Gaztransport & Technigaz Sa · EURONEXT:GTT
Gaztransport & Technigaz Sa — H1 2020 Earnings Presentation
53 slides from Gaztransport & Technigaz Sa's earnings presentation, Jul 30, 2020
Slide 1: Investor Presentation H1 2020 results
Investor Presentation H1 2020 results 30 July 2020
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: Agenda
Agenda 1. Company overview & key highlights 2. Core business: Market & activity update 3. New businesses: LNG as fuel developments 4. Service activity 5. Strategic roadmap 6. Financials 7. Outlook Appendices 4
Slide 5: Company overview & Key highlights
1 Company overview & Key highlights 5
Slide 6: GTT at a glance
GTT at a glance Profile A French technology and engineering Consolidated key figures company with more than 50-year track record in € million H1 2020 Expert in liquefied gas containment systems GTT is a public company listed on the Total Revenues 204 Euronext Stock Exchange (Paris), Royalties (newbu
Slide 7: H1 2020 key Highlights
H1 2020 key Highlights Core business : sustained and diversified new orders 18 orders (12 LNGCs, 2 FSU, 1 FSRU, 3 onshore storage) New services contracts February 2020: services and support contract with CMA CGM group March 2020: global services agreement between GTT NA and Excelerate Energy (USA) J
Slide 8: H1 2020: GTT shows its ability to cover the entire LNG value chain
H1 2020: GTT shows its ability to cover the entire LNG value chain From liquefaction To plant Regasification Courtesy of Excelerate Energy Ice class Very large Conventional Mid-scale Very large Onshore LNG carrier FSU LNG carrier LNG carrier FSRU tanks 5 orders 2 orders 5 orders 2 orders 1 order 3 o
Slide 9: H1 2020: strong level of orderbook
H1 2020: strong level of orderbook CORE BUSINESS Order book: 135 units H1 2020 movements in the order book 112 LNGC 1 FLNG New orders: 18 (12 LNGC, 1 FSRU, 2 FSU, 3 onshore 6 VLEC storage) 6 Onshore storage 5 FSRU Deliveries: 16 (13 LNGC, 2 FSRU, 1 FLNG) 3 GBS 2 FSU NEW BUSINESS (LNG FUEL) Order boo
Slide 10: COVID-19
COVID-19 Health of our employees and their families No severe case reported The Group continues to apply recommendations to employees at head office and abroad, in line with those of the French and local authorities Operational level Head office: employees back to offices at St Remy, except those at
Slide 11: Core business: Market & activity update
2 Core business: Market & activity update 11
Slide 12: LNG demand reforecast post Covid
LNG demand reforecast post Covid Evolution of LNG demand outlooks (Wood Mackenzie) 750 700 Q4 2019 Q2 2020 650 Q4 2018 Q4 2017 600 Q4 2016 550 Mtpa 500 450 400 350 300 2018 2020 2022 2024 2026 2028 2030 2032 2034 Source: Wood Mackenzie Short term: despite Coronavirus, LNG demand is still expected to
Slide 13: Despite Covid, China remains very dynamic
Despite Covid and slowdown in global LNG import growth, China remains very dynamic China monthly LNG demand Chinese LNG imports expected to grow 4% in 2020 despite Covid situation that strongly impacted China in Q1 2020. Strong rebound seen in Q2 Current price situation favors coal to gas switching,
Slide 14: Record low LNG spot prices led to US cargoes cancellation
Record low LNG spot prices led to US cargoes cancellation Coronavirus and lockdowns have LNG prices in Asia pushed LNG spot prices to record low 12 Below $2/Mmbtu in Asia and below Asian oil $1.5/Mmbtu in Europe 10 contracted LNG 8 US LNG delivered in $/Mmbtu Depressed prices and demand led to 6 Asi
Slide 15: US LNG flexibility is valuable in a volatile world
US LNG flexibility is valuable in a volatile world Limited impact for most players Limited impact for gas producers (deep US gas consuming market) Limited impact for liquefactors (Liquefaction fee paid anyway) However, some liquefaction players have some uncontracted volumes (approx 20% of capacity)
Slide 16: LNG Supply & Demand: new capacity needed
LNG Supply & Demand: new capacity needed LNG Supply & Demand balance forecast 700 600 240 Mtpa 500 400 Mtpa 300 200 100 0 2026 2033 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2027 2028 2029 2030 2031 2032 2034 203
Slide 17: c.75-80 more LNGCs required for liquefaction projects under construction
c.75-80 more LNGCs required for liquefaction projects under construction LNGCs supply demand balance of Under Construction liquefaction plants Expected delay Contracted Forecasted Project Location (in months, due to Covid19, Capacity LNGCs requirement according to WoodMackenzie) Start-Up (mtpa) Came
