JPM | EMEA Spec Sits Daily: ZAB PW, PCTN LN/ LMP LN/ SREI LN, 11am expert call on EU Ownership Rules for Airlines

Research evidence excerpt

JPM | EMEA Spec Sits Daily: ZAB PW, PCTN LN/ LMP LN/ SREI LN, 11am expert call on EU Ownership Rules for Airlines

he call placed greater emphasis on execution improvements as an additional contributor, supporting the

case for a durably higher margin level beyond the cyclical uplift. The external backdrop also remains constructive:

management sees no specific high-end reel-lay, J-lay or S-lay newbuilds progressing towards the market, despite potential

concepts remaining on the drawing board. Additionally, Subsea 7’s limited and later-dated Middle East exposure also

provides some comfort in the current environment. The region represents a single-digit percentage of backlog, with CRPO

153 accounting for only ~1% and offshore activity expected to conclude by year-end, while CRPO 148 does not move

offshore until mid-2027 and is weighted toward 2028. Management also reported no significant inflationary impact on

CRPO 153 and no material inflation to date on the early engineering and procurement work for CRPO 148.

• model update - we maintain our 2026 Revenues estimate of $7.8B, at the top end of guidance of $7.4bn-7.8bn, and lower

our 2027 Revenues by 5% driven by lower renewables 2H26 order intake. We raise our FY Renewables and Heavy Lifting

margins to 18% and 17% for 2026 and 2027, respectively (prev. 15.8% and 15%). We maintain our Subsea and

Conventional margins of 26% for 2026. At the group level, we model 24% 2026 margins and 25% for 2027.

• UMG - There is no sugar coating it ... that was not a good quarter - Daniel Kerven here

• UMG’s subscription growth was only 6.7% vs a 9.3% consensus due to ongoing market share headwinds, a tough

comp against one-time benefits that had not been called out last year and a smaller-than-expected contribution from

pricing.