Gaztransport & Technigaz Sa · EURONEXT:GTT
Gaztransport & Technigaz Sa — FY2016 Earnings Presentation
57 slides from Gaztransport & Technigaz Sa's earnings presentation, February 2017
Slide 1: Investor Presentation – 2016 Full Year Results
Investor Presentation 2016 Full Year Results February 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: Agenda
Agenda 1. Company overview 2. Key figures and highlights 3. Market fundamentals 4. Strategy and activity 5. Financials 6. Outlook 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 2015 FY 2016 Leading engineering company Expert in liquefied gas containment Total Revenues 226.5 235.6 Royalties 209.3 223.9 systems Services 17.2 11.7 More tha
Slide 7: GTT exposure to the liquefied gas shipping and storage value chain
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 and Gas-to-w
Slide 8: GTT ecosystem
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 its membr
Slide 9: Innovation is key
Innovation is key … to a diversified offering … and to remain one step ahead Recently developed technologies Unique cryogenic laboratory represent about 80% of the order book as at Dec 31st, 2016 R&D partnerships with shipyards, industrials, public and private labs… Our latest Mark V technology BOR
Slide 10: GTT membrane technologies
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 and secon
Slide 11: GTT SA organisation
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 Marc Haestier* Isabelle Delattr
Slide 12: A responsible company
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: improve p
Slide 13: Key figures and highlights
2 Key figures and highlights 13
Slide 14: Highlights
Highlights Revenues for the full year 2016: €235.6 million (+4%) 5 new orders: 1 LNGC order received in early October with the new Mark V system Diversified shipowners (2 SK Shipping, 2 Maran Gas, 1 Gaslog) 4 FSRU orders since the beginning of 2017 27 deliveries, including the first FLNG and the fir
Slide 15: Breakdown of order book as at December 31, 2016
Breakdown of order book as at December 31, 2016 Order book of 96 units 2016 movements in the order book 84 LNGC/VLEC(1) Deliveries: 27 (25 LNGC/VLEC, 1 FSRU, 1 FLNG) 2 FLNG 7 FSRU/RV(1) New orders: 5 LNGC 2 Onshore storage 1 LNG bunker barge Diversified technologies(2) Diversified shipowners(3) Bala
Slide 16: Market fundamentals
3 Market fundamentals 16
Slide 17: LNG market - 2016 review
3.1 LNG market - 2016 review 17
Slide 18: A healthy growth in 2016
A healthy growth in 2016 Supply(1) : +5.5% est. vs 2015 Demand : +6% est. vs 2015 2016 Highlights 2016 Highlights Additional volumes went online, Five countries joined the “LNG with 34 Mtpa(2) new liquefaction importers club” : Colombia, capacity commissioned in Australia, Jamaïca, Malta, Poland, Ab
Slide 19: Demand growth mainly came from China and India
Demand growth mainly came from China and India, already bridging Japan decrease LNG imports variations by country 2016 vs. 2015 (provisional, including re-exports) 270 260 250 MTPA 240 230 220 2015 China India Egypt Pakistan South Other Others Europe Japan South 2016 Korea Asia America Source: Wood
Slide 20: LNG Asia/HH spread recovering allowing US LNG competitiveness
LNG Asia/HH spread recovering allowing US LNG competitiveness LNG and gas spot prices evolution since 2015 10 9 8 7 6 $/MMBTu 5 4 3 2 1 - Spread LNG Asia / Henry Hub LNG North East Asia LNG North West Europe Henry Hub Sources: Argus, EIA 20
Slide 21: Decline in LNG prices and recent increase in coal prices accelerating coal to gas switch
Decline in LNG prices and recent increase in coal prices accelerating the coal to gas switch Gas vs. coal prices competitiveness $/MWh 120 100 +76 80 60 +34 +6 40 -6 20 Source: World Bank Coal Average Europe NG Japan LNG 21
Slide 22: LNG market - Outlook
LNG market - Outlook ‘eamworl 22
Slide 23: Overall long term outlook bright for gas and LNG
Overall long term outlook bright for gas and LNG Gas share in the energy mix LNG share is total gas trades Source: BP 2017 & 2016 23
Slide 24: A strong anticipated LNG demand calling for new FIDs from 2017
A strong anticipated LNG demand calling for new FIDs from 2017 Existing projects: insufficient to meet demand Additional LNG supply needed from 2022-2023 450 Mtpa Mtpa 450 2017-2027 CAGR for LNG Majority of US demand: +4.6% projects 400 400 Expected demand adjustment due to 90 Mtpa low prices 350 35
Slide 25: Many liquefaction projects ready to be sanctioned soon
Many liquefaction projects ready to be sanctioned soon in order to accompany demand growth Several major liquefaction projects in planning phase with a potential FID in 2017 Project Milestones Capacity Feedgas Concept/ Name Operator Country Environmental Regulatory Participation Marketing Financing
Slide 26: LNG shipping review and outlook
3.3 LNG shipping review and outlook 26
Slide 27: Spot charter rates continued recovery trend in 2016
Spot charter rates continued recovery trend in 2016 Charter rates evolution for 160,000 cbm LNGC since 2011 Like 2015, 2016 continued to be a low rates year, hitting historical lows in the last decade (27,5k$ avg. in May) Nevertheless, 2016 rates finished at rates not observed for 22 months (44,6k$
Slide 28: 50-60 LNGC needed by 2020 to match additional supply in construction
50-60 LNGC needed by 2020 to match additional supply in construction Important amount of contracted LNG capacity to be commissioned in the short term (>100 MTPA by 2020) All vessels to ship this LNG haven’t been booked or ordered yet Up to ~50-60 are still expected according to various analysis (Woo
Slide 29: North America supply and Asia demand growth to lift global ton.miles
North America supply and Asia demand growth to lift global ton.miles LNG trades and major additional supply/demand by 2035 (vs.2017) North America Europe +170-235 +36 MTPA MTPA Asia Atlantic FSRU +15 Pacific FSRU MTPA +13 >2ships/ Africa +170 MTPA MTPA MTPA +45-60 C. & S. MTPA America +13 MTPA Austr
