TotalEnergies (TTE) Q3 2025 earnings call transcript

Good afternoon. Good morning, everyone. Before Jean-Pierre goes through the details of the third quarter results, I would like to make a few opening comments.

Almost exactly one month ago, we updated you for strategy during our Capital Markets Day in New York, and we had four key messages. Consistency and resilience of our two-pillar strategy. Strong and secure production growth in our oil and gas business. Accretive cash flow generation and capital discipline. I believe that this company has strong third quarter results, but again Jean-Pierre will detail with you, perfectly illustrates these key catalysts and highlights the value proposition of a consistent and profitable growth model. The strategy is clearly in motion and is translating into more cash flow, even in a more challenging environment.

Indeed, despite oil pricing dropping by more than $10 per barrel year on year, the cash flow for the third quarter increased by 4%, and adjusted net income for the third quarter held steadily. Why? Primarily for two reasons.

First, the hydrocarbon growth, production growth is a reality and is highly accretive. The new project barrels coming online, such as Meofields in Brazil, Deepwater Projects in the U. S. of Shorghum for oil, Tura, and Phoenix for gas, have an average cash flow margin, which is roughly twice higher than the base portfolio, And they have contributed 170,000 barrels per day during the first nine months of 2025 compared to 2024.

These new barrels have generated around $400 million of additional cash flow year-on-year. So growth volume, around $200 million, and higher margin, another $200 million. And so they have contributed to absorb the equivalent of $6 per barrel of decrease in the brand in terms of cash flow. So that's, I think, the strong demonstration that our disciplined investment framework that includes strict sanctioning criteria, less than $20 per barrel technical cost of $30 per barrel break-even for E&P projects, is delivering its fruits. And we expect, of course, that this cash flow tailoring from new high margin barrels will continue as we work our way through our deep project queue. As a reminder, starting from 2025, continuing in 2026, the company is growing upstream production by 3% per year through 2030.

And what is the differentiation factor that's the standard of a business model is clearly that more than 95% of this production by 2030 is already either online or under construction, and largely under lump sum EPC contracts, which significantly there is a cost. So projects are in hand and we are executing them. And again, this year and this last quarter demonstrate that we are well in the delivery mode. Some people think we are boring, but we are boring for the good. Cash is growing. The second pillar of these good results are in the recovery of the downstream, which contributes to the company's resiliency, with cash flow up by almost $500 million.

It is true that the refining marks here were better, but it's also true that we managed to capture them. Thanks to a good availability of our assets, and in particular, there were several turnarounds during the quarter, but they were executed in time, in schedule, and in budget, and it allows us to reach our objective. And of course, marketing and services continue to deliver consistent results and demonstrate that the priority given to value over volume in this segment is the right approach. In addition to highlighting the strength of our consistent strategy, this third quarter demonstrates as well that we are delivering the short term, specifically on the second half 2025 plan that we laid out during the July earnings call, which included four key elements.

Again, the accritic production growth, giving more cash flows, a downward inflection in our net investments, coming back to the capital discipline, which decreased by $3.5 billion quarter over quarter, a reversal of the seasonal working capital, as we have released this quarter of $1.3 billion. And lastly, of course, all these elements improve the gearing. It is now classed to 70% compared to next to 18%. So the end result is that during the third quarter, at $69 per barrel, the company generated excess free cash flow, with cash flow including working capital variation, more than covering net investment, plus $4.5 billion of shareholder returns in the form of dividends and buyback. It's leading me to shareholder returns. The company, of course, continues its strong track record of dividend growth.

The Board of Directors decided to increase the third interim dividend of close to 8% in euro and more than 10% in dollars compared to 2024. On the buyback side, as announced on September 24, the Board of Directors authorized up to $1.5 billion of share buybacks for the fourth quarter of 2025.

And therefore, assuming annual cash flow between $27.5 and $28 billion, in particular supported by the better refining margin that we observe currently, the 2025 payout ratio is expected to remain around 56%.

Looking forward, we expect to maintain a strong momentum for the fourth quarter. Upstream production is anticipated to grow more than 4% year on year, like this quarter. The net investments are expected to decrease quarter over quarter, in particular because we will deliver the disposal proceeds. At the end, the net of acquisition will represent $1.5 billion of cash inflow in the balance sheet, and that with another anticipated positive contribution from the seasonal working capital, we anticipate to continue to strengthen the balance sheet with gearing forecasted further decline to 15-16% at year end. Last but not least, we have approved the roadmap to transform all ADRs into ordinary shares, and we are happy to announce that we ordered today, JP Morgan, to launch the termination process of the ADR program, with the objective that ordinary shares are expected to begin trading on the New York Stock Exchange from December 8th.

This is, of course, an important milestone for the company, as it will allow for a single class of TotalEnergies SE shares to trade with extended house. It will be essentially a continuous listing from Paris 9 a. m. to New York 4 p. m. , 10 p. m. Paris time. And we hope that these ordinary shares listing will be a clear catalyst for the stock in 2026 in both Paris and New York markets, and we intend to market these ordinary shares on the U. S. market even more actively than today.

I will now turn the call over to Jean-Pierre, who will go through the details of these third quarter financials.

Thank you, Patrick. And we start by commenting on the price environment in the third quarter versus the second quarter. Brent averaged $59 per barrel during the third quarter versus $68 per barrel in the second quarter, up 2%, but down more than $10 per barrel compared to the third quarter, 24. ETF averaged $11.3 per million BTU versus $11.9 per million BTU, down 5%. And the average LNG price decreased to $8.9 per million BTU versus $9.1 per million BTU, down 2%. On the other side, for refining, the European refining margin significantly improved to $63 per ton compared to $35 per ton during the second quarter, up close to 80%. In this price environment, the company reported strong financial results with third quarter 25 cash flow increasing by 7% compared to the second quarter and adjusted net income increasing by 11% thanks to the continued positive impacts of the new attractive upstream barriers and strong downstream results that reflect the company's ability to capture higher refining margins in Europe.

