Gaztransport & Technigaz Sa · EURONEXT:GTT
Gaztransport & Technigaz Sa — FY2019 Earnings Presentation
66 slides from Gaztransport & Technigaz Sa's earnings presentation, Feb 28, 2020
Slide 1: Investor Presentation: 2019 Full Year Results
Investor Presentation 2019 FULL YEAR RESULTS 28 February 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 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 FY 2019 Expert in liquefied gas containment systems GTT is a public company listed on the Total Revenues 288 Euronext Stock Exchange (Paris), Royalties (newbu
Slide 7: GTT, a green stock
GTT, a green stock GTT’s activities are mainly driven by environmental aspects Core business Business model: pure technology and engineering company, no direct emissions Technology: improved performance of LNG carriers with a reduction of the level of LNGC CO2 emissions by 43% over the last 10 years
Slide 8: 2019 Key Highlights
2019 Key Highlights Strong level of new orders, covering the full value chain 57 LNGC, 6 VLEC and 3 GBS New commercial successes in LNG Fuel business including: 2 bunker ships, 1 container ship converted to LNG on behalf of Hapag Lloyd, 5 container ships on behalf of a European ship-owner New TALA w
Slide 9: Core business: Market & activity update
2 Core business: Market & activity update 9
Slide 10: Core Business as at December 31, 2019: A strong order book
Core Business as at December 31, 2019 A strong order book FY 2019 movements 57 LNGC new orders 6 VLEC 3 GBS deliveries 27 LNGC © Shell 3 FSRU Order book of 133 units LNGC VLEC FSRU FLNG Onshore storage / GBS Notes: LNGC – Liquefied Natural Gas Carrier, VLEC – Very Large Ethane Carrier, © SCF Group F
Slide 11: 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 to lead gas trade growth (bcm) 100% 11% 17% Trade Trade 31% 36% 80% 60% Oil +1,500 cbm Gas 40% Coal Renewables 20% Hydro 0% Nuclear 2018 2040 Gas consumed locally Pipe LNG Gas is the only fossil energy to increase share
Slide 12: BP alternative scenarios all point to a prominent share of gas in the energy mix
BP alternative scenarios all point to a prominent share of gas in the energy mix 4 scenarios considered by BP Gas is central in all 4 scenarios 5,8 4,6 4,3 3,2 4,3 Whatever the scenario, gas grows and BP considers 4 scenarios with common ranks as one of 2 leading energies features, such as ongoing e
Slide 13: LNG Supply & Demand: new capacity needed
LNG Supply & Demand: new capacity needed LNG Supply & Demand balance forecast 700 600 250 Mtpa 500 400 Mtpa 300 200 100 0 2003 2011 2019 2000 2001 2002 2004 2005 2006 2007 2008 2009 2010 2012 2013 2014 2015 2016 2017 2018 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 203
Slide 14: Liquefaction projects: record FIDs in 2019
Liquefaction projects: record FIDs in 2019 Volume Exp Project Country Operator Comments (Mtpa) Startup Golden Pass US Exxon, QP 15.6 2025 Sabine Pass T6 US Cheniere 4.5 2023 Cheniere has now 36 Mtpa capacity at Sabine Pass and Corpus Christi FID taken Mozambique LNG-1 Mozambique Anadarko 12.9 2024 O
Slide 15: 85 more LNGCs required for liquefaction projects under construction
85 more LNGCs required for liquefaction projects under construction LNGCs supply demand balance of Under Construction liquefaction plants Contracted Forecasted Project Location Capacity LNGCs requirement Start-Up (mtpa) Cameron T3 US East 2020 4,0 Freeport Train 3 US East 2020 4,6 PFLNG 2 Asia Pacif
Slide 16: Contracted LNG price remain steady despite low spot price environment
Contracted LNG price remain steady despite low spot price environment LNG spot & contracted prices 12 10 Oil linked Asian Price Contracted price 8 US LNG price delivered in Asia $/Mmbtu 6 Spot price Asian 4 LNG European 2 LNG 0 Contracted oil linked Asian LNG price = JCC * 13% + 0,5$ Sources: Argus,
