Bank of America.

Just one question left from me, and that was to touch on your cash flow generation, particularly strong in the quarter, notwithstanding the events in the Middle East, as you highlighted, helped by working capital inflows. I was just hoping you could give us a bit more color based on your latest revenue and EBITDA guidance, how would you expect your cash flows and in particular, the working capital line to evolve throughout the rest of the year, please?

So, I'll take this one.

I think it's a question for Bruno.

So yes, robust Q1 cash flow generation. As always, ex working cap and provisions maintaining a high conversion, just north of 85%, which is what we've guided to. And of course, that's benefiting from the tailwinds of interest rates. So, we are actually, from my position, still quite happy when I see Fed and ECB confirming the rates, that means that's a continuing tailwind. From a working cap standpoint, in Q4, although it was not totally visible, but you had a few items around AP and AR, which reversed in Q1 as expected. And that, again, created a bit of boost to the Q1 figures.

Going forward, I would say that for now, we've seen absolutely no delay in payments in any, on the project in the backlog. So as always, I think the trend from the current operation ex working cap, you should continue to have a high conversion around the 70% to 85%, as I said. And then from a working cap position, the recently signed projects when they will start to be into force and as we build, they would contribute positively. And at the tail end, you should see for tail end projects a bit of unwind as usual. But overall, you should not see a very material movement in working cap, over the remaining of the year. It should be more pretty much net kind of amount.

The next question is from Jean-Luc Romain, CIC CB.

It relates to the participation you took in the project in France. How does this or do you kind of take a participation in exchange for services? Is there some cash involved? And what kind of participation do we talk about? Is it like 10% more? How should we view that? And how should we view the future of that kind of way to be more involved in the clients' outcomes?

Thank you for your question. So, I will start and then hand over to Bruno to complement. So it's the investment into the project, which is about e-fuels, basically confirms Technip Energies' commitment towards sustainable aviation fuels in particular and the, I would say, pertinence of this source of energy in a world that requires diversification of sources and maybe a more regional supply for regions such as France and Europe, which are not oil and gas rich the way other parts of the world are.

I indicated that Technip Energies has been involved in, actually involved 60% of the total world capacity of SAF emanates from Technip Energies engineering and our projects performance. And that shows our commitment to this business stream into the future. And yes, indeed, the idea of investing into the project comes with a number of conditions, including on the recovery side, and I'll hand over to Bruno. But we view our mission, but beyond that, our future profitability and quality of earnings as being enriched by this type of move and the investment that we've made into the year to unlock, I would say, or to contribute to unlock the project. Bruno?

So far, it's not a controlling stake at all, and that's not the purpose. So, we are not also a financial investor. So, it gives us an ability to really become a partner for this project. Of course, for this kind of product, we have all the relevant technologies from carbon capture to, of course, green H2 and so on.

So, we are a bit of a natural partner of choice. But we are also ready to take commitment. And through the work that we start to do on adjacent business models, I think this fits nicely with that to be, for us to be able to partner to bring value on both sides, not to buy a project, but really to be able to add value on both fronts, also to learn from those reputable and very experienced operators. So that gives us a better insight on the market. That potential really means that we derisk and we retain more value and it maybe helps unlock some of these projects. So, a bit of a triple win-win situation.

The next question is from Mick Pickup, Barclays.

Just a quick question. One of your competitors last night talked about more enthusiasm for projects outside the Gulf already accelerating, and they were talking about green ammonia and other things. I wonder if you're seeing the current situation accelerating opportunities elsewhere?

We see, I mean, let's be honest, for us, we see, I would say, the same level of interest for the alternative molecules or energy sources out of the Middle East. Notably India, where we are already present because we are executing a project with, and for Greenko over there. And yes, we see, I would say, where there may have been a bit more hesitation in the past around the second tranche of the project.

We see maybe a bit of a renewed energy and interest for tranche #2. And now it's not a tsunami of new inquiries related to those new molecules. But we do have, yes, some positive vibes from some regions around that. But it's also true for more LNG, more floating LNG. And if it's not necessarily totally new, those, I mean, the inquiries and the, I would say, the pace and the guidance in the dialogue is related to existing opportunities such as Abadi and others.

But the, if I may give a bit of an opinion regarding what this current situation should trigger. I think you can imagine a scenario with three acts. One, it's about reconstruction in the Middle East, and we will be part of it in a way or another. For me, a second act could be and maybe will be, we'll see the GCC countries deciding to act to reshape a bit the export routes, and that should be and could be the opportunity for some of us to be part of building an alternative infrastructure.

And then maybe a third act for, in the rest of the world, excluding the U.S., which is oil and gas rich, a bit of a race to diversification of supply, a bit of a reshoring driven by national security agendas and creating some spare on supply and capacity beyond the strategic reserves that every country has. So that calls upon more regionalization, more regional supplies. It means that circularity should have a bright future as well.

And we'll be part of all that. Now let's be frank, and we are always honest on this call. Like I said, it's not a tsunami of new inquiries, but I would say, renewed energy in the conversations around those topics.

And on the circularity, obviously, you had a slide on Reju. You've got two lots of funding in now. You've got supply chain sorted up. What else do we need to get to FID? And I think that second lot of funding has got a pretty tight time frame that funding is available. So, when do I hear news?

So, I've learned through the Reju venture that the textile industry, but also other industries that are, have been using polyester for some years now or decade. Well, it's, for them to move from other types of material to polyester, but it has taken some time, and they've had their share of pain actually moving from the past solution to the polyester solution.

So here, we're not changing the, we are still remaining with the polyester, but the brands have, I would say, incompressible qualification program for any new material. So, it remains a polyester, but it's a polyester that is from a different source. And therefore, the testing program is kind of incomprehensible. Before they will commit to move from joint development agreements of JDAs to firm purchase orders for a large quantity of material.

So, we are in the middle of the qualification process with some of those brands at the moment. We will have the outcome of their trials, I would say, within Q3. And then we're hoping for the signing of firm orders later in the year or early in 2027. That's what's missing because the rest, from the technology to the feedstock, looks like we've built an ecosystem that is pertinent.

The certified traceability is getting there as well. And the funding certainly, I would say, guarantees and strengthens the commercial nature of the venture. Therefore, it will be a profitable venture. So, it's mostly around signing the offtake agreement, for which we are waiting for the completion of the qualification programs with the brands. But so far, so good.

The next question is from Kate O'Sullivan, Citi.

So, you completed the first major acquisition last year. Reflecting back now, what have been your key learnings from the AM&C transaction? And how is the integration progressing? And just on the M&A to grow the TPS division, what adjacencies are most interested in at the moment?

I'll hand it over to Bruno because I've been talking too much, but I'll be happy to complement at the end if needed.

Lesson Learned. So maybe we should do more M&A because the highest ever share price was on the day we announced the AM&C. So, I don't know if there is a correlation, but that's at least one milestone. I think we've completed very late Q4, this acquisition. So Q1 was all about integration and making sure that we had kind of a smooth integration and alignment of systems, but business continuity, even more so business continuity when you have such a disruption on a worldwide basis, and the one we've seen for assets in the Middle East being impacted, and other assets around the world having to cope with the shortfalls or having to recover.

I think the level of work from an R&D, from a commercial standpoint, from all the teams working together, I think, has been extremely positive. And I think we see the benefit of bringing new expertise in catalysts of materials to our teams and to our domain of expertise, and how this can be applied to our technology portfolio, and also what we can bring from a process standpoint to their team.

So, we see that complementarity. We see, as I said earlier, that revenues should pick up in the coming quarters and the teams work extremely well. So, it was not about the consolidation of market share. So, it's not about cost synergies, it's more about the revenue synergies. We start streaming that.

But okay, as always, revenue synergies take slightly longer to come than just a couple of quarters, but we are extremely confident that some of that will come in the near future. And that I think it's the call for us. We have the balance sheet to continue to look at things. We don't have any must-do M&A. So, we can look at what are, what portfolios could fit nicely into our portfolio, and we could bring those additions.

So, we continue to have a net cash balance sheet. We continue to generate cash flows beyond dividend, which, of course, is for Q2, beyond the share buyback program, which is underway, gives us the ability to accelerate and allocate capital, whether for M&A, whether for adjacent business model like, if an FID comes, but all of that will be to retain and to more value and to be accretive to our global portfolio and to continue to grow TPS and our offering.

The last question is from Bertrand Hodee, Kepler Cheuvreux.

I have two questions. The first one is: I wanted to understand a bit more about the 100 basis point decrease in EBITDA margin in project delivery. I noticed that Bruno used 2x or 3x the absence of milestones in Q1, whereas my understanding is that you were very close to handing over the Bahrain work. So that may have had an impact. And also, the delivery of the first train in Qatar will have been pushed back. So, to make this question shorter, sorry for that. I wanted to understand how much is, between this 100 basis points decrease, and how much is the milestone being pushed beyond '26? And what is the other, probably pure cost? And then I will have a second question, probably.

Bruno will take the first one. And depending on your second one, I may.

So, on the 100 basis points, of course, first, you have a natural effect as you decrease your top line, you have your direct gross margin contribution from projects. You have some fixed costs on SG&A. So, you have a bit of a natural impact that would come with that.

Second would be around milestones and incremental cost, which, taking or staying on the metaphor of Arnaud, could be left in our P&L. That's the second part of that.

As Arnaud mentioned, what was in the assumptions for Q1, how we closed, and now we established guidance, we've absolutely taken a position and a stance where we would not put at risk any of the future margin profile.

So, this we've reflected basically assumptions. Yes, not accelerating the recognition for the project or accelerating milestones or expecting for the best, we haven't taken this kind of somewhat bullish or aggressive position and stand to close Q1 and/or to provide for a 100 basis point kind of adjustment.

Okay. And the second question is, when I look at the current environment and also Trump's model of U.S. energy dominance and so on, and also given the location of Canada, I see more and more momentum on the Canadian LNG project as or LNG. Are you looking at those opportunities? Or are you involved in either an early-stage or more mature FEED study over there?

So, Canada and Canada LNG, and you're right to look at this country as an alternative to the U.S. and others. So, we are not the incumbent on Canada LNG, as you know, others, but there are opportunities that we are looking at, at the moment, yes, in LNG, still notably on the East Coast rather than the West Coast, that would provide shorter routes to Europe and differentiated supply.

So yes, we do have, and we are remaining silent about that at this moment, but there is an early engagement with an alternative LNG project from, I would say, a location that is unusual when compared to where the others are. So, we have engagement of that nature, yes.

And since it's the last question on the call, thank you for that, Bertrand. I just want to close on some key messages for T.EN. What you've heard is that we have a record backlog that is north of EUR 20 billion. We are financially robust, and the balance sheet and the net cash are demonstrating all that. And yes, the highlight of the first quarter has been very much about the Middle East, and it will continue to be about the Middle East because of the level of exposure that we have, but we are navigating the situation.

And I want to reiterate that we do have a clear strategy and that our strategy is absolutely maintained and confirmed. It is about a controlled growth in project delivery, and it is about diversifying away from the Middle East, hence why the recent orders last year, the year before that, and this year, there's more and more outside of the Middle East. And it is also about enriching TPS. So, we have absolutely preserved our ability to deploy capital for growing the technology portfolio or the portfolio of proprietary equipment that we did pertinent for the years ahead, together with going into more of the OpEx, more adjacent business models.

So, tapping into a source of, I would say, pools of revenues and businesses, which we had kind of left aside for maybe too long for Technip Energies, and that clear strategy, we are absolutely able to execute. There's a massive distraction, but I can tell you there's a, with the Middle East, but a very strong part of Technip Energies continues to be dedicated and committed to focusing on strategy execution and all that I've described just a moment ago. So, thank you for all your questions and for being with us this afternoon.

Thank you, Arnaud, and thank you, everybody. That concludes today's call. Please contact the IR team with any follow-up questions. Thank you, and goodbye.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.

Good afternoon. This is the conference operator. Welcome, and thank you for joining the Technip Energies' Full Year 2025 Financial Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Phillip Lindsay, Head of Investor Relations. Please go ahead, sir.

Thank you, Maria. Hello, and welcome to Technip Energies' financial results for full year 2025. On the call today, our CEO, Arnaud Pieton, who will discuss our full year performance and business highlights. This will be followed by CFO, Bruno Vibert, who will discuss our financials. Arnaud will then return to the outlook and conclusion before opening for questions.

Before we start, I encourage you to take note of the forward-looking statements on Slide 3.

I'll now pass the call over to Arnaud.

Thank you, Phil, and a very warm welcome to our 2025 full year results presentation. Before discussing the highlights, let me remind you of what truly sets Technip Energies apart. We are focused on delivering controlled quality growth underpinned by our robust selectivity-driven backlog and differentiated market positioning. We are frontrunners in energy and decarbonization, harnessing our distinct strength and driving transformation to unlock superior profitability. Our strong net cash balance sheet gives us real payout, and we consistently convert most of our profits into free cash flow.

And as we execute our business strategy, channel capital into dividend growth and value-enhancing investments, we are accelerating value creation for our shareholders.

Turning to the highlights. 2025 was a year of successful delivery. We demonstrated strong execution across our global portfolio. We strategically positioned the company for sustained profitable growth. And through some disciplined capital deployment, we enhanced our earnings quality, reinforcing the resilience and stability of our business model.

In terms of headline figures, 2025 marks our strongest year yet with revenue and recurring EBITDA both rising by 5% to reach new highs at EUR 7.2 billion and EUR 638 million, respectively. Both our business segments delivered year-over-year growth in EBITDA with a robust performance for project delivery and solid margin expansion in EPS to above 14%.

Free cash flow, excluding nonrecurring items, increased by 5%, reaching EUR 578 million. And consistent with our capital allocation framework, we are proposing a dividend of EUR 1 per share, up 18% and a EUR 150 million share buyback program. In summary, a solid 2025 that sets a strong foundation for us to achieve our growth objectives.

Let me turn now to our execution, beginning with project delivery. Our portfolio continues to demonstrate the power of replication, modularization, digital tools, and we are executing with disciplined management of scope, cost, and risk.