Overall, profitability remains strong, with return on equity for the 12 months ending September 30 at 14.2%, and Roachet close to 12.5%.

Moving now to the business segment, starting with hydrocarbons. On a year-on-year basis, third-quarter hydrocarbons production exceeded expectations and increased by more than 4%, making it the company's highest growth quarter so far this year. We anticipate that this trend will continue, with fourth-quarter hydrocarbon production expected to grow more than 4% compared to the fourth-quarter of 2024, notably benefiting from the restart of ETS-LMD in Australia.

Turning to the quarterly results and starting with exploration and production, this segment generated during the third quarter 25 an adjusted net income of $2.2 billion, up 10% quarter over quarter in a similar price environment, and outpacing quarter over quarter E&P production growth of around 4%. Similarly, cash flow growth was strong at $4 billion, up 6% quarter for the quarter.

Importantly, our project portfolio is delivering new low-cost, low-emission oil and gas production that is attractive, with an average upstream safe echo per barrel that is roughly two times the base portfolio.

Regarding an ENP project, we are progressing on all fronts. On the project side, we achieved first oil at the Begonia and Cloth-S3 offshore fields in Angola, and we sanctioned phase two of the redevelopment of the Ratawi oil fields in Iraq, which is part of the GGIP project. As we have now launched all phases of GGIP, we are looking forward to the first oil for phase one of the redevelopment early 26. On M&A, the company is consistently upgrading its portfolio. During the last earnings call, we mentioned that we are expecting several E&P divestments in the second half of the year. And during the third quarter, we divested two international blocks in Vaca and Moistar in Argentina, which closed this quarter, and three satellite fields on Nekofisk in Norway, out of our strict investment criteria, which is expected to close in the fourth quarter.

And lastly, on exploration, we continue to reload the helper to complement existing opportunities. And this quarter, we announced new license awards in Nigeria, in the Republic of the Congo, and in Liberia.

Moving to integrated energy. Third-quarter energy sales of 10.4 million tons were essentially flat quarter over quarter, As third-party purchases, offset lower sales from equity production. Cash flow of $1.1 billion was in line with the second quarter in a stable price environment with an average energy price of around $9 per million BTU. Adjusting net operating income of $0.9 billion was down 18% quarter over quarter, primarily due to the planned turnaround at ICTIS LNG in Australia that impacted production by around 50,000 barrels of oil equivalent per day for the quarter. On the price outlook, forward European gas prices continue to be sustained at around $11 per million dTU for the first quarter of 25, as winter 25-26, due to anticipated winter amounts.

Given the evolution of oil and gas prices in the recent months and the lag effect on pricing formulas, the company anticipates an average energy selling price of around $8.5 per million for the first quarter of 25. On the adjustment of our LNG strategy, we are pleased to continue to grow our U. S. presence with the recent FID on Grillo Grande LNG24 in South Texas, and we enhanced resilience in our LNG and gas-to-power strategy by acquiring interest in shale gas assets from continental resources in the Anadarko Basin in the U. S. Turning to integrated power, net power generation increased 9% quarter over quarter to 12.6 terawatt-hour due to increased outputs from flexible generation capacity in Europe.

The value of TotalEnergies unique integrated model is illustrated in the third quarter financials. Total cash flow from operations was $0.6 billion, up 9% quarter over quarter, and in line with annual guidance. To provide more granularity in the integrated power financial performance, this quarter, we disclosed the splits in cash flow between production assets, renewable and gas-fired power plants on one side, and sales activity, B2B, B2C, and trading on the other side, showing that each contributed equally this quarter. During the third quarter, the company has executed well on the farm-down side of its integrated power business model, which contributes capital recycling and will generate a tailwind for free cash flow in the fourth quarter. The company signed an agreement for the sale of 50% of the 1.4 gigawatt renewable portfolio in North America and closed the sale of 50% of the 270 megawatt renewable portfolio in France.

These deals have a combined cash impact of around $1.5 billion, and in this deal, TotalEnergies retains a 50% stake in the assets and will continue to be the operator after closing and to obtain 100% of the electrons. This is in line with our business model.

As an important reminder, our effective upstream growth is not the only contributor to the company's resilience. Integrated power will take a key role in this too, since it is a differentiated and growing cash flow stream that is outside of crude cycles and with strong demand fundamentals.

Moving to downstream, as Patrick mentioned, during the third quarter, downstream efficiently captured the high refining margins in Europe and contributed to the company resilient financials. Third quarter adjusted net operating income of $1.1 billion was up more than 30% quarter over quarter. Cash flow of $1.7 billion was up 11% quarter over quarter, thanks to good availability of assets that allowed us to successfully capture improved European margins. In terms of free cash flow during the third quarter, downstream cash flow from operating activities exceeded net investment by over $2.5 billion.

In refining, the European refining margin marker strengthened during the third quarter due to the tension on the diesel supply chain in the context of low inventories. In the U. S. and HTC, the U. S. and HTC in Korea.

In marketing and services, results remain consistently strong with high-margin activities offsetting lower volumes. Looking ahead, we anticipate refined utilization of 80% to 84% in the fourth quarter, which accounts for scheduled turnarounds at Anvert and Satop.

Moving now to the company level and starting with working capital. As expected, we benefited from a working cap release during the third quarter, which was a $1.3 billion positive contribution to cash. Furthermore, for the fourth quarter, we anticipate another positive contribution. On net investment, they meaningfully decreased to $3.1 billion in the first quarter, which includes $0.4 billion of divestment net of acquisitions. In the first quarter, as mentioned by Patrick, disposals are estimated to total $2 billion, including the closing of Nigeria and Norway divestment for exploration and production, as well as fundown of renewable assets in North America and Greece for integrated power. And we reiterate full year 25 net investment guidelines of $17 to $17.5 billion.

Based on anticipated net investment and working gap, we expect gearing to decrease to 15% to 16% at your end, compared to 17.3% at the end of the third quarter.