Slide 17: 2019 Global LNG demand increasing
2019 Global LNG demand increasing Global LNG demand: +12.5% in 2019 China continues to be among top 3 +14% or 6 Mtpa South Asia (India, Pakistan, Bengladesh) +19% in 2019 Japan and Korea decreasing due to nuclear restart Europe increasing (UK and France, Spain, Netherlands) 17
Slide 18: China expected to remain a dominant region
China expected to remain a dominant region China LNG demand by 2030 33% 46% 41% Efforts continue to improve 100 25% urban air quality 80 20% Sustained long term growth expected by 2030 60 15% 5,8 4,6 4,3 3,2 4,3 40 10% 5 importing terminals under construction + 11 expansions planned at existing term
Slide 19: China's choice to widely consume LNG has significantly reduced its CO2 emissions
China’s choice to widely consume LNG has significantly reduced its CO2 emissions In 2019, China has consumed 61 million tons of LNG it consumed less than 10 million tons 10 years ago LNG share in Chinese energy mix 2,0% By choosing LNG, instead of building new generation coal plants, China has saved
Slide 20: GTT supports CO2 emissions reductions thanks to continuous improvements of its systems
GTT supports CO2 emissions reductions thanks to continuous improvements of its systems Comparison of 2 typical LNG carriers in 2010 (Steam Turbine) and 2020 (MEGI/XDF) CO2 saved Engine type LNG tank Boil Off Size Consumption per cbm transported* Steam Turbine Mark III 0,15% 145k cbm 110t/d - MEGI /
Slide 21: Core business long term estimates
Core business long term estimates GTT FY 2019 Sales GTT order estimates over 2020-2029 Other Services LNGC: between 285 and 315 units(1) LNG Fuel 1% 5% FLNG 3% 2% VLEC: between 25 and 40 units FSRU 9% FSRU: between 10 and 20 units LNGC FLNG: Up to 5 units 80% Onshore and GBS tanks: between 15 and 20
Slide 22: New businesses: LNG Fuel developments
3.2 3 New businesses: LNG Fuel developments 22
Slide 23: New Business (LNG as Fuel) as at December 31, 2019: A growing order book
New Business (LNG as Fuel) as at December 31, 2019 A growing order book © SCF Group © GTT © GTT Order book of 19 units FY 2019 movements ULCS (Ultra Large Container Ships) new orders 2 LNG Bunker ship Container vessel (converted to LNG) 1 Container vessel 5 ULCS Cruise ship LNG bunker ships 23
Slide 24: LNG is the only mature solution allowing comprehensive environmental compliance
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 SOX NOX CO2 Particulates Source : DNV LNG is in advance of existing and anticipated environmental regulations No SOx, no particula
Slide 25: Business case is very favorable to LNG as fuel for large containerships
Business case is very favorable to LNG as fuel for large containerships NPV of LNG fuel vs scrubbers and LSHFO for a 14k TEU containership 50 40 30 20 M$ 10 0 -10 -20 2022 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 (Year 1) vs LSHFO vs Scr
Slide 26: LNG as fuel: choice of LNG fuel for large containerships saves 30,000 tons of CO2 / year
LNG as fuel : choice of LNG fuel for large containerships saves 30,000 tons of CO2 / year Comparison of emissions for 2 fuel types : oil fueled and LNG fueled Energy Engine Over- Particulates Fuel type SOx NOx CO2 content efficiency consumption PM Mmbtu/ton g/kWh %m/m g/kWh g/kg fuel kg/kWh Oil fuel
Slide 27: Open loop scrubbers utilization banned areas keep expanding
Open loop scrubbers utilization banned areas keep expanding Map of areas where the use of open loop scrubbers is banned Since October 2019, 4 areas have banned the use of open loop scrubbers in their waters: Panama canal, Malaysia, Suez Canal, Karachi (Pakistan) 27
Slide 28: Membrane is consolidating its penetration in LNG fuel market
