Investor Presentation
H1 2020 results
30 July 2020
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 secrets protected worldwide by TRIPS and EU Directives against their unlawful acquisition, use and disclosure. It is also protected by Copyright law. The production, offering or placing on the market of, the importation, export or storage of goods or services using GTT's trade secrets or know-how is subject to GTT's prior written consent. Any violation of these obligations may give rise to civil or criminal liability. © GTT, 2010-2020
2
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, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the accuracy, completeness or correctness of the information or opinions contained in this presentation. None of GTT or any of its affiliates, directors, officers and employees shall bear any liability (in negligence or otherwise) for any loss arising from any use of this presentation or its contents.
The market data and certain industry forecasts included in this presentation were obtained from internal surveys, estimates, reports and studies, where appropriate, as well as external market research, including Poten & Partners, Wood Mackenzie and Clarkson Research Services Limited, publicly available information and industry publications. GTT, its affiliates, shareholders, directors, officers, advisors and employees have not independently verified the accuracy of any such market data and industry forecasts and make no representations or warranties in relation thereto. Such data and forecasts are included herein for information purposes only. Where referenced, as regards the information and data contained in this presentation provided by Clarksons Research and taken from Clarksons Research's database and other sources, Clarksons Research has advised that: (i) some information in the databases is derived from estimates or subjective judgments; (ii) the information in the databases of other maritime data collection agencies may differ from the information in Clarksons Research database; (iii) while Clarksons Research has taken reasonable care in the compilation of the statistical and graphical information and believes it to be accurate and correct, data compilation is subject to limited audit and validation procedures.
Any forward-looking statements contained herein are based on current GTT's expectations, beliefs, objectives, assumptions and projections regarding present and future business strategies and the distribution environment in which GTT operates, and any other matters that are not historical fact. Forward-looking statements are not guarantees of future performances and are subject to various risks, uncertainties and other factors, many of which are difficult to predict and generally beyond the control of GTT and its shareholders. Actual results, performance or achievements, or industry results or other events, could materially differ from those expressed in, or implied or projected by, these forward- looking statements. For a detailed description of these risks and uncertainties, please refer to the section "Risk Factors" of the Document de Référence ("Registration Document") registered by GTT with the Autorité des Marchés Financiers ("AMF") on April 27, 2020 and the half-yearly financial report released on July 29, 2020, which are available on the AMF's website at www.amf-france.org and on GTT's website at www.gtt.fr. The forward-looking statements contained in this presentation are made as at the date of this presentation, unless another time is specified in relation to them. GTT disclaims any intent or obligation to update any forward-looking statements contained in this presentation.
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Agenda
1. Company overview & key highlights
2. Core business: Market & activity update
3. New businesses: LNG as fuel developments
4. Service activity
5. Strategic roadmap
6. Financials
7. Outlook
Appendices
4
1
Company overview & Key highlights
5
GTT at a glance
Profile
A French technology and engineering company with more than 50-year track record
Expert in liquefied gas containment systems
GTT is a public company listed on the Euronext Stock Exchange (Paris), compartment A
405 highly qualified people(1)
Activities
Designs and licenses membrane technologies for containment of liquefied gas
Core business: LNG transportation and storage New business: LNG as fuel for vessel propulsion
