Gaztransport & Technigaz Sa · EURONEXT:GTT
Gaztransport & Technigaz Sa — Q3 2015 Earnings Presentation
52 slides from Gaztransport & Technigaz Sa's earnings presentation, November 2015
Slide 1: Investor presentation November 2015
Investor presentation November 2015
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. Key highlights 3. Sector Forecasts 4. Business Update 5. Financials 6. Strategy & Outlook Appendices 4
Slide 5: Company overview
1 Company overview 5
Slide 6: GTT, the global leader in LNG containment technologies
GTT, the global leader in LNG containment technologies Company overview Leading position Expert in LNG with a more than 50-year track record Current Global LNG Fleet (1) Others GTT is based in France with R&D facilities close to 4% Paris, and on-site employee presence at shipyards Moss 25% 4 subsidi
Slide 7: GTT designs containment systems with cryogenic membranes
GTT designs containment systems with cryogenic membranes LNGC GTT provides proprietary technologies VLEC FLNG GTT provides services available for a broad range of products Tank for LNG- FSRU fuelled ship GTT provides detailed engineering (design studies, construction assistance) for Barge Onshore ta
Slide 8: GTT, leading engineering at the core of the LNG sector
GTT, leading engineering at the core of the LNG sector GTT offers broad exposure across the LNG shipping and storage value chain Exploration Re- Off Take / Liquefaction Shipping & Production Gasification Consumption Offshore clients: shipyards Platform / LNG fuelled Installation FLNG LNGC FSRU Gas-t
Slide 9: Deep relationships with all stakeholders of the LNG sector
Deep relationships with all stakeholders of the LNG sector Prescription of containment technology Oil & Gas Companies Ship-owners O&G companies are end Ship-owners order users and prescribers of vessels from shipyards LNG vessels GTT provides GTT provides services modification, feasibility including
Slide 10: Key highlights
GIL, Key highlights 10
Slide 11: Key highlights
Key highlights 35 orders received as of November 1, 2015 31 LNGC orders, 3 FSRU orders,1 LNG bunker barge order As of June 30, 2015, order book in value +€207 M in 6 months, up to c. €800 M(1) The LNG bunker barge is the first one dedicated to the North-American marine market Signature of cooperatio
Slide 12: 35 orders received since the beginning of 2015
35 orders received since the beginning of 2015 Technology Ship owner Number Shipyard/EPC Type Delivery Year NO 96 GW Teekay LNG 4 Daewoo LNGC 2017-2018 NO 96 GW Maran Gas Maritime 4 Daewoo LNGC 2018-2019 NO 96 GW Yamal Trade 5 Daewoo Ice-breaker LNGC 2017-2019 NO 96 GW Chandris (Hellas) INC. 1 Daewo
Slide 13: A well-balanced portfolio and strong order book as at September 30, 2015
A well-balanced portfolio and strong order book as at September 30, 2015 Strong order book of 122 units Long term visibility, deliveries up to 2020 40 37 33 35 108 LNGC/VLEC 3 FLNG 35 30 28 8 FSRU/RV 2 onshore storage 25 1 LNG bunker barge Deliveries 20 9M 2015 movements in the order book 15 9 Deliv
Slide 14: Sector Forecasts
3 Sector Forecasts 14
Slide 15: Sector Forecasts 1/5: Strong demand dynamics: natural gas consumption
Sector Forecasts 1/5: Strong demand dynamics: natural gas consumption Natural gas demand drivers Long term energy consumption trends 40% Oil Natural gas is the fastest 35% Coal 30% growing major energy source 25% Gas 20% Bioenergy Second source of energy in 15% Nuclear 10% 2040, at the same level as
Slide 16: Sector Forecasts 2/5: Strong demand dynamics: specific to LNG
Sector Forecasts 2/5: Strong demand dynamics: specific to LNG LNG demand drivers Long term LNG demand Mtpa 450 LNG demand is expected to remain strong North Africa 400 North America in Asia and in Europe 350 South America Middle East New importing countries in 2015 300 Europe Egypt, Pakistan, Jordan
