Gaztransport & Technigaz Sa · EURONEXT:GTT
Gaztransport & Technigaz Sa — Investor Presentation (January 2018)
52 slides from Gaztransport & Technigaz Sa's investor presentation, Jan 11, 2018
Slide 1: Investor Presentation January 11-12, 2018
Investor Presentation January 11-12, 2018
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 sec
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 More than 50-year track record Services 5.8
Slide 5: Key Highlights
Key Highlights Revenues for the first nine months 2017: €168.5 million 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) Order book of 8
Slide 6: Market update (November 2017)
Market update (November 2017) 6
Slide 7: 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 prices No demand adjustment 150 and FSRUs availability S&D balance in early 2023 Intermediate S&D balance in 2021 scenario New FIDs from early 2019 100 New FIDs
Slide 8: Important new LNG volumes to hit the market in 2019 and 2020
Important new LNG volumes to hit the market in 2019 and 2020 Contracted supply from liquefaction projects under construction 90 Cameroon GoFLNG +25 80 PETRONAS FLNG 2 mtpa Elba Island LNG Export 70 Coral FLNG Prelude FLNG 60 +31 Tangguh Phase 2 mtpa 50 Freeport Train 3 mtpa Freeport Train 2 40 Sabin
Slide 9: Asian LNG imports growing in 2017 vs. 2016
Asian LNG imports growing in 2017 vs. 2016 due to structural energy mix evolution Top-4 LNG importers demand comparison 2017 vs. 2016 Demand of top-4 LNG importing 160 50% countries (60% of imports in 2016) 43% grew by 15% in 2017 vs. 2016 (Jan 140 to Sept. YoY), mainly due to: 40% 120 Coal to Gas s
Slide 10: 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 11: LNG Shipping - Spot market recovering trend
$/d 0 100 000 120 000 140 000 160 000 20 000 40 000 60 000 80 000 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Break even Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13 Recovering trend sin
Slide 12: LNG Shipping: c.50 LNGC orders expected from under construction projects
LNG Shipping: 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 A
Slide 13: An attractive business model supporting high cash generation
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 invoicing and ca
Slide 14: Business Activity
Business Activity 14
Slide 15: 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 12 orders secured during 2017 FLNG 7% 1% FSRU 10% FSRU: between 30 and 40 units 8 orders secured during 2017 FLNG: between 5 and 10 units 1 order secured during 2017 LNGC/
Slide 16: Focus on GTT's competitive advantages
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 capacity ▶
Slide 17: Focus on GTT's competitive advantages
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 $10 M$ M
Slide 18: LNG fuel focus – CMA CGM order
LNG fuel focus – CMA CGM order LNG integrated membrane tanks of 18,600 cbm Space optimization Designed for one bunkering operation per round trip Mark III Flex (270 mm) technology for the fuel storage system Polyurethane Foam 130 kg/m3 and 210 kg/m3 Sea proven technology Guaranteed Boil Off Gas Maxi
Slide 19: Current LNG Fuel market situation
Current LNG Fuel market situation Total LNG fuel tank by ship type (in service & on order) 4 000 Max CMA-CGM 3 500 Total LNG tanks capacity Avg. 3 000 Min 2 500 cbm 2 000 1 500 1 000 Market avg ~750 cbm 500 0 Notes: • Data available for ~70% of the 237 vessels Source: DNV GL • CMA-CGM order not coun
Slide 20: LNG is the only solution allowing comprehensive environmental compliance
LNG is the only solution allowing comprehensive environmental compliance LS HFO ULS HFO MGO / HFO Scrubber Pollutant Level (Low Sulfur (Ultra Low Sulfur MDO1 LNG (Heavy Fuel Oil) HFO) HFO) (Marine Gasoil/Diesel +HFO Oil) 3,5% SOx 0,5% (Sulfur Oxides) 0,1% Tier II NOx2 (Nitrogen Oxides) Except for Ti
Slide 21: LNG fuel market potential: to be driven by newbuilds
LNG fuel Market potential: to be driven by newbuilds Shipping markets newbuild potential 20 000 Container ships (ULCS) • 3,000+ avg. annual orders (2005-2016) • Fleet of 90’000+ vessels in 2017 Est. maximum LNG fuel tanks capacity - cbm 15 000 Bulkers (VLOC) Oil Tankers (VLCC) 10 000 PCTC 5 000 Crui
Slide 22: GTT LNG solutions offering
GTT LNG solutions offering GTT has developed solutions for the main applications of LNG Fuel Solutions for Container Vessels new build Cruise Ship – optimizing the space for and retrofit additional passengers Cost effective solution for bulk carriers Lean bunker barge to standardize the market A wid
Slide 23: Expand innovative services offer
