Technip: Second Quarter 2006 Results; Earnings per Share Up 36%.PARIS Paris, in Greek mythology Paris or Alexander, in Greek mythology, son of Priam and Hecuba and brother of Hector. Because it was prophesied that he would cause the destruction of Troy, Paris was abandoned on Mt. -- Technip Technip is a French engineering company, headquartered in La Défense, Paris. It has a workforce of over 21,000 people worldwide, and annual revenues of over 5.3 billion euros (2005, IFRS). (Paris:TEC) (NYSE NYSE See: New York Stock Exchange :TKP TKP Türkiye Komünist Partisi (Communist Party of Turkey; formerly Sosyalist Iktidar Partisi, Party of Socialist Power) TKP Tulajdonképpen (Hungarian) TKP Tausender-Kontaktpreis TKP Tamarind Kernel Powder ) (ISIN Isin (ĭs`ĭn), capital of an ancient Semitic kingdom of N Babylonia. The city became important after the third dynasty of Ur fell to the Elamites and the Amorites (c.2025 B.C.). The phase from c.2025–c.1763 B.C. :FR0000131708):
Euros in Millions (except Second Quarter First Half
EPS and E/ADS) 2006 2005 Change 2006 2005 Change
------ ------ ------ ------ ------ ------
Revenues 1,589 1,331 + 19% 3,163 2,532 + 25%
Operating Income 84.5 66.0 + 28% 138.5 116.4 + 19%
Net Income 51.5 33.3 + 55% 76.8 55.0 + 40%
Fully Diluted EPS (EUR) 0.47 0.35 + 36% 0.80 0.60 + 32%
Fully Diluted E/ADS ($) 0.60 0.45 + 36% 1.02 0.77 + 32%
On July July: see month. 26, 2006, Technip's (Paris:TEC) (NYSE:TKP) (ISIN:FR0000131708) Board of Directors approved the second quarter and first half 2006 consolidated accounts. Daniel Daniel, book of the Bible Daniel, book of the Bible. It combines "court" tales, perhaps originating from the 6th cent. B.C., and a series of apocalyptic visions arising from the time of the Maccabean emergency (167–164 B.C. Valot, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , commented: "Technip's second quarter 2006 results have improved compared to the previous three-month period. During the first quarter of 2006, revenues grew faster than operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. . This occurred because an unusually high proportion of revenues was generated by recent contracts on which we recognize very little profit as long as they are in their early execution phase. In line with the advancement of these projects during the second quarter, our operating income, as expected, started to grow faster than revenues. For the full year 2006, we retain our operating income target of at least EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 340 million even if it looks more challenging than anticipated a few months ago since the global manufacturing, construction and installation capacities devoted to oil and gas projects are very stretched. Second quarter 2006 financial charges were 40% lower than during the second quarter 2005. The combined effect of higher operating income and lower financial charges is a 55% year-on-year progression in net income. We decided to return to our shareholders excess cash made available by the convertible bond conversion, and subsequently initiated a new share buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may program last May. To-date, Technip has purchased close to 5 million of its shares for a total value of EUR 224 million. We intend to continue this program, and, if needed, complement it with various other steps. Our markets remain very strong. Demand is particularly high in segments where Technip has built leading positions: deepwater Deepwater or Deep Water may refer to:
Given the current market environment, our goal in terms of business development remains to keep our backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. near the high level reached at the beginning of the year, while continuing to work diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d at further improvement in our risk/reward profile." I. OPERATIONAL HIGHLIGHTS A) Business Development During the first half of 2006, Technip's order intake was EUR 3,127 million compared to EUR 4,166 million during the first half of 2005. Listed below are the main contracts that came into force during the first half of 2006 along with their approximate values (Technip's share) if publicly disclosed: --a contract with Qatar Petroleum Qatar Petroleum (QP) is a state owned petroleum company in Qatar. The company operates all oil and gas activities in Qatar, including exploration, production, refining, transport, and storage. , ConocoPhillips ConocoPhillips (NYSE: COP) is an international energy corporation with its headquarters located in Houston, Texas. It was created through the merger of Conoco Inc. and the Phillips Petroleum Company on August 30, 2002. and Shell for the Qatargas Qatargas is a natural gas company in Qatar. It has offshore natural gas production, which supplies the LNG plant in Ras Laffan, which has three operation LNG trains. The company was established in 1984 and the shareholders of the company are Qatar Petroleum, ExxonMobil, Total, III / IV Projects for two LNG LNG (liquefied natural gas): see under natural gas. (1) units located in Qatar Qatar or Katar (both: kŭ`tər, gŭ–, kətär`), officially State of Qatar, independent emirate (2005 est. pop. 863,000), c. (USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 1,600 million), --a contract with RasGas RasGas Company Limited is a liquefied natural gas (LNG) producing company in Qatar. RasGas was established in 2001 by Qatar Petroleum (70%) and ExxonMobil (30%). The company operates five LNG trains in Ras Laffan, with total capacity of 20.7 million tonnes of LNG per annum. Company Limited on behalf of ExxonMobil Exxon Mobil Corporation or ExxonMobil (NYSE: XOM), a multi-national American corporation and a direct descendant of John D. Rockefeller's Standard Oil company[2] for a gas processing facility (AKG-2) located in Qatar (USD 640 million), --a SURF surf: see wave, in oceanography; beach. (2) contract with British Gas British Gas is the name of several companies
