TechnipFMC (FTI) 28 Jul 222022 Q2 Earnings call transcript

Thank you for standing by, and welcome to the TechnipFMC Second Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session [Operator Instructions] Thank you. I would now like to turn the conference over to Matt Seinsheimer, Senior Vice President of Investor Relations and Corporate Development. Mr. ahead. go please Seinsheimer,

Good Quarter good XXXX Jack. to and TechnipFMC's Second Earnings morning, you, afternoon, and welcome Thank Conference Call.

and website. caution release found during this any news financial yesterday made issued Our can forward-looking on statements our with I'd you to call. like respect to statements be

differ expectations, actual and business forward-looking from these are conditions, materially Although, current subject statements information, results wish uncertainties undue to We or regarding assumptions, publicly to whether statements turn which over you based after are and and forward-looking risk the that they cause TechnipFMC's could future to revise our certain expressed on beliefs, developments those result and in, cause by hereof. periodic the statements, described to other will Executive Doug most these forward-looking projected differ that to of Exchange reliance events Chair any only the undertake our otherwise. or future XX-K, statements. to implied place and are Known of as our speak from now call filings Officer. of factors with update material in results Pferdehirt, any We date made, I Commission. to recent a not XX-Q, could our caution obligation as on Chief the or most actual US results and date no recent they our are Securities new

call. promotion, congratulations recent in Thank on and and second for Thank your our expanded Matt, earnings your participating you, you quarter role.

in be strong structure have target an about debt operating and our made believe of we we investment to At towards shareholder achieve reduced than remain quarter, yesterday's stated you the we want allow on period, by successfully ensure first our company. then, Before ability our November through and talk for targeted for in structure that I to shared XXXX, to distributions. This strong Since business gross we In the with the regarding cycle. progress capital capital in goal. of in substantial can credit what confident second comment our continued appropriate the our will more access maintain I $X.X our Analyst Day we results announcement to billion. $XXX million, in we

the share Given This of shares today. shareholder outstanding now our the an price. of program date, investments are as debt closing underscores repurchase our shares reduction we shares of the up our have million represents to to the our the repurchase of to to to available company. the XX% by compelling most company's that undervalued common put, flexibility at confidence $XXX for firmly believe stock. our announcement authorization one We and our is that, Simply in begin long-term buying evidenced us distributions, outlook yesterday's

addition this In quarterly opportunistic of a distributions, dividend have in to intent approach initiate XXXX. second we to shareholder to reaffirmed the half our

a delivering Our share all reaffirmation value. debt and in are repurchase milestones important of dividend greater reduction, distribution, announcement, shareholder

we from quarter, the quarter book-to-bill billion, pleased EBITDA inbound financial X.X the from supply to contract for am year for billion. production is Inbound in high-pressure, the we ExxonMobil performance to a quarter for revenue billion. CLOVX quarter proceed. a subsea inbound was where also XX.X%. We well In offshore flexibles billion was $XXX of $X orders the Total in year. start backlog Subsea Subsea the the quarterly inbound for were as Total and period company first half the Subsea, Block was call. awarded systems Adjusted under enhanced to X.X development company in iEPCI Guyana, agreement, for ExxonMobil's high-temperature the This margin production results, full development included manifolds. to EBITDA direct as of includes awards another risers $X.X with Subsea in growth period our we very in awards orders. Project was were The billion. Yellowtail the and notice $X.X system solid new of sequential contract was the received driving Yellowtail the first exceeding Turning Angola. demonstrated I development. the XX new Services, adjusted trees, XX% company on $X.X strong million, Total with to developments TotalEnergies covering framework the our approximately expectations representing the vertical outlined for And contract $X.X first were of brownfield XX company's trees a total Deepwater XX. given

our two Energy new in be capable our this UK. feed As over been the exceed that integrated would for company largest this iEPCI XXXX our configure-to-order a industry's of FID, Equinor of XXXX. seen the uses Upon full date. will likely of awards indication to to the will partnerships, further previously supports be tree that a client the unique with also were direct title highlighted, awarded projects volume XXX, that total through underscores within project. tree month, in multi-turbine and Orbital by option awards an serves title with the our megawatts, of This positions first leader already awarded production the than mode. for one energy of this and delivering XX% systems is further predictable our in industry energy. title not partnership the X.X will and since first And the volume Power. award of the Earlier of announced the energy we be project, level proceed for Subsea has double The years. offshore the Brazil. view a FEED an Equinor our growth Ventures more we includes year, view in iFEED industry Subsea us The or is as trees. the contracts orders In activity time This phase recently floating our award nearly half all BM-C-XX the as of to the business, sold X.X Marine integrated This study will two next TechnipFMC award high our XXX be

