Transportadora De Gas Del Sur Sa Class B · BCBA:TGSU2
Transportadora De Gas Del Sur Sa Class B — TGS — Investor Day (February 2021)
64 slides from Transportadora De Gas Del Sur Sa Class B's investor day presentation, Feb 11, 2021
Slide 1: Leveraging core strengths to help shape the future of energy
Leveraging core strengths to help shape the future of energy Capital Markets Day 11 February 2021
Slide 2: Forward-looking Statements
Forward-looking Statements All statements in this presentation other than statements of historical fact, are forward-looking statements, which are subject to a number of risks, uncertainties, and assumptions that are difficult to predict and are based upon assumptions as to future events that may no
Slide 3: Agenda
Agenda Time CET Presentation 1400-1410 Introduction 1410-1430 Presentation of Q4 2020 and 2021 guidance 1430-1445 Market outlook 1445-1500 Strategic priorities 1500-1520 New Energy Solutions 1520-1535 Sustainability strategy 1535-1600 Summary and Q&A See the energy at TGS.com -3-
Slide 4: Presentation Team
Presentation Team Kristian Johansen Fredrik Amundsen Jan Schoolmeesters Tanya Herwanger CEO CFO EVP Operations EVP Staff & Support See the energy at TGS.com -4-
Slide 5: Introduction
Introduction Kristian Johansen, CEO
Slide 6: Market Volatility Since Capital Markets Day 2019
Market Volatility Since Capital Markets Day 2019 80 70 60 50 40 30 20 10 0 Oil price back to pre-COVID levels See the energy at TGS.com -6-
Slide 7: Delivering on the Strategic Agenda, Despite Market Disruption
Delivering on the Strategic Agenda, Despite Market Disruption Strategic priorities as presented in CMD Feb 2019 Progress and achievements as of Feb 2021 New technologies in mature basins ~11,000 km2 of modern OBN acquired in GoM and NCS O&G data Acquisition of Spectrum and ~60,000 km2 new 3D acquire
Slide 8: Q4 2020 Results and 2021 Guidance
Q4 2020 Results and 2021 Guidance Fredrik Amundsen, CFO
Slide 9: IFRS 15
IFRS 15 • The accounting standard IFRS 15 regarding revenue recognition implemented from 1 January 2018 • Implications for TGS • Recognition of revenues related to multi-client projects postponed until projects are delivered to customers • No amortization until completion of the project • No impact
Slide 10: Highlights
Highlights • Q4 2020 net revenues of USD 120.3 million • Late sales USD 103.2 million • Pre-funding USD 13.3 million • Costs and capex re-set to reflect challenging market conditions • Personnel and Other operational costs down 58% y/y • Forward run-rate reduced ~40-45% compared to 2019 pro-forma •
Slide 11: Net Revenues
Net Revenues Pro-forma including SPU See the energy at TGS.com - 11 -
Slide 12: Operating Expenses, EBIT, MC Investments
Operating Expenses, EBIT, MC Investments Pro-forma including SPU 1. Personnel costs and other operating expenses excluding reported non-recurring items 2. Earnings before interest and taxes excluding reported non-recurring items See the energy at TGS.com - 12 -
Slide 13: Income Statement
Income Statement Segment reporting See the energy at TGS.com - 13 -
Slide 14: Balance Sheet
Balance Sheet Segment reporting See the energy at TGS.com - 14 -
Slide 15: Cash Flow Statement
Cash Flow Statement Segment reporting See the energy at TGS.com - 15 -
Slide 16: 2020 Operational Highlights
2020 Operational Highlights Investment Distribution • Investment profile highly influenced by high backlog entering 2020 EUR • Activity quickly scaled back due to 8% COVID market impact – reducing investment guidance from USD 450 million to USD 300 million Onshore & WDP • Cash cost base reduced with