--a contract with Diester Industrie for a new biodiesel biodiesel, fuel made from natural, renewable sources, such as new and used vegetable oils and animal fats, for use in a diesel engine. Biodiesel has physical properties very similar to petroleum-derived diesel fuel, but its emission properties are superior. unit to be built in Montoir-de-Bretagne, France, and --a contract with BP for a PTA PTA or parent-teacher association: see parent education. (3) plant in Guangdong Province Noun 1. Guangdong province - a province in southern China Guangdong, Kwangtung , China. As of June June: see month. 30, 2006, the backlog amounted to EUR 11.4 billion, up 38.6% compared to EUR 8.2 billion at June 30, 2005. The breakdown by business segment is as follows (euros in millions): SURF 2,444 22% Offshore Facilities 834 7% Onshore-Downstream 7,941 70% Industries 164 1% Total 11,383 100% Since July 1, 2006, Technip has also signed a contract with Statoil Statoil ASA (OSE: STL, NYSE: STO) is a Norwegian petroleum company established in 1972. It is the largest petroleum company in the Nordic countries and Norway's largest company, employing over 25,000 people. for subsea services in the North Sea which is not included in the backlog at June 30, 2006. Technip continues to see strong markets across all regions: --the SURF market is active in the North Sea, West Africa West Africa A region of western Africa between the Sahara Desert and the Gulf of Guinea. It was largely controlled by colonial powers until the 20th century. West African adj. & n. , Brazil, Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east and South East Asia East Asia A region of Asia coextensive with the Far East. East Asian adj. & n. . The cumulative value of contract awards to the industry during the second half of 2006 is expected to be about 30% higher than during the previous six months, --business development opportunities for Offshore Facilities are primarily focused on the Far East, West Africa, the Gulf of Mexico and the Caspian Sea Caspian Sea (kăs`pēən), Lat. Mare Caspium or Mare Hyrcanium, salt lake, c.144,000 sq mi (373,000 sq km), between Europe and Asia; the largest lake in the world. area. In the absence of major projects in West Africa and Brazil, the value of industry contract awards during the first half of 2006 was approximately 40% below its first half 2005 level. A significant rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective is expected during the second half of 2006, --in the Onshore-Downstream arena, new projects are being launched in the Middle East, Africa, Asia Pacific and the Americas A·mer·i·cas , the See America. . The value of business development opportunities identified by the Group for the next 6 months is some 30% higher than one year ago, --among the Industries markets, mining and metals and biofuels offer the best perspectives over the near future. B) Resource and Asset Management First half 2006 capital expenditures amounted to EUR 71.5 million. Total annual capex is now expected to be around EUR 250 million, out of which approximately EUR 150 million is designated for capacity expansions of the fleet (EUR 100 million) and flexible manufacturing plants (EUR 50 million). With respect to the fleet capacity expansions, so far this year the Group has reached agreements covering: --a new-build DP III vessel, which will be mostly dedicated to the support of the multi-year Statoil frame agreement for installation, repair and maintenance (IRM (1) (Information Resource Management) See Information Systems and information management. (2) (Inherited Rights Mask) In NetWare 3.x and 4. ) services. This vessel will be owned by a 50/50 JV between Technip and DOF See depth of field and 6DOF. DOF - degrees of freedom and will be available at the end of 2008, --a new-build DP II vessel that will be used mainly for subsea construction and IRM projects in the UK North Sea. She has been chartered for a period of eight years and will be available beginning the third quarter of 2007, --the acquisition of the Oceanic Princess. After her conversion into a DSV DSV Deep Submergence Vehicle DSV Diving Support Vessel DSV Dynamic Signature Verification DSV Dilute Solution Viscosity DSV Directia Sanitar Veterinara DSV Dive Surface Valve (rebreather) , she is scheduled to be available during the first quarter of 2007 and will reinforce Technip's position in India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. and the Middle East, and --a three-year charter for the new-build vessel, the MV Geoholm, which, since June 2006, has been supplying survey/utility and light construction services in the North Sea. Expansions of the Group's flexible pipe manufacturing capacities in France and Brazil are moving ahead on schedule/ --half of the 20% expansion program of the Le Trait trait (trat) 1. any genetically determined characteristic; also, the condition prevailing in the heterozygous state of a recessive disorder, as the sickle cell trait. 