Gaztransport & Technigaz Sa · EURONEXT:GTT
Gaztransport & Technigaz Sa — H1 2014 Earnings Presentation
49 slides from Gaztransport & Technigaz Sa's earnings presentation, Jul 25, 2014
Slide 1: 2014 First-Half Results Presentation
2014 First-Half Results Presentation July 25, 2014 This document contains information resulting from testing, experience and know-how of GTT, which are protected under the legal regime of undisclosed information and trade secret (notably TRIPS Art. 39) and under Copyright law. This document is stric
Slide 2: Disclaimer
DISCLAIMER ▶ This presentation does not contain or constitute an offer of securities for sale or an invitation or inducement to invest in securities in France, the United States or any other jurisdiction. ▶ It includes only summary information and does not purport to be comprehensive. No representat
Slide 3: Agenda
Agenda ▶ An excellent first half: key highlights ▶ 1. Company Overview: GTT a global leader in LNG containment ▶ 2. Sector Forecasts & Business Update ▶ Market trends continue post-IPO ▶ New businesses showing promise ▶ 3. Results: Highlights & Financials for H1 2014 ▶ 4. Strategy & Outlook 2014 Fir
Slide 4: An excellent first half: key highlights
An excellent first half: key highlights ▶ Successful IPO ▶ Excellent performance: H1 Revenues up 20%, net margin at 51% ▶ Strong order intake leading to increased visibility ▶ Diversity of new orders and new contracts 2014 First-Half ▶ Return to LNGC market for historic licensee July 2014 ▶ Creation
Slide 5: Company Overview: GTT a global leader in LNG containment
Company Overview: 1 GTT a global leader in LNG containment 2014 First-Half July 2014 5
Slide 6: GTT, leading engineering at the core of the LNG sector
GTT, leading engineering at the core of the LNG sector GTT offers broad exposure across the LNG shipping and storage value chain Exploration & Re- Off Take / Liquefaction Shipping Production Gasification Consumption Offshore clients: shipyards Platform / LNG FPSO LNGC FSRU Gas-to-wire 2014 First-Hal
Slide 7: Deep relationships with all stakeholders of the LNG sector
Deep relationships with all stakeholders of the LNG sector Prescription of containment technology Oil & Gas Ship-owners Companies ▶ O&G companies are end ▶ Ship-owners order vessels users and prescribers of from shipyards LNG vessels ▶ GTT provides modification, ▶ GTT provides services feasibility a
Slide 8: GTT, the global leader in LNG containment technologies
GTT, the global leader in LNG containment technologies Current Global LNG Fleet (1) Global LNGC Orders (2008 – 2013) Other Moss <1% c.10% Moss 30% c.90% 70% 2014 First-Half Total: 366 vessels Total: 119 orders globally(4) July 2014 Source: Company data, Wood Mackenzie LNGC (Liquefied Natural Gas Car
Slide 9: First-Half vessel orders
First-Half vessel orders Technology Ship owner Number Shipyard Type Delivery Year Mark III Flex KNUTSEN 2 Hyundai LNGC 2016 Mark III Flex J3 + SCI 1 Hyundai LNGC 2016 Mark III BW Maritime 1 Samsung FSRU (RV) 2016 NO 96 MOL 1 Daewoo FSRU 2016 Mark III PETRONAS 1 Samsung FPSO 2017 NO 96 L03 MARAN GAS
Slide 10: GTT Business Model: Robust and sustainable
GTT Business Model: Robust and sustainable ▶ High barriers to entry and significant market shares ▶ Engineering expertise with a 50-year track record ▶ Long term visibility on revenue stream ▶ Lean cost base offering high operating leverage 2014 First-Half ▶ Highly cash generative business and negat
Slide 11: Sector Forecasts & Business Update
Sector Forecasts & Business Update 2 Market trends continue post-IPO New businesses showing promise 2014 First-Half July 2014 11
Slide 12: Sector Forecasts 1/3: Strong demand dynamics underpin LNG growth
Sector Forecasts 1/3: Strong demand dynamics underpin LNG growth Advantages of natural gas Strong global LNG demand growth ▶ Natural gas is the fastest growing major energy MMtpa source ▶ Cost competitiveness, especially compared to fuel oil ▶ Abundant, widespread resources, equivalent to c. 230 yea
