Gaztransport & Technigaz Sa · EURONEXT:GTT
Gaztransport & Technigaz Sa — Investor Presentation (June 2018)
58 slides from Gaztransport & Technigaz Sa's investor presentation, June 2018
Slide 1: Investor Presentation June 2018
Investor Presentation June 2018
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. Market update 3. Business activity 4. Financials 5. Outlook Appendices 4
Slide 5: Company overview
GIT Company overview
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 Consolidated key figures Profile Leading engineering company in € million 2016 2017 Expert in liquefied gas containment Total Revenues 237 232 systems Royalties (newbuild) 227 218 Services 10 14 More than 50-year t
Slide 7: 2017 Key Highlights
2017 Key Highlights Core business: orders upturn in 2017: 21 new orders vs 5 in 2016 / already 4 since beg. 2018 CORE BUSINESS Order book: 89 units 2017 movements in the order book 71 LNGC/VLEC(1) 2 FLNG New orders: 21 (12 LNGC, 8 FSRU, 1 FLNG) 13 FSRU/RV(1) 2 Onshore storage Deliveries: 28 (24 LNGC
Slide 8: Q1 2018 Key Highlights
Q1 2018 Key Highlights Q1 2018 Revenues: €64.2 million (+12.4%) Order book: strong level of orders CORE BUSINESS Order book: 83 units Q1 2018 movements in the order book 65 LNGC 2 FLNG New orders: 11 (10 LNGC, 1 FSRU) 13 FSRU 2 Onshore storage Deliveries: 17 LNGC 1 Barge NEW BUSINESS (LNG FUEL) Orde
Slide 9: Market update
GTT Market update
Slide 10: Overall long term outlook bright for gas and LNG
Overall long term outlook bright for gas and LNG Gas share in the energy mix LNG share in total gas trade 40% 30% Oil Gas Coal 20% 10% Bioenergy Nuclear Renewables Hydro 0% 2000 2005 2010 2015 2020 2025 2030 2035 Gas is the only fossil energy to Gas is increasingly exported thanks to increase share
Slide 11: LNG Supply & Demand could balance from early 2021
LNG Supply & Demand could balance from early 2021 LNG Supply & Demand balance forecast 450 400 350 300 250 mtpa 200 Demand adjustment due to low prices and FSRUs availability Intermediate No demand adjustment scenario S&D balance in 2022 150 S&D balance in early 2021 100 50 0 2018 2019 2020 2021 202
Slide 12: Asian LNG imports growing in 2018 vs. 2017
Asian LNG imports growing in 2018 vs. 2017 (Jan. / Apr.) Top LNG importers demand comparison 2018 vs. 2017 2017 trends confirmed 75 75% Demand of top 4 LNG importers increased by +14% so far in 2018 65 65% 59% vs 11% in 2017 55 55% 45 45% Main drivers mtpa 35 35% Coal to Gas switch, especially in 25
Slide 13: New importing countries contribute to demand growth
New importing countries contribute to demand growth Incremental LNG demand from new markets 25 +20,7 Mtpa Colombia 20 Malta Israel Malta + 17,9 Mtpa Jamaica Lithuania Colombia, Poland Israel Malta, Lithuania Malaysia Jamaica Poland 15 Malaysia Singapore Singapore Mtpa Jordan Jordan 10 + 9,5 Mtpa Isr
Slide 14: 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 9,0 Asian oil indexed LNG competitive US LNG competitive 8,5 LNG price - $/Mbtu HH : $4/Mmbtu 8,0 Spread HH : $3,5/Mmbtu 7,5 US LNG HH : $3/Mmbtu 7,0 2017 avg. 2016 av
Slide 15: LNG Shipping: spot market
LNG Shipping: spot market Spot chart rates evolution since 2014 Recovering trend since 2016 Down in Q1 2018 due to: Seasonal effect Production stopped for 2 months at PNG LNG (Papua New Guinea); numerous available vessels in the Pacific area 15
Slide 16: LNG Shipping: c.40 LNGC orders expected from under construction projects
LNG Shipping : c.40 LNGC orders expected from under construction projects LNGC requirements for under construction liquefaction projects Contracted Forecasted LNGCs Project Location Start-Up Capacity requirement 12 LNGCs ordered in 2017 confirming (mtpa) Cameroon GoFLNG Cameroon Q2-18 1,2 market nee
Slide 17: Liquefaction projects: important activity in Q1 and Q2
Liquefaction projects : Important activity in Q1 and Q2, especially FID for Corpus Christi T3 FID at Cheniere’s US Corpus Christi T3 (4.5 Mtpa) Production likely to start 2022/2023 Several projects have signed long term SPAs: Calcasieu Pass (US) : 4 Mtpa signed in 2018 with Galp, BP and Shell 6 Mpta