2. a distinctive behavior pattern. factory is already on line, and --one third of the 50% Vitoria Vitoria (vētō`rēä), city (1990 est. pop. 209,506), capital of Álava prov., N Spain, in the Basque region. It is a manufacturing and administrative center producing furniture, motor vehicles, and refined sugar. expansion plan is complete and on stream. Both expansion programs are expected to be completed by the end of the second quarter of 2007. Technip continues to grow its workforce in line with the development of the Group. Since the beginning of January January: see month. 2005, the Group's workforce has grown 13.5%, from 19,094 to 21,665. Excluding discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: businesses, the growth rate is close to 17%. (1) LNG: liquefied natural gas liquefied natural gas: see under natural gas. Liquefied natural gas (LNG) A product of natural gas which consists primarily of methane. Its properties are those of liquid methane, slightly modified by minor constituents. (2) SURF: subsea umbilicals, risers and flowlines (3) PTA: purified terephthalic acid Terephthalic acid is one isomer of the three phthalic acids. It finds important use as a commodity chemical, principally as a starting compound for the manufacture of polyester (specifically PET), used in clothing and to make plastic bottles. II. FINANCIALS A) Second Quarter 2006 1. Operating Performance by Business Segment SURF revenues were EUR 486.3 million, up 2.9% from EUR 472.8 million one year earlier, and were mostly generated by contracts in West Africa (Dalia Dalia may refer to:
PDET Professional Development Education and Training , Roncador Ron`ca`dor´ n. 1. (Zool.) Any one of several species of A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: ratio was 7.8% (versus 8.0% one year earlier). Offshore Facilities revenues were EUR 305.0 million, up 29.5% compared to the second quarter of 2005 (EUR 235.6 million). Main contributors were projects in West Africa (Akpo FPSO FPSO Floating Production Storage and Off-loading (shipping & oil industry) FPSO Foster Parent Society of Ontario FPSO Fleet Publication Supply Office , East Area), the Caspian Sea (Shah Shah is a Persian term for a monarch (ruler) that has been adopted in many other languages. This term is a Post Islamic Revolution term for monarchs in Iran which is replaced by valie faghih or Supreme Leader. Deniz), the Gulf of Mexico (Tahiti Spar) and South East Asia (Kikeh Spar). Following a contract close-out negotiation, operating income jumped to EUR 30.1 million, versus EUR 6.5 million during the second quarter of 2005. The operating margin ratio was 9.9% compared to 2.8% one year earlier. Onshore-Downstream revenues, at EUR 747.7 million, were 34.0% higher year-on-year compared to EUR 557.9 million, thanks mainly to LNG contracts in Qatar and Yemen, ethylene ethylene (ĕth`əlēn') or ethene (ĕth`ēn), H2C=CH2, a gaseous unsaturated hydrocarbon. It is the simplest alkene. steam-crackers, the Horizon heavy oil project in Canada as well as the Dung Quat refinery Dung Quat refinery is the first oil refinery in Vietnam. Located in Quang Ngai Province, Dung Quat refinery has a designed capacity of 6.5 million tons of crude oil annually, or 130,000 barrels per day and comprising of: in Vietnam. These recent contracts, which accounted for 60% of the segment's second quarter revenues, are still in their early execution stages when little operating income is recognized in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Technip's accounting methods. The segment's quarterly operating income stood at EUR 15.2 million. Operating margin ratio was 2.0% compared to 3.7% one year earlier. In the Industries business segment, revenues amounted to EUR 50.0 million during the second quarter of 2006, versus EUR 64.6 million during the second quarter of 2005. The operating income reached EUR 2.6 million compared to EUR 1.5 million one year earlier. The operating margin ratio increased to 5.2% compared to 2.3% during second quarter in 2005. 2. Income Statement Group revenues during the second quarter of 2006 at EUR 1,589.0 million were up 19.4% compared to EUR 1,330.9 million during the same period in 2005. Group operating income during the second quarter of 2006 was EUR 84.5 million, up 28.0% year-on-year. The Group's operating margin ratio was 5.3% compared to 5.0% one year earlier. Net financial charges, EUR 9.9 million, were down compared to the second quarter of 2005 (EUR 16.5 million) as a result of the conversion of convertible bonds into equity at the end of March. Second quarter 2006 income tax was EUR 21.5 million which represents a nominal tax rate of 28.9%, compared to the nominal tax rate of 32.3% recorded during the second quarter of 2005. Net income was EUR 51.5 million, 54.7% higher than during the same period in 2005. Fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. and E/ADS were EUR 0.47 and USD 0.60, respectively (compared to EUR 0.35 and USD 0.45, respectively one year earlier). The number of fully diluted shares used to calculate second quarter 2006 EPS and E/ADS is 108.9 million compared to 114.6 million one year earlier. Second quarter 2006 net income reconciled to U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) amounted to EUR 65.1 million. B) First Half 2006 1. Income Statement First half 