Slide 17: 2021 Market Outlook Impacted by Uncertainty
2021 Market Outlook Impacted by Uncertainty E&P’s have guided flat to negative spending Higher political risk (e.g. US pausing of federal O&G leasing) 80 60 Positive momentum in oil price 40 20 0 Production from onstream fields Vaccines are showing results See the energy at TGS.com - 17 -
Slide 18: Backlog
Backlog 1. Sales committed by customers but not yet recognized in the Segment Reporting accounts See the energy at TGS.com - 18 -
Slide 19: 2021 Operational Guidance
2021 Operational Guidance Investment Distribution • Investment plan for 2021 is flexible and diversified EUR • Backlog of USD 89 million in prefunding largely relate to the 2021 investment plan 15% • The current cash cost provides flexibility to increase activity as COVID restrictions Onshore & WDP
Slide 20: Business Model with Counter-Cyclical Qualities
Business Model with Counter-Cyclical Qualities • Lean and adjustable cost base 800 • Asset-light – few capital commitments • Allows for continued dividend 500 payments even during down-cycles Financial Guidance: 200 • Multi-client investments of between USD 200 - 230 million • Continued sector outpe
Slide 21: Dividends and Share Buyback
Dividends and Share Buyback • The Board has resolved to increase the dividend to USD 0.14 per share in Q1 2021 • Ex date 18 February 2021 – payment date 4 March 2021 • In addition, the Board has authorized a USD 20 million share buyback program to be completed by May 2022 subject to renewal of the a
Slide 22: Summary
Summary • Q4 2020 net revenues of USD 120.3 million • Late sales USD 103.2 million • Pre-funding USD 13.3 million • Costs and capex re-set to reflect challenging market conditions • Personnel and Other operational costs down 58% y/y • Forward run-rate reduced ~40-45% compared to 2019 pro-forma • Inc
Slide 23: Market Outlook
Market Outlook Kristian Johansen, CEO
Slide 24: A Volatile Ride
A Volatile Ride Brent oil price and EBITDA 100 90 80 70 60 USD/bbl 50 40 30 20 10 2016 2017 2018 2019 2020 363 409 517 646 354 0 EBITDA in million USD according to segment reporting Source: EIA, TGS Oil price back to pre-COVID levels See the energy at TGS.com - 24 -
Slide 25: Supply Shortage in the Making
Supply Shortage in the Making TGS Well Intel 13 790 rigs U.S. Oil Production 12 790 rigs [mmbpd] 380 rigs 11 1.5 12.8 10 11.1 380 rigs 9 10.0 8 Jan 2020 Jan 2021 Dec 2021 Sources: TGS Well Performance Data, Baker Hughes No increase in rig count Rig count increase +42 rigs per month • High decline ra
Slide 26: US Pausing of New Oil and Gas Leases
US Pausing of New Oil and Gas Leases • Oil and gas high importance for US economy and labor market • GoM production compares well on emission intensity compared to other basins Source: Wood Mackenzie Source: US Department of Energy See the energy at TGS.com - 26 -
Slide 27: US Pausing of New Oil and Gas Leases
US Pausing of New Oil and Gas Leases • GoM exploration trends “If conditions in the U.S. become so onerous that it • Shift from frontier to infrastructure-led really disincentivizes investment, we've got other exploration places where we can take those dollars.” • Licensing rounds less important Mik
Slide 28: Oil and Gas to Remain Important in the Long-term
Oil and Gas to Remain Important in the Long-term Share of Primary Energy consumption 60% • Oil and gas to remain an important part of the energy mix in the foreseeable future 50% 40% 30% • Declining consumption of oil to be partly offset by relative stability of gas demand 20% 10% 0% • Strong growth
Slide 29: How to Cover Gap Between Supply from Onstream Fields and Future Demand?
