TechnipFMC plc

Overall Outlook – Economic growth is expected to continue in 2025, although it remains vulnerable to persistent inflationary pressures, global trade tensions, and regional conflicts. Central banks continue to navigate a balance between growth and price stability — with progress uneven across regions. At the same time, economic sanctions and other measures imposed to end persistent geopolitical conflicts create additional risks to global energy markets, underscoring the strategic importance of energy security worldwide.

We maintain a positive long-term outlook for both oil and natural gas given anticipated growth in energy demand. Growth in near-term oil supply is likely to be supported by OPEC+ as member nations restore previously curtailed production. However, affordability and energy security remain major considerations. Our long-term outlook is further supported by our clients’ prioritization of the development of conventional oil and natural gas resources, while also progressing energy transition efforts.

We believe that offshore and Middle East markets will maintain investment preference for operators, with deepwater attracting a growing share of global capital flows, driven by much-improved economic returns and broad access to these resources. We also expect an increasing role for technology innovation in the delivery of both conventional and new energy supply. In that context, TechnipFMC is well positioned to translate our technological, operational, and financial strength into value for our clients, employees, and shareholders.

In 2024, we announced a differentiated set of awards, with three integrated Engineering, Procurement, Construction, and Installation (iEPCI™) projects all representing first-of-its-kind solutions. The Mero 3 HISEP® project was our first iEPCI™ for Petrobras and the first to utilize subsea processing to capture carbon dioxide (“CO 2”) directly from the well stream for injection back into the reservoir, all on the seafloor. The Shell Sparta project was our first iEPCI™ to employ a 20,000-psi production system in the Paleogene play in the Gulf of America. And finally, we were awarded the first iEPCI™ encompassing an all-electric subsea system for carbon capture and storage from the Northern Endurance Partnership, a joint venture between bp, Equinor, and TotalEnergies. Each of these projects provides a unique solution to an industry challenge and exemplifies our differentiated technology portfolio that is creating new market opportunities for our company in existing offshore basins.

As evidenced by these awards, we believe that offshore will play a meaningful role in the development of renewable energy resources and the reduction of carbon emissions. Our efforts are focused on three main pillars: greenhouse gas (GHG) removal, offshore floating renewables, and hydrogen solutions. We are also building on our partnerships as we look to expand our position as the leading architect for offshore energy.

In our New Energy business, we announced a new collaboration agreement in 2024 to deliver the industry’s first full water-column solution for offshore floating wind. Together with Prysmian, the leader in cabling solutions for the energy transition, we will combine our expertise in system design and integration capabilities in dynamic offshore applications to provide an iEPCI™ solution for the offshore floating wind market. We continue to create unique opportunities where we can leverage our onshore and offshore expertise and demonstrated project execution capabilities into leadership positions in evolving energy markets.

Subsea– Innovative approaches to subsea projects, like our iEPCI™ solution, have improved project economics through more efficient design and installation of the entire subsea field architecture. Our integrated commercial model, iEPCI™, brought together the complementary work scopes of the SPS with the SURF, and installation vessels. iEPCI™ created a new market and helped expand the deepwater opportunity set for our clients and has grown to represent nearly one-third of the addressable subsea market.

As the subsea industry continues to evolve, we are driving simplification, standardization, and industrialization to reduce cycle times and further reduce costs. An example of this is Subsea 2.0®, our pre-engineered configurable product offering. This technology simplifies projects by leveraging a Configure-to-Order (CTO) model that further accelerates time to first production while driving greater efficiencies for TechnipFMC.

With Subsea 2.0® and CTO, we have designed an architecture, process, tools, and culture that are scalable and transformational to the future of our company. Subsea 2.0® has allowed us to redefine our sourcing strategy and transform our manufacturing flow, resulting in up to 25 percent lower product cost and a shortened 12-month delivery time for subsea production equipment— savings that are both real and sustainable. This has paved the way for other products within our portfolio to adopt a similar operating model, enabling an enterprise-wide way of working.

Given the significant improvement in project economics, more offshore discoveries can be developed economically below today’s oil prices. We believe these fundamental changes are sustainable, as a result of new business models and technology pioneered by our company.

There is also momentum in new offshore frontiers as nations look to expand economic growth through the development of more recent resource discoveries. In late 2024, we were awarded an iEPCI™ contract for TotalEnergies’ GranMorgu project — the first subsea development in Suriname. In Namibia, there have been multiple discoveries, and operators have initiated appraisal drilling campaigns. We believe additional countries will seek to develop deepwater resources in other new frontiers during this decade, yielding additional inbound orders well beyond those projects currently in discussion.

Offshore development is likely to remain a significant part of many of our customers’ portfolios, not only because of improved economics, but because of the size and accessibility of these resources. We estimate over 35 MMBD of new oil production will be required by 2040 to meet future energy demand. Approximately 10 MMBD of the increase is expected to come from new deepwater production, which is significantly above the current level of offshore production.

After securing $20.2 billion of Subsea orders over the past two calendar years, our unique visibility into the market gives us confidence we will exceed $10 billion of inbound in the current year — ensuring we deliver on our guidance of $30 billion over the three-years ending 2025. These orders are expected to include a more diversified mix of opportunities and further market adoption of our Subsea 2.0® CTO platform and iEPCI™ commercial model. We also foresee the expanding reach of Subsea Services, derived from an aging installed base that continues to grow.

As we look beyond the current year, client discussions remain focused on future project activity as they seek to secure the quality capacity needed to execute their offshore developments. Our visibility into this pipeline of longer-term opportunities is supported by a growing list of named projects identified for potential final investment decision that extend beyond the historical planning horizon. This gives us confidence that activity will remain strong through the end of the decade.

Surface Technologies – International markets comprise a significant portion of segment revenue, representing over 60 percent in 2024. We continue to benefit from our exposure to the North Sea, Asia Pacific, and the Middle East. TechnipFMC’s unique capabilities in these markets — which demand higher-specification equipment and local presence, including a services footprint — provide a platform for us to extend our leadership in these geographies.

North American activity is among the most susceptible to lower commodity prices given the relatively high cost of development in the region. For TechnipFMC, our surface activities on U.S. land are expected to represent just five percent of total Company revenue in 2025.

Investment in international markets is less cyclical, as most activities are undertaken by national oil companies with long-term investment horizons and a lower cost of development. This is most evident in the Middle East, where we have made the investment needed to assist our customers in achieving their desired growth in production. This represents a differentiated growth opportunity for our company.