Gaztransport & Technigaz Sa · EURONEXT:GTT
Gaztransport & Technigaz Sa — H1 2017 Earnings Presentation
40 slides from Gaztransport & Technigaz Sa's earnings presentation, Jul 21, 2017
Slide 1: Investor Presentation First Half 2017
Investor Presentation First Half 2017 July 21, 2017
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 se
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: GTT, a French engineering company, global leader in liquefied gas containment systems
GTT, a French engineering company, global leader in liquefied gas containment systems Key figures Profile Leading engineering company in € million H1 2016 H1 2017 Expert in liquefied gas containment Total Revenues 116.9 111.3 systems Royalties 111.1 103.4 Services 5.8 7.9 More than 50-year track rec
Slide 5: H1 2017 Highlights
H1 2017 Highlights Revenues for H1 2017: €111 million Order book: 13 new orders H1 2017 movements in the order book Order book of 88 units Deliveries: 21 (18 LNGC/VLEC, 2 FSRU, 1 FLNG) 73 LNGC/VLEC(1) 2 FLNG New orders: 13 (8 LNGC/VLEC, 4 FSRU, 1 FLNG) 10 FSRU(1) 2 Onshore storage 1 LNG bunker barge
Slide 6: LNG market
LNG market COL awa. pareney
Slide 7: H1 2017 LNG market: several positive signals
H1 2017 LNG market: several positive signals OPERATIONAL UNDER CONSTRUCTION NEW FIDs 4 new trains online / first Coral FLNG sanctioned Fortuna (2.2 Mtpa) still cargo ; +14.5 Mtpa : Gorgon (3.4 Mtpa) ; start-up in Q1 expected in 2017 T3, MLNG T9, PFLNG 1, 2022 SUPPLY Sabine Pass T3 Several projects c
Slide 8: Most of additional LNG production is already contracted
Most of additional LNG production is already contracted Contracted vs. Uncontracted additionnal LNG production by 2026 120 100% 89% 89% 90% 90% 87% 87% 88% 85% 86% 90% 100 80% 70% 80 60% mtpa 60 50% 40% 40 30% 20% 20 10% 0 0% 2018 2019 2020 2021 2022 2023 2024 2025 2026 Contracted production Uncontr
Slide 9: Asian LNG imports growing in 2017 vs. 2016 due to structural energy mix evolution
Asian LNG imports growing in 2017 vs. 2016 due to structural energy mix evolution Top-4 LNG importers demand comparison 2017 vs. 2016 80 50% Demand of top-4 LNG importing countries (60% of imports in 2016) 70 38% grew by 12% in 2017 vs. 2016 (Jan 40% 60 to May YoY), mainly due to: Coal to Gas switch
Slide 10: Convergence between gas and coal prices is accelerating the coal-to-gas switch
Convergence between gas and coal prices is accelerating the coal-to-gas switch Gas vs. coal prices competitiveness since Jan. 2016 70 60 50 $/ Mwh* 40 +3 +/- 0 +17 +13 30 20 Coal Average Europe NG China LNG Source: World Bank, Argus *Including power plant efficiency : with coal = 34% ; with natural
Slide 11: Low LNG prices attract new importing countries
Low LNG prices attract new importing countries Incremental LNG demand from new markets 25 2 new countries expected + Philippines 3 new countries + Ghana + Malta Israel 20 + Colombia Lithuania Poland + Jamaica Israel Malaysia Lithuania Poland Malaysia Singapore 15 4 new countries + Egypt Singapore Mt
Slide 12: LNG trade forecast is buoyant
LNG trade forecast is buoyant LNG demand by region, 2012-2021 400 historical forecast 350 300 ~ +25Mtpa 2017-2021 250 Mtpa 200 150 ~ +50Mtpa 2017-2021 100 50 - 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Asia Pacific Europe South America North America Middle East Majority of volumes expected t
Slide 13: LNG Supply & Demand could balance from 2021
LNG Supply & Demand could balance from 2021 LNG Supply & Demand balance forecast 450 400 350 300 250 mtpa 200 Demand adjustment due to low No demand adjustment 150 prices and FSRUs availability Intermediate S&D balance in early 2023 S&D balance in 2021 scenario New FIDs from early 2019 100 New FIDs
Slide 14: LNG Shipping
LNG Shipping < = [_irmovation Teamwork transparency
Slide 15: LNG Shipping – Signs of recovery on spot market