Slide 18: Focus on Onshore storage
Focus on Onshore storage GTT has received 2 orders for 3 Onshore tanks in China 2 x 220k cbm GST with Chinese licensee HQCEQ for a new regas terminal of Beijing Gas in Tianjin (North East China) Construction already began (foundations) 1 x 29k cbm GST with CPECCCNC for peak-shaving requirements for
Slide 19: Onshore storage: GST technology for a reduced carbon footprint
Onshore storage: GST technology for a reduced carbon footprint Carbon Footprint in tons CO2-eq 10 000 8 000 Carbon Footprint in tons CO2-eq 30 000 10 000 Carbon Footprint in tons CO2-eq Concrete 25 000 6 000 8 000 Metal C 20 000 4 000 6 000 Insulation Construct M 15 000 2 000 4 000 10 000 Transport
Slide 20: Core business long term estimates
Core business long term estimates GTT H1 2020 Sales GTT order estimates over 2020-2029 GBS LNG Fuel 1% Services LNGC: between 285 and 315 units(1) FLNG 2% 3% 1% FSRU VLEC: between 25 and 40 units 7% FSRU: between 10 and 20 units LNGC FLNG: Up to 5 units 86% Onshore and GBS tanks: between 15 and 20 u
Slide 21: New businesses: LNG as fuel developments
3.2 3 New businesses: LNG as fuel developments 21
Slide 22: LNG as fuel: the only mature solution allowing environmental compliance
LNG as fuel: LNG is the only mature solution allowing comprehensive environmental compliance Comparison of emissions by fuel type 1 0,75 HFO Base 1 0,5 HFO+ Scrubber LSHFO LNG 0,25 0 Source : DNV NOx emissions for LNG SOX NOX * CO2 Particulates are for XDF engines LNG is in advance of existing and a
Slide 23: LNG fuel keeps expanding in a very challenging shipbuilding market
LNG fuel keeps expanding in a very challenging shipbuilding market Annual shipping orders (≥20k dwt) and LNG as fuel market share 5000 12% 11% 10% 4000 LNG as fuel market share 8% # vessels ordered 3000 6% 2000 4% 1000 2% 580 (annualized, 290 as 30 June 20) 0 0% 2010 2011 2012 2013 2014 2015 2016 20
Slide 24: Competition landscape of LNG fuel market
Competition landscape of LNG fuel market LNG fuel tanks competitive landscape LNG as a marine fuel continues its LNG tanks total capacity - cbm penetration in shipping market 11% market share in 2020 20,000 Newbuild & Retrofit Type B • Ultra & Very Large Newbuild Container Vessels The c.30 LNG fuell
Slide 25: Service activity
3.3 4 Service activity 25
Slide 26: Services to make LNG easy
Services to make LNG easy 4 new services contracts in H1 2020: GTT services platform attracts more and more ship-owners CONSULTING to get LNG as ENGINEERING fuel projects on track TRAINING To enable projects and to raise support daily awareness operations about LNG LNG TESTS OPERATIONS to facilitate
Slide 27: Acquisition of OSE Engineering
Acquisition of OSE Engineering OSE Engineering is a French tech company specialised in “smart algorithms” applied to complex industrial and technical problems Created in 2014 Serious scientific expertise and credentials Dynamic relationship within top academic networks (talent pool) Profile studiOSE
Slide 28: Strategic roadmap
5 Strategic roadmap 28
Slide 29: GTT's strategic roadmap
GTT’s strategic roadmap Technology for a 6. Transformation Gas handling technologies sustainable world Smart shipping 2. Enhancement Offshore Multigas LNG as LNG Carriers GBS fuel Evolution of NO 96 & Mark Transfer 1. Intensification systems operations 5. Enlargement 3. Improvement Advisory services
Slide 30: Financials
6 Financials 30
Slide 31: H1 2020: Order book overview (core business)
H1 2020: Order book overview (core business) Order book in units Order book by year of delivery (units per year) In units In units (2) 16 (4) 34 Order book in value Revenues expected from current order book (1) In €M In €M (3) 194 (5) 180 (1) Royalties from core business, i.e. excluding LNG as Fuel
Slide 32: H1 2020 financial performance
H1 2020 financial performance Summary consolidated accounts Key highlights in € M H1 2019 H1 2020 Change Revenues: +66.2% Newbuilds (royalties): +71%. Royalties from LNGCs Total Revenues 122.6 203.8 66.2% fully benefit from the last two years strong flow of EBITDA (1) 70.9 136.6 92.7% orders Margin
Slide 33: H1 2020 Cost base
H1 2020 Cost base GTT consolidated operational costs Key highlights in € M H1 2019 H1 2020 Change (%) External costs: +28.3% Goods purchased -2.6 -2.8 7.5% Subcontractors +54.7%, due to the increase of % sales -2% -1% orderbook Travel expenditures: -20.1% due to the Covid Subcontracted Test and cris
Slide 34: Outlook
7 Outlook 34
Slide 35: 2020 Outlook confirmed