With that, Patrick and I are now available to answer your question. And the operator, so please, open up the line for questions.

Okay. Good morning, good afternoon, Media. First, as you observed, there is quite a huge, quite a big fiscal creativity in the French Parliament these last days, and clearly the full recipe will not work. And we don't know, so be careful not to overreact to the night news. There was a super tax on multinationals, which is completely out of the rule of law. You know, France has signed 125 fiscal agreements with many countries. The principle is no double taxation, and this is very anchored, and as the government reminded to the parliament, this is the right rule, so we will not be touched by that. And you know there is also in the Constitution some already decision when you want to tax above what is reasonable, then these types of taxations are not approved or canceled.

So, honestly, you know the situation, political situation in France is not very stable. There is a huge debate making a lot of noise, but I trust that at the end of the day we land to a reasonable avenue, and as you all know as well, we, TotalEnergies, does not make a lot of benefit in France, so I would say we'll follow this debate, but again, I'm comfortable with the fact that at the end of the day, I hope that governments will take the right decisions to maintain, in fact, which is fundamental, what we call the supply policy. Before you redistribute in a country, you need to create wealth. You need to produce. You need to create results, revenues.

And then you can speak about distribution. And we will come back to that. I understand that and I think by the way that this situation in France is weighting on the share price of TotalEnergies but I remind you as well that we are a global company and that again largely 90 of our cash flows and our results are not coming from our country where we have the equity So again, I think from this perspective, the profile of TotalEnergies is quite different from other French companies, and that market should integrate it. For 2026, honestly, Lydia, you are asking me a question to which I will answer more precisely in February. As we know, we have a meeting for my new results and what is the plan for 2026.

So, I mean, as I told you, in New York, we anticipate a growth of 3%, more than 3% for 2026 again. For the cash flow, I don't have all figures. Of course, it's related to the new production coming on stream, but part of the new production of 25, like the Brazilian production, will have the full effect in 26. So I anticipate another accretive effect on our accretive effect. The size of it, I mean, you have to be a little patient. But again, clearly, we are in a delivery mode. We deliver the production growth more than three. This year, probably, will be next to four, in fact, at the end of the year, rather than three.

I will turn the call over to management for the next five years. And then let's deliver the cash. But you know this is a roadmap, not only 25-26, but for the next five years. And we reminded you and we gave you comfort during the New York presentation that we will deliver this $10 billion of additional free cash from all our segments. In the next five years.

First, I was wondering if you feel like you're able at the moment to capture the extraordinary refined Thank you for this question, Michele. To be honest, when I read again, I think we were a little bearish on the oil price and the refining market. So refining margin, as we captured since the beginning of October for the last month, is around $75 per tonne. So when we guided you at about $50, I think we are a little shy. And in fact, it's fundamentally linked because we begin to see real impact in the market of these last Russian sanctions. I think the market is underestimating what it means when you have U. S. sanctions, two large Russian companies, which are the core of trading Russian oil, by the way.

And when Europe said that we are targeting countries which are considered, I would say, dangerous, like India, Turkey, and China, But if you trade oil or products from these countries, you could be under sanction. The reaction today in the market, and I shared some views with some of my colleagues, including in Riyadh last two days, I can, clearly today, including trading hours as well, are more cautious. And we see that everybody is taking this risk very seriously, including secondary sanctions, you know, which might become. And so I see some impact. And I think the refining margins today is more around $100 per ton than the $75 on average. And it is linked clearly to, in fact, this sanction will oblige to re-root some volumes and to find a way to bring, I would say, products and crude oil more expensively to the different locations of the planet.

So I think this is clear. That also could have an impact, by the way, on the oil price, I mean, the crude oil price. We've seen a reaction when they were announced. Today it's still $65, but $65 I think is a good assumption for this quarter, maybe a little more. So I would say more bullish than what we wrote a few days ago because I begin to realize that these sanctions will have a real impact in this market, and most of the players are taking them seriously, which is good, by the way. TotalEnergies, you know, we stopped trading any Russian oil since the end of 2022. Somewhere we penalized ourselves compared to overpractice. But I think it was the right way to comply and to be strict on the Russian sanctions.

So, capturing the refining margins, for sure the good news of the third quarter is that we managed to do it. We had a turnaround on Port Arthur, which is done, so it's fully back online now. Donja as well is running, so it's not the last equipment we are waiting for by the end of the year, but it's running, so we deliver results. The fourth quarter, we have two turnarounds, one in Anverb, one in Satop, which are two big machines in our reserves. But I expect that this will be compensated again by the other assets and by the fact that the margins are higher. So I'm positive, and when I gave you a guidance of 27.5 for 28, I was maybe too bullish by stating 27 in New York.

It's because as well I integrate these elements, which again, the duty and all the organization of refining chemicals and Vincent Stockard are dedicated to capture these margins, which are good. So this is where we are, and I'm bullish on that.

The second question is clear. It will go to the balance sheet. Thank you. So, the second answer, I would say, is clear. It will go to the balance sheet. It will go to the balance sheet because I observed that, and I spent quite a lot of time with investors in the last month, And clearly, or I would say long-term investor, day-bredging the branch is important for all of us.

And if you want to be the best buyback policy, it would be to be cancer cyclical. To be cancer cyclical, you have a strong balance sheet. So that's a position I would take and keep. So consider the guidance we gave you. We gave you quite a good guidance, and we told you 0.75 to 1.5 between 60 and 70. I will now turn the call over to management for $2,080,000,000. And I'm answering for $26,000,000,000,000,000,000. If we continue, and I will see the plan to deliver more and more pre-cash on the roadmap to $10,000,000,000,000, then we might revisit this scheme. But today, in 26, if it's coming, in your case, if we are above 60 in 26 or about 70, then we will continue to deliverage.