To provide perspective into the scale of our operations, at T.EN, our workforce now exceeds 18,000, yet we take on responsibility and care for more than 100,000 across our sites. In 2025 alone, we surpassed 320 million worked hours with zero fatalities. We strive to be the industry's reference on safety.

Operationally, across our major projects, we achieved strong progress on LNG execution, including NFE and NFS in Qatar, advancement towards completion of key downstream and petrochemical assets, and solid early progress on decarbonization projects, including Net Zero Teesside and Blue Point No. 1. This performance reflects the culture of operational discipline that defines Technip Energies. And as you know, excellence in execution is the cornerstone of our value proposition and a prerequisite to our continued commercial success.

Staying on the execution theme, but now spotlighting TPS, an important component of our equity story. In 2025, TPS delivered solid EBITDA margins, advancing by 140 basis points year-over-year to more than 14%. This improvement was driven by a strong performance in our product activities, including ethylene furnace deliveries. Furthermore, catalyst supply and strength in project management consultancy also contributed to this margin expansion.

What this performance clearly demonstrates is the potential of TPS to drive margin accretion and improved quality of earnings for the group. 2025 was further distinguished with the completion of our first major acquisition. This transaction exemplifies our disciplined capital allocation strategy to enhance our technology and products offering. It extends T.EN's capability across materials science and the catalyst value chain and enhances our ability to deliver high-performance process critical solutions to our clients.

With around 70% of its revenues tied to operating expenditure, AM&C materially expands our TPS offering across the asset life cycle. In terms of financial impact, we closed the transaction on December 31, and the cash outlay is reflected in our year-end balance sheet. As a result, TPS will benefit from a full year contribution in 2026, which we anticipate exceeding EUR 200 million in revenue with EBITDA margins of around 25%.

In summary, AM&C is immediately accretive and accelerates our TPS growth strategy. It benefits from positive long-term market trends and establishes a strong platform to unlock further value for our stakeholders.

Let me now turn to the significant announcement made yesterday, the award of North Field West in Qatar. This major EPC contract builds on our FEED engagement and incumbency in the NFE and NFS projects, which are under execution. As we embark on this next phase for NFW, we will deliver 2 state-of-the-art LNG trains, each of 8 million tonnes per year. The project will benefit from something we like very much, replication and consistency in train design, plus it will leverage construction synergies, ensuring efficiency and excellence in execution.

The facility will also be complemented by a fully integrated carbon capture system. With this award, Technip Energies has 82 million tonnes per annum of LNG under construction globally. It further strengthens our medium-term visibility and solidifies our leadership in LNG.

Before I hand over to Bruno, let me briefly reflect on our sustainability journey to 2025 and the launch of our new roadmap to 2030. Sustainability at T.EN is a core element of our strategy, our culture, and our value proposition. And 5 years into our journey, we can be proud of our progress on many fronts, including the reduction in our Scope 1 and 2 emissions by 46%, our work on human rights and a material gender diversity improvement in our organization.

Looking ahead, our journey is evolving. We have enhanced our strategy and developed our 2030 scorecard. It is more business-oriented and further integrate sustainability as a core driver of value creation. This new scorecard, which features in the appendix of today's presentation, aims, in particular, at delivering impact through continued innovation.

With that, let me now hand over to Bruno to walk you through the financial performance in more details.

Thanks, Arnaud, and good afternoon, everyone. Technip Energies delivered a year of strong execution and high-quality growth in 2025.

Turning to the highlights. We achieved record revenues of EUR 7.2 billion and recurring EBITDA of EUR 638 million, both metrics up about 5% year-over-year. The growth was driven by a notably strong performance from project delivery and robust margin in TPS.

For reference, in Q4, in acknowledgment of the strong performance delivered, better than expected really, we recorded a supplemental EUR 20 million expense for bonus payments to our employees, which was pretty much evenly split between business segments. This momentum translated into a 4% year-over-year increase in EPS, excluding nonrecurring items, despite lower net financial income.

Our strong operational performance also drove healthy free cash flow generation with more than 91% conversion from EBITDA, excluding nonrecurring items. These results provide a solid foundation for continued shareholder returns, which I will discuss later.

After the completion of the AM&C transaction at the end of 2025, we maintain a strong balance sheet with net cash adjusted for project-related cash of approximately EUR 1 billion, providing us with significant flexibility for capital allocation. In summary, our teams continue to execute well and deliver our leading financial performance.

Turning to our segment reporting. I'll begin with project delivery, where strong growth continues. Revenues rose by 10% year-over-year to EUR 5.4 billion, fueled by major projects in LNG, decarbonization, and offshore, which are advancing through high activity phases. Execution remains solid as evidenced by EBITDA margins consistently in a tight range. Our backlog remains high quality and our margins best-in-class with medium-term upside potential as we progress on the execution of our portfolio.

Finally, with some major awards shifting right in 2025, project delivery backlog has declined by 18% year-over-year to EUR 14.4 billion. However, as Arnaud will elaborate, our near-term award momentum is strong, and we anticipate an inflection that will reinforce our growth outlook.

Moving to Technology Products & Services, TPS. The clear highlight for TPS in 2025 was margin strength with EBITDA margins up 140 basis points year-over-year to a new record of 14.3%. This was driven by strong performance in our proprietary product activities as well as favorable mix due to catalyst supply and project management consultancy.

These margin gains more than offset a 9% revenue decline, impacted by low cycle for chemical as well as foreign exchange. Finally, TPS achieved a book-to-bill of 0.84 as strength in services awards was more than offset by lower T&P awards. As a result of this and FX, TPS backlog fell to just over EUR 1.5 billion. As a reminder, TPS backlog is typically understated by several hundred millions of euros as PMC work is booked only when called up by the customer.

Additionally, the inclusion of AM&C, while not a backlog business, provides predictable recurring revenues and is expected to generate over EUR 200 million for TPS in 2026.

In summary, a favorable mix driving strong profitability for TPS, and we continue to advance the strategic shift towards higher-value technology solutions and scalable product platforms that enhance the resiliency and earnings power of the segment over the cycle.

Turning to other key performance items, beginning with the income statement. Net financial income totaled EUR 89 million, down EUR 30 million from last year, reflecting the downward global trend in interest rates. The effective tax rate at 29.7% was consistent with the upper end of our guidance. Net profit adjusted for nonrecurring items edged higher year-over-year. Notably, we delivered a robust 19% return on equity, underscoring the strength of our earnings relative to equity.

Moving to other balance sheet items. Gross debt rose to EUR 1 billion, mainly as a result of commercial paper issuance to partially finance the AM&C acquisition. Commercial paper market conditions were particularly favorable as we were closing the transaction, offering an attractive arbitrage versus prevailing rates on our cash investments.

In December, we fully drew down on the EUR 40 million facility from the European Investment Bank as part of the TechEU initiative. This loan supports our R&D in clean energy technologies, including the development of Reju. Finally, T.EN's economic net cash position adjusted for project associated cash is circa EUR 1 billion, ensuring flexibility to invest in value-accretive opportunities and deliver shareholder returns.

Now let's take a closer look at our cash flows. Free cash flow, excluding working capital and provisions reached EUR 497 million, with cash conversion from recurring EBITDA at 78%. However, this is presented inclusive of nonrecurring items. If we adjust for nonrecurring items, which is a basis for our proposed dividend, cash conversion exceeds 90%. This reflects our asset-light business model, operational excellence, and strong financial income generated from our cash position.

Working capital was a modest inflow of EUR 22 million for the year. As I've highlighted before, working capital inflows can be uneven, but are broadly neutral over the long-term as we have demonstrated. Capital expenditure represented about 1% of our group revenue, totaling EUR 89 million. Notable investments include the planned expansion of our Dahej facility in India and upgrade to our lab and office infrastructure.

The integration of AM&C is not expected to materially change our capital intensity. Other items of note include the EUR 150 million in dividend distributed in the second quarter and the cash outlay associated with the AM&C transaction. We closed the year with more than EUR 3.8 billion gross cash.

Before talking about capital allocation, let's review our guidance for 2026. Project delivery revenues are expected to be between EUR 6.3 billion to EUR 6.7 billion, with an EBITDA margin of approximately 8%. For TPS, we anticipate revenues in the range of EUR 2 billion to EUR 2.2 billion with an EBITDA margin of 14.5%. As a reminder, this guidance reflects a full contribution from the AM&C acquisition.

Other items, including effective tax rate and corporate costs are consistent with the prior year. In addition, as we did for 2025, we have earmarked up to EUR 50 million to invest into adjacent business models, including Reju. Reju continues to advance on maturing its technology, site selection, and building the full ecosystem, positioning it for a possible FID by year-end 2026.

Looking beyond our 2028 financial framework, I'm happy to report that we are trending comfortably ahead in establishing T.EN as an EUR 800 million plus EBITDA company, an ambition we first declared at our 2024 Capital Markets Day.

Before passing back to Arnaud, let me address our capital allocation priorities and shareholder returns. With EUR 578 million in recurring free cash flow generation in 2025 and our balance sheet in excellent shape, we remain disciplined and focused on how we allocate capital. Our strategy is clear. First, we are committed to rewarding shareholders through dividend, distributing a minimum of 25% to 35% of recurring free cash flow. The proposed dividend today equates to a payout of circa 30%.

Second, we prioritize value-accretive investments. This means actively pursuing M&A to grow our TPS segment and looking at adjacent business models that can enhance our quality of earnings. Additionally, when it make sense, we can and we will supplement these investments with share buyback as an additional means of returning capital to our shareholders. With the EUR 150 million buyback program announced today alongside the proposed dividend, we intend to return approximately EUR 300 million to investors in 2026, equivalent to about 5% of our market cap. And together with our ongoing ability to deliver sustainable earnings growth, this underpins the highly attractive total returns we can offer to our shareholders.

With that, I'll pass on to Arnaud to discuss the outlook.

Thank you, Bruno. Turning now to the outlook and how we see our markets evolving. The macro landscape remains complex, shaped by geopolitical shift and policy uncertainty. Yet the underlying fundamentals across our markets are strong and resilient. Energy demand is rising and plastics consumption is set to grow, while the lowering of carbon intensity together with circularity and products end of life responsibility remain central themes. As electrification accelerates, grid stability becomes crucial. Natural gas plays an indispensable role here. No gas, no grid stability and with no grid stability, no renewables scale up. The global energy system demands innovation and technical sophistication, qualities that T.EN delivers.

The investment cycle in gas and LNG will continue well into next decade with focus shifting from oversupply concerns to risks of further future undersupply. A pragmatic decarbonization is essential and affordability is needed to drive adoption of carbon capture, cleaner fuels, and other low-carbon solutions.

Circularity solves for more sustainable solutions, but also for sovereignty through development of localized ecosystems. And as we prepare this future through Reju and other industrial partnerships, T.EN will selectively target opportunities in adjacent markets, including nuclear.

In summary, T.EN's engineering expertise and project execution enable us to deliver sustainable and economically viable solutions at the scale required for today's and tomorrow's markets.

Let's turn to our near-term commercial momentum, which is exceptionally strong. Beyond the Qatar NFW win already discussed, our strength in enhanced replication is further illustrated by progression on Coral Norte floating LNG in Mozambique.

Also this month, we confirmed a substantial contract to develop a 100 kPa plant to produce sustainable aviation fuel in the Netherlands for Sky Energy. Further cementing our leadership in the sustainable fuels market.

For TPS, we have good line of sight for technology licensing and product awards in ethylene, hydrogen, and phosphates and expect to be able to confirm details in the coming months.

When we consider awards already confirmed this year in SAF and in LNG, plus prospects anticipated to materialize in the near term, including Commonwealth LNG, this yields an inflection of new awards exceeding EUR 12 billion. This is equivalent to 75% of our year-end backlog.

Beyond our near-term award potential, as shown in appendix, our global commercial pipeline remains strong and well balanced, and we anticipate reaching our highest ever annual order intake in 2026.

Let me now put this into context with respect to our backlog. An important attribute of Technip Energies' equity story is the clarity and confidence afforded by our multiyear backlog. This is not just our base load. It is the foundation upon which we build sustainable free cash flow and our enablers for effective deployment of capital and the growth of TPS. It's what allows us to look to the future with certainty and ambition. We prioritize quality, not quantity. Through discipline and selectivity, we focus on opportunities where we bring differentiation. Project delivery is not a quarterly business. Lumpiness is inherent to this business and does not hinder our long-term progress.

In fact, when we look beyond the quarterly fluctuations, we see a clear pattern of incremental growth in our backlog, reinforcing our long-term resilience. We are in a period of sustained structural demand for our capabilities. And with the strength of our near-term commercial pipeline, we are confident that 2026 will establish new highs with potential to reach EUR 24 billion of backlog.

This milestone will provide us with one of the most exciting execution pipelines in our history, firmly underpinning our growth trajectory.

So to conclude, 2025 was a successful year of delivery, marked by strong execution and excellent results. We delivered revenue and EBITDA growth. We achieved high free cash flow conversion, and we completed our first major acquisition. We also positioned for important awards that will secure our growth trajectory for the coming years. And we are trending comfortably ahead in establishing Technip Energies as an EUR 800 million-plus EBITDA company. The confidence we have in our outlook is demonstrated through significantly enhanced shareholder returns, and we continue to build for the long-term, supported by our robust net cash balance sheet.

And with that, let's open the line for questions.

[Operator Instructions] The first question is from Richard Dawson of Berenberg.

Firstly, on NFW, and congratulations on getting that award in yesterday. And the timing of that award is maybe slightly earlier than we had expected. So could you provide any color on what brought that forward, and maybe any comments on the actual size of the order intake?

And then secondly, on the buyback, should we read anything into the launch of that buyback and maybe your outlook on further value-accretive investments? I appreciate you've just closed AM&C. -- but given your capital allocation priorities of dividends first and accretive M&A, followed by a buyback if there are no M&A options. Is it fair to say that maybe there are a few M&A options out there and hence you're launching this buyback?

