Gaztransport & Technigaz Sa · EURONEXT:GTT
Gaztransport & Technigaz Sa — Investor Presentation (November 2017)
48 slides from Gaztransport & Technigaz Sa's investor presentation, November 2017
Slide 1: Investor Presentation November 2017
Investor Presentation November, 2017
Slide 2: Disclaimer
Disclaimer This document is strictly confidential. Any unauthorised access to, appropriation of, copying, modification, use or disclosure thereof, in whole or in part, by any means, for any purpose, infringes GTT’s rights. This document is part of GTT’s proprietary know- how and may contain trade se
Slide 3: 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 representation,
Slide 4: GTT, a French engineering company, global leader in liquefied gas containment systems
GTT, a French engineering company, global leader in liquefied gas containment systems Key figures Profile Leading engineering company in € million H1 2016 H1 2017 Expert in liquefied gas containment Total Revenues 116.9 111.3 systems Royalties 111.1 103.4 Services 5.8 7.9 More than 50-year track rec
Slide 5: Key Highlights
Key Highlights Revenues for the first nine months 2017: €168.5 million (-4.6%) Movements in the order book during the first nine months 2017 Deliveries: 24 (21 LNGC/VLEC, 2 FSRU, 1 FLNG) Among deliveries, the Prelude FLNG and the first icebreaking LNGC New orders: 14 (8 LNGC, 5 FSRU, 1 FLNG) Includi
Slide 6: LNG market
LNG market COL awa. pareney
Slide 7: Most of additional LNG production is already contracted
Most of additional LNG production is already contracted Contracted vs. Uncontracted additionnal LNG production by 2026 120 100% 89% 89% 90% 90% 87% 87% 88% 85% 86% 90% 100 80% 70% 80 60% mtpa 60 50% 40% 40 30% 20% 20 10% 0 0% 2018 2019 2020 2021 2022 2023 2024 2025 2026 Contracted production Uncontr
Slide 8: Asian LNG imports continue to grow in 2017 vs. 2016
Asian LNG imports continue to grow in 2017 vs. 2016 due to structural energy mix evolution Top-5 LNG importers demand comparison 2017 vs. 2016 Demand of top-5 LNG importing 140 50% countries (~70% of imports in 2016) 44% grew by 13% in 2017 vs. 2016 (Jan 120 to Aug. YoY), mainly due to: 40% Coal to
Slide 9: US LNG is competitive in Asia
US LNG is competitive in Asia US LNG vs. Asian LNG price depending on Henry Hub and Oil prices 10,0 Asian LNG < US LNG Asian LNG 9,5 Asian LNG < US LNG US LNG < Asian LNG 9,0 8,5 LNG price - $/Mbtu 8,0 Spread 7,5 US LNG 7,0 2017 avg. 2016 avg. 6,5 6,0 5,5 40 45 50 55 60 65 Main sources: GTT analysis
Slide 10: Gas and coal prices trend is accelerating the coal-to-gas switch
Gas and coal prices trend is accelerating the coal-to-gas switch Gas vs. coal prices competitiveness since Jan. 2016 70 60 50 +3 $/ Mwh -10 40 +17 +13 30 20 Source: World Bank, Argus Coal Average Europe NG China LNG *Including power plant efficiency : with coal = 34% ; with natural gas = 48% 10
Slide 11: Low LNG prices attract new importing countries
Low LNG prices attract new importing countries Incremental LNG demand from new markets 25 2 new countries expected + Philippines 3 new countries + Ghana + Malta Israel 20 + Colombia Lithuania Poland + Jamaica Israel Malaysia Lithuania Poland Malaysia Singapore 15 4 new countries + Egypt Singapore Mt
Slide 12: LNG trade forecast is buoyant
LNG trade forecast is buoyant LNG demand by region, 2012-2021 400 350 historical forecast 300 ~ +25Mtpa 2017-2021 250 Mtpa 200 150 ~ +50Mtpa 2017-2021 100 50 - 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Asia Pacific Europe South America North America Middle East Majority of volumes expected t
