Technip Energies

Note: This is a daily stock update and the information stands true as of 04/10/24, 09:00 CET.

Company Update:
Technip Energies' pre-close call offered no significant surprises, with the company confirming expectations of a book-to-bill ratio of approximately 1 for the first nine months of 2024, aligning with our forecasts. Contracting activity in Q3 was less robust compared to the first half of the year, and many ongoing projects remain in their early stages, which has contributed to margin dilution for Technip Energies year to date.

The company also flagged the potential impact of the proposed extra tax regime, anticipating an additional low double-digit million tax expense, against its Net profit of €297m in 2023.

Technip Energies’ current margin growth trajectory is being constrained by several factors:
1) the weight of early-phase projects,
2) elevated tendering activity,
3) strategic investments, and
4) increased R&D spending so far in 2024.
However, we expect a material improvement in margin performance from FY25/26 onwards as the company roll out revenue recognition from its subtantial backlog.

Expert Opinion:
Technip momentum is a bit lackluster. The tax increase in France will impact them and they also have significant exposure to the middle east which deserves a discount at this stage. Saipem is probably a better option over the short term to play the recovery in the sector.


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