Upstream margins. No, Iraq is a good contract, so I know it's directly, but it's not at all the case. You know, as I told you, we are far away from the historical service contract. When we came back in Iraq, it was clear that either we had a good contract, a strong contract, it was a matter of risk and reward, you know, and risk and reward, and in particular, the Iraqi contract is quite reactive to the oil price. We captured some upside on it, which of course is important. We benefit in Iraq from quite low-cost production, so the break-even is low, and so it will contribute. The Iraqi barrels don't make a mistake, are contributing to the increase, are accretive.

And again, you know, I can give you a bit, I think we gave you in New York, that in fact, the base barrels are an average around $19, $20 per barrel, and today these new barrels are more between $30 and $40 per barrel. So it's why we have an accretive growth in upstream. So, I think you will continue to see, again, the free cash flow from upstream will move quicker than the growth of production.

What is the second question? Sorry, I didn't catch it well. Ah, okay, I understood. I know, I know, I know. Okay, understood. European Competitions. Okay. First, on divestment, I will be very precise with you. The two billion, I will give you where it's coming from. We intend to close, and we have already closed some of them, but we are intending to close. And all, I think we have signed, and we are in the process, and it's a matter of closure. The Bunga divestment in Nigeria, Norway, the satellite eco-fix fields, some renewable assets in the U. S. , renewable assets which will be announced in Greece, and as well we have another project where we will, but I cannot yet disclose to the other $300 million which will be announced soon.

So it's a $2 billion. That does not include, to be precise, SBDC-GB divestment, not only because it was not approved, but because we, in fact, were not able to close. There were some conditions precedent on our side. We consider that it was not reasonable to close with, I would say, the supposed buyer. So we have relounced, we are not relounced, we are discussing today, we have advanced discussion with two additional, two new buyers, which are, I think, serious ones.

But we will not be able to be clear to answer your question to close it before this quarter. So it's for next year. By the way, it's good because it's part of the plan for next year. So from this perspective, you know, what we have observed is that divestment of EMP assets generally takes time. It takes more time, even if we have demonstrated with our diverse month in Argentina that we were able to sign and to close in the same quarter.

So sometimes it's going quicker. But so the plan is clear. We will and we have some interested buyers and serious buyers on it. So we are working on this one. There are others, like I mentioned to you, other ideas for this year and next year that I mentioned in New York on which we work as well. On the European competition letter, the answers you probably follow that some tweets or LinkedIn, European leaders are not really, I mean, are listening to our request. Yes, they have been. I would say we had some calls with some discussions with some European commissioners who took the letter seriously from 40 CEOs to say, look, so we understood. They think we are maybe asking them too much, but I think it's a sort of wake-up call from these 40 CEOs.

We, myself and the Stephen CEO, we are the spokesperson. Let's be clear. We were just reflecting what people expressed during our meetings between French and German CEOs. I have seen that on some topics which are, I would say, more, giving some more polemics, there have been some calls that are not only from European CEOs, but from U. S. Energy Secretary and Qatar Energy Minister to call to revisit some of this legislation, which seems to be, in fact, against competitiveness, and again, for some of them, putting at stake the security of supply of Europe. So I think this is something which is serious. And we are European CEOs, and we, of course, want to continue to contribute to Europe development and growth.

But to do it, I think it's also our job to speak up when we consider that conditions are changing and it might be difficult for us to contribute to European prosperity. So it's a moving, you know, it's a continuous, I would say, fight, but let's contribute to it.

Okay. The second question on ADR. No, it does not impact at all the execution of the buyback program. I remind you that the idea of conversion is about around 9-10% of our shares, so obviously the buyback program will be executed on the Paris stock market, to be clear, and not on the New York listed, because it will be strange for us to buy back from New York, where we want, on the contrary, to give more life to this New York market. So I prefer more activity and finding more. We will buy back shares in New York when we will see we'll have much There are much more shares on this side of the Atlantic, I would say.

The first point, and honestly, by the way, it would not avoid in any way tax proposals. And again, the tax proposals are funny proposals. Again, there are some principles. When President Lent tried to impose, by the way, he tried to impose a 3% extra tax on dividend, which was cancelled by the European Union and by the French Constitutional Court, And all of us have the coupon money that it took during three, four years. So again, there are some principles. You know, we are in a rule of law continent and a rule of law country. And this is the reality. So you must make a split between the political debates, which are quite vigorous, I would say, and the reality of the rule of law.

And we know that there is some limit. And when I see the figures, and I will tell you what I'm thinking, the higher it is, the better it is. Because then I'm sure it will not go through the system. So, I mean, that's the reality. And in the French constitution, you cannot deprive people unresonably to their profits and their results.

And buybacks are not at all a profit, you know. Buyback is just a matter of distribution. And by the way, of investment in the company. We invest in the company. So, I mean, I'm ready again. I think it's a topic on which I'm ready to continue to explain to Parliament members with our buybacks. But I think, again, don't overreact to this type of news. And I'm afraid we'll have over news during the next 30 days coming from the Parliament. At the end of the day, I trust the government.

First question, FIDs. Sorry, FIDs. Okay, I mean, I'm not sure. I mean, there was a lot of announcements. I'm not sure about how many FIDs exactly, because between the announcements and you have a flow of news of projects being revised because they get the permitting or they get the approval for non-FTA countries export from the U. S. administration. So you have a news flow coming. Then FID, I know train 4 and 5 in next decade. Yes, I know them. I know that one or two computers are serious and are progressing, because as I said, in New York, all these projects, they need to find the financing. To find the financing, and again, an acceptable, a good financing, you know, a good financing, not an expensive one.

Otherwise, you destroy the value on train 4. We managed to put in place a project financing at Avril Grandet, next 4, around 6.5%, which was good project financing. I will now turn the call over to management for the TotalEnergies SE earnings conference call. I will now turn the call over to management for the TotalEnergies SE earnings conference call. The market, which could be, from this perspective, weaker when we launch the project. So that's a topic on which we will have to work, and we have demonstrated already that we now have to be disciplined in that market, giving priority to, I would say, first and second quarter projects in our portfolio, and that's an element which will have to be taken into consideration.