Slide 18: Business activity
3 Business activity 18
Slide 19: Core business
3.1 Core business 19
Slide 20: Core business
Core business GTT 2017 Sales GTT order estimates over 2018-2027 LNGC: 225-240 units Services 12 orders in 2017, 10 orders in Q1 2018 FLNG 6% 1% FSRU 10% FSRU: between 30 and 40 units 8 orders in 2017, 1 order in Q1 2018 FLNG: between 5 and 10 units 1 order in 2017 LNGC/VLEC 83% Onshore tanks: betwee
Slide 21: LNGCs – Our main business
LNGCs – Our main business Vessels equipped for transporting LNG Existing GTT fleet: 334 units1 In order: 71 units1 24 construction shipyards under license1 Our strengths Technological leadership, boil-off divided by 2 in the last 5 years Long term industrial partnerships with major shipyards A uniqu
Slide 22: FSRUs – The game changer for new importing countries
FSRUs – The game changer for new importing countries Major competitive advantage vs. land-based terminals: Quick to build/deploy & mobile Better local acceptability & easier permitting Affordable / no upfront CapEx Adapted to more volatile LNG prices Quality controlled construction in shipyards with
Slide 23: FLNGs – the new frontier of the LNG world
FLNGs – the new frontier of the LNG world Floating units which ensure treatment of gas, liquefy and store it Existing GTT fleet: 2 units1 In order: 2 units1 Courtesy of Shell Main drivers GTT key advantages Monetisation of stranded Extended amortization offshore gas reserves perspectives Better acce
Slide 24: New businesses: LNG Fuel
3.2 New businesses: LNG Fuel 24
Slide 25: LNG Fuel focus – CMA CGM order
LNG Fuel focus – CMA CGM order 9 Ultra Large Container Ships with LNG integrated membrane tanks of 18,600 cbm each Space optimization Designed for one bunkering operation per round trip Mark III Flex technology for the fuel storage system Sea proven technology Guaranteed Boil Off Gas Flexibility to
Slide 26: 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 +HFO Gasoil/Diesel Oil) 3,5% SOx 0,5% (Sulfur Oxides) 0,1% Tier II NOx2 (Nitrogen Oxides) Except for Ti
Slide 27: 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 28: 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 • 3,000+ avg. annual orders (2005-2016) (ULCS) • Fleet of 90’000+ vessels in 2017 Bulkers 15 000 (VLOC) Oil Tankers LNG fuel tanks capacity - cbm (VLCC) 10 000 PCTC Cruise ships 5 000 LPG
Slide 29: LNG Fuel market potential for GTT
LNG Fuel market potential for GTT Historical avg. Relevant Market Segments Shipping Markets annual orders Fleet at end 2017 for GTT (2007-2016) Tier 1 Container Ships Bulkers Large to Ultra Large ~320 ~4,700 Oil Tankers Cruise Ships > 2,000 passengers ~13 ~400 Car & Truck Carriers > 6,000 CEU ~23 ~4
Slide 30: GTT's LNG Fuel solutions offering
GTT’s LNG Fuel 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 marke
Slide 31: LNG Fuel recent developments
LNG Fuel recent developments LNG Brick® Intended for medium-sized merchant vessels with capacities range between 1,000 and 3,000 m3 Completion of the test phase at the end of March 31
Slide 32: Service activity
3.3 Service activity 32
Slide 33: 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 FEED certification and customised maintenance support for retrofi
Slide 34: 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 Transaction closed on 31 January 2018 No significant impact on GTT’s financial structure Commercial and
Slide 35: Ascenz is a dynamic EMS provider
Ascenz is a dynamic EMS1 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, b
Slide 36: 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 36
Slide 37: Financials
4 Financials 37
Slide 38: Order book overview (core business) – IAS 18
Order book overview (core business) – IAS 18 Order book in units Order book by year of delivery (units per year) In units In units (1) 41 40 120 32 30 96 89 90 21 20 13 60 4 5 0 0 30 2018 2019 2020 2021 As at Dec 31, 2016 As at Dec 31, 2017 As at Dec 31, 2016 As at Dec 31, 2017 Order book in value R
Slide 39: Order book overview (core business) – IFRS 15