Membrane is consolidating its penetration in LNG fuel market LNG fuel tanks competitive landscape LNG as a marine fuel continues its LNG tanks total capacity - cbm penetration in shipping market despite a persisting wait & see 20,000 attitude Newbuild & Retrofit 9% market share in 2019 Type B • Ultr
Slide 29: LNG Fuel market potential for GTT
LNG Fuel market potential for GTT Relevant Market Segments Historical 10y Shipping Markets Fleet at end 2019 for GTT annual orders MAIN TARGETS Container Ships 3-20+ kTEU Bulkers 100+ kdwt ~225 ~5500 Oil Tankers 125+ kdwt Cruise Ships All size ~35 ~1200 Car & Truck Carriers TOTAL SHIPPING MARKET All
Slide 30: Service activity
3.3 4 Service activity 30
Slide 31: Services to make LNG easy
Services to make LNG easy Support of GTT’s LNG core activities Support for the development of LNG as fuel CONSULTING TRAINING LNG OPERATIONS EMERGENCY to get LNG as fuel to raise awareness to support operators in the to avoid escalation and projects on track about LNG first LNG operations minimise i
Slide 32: Acquisition of Marorka, a new step in GTT's digital roadmap
Acquisition of Marorka, a new step in GTT’s digital roadmap A leading global provider of data-driven energy management and operational performance solutions for the international maritime industry Marorka focuses on fuel savings, emission reduction compliance and reporting, and performance optimizat
Slide 33: Strategic roadmap
5 Strategic roadmap 33
Slide 34: GTT's strategic roadmap
GTT’s strategic roadmap 6. Transformation Gas handling technologies Towards a lower emission maritime 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 ser
Slide 35: Financials
6 Financials 35
Slide 36: Order book overview (core business)
Order book overview (core business) Order book in units Order book by year of delivery (units per year)(1) In units In units Order book in value Revenues expected from current order book(2) In €M In €M + 34% (1) Delivery dates could move according to the shipyards/EPCs’ building timetables. (2) Roya
Slide 37: 2019 financial performance
2019 financial performance Summary consolidated accounts Key highlights In € M 2018 2019 Change Revenues Newbuilds (royalties): +18.1%, mainly driven by Total Revenues 246.0 288.2 +17.2% LNGCs (+16.2%),FLNGs (+38.3%) and LNG as fuel EBITDA(1) 168.7 174.3 +3.3% Service revenue: +2.7%, mainly due to a
Slide 38: 2019 Cost base
2019 Cost base GTT consolidated operational costs Key highlights in € M 2018 2019 Change (%) External costs: +32% Goods purchased (3.0) (7.1) +136.9% Subcontractors +50%, due to strong flow of orders % sales -1% -2% Other external costs +19% (mainly fees from external advisors and patent filing) Sub
Slide 39: Dividend
Dividend 2018 2019 Consolidated net profit (IFRS) €142.8 M €143.4 M Total dividend Dividend per share €3.12 €3.25 Total amount paid €115.6 M €120.5 M Pay out ratio 81% 84% Dividend amount 3.25 3.12 +4% Balance dividend of €1.75 - Record date: June 8, 2020 1.79 1.75 - Payment date: June 10, 2020 1.33
Slide 40: Outlook
7 Outlook 40
Slide 41: 2020 Outlook
2020 Outlook 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 orders. Variat
Slide 42: Thank you for your attention
Thank you for your attention Image courtesy of STX, Engie, Excelerate, Reliance, SCF Group, Shell, CMA CGM, Conrad 42 Masque PowerPoint - January 2020 CONFIDENTIAL
Slide 43: Appendix
GIT Appendix
Slide 44: A streamlined group and organisation
A streamlined group and organisation (December 31, 2019) GTT Group Philippe Berterottière* Chairman and Chief Executive Officer GTT SA organisation Lélia Ghilini* Secretary General General Counsel Frédérique Marc Haestier* Sandrine Vibert* Julien Bec David Colson* Karim Chapot* Coeuille* Finance & H
Slide 45: 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 / Gas-to-wire Installation Floating LNG Production, Float
Slide 46: 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 47: 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 47