Provides design studies, construction assistance and innovative services
Consolidated key figures
in € million | H1 2020 |
Total Revenues | 204 |
Royalties (newbuild) | 198 |
Services | 6 |
Net Income | 116 |
© GTT | © Engie |
(1) As at December 31, 2019- GTT SA / Excluding interns and apprentices. 456 employees at Group level. | 6 |
H1 2020 key Highlights
Core business : sustained and diversified new orders
18 orders (12 LNGCs, 2 FSU, 1 FSRU, 3 onshore storage)
New services contracts
February 2020: services and support contract with CMA CGM group
March 2020: global services agreement between GTT NA and Excelerate Energy (USA)
July 2020: two global technical services agreements with Knutsen (Norway) and Fleet Management (Hong Kong)
New TALA
June 2020: agreement with ZVEZDA, a major shipyard in Russia
•
Targeted acquisitions
February 2020: acquisition of Marorka (Iceland), an expert in Smart Shipping
July 2020: acquisition of OSE Engineering, a French Company expert in Smart Algorithms
New Directors
Pierre Guiollot, director replacing Judith Hartmann
Isabelle Boccon-Gibod, independent director replacing Françoise Leroy
Interim dividend
€2.50 per share (+66% vs H1 2019)
To be paid on 3 November 2020
Notes: LNGC - Liquefied Natural Gas Carrier, VLEC - Very Large Ethane Carrier, | |
FSRU - Floating Storage and Regasification Unit, RV - Regasification Vessel, | |
FLNG - Floating Liquefied Natural Gas ,ULCS - Ultra Large Container Ships | 7 |
H1 2020: GTT shows its ability to cover the entire LNG value chain
From liquefaction | To |
Regasification | |
plant | |
Courtesy of Excelerate Energy
Ice class | Very large | Conventional | Mid-scale | Very large | Onshore |
LNG carrier | FSU | LNG carrier | LNG carrier | FSRU | tanks |
5 orders | 2 orders | 5 orders | 2 orders | 1 order | 3 orders |
8
H1 2020: strong level of orderbook
CORE BUSINESS | ||
Order book: 135 units | H1 2020 movements in the order book | |
112 LNGC | 1 FLNG | New orders: 18 (12 LNGC, 1 FSRU, 2 FSU, 3 onshore |
6 VLEC | 6 Onshore storage | storage) |
Deliveries: 16 (13 LNGC, 2 FSRU, 1 FLNG) | ||
5 FSRU | 3 GBS | |
2 FSU |
NEW BUSINESS (LNG FUEL)
Order book: 18 units | H1 2020 movements in the order book | ||
14 ULCS | 1 Container vessel | No new order | |
(conversion) | |||
1 Cruise ship | Deliveries: 1 bunker ship | ||
2 Bunker ships
Notes: LNGC - Liquefied Natural Gas Carrier, VLEC - Very Large Ethane Carrier, | |
FSRU - Floating Storage and Regasification Unit, RV - Regasification Vessel, | |
FLNG - Floating Liquefied Natural Gas ,ULCS - Ultra Large Container Ships | 9 |
COVID-19
Health of our employees and their families
No severe case reported
The Group continues to apply recommendations to employees at head office and abroad, in line with those of the French and local authorities
Operational level
Head office: employees back to offices at St Remy, except those at risk Subsidiaries: same policy than head office, depending on local regulations
Main risks:
delays to the timetable for the construction of vessels, which may lead to a shift in the recognition of revenue from a year to another.
Some delays but no significant impact anticipated on 2020 revenues
Risks related to the impact of the epidemic on the global economy remain today difficult to assess.
LNG market is mainly based on long-term prospects and financing.
The situation has improved in the Asian countries, which represent more than 60% of worldwide imports of LNG.
Our business is operating normally, despite the particularly difficult
circumstances. We closely monitor any changes affecting the markets in which the Group operates.
10
2
Core business: Market & activity update
11
LNG demand reforecast post Covid
Mtpa
750
700
650
600
550
500
450
400
350
300
Evolution of LNG demand outlooks (Wood Mackenzie)
Q4 2019
Q2 2020
Q4 2018
Q4 2017
Q4 2016
2018 | 2020 | 2022 | 2024 | 2026 | 2028 | 2030 | 2032 | 2034 |
Source: Wood Mackenzie
Short term: despite Coronavirus, LNG demand is still expected to increase by 3% in
2020 (vs +6% initially forecasted),
Sustained by low spot prices that favored coal to gas switching
Long term demand trend remains sustained (CAGR of +3.9%/y between 2019 and 2035)
12
Despite Covid and slowdown in global LNG import growth, China remains very dynamic
China monthly LNG demand
Chinese LNG imports expected to grow 4% in 2020 despite Covid situation that strongly impacted China in Q1 2020.