The first based demonstrate is set the from which order years. the note the momentum market. customers participated displayed of our on important the first It represented XX% $XX midpoint There strength fully strength in list, that billion on the update of many also opportunity developments. and have the developments subsea are of underlying also XX market. of increased half value of in by most does quarter strong clearly this represents is these list, offshore opportunity the the underlying The industry Subsea trends, which list reflect not an now to distinct for for Subsea

illustrating However, expect XX% with half XX pipeline base, and the the active previous our composed we approaching year will operators up all base. large strong growing orders across than with diversity customer on customer $X and orders more expanding our year, our be of above first billion as forecast the much half growing our the full was dialogue as in Subsea now of inbound basins, versus Based first prior results, project XX% of the XXXX.

Technologies. Surface to Moving

America our are sales pleased investments. pricing needed saw results. on our We to North sequential the we We in higher move growth in an to improvement we as acceptable ensure and earn continue with profitability. And return good

the Saudi our As outside manufacturing were impacted of in new our facility startup by North America Arabia. of results previously indicated,

remainder the have administrative the stage in-country facility to Alf year. We orders. production leading half as the our milestones our will This year. audit the second the now financial improved more completed in on and performance most of of sets detail the provide first for ramp for outlook we

Now simple me message. remarks close let with my a

We are delivering our on very focused on commitments.

structure. we we reduced additional in the appropriate $XXX gross balance the said billion. to to restore we a debt by would quarter, more million First, $X.X sheet And capital an

and our This has approach of that Second, the progress the capital now debt in would and distributions shareholder to so. ahead our view we is XX schedule given sufficient balanced share full said been warranted, we to months share prospects and made we price have structure a repurchase action accelerated long-term do discount of relative initiate reduction and company. significant our reflects peers our to a towards

beyond. financial XXXX on focused Finally, and we meeting remain our commitments in

within provided achieving further financial ahead, that coupled market in backdrop back path remain our $X with February. looking more XXXX. I Subsea a of to call confident EBITDA by discuss results provide internal We turn that now we over year to And the clear results. billion full than we initiatives us guidance deliver in confident will framework Alf are very with will strong the a our

$XXX million. the in $X.X Thank backlog orders inbound increased inbound Total $X you, billion. billion were in the $X.X X% Revenue to sequentially quarter by Total Doug. was $X.X was company billion. Subsea EBITDA company adjusted quarter strong of billion driven

that Second extinguishment operations of expense credits, $X after-tax continuing and per $X income quarter adjusted charges million netted our income an operations and the from from which charges excluding of loss of on million. continuing $X.XX million. included When early These results also was $X million, to debt adjusted impact a was share. $XX or included of credits

the sequentially, basis Surface the segment results. of XX% revenue installation project quarter XX.X%, of the from was first Adjusted a Adjusted and to EBITDA and due Adjusted new due EBITDA in In in increased adjusted facility revenue activity Subsea benefited growth Revenue to activity. activity. versus of to from improved activity. in XX.X% Adjusted versus quarter. was increased increased revenue and margin Technologies North to increase Revenue margin primarily Subsea was transition higher was the increase service points XX% North $XXX Now up completion pricing from in quarter. drilling higher which sequentially first the modestly first basis billion, with Africa, increased and driven increased XX% up manufacturing Outside sequentially primarily by In America, turning revenue installation was America. including higher million EBITDA impacts quarter. America to EBITDA from activity Saudi the due the improvement, Arabia. first benefited up EBITDA Services the quarter. due seasonal an million, $X.X million in $XX first XXX $XXX XXX XX% Sea accelerated EBITDA adjusted versus North higher the to North increased up points Brazil. Results continued sequentially. primarily a and

million and in million. continuing operations flow Cash and $XX free consumption was to $XX expense resulted million million. second corporate was Turning required quarter. of tax in activities was expenditures in was million the million. $XX expense from $XX Capital This by period. $XXX net $XX other interest were the Corporate cash items expense

guidance, weighted As full to to free expect the when flow XXXX. very provided half year, year of second cash we similar we the to discussed be

strongest our in that half generation. major being drive of the Our which we four period subsea QX, our year In cash and collections remaining operations have shares of second milestone seasonally sold April, Energies. throughout of higher QX with the activity levels million occur QX Technip