Slide 48: 56 ageing vessels with charter contract ending by 2023
56 ageing vessels with charter contract ending by 2023 LNGCs carriers* with charter contract ending by 2023 100 LNGC chart contract to end by 2023 50 Of which 56 equipped with steam turbine 45 propulsion; also smaller vessels (<140k 40 cbm) 35 30 MEGI/XDF 25 DFDE Charterers and ship-owners to prepar
Slide 49: US LNG is competitive in Asia
US LNG is competitive in Asia US LNG vs. Asian LNG price depending on Henry Hub and Oil prices 11 Asian LNG Asian oil indexed LNG competitive US LNG competitive 10 LNG price ($/Mmbtu) 9 Spread 8 HH : $3,5/Mmbtu US LNG HH : $3/Mmbtu 7 HH : $2,5/Mmbtu 2019 avg. 6 Main sources: GTT analysis, EIA, Wood
Slide 50: LNG short term charter rates
LNG short term charter rates 50
Slide 51: 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 52: FSRUs – The game changer for new importing countries
FSRUs – The game changer for new importing countries 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 in shipyards with
Slide 53: FLNGs – the new frontier of the LNG world
FLNGs – the new frontier of the LNG world Floating units which ensure treatment of gas, liquefy and store it Existing GTT fleet: 2 units1 In order: 2 units1 Courtesy of Shell Main drivers GTT key advantages Monetisation of stranded Extended amortization offshore gas reserves perspectives Better acce
Slide 54: Arctic LNG-2 recent FID: a great opportunity for GTT to expand in the LNG value chain
Arctic LNG-2 recent FID: a great opportunity for GTT to expand in the LNG value chain with 1st GBS ordered From liquefaction To plant Regasification Trans shipment Regas terminal: Onshore or FSRU Ice class Conventional GBS LNG carrier LNG carrier The Arctic LNG-2 project sanctioned in September 2019
Slide 55: 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 56: Ethane: Order of 6 VLEC in September 2019
Ethane: Order of 6 VLEC in September 2019 An increasing ethane transportation market Transportation of Liquefied Ethane is an increasing US ethane production, consumptions and exports market, driven by the strong development of shale gas and shale oil production in the US Excess supply of ethane (by
Slide 57: 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 58: LNG is cheap and stable vs volatile oil fuels
LNG is cheap and stable vs volatile oil fuels Evolution of marine fuel prices since 2018 (Delivered onboard) 750 MGO 700 650 600 $/ton HFO eq,eff 550 500 450 400 HFO LNG fuel Asia 350 LNG fuel Europe 300 LNG fuel US 250 Normalisation of the energy content of the different fuels + engine efficiencies
Slide 59: 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 60: 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 60
Slide 61: Commercial successes: container ships…
Commercial successes: container ships… European ship-owner ULCS – Newbuilds – 14,000 m³ 5 ships in June 2019 Built at Jiangnan Shipyard Hapag Lloyd VLCS - LNG Retrofit – 6,700 m³ 1 ship in April 2019 Hudong-Zhonghua as membrane outfitter CMA CGM ULCS – Newbuilds – 18,600 m³ 9 ships in November 2017
Slide 62: … Cruise ships and bunker vessels
… Cruise ships and bunker vessels PONANT Expedition Ship – 4,500 m³ 1 ship in July 2018 Built at VARD Norway GTT acting as EPC for the LNG tank Oct. 2018 MOL1 LNG Bunkering Vessel – 18,600 m³ 1 ship in January 2018 and 1 ship in December 2019 Built at Hudong Zhonghua Shipyard MOL1 LNG Bunkering Vess
Slide 63: 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 64: 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 65: 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 66: Contact: information-financiere@gtt.fr
Contact: information-financiere@gtt.fr / +33 1 30 23 20 87
Gaztransport & Technigaz (GTT) — FY2019 Earnings Presentation on 6ix