Strong rebound seen in Q2
Current price situation favors coal to gas switching, and LNG vs piped gas
Source: Wood Mackenzie
China LNG demand by 2030
Long term growth remains strong, expected to stabilize around 5% by 2030.
Importing terminals remain over used, but situation to improve
Average utilization rate of 85% in 2019 (vs 37% for the rest of the world).
5 importing terminals under construction
+ 11 expansions planned at existing terminals
100 | |
80 | |
Mtpa | 60 |
40 |
20
33% 46% 41%
3,2
25%
20%
15%
10%
5%
Annual growth
0
2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 |
0%
Source: Wood Mackenzie, Q2 20 | 13 |
Record low LNG spot prices led to US cargoes cancellation
Coronavirus and lockdowns have pushed LNG spot prices to record low
Below $2/Mmbtu in Asia and below $1.5/Mmbtu in Europe
Depressed prices and demand led to US cargoes cancellation
30 to 50% of US production in April, May and June.
US LNG is now back in the money vs oil indexed Asian LNG
12 | |
10 | |
$/Mmbtu | 8 |
6 | |
4
2
0
Source: Argus, EIA, GTT
LNG prices in Asia
Asian oil
contracted
LNG
US LNG
delivered in
Asia
Asian spot
LNG
Oil indexed LNG: 13%*Brent+0,5/ HH indexed LNG: 1,15*HH+3,8
Why those cancellations in the US?
US contracts have a light Take or Pay clause, where cargoes can be cancelled 60 days in advance by paying only the liquefaction fee (approx $2.5/Mmbtu)
Thus, if the spread between Asian spot LNG and US LNG contracts delivered in Asia exceeds liquefaction fee, US cargoes may be cancelled and replaced by the purchase of spot cargoes
14
US LNG flexibility is valuable in a volatile world
Limited impact for most players
Limited impact for gas producers (deep US gas consuming market)
Limited impact for liquefactors (Liquefaction fee paid anyway)
However, some liquefaction players have some uncontracted volumes (approx 20% of capacity) that they sell spot, exposing them partly.
Limited impact for ship-owners with contracted vessels
For uncontracted vessels operating on the spot market, difficult situation as many vessels are now available, pushing charter rates down
Impact for LNG buyers, but smaller than if LNG was oil indexed with no flexibility
In June/July, oil indexed LNG has been more expensive than US LNG, but heavier take or pay clauses (full cargo to be paid, lifted or not) prevented their cancellations.
Current situation could reinforce US LNG for future contracts, with appreciated flexibility
Flexibility on prices
Losses capped at liquefaction fee (approx $2.5/Mmbtu) - can be seen as a financial option for offtakers. Losses to be higher for unflexible oil LNG contract
Flexibility on volumes
US cancellations have limited LNG supply and demand imbalance during Covid-19 crisis
On oil indexed LNG contracts, Force Majeure exercised by many players has always been denied by sellers.
15
LNG Supply & Demand: new capacity needed
LNG Supply & Demand balance forecast
700 | ||||||||||||||||||||||||||||||||||||
600 | ||||||||||||||||||||||||||||||||||||
500 | 240 Mtpa | |||||||||||||||||||||||||||||||||||
Mtpa | 400 | |||||||||||||||||||||||||||||||||||
300 | ||||||||||||||||||||||||||||||||||||
200 | ||||||||||||||||||||||||||||||||||||
100 | ||||||||||||||||||||||||||||||||||||
0 | 2026 | 2033 | ||||||||||||||||||||||||||||||||||
2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2034 | 2035 | |||
Supply - Operationnal | Supply - Under Construction | LNG demand | Sources: Wood Mackenzie Q2 2020 | |||||||||||||||||||||||||||||||||
LNG demand slowdown, due to Coronavirus crisis, has postponed the supply/demand gap to 2027
New FIDs have almost all been delayed to 2021, but remain necessary to fulfill the 240 Mtpa gap by 2035.