How to Cover Gap Between Supply from Onstream Fields and Future Demand? Oil and gas 200,000 Incremental supply needed to meet ETO scenario 150,000 Gap to be covered by: 1,000 boe/day • Fields currently under development 100,000 Incremental supply needed to meet AET-2 scenario • Discoveries in the pr
Slide 30: Exploration a Competitive Alternative
Exploration a Competitive Alternative Average point-forward cost of gas supply • Significant share of proven undeveloped resources is unlikely to be developed Pre-FID gas • Best resources already developed • Increasing cost Gas under development • Environmentally challenging Onstream gas incremental
Slide 31: Strong Growth in Renewable Energy
Strong Growth in Renewable Energy Primary consumption renewables 3 000 2 500 SDS CAGR 10.1% 2 000 Mtoe 1 500 1 000 STEPS CAGR 7.4% 500 - 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Source: IEA • Strong growth in renewable energy neede
Slide 32: CCS Important Enabler for the Energy Transition
CCS Important Enabler for the Energy Transition Investments CCS 30,000 25,000 CAGR 6.5% 20,000 USD bn (2019) 15,000 10,000 5,000 0 2000-09 2010-19 2020-30* *Projects at an advanced stage of planning for 2020-30 Source: IEA • Strong growth in Carbon Capture and Storage (CCS) is a pre-requisite for me
Slide 33: Summary: Key Energy Market Trends
Summary: Key Energy Market Trends • International Oil Companies (IOCs) concentrating exploration efforts on fewer basins • National Oil Companies (NOCs) becoming more important in international exploration • Continued focus on Infrastructure-Led Exploration (ILX) • Digitization driving efficiency im
Slide 34: Strategic Priorities
Strategic Priorities Kristian Johansen, CEO
Slide 35: Strategic Priorities
Strategic Priorities New technologies in mature basins O&G data Strengthening position in South Atlantic As presented Further growth onshore at 2019 CMD Expand value chain through Data & Analytics Technology Imaging quality and reputation Capitalize on data library to create exploration upside busin
Slide 36: Leveraging Library to Create Exploration Upside
Leveraging Library to Create Exploration Upside • International oil companies focusing exploration Current ORRI positions in the Gulf of Mexico efforts on fewer areas – leave gaps that may be filled by smaller oil companies • The largest subsurface data library in the world combined with leading geo
Slide 37: Building on Core Skillsets to Support Energy Transition
Building on Core Skillsets to Support Energy Transition • Establish business unit – New Energy Solutions – to capitalize on energy transition trends through data and insights • Leveraging existing data and core competencies to build broad offering to support decision making processes • Carbon Captur
Slide 38: Organizing to Deliver on Strategy
Organizing to Deliver on Strategy TGS ASA Oil and Gas Insights (OGI) New Energy Solutions (NES) New technologies in mature basins Data offering towards other energy related industries Strengthening position in South Atlantic Capitalize on data library to create exploration upside Data Imaging Imagin
Slide 39: Leveraging core strengths to help shape the future of energy
Leveraging core strengths to help shape the future of energy
Slide 40: New Energy Solutions
New Energy Solutions Jan Schoolmeesters, EVP Operations & NES
Slide 41: New Energy Solutions: From Data to Insights
New Energy Solutions From Data to Insights • Energy transition requires massive investments in industries that contribute to removing GHG emissions • Capital intensity combined with long pay-back requires high precision in investment decisions • Providing a path from data to insights creates signifi
Slide 42: Leveraging Core Strengths
Leveraging Core Strengths • Data library • World’s largest integrated subsurface data library • Geoscience skills • Leading geoscience environment • Strong understanding of the subsurface • Digitalization • Data processing competency • High-performance computing capacity • Data analytics and softwar
Slide 43: The New Energy Solutions Offering
The New Energy Solutions Offering Products and Services development Carbon Storage Geothermal Deep Sea Minerals Wind Solar Imaging Technology Integrated Data Well Intelligence Services Imaging Technology Project Site Screening Site Assessment Development Heat Assessment Integrated Seabed Remote Sens
Slide 44: From Data to Insights - Geothermal Application Example
