Chart Industries, Inc. · NYSE:GTLS
Chart Industries — Investor Day (November 2019)
67 slides from Chart Industries's investor day presentation, Nov 14, 2019
Slide 1: Chart Industries 2019 Investor Day
Exhibit 99.1 Chart Industries 2019 Investor Day November 14, 2019Exhibit 99.1 Chart Industries 2019 Investor Day November 14, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements made in this presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning the Company’s business plans, including statements regarding com
Slide 3: Today's Agenda
Today’s Agenda 10:00am 12:00pm Presentation Lunch Our Team 12:45pm Safety Training Our Company 1:00pm Facility Tour Our Future 2:00pm Return to Charmant Q&A All times Central time zone. 2019 Chart Industries Investor Day 3Today’s Agenda 10:00am 12:00pm Presentation Lunch Our Team 12:45pm Safety Trai
Slide 4: Safety Case Study: Box Cutter Usage
Safety Case Study: Box Cutter Usage Corrective Actions Taken Overview of the situation On May 10th, 2019, a fan shop employee was using a box cutter to cut • Use of box cutters in this area has been eliminated. Replaced the carboard cylinder containing bondo material. In this process, operation with
Slide 5: Our Team
Our Team 2019 Chart Industries Investor Day 5Our Team 2019 Chart Industries Investor Day 5
Slide 6: Our Leadership Team
Our Leadership Team Jill Evanko CEO Since 2017 Segment Presidents Functional Hans Lonsain Grady Walker Joe Belling Brad Aaron Bridges Gerry Vinci Herb John Bishop Scott Merkle D&S East D&S West E&C Cryogenics Babineaux Commercial CHRO Hotchkiss COO CAO E&C FinFans General Counsel Since 2005 Since 20
Slide 7: Our Company
Our Company 2019 Chart Industries Investor Day 7Our Company 2019 Chart Industries Investor Day 7
Slide 8: Our Transformation Since June 2018
Our Transformation Since June 2018 2H 2018 2019 Commercial Global Commercial Team 2 LTAs 3 MOUs 2 IG LTAs Investment Ornago LNG Vehicle Tanks Acquisition La Crosse BAHX Divestiture Acquisition Internal Hyderabad Chart Business Re-segment Businesses 80/20 Initiatives Strategic Sourcing Footprint Cons
Slide 9: Leading Supplier of Mission Critical Equipment
Leading Supplier of Mission Critical Equipment Distribution & Storage Energy & Chemical East West Cryogenics FinFans • Bulk and packaged gas cryogenic solutions • Bulk and packaged gas cryogenic solutions • Brazed Aluminum Heat Exchangers (BAHX) • Air Cooled Heat Exchangers (ACHX) for storage, distr
Slide 10: Broadest Product Offering for Industrial Gas and Energy
Broadest Product Offering for Industrial Gas and Energy D&S E&C Biomedical Exploration, Treatment Processing / Transportation Storage Regasification Lifecycle Value Proposition / Production & Pipeline Liquefaction Services Application l ACHXl Orca Microbulkl Engineered Tanksl Ambient Vaporizersl Ins
Slide 11: Broadest Product Offering for Industrial Gas and Energy
Broadest Product Offering for Industrial Gas and Energy D&S E&C Exploration, Treatment Processing/ Transportation Storage Regasification Lifecycle Value Proposition / Production & Pipeline Liquefaction Services Application l ACHXl Orca Microbulkl Engineered Tanks*l Ambient Vaporizers*l Installation
Slide 12: E&C Cryogenics Product Portfolio
E&C Cryogenics Product Portfolio Brazed Aluminum Specialty Pressure & Heat Cold Boxes Nitrogen Rejection Units (NRU) Heat Exchanger Transfer Equipment Integrated Energy Systems (with E&C FinFans) FEMA Valve Portfolio Lifecycle / Aftermarket 2019 Chart Industries Investor Day 12E&C Cryogenics Product
Slide 13: E&C FinFans Product Portfolio
E&C FinFans Product Portfolio Air Cooled Heat Exchangers High Efficiency Fans Lifecycle / Aftermarket Vertical Horizontal Computational Fluid Dynamics Superior Design & Engineering 2019 Chart Industries Investor Day 13E&C FinFans Product Portfolio Air Cooled Heat Exchangers High Efficiency Fans Life
Slide 14: D&S West Product Portfolio
D&S West Product Portfolio Trailers ISO Containers Bulk Tanks Vaporizers Perma-Cyl (Micro Bulk) Dosers CryoBiological Fueling Stations HLNG Orca Lifecycle / Aftermarket LNG by Rail 2019 Chart Industries Investor Day 14D&S West Product Portfolio Trailers ISO Containers Bulk Tanks Vaporizers Perma-Cyl
Slide 15: D&S East Product Portfolio
