This is Technip Energies first sustainability report. What is the importance of this report?
Michael McGuinty (MM): First and foremost, it highlights to our employees and our external stakeholders the importance that ESG holds for the company. The report shows how we incorporate ESG considerations into our priorities, our goals and how we operate as an organization. ESG supports our business and will help drive our future commercial success. It sets a clear direction for the company to achieve its ambition.
Bruno Vibert (BV): Our ESG Roadmap and strategic focus on the Energy Transition highlights an essential part of Technip Energies that financial reporting on its own fails to capture. It doesn t capture the decarbonization agenda which needs to happen. These aspects are important for investors, for our clients, as well as for other stakeholders. As a new company we want to differentiate in the way we carry out our business, work with partners and clients, attract and retain employees; governance, diversity, environment, all these aspects are relevant. The sustainability report presents this information in a clear and comprehensive way.
Technip Energies has published its first set of results as an independent company. What have been the highlights for you?
Bruno Vibert (BV): We have delivered an exceptional set of results in 2021 and this needs to be viewed in the context of two years of a global pandemic which saw delayed investment decisions, logistical challenges, and the build-up of inflationary pressure. Despite this, we delivered major projects on time and on budget, making it possible to grow revenues by 11%, improve our adjusted recurring EBIT(1) margin from 5.5% in 2020 to 6.5% in 2021 and generate positive net cash of 3.1bn. This allows us to pay a dividend to our shareholders for our first year of existence. Our success is the result of our strong business model. Our project delivery business, which forms a major part of our activity, provides long-term visibility and stability to navigate difficult periods such as
we have seen. Our Technology, Products and Services (TPS) business has a much shorter cycle with a differentiated value proposition.
How do the company financials reflect the progress being made for the Energy Transition?
BV: There is no single reporting line to highlight the progress, but we can see clear evidence of the growing importance of the Energy Transition. Two of the major contracts that we were awarded this year, for Qatar NFE and Borouge Petrochemicals, both contained important carbon reduction components. We have also been awarded several FEED studies at the early stage of development, such as Teesside Net-Zero carbon capture project, which are reported in the TPS revenue segment. This segment has grown from 1 billion to 1.2 billion in 2021, partly reflecting increased Energy Transition activity. However, it is our extra-financial ESG reporting which will show actual progress to reach Net-Zero.
What are the challenges and opportunities of extra-financial reporting and the EU green taxonomy framework?
BV: It represents an exciting opportunity to capture and aggregate technical data that were not consolidated before, so it s a new technical challenge for the team. And this will enable a new way of taking informed decisions and realigning investment priorities in a way that is more sustainable. It also provides new information to be compared with peers and across other industries, to track progress, made and still to do, in a consistent way. But there are challenges. We need to compare beyond Europe and to ensure that readers understand how ESG indicators relate to our activity and our trajectory for the future.
MM: The implications of green taxonomy go well beyond Europe, because adhering to the taxonomy standards requires the understanding of all our clients, partners, and suppliers. Indirectly, this brings about positive change in areas such as traceability, environmental standards and Human Rights.
One of the challenges Technip Energies faces is how we comply with the different legal frameworks in the countries where we are present while consistently applying our own internal standards. The good news is that we are up to the challenge we adhere rigorously our internal standards and have more than 60 years experience working across the globe.
What do you consider to be the key achievements of Technip Energies in 2021? And what are your expectations for 2022?
BV: The creation of Technip Energies and successful spin-off on February 16, 2021, was a key achievement. With a tight timeframe and in a challenging environment its successful execution and delivery is a credit to all the teams involved. 2021 has seen exceptional operational and commercial performance. We have proven our credibility with investors as an independent company with significant movement in the shareholder base and we have delivered on our commitments.
MM: Technip Energies achievements over this past year can be summed up by its impressive list of operational successes but also, and perhaps more importantly, by the strategy and roadmap that the company has developed which will pave the way for Technip Energies becoming an undisputed leader in the Energy Transition. But we must view this journey not as a sprint, but rather as a marathon and one for which we are well prepared. We have a strong ambition and a clear purpose, a motivated and expert workforce and a growing base of satisfied customers. I think these are the key ingredients that will sustain the company s future success.
6.7bn Full year adjusted revenue(2)
1.3bn Technology, Products & Services (TPS) segment 2021 revenue(2)(1) Adjusted recurring EBIT: adjusted profit before net financial expense and income taxes adjusted for items
considered as non-recurring. (2) Financial information is presented under an adjusted IFRS framework, which records Technip Energies proportionate share of equity affiliates and restates the share related to non-controlling interests, and excludes restructuring expenses, merger and integration costs, and litigation costs.
5.4bn Projects Delivery segment 2021 revenue(2)
Technip Energies Sustainability Report 2021 . 77