So, it really is a different way of operating. And we’ll walk our clients through that, and they see it in all of our operating locations, they’re able to experience that in our operating locations, and just continue to deliver at a very, very high level.
Kurt Hallead: That’s great color. And a follow-up, kind of curious, right, we’ve seen some recent, kind of tying everything together here, right? With respect to the order book, the upcoming, the insights, as to the projects that are slated for even later this decade, and the incremental oil that’s going to bring to the market right, yet. So, pack them out and suggest continued oil demand growth out beyond 2030. Obviously, that the IEA kind of picks a different tone, but through all your experience in dealing with different cycles, right? At the end of the day, I can’t imagine the customer moving forward with a project that’s going to deliver first oil latter part of the decade, if their data is telling them that the markets not going to be there for the product. But that’s kind of curious as to when try to piece all this stuff together. How do you sort through the noise?
Doug Pferdehirt: Kurt, I think you look for the high quality data, you look for — you listen to your clients, and you look for the most realistic outcome that’s not influenced by external factors. And I think it’s very, very clear that there’s going to be a continued demand and a continued high level of demand. And just using the references that you use at the beginning, we certainly believe in the data and the commentary that’s being provided by OPEC.
Kurt Hallead: Appreciate it, Doug. Thank you.
Operator: Arun Jayaram at J.P. Morgan, your line is open.
Arun Jayaram: Good morning, Doug. I wanted to get some thoughts on the flexibles business at FTI. I was wondering if you give us a sense of how much of your kind of current contribution is from flexibles and as we think about a couple of the large project awards that you announced this quarter with Petrobras and with Woodside and Gulf of Mexico, how that mix could change and maybe the margin profile as well as maybe just the technology that you think you bring to the table versus two of your other peers that are in that segment?
Doug Pferdehirt: Sure, Arun, as you pointed out, there’s very few of us who work in this domain. We’re the pioneer, we’re the market leader. I would say we focus more on the higher end range of the flexibles. We’ve always gone, we’re the ones who have driven diameter, we’re the ones who have driven pressure rating, we’re the ones who have driven tensile strength, et cetera. And as far as percentage of the business, it’s important, but more so than the percentage of the business that it represents. And it depends if you prefer bayou base or gumbo, but anybody who has a bayou base or gumbo recipe has a secret ingredient. This is our secret ingredient. This is what makes iEPCI tasteful. And the reality of the situation is, without this, you can only do limited — there’s only limited benefit to an integrated offering.
This is why, as the first mover, we chose to go with Technip at the time. The flexible offering from Coflexip was absolutely critical to our vision of an optimized subsea architecture. So, it’s not only the value it brings as a product line, but we’re the only ones who have the product within an integrated company. The real benefit we get is the influence it has on our iEPCI awards and also on our iEPCI margins.
Arun Jayaram: Okay. That’s helpful. Maybe just a follow-up for Alf, you mentioned how the soft guide on 2024 is 35% EBITDA growth from the 915. I wanted to maybe ask for a little bit of a clarification on the cash return. I believe the stated policy is to return 60% of your free cash flow back. And one of the questions from investors is, how does the PNF settlement, how does that impact the free cash flow calculation and cash return?
Alf Melin: No. Thank you for the questions. So, first of all, very clear, we do have a commitment out there that we will return at least 60% of our free cash flow to shareholders. And we’re going to stay true to that over the next few years. So, what we further are saying is that really also the growth rate of 35% that you see in EBITDA from 2023 to 2024, we expect to apply that to distributions as well for 2024. So, in short, answering your question, yes, there is an impact of roughly $170 million of payments outflow next year in terms of the free cash flow. But overall, we still expect to increase shareholder distributions by 35% in line with our EBITDA guidance. So, that also tells you something about the underlying strong fundamental cash flow that you’re going to see year-over-year, if you exclude the impact of these $170 million of payments.
Arun Jayaram: That’s helpful. Thank you.
Operator: Scott Gruber at Citigroup, your line is open.
Scott Gruber: Yes, good morning. Doug, in your prepared remarks, I believe you mentioned upside to service revenue in addition to the upside to order intake. You guys have been targeting 1.5 billion of service inbound and in ’25. I’m just curious, whether you guys are contemplating upside to that number as well.
Doug Pferdehirt: Thanks, Scott. Obviously, we’ll be giving a bit more detail with our Q4 on our Q4 call, but I would tell you, as you were kind enough to ask the question, we are very proud of our subsea services business. We have high expectations of our subsea business, so you should expect to see our subsea services business continue to benefit not only from the higher level project awards, which means a higher level of installation activity, but we’re also seeing customers focus more on inspection, maintenance, and repair, really wanting to ensure optimized uptime of their producing assets, as well as our subsea well intervention services. And that’s really about ensuring the production, because there may be some downhole issue that has occurred, and our ability then to go out and help them intervene into the well in the most cost-effective way. So, there’s multiple drivers and a significant amount of optimism around our Subsea services business.
Scott Gruber: Got it. And the margins for that business have typically been better, what’s the outlook for pricing and margins going forward then? I just imagine that there’s more competition between installation and the maintenance and inspection, just given that the equipment award volume is going up and therefore the installation outlook is going up, does that create competition for those resources to do the inspection, maintenance, repair, such that you can get incremental pricing and margins?
Doug Pferdehirt: Well, first of all, Scott, remember this is an OEM model, so we service and maintain everything that we install. We have the world’s largest install base, and we benefit from that with these businesses. It’s only growing as based upon the award activity over the last couple of years where we’ve had a substantial growth relative to the market that has been reflected in subsequent years into our subsea services business. But it’s all an OEM business. Look, I don’t talk a lot about pricing. We work very closely with our clients. They want to ensure that we’re getting — that we are very satisfied with, that we feel we’re being treated appropriately and fairly on an economic basis, and we’re very comfortable with that, yes.