By the way, we have announced that we have lifted the fourth measure on Mozambique. There is a funny figure which is in some press release news agencies which speak about $25 billion. We are not at all, and I want to be clear and strong on this news. I don't know. People are playing games, which is not acceptable.

They have access to some people have relinquished a letter that I sent to the president of Mozambique. It's clear. It's written $20 billion in the letter, out of which $4.5 billion came from what we spent in the last four years. So the budget when we left in 2021 was around $15-16 billion. You add $4.5, you are down to $20-$20.5 billion. That's the reality of this budget. And by the way, this cost, the real cost, you know, what we've done is that we've done all the detailed engineering and all the procurement has been done. And so today as soon as we fully remobilize everybody we are purely in a construction mode And that why we said we are able to deliver the project by 2029 And so I discovered some people were surprised but in fact we spent some money in order to I would say recapture part of the time which was under force measure So the budget is not the TotalEnergies SE earnings, and I want to be strong.

It's $20, $20.5 billion as we will restart. And again, I can confirm it because we had long discussions, of course, with contractors, and so we have put all these figures together with them. And so, and including on the delivery in 29, we have strong commitments, so we have realigned the world system in order to be able to execute properly this project.

Okay, first question. You know, I mean, to be clear, I think we made a demonstration in New York. The message is not that we have a decline of energy trading. We told you that there were exceptional trading profits in 2021, 2022, 2023, and that we are back to a normal environment with lower volatility. And by the way, the results of 25 on integrated LNG are in line with 24. So I'm just glad we don't benefit from the growth on this part at this stage. Later, we'll have a growth of volume, but this stage is stable. And in fact, they are quite related to the results of 2019 before these prices. So I cannot. What is also true is that you have observed, like me, that there are more trading hours which came to this energy business because maybe we were considering we were making good money.

But today, answering your question, no. It's just my view is that today we came back to, I would say, more standard revenues. And I hope, of course, the main goal for energy trading profits from TotalEnergies will come from the growth of volume of assets. So we have a volume impact on our trading business, which will generate additional profits. And we made a mistake when we planned 2025 because we are thinking that we could replicate the last quarter 24 in full 25. It is not the case, so I have to – and again, because that's clear that the volatility in 2025 from the gas, you know, the European gas price, it moved between $11 and $12 per million BTU.

So it's not a big volatility. By the way, I'm not unhappy because $11 or $12 per million BTU for my Norwegian gas and my British gas and my Danish gas, it's a very good price. So I mean, people, we should not give an overway to the trading business. You know, a trading business is adding value, but the base business is, in fact, our upstream and our production. So I prefer to gain $12 billion BTU of profits on my North Sea gas and maybe a little lower volatility on the trading. So let's be – we never – maybe because there were exceptional years, incredible years, 22, 23, again, 21, 3, you consider it was the new normal.

We never said it was the new normal. We even told you, be careful, there are exceptional results. Each time exceptional means exceptional. So that's what I want to comment.

And again, I remind you, and why I'm linking that to a growth volume, because the trading within TotalEnergies is trading around assets. It's an asset-based trading. We don't play casino. It's not the case. So that's the base of what we do. There are more competitors, but again, we have more assets than others. So it will help our trading business. And I think this is the idea, this is the fundamental idea of integration. It's because we have more assets, more volumes, but we have more medium and long-term contracts in Asia. You know, what we signed in the last year, these brand-related medium and long-term contracts, offer some optionalities to our traders. And the optionalities that we include in these contracts have a value.

And this is why I'm linking that to my assets and my business. This is the base of it. And some competitors do not have the same assets and contracts.

Then, about the competitive sustainability rules, I mean, the question is not to have an engine non-compliant. The CS3D does not define compliance. The CS3D is a matter of putting in place some rules, but you have to have a duty of vigilance on the supply chain. Some countries have been strong in the letter. I invite you to read the letter of the Secretary of Rights and Minister Al-Qaabi. If you didn't read it, they send a letter to the European leaders, tell them, if you keep that in place, we will not deliver, we will not take the risk to deliver LNG to Europe. I would say if we don't have energy coming neither from the US nor from Qatar, we will have my European North Sea assets are taking a lot of value, you know.

So I would say it's not. I mean, so it's not a matter of compliance, it's a matter of legal risk, because in fact, why do they complain? In this year, if you were found guilty by a judge, your penalty could be up to 5% of your worldwide turnover, which is just crazy. So the sanction size is completely disproportionate to, in fact, a rule which is against, of course, let's be clear, we are all in, we are for human rights, But you can ask efforts to company to control the supply chain, but we don't control everything, you know. But if you transform supposed not enough vigilance in such a penalty risk, then it's completely disproportionate. And this is a call coming from these two countries.

So for me, so again, and I consider to be honest, that when we produce LNG in the US, as we are the largest exporter of US LNG, we are fully compliant with the duty of vigilance law with all what we produce in the US.

Yeah, I think, so the question, maybe we are cautious. Again, we are cautious on the $50 button. Maybe they are 80-84 is just as I told you, we have Anverb and Sato, which are two big machines we have entered into a large plant and they're on. So they execute, but of course it has an impact on the global, I would say, delivery from our portfolio.

They say you can keep, if you take 82%, this quarter I think we were at 84. Maybe 82% is probably the mid-average of the guidance, probably the right one to take into account. But I told you that it will be more than compensated with capturing better margins on all the other assets. For next year, we are more in the range of 84-86%, I think, for our budget. But again, I didn't begin to look to what our colleagues are planning. So I'm waiting to see. But I think there are less turnarounds next year. So we should have, from this perspective, it should be a better year. And as well, and again, as we mentioned to you, there were some, I would say, difficulties before the turnaround on Portafer.

The turnaround is done, so we expect to have a better tail variability. And on Donj, again, we intend to put into service this new unit, which will enhance the margins on Donj by the beginning of 2026. So from this perspective, the perspective is refining margins remakes at quite a good level, we will be able to capture even more than this year.