$XXX billion offer have exited notes we quarter a $XXX million quarter realizing to May, In $X separation. XXXX. now a in with due million. our in $XXX million X.X% $XXX more since of the fully We the debt for ended of billion debt by equivalents second billion of of position first our since senior Gross net February We proceeds decreased cash $X.X $X.X spin-off outstanding the in completed of the million the reduction tender and XXXX. total of than quarter cash and

the guidance remain for to remainder ranges to I our help guidance, will reaffirmed the the -- guidance. some the previously as year, we help on segment have additional you XXXX within to of all your in items provided modeling color provide Moving

adjusted range. we guidance the year Subsea, revenue to both near at EBITDA expect For midpoint the full the margin or for of and be

we improved revenue both should reported third in reflect from margin QX EBITDA continued margins The to in benefiting and for strong activity and the backlog. what results, quarter strong adjusted similar

guidance Technologies, midpoint full For modestly to expect or revenue the the be range. above Surface at we year of

Third is increase XX%. to to quarter up expected revenue

We also approximate to EBITDA the year. anticipate of XX% remainder incremental margins the for

We facility, This primary our I Saudi will America sheet. be activity in driven share will second quarter, of reduction with at the quarter. international led Arabia new half, plan the higher balance of by to debt half on strong in North markets driver expect While the be our the by to in In demonstrating to commitment across the our in production Middle supported growth was you ramp-up year the by for addition we a primarily the my a the in East. first region. gross major closing, from delivered takeaways significant the

in is more has the our the free than Importantly, further this distributions, capital pull action just the by confidence supported structure. provided decision going generation timing improve that It flexibility we our done a us of cash to see shareholder forward has forward. flow

confident setting line segments performance half second Finally, operating up both improved further you is XXXX. and may a experienced in I solid for Operator, us improvement for now questions. the across am that open the

Your Instructions] Chase of [Operator Mulvehill Certainly from first America. Bank question with comes

open. Your is line

Hi. good guess, Europe. Good morning. in afternoon I over

lot you obviously opportunities, So that on we've Doug, there? here kind past a thinking and just And tieback I billion. us mean much list about tieback the past still over you tiebacks Subsea can we been think could about of you question opportunity update first years. and the think bit if left gave just the macro opportunities a of out doing good little look there? $XX about maybe that's talk a how But obviously, few out

still of trying sits there. So of of understand opportunity out kind much just kind to how that

good point. morning, Sure. really you Chase. a Good raised Actually

at that fairly often actually will, And opportunities. increased there's of $XX number aren't brownfield. are half, or middle call coming some are actually in can a awards, now awards projects. I'd tieback of is out see that time you is you is inbound correct of brownfield unannounced that activity innings. pointing since Subsea you are I numbers in list, of which lots a know We're from inbound but that XX% that tiebacks year portion even in last majority that Behind early of the If still don't smaller you the billion, still or significant where large and the the if or and this ongoing. that the look always, in of opportunity large category it our amount represents greenfield first these

the coupled us Subsea It extremely to makes a Subsea reason doing huge platform, it is part activity. and deliver partner will, So in XX our we if that has why simply well so because of which stated, model, cycle with the we've projects remains been, integrated a robust. of There's one choice, that shorter it's months, lot can the XX those on X.X of in impact a opportunities and tieback our market. you

Okay. a All better give for year. far booking, the going But but get margins. this, said, shot. towards strong quick follow-up, obviously, Perfect. kind know you going margins, a don't backlog, A I'm for I'm XXXX, of, to it with I to you're full better some how the But pointing right. us Subsea for just midpoint presumably pricing,

kind color, So if early out margins of should -- -- we how for XXXX, for of but to give for margins. you kind Subsea But we directionally, know, don't explicit, look assuming to points that thinking when I in I'm better be any you won't you know, I XXXX? about be too if it's just to

surprised have if you didn't Chase, been ask. I would

certainly, So, worth asking.