2006 revenues were EUR 3,163.4 million, a 24.9% increase compared to EUR 2,532.2 million during the same period one year prior. Revenue growth occurred in all segments except Industries. Operating income for the first half of 2006 was EUR 138.5 million and, in accordance with IFRS IFRS International Financial Reporting Standard(s) IFRS Inter Frame Relay Service IFRS Indiana Facilities Registry System , included a capital gain of EUR 21.5 million related to the sale of assets in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The operating margin ratio was 4.4% compared to 4.6% one year earlier. Net financial charges were EUR 27.2 million and included a EUR 10.0 million first quarter 2006 charge related to the Group's convertible bonds. Income tax was EUR 32.6 million which represents a nominal tax rate of 29.2%, Net income for the first half of 2006 was EUR 76.8 million, up 39.6% compared to the same period in 2005. Fully diluted adjusted EPS and E/ADS were EUR 0.80 and USD 1.02, respectively. 2. Balance Sheet Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. increased by EUR 387.5 million during the first half of 2006 and reflects both the conversion of the convertible bonds into shares during the first quarter and subsequent share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. during the second quarter. 3. Cash Flow Statement The Group's net cash position at June 30, 2006 was EUR 1,234.8 million, compared to EUR 668.1 million at the end of December 2005. During the first half of 2006, the operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. was EUR 115.5 million and the working capital position was positive at EUR 290.1 million. A dividend in the amount of EUR 91.0 million was paid to shareholders in May 2006. During the second quarter 2006, the Group also repurchased 4,984,474 shares for a total amount of EUR 223.5 million. In order to comply with the requirements of the Sarbanes-Oxley Act See SOX. , Technip established in 2004 a project task force whose mission is to evaluate and propose improvements, if necessary, to the Group's internal control procedures. Every quarter, the work of the task force as well as the actions taken following testing of control procedures by external consultants in the subsidiaries and at the corporate level are reported to the Audit Committee of the Board of Directors. The task force will continue its work during the remainder of 2006, testing the existing internal control procedures of the entire Group in order to identify any weaknesses and propose corrective cor·rec·tive adj. Counteracting or modifying what is malfunctioning, undesirable, or injurious. n. An agent that corrects. corrective, n steps. In application of the provisions of the Sarbanes-Oxley Act, Technip will issue its self-evaluation report at the beginning of 2007. ---------------------------------------------------------------------- The information package on second quarter and first half 2006 results includes the press release and the annexes which follow as well as the presentation published on the Group's web site (www.technip.com). ---------------------------------------------------------------------- Cautionary note regarding forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. These documents contain both historical and forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, or statements of future expectations; within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . These forward-looking statements are not based on historical facts, but rather reflect our current expectations concerning future results and events. Similarly, statements that describe our objectives, plans or goals are or may be forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by these forward-looking statements. Risks that could cause actual results to differ materially from the results anticipated in the forward-looking statements include, among other things: our ability to successfully continue to originate o·rig·i·nate v. 1. To bring into being; create. 2. To come into being; start. and execute large integrated services In computer networking, IntServ or integrated services is an architecture that specifies the elements to guarantee quality of service (QoS) on networks. IntServ can for example be used to allow video and sound to reach the receiver without interruption. contracts, and construction and project risks generally; the level of production-related capital expenditure in the oil and gas industry as well as other industries; currency fluctuations; interest rate fluctuations; raw material, especially steel, price fluctuations; the timing of development of energy resources; armed conflict or political instability instability /in·sta·bil·i·ty/ (-stah-bil´i-te) lack of steadiness or stability. detrusor instability in the Arabic-Persian Gulf, Africa or other regions; the strength of competition; control of costs and expenses; the reduced availability of government-sponsored export financing; loses in one or more of our large contracts; U.S. legislation relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc investments in countries in which we seek to do business; changes in tax legislation; severe weather conditions; our ability to successfully keep pace with technology changes; our ability to attract and retain qualified personnel; political and social stability in developing countries; supply chain bottlenecks; the ability of our subcontractors to attract skilled labor; and our ability to manage and mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. logistical lo·gis·tic also lo·gis·ti·caladj. 