Yeah, I think the second question, first, as we told you, yeah, we have, and I think it will be a topic on which we could focus more on what we are doing. In fact, since 2020, we have put in place a digital factory in a bottom-up approach with 300, I would say, data experts or data scientists, and at a very high level, a good team. But what we observed is that if we want to deploy these new technologies, which are spinning up on a worldwide basis, going from the bottom up to scale up is difficult. So we decided that it's time now to have a broad effort, a worldwide effort on organizing all these data, because there are plenty of data on platforms and refineries, but all that is not connected.

If you want to really, for example, enhance your linear program in refineries, the best would be to have access to all these data, to develop new tools in order to enhance another additional percent of, I would say, use of the refinery and better margins. So we have engaged with two large programs, which are quite an investment, an investment on the platform with Amazon, which is called, I don't remember now, with Amazon in order to, in-mation, in order to connect all these physical data to, I would say, a large database, all physically, and it will take two years and a half, three years to deploy, because we need to go on all the sites. We know where the data is, but we need to connect them, and then they will be available.

And we have also engaged in a very large worldwide program on the EMP side with Cognite, which is in advance, I would say, from digitalization, and we have made some different pilots with them. Now we are all convinced. So another big program to equip, to deploy these Cognite softwares, which obviously will help us to really accelerate the user AI. So for me 2025 will be the year where we have really decided to scale and to go from a scale and to take some large worldwide program to give us the capacity to take the most of these new AI tools. It will take a few years to install all that, but if we want to be efficient and I'm sure, and you know it's not cost cutting in our case, it's more Additional revenues, if I can, with advanced process control tools, thanks to AI, produce 1% more of all my oil fields and my refineries, I can tell you, it's quite a lot of free cash.

So it's worth making investments, and this is what we have done. On marketing, so I think there is different drivers, but again, fundamentally, the strategy which is put in place in marketing is value over volume, which means not chasing the additional growth. It's difficult for marketers. They love to show you more tons, but what we discovered is that it's quite mature markets. They are mature markets. Whatever in European market is mature, the lubricant market is mature, so it's very difficult to gain market share. The only way to do it is to do it at the expense of margins. And what we have decided is to enter into a policy which is a bit higher margins and not less volume, but not to sacrifice, I would say, the margins at the expense of the volume.

And this is why, by the way, if you observe our results, we have sold our network in Germany and Netherlands and half of Belgium. There is not much impact. In fact, because we have managed to absorb it, I would say it's also because fundamentally in marketing, we have decided to divest or to start a business which was very low margin, which was, I would say, sharing some logistics assets which were creating a lot of pass-through volumes, but with a minimum margin. So this has been reduced because it was not really adding money. It was quite confusing a lot of people. So structurally, your answer to your question is that structurally we are in the mode to enhance the margin on marketing and services.

That's where we are. And this will continue. I hope I'm clear.

On Mozambique, you know, again, we have lifted the force majeure. We are now expecting the government to approve our new plan and budget, and we are remobilizing the contractors in order to be able to execute the project within this schedule with time worth, time table of 2029, and that's where we are. So I think consider we are moving on.

On the first question, it's a complex question because I'm not sure to have fully understood. Let me be clear, I am not in favor of regulations and regulatory approach. We are more merchant people, we like the market, so for us that means that signing PPAs is the best way to commercialize our assets. And so we know that we need, in Europe, you know you need to sign when you develop, I think you were referring to offshore wind. We signed a contract in France at 65 dollars or 66 euros per megawatt hour, which is a contract, by the way, which the price can be adapted if the capex are higher. So the price of capex risk is in fact covered because we could, not only we have given the price, but the capex linked to the price.

So that's a protection. It's also partly inflated for the OPEX. So, and at this level, honestly, we can develop an offshore wind project in Europe because it is projects where, in fact, the connection is developed and paid by the DSO, not by us. We are only in charge of the plant itself. But again, we follow that. I think today, you know, there are many creativity there again in different circles. All that we are in the European market. European market is a unique European market, which are fundamentally driven by some market rules, in fact. And when I discuss with European authorities, I see little appetite in the Commission to put into, I would say, even in some countries like Germany, who believe in the markets, to change the rule of this, I would say, electricity market.

So, again, that's a debate, but I'm – and you know, by the way, in France, the same people who were complaining about the famous system of nuclear commercialization, which was called AREN two years ago, now are complaining of the new system. So, people will never be happy. What they want is electricity for free, but that's difficult. You know, at the end, we need to invest, and if everything is too much regulated, it will be against investment, and Europe desperately needs to invest more in renewable, gas-fired power plants, grids, if we want to ensure security of supply. But the reality, so you can have good both. So I think I would say I trust there again the political leaders which are spending a lot of time on this energy story to take the right decision and not to be complacent.

Okay. No, I'm not a chemical company. We are a refining and petrochemical company, and we make ethylene and polyethylene basics.

No, no, but I'm just to tell you, the proof is that you know the situation. The situation is that, in fact, in terms of cracking capacity, ethylene capacity, China, in the last five years, went from 50 million tons of cracker to 100 million tons of cracker. And so they are, in fact, almost self-sufficient. So they were moving from a large importing country to almost self-sufficient, even exporting. So that changed the world patterns.

By the way, Chinese companies also suffer from the situation, but other places suffer from the situation. For me, I've always been very clear with you. If you want to invest in petrochemicals, you have the fundamental matter, the fundamental competitive factor is feedstock. Either you are an EFAN ship LPG in the U. S. or in the Middle East, or you will face difficulties. So that's the situation. So we know that our NAFTA crackers in Europe are facing competition which is super difficult either from the U crackers or from the Middle East By the way TotalEnergies since earnings conference We have invested in two crackers one in Port Arthur one with Amiral in Saudi Arabia So, consistent with what we think fundamentally, and we are shutting down some crackers like the one we have just decided in Anverb.

