Gaztransport & Technigaz Sa · EURONEXT:GTT
Gaztransport & Technigaz Sa — H1 2016 Earnings Presentation
49 slides from Gaztransport & Technigaz Sa's earnings presentation, 2016
Slide 1: First Half 2016
GT . ee’ Expert in LNG First Half 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. Key highlights 2. Strategy and activity update 4. Financials 5. Outlook Appendices 4
Slide 5: Key highlights
Key highlights ‘eamworl
Slide 6: Key highlights of the first half 2016
Key highlights of the first half 2016 H1 2016 movements in the order book Deliveries: 13 (11 LNGC, 1 FSRU, 1 FLNG) New orders: 2 LNGC Strong order book of 107 units 96 LNGC/VLEC 2 FLNG 6 FSRU/RV 2 Onshore storage 1 LNG bunker barge Sustained subsidiaries activity New partnerships dedicated to LNG as
Slide 7: Strategy and activity update
2 Strategy and activity update 7
Slide 8: 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 9: Consolidate our position in LNG shipping industry
Strategy and activity update 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 9
Slide 10: LNG market current situation
Strategy and activity update: LNG market current situation Over-demand anticipated from 2022 due to strong long-term LNG demand / supply demand drivers Current low LNG price should offer new market LNG price opportunities (coal to gas switching) Some vessels not chartered: LNG charts ~20 vessels too
Slide 11: Focus on LNG market drivers
Strategy and activity update: focus on LNG market drivers LNG supply vs demand Additional LNG capacity needed to meet mid-term demand(2) Abundant supply expected in the years 600 Mtpa 550 to come 500 Australia to become the main LNG supplier 450 by 2019 400 Additional capacity to come from the Unite
Slide 12: Major liquefaction projects to come, mainly in the US
Strategy and activity update: 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 Lake Charles Nominal start-up production capacity PNW LNG LNG Canada Mozambique (A1) Mozambique (A4) Freeport Delfin F
Slide 13: Focus on pricing environment
Strategy and activity update: focus on pricing environment Breakdown of US LNG cost to Asia ($/Mbtu) US, UK natural gas and LNG Asia prices 9 $60/bbl(2) $/MBtu 8 8.9 16 $50/bbl(2) 7 14 7.5 Current breakeven: $5.76/Mbtu / eq. $38/bbl $40/bbl(2) 12 6 5 1.21 10 4 8 2.25 3 6.1 6 2 4 1 2.30 2 0 0 Henry H
Slide 14: New opportunities for LNG
Strategy and activity update: new opportunities for LNG Drivers and assumptions Increasing attractiveness of Gas vs Coal in Power Lower LNG prices create new $/MWh 120 opportunities Why? 100 76 Reduced price gap Will to decarbonise the energy mix Gov. target in China: 10% of natural 80 gas in energy
Slide 15: LNG Carriers
Strategy and activity update: LNG Carriers LNGC: our core business Incremental shipping demand # vessels Vessel equipped for transporting LNG 60 55 53 51 Existing fleet: 400 units(1) 41 40 35 34 33 In order: 90 units 27 21 construction shipyards under license 20 16 3 GTT order estimates over 2016-20
Slide 16: Other applications
Strategy and activity update: 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 fleet: 23 FSRU Existing fleet: 1 In order: 6 units In order: 2 units GTT order estimates over 20
Slide 17: Capitalise on the expected potential in adjacent sectors
Strategy and activity update 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 17
Slide 18: Why LNG as fuel now?
