Gaztransport & Technigaz Sa · EURONEXT:GTT
Gaztransport & Technigaz Sa — FY2017 Earnings Presentation
55 slides from Gaztransport & Technigaz Sa's earnings presentation, Feb 19, 2018
Slide 1: Investor Presentation: 2017 Full Year Results
Investor Presentation 2017 Full Year Results February 19, 2018
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. Market update 3. Business activity 4. Financials 5. Outlook Appendices 4
Slide 5: Company overview
GIT Company overview
Slide 6: GTT, a French engineering company, global leader in liquefied gas containment systems
GTT, a French engineering company, global leader in liquefied gas containment systems Consolidated key figures Profile Leading engineering company in € million 2016 2017 Expert in liquefied gas containment Total Revenues 237 232 systems Royalties (newbuild) 227 218 Services 10 14 More than 50-year t
Slide 7: Key Highlights
Key Highlights Core business: orders upturn in 2017: 21 new orders vs 5 in 2016 / already 4 since beg. 2018 CORE BUSINESS Order book: 89 units 2017 movements in the order book 71 LNGC/VLEC(1) 2 FLNG New orders: 21 (12 LNGC, 8 FSRU, 1 FLNG) 13 FSRU/RV(1) 2 Onshore storage Deliveries: 28 (24 LNGC/VLEC
Slide 8: Market update
GTT Market update
Slide 9: 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 share in total gas trade 40% 30% Oil Gas Coal 20% 10% Bioenergy Nuclear Renewables Hydro 0% 2000 2005 2010 2015 2020 2025 2030 2035 Gas is the only fossil energy to Gas is increasingly exported thanks to increase share
Slide 10: LNG Supply & Demand could balance from early 2021
LNG Supply & Demand could balance from early 2021 LNG Supply & Demand balance forecast 450 400 350 300 250 mtpa 200 Demand adjustment due to low prices and FSRUs availability Intermediate No demand adjustment scenario S&D balance in 2022 150 S&D balance in early 2021 100 50 0 2018 2019 2020 2021 202
Slide 11: 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-5 LNG importers demand comparison 2017 vs. 2016 Demand of top-5 LNG importing countries (2/3 of imports) grew by 200 47% 50% 11% in 2017 vs. 2016, mainly due to: 175 Coal to Gas switch, especially in 40% China due
Slide 12: New importing countries contribute to demand growth
New importing countries contribute to demand growth Incremental LNG demand from new markets 25 +20,7 Mtpa Colombia 20 Malta Israel Malta + 17,9 Mtpa Jamaica Lithuania Colombia, Poland Israel Malta, Lithuania Malaysia Jamaica Poland 15 Malaysia Singapore Singapore Mtpa Jordan Jordan 10 + 9,5 Mtpa Isr
Slide 13: 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 10,0 Asian LNG < US LNG Asian LNG 9,5 9,0 Asian oil indexed LNG competitive US LNG competitive 8,5 LNG price - $/Mbtu HH : $4/Mmbtu 8,0 Spread HH : $3,5/Mmbtu 7,5 US LNG HH : $3/Mmbtu 7,0 2017 avg. 2016 av
Slide 14: LNG Shipping: spot market recovering trend
LNG Shipping: spot market recovering trend Spot chart rates evolution since 2011 Up to $82k/d in end Dec.2017 Estimated breakeven Recovering trend since 2016 Currently reaching levels not observed for 4 years; above breakeven 14
Slide 15: LNG Shipping: c.40 LNGC orders expected from under construction projects
LNG Shipping : c.40 LNGC orders expected from under construction projects LNGC requirements for under construction liquefaction projects Contracted Forecasted LNGCs Project Location Start-Up Capacity requirement 12 LNGCs ordered in 2017 confirming (mtpa) Cameroon GoFLNG Cameroon Q2-18 1,2 market nee
Slide 16: Many liquefaction projects ready to be sanctioned soon
Many liquefaction projects ready to be sanctioned soon in order to accompany demand growth Several major liquefaction projects in planning phase with a potential FID in 2018 Project Milestones Capacity Feedgas Concept/ Name Operator Country Environmental Regulatory Participation Marketing Financing
Slide 17: Business activity
3 Business activity 17
Slide 18: Core business
3.1 Core business 18
Slide 19: Core business
Core business GTT 2017 Sales GTT order estimates over 2018-2027 LNGC: 225-240 units Services 12 orders in 2017 FLNG 6% 1% FSRU 10% FSRU: between 30 and 40 units 8 orders in 2017 FLNG: between 5 and 10 units 1 order in 2017 LNGC/VLEC 83% Onshore tanks: between 5 and 10 units Courtesy of Shell Courtes
Slide 20: LNGCs – Our main business