So, that's my view. To come back on the proportion, I don't know, it's not big, it's not good. I have no miracle recipe compared to my competitors on this one. But again, it's not a major part of our downstream results and cash flow. So most is coming from refining and trading more than chemicals. But again, it's part of the integration. When the margins are good, we are happy to capture them. But again, fundamentals, let's invest in the U. S. and in the Middle East. That's all.

First question, I think Stephen Michel in New York gave you some answers to that. You know, we never told you, 8-12% tomorrow, we told you it's a five-year plan going, by the way, from 10 to 11, from 11 to 12. Part of it, as I told you, is that today we have a sort of burden on our capital employed because we have, I mean, quite a large pipeline of projects which are, of course, non-productive, I would say, capital employed assets, Which will be, because we continue to grow, we have a growth to 20% per year, and we will execute, which will, of course, as we don't intend to make large M&A on this part, which will transform, I would say, non-productive assets into productive assets.

So part of it is there. Then the second part of the 1%, the other percent will come from, let's say, rationalization, better use of the assets, industrialization, and this is what we are doing. We also, I think, frame in New York a clear roadmap by concentrating most of the investments of integrated power on some major markets, the oil and gas countries, which are in EMP. And then the rest, we are clear that where we don't see potential to contribute above 12%, there is no future for them in the portfolio. So that's, I would say, in a way, what we told you, it is a recipe to go to 12%. So honestly, today we are a little lower than 10, but I will recover from it.

And don't forget that there is a contribution from farmdowns. They will come in fourth quarter, so all that will give you colors. But I would say I'm there for – we will raise the 10%, and you know it's a five-year journey, but I'm happy with the development of this business. The next target is to be, for me, net cash positive. As soon as we are net cash positive, I'm sure that the valuation of this part of the business will be better. Because when I will tell you this business is contributive to your dividend, it's a way to have a better leverage on this business. And we plan 28. If we can do 27, we are working on that.

EU ban on Russian energy. Honestly, there have been a new regulation, which needs to have some clarification, because there is some language there we need to understand what it means exactly. Like, by the way, when EU banned oil in 2022-23, it was the exact situation. There was a regulation, and the energy regulation is copy-paste of the old one. There was what they call FAQ, you know, where you need to have answers to clarify what is the real scope of the ban. For sure, the ban is not to bring any more ocean energy in Europe, but we want to be sure that the ban is not larger than that. So before I answer your question, and otherwise, yes, in this case, we have a commitment.

If there is no further, I would say, ban, I cannot choose a force majeure to cancel the contract. If I don't have force majeure, I am committed to offtake some cargos. We are looking to that precisely today. Our lawyers are working, to be honest. Of course, for us, the role is to be sanctioned compliance. Our lawyers are working on it. It's a fresh regulation, so I don't have the full clarity. I don't want to make more answering longer because I could say something which could become wrong if the lawyers – and again, we are always at the Executive Committee on the cautiousness side. I would say from this perspective.

And so I'm waiting to see the reports and to understand exactly the scope of the new EU regulation.

Okay. First question, AI. The program I mentioned, our booth represents more than 300 million euros, so 350 million dollars, I would say, worldwide. So it's quite an investment for these data platforms at the worldwide level. First comment. Second comment, in terms of people, we have some assistance come from the Emerson guys, Aspen Tech or from Cognite. But remember that we have a digital factory with 300 people, and of course we are using part of these people to help to deploy this program. You know, they are there, they are available, they know about it. We have built these competencies in the last five years. The second answer, the third answer is that there is a nice country in order to get access to good AI competencies with not so high cost, which is called India.

So it's also a way for us to, in fact, grow in the digital. You know, for us, we are looking today to, we need to grow, I would say, our technical competencies in terms of people, to have more resources in the side of electricity, of power, and in the area of digital. And today we are seriously thinking to enhance or to grow our presence there. And we speak about, we are discussing about competence center in India. It's part, by the way, of a way as well to contribute to the, I would say, cash saving program that we mentioned. So this is the area. So I know it's a point, but in fact, what I've observed is that we have been able to attract people in this field with a reasonable price.

We are, because we offer them some real, I would say, use case. You know, we are very interesting use case. In the field of energy, you can use AI in many areas, so it's good. Iraq, on the ground, it's okay. Otherwise, I mean, we just signed the full contract, EPC contract. If we had to adopt, we would not have done it. Honestly, in the Batchel area, the situation is good. I can't think only for the areas where we are. We have deliberately located our teams in the south of the country, in the Batchel area, because it's a more, I would say, united area, unified area, I would say, in terms of in Iraq. There are other areas that I would be more careful, to be clear, but in our area we are fine.

And the barrier, but the barrier partly is still security because you cannot, what I say for Basra is maybe not true for the whole country, to be honest, and it's not true. And second, in fact, you need investment. And investment, and you know, the issue for Iraq, and again, I'm happy to have been the company which came back first, But you know, we went there in 21, we finalized the contract in 23, we are FID all the phases in 25, and we'll produce in 28, 29. So the cycle is eight years. So I think we are maybe a little true. I'm not sure because I can tell you it's all that is in fact from my point of view as a CEO quite a remarkable journey in a new country.

So I'm very happy with all the work the teams have done. I contributed myself by supporting them many times there. So when people think today that yes, there is a potential in Iraq, it's clear, but it will not depress oil prices before many years. So it's good for the country, and again, the country, and I know what will happen. If there is more companies to come, the temptation will be to decrease the margins, and then again, it will not work. So that's the history. I hope the country has taken some lessons of what happened from 2010 to 2020. If we don't have the right reward for the risk we take, there is no investment. So that's a question of capital allocation.

So yes, and that's why, by the way, to answer to your question, to be clear, if we decided to move to come back in Iraq in 2021, we see quite a long perspective. In my plan, in my view, Iraq will be a growth area for TotalEnergies beyond 2030, and we will work on other projects.

So that's what I'm thinking. So I don't see an impact on the short-term or short-medium-term, but potentially so.