Slide 13: LNG Supply & Demand could balance from 2021
LNG Supply & Demand could balance from 2021 LNG Supply & Demand balance forecast 450 400 350 300 250 mtpa 200 Demand adjustment due to low No demand adjustment 150 prices and FSRUs availability Intermediate S&D balance in early 2023 S&D balance in 2021 scenario New FIDs from early 2019 100 New FIDs
Slide 14: LNG Shipping
LNG Shipping < = [_irmovation Teamwork transparency
Slide 15: LNG Shipping – Positive trend is firming on the spot market
LNG Shipping – Positive trend is firming on the spot market # prompt k$/d Spot rates and prompt available vessels evolution since January 2017 available vessels 30 50 25 40 20 30 15 20 10 10 5 0 0 Available vessels on the spot market (rhs) 160k cbm TFDE 145k cbm Steam Turbine Sources: Clarksons, Pot
Slide 16: LNG Shipping - Positive trend is firming on the spot market
LNG Shipping - Positive trend is firming on the spot market 60 000 Spot rates evolution since May 2015 50 000 40 000 $/d 30 000 20 000 10 000 0 160k cbm DFDE 145k cbm ST Positive trend on the mid-term (average May 2015 – October 2017) Trend expected to continue as new supply projects starting-up in
Slide 17: LNG Shipping – Liquefaction projects are underway
LNG Shipping – Liquefaction projects are underway A large majority of liquefaction projects currently under construction expected to start-up in time c.50 vessels to be ordered from these under construction projects Main downside risks Additional LNG contracts swapping (shorter routes) Start-up dela
Slide 18: Business Activity
Business Activity ‘eamworl 18
Slide 19: Core business and adjacent markets
Core business and adjacent markets GTT Q3 2017 Sales GTT order estimates over 2017-2026 LNGC: between 235 and 255 units Services Already 8 orders secured during H1 2017 FLNG 7% 1% FSRU 10% FSRU: between 30 and 40 units Already 4 orders secured during H1 2017 FLNG: between 5 and 10 units Already 1 or
Slide 20: Strong potential: FSRUs are clearly preferred by new LNG importers
Strong potential: FSRUs are clearly preferred by new LNG importers FSRU capacity by region New LNG importing countries first terminal 16 000 14% 5 14 000 12% 4 12 000 10% No. of countries % global capacity 10 000 3 8% 8 000 mmcfd 6% 2 6 000 4% 4 000 1 2 000 2% - - 0% 2004 2006 2008 2010 2012 2014 20
Slide 21: Order book overview (H1 2017)
Order book overview (H1 2017) Order book in units Order book by year of delivery (units per year) In units In units (1) 38 37 40 35 120 96 32 28 88 21(4) 21 90 20 8 60 16 4 1 0 30 2017 2018 2019 2020 2021 As at Dec 31, 2016 As at June 30, 2017 As at Dec 31, 2016 As at June 30, 2017 Order book in val
Slide 22: Strategy and activity: expand innovative services
Strategy and activity: expand innovative services Advisory and optimisation services Intervention services TRAINING TIBIA Training tool Inspection tool for LNGC for FLNG crew members inspection HEARS GTT ON SITE LNG Advisor Boil-off Gas Hotline Technical monitoring Emergency assistance Assistance &
Slide 23: LNG as fuel & Bunkering: GTT ideally positioned
LNG as fuel & Bunkering: GTT ideally positioned to take full benefit of expected market development Fuel prices spread narrowing since 2014 Marine fuel prices since June 2014 (delivered onboard) favouring small-mid vessels projects 25 (‘000 cbm LNG tanks) 20 Up to $13/mmbu Larger vessels market (>10
Slide 24: Financials
Financials Cll eax == Ww. wee: aa)
Slide 25: H1 2017 financial performance