Slide 30: FSRU utilization increase trend calling for new orders
FSRU utilization increase trend calling for new orders FSRU orders and utilization contracts since 2011 6 5 4 3 2 1 0 2011 2012 2013 2014 2015 2016 orders contracts Main sources: Pareto Securities Equity Research, Wood Mackenzie FSRUs are a popular mean of matching uncontracted volumes with new mark
Slide 31: Strategy and activity
4 Strategy and activity 31
Slide 32: Growth, Technology, Transformation
Continuation of the organic growth strategy New potential businesses Services Enlargement LNG as a fuel REACH4 Small / Very small HEARS onshore tanks Growth, Technology, Transformation New applications SloShield Advisory and Training optimisation center Enhancement services LNG New Advisor customers
Slide 33: Strategy and activity
Strategy and activity Consolidate our 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 33
Slide 34: Strategy and activity: LNG Carriers
Strategy and activity: LNG Carriers LNGC: our core business Our strengths Vessel equipped for transporting LNG Technological leadership, strengthened Existing GTT fleet: 312 units(1) by innovation In order: 82 units Long term industrial partnerships with major shipyards 21 construction shipyards und
Slide 35: Strategy and activity: other applications
Strategy and activity: other applications FSRU FLNG Stationary vessel capable of loading LNG, Floating unit which ensure treatment of gas, storing and re-gasifying it liquefy and store it Existing GTT fleet: 20 FSRU Existing GTT fleet: 1 In order: 7 units In order: 2 units GTT order estimates over 2
Slide 36: LNG-as-a-fuel: an energy transition for the shipping industry
LNG-as-a-fuel : an energy transition for the shipping industry Compelling environmental performance World fleet of merchant ships Around 27,000 large and highly consuming vessels* ~ 11 000 ~ 10 000 ~ 4 500 ~ 1 500 Bulkers Tankers Containerships Ro-Ro/Ro-Pax & Ferries *dwt ≥10.000 for merchant vessel
Slide 37: LNG-as-a-fuel: a full range of initiatives towards an energy transition
LNG-as-a-fuel: a full range of initiatives towards an energy transition 2016 highlights The regulatory framework is developing IMO confirmed the 2020 sulphur cap New local initiatives limiting emissions, new incentives programs GTT brings its LNG expertise to authorities Technology is available Mark
Slide 38: 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 HEARS inspection GTT ON SITE MOON LNG Advisor Hotline MOtorized Emergency Technical Boil-off Gas BalloON Assistance &
Slide 39: Strategy and activity: external growth policy
Strategy and activity : 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 39
Slide 40: Financials
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Slide 41: FY 2016 Financial performance
FY 2016 Financial performance Summary financials Key highlights In € M 2015 2016 Change Increase in revenues (+4%) Total Revenues 226,5 235,6 4% Revenues derived from royalties (+7%) EBITDA(1) 142,2 144,2 1% Increase of 11% in royalties coming from LNG and ethane carriers, and 9% from FSRU Margin (%
Slide 42: Order book overview
Order book overview Order book in units Order book by year of delivery (units per year) In units In units 118 38 39 (1) 40 120 32 96 28 90 21 20 60 10 3 4 30 0 As at Dec 31, 2015 As at December 31, 2017 2018 2019 2020 2016 As at Dec 31, 2015 As at Dec 31, 2016 Order book in value Revenues from curre
Slide 43: Cost base
Cost base GTT operational costs Key highlights Change External costs As at 31/12, in € M 2015 2016 (%) Up 7% mainly due to an increase in fees (legal and Cost of sales (2.3) (2.0) -12% R&D) and other external costs (patents) Stable in % of sales % sales (1%) (1%) Staff costs down 2.5% due to a decre
Slide 44: Dividend
Dividend 2015 2016 Net income available for distribution €118.9 M €117.5M (French GAAP) Total dividend Dividend per share €2.66 €2.66 Total amount paid €98.6 M €98.6 M Dividend Payout €3.00 amount ratio(1) €2.00 €1.00 €0.00 (1) Dividend payout ratio calculated on profit distributed (and possible dis
Slide 45: Outlook
Outlook < = [_irmovation Teamwork transparency
Slide 46: 2017 Outlook
2017 Outlook 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) Subject to any significant delays or cancellations in orders. Var
Slide 47: Thank you for your attention
Thank you for your attention Re-gasification Exploration & Liquefaction Storage Shipping Storage Consumption Production Bunkering ONSHORE Large Scale Platform / Liquefaction terminal Onshore tanks Onshore tanks Re-gasification Gas-to-wire Installation terminal OFFSHORE FLNG LNG Carrier FSRU ~1MTPA O
Slide 48: Appendices
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Slide 49: 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 $9.1
Slide 50: 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 51: Key emerging LNGC trade routes
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 2016 and 2
Slide 52: Track record of high margin and strong increase in backlog since 2010
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 FSRU/FLNG
Slide 53: Illustrative LNGC revenue recognition summary
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 vessel Of which
Slide 54: 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 55: Capital structure
Capital structure As of December 31, 2016 Stabilised capital structure 55
Slide 56: 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 investigation had been opened. Concerns a possible abuse by the Company of dominant position because of its commercial practices in Korea. No significant development to report
Slide 57: Thank you for your attention
Thank you for your attention information-financiere@gtt.fr 57
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