Likely projects for 2021 FIDs: Costa Azul (Mexico), Qatar, Obskiye (Russia), Corpus Christi Stage III (US),
Mozambique LNG-4. | 16 |
c.75-80 more LNGCs required for liquefaction projects under construction
LNGCs supply demand balance of Under Construction liquefaction plants
Expected delay | Forecasted | Contracted | ||||||||||||||||
Project | Location | (in months, due to Covid19, | Capacity | LNGCs requirement | ||||||||||||||
Start-Up | ||||||||||||||||||
according to WoodMackenzie) | (mtpa) | |||||||||||||||||
Cameron T3 | US East | 0 | 2020 | 4 | 6 | |||||||||||||
Freeport Train 3 | US East | 0 | 2020 | 4,6 | 8,1 | |||||||||||||
PFLNG 2 | Asia Pacific | 0 | 2020 | 1,4 | 1 | |||||||||||||
Corpus Christi T3 | US East | 3 | 2021 | 4,5 | 8,6 | |||||||||||||
Tangguh Phase 2 | Asia Pacific | 8 | 2022 | 4,5 | 4 | |||||||||||||
Coral FLNG | East Africa | 6 | 2023 | 3,4 | 5,5 | |||||||||||||
Sabine Pass T6 | US East | 3 | 2023 | 4,5 | 10 | |||||||||||||
TortueFLNG | West Africa | 12 | 2023 | 2,4 | 4 | |||||||||||||
Calcasieu Pass | US East | 6 | 2024 | 8 | 12 | |||||||||||||
Arctic LNG-2 | Russia | 3 | 2024 | 19,8 | 35 | |||||||||||||
Mozambique LNG (Area 1) | East Africa | 12 | 2025 | 11,2 | 17 | |||||||||||||
LNG Canada | Canada West | 6 | 2025 | 14 | 20 | |||||||||||||
Golden Pass | US East | 6 | 2025 | 15,6 | 25,7 | |||||||||||||
NLNG T7+expansion | West Africa | 12 | 2026 | 8 | 14 | |||||||||||||
Average: 5,5 months | ||||||||||||||||||
TOTAL | 171 | |||||||||||||||||
- Current Orderbook | 87 | |||||||||||||||||
- Available vessels in operation | 7 | |||||||||||||||||
Expected orders | 77 | Source: Wood Mackenzie / | ||||||||||||||||
GTT |
Market still requires around 75-80 more LNGCs for contracted supply of LNG plants under construction Expected fleet replacement could increase that number
US LNG projects are less delayed than other projects thanks to their track record.
NB: Current orderbook excludes vessels in orderbook for currently operating projects | 17 |
Focus on Onshore storage
GTT has received 2 orders for 3 Onshore tanks in China
2 x 220k cbm GST with Chinese licensee HQCEQ for a new regas terminal of Beijing Gas in Tianjin (North East China)
Construction already began (foundations)
1 x 29k cbm GST with CPECCCNC for peak-shaving requirements for Hebei North
GTT returns to the onshore tanks market with its GST technology, on the most dynamic country currently (China) with many new LNG import terminals and expansions expected in the coming years
This success will contribute to open other new markets for GTT
18
Onshore storage: GST technology for a reduced carbon footprint
10 000
30 000 | Concrete | |||||||||||||||||
25 000 | ||||||||||||||||||
Metal | C | |||||||||||||||||
20 000 | ||||||||||||||||||
2 000 | Insulation | |||||||||||||||||
15 000 | ||||||||||||||||||
10 000 | 0 | I | ||||||||||||||||
Full | Containment | Membrane | ||||||||||||||||
5 000 | ||||||||||||||||||
0 | ||||||||||||||||||
0 | ||||||||||||||||||
Full Containment | Membrane | |||||||||||||||||
Full Containment | Membrane | |||||||||||||||||
Source: Bouygues TP, LNG17
Significant reduction of the environmental impact by using Membrane technology
Thanks to reduced content of metal
19
Core business long term estimates
GTT H1 2020 Sales
GBS
LNG Fuel1% Services
FLNG 2% 3% 1%
FSRU
7%
LNGC
86%
GTT order estimates over 2020-2029
LNGC: between 285 and 315 units(1)
VLEC: between 25 and 40 units
FSRU: between 10 and 20 units
FLNG: Up to 5 units
Onshore and GBS tanks: between 15 and 20 units
