The Group starts the period with a strong, profitable and diversified backlog of projects to execute across its two segments. It continues to see good near and medium-term opportunities to win new projects. Focusing on Subsea, it expects 2014 revenue between
€4.35 billion and €4.75 billion and, after a slow start in the first quarter 2014, a robust margin performance from the second quarter 2014 onwards. Technip targets in particular, strong revenue growth on higher margins in 2015 for Subsea - revenue well above €5 billion and operating margins between 15% and 17%.
Subsea 2014 and 2015
In 2014, it targets revenues between €4.35 billion and €4.75 billion. Before a substantial improvement from the second quarter onwards, Subsea operating margins will be exceptionally low in the first quarter 2014 at around 5% on similar revenues to the first quarter 2013 reflecting the following elements:
- A very high proportion of revenues coming from multi-year projects on which the Group's policy is not to recognize margin in early phases
- Additional time for our accelerated vessel maintenance and enhancement program
- The tail of revenue from the zero-margin Gulf of Mexico projects
- Start-up of the Açu facility during the quarter as planned, with associated costs
These elements will be much less important, already in the second quarter. The last three quarters of the year will all show substantially better margins, with normal seasonality. This enables us to set as a floor an operating margin of at least 12% for the year as a whole.
The margin performance from the second quarter 2014 onwards will prepare for strong growth in 2015. At this point, we target 2015 Subsea revenue to be well above €5 billion and 2015 Subsea operating margins between 15% and 17%.
Onshore/Offshore 2014 and 2015
In 2014, we target revenues of between €5.4 billion and €5.7 billion with operating margins between 6% and 7% on revenues. This is in line with our comments at the time of our third quarter 2013 statement and with our long-term goals. In 2015, we target continued modest growth in our revenues and stability in our margin levels.
There is a good balance across the Onshore/Offshore segment of early, mid and late stage projects in 2014 and 2015. We will continue to focus our efforts on maintaining a diversified project portfolio, based increasingly on value-added engineering and technology. Our outlook does not take into account any very major project awards at this time.
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