1. Of or relating to symbolic logic. 2. Of or relating to logistics. [Medieval Latin logisticus, of calculation challenges due to underdeveloped un·der·de·vel·oped adj. Not adequately or normally developed; immature. infrastructure in some countries where we are performing projects. Some of these risk factors are set forth and discussed in more detail in our Annual Report on Form 20-F as filed with the SEC on June 29, 2006, and as updated from time to time in our SEC filings. The forward-looking statements included in this release are made only as of the date of this release. We cannot assure you that projected results or events will be achieved. We do not intend, and do not assume any obligation to update any industry information or forward looking information set forth in this release to reflect subsequent events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . With a workforce of more than 21,000 people, Technip ranks among the top five corporations in the field of oil, gas and petrochemical petrochemical, any one of a large group of chemicals derived from a component of petroleum or natural gas. The cracking processes for manufacturing gasoline produce vast quantities of gaseous hydrocarbons. engineering, construction and services. Headquartered in Paris, the Group is listed in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Paris. The Group's main operations and engineering centers and business units are located in France, Italy, Germany, the UK, Norway, Finland, the Netherlands, the Netherlands, The officially Kingdom of The Netherlands byname Holland Country, northwestern Europe. Area: 16,034 sq mi (41,528 sq km). Population (2005 est.): 16,300,000. Capital: Amsterdam. Seat of government: The Hague. Most of the people are Dutch. USA, Brazil, Abu-Dhabi, China, India, Malaysia and Australia. In support of its activities, the Group manufactures flexible pipes and umbilicals, and builds offshore platforms in its manufacturing plants and fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. yards in France, Brazil, the UK, the USA, Finland and Angola, and has a fleet of specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. vessels for pipeline installation and subsea construction.
ANNEX I (a)
CONSOLIDATED STATEMENT OF INCOME
IFRS
Euros in Millions Second Quarter First Half
(except EPS, E/ADS ------------------------- -------------------------
and number of
fully diluted
shares) 2006 2005 2006 2005
------------------ ------------ ------------ ------------ ------------
Revenues 1,589.0 1,330.9 3,163.4 2,532.2
------------------ ------------ ------------ ------------ ------------
Gross Margin 166.6 145.1 288.8 279.9
------------------ ------------ ------------ ------------ ------------
Research &
Development
Expenses (7.7) (6.9) (14.4) (13.8)
SG&A and Other
Costs (74.4) (72.2) (135.9) (149.7)
------------------ ------------ ------------ ------------ ------------
Operating Income 84.5 66.0 138.5 116.4
------------------ ------------ ------------ ------------ ------------
Financial Income
(Charges) (9.9) (16.5) (27.2) (33.8)
Income of Equity
Affiliates (0.1) 0.1 0.3 (0.1)
------------------ ------------ ------------ ------------ ------------
Profit Before Tax 74.5 49.6 111.6 82.5
------------------ ------------ ------------ ------------ ------------
Income Tax (21.5) (16.0) (32.6) (27.8)
Minority Interests (1.5) (0.3) (2.2) 0.3
------------------ ------------ ------------ ------------ ------------
Net Income 51.5 33.3 76.8 55.0
------------------ ------------ ------------ ------------ ------------
------------------ ------------ ------------ ------------ ------------
Net Income 51.5 33.3 76.8 55.0
Split Accounting &
Post-tax
Financial Charges
on Convertible
Bonds - 6.7 10.0 14.1
------------------ ------------ ------------ ------------ ------------
Restated Net
Income 51.5 40.0 86.8 69.1
------------------ ------------ ------------ ------------ ------------
------------------ ------------ ------------ ------------ ------------
Number of Fully
Diluted Shares
(1) at Period
End 108,863,692 114,642,768 108,863,692 114,642,768
------------------ ------------ ------------ ------------ ------------
------------------ ------------ ------------ ------------ ------------
Fully Diluted EPS
(EUR) 0.47 0.35 0.80 0.60
------------------ ------------ ------------ ------------ ------------
------------------ ------------ ------------ ------------ ------------
Fully Diluted
E/ADS ($) (2) 0.60 0.45 1.02 0.77
------------------ ------------ ------------ ------------ ------------
(1) The number of fully diluted shares as of June 30, 2005:
-- includes shares that would have been issued if all outstanding
convertible bonds existing at that time had been redeemed for
new shares,
-- includes shares that would have been issued if stock options
had been exercised,
-- excludes treasury shares.
The number of fully diluted shares as of June 30, 2006:
-- includes shares that would be issued if stock options were
exercised,
-- excludes treasury shares.
(2) Earnings per American Depositary Share (E/ADS) are in U.S. dollars
and are calculated based upon fully diluted EPS in euros converted
into US dollars using the Federal Reserve Bank of New York noon
buying rate (USD/EUR) of 1.2779 as of June 30, 2006.