Courtesy of Shell | Courtesy of Excelerate Energy |
(1) Including replacement market | 20 |
3.2 | 3 |
New businesses: LNG as fuel developments
21
LNG as fuel: LNG is the only mature solution allowing comprehensive environmental compliance
Comparison of emissions by fuel type
Base 1
1 | ||
0,75 | ||
0,5 | ||
0,25 | ||
0 | ||
SOX | NOX * | CO2 |
HFO | |
HFO+ Scrubber | |
LSHFO | |
LNG | |
Source : DNV | |
Particulates | NOx emissions for LNG |
are for XDF engines | |
LNG is in advance of existing and anticipated environmental regulations
No SOx, no particulates, low NOx, reduced CO2 emissions
Implementation in January 2021 of NOx reduction in North Sea and Baltic Sea will further degrade potential of oil fuels and scrubbers
22
LNG fuel keeps expanding in a very challenging shipbuilding market
Annual shipping orders (≥20k dwt) and LNG as fuel market share
5000 | 12% | ||||||||||||
11% | 10% | ||||||||||||
4000 | |||||||||||||
# vessels ordered | 8% | LNG as fuel market share | |||||||||||
3000 | |||||||||||||
6% | |||||||||||||
2000 | 4% | ||||||||||||
1000 | 2% | ||||||||||||
580 | |||||||||||||
0 | (annualized, 290 as 30 June 20) | 0% | |||||||||||
2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
Sources: GTT, Clarksons
Shipping annual orders (excl gas carriers) | % LNG fueled | |
Despite depressed shipping market with only 290 orders in 2020 (as at 30 June 2020) because of Coronavirus, LNG as fuel market keeps developing with 11% market share.
Shipping market is expected to recover, with Clarksons forecasting between 1,500 and 2,000 orders annually over the next 10 years.
23
Competition landscape of LNG fuel market
LNG as a marine fuel continues its penetration in shipping market
LNG fuel tanks competitive landscape
LNG tanks total capacity - cbm
11% market share in 2020
The c.30 LNG fuelled vessels ordered so far in 2020 have all been in Type C
Mainly oil/product tankers, with small/medium capacities (<3,000 cbm)
Two 7,500 cbm VLCCs and two 12,000 cbm for containerships have been ordered in 2020, marking an increase in Type C size.
20,000
Newbuild & Retrofit | ||||
Type B | • | Ultra & Very Large | ||
Newbuild | Container Vessels | |||
• Very Large Container | • | Cruise ships | ||
10,000 | Vessels | |||
(expedition) | ||||
10-15 vessels | 15-20 vessels |
100-150k cbm | |
200-300k cbm | |
5,000
Lower sizes
possible
1,000
Higher sizes
possible
Type C
Newbuild & Retrofit
- Ferries
- Ro-Ro
- Tugs
- Small Containers
- Small Tankers
- Small bulkers
- VLCC
300-400 vessels
350-450k cbm
1 | 2 | 3+ |
Number of market segment penetrated |
Main sources: Clarksons, DNV GL
24
3.3 | 4 |
Service activity
25
Services to make LNG easy
4 new services contracts in H1 2020: GTT services platform attracts more and more ship-owners
CONSULTING | |
to get LNG as | |
ENGINEERING | fuel projects on |
track | |
To enable | |
projects and | |
support daily | |
operations |
TESTS
to facilitate LNG tanks maintenance
MAINTENANCE
To maintaiin the industry's track record
DIGITAL
To support the industry's digital transformation
TRAINING
to raise
awareness about LNG
LNG
OPERATIONS
To support
operators in the
first LNG operations
EMERGENCY
To avoid
escalation and
minimise
impacts
26
Acquisition of OSE Engineering
OSE Engineering is a French tech company specialised in "smart algorithms" applied to complex industrial and technical problems
Profile
Products
Services
Created in 2014
Serious scientific expertise and credentials Dynamic relationship within top academic networks (talent pool)