H1 2017 financial performance Summary financials Key highlights In € M H1 2016 H1 2017 Change Decrease in revenues (-4.7%) Revenues derived from royalties: -6.9% Total Revenues 116.9 111.3 -4.7% Impacted by the low level of orders during 2016 EBITDA(1) 73.7 74.6 +1.2% Revenues from services: +36.4%
Slide 26: Cost base
Cost base GTT operational costs Key highlights Change in € M H1 2016 H1 2017 (%) External costs Down 11% mainly due to a decrease in Cost of sales (1.4) (0.9) -12% subcontracted tests and studies and in legal fees % sales (1%) (1%) -1pt in % of sales Subcontracted Test Staff costs down 2% due to a d
Slide 27: 9 months 2017 revenues at €169 million
9 months 2017 revenues at €169 million Summary financials Key highlights in € M 9M 2016 9M 2017 Change Total revenues: €168.5 million (%) Revenues 176.7 168.5 -4.6% Revenues from royalties: -6.3% at Royalties 167.7 157.1 -6.3% €157.1 million % of revenues 95% 93% LNGC: -8.2%, impacted by the low lev
Slide 28: Outlook
Outlook < = [_irmovation Teamwork transparency
Slide 29: 2017 Outlook confirmed
2017 Outlook confirmed GTT revenue(1) 2017 revenue estimated in a range of €225 M to €240 M Net margin(2) Net margin above 50% Dividend 2017 dividend amount at least equivalent to 2015 and 2016 Payment(3) 2018 – 2019: payout of at least 80% (1) In the absence of any significant delays or cancellatio
Slide 30: Thank you for your attention
Onshore tank Ice breaking LNG carrier FLNG LNG carrier Multigas carrier Thank you for your attention © STX, Engie, Excelerate Gravity-based system LPG carrier Small scale LNG carrier at import terminal Bunker barge Power barge FSRU 30
Slide 31: Appendices
Appendices Cll ea=x==eAx Ww. wee: aa)
Slide 32: A streamlined group and organisation
Appendix: a streamlined group and organisation GTT Group GTT North America Cryovision GTT Training GTT SEA PTE Ltd Cryometrics Philippe Berterottière* Chairman and Chief Executive Officer GTT SA organisation Lélia Ghilini* General Counsel Frédérique Marc Haestier* Isabelle Delattre* Julien Bec David
Slide 33: A responsible company
Appendix: a responsible company Social and societal responsibility Social Employment: recruit, retain and develop talents >>> 6.6% of turnover in 2016 Compensation: implement an attractive and evolutive system Training: develop employability and expertise >>> 13,654 hours of training in 2016 Safety:
Slide 34: External growth policy
Appendix: external growth policy Support the mainstays of GTT strategy A continuous approach, towards selective acquisitions Key criteria include sector attractiveness ; business model ; differentiation through technology ; size and profitability ; ease of integration 34
Slide 35: GTT exposure to the liquefied gas shipping and storage value chain
Appendix: GTT exposure to the liquefied gas shipping and storage value chain Exploration Off Take / Liquefaction Shipping Regasification & Production Consumption Liquefied Natural Gas LNG fuelled Offshore Carrier ship clients: (LNGC) shipyards Platform / Installation Floating LNG Floating Storage an
Slide 36: GTT ecosystem
Appendix: GTT ecosystem Oil & Gas Companies Shipowners End clients and End clients and prescribers prescribers provides services provides services and maintenance Classification Societies Regulatory oversight of the industry Shipyards Direct clients receives new technology certification and licences
Slide 37: c.50 LNGC orders expected from under construction projects
Appendix: c.50 LNGC orders expected from under construction projects LNGC requirement for under construction liquefaction projects Most liquefaction projects under Forecasted Total Capacity LNGC Project Location Start-Up (Mtpa) requirement construction expected to start-up in Wheatstone LNG T1 Austr