Strategy and activity update: why LNG as fuel now? Favorable Regulatory framework Restriction of emission in key areas and local initiatives Localisation géographique des zones soufre (ECA) LNG is green No particule, no SOx, almost no NOx, less CO2 Source : DNV Sustainable Economic concerns Low pric
Slide 19: LNG as a fuel solutions market drivers
Strategy and activity update: LNG as a fuel solutions market drivers Stricter emissions standards Incentives to use LNG as a fuel Stricter emissions standards in Local funding programs for the ECAs for SOx and NOx since 2015 creation of LNG fueled vessels ~5,700 commercial ships concerned by current
Slide 20: GTT LNG solutions offering
Strategy and activity update: GTT LNG solutions offering Container ship offer LNG supply chain Both retrofit or new built LNG is available everywhere Easy to install Simple bunkering solutions exist Reduced planning 5,000 cbm % sales H1 2016 LNG barge impact designed by GTT 0.2 % (few weeks) Cruise
Slide 21: Expand innovative service offering
Strategy and activity update 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 21
Slide 22: Expand innovative services
Strategy and activity Update: expand innovative services 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 for LNGC MOON system crew membe
Slide 23: Create growth opportunities through selected tech acquisitions
Strategy and activity update 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 23
Slide 24: External growth policy
Strategy and activity update: external growth policy 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 25: Financials
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Slide 26: H1 2016 financial performance
H1 2016 financial performance Summary financials Key highlights In € M H1 2015 H1 2016 Change Increase in revenues (+11.4%) Revenues derived from royalties (+15.2%) Total Revenues 104.9 116.9 +11.4% Increase of 19.5% in royalties coming from EBITDA(1) 66.0 73.7 +11.8% LNG and ethane carriers, and 25
Slide 27: Strong order book and visibility on future revenues
Strong order book and visibility on future revenues Order book in units Order book by year of delivery (units per year) In units In units 39 38 118 40 34 (1) 36 120 107 30 28 90 20 16 10 60 3 4 0 2016 2017 2018 2019 2020 30 As at Dec 31, 2015 As at June 30, 2016 As at Dec 31, 2015 As at June 30, 201
Slide 28: A cost base offering a high operating leverage
A cost base offering a high operating leverage GTT operational costs(1) Cost flexibility Change Operational costs decreased from 42% of In € M H1 2015 H1 2016 (%) sales to 39% of sales on the period Salaries and Social (17.1) (17.5) +2.3% Stability in staff expenses Charges Share-based payments (0.8
Slide 29: Outlook
Outlook < = [_irmovation Teamwork transparency
Slide 30: 2016 Outlook
2016(1) Outlook Taking into account the postponement of some construction milestones GTT revenue(2) and the current level of orders, 2016 revenue now estimated at around €240 M Net margin(3) Unchanged: net margin above 50% Dividend Unchanged: 2016 and 2017 dividend amount at least equivalent to 2015
Slide 31: Appendices
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Slide 32: GTT, a French engineering company, global leader in liquefied gas containment systems
Appendix 1: 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 1
Slide 33: Breakdown of order book as at June 30, 2016
Appendix 2: breakdown of order book as at June 30, 2016 Strong order book of 107 units H1 2016 movements in the order book 96 LNGC/VLEC Deliveries: 13 (11 LNGC, 1 FSRU, 1 FLNG) 2 FLNG 6 FSRU/RV New orders: 2 LNGC 2 Onshore storage 1 LNG bunker barge Balanced geographical breakdown(1) Diversified shi
Slide 34: A streamlined group and organisation
Appendix 3: 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 Cécile Arson* Isabe
Slide 35: Capital structure
Appendix 4: Capital structure As at March 31, 2016 Stabilised capital structure 35
Slide 36: GTT offers broad exposure across the liquefied gas value chain
Appendix 5: 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 LN
Slide 37: Prescription of GTT's containment technology
Appendix 6: 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 tech
Slide 38: GTT membrane technologies
Appendix 7: 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 39: Innovation is key
Appendix 8: 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 2 classification 8% 6
Slide 40: Track record of high margin and strong increase in backlog since 2010
Appendix 9: 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 47 44 37 34 35 26 Evolution of new 19 GTT orders (1)(2) 7 4 1 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 LNGC/VLEC FSRU/FLN
Slide 41: Development of US LNG projects
Appendix 10: 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 Ap
Slide 42: Illustrative LNGC revenue recognition summary
Appendix 11: 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 v
Slide 43: An attractive business model supporting high cash generation
Appendix 12: 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 inv
Slide 44: Sustained level of revenue since 2013
Appendix 13: 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 20
Slide 45: Managing employee base to meet growing demand
Appendix 14: 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 l
Slide 46: A responsible company
Appendix 15: 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 Safet
Slide 47: Key emerging LNGC trade routes
Appendix 16: key emerging LNGC trade routes 1.8 29 Russia 10 27 United Kingdom 11 70 Qatar 31 41 82 73 United States of America China 51 03 Korea 1.2 23 India Japan 78 78 18 21 29 0.6 2.2 17 Nigeria 25 31 Malaysia 0.9 17 14 Indonesia Australia 75 42 Largest producers Other producers LNG supply (Mtpa
Slide 48: Focus on GTT's competitive advantages
Appendix 17: 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 49: Information about the KFTC enquiry
Appendix 18: information about the KFTC enquiry On January 29, 2016, GTT was notified by the Korean Fair Trade Commission (KFTC) that an enquiry had been opened. Concerns a possible abuse by the Company of dominant position because of its commercial practices in Korea. We have received a first reque
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