60 slides from Gaztransport & Technigaz Sa's earnings presentation, February 2016
Slide 1: Investor presentation February 2016
Investor presentation February 2016
Slide 2: Disclaimer
Disclaimer 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 strictly confidential and the exclusive prope
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: Agenda
Agenda 1. Company overview 2. Key figures and highlights 3. Market drivers 4. Business update 5. Financials 6. Outlook and conclusion Appendices 4
Slide 5: Company overview
Company overview COL awa. pareney
Slide 6: GTT, a French engineering company, global leader in liquefied gas containment systems
GTT, a French engineering company, global leader in liquefied gas containment systems Company overview Key figures Profile in € million FY 2014 FY 2015 Leading engineering company Expert in liquefied gas containment Total Revenues 226.8 226.5 Royalties 216.4 209.3 systems Services 17.2 10.4 More tha
Slide 7: GTT offers broad exposure across the liquefied gas shipping and storage value chain
GTT offers broad exposure across the liquefied gas shipping and storage value chain Exploration Re- Off Take / Liquefaction Shipping & Production Gasification Consumption Liquefied Natural Gas LNG fuelled Offshore Carrier ship clients: (LNGC) shipyards Platform / Installation Floating LNG Floating S
Slide 8: Prescription of GTT's containment technology
Prescription of GTT’s containment technology 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 certi
Slide 9: Our strategy
Our strategy Consolidate leading position in LNG shipping industry Capitalise on the expected potential in adjacent sectors Expand innovative service offering to shipowners and oil & gas companies Create growth opportunities through selected tech acquisitions 9
Slide 10: A responsible company
A responsible company Social and societal responsibility Social Employment: recruit, retain and develop talents >>> 4.2% of turnover in 2015 Compensation: implement an attractive and evolutive system Training: develop employability and expertise >>> 8,316 hours of training in 2015 Safety: improve pr
Slide 11: 2015 key figures and highlights
2 2015 key figures and highlights 11
Slide 12: Key highlights
Key highlights 35 orders received as at December 31, 2015 31 LNGC orders, 3 FSRU orders,1 LNG bunker barge order Order book in value up to c. €619 M (+4.7% vs Dec. 31, 2014) The LNG bunker barge is the first one dedicated to the North-American marine market Signature of cooperation agreements aiming
Slide 13: Information about the KFTC enquiry
Information about the KFTC enquiry On January 29, 2016, GTT was notified by the Korean Fair Trade Commission (KFTC) that an inquiry had been opened. No precise information at this stage. May concern: possible abuse of dominant position in connection with the Korean shipyards’ LNG carrier constructio
Slide 14: A strong order book as at December 31, 2015
A strong order book as at December 31, 2015 Strong order book of 118 units 2015 movements in the order book 105 LNGC/VLEC Deliveries: 29 (26 LNGC, 2 FSRU and 1 onshore storage) 3 FLNG 7 FSRU/RV New orders: 35 (31 LNGC, 3 FSRU and 1 LNG bunker barge) 2 onshore storage 1 LNG bunker barge Cancellations
Slide 15: Breakdown of order book as at December 31, 2015
Breakdown of order book as at December 31, 2015 6 shipyard clients(1) Diversified shipowners(1) Conrad Maran Gas 1% Maritime Samsung 14% 23% Other (1-3% Teekay each) 10% Daewoo 40% Imabari Ceres 46% 3% 7% Bonny Gas (2) Transport Hyundai BP 5% 18% 5% BW Gas China 4% CLNG Dynagas Shipping Hudong- 5% 5
Slide 16: Market drivers
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Slide 17: Market drivers 1/9: overview
Market drivers 1/9: overview Long term market drivers are strong Natural gas demand Natural gas exports Share of LNG Need of additional capacity New trade routes In a troubled context Oil & gas price drop Global economics concerns Low gas prices should lead to new opportunities for LNG Coal-to-gas s
Slide 18: Market drivers 2/9: natural gas, the fastest-growing fossil fuel worldwide