Slide 13: Sector Forecasts 2/3: Increasing need for LNG shipping and storage
Sector Forecasts 2/3: Increasing need for LNG shipping and storage Drivers of increase in shipping activity LNGCs required in selected key regions(1) ▶ Regional supply dynamics MMtpa 1.2 0.6 0.6 2.0 2.2 0.9 ▶ Significant growth in supply from new emerging regions ▶ 120 MMtpa increase (2013-2025) in
Slide 14: Sector Forecasts 3/3: Strong growth in LNGC sector
Sector Forecasts 3/3: Strong growth in LNGC sector Forecast LNGC orders GTT expected Average orders per year sector share Base case 23 84% POTEN PARTNERS High case 29 87% GTT expected Average orders per year sector share(1) WOOD Base case 21 MACKENZIE 90% High case 27 2014 First-Half GTT expected Av
Slide 15: Business Update 1/4: Offshore market
Business Update 1/4: Offshore market - GTT a leader with strong growth potential FSRU: GTT, the solution of choice FPSO: the new frontier of the LNG World 2014 First-Half ▶ 100% of ordered FSRUs will be equipped with GTT’s ▶ Three LNG FPSOs are currently on order for Petronas technologies(1) Malaysi
Slide 16: Business Update 2/4: Onshore market
Business Update 2/4: Onshore market - A large and attractive sector Membrane tanks, a proven containment storage solution 2014 First-Half Photo credit: Photo credit: GDF SUEZ_ GDF SUEZ_ HELSLY HELSLY CEDRIC CEDRIC et DUREUIL et DUREUIL PHILIPPE PHILIPPE ▶ Demand drivers: re-gasification and liquefac
Slide 17: Business Update 3/4: Services provided by GTT
Business Update 3/4: Services provided by GTT meet the LNG sector needs Broad range of services provided by GTT Innovative services provided by Cryovision ▶ Pre-project studies ▶ Cryovision provides innovative membrane ▶ Vessel modification integrity tests MOON and TAMI to ship owners ▶ Feasibility
Slide 18: Business Update 4/4: Inception of new services
Business Update 4/4: Inception of new services ▶ Enhancement of the training offering ▶ Qualifying training for crews according to professional standards ▶ Customized training provided on-site to ship-owners, classification societies and LNG companies ▶ Creation of GTT Training as a subsidiary in UK
Slide 19: Results: Highlights & Financials for H1 2014
3 Results: Highlights & Financials for H1 2014 2014 First-Half July 2014 19
Slide 20: An excellent financial performance
An excellent financial performance Summary financials Key comments As of 30/06, in € MM H1 2013 H1 2014 Change (%) ▶ High level of revenues : increase of 20% compared Total Revenues 96 115 20% to H1 2013. EBITDA 61 73 20% ▶ 82% of revenue derived from licenses Margin (%) 63% 63% ▶ Increase of 38% fo
Slide 21: A well-balanced portfolio, and strong order book at end H1
A well-balanced portfolio, and strong order book at end H1 Strong order book Visibility goes now up to 2019 (2017 at the time of IPO) ▶ 89 LNGCs LNGC FLNG FSRU/RV 40 ▶ 8 FSRU/RV (regasification vessels) 30 ▶ 3 FPSO 20 ▶ 2 onshore storages 10 First-half movements in the order book 0 ▶ Deliveries: 15
Slide 22: Strategy & Outlook
4 Strategy & Outlook 22 July 2014 2014 First-Half
Slide 23: Strategic Roadmap 1/6: Develop promising new business areas and products
Strategic Roadmap 1/6: Develop promising new business areas and products LNG as a fuel Enlargement New concepts: e.g. inspection equipment New and services applications Enhancement New customers / geographies Offshore Specific conditions Small scale Onshore Ethane (e.g. Arctic) LNG carriers storage
Slide 24: Strategic Roadmap 2/6: LNG as a fuel
Strategic Roadmap 2/6: LNG as a fuel - GTT technologies well-suited to benefit Stricter emissions standards: January 2015 Significant opportunity for GTT Norvège Mer Baltique Mer du Nord Amérique du Nord Mer Méditerranée Japon Etats-Unis/ Caraïbes Mexique Singapour Existing ECA Possible future ECA 2
Slide 25: Strategic Roadmap 3/6: Small Scale applications