studiOSE: algorithms design, simulation & validation platform
bOSE: Vessel Energy Flow Simulation module
OSERoad: road transport emissions simulator for design validation and certification
Services based on data processing, modelling and simulation include: Engineering study
Algorithm design
Modelling: optimization, validation and
calibration
Product customisation and integration
27
5
Strategic roadmap
28
GTT's strategic roadmap
6. Transformation
Gas handling | Technology for a |
sustainable world | |
technologies |
Smart shipping
Offshore
2. Enhancement
Multigas
5. Enlargement
LNG as | LNG Carriers | GBS |
fuel | ||
Evolution | ||
of NO 96 | ||
Transfer | 1. Intensification | & Mark |
systems | ||
operations | ||
3. Improvement | ||
Advisory services |
Intervention services
Training
4. Advisory and services | 29 |
6
Financials
30
H1 2020: Order book overview (core business)
Order book in units | Order book by year of delivery (units per year) | ||||
In units | In units | ||||
(2) | |||||
(4) | |||||
16 | |||||
34
Order book in value | Revenues expected from current order book (1) | ||||
In €M | In €M | ||||
(3) | |||||
194 | (5) | ||||
180
- Royalties from core business, i.e. excluding LNG as Fuel , services activity.
- 2020 deliveries include 16 vessels delivered until June 30, 2020 / Delivery dates could move according to the shipyards/EPCs' building timetables.
- Taking into account 2020 H1 revenues from royalties (€194M), the total amount would have been €832M
(4) | 2020 H1 deliveries | 31 |
(5) | 2020 H1 revenues from royalties. | |
H1 2020 financial performance
Summary consolidated accounts
in € M | H1 2019 | H1 2020 | Change | |
Total Revenues | 122.6 | 203.8 | 66.2% | |
EBITDA (1) | 70.9 | 136.6 | 92.7% | |
Margin (%) | 57.8% | 67.0% | ||
Operating Income/ EBIT | 68.9 | 133.9 | 94.4% | |
Margin (%) | 56.2% | 65.7% | ||
Net Income | 56.6 | 115.5 | 104.0% | |
Margin (%) | 46.2% | 56.7% | ||
Free Cash Flow (2) | 62.2 | 103.6 | nm | |
Change in Working Capital | 5.5 | 26.0 | nm | |
(3) | ||||
Capex | 3.1 | 7.0 | 125.0% | |
Dividend paid | 66.3 | 64.9 | -2.1% | |
in € M | 30/06/2019 | 30/06/2020 | ||
Cash Position | 155.6 | 199.0 | ||
Key highlights
Revenues: +66.2%
Newbuilds (royalties): +71%. Royalties from LNGCs fully benefit from the last two years strong flow of orders
Service revenue: -13%, mainly due to the decrease in maintenance and intervention services during the Covid crisis
EBITDA: +92.7%
Increase of external charges: +28% due to increased number of new orders
Increase of staff costs: +33%
Capex: Impact of Marorka acquisition
2020 interim dividend: €2.50 to be paid in Nov. 2020
(1) Defined as EBIT + amortisations and impairments of fixed assets
(2) Defined as EBITDA - capex - change in working capital
(3) Defined as December 31 working capital - June 30 working capital
32
H1 2020 Cost base
GTT consolidated operational costs
in € M | H1 2019 | H1 2020 | Change (%) |
Goods purchased | -2.6 | -2.8 | 7.5% |
% sales | -2% | -1% | |
Subcontracted Test and | -11.4 | -17.6 | 54.7% |
Studies | |||
Rental and Insurance | -2.4 | -2.8 | 16.6% |
Travel Expenditures | -4.4 | -3.5 | -20.1% |
Other External Costs | -5.8 | -6.9 | 18.0% |
Total External Costs | -23.9 | -30.7 | 28.3% |
% sales | -20% | -15% | |
Salaries and Social | -20.8 | -26.1 | 25.6% |
Charges | |||
Share-based payments | -0.8 | -1.4 | 72.6% |
Profit Sharing | -3.2 | -5.6 | 71.5% |
Total Staff Costs | -24.9 | -33.1 | 33.2% |
% sales | -20% | -16% | |