Market drivers 2/9: natural gas, the fastest-growing fossil fuel worldwide Natural gas demand drivers Long term energy consumption trends Natural gas is the fastest growing major energy source Close to 25% of energy consumption in 2040, at the same level as coal Small (8.6%) but increasing share of
Slide 19: Market drivers 3/9: additional LNG capacity needed to meet demand
Market drivers 3/9: additional LNG capacity needed to meet demand Major suppliers around the world LNG supply vs demand Australia to become the main LNG 450 supplier by 2019 Additional capacity to come from the 400 United States within the next few years 350 Qatar to remain an important supplier 300
Slide 20: Market drivers 4/9: pricing environment
Market drivers 4/9: pricing environment Breakdown of US LNG cost to Asia ($/Mbtu) US, UK natural gas and LNG Asia prices $/Mbtu 8 $/Mbtu 17 7 7.5 $50/bbl(2) Current breakeven: 6.3 15 6 6.1 $40/bbl(2) 13 1.75 5 11 4 4.7 $30/bbl(2) 9 2.25 7 3 5 2 3 1 2.30 1 0 Henry Hub Tolling Fee Shipping Cost Asian
Slide 21: Market drivers 5/9: lower LNG prices create new opportunities
Market drivers 5/9: lower LNG prices create new opportunities Drivers and assumptions Increasing attractiveness of Gas vs Coal in Power(2) $/MWh LNG from the US and Australia to be absorbed by Asia and Europe 120 How ? 72 100 Switch from coal to gas in the power mix (1) + 40 Mtpa in Europe by 2020 8
Slide 22: Market drivers 6/9: major liquefaction projects to come, mainly in the US
Market drivers 6/9: major liquefaction projects to come, mainly in the US Some major liquefaction projects with a FID expected in the next few years 15 Golden Pass Cameron Nominal start-up production capacity PNW LNG LNG Canada Browse FLNG Freeport T1&2 Tanzania P1 10 Cameron Exp Mozambique (A1) Por
Slide 23: Market drivers 7/9: key emerging LNGC trade routes
Market drivers 7/9: key emerging LNGC trade routes 1.8 29 Russia 9 27 United Kingdom 11 72 34 39 86 91 United States of America 0 Qatar China 50 Korea 1.2 19 India Japan 78 68 20 21 32 0.6 2.2 14 Nigeria 25 32 Malaysia 0.9 17 14 Indonesia Australia 76 28 Largest producers Other producers LNG supply
Slide 24: Market drivers 8/9: LNG as a fuel, a new growing market
Market drivers 8/9: LNG as a fuel, a new growing market mainly driven by regulatory and environmental concerns Stricter emissions standards Extension of ECAs Norway North Sea Baltic Sea North America Mediterranean Japan U.S. Caribbean Mexico Singapore Active areas Potential areas Source : DNV Source
Slide 25: Market drivers 9/9: environmental performance of LNG vs other fuels
Market drivers 9/9: environmental performance of LNG vs other fuels Emissions for a Typical Baltic Sea Cargo Ship No Almost SOx ! No NOx ! Source : DNV Lower No CO2 particulates! 25
Slide 26: Business update
Business update ‘eamworl 26
Slide 27: Business update 1/13: strategic roadmap
Business update 1/13: strategic roadmap New potential businesses Enlargement Services LNG as a fuel REACH4 Small / Very small onshore tanks Growth, Technology, Transformation New HEARS applications SloShield Advisory Enhancement and optimisation Training services center New customers / geographies L
Slide 28: Business update 2/13: innovation is key
Business update 2/13: innovation is key Diversified technologies New technologies going forward Recently developed technologies Mark V (BOR (1) of 0.07%) represent more than 80% of the Two cooperation agreements with order book Samsung and Hyundai Mark III Multi-gas General Approval from 3 classific
Slide 29: Business update 3/13: focus on GTT's competitive advantages
Business update 3/13: focus on GTT’s competitive advantages Performance of GTT technologies Value of reducing BOR(1) to a shipowner 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 M $11.4 M 12 M$ $10.6 M -6 bp -8
Slide 30: Business update 4/13: GTT's system competitiveness
Business update 4/13: GTT’s system competitiveness Vs KC-1 Vs Moss In % Boil-Off Rate (BOR) (1) $/m3 LNGC price per capacity (2) 0,18 0.18 1450 1,450 +18% +9 bp 0.16 0,16 1400 1,400 0.14 0,14 0.16% 1350 1,350 1,415 0.12 0,12 1300 1,300 0.10 0,10 KC-1 Moss 1250 1,250 0.08 0,08 GTT 1200 1,200 GTT 0.06
Slide 31: Business update 5/13: LNG Carriers