Hello, Richard, thanks for the question. So NFW, I'm happy that you're surprised by the timing of it. We are not totally. As you know, we at Technip Energies like to be involved in the early engagement on FEED stage. And so we were engaged there. And NFW, the timing of it, why now? It's -- well, simply because as being the incumbent on NFE and NFS, NFW being somewhat an addition to NFS.

There was, I would say, a sweet spot for maximizing synergies with notably site utilization, storage areas, construction resources. So there was really a sweet spot for NFW to kick off, which was presented to our client and the client was aware of that, and we worked jointly with them on converging towards taking advantage of the sweet spot for synergies between NFS and NFW. So this is exactly what has driven the award of NFW.

As a reminder, maybe, those 2 additional megatrends of LNG were first announced by Qatar Energy CEO early 2024 at the time when they mentioned that they would -- Qatar would have the ambition to go beyond the -- 140 sorry, MTPA of LNG per year. So that's about NFW.

On capital allocation, I would say, no, there is no shortage. You should not read anything into the fact that we have decided to initiate, I would say, a reasonable amount of share buyback. When you look at Technip Energies, you are facing a company that is extremely financially healthy that is capable of returning to shareholders through increased dividends through a little bit of a reasonable amount of share buyback and through further capital allocation.

So doing share buyback is not at all affecting our ability to invest nor is it the reflection of a lack of M&A targets for Technip Energies. We have, on the contrary, quite a few on the radar screen. So I can't say much more, as you can imagine, for now. But we're excited about the opportunity set outside, so inorganically, but we also wanted to demonstrate that we are very confident in our future. And hence, why we are combining this time a bit of buyback as well as an increased dividend by 18%.

The next question is from Alejandra Magana of J.P. Morgan. Excuse me, Alejandra Magana withdrew the question. The next question is from Sebastian Erskine, Rothschild & Co.

Congratulations on the announcement of the enhanced distribution. I'd like to start on the AM&C acquisition. So EUR 200 million revenue contribution in FY '26, that would imply kind of TPS at EUR 1.9 billion at the midpoint. So that's kind of in line with the commentary you gave at the third quarter. But on AMC specifically, can you give us -- a few questions.

Can you give us an indication of the operational performance of that business in 2025? I think there have been some concern in the market around Catalyst Technologies given the sale of that business under Johnson Matney to Honeywell. There was some concern in that market. And potentially, any detail on the growth outlook? I think, Bruno, you mentioned that the growth of that business should be around a mid-single-digit revenue level per annum going forward. Is that still intact? Any color on that would be great.

Hello, Sebastian, I'll take the question. So yes, the deal for AM&C was completed at the end of the year and will start to contribute to our top line in TPS starting Jan 1. I think AM&C closed the year pretty much where we expected. They have 2 main businesses, one on advanced features -- and they are basically addressing hydrocracking and also polyolefins market. Of course, from a quarter, it's more product. So you can have one refill, which may slip by 1 month in 1 year and then it's transferred to the other year. But overall, I think the momentum and market share of this business was absolutely where we expected. And the initial signals we have for the beginning of the year is exactly at this level.

Now of course, the teams have started. We started to engage with our joint venture partners on Zeolyst International, which is Shell. So this integration is working very well. We've also started to see how this business of AM&C can create cross-selling synergies with our businesses, because they have advanced materials expertise. So that can complement to our process technology portfolio. And their client proximity, our client proximity are somewhat complementary. So the teams are starting to engage on creating those bridges, which, of course, may take a bit longer than just one month or a couple of months to manifest or evidence in themselves. But we're quite confident that the trajectory we've given through the cycles will be absolutely there.

Sebastian, I will also add something. There is one key attribute to AMNC that one must not forget. It's the quality of the portfolio and I would say the vitality of the portfolio in the sense that about 35% of AM&C's portfolio is less than 5 years old. Therefore, you're talking about solutions that are not solutions of the past, but solutions of today and into the future. So the field of applications for AM&C solutions is one that is actually well into its time and well into what's needed for the years to come.

Super. Thank you very much for that. And if I can squeeze in a question unrelated, but Arnaud, you gave very insightful interview in upstream on the opportunities presented by FLNG and kind of other floating solutions in the E&C market. Can you maybe provide an update on that pipeline and when we might see some kind of related orders on FLNG? And of course, you have that partnership with SBM Offshore. So could we see you involved in some of the FPSOs that are up for tender in the coming years?

Yes. There's an exciting set of opportunities for floating solutions, FPSOs or floating LNG. So first of all, we are -- and we announced a bit more clearly that we are progressing with Coral Norte at the moment for ENI in Mozambique. We very much love a little bit like for NFW, we love the Coral Norte floating LNG because it's a true replicate of Coral South. And I would say, an enhanced replicate to paraphrase our clients because it's not only a replication, but we'll be able to deliver it with a much shorter lead time than the first unit.

So we like that. We have indications that there's interest for maybe more than 2 FLNGs in Mozambique. And floating LNG in Africa on the East or the West Coast seems to be gaining momentum. So it is a solution for some markets. And indeed, our presence for delivering floating solutions being gas or into floating LNG or gas FPSOs or oil FPSOs, I think, is enhanced by the associations that we have formed with SBM purely on FPSO and purely for Suriname at the moment.

But as we -- this project is progressing really well. And at T.EN, we like replication. So if we are all having good experience, and most importantly, if our customer has a good experience with this JV and this association that we formed, why not replicating it? I think that will be pretty powerful.

The next question is from Henri Patricot of UBS.

I'll stick to 2 questions, please. The first one, following up on Qatar NFW. You mentioned your synergies with the existing projects. I was just wondering if you have any comment on how the margin on that project compared to the previous ones and the rest of the portfolio. I think you mentioned medium-term upside potential to the margin. Wondering to what extent NFW plays a role here. And then secondly, still on the margin, this time on TPS. So you're guiding to 2026 EBITDA margin, 14.5%, that's compared to last year, there was 14.3%, but you also mentioned AM&C at 25% margin. So that will imply a bit of a decline for the rest of the TPS business. Just wondering what's the driver of the lower TPS margin ex AM&C in '26 and the outlook beyond that?

Okay. Henri, I'll start with Qatar, and then I know Bruno is burning to answer the TPS margin question. So Qatar NFW, right, we -- like I said, we like it very much because it is coming at the right timing, and it provides a lot of synergies with NFE and NFS, mostly NFS. And it is a true replication of the NFS LNG train. So limited engineering, and it's a unique opportunity. And very rarely in this industry, will you see basins or clients ready to invest this way. There's Qatar Energy onshore on LNG, the way they are doing it, you will have ExxonMobil in Guyana with a delivery model that an execution model that is a bit like a conveyor belt and therefore, very successful because there is replication and replica.

We always, in our industry, including at Technip Energies, have a tendency to underestimate the power of replication. And so yes, I mean, we are entering into NFW starting the project with a level of margin at the start of the project that is absolutely in line with our margin trajectory at Technip Energies for the long-term. But you can trust us with having expressed a different type of ambition to our project execution team. And in particular, because it is replicate. So let's see what the future will provide. As a reminder, we have a very nonlinear margin recognition at Technip Energies. So the first couple of years are about early works, if I may say, or early part of the project. It's going to be slightly dilutive. You will only see the full breadth of NFW's margin contribution later, so into 2028, and 2030. That's where you will see the full contribution and I would say, the full power of the replication.

But again, this is a -- it's a unique opportunity for T.EN, a unique opportunity in the industry, and we are extremely excited to continue with Qatar Energy on this partnership. I think it will yield some very interesting results for us. Bruno on the TPS?

Sure. Thanks, Arnaud. Good afternoon, Henri. So on TPS, it's true that we ended the year at 14.3% at a quite high position. Quite high, and we were, of course, very happy about that. Even that, as I said in my prepared remarks, in Q4, we made some provisions because of this very good performance of the year for increased payout and bonuses to our employees, which impacted Q4. So to some extent, Q4 would have been even higher without that.

But when we started the year, we were at 13.5% as a guidance for TPS and 14.5% was actually the target for 2028 in our medium-term outlook. What happened in 2025 was really a good performance for tail end project of property equipment like furnaces, furnace islands and the delivery of that with slightly lesser revenues. Now for the organic portfolio, what we expected as new awards will come and some of them were unnamed, but highlighted and flagged by Arnaud in the prepared remarks, we would expect a bit of a normalization of this portfolio, not maybe going back to 13.5% EBITDA, but with somewhat of a normalization before being able to step up again.

So you have a bit of a normalization, which was to be expected from the TTS portfolio. That's then you add on the accretive part of AM&C. And basically, that puts us around 14.5% as a guidance. Of course, then we'll want to accelerate and continue to step up as the full of the portfolio will continue to deliver. But at 14.5%, we are already ahead and already had the previously mentioned 2028 kind of target.

The next question is from Victoria McCulloch of RBC.

Can we just focus for a second on the commercial pipeline? Can you give us some color as to -- of that EUR 70 billion, how is decarbonization as a percentage of the commercial pipeline changed maybe over the last 12 months? We've seen calls for EU carbon market to be suspended. The latest of these has been from Italy today, which feels like a stark difference, I guess, to a couple of years ago. How have the conversations with your customers within this decarbonization portion of commercial pipeline, how have they been evolving over the last 6 months as the sentiment in the sector has changed significantly?

Hello, Victoria. It's a very interesting topic. And I would say the past year have been a clear reminder that there will be no whatever, so-called energy transition or no decarbonization that is not an affordable one. And it needs to be a market-driven transition. And unfortunately, there are, I would say, areas and spaces and also domains in terms of being carbon capture, sometimes SAF, sometimes low carbon molecules such as the blue ammonia, et cetera, where things have slowed down for the lack of takers.

So it's obviously disappointing that those projects could not find a path forward in the near term, ultimately due to the challenges with offtake and policy. And those projects, they need stable policies. They don't need moving goalposts. They also need a carbon price that is adapted to creating a market. One project alone is not sufficient to create a market. So I think there has been a bit of realization that we've reached the end of the fairy tail when it comes to some of those domains. But I'm going to look at the glass half full rather than half empty.

There are areas and there are pockets of opportunities where those projects are viable in Spain, Southern Europe, in India, some in the Middle East. We just signed the SAF project in Netherlands. So we Technip Energies, we invested when we were created 5 years ago, we invested into carbon capture, SAF circularity and other blue molecules. But we also did that and green actually as well on green hydrogen. But we did that in -- without deploying too much capital.

And so I am personally not so disappointed about the way the market is -- because we, as T.EN, we are present when those projects are happening. We are executing the large green ammonia project for -- I mean, in India. We are on SAF in Europe and elsewhere. We are on carbon capture in the U.S. and Northern Europe.

So the important for us is to be present and to be winning in those spaces, and we are. The only, I would say, space for a slight disappointment is that, yes, we would have loved for the volume to be greater. But where it's happening, you will find Technip Energies, and that's the most important. And all this is happening while the rest of the business, the core business like LNG, like everything around gas continues to thrive and continues to grow and continues to decarbonize because let's not forget that our clients in the more traditional space are looking at solutions to lower the carbon intensity of their products. That's why you see large carbon capture being deployed on all LNG facilities in Qatar. But not only, that's why you see LNG facilities being electrified on Ruwais in UAE by ADNOC powered by nuclear electricity, therefore, decarbonized electricity. Same story for TotalEnergies in Oman for LNG as a shipping fuel, where associated solar plants are being built.

So I think the train around towards lowering the carbon intensity of the product has left the station. We are onboard that train and it's fantastic. What is a bit slower than one could have dreamed or dream, sorry, it's really some of the blue molecule and around that space, yes, it's much slower. But the important is that to remember that the rest has not disappeared, it continues to grow and that Technip Energies is present where the blue or the green or the carbon capture or the sustainable aviation fuel is happening. And that plays to the strength of the portfolio.

That's great. Thanks very much for that color. And just as a follow-up, maybe one for Bruno. Could you give us some color on what you expect working capital movements to look like through the year?

Sure. Hello, Victoria. So working capital, first, I'll start maybe with year-end because we had a bit of unusual working capital swings, a bit more, if you look at our balance sheet, a bit more accounts receivable because we had EUR 100 million, EUR 150 million plus of invoices, which were supposed to be paid just at the tail end and which were instead were received on the very, very early Jan.

So as you know, always the lumpiness of having one invoice and a few days can present and also from an accounts payable side, as we migrated an ERP for our largest operations to be France, Middle East and so on, we decided to anticipate some payments to subcontractors and suppliers so that projects would go ahead despite any issues of ERP migration and as you ramp up. So you should expect this kind of accounts payables or working capital to unwind.

Then you will have the more traditional aspect of working capital, which means the new generation of projects, so NFW with the advanced payment and the first milestones being reached plus all the rest of the projects that may constitute the EUR 12 billion plus order intake that Arnaud highlighted in the slide, this will positively contribute in terms of working capital. It will be dilutive from a P&L and bottom line perspective, but it will be accretive from a cash flow and working capital perspective.

Then you will have the more tail end projects that which you may have a bit of an unwind. But I think with the momentum of the portfolio, you should expect somewhat of a positive movement on working capital overall because that of the portfolio plus the reversal of the somewhat specific end of the year '25 situation.

The next question is from Jean-Luc Romain of CIC CIB.

I have 2 questions on LNG. The first is in the NFW contract you announced yesterday. Is there a TPS component, for instance, of part of the carbon capture? And the second is, in your incoming orders, I noticed there's nothing about Rovuma LNG. Is this a decision that ExxonMobil plans to take later in the year or maybe next year?

Thank you, Jean-Luc. So first on NFW, short answer, no, there is no TPS content into NFW. In this case, the carbon capture is pre-combustion and not post combustion. We own and we deploy solutions that are part of TPS in the post-combustion world. That's why that is what is deployed on net zero T side and other applications. So -- but precombustion, we deploy someone else's solution as we have done it for now many years, so we master that one. We know how to scale it up, but it's not Technip Energies, and therefore, it doesn't provide for TPS content through NFW.