LNG Shipping – Signs of recovery on spot market Spot rates and prompt available vessels evolution since Jan-17 k$/d # prompt available vessels 50 30 25 40 20 30 15 20 10 10 5 0 0 Available vessels on the spot market 160K TFDE 145 K Steam Turbine Slight chart rates recovery since May supported by ves
Slide 16: Global LNG Shipping – Increase in shipping intensity
Global LNG Shipping – Increase in shipping intensity Bcm.miles/month/ship Bcm.miles monthly evolution since Jan-16 450 400 350 300 250 200 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jan. to May avg. Slight growth trend of bc
Slide 17: c.50 LNGC orders expected from under construction projects
c.50 LNGC orders expected from under construction projects LNGC requirement for under construction liquefaction projects Most liquefaction projects under Forecasted Total Capacity LNGC Project Location Start-Up (Mtpa) requirement construction expected to start-up in Wheatstone LNG T1 Australia Q3-17
Slide 18: H1 2017 Activity
H1 2017 Activity ‘eamworl 18
Slide 19: Core business and adjacent markets
Core business and adjacent markets GTT H1 2017 Sales GTT order estimates over 2017-2026 LNGC: between 235 and 255 units Services Already 8 orders secured during H1 2017 FLNG 7% 1% FSRU 12% FSRU: between 30 and 40 units Already 4 orders secured during H1 2017 FLNG: between 5 and 10 units Already 1 or
Slide 20: Strong potential: FSRUs are clearly preferred by new LNG importers
Strong potential: FSRUs are clearly preferred by new LNG importers FSRU capacity by region New LNG importing countries first terminal 16 000 14% 5 14 000 12% 4 12 000 10% No. of countries % global capacity 10 000 3 8% 8 000 mmcfd 6% 2 6 000 4% 4 000 1 2 000 2% - - 0% 2004 2006 2008 2010 2012 2014 20
Slide 21: Order book overview
Order book overview Order book in units Order book by year of delivery (units per year) In units In units (1) 38 37 40 35 120 96 32 28 88 21(4) 21 90 20 8 60 16 4 1 0 30 2017 2018 2019 2020 2021 As at Dec 31, 2016 As at June 30, 2017 As at Dec 31, 2016 As at June 30, 2017 Order book in value Revenue
Slide 22: Strategy and activity: expand innovative services
Strategy and activity: expand innovative services Advisory and optimisation services Intervention services TRAINING TIBIA Training tool Inspection tool for LNGC for FLNG crew members inspection HEARS GTT ON SITE LNG Advisor Boil-off Gas Hotline Technical monitoring Emergency assistance Assistance &
Slide 23: LNG as fuel & Bunkering: GTT ideally positioned to take full benefit of expected market development
LNG as fuel & Bunkering: GTT ideally positioned to take full benefit of expected market development Fuel prices spread narrowing since 2014 Marine fuel prices since June 2014 (delivered onboard) favouring small-mid vessels projects 25 (‘000 cbm LNG tanks) 20 Up to $13/mmbu Larger vessels market (>10
Slide 24: Financials
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Slide 25: H1 2017 financial performance
H1 2017 financial performance Summary financials Key highlights In € M H1 2016 H1 2017 Change Decrease in revenues (-4.7%) Revenues derived from royalties: -6.9% Total Revenues 116.9 111.3 -4.7% Impacted by the low level of orders during 2016 EBITDA(1) 73.7 74.6 +1.2% Revenues from services: +36.4%
Slide 26: Cost base
Cost base GTT operational costs Key highlights Change in € M H1 2016 H1 2017 (%) External costs Down 11% mainly due to a decrease in Cost of sales (1.4) (0.9) -12% subcontracted tests and studies and in legal fees % sales (1%) (1%) -1pt in % of sales Subcontracted Test Staff costs down 2% due to a d
Slide 27: Outlook
Outlook < = [_irmovation Teamwork transparency
Slide 28: 2017 Outlook confirmed