Strategic Roadmap 3/6: Small Scale applications - A Great Potential A worldwide emerging market for small scale applications: LNGCs and onshore storage tanks 2014 First-Half ▶ Small LNG carriers are crucial for supplying merchant vessels with LNG ▶ Significant geographical potential: Caribbean, Chin
Slide 26: Strategic Roadmap 4/6: Develop the range of services
Strategic Roadmap 4/6: Develop the range of services to support LNGCs throughout lifecycle Pre-project studies Advanced training Maintenance and Repair TAMI MOON Thermal camera MOtorized BalloON for secondary for primary membrane membrane inspection inspection Recently launched innovative services T
Slide 27: Strategic Roadmap 5/6: New developments coming up
Strategic Roadmap 5/6: New developments are coming up, providing enhanced operational performance and flexibility Mark V for LNG Carriers NO 96 Max 2014 First-Half ▶ Bonded triplex replaced with Invar: ▶ Innovative pillar-type insulation box Innovative secondary membrane, construction allowing quick
Slide 28: Strategic Roadmap 6/6: Value-add from in-house GTT innovation
Strategic Roadmap 6/6: Value-add from in-house GTT innovation Value of reducing BOR to a ship-owner / O&G major Performance of GTT technologies 10 year NPV of reduced BOR for an LNGC, in $ MM(1) BOR of GTT systems developed since 2010 30 0.16% 0.160% 24.1 22.8 0.12% 0.120% 20 15.2 0.08% 0.080% 0.15%
Slide 29: Outlook 1/2: Outlook confirmed for 2014
Outlook 1/2: Outlook confirmed for 2014 ▶ Expected 2014 revenue of at least €223 M ▶ Net margin of c. 50% ▶ 2014 dividend payout of at least 80%(1) 2014 First-Half July 2014 (1) GTT by-laws provide that dividends may be paid in cash or in shares based on each shareholder’s preference and subject to
Slide 30: Outlook 2/2: Medium-term outlook confirmed
Outlook 2/2: Medium-term outlook confirmed Medium Term ▶ 270-280 LNGC New GTT Orders ▶ 25-35 FSRU over 2014-2023 ▶ 3-7 FPSO ▶ c. 10 onshore storage tanks Average revenue ▶ No significant change compared to 2012 and 2013 levels, except for inflationary price per vessel increase 2014 First-Half ▶ 2015
Slide 31: Conclusion
Conclusion GTT, a unique vehicle to capture LNG growth in coming years ▶ Strong macro themes underpin LNG growth ▶ GTT offers pure play exposure to LNG investment theme ▶ Significant upside opportunities in adjacent sectors ▶ Highly attractive business model with high switching costs ▶ Clear sector
Slide 32: Q&A session
Q&A session 32 July 2014 2014 First-Half
Slide 33: Appendices
Appendices 33 July 2014 2014 First-Half
Slide 34: Appendix 1: US projects
Appendix 1: US projects Development of US LNG projects provides for significant potential export capacity Significant potential US LNG development projects Department of Energy Federal Energy Regulatory Commission Expected Capacity Export to FTA Export to non-FTA Projects (MMtpa) Filed Approved File
Slide 35: Appendix 2: FSRU forecasts
Appendix 2: Forecasts FSRU: Leadership position with high-growth potential Drivers for FSRU demand GTT – a superior technology for FSRUs ▶ Existing fleet of 14 FSRUs(1) ▶ All of the newbuild FSRUs ordered to date will be equipped ▶ Demand driven by competitive advantage vs. land-based terminals with
Slide 36: Appendix 2: Emergence of the FPSO sector
Appendix 2: Forecasts Emergence of the FPSO sector FPSO projects progressing GTT – a superior technology for FPSOs ▶ Two LNG FPSOs are currently on order for Petronas Malaysia ▶ The only two post-FID (Final Investment Decision) FPSO and Shell Prelude respectively (1) projects will be equipped with G
Slide 37: Appendix 2: Onshore storage
Appendix 2: Forecasts Onshore storage, a large and attractive sector GTT returning to… … A large and growing sector ▶ Technology initially developed by Technigaz in the 1960s secured a ▶ Demand driven by: total of 33 orders ▶ Development of re-gasification and liquefaction projects ▶ In 2006, GTT re
Slide 38: Appendix 3: Illustrative LNGC revenue recognition
Appendix 3: GTT Business Model Illustrative LNGC revenue recognition summary Illustrative revenue recognition 2013 key statistics % of total revenues – order of 4 LNGCs placed on June 30th of year 0 c. 18 months c. 18 months studies royalties Total orders: 36 TOTAL LNGC Studies 56% collected on th