D&S East Product Portfolio Trailers ISO Containers Bulk Tanks Vaporizers Perma-Cyl (Micro Bulk) Marine Applications Fueling Stations Flow Meters Orca Lifecycle / Aftermarket 2019 Chart Industries Investor Day 15D&S East Product Portfolio Trailers ISO Containers Bulk Tanks Vaporizers Perma-Cyl (Micro
Slide 16: Acquisitions Complete Global Diversification Strategy
Acquisitions Complete Global Diversification Strategy September 2017 November 2018 July 2019 1. Establish ACHX Content 2. Build Global Footprint 3. Complete the Portfolio • Strong ACHX position in • Complementary European • Upstream / Midstream ACHX downstream / footprint complement to Hudson petroc
Slide 17: Industry Leading Brands
Industry Leading Brands E&C FinFans D&S East D&S West E&C Cryogenics 2019 Chart Industries Investor Day 17 Legacy Acquired (Pre-Sept. 2017)Industry Leading Brands E&C FinFans D&S East D&S West E&C Cryogenics 2019 Chart Industries Investor Day 17 Legacy Acquired (Pre-Sept. 2017)
Slide 18: We Serve 2,000+ Globally Diversified Customers
We Serve 2,000 + Globally Diversified Customers 2019 Chart Industries Investor Day 18We Serve 2,000 + Globally Diversified Customers 2019 Chart Industries Investor Day 18
Slide 19: Our Future
Our Future 2019 Chart Industries Investor Day 19Our Future 2019 Chart Industries Investor Day 19
Slide 20: Our Focused Strategy
Our Focused Strategy Community & Employees Broadest Product Offering for Industrial Gas & Energy • Environmental, Social & Governance • Application and Customer Expansion • Building capabilities to support other strategic pillars • Cryo-pump opportunity • Branding • Repair & Service E A • Specialty
Slide 21: Market Trends
Market Trends Community & Employees Broadest Product Offering for Industrial Gas & Energy • Environmental, Social & Governance • Application and Customer Expansion • Building capabilities to support other strategic pillars • Cryo-pump opportunity • Branding • Repair & Service E A • Specialty Markets
Slide 22: Macro Trends Driving Our Business
Macro Trends Driving Our Business Sustainability Energy Transition Population Growth • 7 million people / year die • Nearly 1 billion people live • Water scarcity impacts 40% of from air pollution without electricity the world’s population • Reducing annual CO • Global power demand to • Over 33% of
Slide 23: Macro Trends Driving Our Business
Macro Trends Driving Our Business Energy Transition Population Growth Sustainability Regulatory Drivers • Paris Agreement • LNG by Rail • IMO 2020 • Subsidies / economic drivers • Emissions Standards • Shift to “Gas economy” (i.e. India) 2019 Chart Industries Investor Day 23Macro Trends Driving Our
Slide 24: Gas-to-Power
Gas-to-Power What we are seeing today What’s coming tomorrow Where we play • Large scale solutions for gas-to-power Strong policy push to replace coal / diesel Gas generation growth continues through 2035 projects with gas / renewables as stable baseload and dispatchable capacity provider • LNG stor
Slide 25: Marine
Marine What we are seeing today What’s coming tomorrow Where we play Growing LNG-Powered Fleet (~10% of total) • Ship fuel systems including Global Fleet: 4,600 1% Hydrogen 10% In Operation On Order LNG Ready permanent tanks and LPG/Methanol LNG/LNG Ready 8% ISO containers Battery Scrubber • Fully-e
Slide 26: Over-the-Road
Over-the-Road What we are seeing today What’s coming tomorrow Where we play Significance to Chart LNG Trucks (EUR) LNG Stations (EUR) • LNG vehicle tanks – LTAs with Continued LNG and Hydrogen transportation and multiple truck manufacturers 6,500 229 infrastructure network development in countries s
Slide 27: Rail
Rail What we are seeing today What’s coming tomorrow Where we play Hydrogen Trains • LNG and hydrogen fuel tenders and Florida East Coast Rail ISO tanks Select Florida and • Chart is the most accomplished Alaska RR using LNG supplier of cryogenic / LNG tank Alaska Railroad solutions and LNG fuel ten
Slide 28: Treatment for Clean Water
Treatment for Clean Water What we are seeing today What’s coming tomorrow Where we play Growing populations pressuring existing water Middle East and Asia, facing water scarcity, • Engineering and manufacturing of treatment systems turning to desalination turnkey cryogenic liquid oxygen • 34 billion
Slide 29: Market Trends Complement Our Integrated Offering