So Rovuma, as you would have seen in the news flow, there is quite a positive momentum on this one, and that's -- we're very happy about that. We know the lifting of the force majeure on TotalEnergies, Mozambique LNG. This is a positive development. And we see increased momentum on Rovuma prospect from our conversations.

So as always, a reminder, we do not control the timing of the FID. That's very much in Exxon's hands. This Rovuma project is absolutely very high on our radar screen, but it is competitive. And it is worth noting that we've been engaged on Rovuma for several years already. As you know, we've done the FEED, and we've been engaged with Exxon, assessing the project from different solutions and development perspectives. And this project will be modular and which is, as you know, our preferred solution.

So FID 2026 or 2027, let's see, lots of engagement, lots of interest and a very good momentum, but it is competitive. Therefore, we're going to remain cautious with our comments, but it's a project with attributes and characteristics that are extremely interesting and attractive for us. And yes, we intend to be the fierce competitor on this race.

The next question is from Bertrand Hodee of Kepler Cheuvreux.

Yes. I have 2. The first one is on your prospect in TPS. Regarding either carbon capture or ethylene, especially ethylene in the Middle East. Do you see more momentum here? And then the second question, I was doing some very rough math, EUR 16 billion backlog end of year '25, your projection EUR 24 billion H1 '26. It looks to me that you are -- if you achieve that, you will be already above EUR 12 billion of order intake for H1? Or am I doing any mistake here?

Hello, Bertrand, I mean, you rarely do mistakes. So -- but we like to have a bit of a cautious approach as always. And on our communication, we are providing a -- I would say, a number that is about what has been announced or what is known and what is supposed to be awarded in the very near term. So it's a very short, I would say, window that we are projecting.

Of course, then there's the rest of the year, H2 in particular, with some opportunities. So the -- we always -- like I said, lumpiness is part of our life. And whether a project is awarded on the left side or the right side of the 31st of December, it doesn't change much for Technip Energies, except of course, that it does change -- it can change drastically the shape and form of an order intake for a year. But yes, the potential is the one you're describing. Let's see if it realizes.

But there is -- it's a realistic scenario. But we've seen last year, a few things pushing to the right. And so -- and it wouldn't be the first time. So that's why we decided to report on, I would say, what is a shorter window. And we don't guide on order intake, as you know. And also just a reminder for everyone on the call, we don't reward on order intake. That's because we want the right orders to make it to our portfolio, we don't want to race to volume. We want to race on quality.

In terms of the prospects for TPS, Yes, we do have -- and we -- I believe on the slide, we decided to call them undisclosed prospects, but we are very clear -- if they are on the slide, it's because we have a very clear line of sight for them, in particular, in ethylene and phosphates and others. So there's a bit of a restart on that front, and that should provide for a positive momentum ahead.

Thank you very much. And congrats again for this new win in Qatar that resemble more of partnership than anything else.

It is, thank you.

The next question is from Paul Redman of BNP Paribas Exane.

My first one is just going back to TPS quickly. I just wanted to ask what gives you the confidence to guide to EUR 2 billion to EUR 2.2 billion of revenue in '26? The reason I ask is when I look back at last year, you have EUR 1.3 billion of buyback into backlog in 2025 and you guided to EUR 2 billion to EUR 2.2 billion. This year, it looks like you've only got EUR 1 billion in the backlog at the moment.

And then secondly, just to touch on NFE. Just to touch on timing for when you expect start-up, interval between trains, kind of how is that project progressing?

Hello, Paul. I'll start with NFE and then I'll hand over to the -- to our TPS expert, because Bruno has been diving on TPS quite a bit recently. So NFE, I was on site just earlier this month on NFE and on NFS. And I'm just happy to report that the project is progressing well with the first train being in a commissioning and pre-commissioning and commissioning phase. So construction on the first of the 4 NFE LNG trains is actually mostly completed. And we are progressing per plan on the ramp-up of -- when you start up the plant, you need to be -- to put everything under pressure, pressure test everything, everything makes a pre-commissioning and commissioning activity.

A reminder as well of the fact that in order to start up the first train on NFE, we needed to have all of the utilities up and running. So the utilities for the totality of the 4 trains, right? So I would say the level of effort to reach Train 1 readiness is much higher than what has to be achieved for Train 2, 3, and 4 readiness. And the fact that we are in pre-commissioning and commissioning mode should signal to you that all the utilities are actually up and running and that we are capable of bringing the gradually the first train on stream.

So it's -- and that construction is broadly over there. And I could see it in my own eyes just earlier this month. So I would say, let's not believe everything that we can read in the press. If the client was unhappy, I think we would have heard about it and probably we would not have been awarded NFW. We stay very close to them. And for any commissioning and pre-commissioning of that scale, this is -- it's an activity that is happening hand-in-hand with the client and the client's operations team to bring such a large facility on stream. It's not only with Technip Energies, it's hand-in-hand with the -- it's a teamwork with the clients' team. So there is really no reason to doubt the timing that you have heard from our clients.

Yes. So on the TPS momentum and backlog versus the projected revenues. So first, of course, as I said, AM&C will be consolidated from Jan 1. It's not a backlog business, so that will contribute despite that it's not really part of the backlog at the end of the year. So of course, that's the first element.

Second, as I also said, you always have some PMC work, which was quite successful over the last couple of years, which are not recognized in backlog. But as the services are called off, then they are delivered. So they are absolutely representing kind of a book and burn element.

But third and maybe most importantly, last year, we were having some tail end delivery of property equipment, so more technologies and products backlog, which pretty much have been completed during the year and represented a bit of a boost to the bottom line, as I said before. Now this is a bit of the reverse this year. And as mentioned by Arnaud to Bertrand's question, we have a clear line of sight in more meaningful awards in ethylene, in hydrogen and for instance fossil projects, which were not in the backlog of revenues in the prior years, that should complement. So that should give us some contribution this year, although not in the backlog. So that's why it's not exactly easy to compare last year's momentum with this year's momentum.

Paul, it's good because we will be adding product content into the TPS backlog, and that's like putting more volume and also provides a bit of a longer cycle content into a short-cycle business.

The last question is from Jamie Franklin of Jefferies.

So firstly, just on project delivery revenues. I know you typically don't give any quarterly guidance, but given the significant step change in revenues through 2026, could you help us think about the phasing this year? Should we assume kind of a slow ramp-up and more of a back half weighting? Or is it more evenly split than that? And then obviously, projects revenues are very well covered by backlog already, and you talked to the EUR 12 billion near-term order intake potential. In terms of NFW, how should we think about the revenue phasing for that particular contract? Could there be much of a contribution in 2026?

Hello, Jamie. So I can start and Arnaud may complement. So yes, in terms of there will be a ramp-up, and you would have -- you could have some cutoff and milestones and so on, but you would expect some ramp-up during the year. Now it's true also to your point, that NFW won't have a major contribution this year because it's early phase. It's going to be this year early phase since it's a replication, the detailed engineering and so on is, to some extent, already done. So that's why you would have a bit of low start for NFW in terms of P&L contribution and then you will ramp up as the orders are placed to the market. So for the ramp-up of revenue for project delivery, I think it would be fair to have a bit of a gradual step-up as we go throughout the year.

Gentlemen, I turn the call back to you for any closing remarks.

That concludes today's call. Please contact the IR team with any follow-up questions. Thank you, and goodbye.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.

Good afternoon. This is the conference operator. Welcome and thank you for joining the Technip Energies Third Quarter 2025 Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Phillip Lindsay, Head of Investor Relations. Please go ahead, sir.

Thank you, Maria. Hello and welcome to Technip Energies financial results for the first 9 months of 2025. On the call today, our CEO, Arnaud Pieton, will discuss our 9-month performance and business highlights. This will be followed by CFO, Bruno Vibert, who will discuss our financials. Arnaud will then return for the outlook and conclusion before opening for questions. Before we start, I would urge you to take note of the forward-looking statements on Slide 3.

I will now pass the call over to Arnaud.

Thank you, Phil, and welcome, everyone, to our results presentation for the first 9 months. Let me begin with the key highlights. I am pleased to report that Technip Energies has delivered a solid financial performance for the first 9 months of this year. We recorded year-over-year revenue growth of 9%, we maintained strong profitability and we generated a significant uplift in free cash flow. These results reflect our disciplined execution, the strength of our asset-light business model and the commitment of our teams worldwide. Based on these results, we confirm our full year guidance.

On the commercial front, we strengthened our global leadership in LNG and modularization. Notably, we were awarded a major contract in U.S. for Commonwealth LNG using our modular SnapLNG solution, a topic I will expand upon shortly. Finally, in line with our strategy to enhance our Technology, Products and Services segment; we announced the acquisition of Ecovyst's Advanced Materials & Catalysts. The transaction broadens our capabilities across the catalyst value chain and upon completion will be immediately accretive to T.EN's financial profile.

Turning now to our theme for 2025 and our foremost priority, execution. On Project Delivery portfolio, it continues to deliver solid progress as evidenced by year-to-date revenue trends and margin resilience. We are transitioning into pre-commissioning activities for the first of our 4 trains on the NFE project. Simultaneously, we are intensifying activities on the adjacent project, NFS, which continues to ramp up. Alongside this progress, we are advancing towards completion of downstream projects, including the Assiut cleaner fuels refinery in Egypt and the Borouge ethylene plant in the UAE.

In TPS, we have been achieving important milestones across a range of decarbonization projects. We have successfully started up the first plant deploying our innovative Canopy by T.EN solution for Carbon Centric in Norway. And for the TPS scope of Net Zero Teesside, we are progressing with the CO2 absorber module fabrication at our facility in India. In summary, the third quarter has seen strong execution across important energy and decarbonization contracts.

Let me now provide an update on our recent commercial successes, which have further cemented T.EN's global leadership in LNG and modularization. I am delighted to confirm that we signed another major LNG contract in the U.S. with Commonwealth LNG. This milestone follows the execution by T.EN of the front-end engineering and design. The delivery model for Commonwealth LNG leverages SnapLNG by T.EN, our innovative modular pre-engineered and standardized solution.

The Commonwealth LNG facility will feature 6 identical liquefaction trains to deliver a total capacity of 9.5 million tons per annum. We have initiated the project under a limited notice to proceed. This allows us to begin preliminary activities such as placing purchase orders for key equipment. It is important to note that the full value of this contract will only be reflected in our order book upon issuance of the full notice to proceed, at which point it will make a significant contribution to the company's backlog.

In conclusion, a very positive development for T.EN, one that enables us to enter the U.S. LNG market on our own terms through early engagement, the application of modular solutions and a disciplined contractual approach. Beyond our recent success in the U.S., I would like to draw attention to several other important awards in LNG and circularity markets. First, our position as a leader in deep offshore floating gas liquefaction has once again been reaffirmed. In August, we secured a large contract for Coral Norte, a floating LNG unit in Mozambique for Eni. This initial scope covers preliminary activities with further order intake anticipated upon full contract award.

Second, our early engagement approach continues to be a cornerstone of our success. It positions us strongly for future awards and helps derisk project execution. In line with this strategy, we have been awarded 2 FEED contracts for the Abadi LNG development in Indonesia for INPEX. First, for the liquefaction facilities to deliver annualized production of 9.5 million tons and the second is for the modularized floating gas infrastructure. We remain very confident in our medium-term outlook for further LNG awards.

Lastly, we have secured a key service role for the Ecoplanta waste-to-methanol project in Spain for Repsol. This award builds on the strategic collaboration between Technip Energies and Enerkem and illustrates the strength of the partnership in accelerating the deployment of circular solutions at scale.

Turning now to September's announcement of the acquisition of Ecovyst's Advanced Materials & Catalysts, AM&C. The acquisition supports Technip Energies' strategy for disciplined growth of our TPS segment. It demonstrates our value-driven approach to M&A, it is financially accretive and it benefits from positive long-term market trends. It will bring in differentiated capabilities in catalyst technologies and advanced materials, enhancing our ability to deliver high performance process critical solutions to our clients. It also adds a new dimension to our catalyst business, unlocking avenues for product development and market expansion.

Post completion, a talent pool of 330 people will join Technip Energies bringing complementary skills and expertise into the company and we will ensure the entrepreneurial culture and business momentum of AM&C is preserved through the integration process. Now importantly, the deal will have no impact on our investment-grade credit rating. T.EN will retain a substantial net cash position providing capital allocation flexibility for other opportunities.

Before passing to Bruno to review our 9-month performance, I'd like to take a moment to outline how the AM&C acquisition will, following completion, materially enhance our TPS offering across the asset life cycle. With catalyst IP at the core of many process technologies, catalysts serve as a key differentiator in process technology development and are highly complementary to our existing offerings. One of the compelling aspects of catalyst is their consumable nature, which opens multiple recurring revenue streams throughout the OpEx phase.

Where T.EN would typically sell process technology once per project, catalysts are replenished multiple times throughout the lifespan of a plant. As such, around 70% of AM&C revenues are tied to operating expenditures, which will improve our long-term revenue visibility. In terms of financial impact, the addition of AM&C will increase the technology and product component of our TPS revenues from 40% to over 45% based on 2024 pro forma. Furthermore, AM&C generates EBITDA margins substantially higher than our TPS segment. In summary, the transaction is all about advancing TPS, accelerating its growth, enhancing profitability and providing T.EN with a platform to unlock further value for all stakeholders.

I will now pass to Bruno to discuss the financials.

Thanks, Arnaud. Good morning and good afternoon, everyone. I am pleased to present the key highlights of our solid financial performance for the first 9 months of 2025 reported on an adjusted IFRS basis. Our revenues increased by 9% year-over-year reaching EUR 5.4 billion. This growth was underpinned by strong activity levels across our LNG portfolio and offshore projects. Recurring EBITDA rose also by 9% to EUR 478 million delivering a healthy margin of 8.8%, which is stable versus last year. The improvement in TPS profitability was notable although it was offset by a rebalancing of the project delivery portfolio towards more early stage work.