ANNEX I (b)
CONSOLIDATED STATEMENT OF CASH FLOWS
IFRS
First Half
Euros in Millions --------------------------------
2006 2005
------------------------------------- ---------------- ---------------
Net Income 76.8 55.0
Depreciation of Property, Plant &
Equipment 67.3 61.9
Provision for Convertible Bond
Redemption Premium - 5.9
Split Accounting of Convertible Bonds 10.0 8.8
Stock Option Charge 0.9 2.8
Long-Term Provisions (Employee
Benefits) 0.4 -
Deferred Income Tax (15.7) 25.2
Capital (Gain) Loss on Asset Sales (26.4) -
Minority Interests and Other 2.2 1.1
-------- --------
Cash from Operations 115.5 160.7
-------- --------
Change in Working Capital 290.1 (53.2)
-------- --------
Net Cash Provided by (Used in)
Operating Activities 405.6 107.5
------- ------
------------------------------------- -------- ------- -------- ------
Capital Expenditures (71.5) (30.9)
Cash Proceeds from Asset Sales 33.2 -
Other 0.8 (0.2)
-------- --------
Net Cash Provided by (Used in)
Investment Activities (37.5) (31.1)
------- ------
------------------------------------- -------- ------- -------- ------
Increase (Decrease) in Debt (10.5) (4.3)
Capital Increase 20.0 2.0
Dividend Payment (91.0) (32.0)
Share Repurchases (223.5) (9.1)
Convertible Bond Softcall Adjustment (63.4) -
-------- --------
Net Cash Provided by (Used in)
Financing Activities (368.4) (43.4)
------- ------
------------------------------------- -------- ------- -------- ------
Foreign Exchange Translation
Adjustment (96.4) 35.8
------- ------
Net Increase (Decrease) in Cash and
Equivalents (96.7) 68.8
======= ======
------------------------------------- -------- ------- -------- ------
Cash and Equivalents at Period
Beginning 2,187.8 1,434.0
Cash and Equivalents at Period End 2,091.1 1,502.8
-------- --------
96.7 (68.8)
======= ======
ANNEX I (c)
CONSOLIDATED BALANCE SHEET
IFRS
Euros in Millions June 30, Dec. 31,
2006 2005
-------- --------
---------------------------------------------------- -------- --------
Fixed Assets 3,253.2 3,244.5
Deferred Taxes and Other Non-Current Assets 97.4 90.0
---------------------------------------------------- -------- --------
NON-CURRENT ASSETS 3,350.6 3,334.5
---------------------------------------------------- -------- --------
---------------------------------------------------- -------- --------
Construction Contracts 748.0 585.0
Inventories, Customer & Other Receivables 1,090.4 1,146.8
Cash & Cash Equivalents 2,091.1 2,187.8
---------------------------------------------------- -------- --------
CURRENT ASSETS 3,929.5 3,919.6
---------------------------------------------------- -------- --------
---------------------------------------------------- -------- --------
ASSETS HELD FOR SALE - 42.9
---------------------------------------------------- -------- --------
---------------------------------------------------- -------- --------
TOTAL ASSETS 7,280.1 7,297.0
---------------------------------------------------- -------- --------
---------------------------------------------------- -------- --------
Shareholders' Equity (Parent Company) 2,340.1 1,953.7
Minority Interests 15.0 13.9
---------------------------------------------------- -------- --------
SHAREHOLDERS' EQUITY 2,355.1 1,967.6
---------------------------------------------------- -------- --------
---------------------------------------------------- -------- --------
Convertible Bond - 650.1
Other Non-Current Debt 682.0 655.2
Non-Current Provisions 109.4 106.3
Deferred Taxes and Other Non-Current Liabilities 132.9 100.4
---------------------------------------------------- -------- --------
NON-CURRENT LIABILITIES 924.3 1,512.0
---------------------------------------------------- -------- --------
---------------------------------------------------- -------- --------
Current Debt 174.3 214.4
Current Provisions 101.1 133.4
Construction Contracts 1,955.2 1,672.4
Accounts Payable & Other Advances Received 1,770.1 1,797.2
---------------------------------------------------- -------- --------
CURRENT LIABILITIES 4,000.7 3,817.4
---------------------------------------------------- -------- --------
---------------------------------------------------- -------- --------
TOTAL SHAREHOLDERS' EQUITY & LIABILITIES 7,280.1 7,297.0
---------------------------------------------------- -------- --------
Changes in Shareholders' Equity (Parent Company)
----------------------------------------------------------------------