Market Trends Complement Our Integrated Offering Gas-to-Power Marine Over-the-Road Rail Clean Water D&S East D&S West E&C Cryogenics E&C FinFans These 5 examples illustrate the opportunity for Chart’s integrated offering… but there are many more! 2019 Chart Industries Investor Day 29Market Trends Co
Slide 30: Broadest Product Offering
Broadest Product Offering Community & Employees Broadest Product Offering for Industrial Gas & Energy • Environmental, Social & Governance • Application and Customer Expansion • Building capabilities to support other strategic pillars • Cryo-pump opportunity • Branding • Repair & Service E A • Speci
Slide 31: Global Infrastructure
Global Infrastructure Liquefaction Marine Transportation Fueling Power Liquefaction can use Transportation, LNG by truck uses Chart’s Fueling stations for LNG, LNG is used for power Chart’s IPSMR® consumption, and HLNG cryogenic cylinder CNG and bio-gas vehicles generation using Chart’s technology,
Slide 32: Small and Utility-Scale LNG: The List Keeps Growing
Small and Utility-Scale LNG: The List Keeps Growing Attractive Market Fundamentals US / Canada • $650M revenue opportunity over US East Coast l Utility / peak gas capacity the next 3 years l Marine fuel / bunkering • Estimated 12-15% annual growth US West Coast / Other for next 10 years l Utility /
Slide 33: Case Study: Shell Gibraltar
CASE STUDY Shell Gibraltar Gibraltar needed a solution to meet clean power Power Plant generation, vehicle fueling, and vaporization needs. LNG Terminal Chart delivered a custom build solution including bulk storage, vacuum insulated piping, vaporization, LNG Vessel loading arms, and a control and s
Slide 34: Case Study: NiCHe LNG's Towanda Facility
CASE STUDY NiCHe LNG’s Towanda Facility NiCHe LNG required a solution to capture surplus natural gas to provide to a wide range of customers from commercial and industrial users, local gas utilities and power generation facilities. Chart delivered a custom pre-treatment, 50,000 GPD liquefaction unit
Slide 35: ssLNG Order Opportunities
ssLNG Order Opportunities Number Project Chart Customer Operator Chart Content 1 Utility-scale project for U.S. East Coast ODIN Confidential C50N 2 Utility-scale project for Northeast ODIN Confidential C50N, 5x100k gallon storage 3 NorthEast Energy Center ODIN Liberty Energy C250N and pretreatment 4
Slide 36: Big LNG Order Opportunities
Big LNG Order Opportunities Number Project Chart Customer Operator Size Chart Content 1 - BOOKED Calcasieu Pass BHGE Venture Global 10 MTPA 18 cold boxes, BAHX 2 - BOOKED Gimi (Tortue) Black & Veatch Golar 3.75 MTPA 4 cold boxes, BAHX 27 MTPA IPSMR®, cold boxes, 3 Driftwood Bechtel Tellurian (Phase
Slide 37: Case Study: Big LNG Elba Island
CASE STUDY Big LNG: Elba Island Elba Island was constructed as an LNG import terminal and regassification facility in 1972. With a natural gas surplus, Shell needed a solution to re-purpose the facility as an LNG export terminal. Chart delivered a modular multi-train liquefaction system to meet thei
Slide 38: Specialty Markets: Dynamic Growth
Specialty Markets: Dynamic Growth Market End-use of Products Potential Drivers of Size Opportunity (1) Market Size Food and Beverage • Food preservation equipment $500M • Nitro-beverage changeover • Nitrogen dosing equipment Cannabis • Liquid CO2 storage and supply / delivery systems $250M • Legaliz
Slide 39: Case Study: Specialty Markets Water Treatment
CASE STUDY Specialty Markets: Water Treatment Clark County Nevada needed a liquid oxygen storage and regassification solution for oxygen supply used in Energy ozone generation for water treatment (disinfection). Chart delivered an engineered system equipped with liquid oxygen storage tanks and vapor
Slide 40: Aftermarket Evolution and Roadmap
Aftermarket Evolution and Roadmap YE 2021 Aftermarket Target sales as a % 21.0% of total sales Since 2017, M&A helped us transform the aftermarket business… 15.4% E&C FinFans E&C Cryo D&S East D&S West 13.8% 13.5% 2017 2018 Q3 2019 2021 …Along with organic capital investment 2019 Chart Industries In
Slide 41: Innovative Solutions
Innovative Solutions Community & Employees Broadest Product Offering for Industrial Gas & Energy • Environmental, Social & Governance • Application and Customer Expansion • Building capabilities to support other strategic pillars • Cryo-pump opportunity • Branding • Repair & Service E A • Specialty
Slide 42: Why Do Customers Choose Chart?