EPS recorded a modest increase of 2% year-over-year supported by strength in EBITDA. This was partially offset by lower financial income and an increase in nonrecurring costs mainly attributable to planned investment in Reju and other strategic initiatives, which are more capital allocation in nature. Excluding these strategic investment costs, EPS growth would have been double digit. Free cash flow conversion from EBITDA remained robust at 87%. This strong conversion rate supported free cash flow growth in the midteens compared to last year. In summary, a very solid first 9 months and I'm pleased to confirm that we are on track to achieve our full year guidance.

Turning to the performance of our segments. Let me begin with Project Delivery. Revenues have grown substantially rising by 16% year-over-year to reach EUR 4.1 billion. This uplift has been driven by strong activity across LNG projects and growth in contribution from recently awarded projects, including GranMorgu and Net Zero Teesside. On profitability metrics, both recurring EBITDA and EBIT have recorded strong increases with growth rates at or approaching double digits. Recurring EBITDA margins experienced a modest contraction of 30 basis points year-over-year.

This movement primarily reflects portfolio rebalancing with a higher proportion of early phase projects, which typically contribute limited margin at this stage. We continue to see the full year EBITDA margin to be consistent with the 9-month performance at around 8%. Finally, our backlog remains reassuringly strong at over EUR 15 billion equating to more than 3x our 2024 segment revenue. This resilience persists despite the absence of major awards during the third quarter and the impact of adverse foreign exchange movements.

Encouragingly, our commercial pipeline remains well populated with good proximity to major awards in the coming months and quarters. In summary, Project Delivery continues to demonstrate robust momentum underpinned by solid revenue growth, a healthy backlog and very strong positioning for future opportunities.

Turning now to our Technology, Products and Services segment, TPS. TPS revenues declined by 9% year-over-year. Strong volumes in consultancy services and studies and ramp-up of assembly on our carbon capture products were more than offset by a lower contribution from our ethylene furnace deliveries. Additionally, foreign exchange movement had a significant impact on our revenues. In fact approximately half of the overall revenue decline can be attributed to these currency effects with the weaker U.S. dollar being a notable factor.

Despite the reduction in revenue, recurring EBITDA increased by 6% year-over-year driven by an impressive 200 basis point margin expansion to 14.8%. This improvement was driven by a strong performance in our productivity activities. Furthermore, catalyst supply and strength in project management consultancy also contributed to this margin expansion. Looking at our order intake. The book-to-bill ratio on a trailing 12-month basis remained above 1, which is a positive indicator.

Nevertheless, commercial activity through 2025 has been affected by the broader macroeconomic environment leading to some delays in the awarding of several anticipated larger product and services contracts. As a result, TPS backlog has reduced by [ 16% ] since the start of the year standing at EUR 1.7 billion as of period end. Despite these short-term headwinds, our teams are actively engaged with clients and we see healthy pipeline of tangible opportunities across our core markets.

Turning to other key financial metrics beginning with the income statement. Corporate cost for the first 9 months of 2025 totaled EUR 46 million with a return to more normalized pattern in Q3 following the specific factors that impacted long-term incentive plans in the first half of the year. Net financial income remained very positive at EUR 70 million, but trending modestly lower compared to the prior year aligned with the broader movement in global interest rates. Finally, on the P&L, nonrecurring expenses has increased year-over-year presenting a headwind to our EPS growth.

As I highlighted last quarter, the majority of these costs are associated with capital allocation decisions. Approximately EUR 35 million relates to the investment in adjacent business models, including Reju, as well as strategic initiatives such as M&A activity. Moving on to the balance sheet. Our financial position remains very healthy. Key line items, including cash, debt and net contract liability are stable compared to our year-end position.

Before handing back to Arnaud, let's take a closer look at our cash flows. Free cash flow, excluding working capital, totaled EUR 416 million for the first 9 months corresponding to a robust cash conversion from EBITDA of 87%. This strong result underscores our disciplined execution, the strength of our asset-light business model and the favorable contribution from net financial income. Working capital year-to-date is slightly positive. Capital expenditure at EUR 60 million was modestly up compared to last year.

The main investments were directed towards the ongoing expansion of our Dahej facility in India as well as the continued modernization of our facilities and labs. Finally, despite a foreign exchange impact of EUR 201 million, cash and cash equivalents at the end of September stood at EUR 4.1 billion, which is consistent with the year-end position.

With that, I now hand back the call to Arnaud.

Thank you, Bruno. And turning now to our outlook. Last November at our Capital Markets Day, I spoke about the global megatrends of population expansion, urbanization and rising economic output; all driving demand for more energy and infrastructure. I talked about the need to supply more energy derivatives like fertilizers and plastics and about producing more with less emissions and less waste. In other words, the critical need for a pragmatic decarbonization with greater circularity.

Despite the macroeconomic and geopolitical backdrop, these trends are robust and enduring and as T.EN has the solutions to these challenges, we see opportunities across our markets to build upon our growth potential. Traditional energy sources, particularly natural gas, continue to play a vital role in ensuring energy security and affordability for the foreseeable future. This reality is creating compelling opportunities for T.EN in the near, medium and long-term horizons, notably in LNG and selective offshore developments.

The chemical sector, especially ethylene where T.EN is a leader, is seeing early signs of recovery. Plans for greenfield projects and retrofit work are firming up with major investments ahead, notably in markets like India. In decarbonization, the blue molecule space is already a source of opportunity for T.EN where carbon capture remains the preeminent solution for decarbonizing many sectors, notably power generation and cement. In summary, T.EN remains opportunity rich, naturally hedged and positioned to thrive in any energy scenario.

So to conclude, our performance for the first 9 months delivered solid year-over-year growth in revenue, EBITDA and free cash flow. We have very notable near-term prospects with potential to strengthen our medium-term outlook and we have excellent visibility for 2026 with already close to EUR 7 billion scheduled for execution next year. As we pursue further growth, we remain disciplined in managing the company's capital allocation and our cost base. We are focused on building for the long term, investing to enhance our differentiation and delivering value creation for our shareholders.

With that, we can now open for questions.

This is the conference operator. [Operator Instructions] The first question is from Sebastian Erskine of Rothschild & Co Redburn.

The first one just on TPS and the performance so far. So I'm thinking about the full year, it looks towards the bottom end of the EUR 1.8 billion to EUR 2.2 billion. I'd appreciate to get your thoughts on specifically what's kind of disappointed year-to-date versus your expectations. And then I was intrigued to note in the presentation, you mentioned kind of early signs of recovery in ethylene. I'm just thinking kind of given the supply of polyolefins driven by China and some kind of supply consolidation in Europe and North America, it appears a difficult market. So I appreciate some more details on that and what you're seeing so far.

So let's start with the TPS performance. I'll start with making a bit of a statement in a sense that, yes, TPS 2025 is a bit of a blip, we may call it this way, in a sense and I'll remind everyone of a few things. Technip Energies we were creating in 2021 and since our creation, we have dedicated our investment R&D efforts to low carbon solutions. So we have invested with notable successes and continued successes to bring to the market new solutions and new solutions were mostly in future growth markets such as SAF, carbon capture, circularity for example.

And it's fair to say that the environment in 2025 hasn't really been supportive of more CapEx in those areas. But when I look at what is coming our way, I must say that the trend is undisputed. So it's a bit of a game of resilience. We, as a company, must find the right solution, make them investable and affordable for our clients and everyone around. So in the short term, this has impacted 2025. You've heard from Bruno that the services part of our TPS segment has remained really strong.

The blip or the disappointment is more coming from the amount of CapEx in solutions for decarbonization and SAF and carbon capture in 2025. But we remain extremely confident for the future. Again, the trend is undisputed. So I will take advantage of your question and my answer to your question to also say that in the short term, this CapEx trend for low carbon solution may impact the growth momentum for TPS in 2026 as well. So in the same way as we have been trending towards the bottom end of the 2025 guidance for this year, I think it might be fair to consider that the same trend will apply to 2026.

So maybe calling for a bit of a rebaseline for TPS towards the bottom half of the 2025 guidance for 2026 on a pure organic basis. I'll take advantage of your question as well to remind everyone that during our Capital Markets Day, we also said that we needed to continue to invest in our traditional markets. So in 2026 you will see, I would say, a larger share of our R&D investment being directed towards what people may consider more traditional markets so a bit less decarbonization and a bit more ethylene maybe even though even in ethylene, we are innovating through low emission furnaces.

And we continue to invest in all markets, hence also the acquisition of AM&C, which covers both the traditional and the future growth markets. So really, look, the important is maybe a little bit of a blip in terms of the top line, but TPS should not be about top line. It should be about bottom line and we are delivering on the bottom line for TPS as well as for the whole company. And it highlights again the benefits of our model, which combines long cycle Project Delivery and a short-cycle TPS. So I think it speaks to the strength of the company overall.

In terms of ethylene, yes, indeed, we see an increased visibility on ethylene and we are anticipating order intake in 2026 based on our various discussions with series of clients. This includes green and brownfield opportunities. The key ethylene opportunities with technology and license selections will happen as early as Q4 2025 so in the weeks to come. Of course if it's pure technical license selection, it will not have a significant impact to our order intake just as yet, but it will follow with potential proprietary equipment award in 2026 and this will be more clearly visible in our order intake for TPS next year and the main areas, as indicated, are India, Middle East, China and Africa.

The global ethylene industry today has a capacity that is north of 200 million metric ton per annum and again, ethylene is GDP led and with the expansion driven by demand in packaging, construction, automotive, consumer goods sectors. The global growth forecast at 3% to 4% per annum of this GDP would see the industry capacity grow to north of 300 MTPA by 2040. So there's a large volume of work that is required in terms of greenfield and brownfield in the ethylene sector and we are starting to see those early signs of work and recovery coming our way.

The next question is from Bertrand Hodee of Kepler Cheuvreux .

So I have many question on your LNG potential awards. You've been highly successful commercially, but yet there are significant awards that are not yet in the backlog. And probably can you give us some color on U.S. Commonwealth LNG? Specifically, you've been ordered limited notice to proceed. The project is very close to FID, but had a setback 2 weeks ago in terms of permitting in Louisiana. Maybe you can share your view on that and also whether you think that the client could be in a position of taking FID without having these permits on board?

And then if you can give us some color also on Coral, why it's not, I'd say, in the backlog as Eni has taken full FID? And then probably the last one to make the world too on Rovuma LNG, it looks like Exxon is targeting now an FID in Q1. Can you confirm that you've performed the FEED and that the FEED is complete? And probably if you can also give us some color on the FEED, whether it is on the SnapLNG concept or not?

So I'll start with stating that our overall environment and commercial pipeline has not really changed. You're right to say that we haven't seen large awards in Q3 or even through 2025 with the exception of our very large -- I mean the largest blue ammonia plant in U.S. that we signed in Q1. But 2025, we always stated that it would be a year of execution and that not controlling the FID, awards could come very late in '25 or could actually be in 2026. But the long-term fundamentals and the medium-term fundamentals of our markets really remain strong.

So the commercial pipeline has not weakened at all and it's not the first year in 2025 where we are seeing a bit of a weak order intake until FIDs are coming, in which case, all of a sudden there is a very nice spike of new awards coming to -- making it to our backlog. So specifically on Commonwealth LNG, first of all, the team is mobilized. We are progressing the work through limited notice to proceed and we continue to be very confident with the project. We obviously don't control the FID. Whether it's this quarter or next makes very little difference for us.

We continue and our client is very confident that they can address the small concern that was maybe caused by a permit situation and they are very confident that there is no impact whatsoever on their path to FID from this permit vacation. I will also state that earlier this year, the project was really strengthened with Mubadala Energy agreeing to acquire about 25% stake in the project. So it's giving a lot of credibility to this project. And I mean our contract with Commonwealth LNG also allows for, I would say, a next or an extended limit notice to proceed if the FID is not reached in the weeks or months to come or before year-end.

Then we will enter into another phase of limit notice to proceed with, I would say, more money being spent and more investment being made into the project and the team continuing to progress the project. So I would say what you're hearing from me is a high level of confidence in this project because of its progress, its stakeholders and the money that is flowing into progressing the work at this stage.

On Coral floating LNG, why not in the backlog? There has been a lot of press about this one. FID has been taken. It's not yet in the backlog because there's a bit of an administrative technicality that needs to happen for the full notice to proceed to be provided. In other words, there's a bit of SPV or special purpose vehicle in Mozambique that needs to be formed and we will receive our purchase order, if I may say, from this SPV. It's a pure administrative exercise and we are very confident that it will happen in the early part of next year. So it will come into -- join our backlog by then.

On Rovuma LNG, a very exciting project for Exxon in Mozambique. We have indeed executed the FEED and so therefore, following our guiding principles, we are competing for the project execution. It's a competitive process, as you know, it's all over the press. So our association with JGC is competing against another consortium or JV and we are in, I would say, final stage of finalizing our price. That will be submitted to Exxon in the weeks to come. The concept that is selected is, I would say, very similar to SnapLNG even though it's not totally Snap because there are a few variations in technologies, but nothing major. So it's a concept that we like and that we know really well now because we've worked on the field for the past couple of years.

And just a very small follow-up. Obviously there is some market concern on the low level of revenues for TPS in Q3. I noted that you have EUR 480 million something of revenue for execution for TPS in Q4. It looks to me that something around EUR 500 million or even above is likely within reach for Q4 for TPS now?

Yes. And that's why you've heard from Bruno and myself that we are confirming guidance for the year. So we will be within the range that we provided for 2025, absolutely.

The next question is from Alejandra  Magana of JPMorgan.

Just 2 quick ones from my end. After the Ecovyst AM&C deal, are you seeing other bolt-on opportunities at similarly attractive multiples or does it make more sense to focus on integration before adding more? And my second one, what is the current share of recurring technology and services within TPS currently?

So to start, I'll start with AM&C and then I'll hand over to Bruno on the level of recurring revenue within TPS. So AM&C, it's a super attractive acquisition that we are making. We are focusing in the short term on integration of course; first of all on the closing and then on the integration. Now I want to characterize a little bit AM&C. AM&C is a business that is, first of all, self-sufficient and performing. That's why in my prepared remarks, I really insisted on the fact that we will be focusing on making sure that we are through integration, maintaining AM&C's ability to operate and be, I would say, entrepreneurial and provide them with the means to invest.