From Data to Insights - Geothermal Application Example Assessing Geothermal Energy Potential with Analytics Ready Well Data Unique Temperature Data Novel Modelling Technology TGS Data Site Screening Unmatched Amount and Investment of Data Decision Support Economic Forecasting Public Infrastructure •
Slide 45: From Data to Insights – CCS Application Example
From Data to Insights – CCS Application Example Explore relationships between GHG emitters and potential CCS hubs in the area, leading to an improved understanding of storage opportunities and economics. Key Attributes: • Worldwide Coverage • Existing & planned CCS Hubs and main Emitters • Regional
Slide 46: From Data to Insights – Wind Application Example
From Data to Insights – Wind Application Example Explore relationships between wind resources and wind farm specifics, leading to an improved understanding of the energy output potential. Key Attributes: • Worldwide Coverage • 12,000 windfarms • 5,000 offshore wind turbines • 200 active offshore win
Slide 47: The NES Ecosystem – Our Delivery Platform
The NES Ecosystem – Our Delivery Platform Data input Data lake Apps Use cases TGS data TGS apps Site screening Public data Structured Partner apps Concept evaluation Contextualized Partner data Analytics ready Customer apps Investment decisions Customer data 3rd party apps Financing • An industry po
Slide 48: A Path to Growth
A Path to Growth Organic Growth • Solid base for expanding data and insights solutions • Recruitment of subject matter experts in renewables Partnerships • Building momentum with companies in all segments, including platform and application development Inorganic Growth • Identifying value add compan
Slide 49: Summary and Way Forward
Summary and Way Forward Existing subsurface product offering has significant potential to accelerate in growing new energy markets Core strengths in combining data, AI and compute power enables fast development and commercialization of products and services On track for organic growth, to be supplem
Slide 50: Sustainability Strategy
Sustainability Strategy Tanya Herwanger, EVP Staff & Support
Slide 51: Helping to Shape a Sustainable Future
Helping to Shape a Sustainable Future We believe it is our responsibility to help our customers, shareholders and communities in which we live and work to shape a sustainable energy future. See the energy at TGS.com - 51 -
Slide 52: What We have Accomplished
What We have Accomplished Set targeted goals Allocated resources Acted • Carbon Emissions • Executive ownership & • Improved reporting & • Gender Diversity oversight transparency • Employee Engagement • New ESG function • Adopted carbon neutral • Senior Leader assigned solutions in our data centers
Slide 53: What We Plan To Do
What We Plan To Do Focus Build Lead • Climate Change • Work toward carbon • Incorporate emissions neutrality by 2030 analysis into project • Diversity & Inclusion (scope 1 & 2) investment decisions • Health & Safety • Expand our commitment • Drive the advancement of ESG standards in the • Reporting
Slide 54: Recognition & Momentum
Recognition & Momentum 2020 ESG STATE STREET GLOBAL Report Card ADVISORS 58 R-FACTOR RATING C Top 10- 30% We remain above industry average BLOOMBERG GENDER A- THE CDP SCORE EQUALITY INDEX ISS CORP. SOLUTIONS We remain above 1 of 3 Norwegian industry average companies; 1 of 18 GOVERNANCE 1,4,3 Govern
Slide 55: Summary
Summary CEO, Kristian Johansen
Slide 56: Different Cycles – Different Priorities
Different Cycles – Different Priorities 1,000 CAGR +1% 900 800 700 600 500 400 300 200 100 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E Net revenues MC investments Growth and returns Counter- Growth and market share Costs and cash flow Capital Cos
Slide 57: What TGS May Look Like After 2030
What TGS May Look Like After 2030 2020 energy mix 2040 energy mix Other Other Oil Oil TGS addressable TGS addressable Coal market market Coal Gas Gas Renewables Renewables Source: IEA (SDS scenario) TGS today: TGS Long-term ambition • World’s leading subsurface data company • World’s leading energy
Slide 58: Questions & Answers
Questions & Answers
Slide 59: Thank you
Thank you TGS?
Slide 60: Appendix
Appendix
Slide 61: Income Statement
Income Statement IFRS See the energy at TGS.com - 61 -
Slide 62: Balance Sheet
Balance Sheet IFRS See the energy at TGS.com - 62 -
Slide 63: Reconciliation
Reconciliation IFRS See the energy at TGS.com - 63 -
Slide 64: Multi-Client Library
Multi-Client Library TGS/SPU Consolidated (Q1 2018 – Q4 2019) 1. Operational multi-client seismic investments See the energy at TGS.com - 64 -