Shareholders' Equity at December 31, 2005 1,953.7
First Half 2006 Net Income 76.8
Capital Increase 570.1
Equity Component of Convertible Bond (IAS 32) (25.5)
Other Impacts of IAS 32 and 39 50.7
Dividend Payment (91.0)
Treasury Shares (174.2)
Translation Adjustments and Other (20.5)
Shareholders' Equity at June 30, 2006 2,340.1
------------------------------------------------------------- --------
ANNEX I (d)
TREASURY AND CURRENCY RATES
IFRS
Euros in Millions Treasury and
Financial Debt
----------------------
June 30, Mar. 31,
2006 2006
----------------------------------------------- =========== ==========
Marketable Securities 393 738
----------------------------------------------- ----------- ----------
Cash 1,698 1,438
----------------------------------------------- ----------- ----------
Cash & Cash Equivalents (A) 2,091 2,176
----------------------------------------------- ----------- ----------
Current Debt 174 191
----------------------------------------------- ----------- ----------
Non Current Debt 682 657
----------------------------------------------- ----------- ----------
Gross Debt (B) 856 848
----------------------------------------------- ----------- ----------
Net Financial Cash (Debt) (A - B) 1,235 1,328
----------------------------------------------- ----------- ----------
Euro vs. Foreign Currency Conversion Rates
Statement of Income Balance Sheet
----------------------------- ------------------------------
First Second First
Half Half Half June 30, Dec 31, June 30,
2006 2005 2005 2006 2005 2005
========= ========= ========= ========= ========= ========= ==========
USD 1.22 1.24 1.29 1.29 1.18 1.21
--------- --------- --------- --------- --------- --------- ----------
GBP 0.69 0.68 0.69 0.69 0.69 0.67
--------- --------- --------- --------- --------- --------- ----------
ANNEX II (a)
REVENUES BY REGION
IFRS
Euros in Millions Second Quarter First Half
------------------------ ------------------------
2006 2005 Change 2006 2005 Change
==================== ======== ======== ====== ======== ======== ======
Europe, Russia, C.
Asia 386.7 386.2 0.1% 704.2 669.2 5.2%
-------------------- -------- -------- ------ -------- -------- ------
Africa 305.4 348.9 -12.5% 618.5 686.8 -9.9%
-------------------- -------- -------- ------ -------- -------- ------
Middle East 433.6 239.5 81.0% 879.2 513.9 71.1%
-------------------- -------- -------- ------ -------- -------- ------
Asia Pacific 129.3 89.5 44.5% 364.9 193.6 88.5%
-------------------- -------- -------- ------ -------- -------- ------
Americas 334.0 266.8 25.2% 596.6 468.7 27.3%
-------------------- -------- -------- ------ -------- -------- ------
TOTAL 1,589.0 1,330.9 19.4% 3,163.4 2,532.2 24.9%
-------------------- -------- -------- ------ -------- -------- ------
ANNEX II (b)
SUPPLEMENTAL INFORMATION BY BUSINESS SEGMENT
IFRS
Euros in Millions Q2 Q2 1H 1H
2006 2005 Change 2006 2005 Change
------ ------ ------ -------- -------- ------
------------------------
SURF
------------------------ ------ ------ ------ -------- -------- ------
Revenues 486.3 472.8 2.9% 979.7 873.6 12.1%
------------------------ ------ ------ ------ -------- -------- ------
Gross Margin 73.3 69.4 5.6% 150.9 132.5 13.9%
------------------------ ------ ------ ------ -------- -------- ------
Operating Income 38.1 37.6 1.3% 78.1 68.6 13.8%
------------------------ ------ ------ ------ -------- -------- ------
------------------------ ------ ------ ------ -------- -------- ------
Depreciation (27.6) (23.6) 16.9% (53.9) (46.9) 14.9%
------------------------ ------ ------ ------ -------- -------- ------
------------------------
OFFSHORE FACILITIES
------------------------ ------ ------ ------ -------- -------- ------
Revenues 305.0 235.6 29.5% 598.0 415.4 44.0%
------------------------ ------ ------ ------ -------- -------- ------
Gross Margin 48.7 24.5 98.8% 53.7 41.8 28.5%
------------------------ ------ ------ ------ -------- -------- ------
Operating Income 30.1 6.5 nm 41.5 10.1 nm
------------------------ ------ ------ ------ -------- -------- ------
------------------------ ------ ------ ------ -------- -------- ------
Depreciation (2.2) (3.2) -31.3% (4.5) (7.0) -35.7%
------------------------ ------ ------ ------ -------- -------- ------
------------------------
ONSHORE-DOWNSTREAM
------------------------ ------ ------ ------ -------- -------- ------
Revenues 747.7 557.9 34.0% 1,486.8 1,111.2 33.8%