So there isn't, I would say, too much integration to do and therefore, I think this speaks in favor of preserving nicely AMC's ability to perform. This addition actually opens the door to actually more avenues and things we can now contemplate to complement the AM&C offering. So it's probably not the end of the journey. But with always some prerequisite, as Technip Energies, we want to preserve investment grade. We will remain selective and disciplined and our M&A targets are focusing on techno product and catalyst and maybe opportunistic in services, but the technology is our priority.

So we are contemplating adding complementary technologies and solutions to AM&C and our existing portfolio. So yes, we continue to scout like any good and healthy company is probably doing and we feel really good about AM&C in particular as there isn't a massive herculean effort of integration to do. We will preserve the AM&C objective, if I may say, once it is part of the Technip Energies family. Bruno on...

Yes, sure. So on the recurring revenue aspect and contribution within TPS to your point. And as Arnaud mentioned in his remarks, one of the attributes for AM&C and the quality of earnings was the fact that this was 70% OpEx related in terms of revenue generation, which is for us something which is interesting because today, we would be far below in terms of this. When it gets to the current TPS portfolio in terms of services, we may have a few master service framework and we may have very limited operation and maintenance services. So the bulk of our services are really associated to new CapEx.

And in the variation of revenues that we've seen this year and the 9% reduction of TPS, as I said, part of it -- almost half of it is FX. But a significant component was the fact that over the last couple of years, we've had a low petrochemical cycle so ethylene cycle, which has resulted to some extent in this movement. So as explained in the CMD, the replication of the ethylene model was I think a good way for us to derisk that we were less dependent on the cycle so to have carbon capture, sustainable fuels, circularity.

All these are building blocks to make us a little less dependent on one industry cycle. But second, to your point, yes, having a bit more exposure to the OpEx element such as the catalyst and what it brings in terms of proximity to clients, that's an interesting bolt-on and add-on as a platform to our revenues. So that will absolutely increase the quality of earnings of TPS.

The next question is from Richard Dawson of Berenberg.

Just a couple of follow-ups from my side. So margins in TPS actually have been running above the top end of guidance year-to-date. Clearly, you had a very strong result in Q2. But looking into Q4, do you still see pretty good sort of solid margins there for TPS? And then secondly, just coming back to the U.S. LNG opportunities and particularly Lake Charles. We saw the client delay FID to Q1 2026, which, to your point, doesn't really matter for earnings estimates going forward. But does this have anything to do with the price refresh campaign on that project concluding?

Richard, I'll start with the first question and I think Arnaud will cover the second one. So on TPS margin, yes, to your point, we've seen high margin. That's why at the end of H1 in July, we upgraded guidance in terms of EBITDA percentages and we're absolutely on track there. It was the outcome of good performance from the services aspect of TPS that you should absolutely expect this to continue. And the fact that by the delivery of the furnaces and some of that, we had a bit less contribution from the top line, but then more contribution from the bottom line.

As Arnaud mentioned, I think the trajectory and the kind of rebaseline, we are around the same track is in continuity. So yes, although revenues are expected to pick up from TPS on Q4 versus Q3 in terms of bottom line, the bottom line of TPS should continue to be strong. And then when the closing of AM&C is done, we will have a further upside coming from the contribution from AM&C, which will be a further improvement of TPS margin.

So on U.S. LNG and your follow-up question. So we have 2 opportunities in the U.S. on LNG. The first one, which I discussed a bit earlier, which is Commonwealth and on which we have a team already mobilized and therefore, working on this limited notice to proceed. By the way, this limited notice to proceed is the same, I would say, avenue or system that is being used by Eni to allow the progress to happen on Coral Norte. So it's not unusual. And there's on Commonwealth again, money spent and there isn't subject around price or budget.

The price verification campaign, that was a contractual phase agreed with our client on Lake Charles LNG, was completed. The good news is that you may have heard from Lake Charles LNG themselves, our client, that the price that we came up with was actually well per expectation for the lack of better word. So this price verification done, the ball is in the hands of our clients and no concerns with regard to cost. The price verification results basically to qualify it as per our client was right. So that's super encouraging. And obviously while we don't control FID, we are hopeful and very hopeful that this FID will be taken next year.

The next question is from Victoria McCulloch of RBC.

And just to follow-up on that point about Lake Charles. Does that mean the price verification that you've done lasts until the end of 2026? Is there a time that you can give us that that lasts for? Obviously we've seen lots of delays to the U.S. LNG FIDs and with respect that continues. So it would be helpful to understand when exactly the refresh lasts until. And then we haven't really talked about SAF today. Can you give us a view on the contracting outlook maybe for the next 6 to 12 months? I think there has been discussed a reported opportunity coming up at some point in this year. Has that slipped again to the right into next year? That would be helpful.

So again, on Lake Charles, the price verification comes with, I would say, the mechanism for price adjustments depending on the delay or the time the client takes from the submission of the price refresh and the actual time for FID. So there is a frame and we are absolutely within the frame in a very controlled manner. So everything is accounted for, if I may say, and planned. So the validity remains because the contract allows for the price adjustment depending on the timing between submission of the budget and actual FID. So no exposure for T.EN and I would say, a constant monitoring of the situation there.

When it comes to SAF, so indeed, you're right. We had signaled that SAF was and is an opportunity. So I'm happy to report that SAF remains an opportunity for 2025 and 2026, but including for Q4 2025. So yes, let's see. We are well advanced with one, which I won't share too much on right here, but many and good building blocks for potential FID within this quarter. And more generally speaking, when you think about SAF and you need to think about scale, the SAF projects are kind of feedstock constrained and most will be local plants serving local needs.

So don't expect big export projects like for LNG for example. SAF is not about that scale, but there's a lot of SAF needed going forward with -- it's a theme for the long term for sure. EU is 6% by blending by 2030 and 20% by 2035. So that's 15 million ton per annum by 2035. So it's a huge investment required. So even if there was to be a bit of a slowdown as policies can be challenged, there's still a massive potential and it's important to know that T.EN is part of it and it remains an opportunity, including for this quarter.

The next question is from Guilherme Levy of Morgan Stanley.

I have 2, please. The first one on a topic that we haven't spoken about today, Reju. You talked about the pace of -- you talked about the nonrecurring expenses this quarter related to this one. So I was just curious about the pace of spending there over the coming quarters. And if you can provide us with an update on FID conversations in terms of service [ Reju ] partners, that would be great. And then the second one thinking about your backlog. Can you quantify to us how much of the TPS backlog and how much of the Project Delivery backlog are denominated in euros or U.S. dollars?

So I'll start with the easy part, if I may. So on Reju in particular, before handing over to Bruno, a bit of -- I'm happy to offer a bit of an update on the progress. So we've continued to progress on Reju development and this progress is coinciding with progress on regulation and policies, which is extremely encouraging for our Reju initiative and the brand that we have created. So in this quarter, we've produced from our demo plant in Germany the first batch of yarn made of RPET or recycled polyethylene and this yarn was subsequently converted into fabric.

And we have now the first Reju fabric that has been made available to a series of brands for them to conduct their testing and, I would say, the characterization and the qualification of the product. So really super encouraging and good progress on Reju this quarter and more to come. All that progress is taking us closer to FID of course. Now as we've mentioned in the past, FID remains dependent on of course the level of subsidies that we will and we can benefit from and from the countries in which we've applied for subsidies and contemplated the installation of the first plant. So that is work in progress and we are a few months away from, I would say, finding out what and how many subsidies will be coming our way. Bruno?

Yes. So on the FX, of course it's a moving element because of project change and so on and they have a bit of a different setup. On project, most of the projects are delivered with what we call multicurrency, which means back-to-back we invoice to the client the cost of our cost base in a specific currency and this is then recharged as part of the selling mechanism. So a lot of USD, but there is a bit of a hedge which is made through these elements. So Project Delivery is slightly less impacted to some extent by FX on a given year.

For TPS, and as I said, about half of the year-on-year movement can be assessed to be associated to FX. When we do services in the U.S., in the Middle East; it's very much USD denominated. So that's why year-to-date you would have close to 50%, for instance, of TPS that was run through USD services.

Maybe on Reju and nonrecurring,

Yes. Sure. On nonrecurring, so EUR 49 million and what I said about EUR 35 million being Reju, also adjacent business models and also cost for the quarter that we've incurred notably for consulting and so on for the AM&C transaction. I think it was a very good investment. Part of when I recall the question earlier on having good multiples, it's also the very thorough due diligence that we made on all aspects to get to this point and to cover our base. So overall, I think Reju and adjacent business models are well on track.

I think we said EUR 50 million max as an expenditure for 2025. That's what we expressed at the time of the CMD. We are actually on a run rate slightly lower than that. I think we are closer to EUR 10 million over the last couple of quarters as a run rate. And the incremental for this quarter, it was a bit of summer, was around the ad hoc expenses associated to the transaction. The rest of nonrecurring is as always some small restructuring and so on, which is as we have our backlog shift and so on, we always slightly addressed.

We are not presenting EPS on an adjusted basis so that's why when you have such an increase in EBIT or EBITDA at 9%, you don't see the full -- this doesn't follow through to the bottom line. But as I said, if you take out the EUR 35 million, which are really investments in capital allocation, you will have close to 15% actually of EPS growth year-on-year. So that's where you see the traction.

We are really investing for the future here and I think it's one of the attributes of Technip Energies is that we have the ability to invest for our future and unlock future value creation.

The next question is from Guillaume Delaby of Bernstein.

I have many questions, but I'm going to stick to one. If I understand correctly, since the beginning of the year within TPS, you've been actually surprised by your carbon capture business, but slightly disappointed by your ethylene business. If I understand correctly, this is about to reverse, i.e., over the coming quarters ethylene could accelerate while CCUS may or might slow down a little bit. Just a confirmation that my understanding is correct. And second point, I understand that there are only very early signs, but should we assume that the provision -- the forecast you made for the ethylene market at the Capital Market Day is still valid?

Yes. So first of all, the forecast is still valid as far as we see. Yes, absolutely. So back to TPS. I mean you're right to say that in the year we've seen some acceleration recently in carbon capture and while ethylene was low and it is about to reverse. Very clear early signs of reengagement and new investments in brownfield and greenfield and also decarbonization with the replacement of furnaces by low emission furnaces for existing infrastructure.

Now I wouldn't be, I would say, so negative as to say that carbon capture will slow down. Carbon capture, we have some significant opportunities on the horizon with FID in 2026 probably for projects of significant size. So it's still there. For sure, I think where we would have hoped further acceleration, it's in the space of green hydrogen for example where the business plan is not exactly as we would have expected despite the fact that we were successful last year with the largest green ammonia project in the world in India.

Well, the momentum is we have those spikes, but I would say it's not a very recurring trend of awards in that space. So a bit of a disappointment in some of those new markets. Now I think the 2035 trajectory is there for decarbonization. It's here to stay. It's happening maybe not at the pace that we would have preferred or we could have hoped, but it's happening. So I think the fundamentals are here and it's important to -- it's a bit of a game of resilience as I explained earlier.

The next question is from Paul Redman of BNP Paribas.

Two questions, please. The first one is I can see some phasing going on in the backlog for TPS so it looks like some phasing forward. There might be other movements. I just wanted to see whether from '27 into '26, whether you can give any guidance on kind of what's going on there? And then secondly, I just want to ask about the conversations you're having with possible LNG customers and whether you're hearing any growing concerns about gas price outlook in the next decade 2030 plus and whether you think that could have an impact on LNG project sanctions from here?

I'll start with LNG and then I'll hand over to Bruno on the phasing of the TPS backlog. So LNG, the sentiment, as you read the press, is indeed on a potential surplus. But as far as we are concerned, what we're observing is that the energy demand and the coal to gas switching will continue to support the long-term demand growth for LNG. A reminder of the fact that LNG is a supply-led market and very long cycle. So while there might be an oversupply in 2028 when the new trains currently under construction are coming on stream or a lot of them are coming on stream.

Well, we are not LNG producers and our customers, they take their investment decision not based on an oversupply that will be probably temporary. They take their investment decision based on their Vision 2040 to meet the demand by then. So LNG is a supply-led market long cycle. If prices do soften, then it will attract a new breed of customers and buyers of LNG and therefore, it will trigger another wave of investment. So we continue to see the total liquefaction capacity needing to be around or north of 900 million tons per annum by the middle of the next decade.

So a very healthy pipeline for Technip Energies in spite or despite the short-term softening on price of LNG. And this is not exactly what we are subject to at Technip Energies. The investments are really for the long term and when you take investment decision in 2025, you start producing depending on the size of your project in 2030. So you really look beyond the short-term softening of the price and, if anything, it would just attract more customers. And gas would be a good idea to replace coal and displace coal and gas is very needed for all the data centers. And so yes, that's why we've put and we are putting this 900 million ton number out for the middle of the next decade. Bruno?

Yes. In terms of TPS and phasing and backlog scheduling, as always, TPS is a shorter cycle. So you will always have more of the TPS backlog incurred over a short period of time. And usually you have basically the backlog, which represents about 1 year of revenues. In terms of services, you may have some services which are spread out for master service agreements or master services. And then we've seen a bit of acceleration for some project management consultancy.

Now where you have somewhat an extended backlog in TPS, it's for construction scopes of equipment and here I think, as I said in my remarks and as Arnaud mentioned also, the work done for the TPS scope of Net Zero Teesside has started well notably at our fabrication yard in India. So firming this up meant that we've been able to reassess the backlog scheduling and certainly more on moving it forward versus backwards due to good progress and good execution.

And I know we are reaching the top of the hour, but I want to take maybe 1 more minute to insist again on the quality of the coverage that we have for 2026 Technip Energies and notably in Project Delivery. We have a large and qualitative coverage for 2026 at EUR 7 billion as I stated during my prepared remarks. So it's putting us well ahead of the curve, if I may say, for achieving our 2028 framework that we declared last year at our Capital Markets Day. So it speaks to the strength of the model we have.