Slide 38: LNGCs
Appendix - LNGCs Our core business Vessel equipped for transporting LNG Existing GTT fleet: 318 units(1) In order: 73 units 21 construction shipyards under license GTT order estimates over 2017-2026: 235-255 units(2) Our strengths % sales(3) Technological leadership, boil-off divided by 2 in the las
Slide 39: FSRUs
Appendix - FSRUs The solution for emerging countries Stationary vessel capable of loading, storing and re-gasifying LNG Existing GTT fleet: 20 FSRU(1) In order: 10 units GTT order estimates over 2017-2026: 30-40 units(2) Courtesy of Excelerate Energy Main drivers GTT key advantages % sales New buyer
Slide 40: FLNGs
Appendix - FLNGs The new frontier of the LNG world Floating unit which ensure treatment of gas, liquefy and store it Existing GTT fleet: 2 units(1) In order: 2 units GTT order estimates over 2017-2026: Courtesy of Shell 5-10 units(2) % sales H1 2017 Main drivers GTT key advantages 0.9% Monetisation
Slide 41: GTT membrane technologies
Appendix: GTT membrane technologies NO96 Max Mark V Primary Invar® Secondary Invar® membrane Primary stainless steel membrane membrane Corner Secondary Invar® panel Primary membrane insulation box (plywood and glasswool) Coupler Inner hull Resin Secondary patch insulation box Anchoring strip Primary
Slide 42: Focus on GTT's competitive advantages
Appendix: focus on GTT’s competitive advantages Performance of GTT technologies Value of reducing BOR(1) to a charterer LNG Boil Off Rate (BOR)(1) of GTT systems developed since 2010 10 year NPV of reduced BOR(1) for an LNGC(2) 0,16% 0.16% 0.15% 0.15% 12$12 M$M $11.4 M $10.6 M -6 bp 0,12% -8 bp 10$1
Slide 43: Focus on GTT's competitive advantages
Appendix: focus on GTT’s competitive advantages GTT’s technology positioning (1) GTT Moss SPB KC-1 Technology ▶ Membrane ▶ Spherical tank ▶ Tank ▶ Membrane ▶ Requires less steel and Construction ▶ Slightly higher costs aluminum than tanks for ▶ Higher costs ▶ Higher costs costs than GTT a given LNG
Slide 44: Key emerging LNGC trade routes
Appendix: key emerging LNGC trade routes 1.8 29 Russia 7 26 United Kingdom 11 70 Qatar 32 33 83 72 United States of America China 63 4 Korea 1.2 26 India Japan 78 78 36 17 21 0.6 2.2 19 Nigeria 25 31 Malaysia 0.9 17 18 Indonesia Australia 76 45 Largest producers Other producers LNG supply (Mtpa) in
Slide 45: Track record of high margin and strong increase in backlog since 2010
Appendix: track record of high margin and strong increase in backlog since 2010 2008 2011 Economic crisis Fukushima US shale gas boom 120 112 66 30 18 52 77 99 114 118 96 47 44 37 34 35 26 Evolution of new 19 GTT orders (1)(2) 7 4 5 1 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 LNGC/VLEC
Slide 46: Illustrative LNGC revenue recognition summary
Appendix: illustrative LNGC revenue recognition summary Illustrative revenue /cash recognition 2016 key statistics % of total revenues – order of 4 LNGCs placed on June 30 of year 0 c. 18 months c. 18 months studies royalties Total orders: 5 56% TOTAL LNGC Studies collected on ORDERS the first vesse
Slide 47: An attractive business model supporting high cash generation
Appendix: an attractive business model supporting high cash generation Invoicing and revenue recognition Business model supports high cash generation % of contract (1) c. 18 months c. 18 months Delivery ▶ Revenue is recognized pro-rata temporis studies royalties between milestones ▶ Timing of invoic
Slide 48: Investor Presentation November 2017
Investor Presentation November, 2017
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