large to up us, of will. give doubt, portion if it you installed partners. we offering think of as for the and partners awards is of from I because the that the a are our is the that early direct setting direct base segment received services, iEPCI as market well bit nicely, But the particularly in large our guidance, awards no result unique a very are Subsea

the very XXXX total than excited So well XXXX. turn to perspective. more to as bit color, we a maybe going of as give over about But perspective a you from I'm to of segment a remain company Alf it remainder

based can early bit seen we to company give to revenue are progress it's the grow do here Yes. is up what on segments. XX% we've little maybe, EBITDA, Thank is for that continued when look, a we on we And to growth Doug. so expect both far. And say certainly, at and in guidance XXXX. But you, we that, specific track

continue margins quarter continued the our at inbound certainly of well. second consecutive to to orders and margins to accretive glance just when the total indeed the Surface, Subsea billion approaching at you instance, as billion booked inbound in of $X.X then, average we $X for And see are -- Subsea average and progression So, Surface continue be margins that backlog. quickly in

to we in the up can probably point this go that, color saying company in to at and So that's XX%. XXXX is I takeaway up EBITDA time. expected the the currently offer are is But

Okay. Perfect.

over. Sounds on promotion. turn I'll congrats it And Matt the good.

you, Chase. Thank

of Your next Jefferies. Wilson Mark question comes from the with line

is line open. Your

Good flow specifically, cash to Hi. profile is about I'd different going of free here. generation gentlemen. morning, like what talk XX the the cash of ask since from versus, let's past And and the forward Energies. months, or to Technip separation

$X.X is year billion, billion under a just had of debt net last now. just $X.X XQ You under

$X and there's of shares. So billion you've $X.X energy billion deleverage sold of

You CapEx. spent about of million $XXX

the XX breakeven So over it cash suggests last XX roughly months. to

parts take you terms yes, market us forward. going moving inflation, your about this moving your in changed generation. the and we of Alf, imagines. that these could cash so, the of to just talking forward or own as Everyone's cost profile cost, the Thank self-help pass one you. through Doug pricing And on that but, versus parts look

No, Yes. you. thank certainly,

So, of quarter-to-quarter achieving getting done in capital and QX year, expected. from And to billings specifically net you it see working the apart we is most remains the outflow have last our the a of We the some particular do our projects. if Subsea we the all, and bit do first in milestones at quarter-to-quarter, than driver did for And Subsea profile. the truly lighter was expect this admittedly, moving This fluctuations. similar quarter. timing in biggest for collections look

contract receivables they in highest and activity collection towards progress mentioned remarks, Subsea third in and we my drives QX I the that the the the QX through quarter have assets them our fourth our in drive prepared on As driving really quarter. and and

the same pattern this expect much very So we year.

milestones collections. we obviously to why visibility In all terms and we're associated these have the of confident,

going for to confidence us guidance. major that's overall And obviously, annual cash the the gives be our driver this flow. again, in So

more you that expect just if look about Now drive the at EBITDA, continue to forward. we to it talked that broadly,

favorable call profile depreciation We and versus amortization ratio continue to the the it a expect to have between CapEx.

We continue to for come in to CapEx million, and to to continue is ratio have this that. depreciation, CapEx. a that to expect our we amortization at have below between good adding probably chance for instance, new the CapEx come year $XXX look CapEx -- for favorable in we But and

revenue to would to to you said actually CapEx. that remember X.X% in the our X.X% back Analyst we if range Day, be So of have a we of

range. to I continue we end that the now. have expect as trend it We of right that up lower don't to anything significantly, really I are see And we at a that that look drive forward

those some But a dynamics words. few are I maybe Doug So, that and the know helps add wants of don't to if you.

billion, Sure. iEPCI a question. give now was as in the we're bit this Subsea lot certainly had years Day orders that really envisioned side and gave our are pricing innovation and configure company on doubling in activity hard the pricing be the our benefit in then And get expand the And little volume A the that talked by doing Subsea your to new there that different get a six add different than to the at a the guidance you Subsea of with don't scalability enabling a operating billion months to to of was the saturation all because and can commercial our leverage And from model, creates X.X ago. Subsea that today. in Why the but the year, model back XX% along we CTO changing of we seeing next to revenue November. seeing the back November involved. little of very expect leverage. benefits the we to going element with X.X cost significant of order, that Analyst been and There We us of would cost lot of or very work we're start I we're growth, very top in cost revenue on Subsea to to XXXX we Mark was about XX% have two which remember if X.X, $X had environment that. $X.X margins was because both over EBITDA just environment last ability we we what