Why Do Customers Choose Chart? UPFRONT ENGINEERING + + BROADEST APPLIED R&D PRODUCT OFFERING TURNKEY SOLUTIONS 2019 Chart Industries Investor Day 42Why Do Customers Choose Chart? UPFRONT ENGINEERING + + BROADEST APPLIED R&D PRODUCT OFFERING TURNKEY SOLUTIONS 2019 Chart Industries Investor Day 42
Slide 43: Focus on Research & Development
Focus on Research & Development Category Description Product Lines Impacted Enhanced air side and tube side technologies that reduce area Enhanced Heat Transfer Air Cooled Heat Exchangers and equipment size resulting in reduced costs for customers Development of a high pressure gas Flowmeter that ca
Slide 44: Margin Expansion
Margin Expansion Community & Employees Broadest Product Offering for Industrial Gas & Energy • Environmental, Social & Governance • Application and Customer Expansion • Building capabilities to support other strategic pillars • Cryo-pump opportunity • Branding • Repair & Service E A • Specialty Mark
Slide 45: Leveraging Our Global Operations
Leveraging Our Global Operations Americas D&S West Ball Ground, GA New Prague, MN Fremont, CA McCarran, NV (Repairs) Houston, TX (Repairs) Skaff – Brentwood, NH (Repairs) E&C New Iberia, LA Tulsa, OK La Crosse, WI The Woodlands, TX Hudson/Cofimco – Beasley, TX Franklin, IN (Repairs) Asia-pacific D&S
Slide 46: Optimizing Production Location to Improve Deliverability and Lower Cost
Optimizing Production Location toImprove Deliverability and Lower Cost2019 Chart Industries Investor Day 46Load ontotruck1 km transportto riverLoad ontoriver bargeSchedule rivertransport600 km toHamburg,GermanyArriveGenoaPath to Port: Decin to Hamburg+600 Km, 3 stops, 6-7 daysPath to Port: Ornago to
Slide 47: Case Study: AXC Integration Providing $29M Synergies
CASE STUDY AXC Integration Providing $29M Synergies $ in millions Synergy Description Synergy Target (OI) Tulsa / FinFan Consolidation: Cost Synergies Achieved to Date Rooftop / Facility Consolidation $15.0 One Chart Sales Force 5.0 Sourcing / Functional Savings 7.5 5 into 1 4 $15M facilities Months
Slide 48: VRV India
VRV India 2019 Chart Industries Investor Day 48VRV India 2019 Chart Industries Investor Day 48
Slide 49: Focus on India: Leveraging Cost and Proximity
Focus on India: Leveraging Cost and Proximity Chart Initiatives Why India? Commitment to increase natural gas in total energy mix from 6% percent to 15% by 2030 Hyderabad Engineering • Reduced dependence on coal / oil • Legacy AXC engineering center with 35 engineers • Lowers energy costs by 25% • H
Slide 50: Thinking Disruptive
Thinking Disruptive Community & Employees Broadest Product Offering for Industrial Gas & Energy • Environmental, Social & Governance • Application and Customer Expansion • Building capabilities to support other strategic pillars • Cryo-pump opportunity • Branding • Repair & Service E A • Specialty M
Slide 51: Worldwide Adoption of Clean
Worldwide Adoption of Clean! China Ireland Japan Ban on gasoline and diesel No non-zero emission cars Planning to reduce CO2 emissions by 90% ICE by 2040 for sale after 2030 below 2010 levels by 2050 for new passenger vehicles, assumes almost 100% EV Costa Rica Israel Papua New Guinea Ban on fossil
Slide 52: Global Footprint Provides Helium Opportunity
Global Footprint Provides Helium Opportunity Helium Opportunity • Global consumption of 6.3 Bcf per Helium is a global opportunity requiring a global footprint year, sourced from US, Qatar and Algeria (not renewable) RasGas Helium 2 Plant, Qatar • Critical to industrial, medical and consumer markets
Slide 53: Thinking Disruptive: Direct Air Carbon Capture
Thinking Disruptive: Direct Air Carbon Capture Direct Air Capture: Taking companies to net zero? • Carbon capture by moving ambient air across a membrane • Process efficiency directly correlated to amount of air moved, how efficiently it is moved (power / volume / speed) • Captured CO can be stored,
Slide 54: Thinking Disruptive: Smart Products