LNGCs – Our main business Vessels equipped for transporting LNG Existing GTT fleet: 334 units In order: 71 units 24 construction shipyards under license Our strengths Technological leadership, boil-off divided by 2 in the last 5 years Long term industrial partnerships with major shipyards A unique p
Slide 21: 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 22: 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 units In order: 2 units Courtesy of Shell Main drivers GTT key advantages Monetisation of stranded Extended amortization offshore gas reserves perspectives Better accept
Slide 23: New businesses: LNG Fuel
3.2 New businesses: LNG Fuel 23
Slide 24: LNG Fuel focus – CMA CGM order
LNG Fuel focus – CMA CGM order 9 Ultra Large Container Ships with LNG integrated membrane tanks of 18,600 cbm each Space optimization Designed for one bunkering operation per round trip Mark III Flex technology for the fuel storage system Sea proven technology Guaranteed Boil Off Gas Flexibility to
Slide 25: LNG is the only solution allowing comprehensive environmental compliance
LNG is the only solution allowing comprehensive environmental compliance LS HFO ULS HFO MGO / HFO Scrubber Pollutant Level (Low Sulfur (Ultra Low Sulfur MDO1 LNG (Heavy Fuel Oil) HFO) HFO) (Marine +HFO Gasoil/Diesel Oil) 3,5% SOx 0,5% (Sulfur Oxides) 0,1% Tier II NOx2 (Nitrogen Oxides) Except for Ti
Slide 26: Current LNG Fuel market situation
Current LNG Fuel market situation Total LNG fuel tank by ship type (in service & on order) 4 000 Max CMA-CGM 3 500 Total LNG tanks capacity Avg. 3 000 Min 2 500 cbm 2 000 1 500 1 000 Market avg ~750 cbm 500 0 Notes: • Data available for ~70% of the 237 vessels Source: DNV GL • CMA-CGM order not coun
Slide 27: LNG Fuel market potential: to be driven by newbuilds
LNG Fuel market potential: to be driven by newbuilds Shipping markets newbuild potential 20 000 Container ships • 3,000+ avg. annual orders (2005-2016) (ULCS) • Fleet of 90’000+ vessels in 2017 Bulkers 15 000 (VLOC) Oil Tankers LNG fuel tanks capacity - cbm (VLCC) 10 000 PCTC Cruise ships 5 000 LPG
Slide 28: LNG Fuel market potential for GTT
LNG Fuel market potential for GTT Historical avg. Relevant Market Segments Shipping Markets annual orders Fleet at end 2017 for GTT (2007-2016) Tier 1 Container Ships Bulkers Large to Ultra Large ~320 ~4,700 Oil Tankers Cruise Ships > 2,000 passengers ~13 ~400 Car & Truck Carriers > 6,000 CEU ~23 ~4
Slide 29: 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 Cruise Ship – optimizing the space for and retrofit additional passengers Cost effective solution for bulk carriers Lean bunker barge to standardize the marke
Slide 30: Service activity
3.3 Service activity 30
Slide 31: Expand innovative services offer
Expand innovative services offer: customised services package fitting industry expectations © Excelerate Energy DESIGN CONSTRUCTION OPERATIONS MAINTENANCE UPGRADE Feasibility studies Materials Training courses Inspections, Engineering FEED certification and customised maintenance support for retrofi
Slide 32: Ascenz transaction
Ascenz transaction Acquisition of 75% of the share capital from founders and several investment funds Founders to retain 25% of the share capital and continue to manage the company Funded in cash Transaction closed on 31 January 2018 No significant impact on GTT’s financial structure Commercial and
Slide 33: Ascenz is a dynamic EMS provider
Ascenz is a dynamic EMS1 provider Activities, markets & awards Based in Singapore, founded in 2008 Provides remote fuel consumption and bunkering monitoring solutions Positioned on fast growing markets Markets : Offshore Supply Vessels (OSV), container ships, oil and crude carriers, bulk carriers, b
Slide 34: GTT's strategic roadmap
GTT’s strategic roadmap Gas handling technologies Growth, Technology, Superior LNG Transformation Fuel Gas handling system for vessels gas handling Advanced decision systems support systems Framework service and maintenance contract (Shell Prelude) Courtesy of Shell Smart shipping 34
Slide 35: Financials
4 Financials 35
Slide 36: Order book overview (core business) – IAS 18
Order book overview (core business) – IAS 18 Order book in units Order book by year of delivery (units per year) In units In units (1) 41 40 120 32 30 96 89 90 21 20 13 60 4 5 0 0 30 2018 2019 2020 2021 As at Dec 31, 2016 As at Dec 31, 2017 As at Dec 31, 2016 As at Dec 31, 2017 Order book in value R