Slide 17: Sector Forecasts 3/5: additional capacity to meet demand
Sector Forecasts 3/5: Strong demand dynamics: additional capacity to meet demand Some major suppliers LNG supply vs demand Mtpa Australia US East 500 Australia to become the Qatar main LNG supplier Malaysia 450 Russia West Additional capacity to come 400 Nigeria from the United States within Indones
Slide 18: Sector Forecasts 4/5: Major liquefaction projects to come
Sector Forecasts 4/5 : Major liquefaction projects to come Significant additional capacity Some major liquefaction projects with a FID expected in the short term 8 major projects with a FID Golden Pass 15 reached in 2014 and 2015: Nominal start-up production capacity ≈50 Mtpa of additional capacity
Slide 19: Sector Forecasts 5/5: Pricing environment
Sector Forecasts 5/5: Pricing environment Crude oil and Natural gas prices US HH linked* LNG vs Crude Oil linked LNG in Asia $/MBtu 14 12 HH $6/MBtu HH $5/MBtu 10 HH $4/MBtu HH $3/MBtu 8 6 4 40 50 60 70 80 90 100 $/Bbl Landed Asian LNG Price (14%+$0.5) US HH Linked * Hyp: Liquefaction cost: $2.25/MB
Slide 20: Business Update
4 Business Update 20
Slide 21: Business Update 1/8: LNGC: Key emerging trade routes
Business Update 1/8: LNGC: Key emerging trade routes 28 Russia 5 26 United Kingdom 11 61 United States of America 0 Qatar 90 91 China Japan 61 India 77 68 21 20 21 33 14 Nigeria 25 31 Malaysia 17 15 Indonesia Australia 76 24 Largest producers Other producers Current key trade routes LNG demand (Mtpa
Slide 22: Business Update 2/8: LNGC: increasing need for LNG shipping
Business Update 2/8 : LNGC: increasing need for LNG shipping Drivers of increase in shipping activity LNGC required in selected key countries (1) More complex LNG trade 0.9 2 1.2 0.6 1.8 2.2 Mtpa routes 80 72 Increasing cross-basin trade 60 49 Emerging routes 40 US exports into Pacific Basin 16 20 v
Slide 23: Business Update 3/8: Innovation is key
Business Update 3/8 : Innovation is key The new Mark V technology going forward The two cooperation agreements with SHI and HHI are progressing as expected Mockups are completed, with ongoing tests at SHI. The Mark V technology has earned a « General Approval » from the classification societies DNV-
Slide 24: Business Update 4/8: Offshore market: FSRU
Business Update 4/8: Offshore market: FSRU FSRU: the solution for emerging countries In units What is an FSRU? Stationary vessel capable of loading LNG from LNG carriers, storing and re-gasifying it Main driver: Competitive advantage vs. land- based terminals Better acceptability Reduced constructio
Slide 25: Business Update 5/8: Offshore market: FLNG
Business Update 5/8: Offshore market: FLNG FLNG: the new frontier of the LNG World In units What is an FLNG? Floating unit which receive the gas from scattered sites, ensure the treatment of gas, liquefy and store it until it is loaded on a LNG carrier Main drivers: Monetisation of stranded offshore
Slide 26: Business Update 6/8: Onshore market - A large and attractive sector
Business Update 6/8: Onshore market - A large and attractive sector Membrane tanks, a proven containment storage solution What is an Onshore Storage? A tank installed next to LNG loading and unloading terminals in order to transport, re-gasify and distribute LNG Drivers: Development of re-gasificati
Slide 27: Business Update 7/8: First order for an LNG bunker barge
Business Update 7/8: First order for an LNG bunker barge dedicated to the North American market A strong partnership: Shipyard Shipowner Shipowner Classification society Fully designed by GTT, this barge will be built with the innovative Mark III Flex technology and will be equipped with the bunker