Thinking Disruptive: Smart Products Smart Product Strategy ü Today, Chart provides smart ü ü ü ü enabled products ü • Smart Layer (BAHX), Smart ü Tanks, and CryoBio rd • Enabled by Chart or 3 party technology ü We are listening to customers, actively solving complex problems ü ü Leveraging intel com
Slide 55: Community & Employees
Community & Employees Community & Employees Broadest Product Offering for Industrial Gas & Energy • Environmental, Social & Governance • Application and Customer Expansion • Building capabilities to support other strategic pillars • Cryo-pump opportunity • Branding • Repair & Service E A • Specialty
Slide 56: Building Capabilities for the Future
Building Capabilities for the Future Organization structure Programs to build capabilities Network of teams; organizing for speed agility, • Engineering Fellows and adaptability • University Relations Culture, engagement, and brand • Emerging Leaders Holistic solution focused on all elements of the
Slide 57: Being Responsible Globally
Being Responsible Globally Environmental Social Governance • Produce products used • Inclusive hiring practices • Separate Chairman and CEO in clean energy and • Investing in training for all • 2 out of 7 female directors emissions reductions levels of employees • 6 out of 7 directors are • Customer
Slide 58: Case Study: Lowering Cost and Carbon Footprint
CASE STUDY Lowering Cost and Carbon Footprint +30% $4M 10% 40% Lower PET Savings per 1g Energy Savings Lighter of PET reduced Nitrogen dosing in bottles lowers their carbon footprint (1) • Reduction in PET • Lower heat energy in bottle formation • Structural rigidity reduces storage area, improves d
Slide 59: Profitable Growth
Profitable Growth Community & Employees Broadest Product Offering for Industrial Gas & Energy • Environmental, Social & Governance • Application and Customer Expansion • Building capabilities to support other strategic pillars • Cryo-pump opportunity • Branding • Repair & Service E A • Specialty Mar
Slide 60: Strong Balance Sheet and Cash Flow
Strong Balance Sheet and Cash Flow ($ in millions) Capital Structure (as of 3Q 2019) Net Leverage 3.5x (Q3 ‘17) $778 Net Debt Term Loan $339 Capacity 2.9x (Q4 ‘18) Revolver $259 $420 Liquidity Converts $450 3.3x (Q2 ‘19) $150 Current 3.2x (Q3 ‘19) Target $859 Total Debt Under 2.0x Working Capital Fr
Slide 61: Disciplined Capital Allocation Strategy
Disciplined Capital Allocation Strategy Organic Delever Growth } Leverage target under 2.0x Debt to EBITDA } $35-40M of annual CapEx M&A } Capital allocation to position for growth } Focused on long-term shareholder value creation Direct Shareholder Return 2019 Chart Industries Investor Day 61Discip
Slide 62: Financial Targets
Financial Targets STRATEGIC FINANCIAL PLAN 2021 Target Aftermarket Sale: 21% mae Percent of Total Revenut Goole By Des. 2021 Target With Big LNG $24 -$22billion 17.0% - 18.0% 2010 Chat es esr Day
Slide 63: Q&A
Q&A 2019 Chart Industries Investor Day 63Q&A 2019 Chart Industries Investor Day 63
Slide 64: Appendix
Appendix 2019 Chart Industries Investor Day 64Appendix 2019 Chart Industries Investor Day 64
Slide 65: Financial Results by Segment GAAP – Continuing Operations
Financial Results by Segment GAAP – Continuing Operations E&C Cryogenic Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 YTD 2019 $M Sales $28.2 $34.8 $35.6 $38.3 $136.9 $35.1 $47.3 $48.9 $131.3 Gross Margin 5. 0 4.9 12.1 6.6 0.1 10.3 7.9 28.6 18.3 GM % 17.7% 14.1% 34.0% 17.2% 20.9% 0
Slide 66: Financial Results by Segment Adjusted – Continuing Operations
Financial Results by Segment Adjusted – Continuing Operations D&S West Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 YTD 2019 $M Sales $455.5 $350.7 $100.6 $117.6 $119.0 $118.3 $122.3 $113.5 $114.9 2 Gross Margin 36. 1 42.0 44.7 38.0 160.7 39. 6 41.7 38.1 119.4 GM % 35.9% 35.7% 37.
Slide 67: Financial Results by Segment Adjusted – Continuing Operations
Financial Results by Segment Adjusted – Continuing Operations E&C Cryogenics Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 YTD 2019 $M Sales $28.2 $34.8 $35.6 $38.3 $136.9 $35.1 $47.3 $48.9 $131.3 2 Gross Margin 5. 1 5.0 12.2 6.8 29.0 3. 1 9.1 8.9 21 .1 GM % 18.2% 14.3% 34.2% 17.7%