And it's not the first time that we see delayed FIDs, but this is not a source of anxiety for us. We continue to remain calm and focus on the right opportunities, the derisked one and those that are compatible with the level of financial performance and profitability that we want to achieve as Technip Energies.

Mr. Lindsay, I'll turn the call back to you for closing remarks.

Thank you, Maria. That concludes today's call. Please contact the IR team with any follow-up questions. Thank you and goodbye.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.

I'm pleased to welcome you to this call regarding Technip Energies' announced acquisition of Ecovyst's Advanced Materials & Catalysts business, AM&C. We'll have 3 speakers on the call today: our CEO, Arnaud Pieton, who will discuss the strategic rationale for the transaction. This will be followed by our Chief Strategy and Sustainability Officer, Benjamin Lechuga, who will provide a detailed business overview. Finally, our CFO, Bruno Vibert, will discuss financials and value creation. We will then open up for Q&A. Before we start, I would urge you to take note of the forward-looking statements on Slide 2. I will now pass the call over to Arnaud.

Thank you, Phil, and thank you all for joining our call this morning at a very short notice. Before I discuss today's announcement, I wanted to revisit a slide with you that we shared at our Capital Markets Day in November last year, about investment to drive incremental growth. At that time, we reported that the strength of our balance sheet with more than EUR 1 billion of net cash was allowing us to consider inorganic growth opportunities. We discussed that our disciplined and selective approach covers a range of opportunities, mostly centered around technology.

It's about technologies to complement our existing set of solutions and generate new offerings as well as technologies to expand along the value chain. It's about synergies and margin expansion. Ultimately, it's about long-term value creation and about making T.EN even more differentiated. This is the strategy that we have embarked on, and we are convinced we will make Technip Energies a stronger company for the long term. So with that as a backdrop, I am delighted to announce the acquisition of Ecovyst's Advanced Materials & Catalysts, AM&C business.

The acquisition supports Technip Energies' strategy of disciplined growth for our technology, product and services, TPS segment and drives long-term value creation. AM&C complementary technologies will enhance T.EN's development of integrated technology and catalysts solution, both in established and fast-growth markets. For Technip Energies, the benefits are fivefold. First, it expands our capabilities in the catalyst value chain, establishing a scalable catalyst platform built on high-value silicas and zeolites, supporting the development of Technip Energies' process technologies.

Second, it secures leading position in the market with long-term visibility, including polyethylene and hydrocracking, while unlocking promising growth avenues in emerging end users, including sustainable aviation fuel, biocatalyst and advanced recycling. Third, it enhances our R&D capabilities, bringing world-leading expertise in catalyst design and materials science that is complementary to Technip Energies' process technology labs while reinforcing our collaboration with Shell Catalysts & Technologies, where we have a global exclusive alliance already for the CANSOLV carbon capture technology.

Fourth, it broadens our customer offering and value proposition, providing integrated solutions across the full asset life cycle to drive measurable improvement in process efficiency, reliability and emission performance for a wider range of clients. And lastly, it is accretive to T.EN's financial profile with identified value creation levers, providing immediate earnings and cash flow accretion, improved quality of earnings and clear synergy opportunities. I will now pass the call to Benjamin to provide more details on AM&C.

Thank you, Arnaud, and good morning to everyone on the call. Let me begin by explaining why catalysts are key to a successful technology strategy at T.EN. Put simply, catalysts are materials that accelerate chemical reactions and improve process efficiency in industrial plants. With catalyst IP at the core of many process technologies, catalysts are a key differentiator in process technology development and are clearly complementary to our existing technology and proprietary equipment offering. As catalysts are consumed during the operation of a plant and need to be replaced by integrating AM&C, Technip Energies will monetize technologies with increased recurring revenue tied to customer operating expenditures.

Approximately 70% of AM&C revenues are tied to OpEx, which will improve our long-term revenue visibility. With applications in traditional markets such as polyethylene or hydrocracking and growth markets such as sustainable fuel production, the overall opportunity set for catalysts is substantial and growing. Technip Energies is already experienced in the catalyst business today, largely through past bolt-on acquisitions and internal developments. This slide lays out a series of examples of Technip Energies-owned catalysts, which include, for instance, on the left, our Hummingbird technology, where we have matured the process technology and catalysts for use in the world's first industrial scale sustainable aviation fuel plant using alcohol-to-jet technology in the U.S.

We believe the technical expertise of AM&C can further enhance the development of our Hummingbird technology. On the right side, in the petrochemical space, our 1.3-PDO technology, which we acquired from Shell, allows the production of industrial chemicals with low operating cost for our customers and is already used in multiple projects. One of the attractions of catalyst is their consumable nature, which provide multiple revenue opportunities across the life cycle of an asset, where Technip Energies typically would sell a process technology to a project only once, catalyst can be sold 5, 10x over the plant's life. Today, about 1/4 of our technology and product portfolio requires catalyst usage.

This require own bespoke technology specific catalysts developed internally or through partners, underscoring our innovation credentials. Now let's look at the business profile of AM&C, Advanced Materials & Catalysts, a global leader in specialty catalysts and advanced materials. AM&C is a technology-driven developer and manufacturer of advanced materials and catalysts. It benefits from strong intellectual property with a comprehensive global portfolio of 28 patents and 30 trademarks. It has a first-class R&D team with deep domain expertise in catalyst design and materials science and is focused on driving commercial innovation.

An important differentiator for AM&C is its proven ability to collaborate across the value chain to develop customized solutions and high-performance catalysts. Furthermore, its innovation track record is compelling with 35% of its revenues generated from products launched within the last 5 years, a very strong vitality. More broadly, Advanced Materials & Catalysts has a leading position in well-established markets such as the high-growth chemical sector and the steady downstream market. For example, AM&C is a leader in polyethylene, and this acquisition expands Technip Energies' presence across the ethylene value chain as polyethylene is immediately downstream from ethylene cracking with the same clients.

And just like Technip Energies, AM&C has been preparing for the future, establishing new leadership positions in high-growth markets, notably in sustainable fuels and biocatalysts. From a financial perspective, in 2024, AM&C generated revenues of $223 million and $57 million of EBITDA adjusted for stand-alone operating costs. This equates to EBITDA margin of more than 25%, which is accretive to both Technip Energies Group financial and the TPS segment. Bruno will elaborate on financial aspects shortly. But before that, taking a deeper look into the business, AM&C has 2 business units, Advanced Silicas and Zeolyst International, each providing a similar contribution to the revenue base.

Starting with Advanced Silicas on the left. This business innovate, produce and supplies specialty silica-based advanced materials and catalysts. Its products, which consist of polyethylene catalysts and support, functionalized silicas and chemical catalysts are used in applications from pipes, tubing to food packaging. And its deep polyethylene and chemical catalysts know-how is being used to capitalize on emerging uses in areas like carbon capture and biocatalysis. Advanced Silicas benefit from long-term customer relationships underpinned by multiyear contracts and collaboration to develop custom solutions. And in terms of business drivers, its high long-term growth is underpinned by population and GDP and demand for sustainable packaging and flexible lightweight products.

Turning to Zeolyst International on the right, which is a multi-decade established 50-50 joint venture with Shell Catalysts & Technologies and a leading innovator and supplier of custom zeolite-based advanced materials and catalysts. Its products include high-performance catalysts for traditional and sustainable fuels as well as custom and specialty catalysts and emerging uses in advanced recycling. Zeolyst customer base is diverse with long-established customers, including leading integrated energy, downstream and chemical companies, while intimate relationships are being built with growth companies with novel technologies. And what matters most to its customers is performance and quality.

In summary, 2 highly differentiated businesses with long-term blue-chip customers and a supportive long-term growth outlook. Before passing over to Bruno to discuss the financial aspects of the deal, I will highlight the operational base of AM&C, its talent pool and its physical assets. The business has a global presence with operations in the U.S. and Europe and a manufacturing and distribution platform that is optimized for a mix of in-house and third-party expertise. Importantly, its safety culture is strong and consistent with Technip Energies. In terms of core facilities, it has state-of-the-art R&D and pilot facilities and has 3 manufacturing plants in the U.S., the Netherlands and the U.K.

Those operating assets are well maintained and well invested with spare capacity to meet the high growth production we anticipate in the future. AM&C operates a global supply strategy with each manufacturing location optimized in terms of scale and technical expertise. And beyond its in-house capabilities, it has a global network of contract manufacturing partners, leveraged to enable regional supply, contingency supply and flexible asset capabilities.

The employee base, which is culturally aligned with Technip Energies, consists of around 330 talents and mirrors the operational footprint with more than 60% located in the U.S. and around 30% in the Netherlands, with the remaining employees largely in the U.K. In summary, AM&C benefits from a global presence with a notable footprint in the U.S. I will now pass the call over to Bruno.

Thank you, Benjamin, and good morning to all. I'll begin with the transaction highlights. Regarding the purchase price, T.EN is acquiring AM&C for a purchase price of USD 556 million, subject to adjustments for cash, debt and working capital. Based on T.EN's views of 2024 EBITDA, which is adjusted for corporate and stand-alone costs and employees stock compensation, the deal values AM&C at a high single-digit multiple of EBITDA. This is quite consistent with the current trading multiple of T.EN. From a financing perspective, T.EN has obviously the net cash available to fund the transaction.

As a reminder, at the end of June, T.EN's net cash position adjusted for project-related cash is more than EUR 1.6 billion. So we may use the net cash position of the group, but we are also considering alternative funding structures more optimized from a value creation standpoint. We will revert in due course on that. The deal is accretive on many aspects, including EBITDA margins and free cash flow. As Benjamin mentioned, a talent pool of 330 people will join Technip Energies post completion, bringing complementary skills and expertise into the company. AM&C will benefit from T.EN's global scale and its commercial and technical footprint while preserving its entrepreneurial culture and operating model.

This will ensure strong business continuity. Finally, timing-wise, the deal should close by the first quarter of 2026, pending customary regulatory approvals and closing conditions. And on a go-forward basis, the financial performance of AM&C will be reported within our TPS segment. In summary, this transaction aligns with T.EN's longer-term strategy to grow TPS through internal development and targeted acquisition that had both financial and operational strength. Now moving to pro forma financials and assessing both from a group and TPS segment perspective. Please note that the figures reported here are in euros and not in USD as in previous slides.

AM&C generates EBITDA margin substantially higher than T.EN. Therefore, the impact at the group level can really be seen in terms of EBITDA, which is close to 10% higher on a pro forma basis with a less material impact on revenues. On these pro forma views, the EPS accretion is less pronounced due to historical G&A, lower interest income and tax, but still favorable. Turning to the segment view, where the impact is significant for TPS, adding around 10% to segment revenues and 21% to segment EBITDA to EUR 311 million. With AM&C delivering EBITDA margins nearly twice the level of TPS in 2024, the uplift to margins on a pro forma basis around 120 basis points to more than 14%.

In essence, the transaction is about TPS accelerating its growth, providing scale and in catalyst, enhancing its profitability and providing T.EN with a platform to unlock further value. Turning then to the deal synergies, where our strategy is built around 3 key pillars: cross-selling, new business generation and cost optimization. Firstly, the cross-selling potential is significant. By leveraging AM&C's catalysts and advanced materials portfolio, it will allow us to penetrate deeper into T.EN's current customer base while addressing a new set of clients. This dual opportunity will accelerate revenue growth, driving top line momentum.

Secondly, this transaction will allow for the creation of new businesses. We believe that accelerating the commercialization of AM&C's catalyst portfolio while investing in R&D to develop next-generation catalyst tailored to T.EN's process technologies will create tangible business opportunities in both traditional and new markets, including plastic pyrolysis and carbon capture. Finally, we plan to broaden AM&C's polyolefins catalyst and enhance our alcohol-to-jet SAF solutions to unlock further value. This transaction is not about size and consolidation, so the cost synergy component is not the key value creation driver. But by consolidating G&A, sales and marketing and R&D functions, we can and will generate cost efficiencies.

Our integration plan ensures that we deliver business continuity, optimizing resource allocation and accelerating time to market for new products and services. Cost synergies will be delivered relatively quickly, while revenue and commercial synergies will flow to the P&L in a more medium- to long-term basis. In summary, value creation levers are identified and will allow us to generate incremental value from this acquisition. I will now pass back the call to Arnaud to conclude.

Thank you, Bruno. So to conclude, the acquisition of Advanced Materials & Catalysts is accretive for Technip Energies and is exactly in line with our disciplined capital allocation strategy to drive long-term value creation that we set out at our CMD. It brings differentiated capabilities in catalyst technologies and advanced materials, enhancing our ability to deliver high-performance process critical solutions to our clients.

This acquisition is an important step in strengthening our technology platform, bringing a new dimension to our catalyst business and unlocking avenues for product development and market expansion. Furthermore, the deal will have no impact on our investment-grade credit rating. We retain a substantial net cash position, providing capital allocation flexibility for other opportunities. We are delighted to welcome the Advanced Materials & Catalysts management team and employees as we continue building a more integrated and technology-driven portfolio. With that, we can now open the line for questions.

[Operator Instructions] The first question is from Guilherme Levy of Morgan Stanley.

The first one, just how should we think about [indiscernible] from here? Is it still a priority after this acquisition of $0.5 billion? And how this capital allocation should look like also considering the adjacent business model from here? And then just to double check, was there any upfront payment? Or should the entire cash payment be made only at closing?

Thank you, Guilherme. So on -- I'll take the first question and give the second one to Bruno. So about [indiscernible], we are trying to make a very important point at the end of my talks and addresses. So really, our ability to invest really -- is preserved, and that's a very important point through this transaction. You've heard from Bruno that we could actually go for an all-cash deal or a combination of cash and other options, and we will provide more details in due course. So really, there is no change to the philosophy of our capital allocation.