2020 Outlook confirmed GTT revenue(1) 2020 consolidated revenue estimated in a range of €375M to €405M EBITDA 2020 consolidated EBITDA estimated in a range of €235M to €255M Dividend 2020 and 2021 payout of at least 80% Payment(2) (1) In the absence of any significant delays or cancellations in orde
Slide 36: Thank you for your attention
Thank you for your attention Image courtesy of STX, Engie, Excelerate, Reliance, SCF Group, Shell, CMA CGM, Conrad 36 Masque PowerPoint - January 2020 CONFIDENTIAL
Slide 37: Appendix
GIT Appendix
Slide 38: A streamlined group and organisation
A streamlined group and organisation (June 30, 2020) GTT Group Philippe Berterottière* Chairman and Chief Executive Officer GTT SA organisation Eric Dehouck* Deputy CEO Lélia Ghilini* General Counsel/ Director of Legal Affairs Eric Dehouck* Julien Bec David Colson* Karim Chapot* Sandrine Vibert* Mar
Slide 39: GTT exposure to the liquefied gas shipping and storage value chain
GTT exposure to the liquefied gas shipping and storage value chain Exploration Regasification Off Take / Liquefaction Shipping & Production & Storage Consumption Offshore Liquefied Natural Gas Floating Storage and LNG fuelled clients: Carrier (LNGC) Regasification Unit ship (FSRU) shipyards Platform
Slide 40: 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 41: 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 41
Slide 42: 54 ageing vessels with charter contract ending by 2023
54 ageing vessels with charter contract ending by 2023 LNGCs carriers* with charter contract ending by 2023 90 LNGC chart contract to end by 2023 35 Of which 54 equipped with steam turbine propulsion; also smaller vessels (<140k 30 cbm) 25 20 MEGI/XDF Charterers and ship-owners to prepare the DFDE 1
Slide 43: LNG short term charter rates
LNG short term charter rates Spot charter rates Source: Poten 43
Slide 44: LNGCs – Our main business
LNGCs – Our main business Vessels equipped for transporting LNG Existing GTT fleet: 384 units1 In order: 113 units1 26 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 uniq
Slide 45: FSRUs – A flexible solution for opening quickly new access to energy
FSRUs – A flexible solution for opening quickly new access to energy 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 i
Slide 46: GBS is suitable for a very wide range of applications
GBS is suitable for a very wide range of applications @ SemCorp @ Acciona Concrete or steel, installed in jetty, breakwater dike or nearshore GBS range 5k 50k 200k+ Storage capacity (cbm) LNG SUPPLY CHAIN • Liquefaction or regasification plants • Peak Shaving • Satellite Station • Inland distributio
Slide 47: Focus on GTT's competitive advantages on LNGCs
Focus on GTT’s competitive advantages on LNGCs GTT’s technology positioning (1) GTT Moss SPB KC-1 ▶ Integrated tank ▶ Integrated tank ▶ Self supported spheric tank ▶ Self supported prismaticl tank Technology (membrane) (membrane) ▶ Atmospheric pressure ▶ Atmospheric pressure ▶ Atmospheric pressure ▶
Slide 48: 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 and retrofit Cruise Ship – optimizing the space for additional passengers Lean bunker barge to Cost effective solution for bulk carriers standardize the marke
Slide 49: LNG Fuel: wide network of partnerships
LNG Fuel: wide network of partnerships 25 shipyards under licensed agreements Network of membrane tank outfitters A close relationship with engine makers and FGHS1 providers (1) Fuel Gas Handling System 49
Slide 50: Focus on GTT's competitive advantages on LNG fuel
Focus on GTT’s competitive advantages on LNG fuel GTT’s technology positioning on LNG fuel GTT Membrane Prismatic Type B Type C ▶ Self supported Cylindrical tank Technology ▶ Integrated tank ▶ Self supported tank ▶ Pressurized principle ▶ Atmospheric pressure ▶ Atmospheric pressure ▶ Insulation: vac
Slide 51: 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. 9 to12 months c. 18 months Delivery Revenue is recognized pro-rata 10000 studies royalties temporis between construction milestones 8000 Sh
Slide 52: Appendix: track record of high margin and strong backlog
Appendix: track record of high margin and strong backlog 2008 2011 Economic crisis Fukushima US shale gas boom 120 112 66 30 18 52 77 99 114 118 96 89 97 133 66 51 44 47 37 Evolution of new 34 35 26 21 GTT orders (1)(2) 19 7 4 1 5 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Slide 53: Contact
Contact: information-financiere@gtt.fr / +33 1 30 23 20 87
GTT (Gaztransport & Technigaz) — H1 2020 Earnings Presentation on 6ix