2017 Outlook confirmed GTT revenue(1) 2017 revenue estimated in a range of €225 M to €240 M Net margin(2) Net margin above 50% Dividend 2017 dividend amount at least equivalent to 2015 and 2016 Payment(3) 2018 – 2019: payout of at least 80% (1) Subject to any significant delays or cancellations in o
Slide 29: Thank you for your attention
Onshore tank Ice breaking LNG carrier FLNG LNG carrier Multigas carrier Thank you for your attention © STX, Engie, Excelerate Gravity-based system LPG carrier Small scale LNG carrier at import terminal Bunker barge Power barge FSRU 29
Slide 30: Appendices
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Slide 31: Appendix - Sabine Pass shipping pattern rebalancing
Appendix - Sabine Pass shipping pattern rebalancing Sabine Pass LNG Exports By Region Shipping Intensity (Eq. # 160k cbm / mtpa) 2.45 1.47 1.43 2.20 Most Sabine Pass production went to LatAm instead of Asia due to narrow prices spreads between US and Europe / Asia, thus reducing expected shipping de
Slide 32: Appendix - Gas is gaining shares versus coal to accompany economic growth in Asian countries
Appendix - Gas is gaining shares versus coal to accompany economic growth in Asian countries Economic growth and Energy consumption of Top4 LNG importers in 2016 10% 8% 6% 2016 vs. 2015 growth in % 4% 2% 0% India China S. Korea Japan -2% -4% Sources : World Bank , BP -6% GDP (%) Energy consumption E
Slide 33: Appendix - Legacy LNG importers focus
Appendix - Legacy LNG importers focus Japan energy consumption evolution S. Korea energy consumption evolution 140 140 120 120 100 100 Energy Consumption in mtoe Energy Consumption in mtoe 80 80 60 60 40 40 20 20 0 2010 2011 2012 2013 2014 2015 2016 0 2010 2011 2012 2013 2014 2015 2016 Gas Coal Nucl
Slide 34: Appendix - New LNG importers focus
Appendix - New LNG importers focus China energy consumption evolution India energy consumption evolution 2 000 450 1 800 400 1 600 350 1 400 Energy Consumption in mtoe Energy Consumption in mtoe 300 1 200 250 1 000 200 800 150 600 400 100 200 50 0 0 2010 2011 2012 2013 2014 2015 2016 2010 2011 2012
Slide 35: Appendix – Japan thermal power plants focus
Appendix – Japan thermal power plants focus Thermal power plants status in Japan (# of plants and MW installed) 120 100 000 90 000 100 80 000 2 100 70 000 80 3 60 000 - # plants MW 60 6 50 000 36 284 38 40 000 2 621 71 009 40 77 30 000 57 20 000 39 663 20 10 000 2 2 650 4 3 368 - - Coal Gas Nuclear
Slide 36: Appendix - LNGCs
Appendix - LNGCs Our core business Vessel equipped for transporting LNG Existing GTT fleet: 318 units(1) In order: 73 units 21 construction shipyards under license GTT order estimates over 2017-2026: 235-255 units(2) Our strengths % sales(3) Technological leadership, boil-off divided by 2 in the las
Slide 37: Appendix - FSRUs
Appendix - FSRUs The solution for emerging countries Stationary vessel capable of loading, storing and re-gasifying LNG Existing GTT fleet: 20 FSRU(1) In order: 10 units GTT order estimates over 2017-2026: 30-40 units(2) Courtesy of Excelerate Energy Main drivers GTT key advantages % sales New buyer
Slide 38: Appendix - FLNGs
Appendix - FLNGs The new frontier of the LNG world Floating unit which ensure treatment of gas, liquefy and store it Existing GTT fleet: 2 units(1) In order: 2 units GTT order estimates over 2017-2026: Courtesy of Shell 5-10 units(2) % sales H1 2017 Main drivers GTT key advantages 0.9% Monetisation
Slide 39: Appendix - LNG as fuel & Bunkering: GTT initiatives
Appendix - LNG as fuel & Bunkering: GTT initiatives Fully participate in the energy transition of the shipping industry Main drivers Examples of GTT solution Regulatory framework (2020 IMO offering sulphur cap + local initiatives) Container ship offer Both retrofit or Large world fleet of merchant s
Slide 40: Investor Presentation First Half 2017
Investor Presentation First Half 2017 July 21, 2017
GTT (Gaztransport & Technigaz) — H1 2017 Earnings Presentation on 6ix