We will continue to concentrate on returning to shareholders through dividends as we indicated in our Capital Markets Day with between 25% to 35% of our free cash being returned through dividends and the rest of our capital being allocated to our growth and strategic opportunities, knowing the fact that we don't have any deleveraging to perform as a company. So really no change in philosophy, a firepower that is actually preserved, if I may say, should other opportunities arise in the medium -- short, medium or long term. And bear in mind that this net cash position that was at EUR 1.6 billion at the end of H1 continues to grow. So really, I think the investment capability for Technip Energies continue to be there.

And one area of development and one area of investment, of course, is organic in the sense of the adjacent business model. That is totally preserved. [ Reju ] and other possible initiatives are totally preserved in our ability to move them ahead and to move forward with them. So this potential for value creation through [ Reju, again, Reju ], we haven't taken a final investment decision on the first commercial plant, but should we take final investment decision on [ Reju ] in the months to come into 2026, then there will be further value creation for T.EN and that value creation probably isn't reported or baked into Technip Energies' valuation today.

So again, this investment, this acquisition that we are discussing today is made with the spirit of the preservation of Technip Energies' ability to continue to, one, operate and two, to invest for future growth. It was one of the conditions for the investment and one of the conditions set during our Capital Markets Day, and I want to insist on the consistency between our Capital Markets Day messaging and this investment today. Bruno, maybe on the way we're going to pay for this acquisition?

Sure. Thanks, Arnaud. Guilherme, thanks for your question. So USD 556 million transaction price, as usual, cash free, debt free adjusted -- that will be adjusted for cash debt and working capital. No prepayment or down payment, everything will be settled at closing, which we should expect by the end of Q1 2026.

The next question is from Guillaume Delaby of Bernstein.

Congrats for the acquisition. Quite impressive, to be honest. Two questions, if I may. You mentioned that it is going to increase the proportion of recurring revenue. Could you maybe provide a little bit of guidance or whatever about what is the proportion of recurring revenue either within TPS or within, I would say, the power process business of TPS? So -- and the second question, which is more, I would say, housekeeping. Zeolyst International, it is a 50-50 JV. So I guess the $117 million is the 50% stake, which was -- which is going to be yours, correct?

Guillaume, I'll start with the easy one, which is the -- your second question. You're correct. What we are displaying is indeed the 50% share in the JV, absolutely. In terms of recurring revenue, you look at our TPS business, we have a very low percentage of truly recurring revenue within TPS. And what I mean is something that would be comparable to what we are acquiring. The acquisition actually will grow significantly the recurring part. 70% of AM&C's business is based on recurring revenue. So that's AM&C alone. Of course, once you integrate AM&C into TPS, well, it will grow the percentage within TPS.

TPS being fairly large and larger than AM&C, the 70% will drop to something a bit lower because there will be dilution. And because the current TPS business, I would say, is not so rich in recurring businesses in the way we define it when looking at the acquisition today. So it is actually addressing one of the somewhat weakness of our TPS business, which was this kind of shortage of recurring business opportunities being more in the OpEx than in the CapEx. Technip Energies historically has been very engaged into the CapEx part of our customers and a lot less into the OpEx.

We have taken positions to be more into the OpEx in the domains of sustainable aviation fuel, and it will be the case when alcohol-to-jet fuel is taking off through the Hummingbird technology. Why did we move into the Hummingbird technology? That's exactly to be in the CapEx -- in the OpEx side of our clients as well. So this acquisition will significantly grow the recurring revenue part of TPS, which pre-acquisition was fairly low.

The next question is from Sebastian Erskine of Rothschild & Co Redburn.

Congratulations on the announcement today. The first one, just on the deal synergies that you kind of outlined in the presentation. You mentioned predominantly kind of revenue synergies, and I appreciate it's difficult to quantify that more so than the cost side. Could you attempt to kind of frame that and kind of how long it might take to realize those kind of cross-selling synergies on the new business side? And then the second question is kind of more why now, particularly some of the weakness that we're seeing, macroeconomic uncertainty. I appreciate you're growing the recurring revenue side, but we are seeing weakness in a lot of kind of petrochemical end markets, particularly on the growth, SAF as well. It remains a challenged market. So perhaps frame the timing as well.

Yes, Sebastian, thank you. I'll start with the second question and then hand over to Benjamin for the first one. Well, why now? Well, the opportunity is now, and it was important for us to seize the opportunity now. We have also this cash and firepower that is available. So it's a combination of being able to and then having and finding the right opportunity. And this acquisition actually, as explained by Benjamin in the presentation, comes with, I would say, twofold in the sense with 2 types of markets. And both the markets in which AM&C is playing are -- actually it's established high-value markets and/or growth markets. And AM&C holds a significant share in both markets.

We are both types of markets. So of course, although the market for building new refineries is not a growth market, AM&C is positioned in the OpEx pool of the hydrocracking submarket, which has a steady medium-term outlook. And it's a long-tail business and a long tail opportunity directly linked with the demand of diesel and hydrocracking solutions, et cetera. So really, you might -- I mean, from the outset, you may go, wow, it doesn't look like a massive growth in this area, except that there is still growth in a steady way, not in a hockey stick way maybe, but in a steady way. And remember that a lot of those products and the consumption of those products are very much a function of the population on the planet.

We see it and we experience it ourselves through our ethylene business with the form of lumpiness with an ethylene season every 2 to 3 years and I would say, a series of investments in a bulky manner. And then AM&C is also positioned in technologies that serve growth markets in SAF and carbon capture in particular. So one could argue that SAF is not growing fast enough, but we see strong structural growth and a very clear role for AM&C in hydrocracking and dewaxing related to catalysts across multiple SAF routes, alcohol-to-jet and eSAF as well. And there is absolutely growth in the SAF market.

We have not announced this year, yet a large SAF project that has Technip Energies, but the potential for us to announce a large SAF project this year is still there. So the -- from the perception to, I would say, what we are experiencing in terms of inquiries in the SAF domain, in particular, well, there is growth, and it's accelerating, of course, at higher rate than the [indiscernible] market in which AM&C is engaged. So SAF in their various form is part of the future. There is growth, and it is important for us to play in that space. Benjamin, on the [ deal synergies ].

Thank you, Arnaud. And as Arnaud said, I mean, the market of AM&C are quite long-tail markets. And the transition and the system of the future is not just about electron, it's also about molecules. And the world needs molecules. And that's exactly what we try to achieve with AM&C. I mean it's a foundational step for our ambition to become a key player in downstream technology and catalyst space, which are required for process technologies.

As Bruno said, I mean, the synergy plan is less a cost plan, but more a commercial cross-selling opportunity and broadening the offering to our clients and third, developing new technologies. So in terms of timing, which I understand is your question, next year, we're going to invest in the business. That will be -- we anticipate to cover it with the synergies that we derive, but we expect that this work of developing cross-selling, improving our R&D development and helping AM&C benefit from the scale of Technip Energies that the full synergies will be achieved between year 2 and 3.

The next question is from Jean-Luc Romain of CIC Market Solutions.

I was wondering what is the potential for Technip Energies to replicate with Zeolyst joint venture, the success you have had with the CANSOLV collaboration with Shell?

There's a bit of an echo. All right. So this JV with Shell is actually a JV that is a very long-lasting JV. So the AM&C and Shell Catalysts have a multi-decade long -- I can't remember exactly what -- when the JV was created, but 30, 40 years ago. And it has been a source of many commercial successes for both companies, Shell Catalysts and AM&C. So I would say, rather than duplicating what we are doing with CANSOLV, I would describe this acquisition and the JV that comes with it, and therefore, Technip Energies is now becoming the JV partner to Shell as simply a way to strengthen this relationship, this exceptional relationship that we have with Shell Catalysts.

So it's a lot more than a replication because here, we are entering into a JV that is proven and has delivered for multi-decades, and we will take advantage of, I would say, the unique relationship that we have with Shell to take the JV to new heights. And we are lucky to enjoy and of course, a shared vision for the future of the JV. And now the JV, I would say, is equipped with 2 companies, Shell on one hand and Technip Energies on the other hand that have the means of the ambition -- to the ambition of the JV. So this JV will continue to grow and develop. So it's adding foundations and very strong foundations to this relationship with Shell.

The next question is from Mick Pickup of Barclays.

Please excuse me if I'm asking a silly question. But the way I understand it, AM&C provides catalysts to license providers or technology license providers and you are aiming to become a license provider in these adjacencies. So question is, what's the competitive landscape like for catalysts? Sorry, I don't know that. And is there a risk that other license providers who may be your competitors then start designing with somebody else's catalysts?

So I'll start and hand over to Benjamin. The AM&C competes with really a handful of global catalyst leaders, and we have chosen to make this acquisition because of, I would say, the differentiated nature of the product within AM&C. So there is, I would say, very low probability of those products becoming a commodity soon, and that will be described by Benjamin. But that's really the driver for the investment is that we've invested into a solution and into products and the zeolite in particular, that are solutions for the future and a lot less solutions of the past.

So yes, as Arnaud said, I mean, we have shied away from -- we have been avoiding like commoditized catalyst segments like FCC or emission control. So AM&C is positioned on a differentiated market. Yes, we -- they compete with some global catalyst companies like BASF, UOP, Grace, Albemarle. At the same time, they -- in the name, the AM is Advanced Materials. So they also supply to those very same competitors, important support material for their own catalysts. So while there is competition, there is also existing commercial relationship.

So that's -- this is a feature, I would say, of the industry where in some markets, you compete and, in some markets, you collaborate. So yes, names, as I said, UOP, Grace, Albemarle, BASF. We supply to Topsoe, for instance. I mean you have like this dual relationship, and we took care of that during our analysis of the transaction, and we don't fear this potential competitive tension.

The next question is from Bertrand Hodee of Kepler Cheuvreux.

Congratulations for the deal. My line may be a bit lumpy. I got some technical issues. But 2 questions, if I may. You disclosed some numbers, and thank you [Audio Gap] for AM&C, 25% EBITDA margin. Can we have an idea of the EBIT margin? And also on the capital intensity in the business? I mean, so what is the level of CapEx you see on a go-forward basis? And the second question relates to your 2028 ambition for TPS. So you clearly stated that inside the EUR 2.6 billion revenue target, there was built in some bolt-on acquisition like this one. But in terms of margin, it's highly accretive. So how should we think about your 14.5% EBITDA margin by 2028?

Bertrand, do you mind repeating the back end of your last question because your line broke and I missed the point.

The second question or the first part?

Yes, the one related to 2028 ambition for TPS and therefore, the profitability.

Yes. It was -- so the question on revenues, it's a big step, but I guess you will not change your EUR 2.6 billion revenue target at this stage because some acquisitions were already embedded in your strategy and your 2028. But I was thinking more about the margin because it's highly accretive to margin, 25% EBITDA margin. So how should we think about the 14.5% EBITDA margin that was your target for TPS for 2028?

Okay. Thank you, Bertrand. I'll start and then hand over to Bruno. I will start with, I would say, a general comment on what Technip Energies is. As you know, we are an asset-light company, and we intend to remain an asset-light company in a sense. And therefore, we have been in the analysis and the selection of the target before moving forward with this acquisition, very careful and mindful of making sure that we are not adding, I would say, extraordinary level of CapEx to the company. So the CapEx, and Bruno will describe it, will marginally increase, but AM&C is a company of 330 people overall with 3 production assets in 3 locations -- or 3 countries.

So it's not -- we're not acquiring a very large asset base. And so the CapEx will be only marginally affected. In terms of the 2028 ambition, again, before handing over to Bruno, indeed, no change to this framework that we provided for 2028 at this stage. And this acquisition certainly only provides more certainty to our shareholders towards them being able to deliver on -- in a steady manner, the improved margins that we've declared for 2028. So I would say this acquisition is an enabler and certainly something that will reassure, I hope our shareholders when it comes to our capacity and ability to deliver to our promise. Bruno?

Yes. Thanks, Arnaud. So for CapEx intensity, as Arnaud has started to present it. What will be the definitive CapEx will be the outcome of basically a spin so carve-out from the current Ecovyst financials. So it's not -- the historical CapEx and G&A is not exactly apples-to-apples. But overall, out of the 3 assets, what we've seen is well invested with some spare capacity for growth. And when you look back at some of the historical kind of maintenance CapEx, it's actually not very meaningful. So that's why Arnaud was saying it doesn't really change the CapEx profile for the group. And for both assets, you would say that maintenance CapEx are kind of high single-digit CapEx a year.

So that would give you an order of magnitude of what would be a bit of a recurring CapEx from this asset base. So that still gives on a normative basis, a good free cash flow conversion and also a nice EBIT margin when the carve-out and purchase accounting will have been completed from the current Ecovyst account. So that will complement to TPS margin to boost as we've presented the pro forma 2024, providing more than 100 basis point increment. So of course, that will help and continue to boost the 2028 vision and framework that we've presented, but that will also be a benefit to EBIT and net earnings. That's why across the P&L, this acquisition will be accretive.

May I squeeze a very quick short one? You disclosed $223 million revenues for the acquired company. Can we have a feel of what it was '22, '23, meaning just wanted to understand whether it was in growth mode or it was stable.

Yes. Benjamin will answer that question.

So '22, '23 has been impacted actually by the COVID follow-up. During 2021, most of the players actually either underused their assets and kept their stock. So in '21, they reused what they had stocked in 2020. So we had like in 2022, a bump in revenues because people were restocking. In 2023, there was a bump into renewable diesel. So the past '22, '23 were slightly higher than 2024 as in 2024, the activity normalized, and we had some trends which we factored in our business plan around less use for emission control with EVs going on the road. And now we're entering into a new cycle regarding hydrocracking. But yes, '22,'23 benefited, if I may say, "from the disruption of 2021."

If I can complement Benjamin for Bertrand, I think H1, we are seeing some growth. So trailing 12 months shows kind of improved figures versus 2024. So I think we are -- after kind of the post-COVID impact, I think we are seeing a bit normalization to the more long-term growth market, which are kind of depending on the market, around mid-single digit as a compounded kind of growth rate.

[Operator Instructions] Mr. Lindsay, there are no more questions registered at this time. [ Sir ], back to you for any closing remarks.

Thank you very much. That concludes today's call. Please contact the IR team with any follow-up questions. Thank you, and goodbye.