So, net-net very favorable.

is the a lot yes That this at Day. great Analyst color. on there's And

Doug that. that just I a that the Subsea of types the -- from in roll So to you've Can starting maybe of follow-on also those X.X, case appreciate follow ask sets I equipment really terms only and out manufactured. it that is up you're

out Just give there you've us market? idea the actually place of many of how those an put in in

Yes.

orders ramping a orders at we now pretty X.X XXXX obviously the So tough commercialized -- and -- up XXXX, in And Started all the of was XXXX. of year indicated. orders obviously for XXXX, some end as to get started are us. we're

XX%. expect up to We

like in you this brownfield from first for of some to to I if So And that see activity the you're an They're do announced like have if had then that schedule that repeat count. go are you they cases to well. those off, exact all exclusively the of kind to in Angola. Subsea we've last quarter just announce the and going but orders you Subsea now add don't X.X installations don't are actually TotalEnergies delivery we exact delivered us We've their Subsea normal customers quarter that, there. into decision I have going X.X number installations starting saw track customers of place. will, X.X. call the

definitely the success very yeah moving pleased favorably So by things and of humbled and X.X. we're are very

Excellent. out. Thank I’ll it you for the color. hand

David Our comes Barclays. with Anderson from question of line the next

line Your is open.

are how Doug, Hi, you?

well. morning, Very David. Good

Good morning.

has as leg you up mentioned taken order XXXX. So a big here since

of I configure-to-order expectations quite leverage for necessarily your with drive we saw would we've time market about I which where changed to model, but since it number could was today manufacturing your wondering your more not bit a think footprint, if expanded, what's time this this. seen us. bit you that. particularly just operating how the the is, a capacity trees and would Last compared a it time last talk sits really long of and So

environment develop done. question we'd announcing way spot be manufacturing And we change and intriguing think to going was adding We it's were X.X were our said configure-to-order more David the And so in more capacity, and ability this drive actually and returns now leverage a business be on. and that through-cycle increases the big different able we you're if to model capital assets. an be because situation. to wasn't adding would fixed you returns it returns. We going Well, attractive David higher in model, could sustainable very for the to

So within we have Subsea us the to same capacity double the allows CTO throughput doubled the X.X, footprint.

So what than we've it's actually reduced our manufacturing different capacity increasing results companies sets the capacity. budgets their to believe I hear a the we when what want exactly hear. point are capital to at roofline, us growth. but That's is accommodate increased and investors in typical cycle our deliver just to to very what want throughput we And this believe up

access the is to model their assets beyond our that have, assets to to them we support this without and integrated that the service you we've others manufacturing their add us where changed able if industry you In access operating awards providing having to utilize can the that which market, to be floating to additional of addition will capacity we to and the allowing market growth. them our and fleet the direct of proprietary know a partnering model with using because in much by

all So remain this scenarios. is I the still to best going very approach. of grow think disciplined, the but company, our We're is which

the quick follow-up on a Just trees.

the were is it X.X. -- works, would model? that also XX% mean Does of kind XX% be Is mentioned that or… CTO how Subsea You it

great… a That's Yeah.

…will X.X. on you I just little confused got do non-Subsea a Maybe CTO bit. that

X.X clarifying. for And you the think CTO. it to Thank yeah way No. enables best is about

equals CTO X.X. So

Thanks. Okay.

Middle a other good business. count. on Surface really rig my was to the your So Obviously question leverage East

I this You also starting new sounds that on big are in have right like facility your and manufacturing in I what's things up more you in? rig does briefly. was bring wondering you're that if expand that of or to would you picking on needs Surface all on see with now. still We've side a Saudi, think bit It in the some mixed little idling. counts pickup do heard things. that cover the a country in talked But about demand could already stuff market to going does pretty

Sure Dave.

amount So us Saudi, market And will be et today. Oman, a and going Saudi. cover It's let's what Aramco's not Surface, significant it will And The it be significant our is built in East There's it's us. believe most of the we Middle UAE, for Middle investment that beyond from East. on Saudi. the of the with in needs Kuwait, start facility XXX% be Saudi cetera. growth needs we in which just

that doing will UAE. country be the will you approach in we vertigrated So if fully have be we a within similar the and

us. So that's the for most significant market

be generate we kind in very we've the ramp-up. prepared available as point for for being result of the there's remains -- end in capacity a but are the happen but resources within a we're It of in the the strong view, overnight, where beyond as of -- year resources XXXX. We indicated rate the it robust American be stretched a price acceptable. resources we we're limitation that important that higher market. are a the are be physical returns as well, as that now or one returns that kind growth of a requiring America on new work there'll to a reached the -- And There well -- same potential human us in North necessarily ramp-up it's are positioned run we the really our remarks, through market. that higher North way then not in accepting of orders doing doesn't there'll and certainly

Pretty clear. Thanks Doug.