Order book overview (core business) – IFRS 15 Order book in units Order book by year of delivery (units per year) In units In units (1) 41 40 120 32 30 96 89 90 21 20 13 60 4 5 0 0 30 2018 2019 2020 2021 As at Dec 31, 2016 As at Dec 31, 2017 As at Dec 31, 2016 As at Dec 31, 2017 Order book in value
Slide 40: Consolidated accounts
Consolidated accounts Consolidated accounts prepared for the first time in 2017 2016 comparatives restated to show consolidated figures Consolidation perimeter excluding ASCENZ (closing signed on 31 January 2018) % of interest Consolidation method Name Activity Country 31-Dec-17 31-Dec-16 31-Dec-17
Slide 41: 2017 financial performance
2017 financial performance Summary consolidated accounts Key highlights In € M Proforma 2017 Change Limited decrease in revenues (-2.3% in FY 2017 vs 2016 -4.7% in H1) Total Revenues 237.0 231.6 -2,3% Revenues derived from royalties: -3.9%, still EBITDA(1) 146.4 142.1 -2.9% reflecting the difficult
Slide 42: 2017 Cost base
2017 Cost base GTT consolidated operational costs Key highlights Change in € M 2016 2017 (%) External costs: -€7.5 M (-17%) Cost of sales (2.0) (1.8) -10% Subcontractors: -€5.4 M % sales -1% -1% Travel costs -€0.8 M Other external costs -€1.5 M Subcontracted Test (18.0) (12.6) -30% and Studies Renta
Slide 43: Dividend
Dividend 2016 2017 Net income available for distribution €117.5 M €114.1 M (French GAAP) Total dividend Dividend per share €2.66 €2.66 Total amount paid €99.7 M €98.6 M 90% €3.00 3,0 Dividend 86% Payout (1) amount 84% ratio 60% €2.00 2,0 1.33 1.33 €1.00 1,0 30% 1.33 1.33 €0.00 0,0 0% 2016 2017 Inter
Slide 44: First quarter 2018 consolidated revenues
First quarter 2018 consolidated revenues Summary financials Key highlights in € M Q1 2017 Q1 2018 Change Total revenues: €64.2 million (+12.4%) (%) Revenues 57.1 64.2 +12.4% Revenues from royalties: €61.5 million Royalties 53.6 61.5 +14.9% (+14.9%) mainly driven by LNGCs (+19.5%) % of revenues 94% 9
Slide 45: Outlook
5 Outlook 45
Slide 46: 2018 Outlook
2018 Outlook GTT revenue(1) 2018 consolidated revenue estimated in a range of €235 M to €250 M EBITDA 2018 consolidated EBITDA estimated in a range of €145 M to €155 M Dividend 2018 dividend amount at least equivalent to 2015 - 2017 Payment(2) 2019 payout of at least 80% (1) In the absence of any si
Slide 47: Thank you for your attention
A wide range of applications integrating GTT technologies Thank you for your attention Image courtesy of STX, Engie, Excelerate, SCF Group, Shell, CMA CGM, Matthieu Pesquet, Conrad 47
Slide 48: Appendix
GIT Appendix
Slide 49: A proactive sustainable development policy
A proactive sustainable development policy Environmental responsibility Social responsibility Stakeholders CSR responsibilities form an Core business integral part of GTT project Performance of GTT systems Employment Safety of installations and crew Compensation New business Training Development of
Slide 50: GTT SA 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 51: 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 / Gas-to-wire Installation Floating LNG Product
Slide 52: 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 53: 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 mtpa PETRONAS FLNG 2 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 54: GTT membrane technologies
GTT membrane technologies Primary General principle: membrane Two membranes Primary insulation Two layers of insulations Secondary membrane Containment system Secondary insulation anchored to the inner hull Hull Mark III system NO96 system 54
Slide 55: 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 56: 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 10000 studies royalties temporis between construction milestones 8000 Ship l
Slide 57: 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 89 47 44 37 35 34 26 Evolution of new 21 19 GTT orders (1)(2) 4 7 5 1 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 58: Contact: information-financiere@gtt.fr
Contact: information-financiere@gtt.fr / +33 1 30 23 20 87
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