Business update 5/13: LNG Carriers LNGC: our core business Existing fleet: 391 units(1) What is an LNGC? 74% of LNG carriers’ fleet equipped with GTT A vessel for transporting technology methane Equipped with cryogenic In order: 99 technology 25 construction shipyards under license (Indian Cochin Sh
Slide 32: Business update 6/13: Multigas carriers
Business update 6/13: Multigas carriers VLEC / multigas: an interesting business opportunity GTT order intakes: 6 (since 2014) What is a VLEC? A vessel capable of transporting ethane and other liquified gas Underline GTT’s competitiveness (ethylene, propane, butane and of its containment systems for
Slide 33: Business update 7/13: FSRU
Business update 7/13: FSRU FSRU: the solution for emerging countries In units What is an FSRU? Stationary vessel capable of loading LNG from LNG carriers, storing and re-gasifying it Specific driver: Competitive advantage vs. land-based terminals Better acceptability Outlook: Low Medium High attract
Slide 34: Business update 8/13: FLNG
Business update 8/13: FLNG FLNG: the new frontier of the LNG World In units What is an FLNG? Floating unit which ensures the treatment of gas, liquefy and store it Specific drivers: Monetisation of stranded offshore gas reserves Outlook: Low attractivity High attractivity x/y Probable/Speculative Be
Slide 35: Business update 9/13: Onshore tanks
Business update 9/13: Onshore tanks Membrane tanks, a proven containment storage solution What is an Onshore Storage? A tank installed next to LNG loading and unloading terminals in order to transport, re-gasify and distribute LNG Specific drivers: Development of re-gasification and liquefaction pro
Slide 36: Business update 10/13: LNG bunker barge dedicated to the North American market
Business update 10/13: LNG bunker barge dedicated to the North American market A strong partnership: Shipyard Shipowner Shipowner Classification society Fully designed by GTT, this barge will be built with the innovative Mark III Flex technology and will be equipped with the bunker mast REACH4 Deliv
Slide 37: Business update 11/13: GTT technologies well-suited to LNG as fuel
Business update: 11/13: GTT technologies well-suited to LNG as fuel, small scale and barge applications LNG as Fuel Small scale and barge applications GTT offers membrane solutions that GTT offers full designed vessels can easily be integrated in new and equipment (ReaCH4 bunker builds or retrofitte
Slide 38: Business Update 12/13: range of services to support ship-owners and oil & gas companies
Business Update 12/13: range of services to support ship-owners and oil & gas companies Advisory and optimisation services Intervention services HEARS TIBIA Hotline Emergency Inspection tool Assistance & for FLNG LNG Advisor Response TRAINING inspection Service Boil-off Gas Training tool monitoring
Slide 39: Business update 13/13: external growth opportunities
Business update 13/13: external growth opportunities Deepen our technological know-how Strengthen GTT position as the LNG expert on core markets Accelerate our Objective Generate technical and commercial synergies on penetration on adjacent adjacent markets markets Leverage technological Cryogenics,
Slide 40: Financials
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Slide 41: 2015 financial performance
2015 financial performance Summary financials Key highlights As at 31/12, in € M 2014 2015 A slight decrease in revenues Total Revenues 226.8 226.5 Revenues derived from royalties : 92% of total revenues EBITDA(1) 142.3 142.2 Increase of 65% for revenues from services (17 M€) Margin (%) 62.7% 62.8%
Slide 42: 2015 revenues at €226.5 million
2015 revenues at €226.5 million Summary financials Key highlights Change As at 31/12, in € M 2014 2015 (%) Total revenues: €226.5 million Revenues 226.8 226.5 -0.1% Royalties 216.4 209.3 -3.3% Revenues from royalties: €209 million % of revenues 95.4% 92.4% Driven mainly by LNG carriers (80% of total
Slide 43: Stronger order book and visibility on future revenues
Stronger order book and visibility on future revenues Order book in units Order book by year of delivery (units per year) In units In units 118 39 38 120 40 37 114 26 28 110 20 9 10 100 4 2 3 0 90 2016 2017 2018 2019 2020 As at Dec 31, 2014 As at Dec 31, 2015 As at Dec 31, 2014 As at Dec 31, 2015 Or