Slide 39: Appendix 3: Strong revenue growth since 2010
Appendix 3: GTT Business Model Strong revenue growth since 2012 reflecting recent increase in order intake Historical revenue development Order book evolution In € MM In number of orders – at end of period 99 250 77 218 52 7 200 18 2010 2011 2012 2013 150 2013 Revenue Breakdown 2014 First-Half 210 O
Slide 40: Appendix 3: Strong order book and visibility on future revenue
Appendix 3: GTT Business Model Strong order book and visibility on future revenue (as at 31/12/2013) Current order book (1) Order book by year of delivery Total orders to be delivered between 2014 – 2017 40 36 120 32 21 99 20 2 10 2 90 10 0 2014 2015 2016 2017 Scheduled deliveries (vessels per year)
Slide 41: Appendix 3: A cost base offering high operating leverage
Appendix 3: GTT Business Model A cost base offering a high operating leverage GTT operational costs(1) Key comments As of 30/06, in € MM H1 2013 H1 2014 Change (%) ▶ Lean cost base offering high operating leverage Salaries and Social ▶ Total costs stable at around 40% of sales (12,9) (20,8) 61% Char
Slide 42: Appendix 3: Contractual framework (TALA)
Appendix 3: GTT Business Model A contractual framework governs and protects GTT’s expertise in construction projects Technical Assistance and License Agreement (TALA) ▶ TALA is a framework agreement between GTT and the shipyard ▶ GTT grants non-exclusive licence to the shipyard to use its technology
Slide 43: Appendix 3: An attractive business model supporting high cash generation
Appendix 3: GTT Business Model An attractive business model supporting high cash generation Invoicing and revenue recognition Business model supports high cash generation % of contract (1) ▶ Revenue is recognized pro-rata temporis between c. 18 months c. 18 months Delivery 100 studies royalties mile
Slide 44: Appendix 3: Managing employee base to meet growing demand
Appendix 3: GTT Business Model Managing employee base to meet growing demand Evolution of GTT staff GTT staff by type of contract 370 388 400 Non-permanent 300 286 24% 242 200 100 Permanent 76% 0 Dec2011 31, 2011 Dec 31, 20122012 Dec 31, 2013 2013 June 30, 2014 2014 Total: 388 employees(1) 2014 Firs
Slide 45: Appendix 4: Track record of high margin and backlog
Appendix 4: General information Track record of high margin and strong increase in backlog since 2010 Current backlog (3) 120 112 66 30 18 52 77 99 44 37 34 26 Evolution of new 19 GTT orders (1)(2) 7 4 1 2006 2007 2008 2009 2010 2011 2012 (5) 2013 LNGC FSRU/FPSO Onshore storage Historical backlog (#
Slide 46: Appendix 4: Shareholding structure (post IPO)
Appendix 4: General information Shareholding structure (post IPO) Before IPO and capital increase After IPO and capital increase reserved for employees reserved for employees Employees and management 30% 40% 10.38% 0.19% 10.38% 40.41% 2014 First-Half Free-float 38.64% 30% Lock-up for Total and Hellm
Slide 47: Appendix 4: A streamlined group and organisation
Appendix 4: General information A streamlined group and organisation GTT Group GTT North America Cryovision GTT Training Subsidiary Subsidiary Subsidiary Philippe Berterottière Chairman and Chief Executive Officer 2014 First-Half GTT SA organisation Research Committee Manuèle Haton Organization and
Slide 48: Appendix 4: GTT membrane technologies
Appendix 4: General information GTT membrane technologies NO 96 Mark III Primary Invar membrane Primary stainless steel membrane Top bridge Invar pad tongue Primary Corner Metallic insert insulation box panel Hard wood key Coupler Secondary Invar Inner membrane hull Top plywood Inner hull Insulation
Slide 49: Thank you for your attention
Thank you for your attention 2014 First-Half July 2014 [email protected] • Lisa Finas and Lynda Khoudi • +33 1 30 23 47 89 49
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