JPMorgan. with of the Your line comes Arun Jayaram next question from

Your line is open.

bit if the Good morning, Doug. dynamic could within talk you're industry. pricing seeing I see the about wanted little you a to

things for note be key that potential the of XXX to of Schlumberger's call tree the improving the did is noted growth. they this a to we And their that their growing. back was awards backlog dynamics mentioned pricing second And the You going driver going Subsea was that half year. and one fact

what on thoughts you're seeing some pricing? terms get to of wanted just So in

Sure. Arun. morning, Good

Schlumberger not value we greater wanting is our now. our the is So we're event. agree a speak. always portion guess showing economic it It's to seeing objective as made. the point I customers. I'm results with that we deliver our capture difference only second It's of in up half to the -- we comments to -- a that obviously out

which So over that are XX we very of are been of in some for over which company years our long-term XX have to have place relationships years. many -- exclusive

is as create of do result we to what of that greater customers, than we that value And greater value are a us create. a we for that, So with economic differentiate. if to our continue portion continue more economic pleased to we innovate, share we they can

So is benefit that are benefit combination that. doubt the share there no And of into the offer in terms the of is to iEPCI X.X that Subsea that of we economic unique coupled value. allowing marketplace with the the seeing get model we us

that, addition question associated cost responded I as In with earlier to to that. leverage an there's also

do -- value making not typically the investment innovation by but the same the rest most what it you integrated the as would will innovation creation returns of ahead customers and that Subsea and our we X.X. time on single without to do that. able of evidenced have is or ends, technology the project we company doing, in capable are the delivering -- Most of if creating we're for a sure way economic which industry been well and projects of at we we continued can So that both is capturing direct greater better do

what confidence us that's move continue So to forward. as we gives the

versus pretty fluctuations we've dollar Great. obviously is the in the seen And euro. significantly of a the appreciate that follow-up my Doug, is -- currency lot US

a business just the we in but quarter, your about had think a currency impact small dollar? impact how the You very to should from stronger

to I'm Sure. Alf going have comment.

Yeah.

So it to maybe take our financial impact in bit just statement a we this. have from actually company the do little that from

business currency fact of So dollar. our that denominated let's coming start functional portion US good out -- actually of backlog units is than different a with the that have the

$XXX over down to alone. million So lead exchange quarter for but in an a case loss translation backlog instance our that of not does that by this this economic to in drives foreign

but is translation that there's that So you the a that see impact. billion $X total, see still impact backlog you in to

other The US will translate you continue comes financial if -- US and slightly dollar reasons same their is dollars higher that a dollars through into way into statement. those revenues experience the for you lower that to earnings as non-US

you our we foreign So and are most immediate our it such a impact statement positions the flows, the et and way gains financial to hedging that's we in when balance continuing cash sheet that cetera, Otherwise, minimize losses. will manage to our have. of portfolio exchange comes

will there. There extraordinary I make you for see currencies cannot the a devalue variance, the create exchange third probably So we are currencies also and impact is see impacts There against are African dollar in you will hedge, anything point those in an either but certain some though. that dollars as or the primary foreign the appreciate shouldn't the strengthening. will which line Africa instance, from

Thanks a Great. lot.