Slide 28: Business Update 8/8: Range of services to support ship-owners
Business Update 8/8: Range of services to support ship-owners and oil & gas companies ASSISTANCE & INTERVENTION GTT ON SITE Technical HEARS assistance maintenance TIBIA Hotline & repair Inspection tool Emergency Assistance & for FLNG Response inspection Service MOON TRAINING MOtorized Training tool
Slide 29: Financials
Financials GT ER 29 Cee
Slide 30: H1 2015 financial performance
H1 2015 financial performance Summary financials Key highlights A slight decrease in revenues in € M S1 2014 S1 2015 Variation Revenues derived from royalties Total Revenues 114.9 104.9 -8.7% Still represent 92% of total revenues Decrease resulting from a comparatively high EBITDA(1) 72.8 66.0 -9.4%
Slide 31: 9 months 2015 revenues at €158.4 million
9 months 2015 revenues at €158.4 million Summary financials Key comments As of 30/09, in € M 9M 2014 9M 2015 Change (%) Total revenues: €158.4 million Revenues 173.6 158.4 -8.8% Revenues from royalties: €146.7 million Royalties 167.1 146.7 -12.2% Driven mainly by LNG carriers (81% of total % of reve
Slide 32: Stronger order book and visibility on future revenues
Stronger order book and visibility on future revenues Order book in units Order book by year of delivery (units per year) In units In units 128 40 37 36 37 35 114 33 120 26 23 90 20 9 12 60 4 2 3 0 2015 2016 2017 2018 2019 2020 30 As at Dec 31, 2014 As at June 30, 2015 As at Dec 31, 2014 As at June
Slide 33: Strategic Roadmap & Outlook
6 Strategic Roadmap & Outlook 33
Slide 34: Strategic Roadmap 1/5: Growth, Technology, Transformation
Strategic Roadmap 1/5 Develop promising new business areas and products New potential businesses Enlargement LNG as a fuel REACH4 Small / Very small New concepts: onshore tanks e.g. inspection equipment and services Growth, Technology, Transformation New applications HEARS Assistance & Intervention
Slide 35: Strategic Roadmap 2/5: Small scale and barge applications
Strategic Roadmap 2/5 Small scale and barge applications: A worldwide emerging market representing a great potential GTT offers full designed vessels equipped with: ▶ Its NO96 et Mark III technologies (& tomorrow Mark FIT) ▶ Its ReaCH4 bunker mast optimising GNL bunkering operations under security c
Slide 36: Strategic Roadmap 3/5: LNG as a fuel
Strategic Roadmap 3/5 LNG as a fuel A new growing market driven by regulatory, environmental and economic concerns Stricter emissions standards Extension of ECA areas Source : DNV Source: Clarkson Research Service Limited Source : DNV Stricter emissions standards for SOx and NOx imposed by IMO since
Slide 37: Strategic Roadmap 4/5: LNG as fuel displays short paybacks
Strategic Roadmap 4/5 LNG as fuel Displays short paybacks for ship-owners Fuel bunker price LNG and Scrubber payback vs. LSMGO 30 8 25 6 Payback (années) 20 $/MMBtu 4 15 10 2 5 0 Grands porte- Petits porte- Grands pétroliers 0 conteneurs conteneurs Route Europe / HFO LSMGO LNG USA LNG Asia LNG Route
Slide 38: Strategic Roadmap 5/5: LNG as a fuel, GTT technologies well-suited
Strategic Roadmap 5/5 LNG as a fuel GTT technologies well-suited GTT key advantages GTT performance vs other technologies Fuel switch is relevant to LNG ~98% Type B LNG is a clean and affordable fuel loading limit LNG tank Membrane solutions can easily be retrofitted or integrated in new builds Type
Slide 39: Outlook 1/2: Confirmed outlook for 2015
Outlook 1/2: Confirmed outlook for 2015(1) Revenues close to €227 million, as postponed revenues linked to shipbuilding milestones should be recovered by year-end. Net margin of c. 50% 2015 dividend payout of at least 80%(2) (1) Subject to any significant delays or cancellations in orders. (2) GTT b