GOOGLE BIRDLEMENGELA Exploration. I have been consistent since I was CEO. I think there is one thing which did not change, which is the budget for exploration. It was $800 to $1 billion. I put it as a sort of rule of the game when I became CEO because strongly I think it's not because you spend more, but you find more. At a certain point, you need to be efficient and oblige your exploration team to take so cheap. I'm happy, by the way, by the way Kevin has led this team during the last 10 years. He became an exploration senior manager of the president almost at the same time. He has, I would say, developed some ideas.

10 years is a long cycle in exploration, so when he told us one year ago that he has tried to do something else, it was fine for us because we thought it was the right time to renew, in fact, having a different approach because, again, exploration is a different business. Again, it's not a matter of dollars, it's a matter of ideas, of which to approach. I'm very happy to have welcomed in the company, Nicola Mavila, which is coming from a successful exploration company. He has, of course, himself has been educated in different environments, of very new ideas. I told him that he's free to do and to lead the team. It's not a one-man show exploration, you know, it's a team building, quite a lot of people.

You need to take the risk to explore. You need to build some consensus, but you know you can drive your people in different, I would say, directions in terms of concepts and being creative. So I think it's very good. I hope and I'm convinced that Nicolas will be able to have the same success that we had with Kevin the last 10 years. But it's not a matter of money. It's a matter of ideas and then to make choices. And by the way, you notice that in the last quarter we have been active on taking some licenses back in Nigeria, which has been unexplored for more than 10 years. It's a pity. It's probably the most, Niger Delta, it's probably the most prolific Delta in Africa.

So no license were awarded. We are happy to have the first ones to IOCs. We went as well to a country like Liberia. It's a new one. Congo is more mature, but we managed to get a license on which our explorers were excited. I hope they were fine. We'll have a nice gift for Christmas, we'll see. And again, we'll continue to explore in other countries. So, exploration, I heard during the Maro Show that it seems that some companies are rediscovering exploration. For TotalEnergies, we never give up on exploration. I always consider it to be part of the value creation. And again, a lesson to my colleagues, not because you spend more, then you will find more.

We spend more, at the end, you take more risk, and if you take more risk, you have more disappointing wells. So it's a question of finding the right metrics, and I think it's good for an IOC, a major like us, when we can build 20, 25 wells per year. That's good. That's enough to find some nice wells.

Namibia, South Africa, you know Namibia, but we have some exploration to continue to do, and we look to priorities also to develop business. And South Africa, you follow like the news, there is a legal context which seems to be more complex than in other countries. If each time we want to do it, we need to go to court. It's a little difficult. So we want, but I think that the South African government has made some public statements that they want to find a way to go to ease the exploration. So we hope we will manage because of course for us it's important. We cannot spend money in a geography if we have to face permanently courts and the permitting becomes really complex.

Because it's not only of doing one or two of free exploration, it will be to develop. And we explore to develop. We don't explore just to find all. So we need, honestly, on the South Africa side, I hope the government will take the right decision as soon as possible.

Jason, you are very quarterly driven in your questions. But my commitment to you, the commitment of the company, is the annual budget of CAPEX. And by the way, it's an annual budget of net CAPEX. You know, it's organic CAPEX plus acquisition minus sales, minus investments. I think we have a strong practical of being compliant with our annual budget of CAPEX. I think since I've been CEO, I think 10 years in a row, you don't see that we have not respected the CAPEX budget, the annual CAPEX budget. And again, what we told you today, and what we said at the beginning of the year, it will be $17, $17.5 billion, and I can tell you we'll land in $17, $17.5 billion.

As we told you, the net acquisition is expected to be at $1.5 billion. You can calculate yourself the organic capex for the fourth quarter. I don't follow, honestly, the stability of the organic capex through quarters. It depends on some projects when you put into production as we have done this year, or Meru in Brazil, T-Rank in Denmark, Balimo in the US, or Balimo, that means that this quarter there was a lot of capex, and then it's decreasing because you have put into production and some of the capex, some of the projects are ramping up. So I'm not at all, I have no KPIs to have a stable quarterly organic capex, to be honest. At the end of the day, my KPI is to be sure that we are within the annual budget, and if we can be a little lower, I'm happy.

But not so much, I'm not happy because sometimes it means that some projects are late. So I prefer to really be in our budget. So first point. So sorry to disappoint, but it's not a major issue. I'm not in a, I mean, to be clear, we are not in a company with short cycle capex permanently. But you can maybe make more, less volatility. The second one, I think the same answer to that, Lydia, if I remember the first beginning of the first question I had. You have to wait for 2026. You have to be a little patient until February. We'll give you more color. It's clear that, again, we gave you a point, I think, in the chart of 2027 when we think about reinvestment rate.

So we told you that in 2027, yes, I remember the reinvestment rate, we go down from 70% to something like 50%. It was a chart which was in the New York package and that's the reality. And it's coming from both. It's coming from, on one side, higher cash flows because we are delivering along the three years.

So let me be clear, the figure 27 means by end of 27. So it's a three-year decrease. It's not beginning or I don't know which quarter. And it's an annual one. So it's the end, to be clear. It doesn't mean that all the growth is back-loaded. It just means that it's an average of the year 27. And it's coming as well from the discipline of the capex because we have your guidance. It's $16 billion. So both contribute to this investment rate, which is lower by 20%. So if you have 20%, if you are lowering the investment rate, it's good and it's consistent with the free cash flow per share increase that we have announced. So that's a way to explain why we will be able to increase the free cash flow per share because we have more cash and less capex.

That's where we want to embark all of investors who trust TotalEnergies.

Okay, so thank you to all of you for your attendance. I hope that all the analysis you've done will be reflected in the stock price. It was not the case this morning. But again, we are delivering. This is a message. We are delivering. We have a consistent strategy. We are just executing in. We deliver. And frankly, as board of directors and myself, as you, we are quite pleased with the results of this quarter because that demonstrates, and again, that's all what we explain to you quarter and year after year is on the delivery mode and that free cash flow will increase. Thank you for your attendance.