Slide 44: A cost base offering a high operating leverage
A cost base offering a high operating leverage GTT operational costs(1) Key highlights Change Lean cost base offering high operating As at 31/12, in € M 2014 2015 (%) leverage Salaries and Social (37.4) (34.1) -9% Charges Total costs (1) stable at around 40% of sales Share-based payments (3.0) (2.3)
Slide 45: Capital structure
Capital structure As at December 31, 2015 10.38% 40.41% Free-float 48.67% Treasury shares 0.35% Management and employees 0.19% Stabilised capital structure 45
Slide 46: Proposed dividend
Proposed dividend 2014 2015 Net income available for distribution €123.3 M €118.9 M (French GAAP) Total dividend Dividend per share €2.66 €2.66(1) Total amount paid or to be paid €98.6 M €98.5 M(2) 90% Dividend Payout €3.00 3,0 amount 80% 83% ratio(3) 1.16 60% €2.00 2,0 1.36 €1.00 1,0 30% 1.50 1.30
Slide 47: Outlook and conclusion
6 Outlook and conclusion 47
Slide 48: Outlook for 2016
Outlook for 2016(1) 2016 revenue growth of more than 10% vs 2015, which represents GTT revenue(2) more than €250 M of revenues Net margin(3) Net margin above 50% Dividend 2016 and 2017 dividend at least equivalent to that proposed for 2015 Payment(4) (1) Subject to any significant delays or cancella
Slide 49: Why invest in GTT ?
Why invest in GTT ? Business Pure player Strong markets drivers Strong competitive advantages High visibility on revenues Innovation capacity and know-how Growth potential in adjacent businesses Finance Cost base flexibility No currency risk Strong balance sheet Commitments Meeting IPO guidance High
Slide 50: Appendices
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Slide 51: Appendix 1: A streamlined group and organisation
Appendix 1: 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 Julien Burdeau* Chief Operating Officer Lélia Ghilini* General Counsel Julien Burdeau* Jac
Slide 52: Appendix 2: GTT membrane technologies
Appendix 2: 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 panel Primary insul
Slide 53: Appendix 3: track record of high margin and strong increase in backlog since 2010
Appendix 3: track record of high margin and strong increase in backlog since 2010 120 112 66 30 18 52 77 99 114 118 47 44 37 34 35 Evolution of new 26 GTT orders (1)(2) 19 7 4 1 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 LNGC/VLEC FSRU/FLNG Onshore storage Barge Backlog (# of orders) 65% 64%
Slide 54: Appendix 4: development of US LNG projects provides significant potential export capacity
Appendix 4: development of US LNG projects provides for significant potential export capacity Significant potential of US LNG development projects Department of Energy Federal Energy Regulatory Commission / MARAD Nominal To/From FTA To/From non-FTA capacity Projects Status *1 (Mtpa) / Year Filed App
Slide 55: Appendix 5: illustrative LNGC revenue recognition summary
Appendix 5: illustrative LNGC revenue recognition summary Illustrative revenue /cash recognition 2015 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: 31 56% TOTAL LNGC Studies collected on ORDERS the first ve
Slide 56: Appendix 6: an attractive business model supporting high cash generation
Appendix 6: 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 invo
Slide 57: Appendix 8: sustained level of revenue since 2013
Appendix 8: sustained level of revenue since 2013 reflecting increase in order intake Historical revenue development Order book evolution In € M In number of orders – at end of period 114 118 99 250 227 226 77 218 10 17 52 7 200 18 2010 2011 2012 2013 2014 2015 150 2015 Revenue Breakdown 210 217 209
Slide 58: Appendix 9: managing employee base to meet growing demand
Appendix 9: managing employee base to meet growing demand Evolution of GTT staff GTT staff by type of contract 377 378 Non-permanent 400 370 15% 300 286 242 200 Permanent 100 85% 0 Total: 378 employees(1) Dec 2011 31, 2011 Dec 2012 31, 2012 Dec2013 31, 2013 Dec2014 31, 2014 Dec2015 31, 2015 Staff le
Slide 59: Appendix 10: focus on GTT's competitive advantages
Appendix 10: 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 L
Slide 60: Thank you for your attention
Thank you for your attention information-financiere@gtt.fr 60