Slide 40: Outlook 1/2: Confirmed medium-term outlook
Outlook 1/2: Confirmed medium-term outlook(1) New GTT Orders over 270-280 LNGC 2015-2024 25-35 FSRU (estimates 3-7 FLNG released 15-20 onshore storage tanks (large tanks) in Feb. 2015) 2016 revenue growth of more than 10% vs 2015, which represents GTT revenue(2) more than €250 M of revenues Dividend
Slide 41: Appendices
Appendices GT ER at Cee
Slide 42: Appendix 1: A streamlined group and organisation
Appendix 1: General information A streamlined group and organisation GTT Group GTT North America Cryovision GTT Training GTT SEA PTE Ltd Subsidiary Subsidiary Subsidiary Subsidiary Philippe Berterottière Chairman and Chief Executive Officer GTT SA organisation Julien Burdeau Chief Operating Officer
Slide 43: Appendix 2: GTT membrane technologies
Appendix 2: General information 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
Slide 44: Appendix 3: Adding value to the LNG chain from GTT innovation
Appendix 3: General information Adding value to the LNG chain from GTT innovation LNG Boil Off Rate (BOR) is a parameter for the performance of LNG containment systems GTT has brought major improvements on its technologies and is continuously striving to enhance them Example: the 7.5 basis points (b
Slide 45: Appendix 4: Track record of high margin and strong increase in backlog
Appendix 4: General information Track record of high margin and strong increase in backlog since 2010 Current backlog (3) 120 112 66 30 18 52 77 99 114 44 47 37 34 26 Evolution of new 19 GTT orders (1)(2) 7 4 1 2006 2007 2008 2009 2010 2011 2012 2013 2014 LNGC/VLEC FSRU/FLNG Onshore storage Historic
Slide 46: Appendix 5: US projects
Appendix 5: US projects Development of US LNG projects provides for significant potential export capacity Significant potential US LNG development projects Department of Energy Federal Energy Regulatory Commission / To/From FTA To/From non-FTA MARAD Nominal capacity Projects Object Status *1 (Mtpa)
Slide 47: Appendix 6: GTT Business Model
Appendix 6: GTT Business Model Illustrative LNGC revenue recognition summary Illustrative revenue recognition 2014 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: 36 56% TOTAL LNGC Studies collected on ORDERS
Slide 48: Appendix 7: An attractive business model supporting high cash generation
Appendix 7: GTT Business Model 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 mileston
Slide 49: Appendix 8: Strong revenue growth reflecting recent increase in order intake
Appendix 8: GTT Business Model Strong revenue growth since 2012 reflecting recent increase in order intake Historical revenue development Order book evolution In € M In number of orders – at end of period 114 99 250 227 77 218 10 7 52 200 18 2010 2011 2012 2013 2014 150 2014 Revenue Breakdown 210 21
Slide 50: Appendix 9: Managing employee base to meet growing demand
Appendix 9: GTT Business Model Managing employee base to meet growing demand Evolution of GTT staff GTT staff by type of contract 400 370 377 Non-permanent 300 286 18% 242 200 100 Permanent 82% 0 2011 Dec 31, 2011 2012 Dec 31, 2012 2013 Dec 31, 2013 201431, 2014 Dec Total: 377 employees(1) Staff lev
Slide 51: Appendix 10: Unique technology with key competitive advantages
Appendix 10: General information Unique technology with key competitive advantages Membrane technology overview GTT’s technology positioning (1) GTT is the only company which widely offers GTT Moss LNG membrane containment technology for ships: Technology ▶ Membrane (Mark III, NO ▶ Spherical technol
Slide 52: Thank you for your attention
Thank you for your attention information-financiere@gtt.fr 52
Gaztransport & Technigaz (GTT) — Q3 2015 Earnings Presentation on 6ix