Guillaume Delaby: Yes, good morning, Doug. Good morning, Alf. Maybe a quick question regarding your new capital allocation policy, I’m not sure we can call it that way. So is it essentially resulting from, I would say, a better financial outlook or is there also some kind of underlying, I would say, strategic thinking behind it? So maybe if you can elaborate a little bit on that. And an associated question, maybe I know it’s time for capital discipline, but are you still considering or do you may consider to do some small targeted acquisition again in the coming quarters? Thank you.
Doug Pferdehirt: So let me start with the second part, Guillaume, and thank you for the questions. Look, we have and will continue to do small targeted acquisitions, but in most cases, we’re taking small investments in early start-ups. Often it doesn’t cost any capital because we’re using, if you, financial capital, because we’re using human capital. The greatest currency we have in our company today is our subsea engineering. It is very unique to our company and we have by far the most significant and most experienced and talented workforce. So often we can trade, if you will, subsea engineering hours to a company who’s trying to tackle this challenge of how do I go from being a terrestrial developer to being an offshore developer?
Things change quite a bit. And we have that knowledge, particularly when it comes to dynamic design and I won’t get into the details of that, but that’s a major component and then also obviously putting things onto the sea floor. I’m going to have Alf weigh in on the first part of your comment, but I do want to comment, Guillaume, there were two major messages that Alf delivered earlier. One, we were upgraded by S&P, and two, we were targeting net zero in terms of our net debt. So two major milestones, but I’ll pass it over to Alf.
Alf Melin: Yeah, Doug, thank you. And maybe just to build on that. So today, so we have a gross debt of just about $1 billion and a net debt of $327 million and we have previously stated that we will operate this company on $800 million of cash and further, as Doug said, I honestly believe this, that the net debt neutral position is a good target for us and it would imply that we would reduce debt by a little bit more than $200 million — reduce debt by a little bit more than $200 million from the current $1 billion level. And so this is a — call it an intermediate term target, and not necessarily where we need to be immediately and we certainly have debt that is going to mature over the next two years that will take us there naturally.
I will also emphasize that, given our business outlook and the strong cash generation we see ahead, we continue to believe that share repurchases remains one of our best uses of funds and we demonstrated that by distributing the majority of the Measurement Solutions proceeds here in the first quarter, but we also remain committed to achieving investment grade and as Doug said, we achieved an upgrade to investment grade from S&P now just in March. But overall, when you think about it longer term and strategically, and maybe that’s what you’re asking with expected growth in EBITDA and with the debt keep on coming down from current levels, clearly expect to be below one time gross debt to EBITDA leverage ratio as we go forward.
Guillaume Delaby: Okay, very useful. I hand it over. Thank you, Alf.
Operator: Our next question comes from the line of Marc Bianchi with TD Cowen. Please go ahead.
Marc Bianchi: Hi, thank you. I wanted to ask about sort of your scope opportunity on large projects and I’m looking at the Whiptail Award and the YARU [ph] earlier. I think you had expected them to be over $1 billion of inbound and they ended up being $500 million to $1 billion. I suspect what might be going on there is some of the scope that you anticipated to get didn’t materialize for you, it went to competitors. But could you maybe address that and then talk about for your direct awards sort of what scope you’re getting right now versus maybe what your opportunity could be over time?
Doug Pferdehirt: Thanks, Mark, appreciate it and look, that’s an important question. If it’s on your mind, then we need to clarify it. So I appreciate you giving us the opportunity to clarify it. The Subsea opportunity list that we publish every quarter is published from an industry perspective. Think of it as the rate count, if you will. So we’re trying to demonstrate to give people the opportunity to be able to see the opportunity set that exists within the subsea industry. Therefore, when we put that out, that’s not what we expect or what we anticipate. It’s these are tenders, these are projects that are being tendered by our clients and the full scope of that is reflected in the value of those awards replaces the value, if you will.
We use purple, blue and red on our charts. So hopefully that clarifies this is just what the company happens to be tendering. We may or may not be targeting the full scope of the project. In many cases we are. What’s important also to understand is that is a subset of the opportunity list for TechnipFMC. Now, that is the full opportunity set for the competition. But for TechnipFMC, because we are an integrated company, because we have IEPCI, because we do integrated feed studies, we have the ability to enter into an exclusive, proprietary, integrated feed study that upon completion, assuming we achieve the economical hurdle rate for the project and the project receives FID, that project is then direct awarded to our company. Those aren’t on the subsea opportunity list.
Occasionally one might show up on there just because it’s such a well-known project. We need to put it out there, but because these are direct awards and proprietary to us, they’re not on that opportunity list. So we have a second opportunity list that we look at every day and that’s really what drives the performance of our company, and quite frankly, the outperformance, and why our inbound numbers often surprise to the upside. So just to give you a little bit of an idea of what’s — there’s really two lists. We’re looking at one. The world’s looking at the other. We may not be tendering some of the projects, by the way, on the subsea opportunity list, because we may not think that they’re projects that we can contribute the greatest value to, meaning integrated or Subsea 2.0 or whatever it may be.
Or we may be concerned about something about the project. So we may or may not tender those as well. As far as the scope, I think you know, we have the most comprehensive. We can do an entire subsea project. We don’t have to bring in a third party or buy third party key components. We’ve talked about it before. The ability to be able to have the entire SPS, the entire surf, both products and installation capability makes us and positions us uniquely.
Operator: Our next question comes from a line of Kurt Hallead with Benchmark. Please go ahead.