------------------------ ------ ------ ------ -------- -------- ------
Gross Margin 37.2 45.0 -17.3% 69.8 92.2 -24.3%
------------------------ ------ ------ ------ -------- -------- ------
Operating Income 15.2 20.5 -25.9% 16.4 40.3 -59.3%
------------------------ ------ ------ ------ -------- -------- ------
------------------------ ------ ------ ------ -------- -------- ------
Depreciation (1.1) (2.6) -57.7% (3.5) (4.8) -27.1%
------------------------ ------ ------ ------ -------- -------- ------
------------------------
INDUSTRIES
------------------------ ------ ------ ------ -------- -------- ------
Revenues 50.0 64.6 -22.6% 98.9 132.0 -25.1%
------------------------ ------ ------ ------ -------- -------- ------
Gross Margin 7.4 6.2 19.4% 14.4 13.4 7.5%
------------------------ ------ ------ ------ -------- -------- ------
Operating Income 2.6 1.5 73.3% 5.1 2.2 nm
------------------------ ------ ------ ------ -------- -------- ------
------------------------ ------ ------ ------ -------- -------- ------
Depreciation (1.6) (0.6) nm (1.9) (1.1) 72.7%
------------------------ ------ ------ ------ -------- -------- ------
------------------------
CORPORATE
------------------------ ------ ------ ------ -------- -------- ------
Operating Income (1.5) (0.1) nm (2.6) (4.8) -45.8%
------------------------ ------ ------ ------ -------- -------- ------
------------------------ ------ ------ ------ -------- -------- ------
Depreciation (1.7) (1.0) 70.0% (3.5) (2.1) 66.7%
------------------------ ------ ------ ------ -------- -------- ------
nm = not meaningful
ANNEX II (c)
ORDER INTAKE & BACKLOG
Euros in Millions Order Intake by Business Segment
-------------------------------------------------
Second Quarter First Half
------------------------ ------------------------
2006 2005 Change 2006 2005 Change
-------------------- -------- -------- ------ ======== ======== ======
SURF 382.5 532.9 -28.2% 658.3 985.8 -33.2%
-------------------- -------- -------- ------ -------- -------- ------
Offshore Facilities 112.0 492.1 -77.2% 267.5 733.6 -63.5%
-------------------- -------- -------- ------ -------- -------- ------
Onshore-Downstream 746.4 1,270.1 -41.2% 2,101.1 2,393.8 -12.2%
-------------------- -------- -------- ------ -------- -------- ------
Industries 61.1 14.4 nm 99.8 52.7 89.4%
-------------------- -------- -------- ------ -------- -------- ------
TOTAL 1,302.0 2,309.5 -43.6% 3,126.7 4,165.9 -24.9%
-------------------- -------- -------- ------ -------- -------- ------
-------------------------
Backlog by Business
Segment
-------------------------
As of As of
June 30, June 30,
2006 2005 Change
==================== ========= ======== ======
SURF 2,443.8 1,939.1 26.0%
-------------------- --------- -------- ------
Offshore Facilities 833.4 1,243.4 -33.0%
-------------------- --------- -------- ------
Onshore-Downstream 7,941.4 4,886.7 62.5%
-------------------- --------- -------- ------
Industries 164.2 140.7 16.7%
-------------------- --------- -------- ------
TOTAL 11,382.8 8,209.9 38.6%
-------------------- --------- -------- ------
-------------------------
Backlog by Region
-------------------------
As of As of
June 30, June 30,
2006 2005 Change
==================== ========= ======== ======
Europe, Russia, C
Asia 730.9 968.9 -24.6%
-------------------- --------- -------- ------
Africa 1,701.6 1,664.5 2.2%
-------------------- --------- -------- ------
Middle East 6,112.1 2,708.8 125.6%
-------------------- --------- -------- ------
Asia Pacific 1,079.6 1,072.9 0.6%
-------------------- --------- -------- ------
Americas 1,758.6 1,794.8 -2.0%
-------------------- --------- -------- ------
TOTAL 11,382.8 8,209.9 38.6%
-------------------- --------- -------- ------
Estimated Backlog Scheduling at June 30, 2006
-------------------------------------------------
Offshore Onshore-
SURF Facilities Downstream Industries Group
==================== ====== =========== =========== ========== =======
2006 (Second Half) 1,178 485 1,900 96 3,659
-------------------- ------ ----------- ----------- ---------- -------
2007 906 256 3,300 49 4,511
-------------------- ------ ----------- ----------- ---------- -------
2008 and Beyond 360 93 2,741 19 3,213
-------------------- ------ ----------- ----------- ---------- -------
TOTAL 2,444 834 7,941 164 11,383
-------------------- ------ ----------- ----------- ---------- -------
nm = not meaningful
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