Expand innovative services offer: customised services package fitting industry expectations © Excelerate Energy DESIGN CONSTRUCTION OPERATIONS MAINTENANCE UPGRADE • Feasibility studies • Materials • Training courses • Inspections, • Engineering support • FEED certification and customised maintenance
Slide 24: Ascenz transaction
Ascenz transaction Acquisition of 75% of the share capital from founders and several investment funds Founders to retain 25% of the share capital and continue to manage the company Funded in cash No significant impact on GTT’s financial structure Commercial and technical synergies 24
Slide 25: Ascenz is a dynamic EMS provider
Ascenz is a dynamic EMS provider Activities, markets & awards Based in Singapore, founded in 2008 Provides remote fuel consumption and bunkering monitoring solutions Positioned on fast growing markets Markets : Offshore Supply Vessels (OSV), container ships, oil and crude carriers, bulk carriers, bu
Slide 26: GTT's strategic roadmap
GTT’s strategic roadmap Gas handling technologies Growth, Technology, Superior LNG Transformation Fuel Gas handling system for vessels gas handling Advanced decision systems support systems Framework service and maintenance contract (Shell Prelude) Courtesy of Shell Smart shipping 26
Slide 27: Financials
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Slide 28: 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 29: 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 30: 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 subcontracted Cost of sales (1.4) (0.9) -12% 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 31: 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 32: Outlook
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Slide 33: 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 34: Thank you for your attention
Onshore tank Ice breaking LNG carrier FLNG LNG carrier Multigas carrier Thank you for your attention © STX, Engie, Gravity-based system LPG carrier Small scale LNG carrier at import terminal Bunker barge Power barge FSRU 34
Slide 35: Appendices
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Slide 36: 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* Julien Bec David Colson* Karim Chap
Slide 37: 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 38: 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 38
Slide 39: 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 Production, Floatin
Slide 40: GTT ecosystem
Appendix: GTT ecosystem Oil & Gas Shipowners Companies 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 41: 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 42: 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 43: FSRUs – The importing countries game changer is gaining momentum
Appendix: FSRUs – The importing countries game changer is gaining momentum Since 2008, more than half of new LNG importing countries have Major competitive advantage vs. land-based terminals: chosen FSRUs instead of onshore terminals Quick to build/deploy & mobile 4 No. of countries Better local acc
Slide 44: 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: 5-10 Courtesy of Shell units(2) % sales H1 2017 Main drivers GTT key advantages 0.9% Monetisation
Slide 45: LNG as fuel & Bunkering
Appendix: LNG as fuel & Bunkering 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 (>10,000 cbm LNG $/mmbtu 15 tanks) expecting better price environment
Slide 46: GTT membrane technologies
Appendix: GTT membrane technologies NO 96 Mark III Primary Invar membrane Primary stainless steel membrane Top bridge pad Invar tongue Primary insulation Corner panel Metallic insert box Hard wood key Coupler Secondary Invar Inner membrane hull Top plywood Inner hull Insulation panel Primary insulat
Slide 47: 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 2.2 17 21 19 0.6 Nigeria 25 31 Malaysia 0.9 17 18 Indonesia Australia 76 45 Largest producers Other producers LNG supply (Mtpa) in
Slide 48: Most of additional LNG production is already contracted
Appendix: Most of additional LNG production is already contracted Contracted vs. Uncontracted additionnal LNG production by 2026 120 100% 89% 89% 90% 90% 87% 88% 87% 86% 90% 85% 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 producti
Slide 49: LNG trade forecast is buoyant
Appendix: 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
Slide 50: 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 51: 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 the ORDERS first vesse
Slide 52: Investor Presentation
Investor Presentation Contact: Jean-Baptiste Garnier / [email protected] / +33 1 30 23 20 87
Gaztransport & Technigaz (GTT) — Investor Presentation (January 2018) on 6ix