Cowen. Your of next Bianchi comes from line Marc question the with

open. is line Your

bit more little wanted I you. to a about cash talk free Thank flow.

guidance the of the the year. cash million for kept the seem to of, of imply, free generation back million year would in half sort to $XXX $XXX that you and So

First part point be expect you given that appropriate third now the how wondering would And more then what quarter developed. helpful. put the if finer question range of lower of first in the just sort half is that could is on if, a of, just to end

Certainly. Okay.

we So first target the of continue flow. free midpoint of the all, to cash

the in that's we point at. still So that have be the at -- confidence can that we

high going from variation to be be to but whether and they reach and guide. the high the see the to end. we That's to billings the convert or visibility or the end fourth for to primary where the year the and how driver you mentioned the to the milestones the what is having reach in of the by range, up low cause low quarter ourselves end I midpoint timing the continue of kind point that's collections quickly will going guidance, we it's how we to of quickly in exact end continue what Now certain before, really

the And the it's be I quarter, generation be but to is same the positive cash -- terms with precision, because be the dynamics in of clear also this but mentioned, to quarter. always be fourth flow bulk believe call In certainly difficult third to we quarter. will by do -- I cash expect say the the that of quarter we of expected third to in it's

still profile So the we that's year. the expect for

the the of occurring from more sort or be likely cash generation, you're And helpful. buyback in of strong progression. Should on we they having each cash free That's when buyback periods are Yes. then flow context of other? that independent thinking to the be about

Yes.

way. So this say maybe to it

already do have the we advantage pleased going I describes can So, mind, company. it of where current being it program we a leverage And we've mean, committed call share timing. satisfied mean, now. reflects with is Also the share believe sheet. all, balanced with to buyback we I while And question approach this on this believe we're going first forward really we're balance very strong of price of our also to and progress with an much announcement a a that how of we're in take our the undervaluation the undervaluation, balance sheet. having certainly had

as So flow buyback. that economics completely the either in going sidelines mean as it free difference. favorable long a see that through certainly to doesn't on cash But share where do the valuation sit mix to is is we we make

Thank Okay. very you much.

Markets. of final Our the Waqar comes from question with ATB line Syed Capital

Your line is open.

increased catalyst considerably. unfolded? security or you we've Doug, -- seen broader energy offshore for offshore the you. it think recently cycle outlook trend been was improve just the as activity always Do a towards like that issues, has is it's absent the this the Thank think -- you even question

the for you thank -- question. So

a This think. are been clear seeing important we we I it's is really this underway very trend it in are and has that response. unfold. just that

a is has investment preferential there offshore continue forward. of short-term building underway variety in not a effect. a been catalyst, or going reasons, the certainly, has we for different will been single that believe So and This is and something

like very been -- -- across. Thank issue, big question that helpful. other all has just That's one And much. seeing we're you very the supply a chain is inflation

held well Now your margins pretty that have the before. given you've guidance from been up

And results are you've managing chain similarly, of with you your seems issues, on backlog? issues -- to how you in So going relatively throughput, your are inflation first across all, world. all been the how supply be your the immune your that in these managing

No.

question. our Of Yes, to with planning it's a if development real. thank it our and it's challenging of managed. And during use that the relationships, challenging. that So, real? for suppliers, appreciate as approach. it one you both it's I that's expect with the the forward that of make And our our shareholders that that's win-win-win, a But challenging? we these And will. us me, Is Is to with fact, course, that have do. you well sure as exactly recognize been bit customers can to you something times,

through stood in even pandemic suppliers, all customers have us. that and the our We beside always our difficult stood have by times we went during

able But We that. have why legal and lots I reasons, of contractual don't should you underestimate think to we are do that.

we today, the remarks, of alluded advantage if And If first in prepared we are XXX take trees to you you look received don't treat at my where they'll But the in is. remember year. when the the market I opportunity that. half right, in they'll people just

for Now we XXX said, year. total the

is position ballpark, the of total probably could market market. what total what our the one So was and

business, understand is for customers the comes with well tremendously This our And suppliers. core with and operate today, is way both, a I with and that very as that has we're -- we some that certain that continue for think as if company treatment. business, well our will us So think is tomorrow. preferential focused with our as I -- they that know on. this as they helped this don't And don't align appreciated suppliers it's that they're us is -- leader a that that that business. to it's aligning our This with

It's in of really today. the So there's of But it's has its bit the way but those be a the very we that of business. the just it's day evidenced done, do team relationships, proud chain. as sustaining unique. again, And And done end very -- our has supply to supportive our support, yes, relationships. at that work we building those being benefits, contractual is it continue

the Appreciate Doug. much, very colors. you Thank

turn over I will back to now Matt the call Seinsheimer.

you. call. our quarter Summer will Thank be our website, p.m. today. call of the available concludes at X:XX conference A Time replay British This approximately on beginning second

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