Slide 37: Order book overview (core business) – IFRS 15
Order book overview (core business) – IFRS 15 Order book in units Order book by year of delivery (units per year) In units In units (1) 41 40 120 32 30 96 89 90 21 20 13 60 4 5 0 0 30 2018 2019 2020 2021 As at Dec 31, 2016 As at Dec 31, 2017 As at Dec 31, 2016 As at Dec 31, 2017 Order book in value
Slide 38: Consolidated accounts
Consolidated accounts Consolidated accounts prepared for the first time in 2017 2016 comparatives restated to show consolidated figures Consolidation perimeter excluding ASCENZ (closing signed on 31 January 2018) % of interest Consolidation method Name Activity Country 31-Dec-17 31-Dec-16 31-Dec-17
Slide 39: 2017 financial performance
2017 financial performance Summary consolidated accounts Key highlights In € M Proforma 2017 Change Limited decrease in revenues (-2.3% in FY 2017 vs 2016 -4.7% in H1) Total Revenues 237.0 231.6 -2,3% Revenues derived from royalties: -3.9%, still EBITDA(1) 146.4 142.1 -2.9% reflecting the difficult
Slide 40: Cost base
Cost base GTT consolidated operational costs Key highlights Change in € M 2016 2017 (%) External costs: -€7.5 M (-17%) Cost of sales (2.0) (1.8) -10% Subcontractors: -€5.4 M % sales -1% -1% Travel costs -€0.8 M Other external costs -€1.5 M Subcontracted Test (18.0) (12.6) -30% and Studies Rental and
Slide 41: Dividend
Dividend 2016 2017 Net income available for distribution €117.5 M €114.1 M (French GAAP) Total dividend Dividend per share €2.66 €2.66 Total amount paid €99.7 M €98.6 M 90% €3.00 3,0 Dividend 86% Payout (1) amount 84% ratio 60% €2.00 2,0 1.33 1.33 €1.00 1,0 30% 1.33 1.33 €0.00 0,0 0% 2016 2017 Inter
Slide 42: Outlook
5 Outlook 42
Slide 43: 2018 Outlook
2018 Outlook GTT revenue(1) 2018 consolidated revenue estimated in a range of €235 M to €250 M EBITDA 2018 consolidated EBITDA estimated in a range of €145 M to €155 M Dividend 2018 dividend amount at least equivalent to 2015 - 2017 Payment(2) 2019 payout of at least 80% (1) In the absence of any si
Slide 44: Thank you for your attention
A wide range of applications integrating GTT technologies Thank you for your attention Image courtesy of STX, Engie, Excelerate, SCF Group, Shell, CMA CGM, Matthieu Pesquet, Conrad 44
Slide 45: Appendix
GIT Appendix
Slide 46: A proactive sustainable development policy
A proactive sustainable development policy Environmental responsibility Social responsibility Stakeholders CSR responsibilities form an Core business integral part of GTT project Performance of GTT systems Employment Safety of installations and crew Compensation New business Training Development of
Slide 47: GTT SA organisation
Appendix: 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 Lélia Ghilini* General Counsel Frédérique Marc Haestier* Isabelle Delattre* Julien Bec David
Slide 48: GTT exposure to the liquefied gas shipping and storage value chain
Appendix: 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 Product
Slide 49: GTT ecosystem
Appendix: 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
Slide 50: Important new LNG volumes to hit the market in 2019 and 2020
Important new LNG volumes to hit the market in 2019 and 2020 Contracted supply from liquefaction projects under construction 90 Cameroon GoFLNG +25 80 mtpa PETRONAS FLNG 2 Elba Island LNG Export 70 Coral FLNG Prelude FLNG 60 +31 Tangguh Phase 2 mtpa 50 Freeport Train 3 mtpa Freeport Train 2 40 Sabin
Slide 51: 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 51
Slide 52: Focus on GTT's competitive advantages
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 LNG capacity ▶
Slide 53: 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. 18 months c. 18 months Delivery Revenue is recognized pro-rata studies royalties temporis between milestones Ship launching Timing of invoi
Slide 54: Track record of high margin and strong increase in backlog since 2010
Appendix: 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 96 47 44 37 34 35 26 Evolution of new 19 GTT orders (1)(2) 7 4 5 1 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Backlog (#
Slide 55: Contact
Contact: information-financiere@gtt.fr / +33 1 30 23 20 87
Gaztransport & Technigaz (GTT) — FY2017 Earnings Presentation on 6ix