Other(1) | 2.3 | 3.2 | 39.9% |
% sales | 2% | 2% | |
Key highlights
External costs: +28.3%
Subcontractors +54.7%, due to the increase of orderbook
Travel expenditures: -20.1% due to the Covid crisis
Other external costs +18.0% (mainly fees from external advisors and patent filing)
Staff costs up 33.2%, mainly due to the increase in headcount and profit sharing
GTT H1 2020 costs(1) by nature
Staff costs
52%
External costs
48%
Goods purchased
& other
NS
(1) Excluding depreciations, amortisations, provisions and impairment of assets
33
7
Outlook
34
2020 Outlook confirmed
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) | ||
- In the absence of any significant delays or cancellations in orders. Variations in order intake between periods could lead to fluctuations in revenues
- Subject to approval of Shareholders' meeting. GTT by-laws provide that dividends may be paid in cash or in shares based on each shareholder's preference
35
Thank you for your attention
Image courtesy of STX, Engie, Excelerate, Reliance, SCF Group, Shell, CMA CGM, Conrad
36
Masque PowerPoint - January 2020 CONFIDENTIAL
Appendix
37
A streamlined group and organisation (June 30, 2020)
GTT Group
GTT SA organisation
Philippe Berterottière*
Chairman and Chief Executive
Officer
Eric Dehouck*
Deputy CEO
Lélia Ghilini*
General Counsel/
Director of Legal Affairs
Eric Dehouck* | Julien Bec | David Colson* | Karim Chapot* | Sandrine Vibert* | Marc Haestier* |
Director | Director | Commercial | Technical | Human Resources | Chief Financial |
of Innovation | LNG as fuel | Director | Director | Director | Officer |
~102 people | ~17 people | ~28 people | ~194 people | ~10 people | ~40 people |
Anouar Kiassi
Digital & IT
* Member of the Executive Committee | Director |
38
GTT exposure to the liquefied gas shipping and storage value chain
Exploration | Liquefaction | Shipping | Regasification | Off Take / | |||||||||
& Production | & Storage | Consumption | |||||||||||
Offshore | Liquefied Natural Gas | Floating Storage and | LNG fuelled | |||
clients: | Carrier | Regasification Unit | ship | |||
shipyards | (LNGC) | (FSRU) | ||||
Platform / | ||||||
Gas-to-wire | ||||||
Installation | Floating LNG Production, | |||||
Storage and Offloading | ||||||
unit (FLNG) | ||||||
Floating Storage Unit | Bunker vessel / | |||||
(FSU) | ||||||
Ethane/ multigas | Barge | |||||
Carriers | ||||||
Onshore | ||||||
clients: | ||||||
EPC | Power plant | |||||
contractors | Onshore storage / GBS | Onshore storage / GBS | Tank in | |||
liquefaction plant | regasification terminal | industrial plant | ||||
Source: Company data
39
GTT ecosystem
Oil & Gas
Companies
End clients and prescribers
provides services
Classification
Societies
Regulatory oversight of the industry
receives new technology certification and approval
Shipowners
End clients and prescribers
provides services and maintenance
Shipyards
Direct clients
licences its membrane technology and receives royalties
provides engineering studies, on-site technical and maintenance assistance
40
GTT membrane technologies
General principle: | Primary | |
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 |
41
54 ageing vessels with charter contract ending by 2023
90 LNGC chart contract to end by 2023
Of which 54 equipped with steam turbine
propulsion; also smaller vessels (<140k cbm)
Charterers and ship-owners to prepare the shift to more modern vessels
Better economics
Some Majors already started selling and replacing part of their ageing fleet (e.g. Shell, NWS project)
LNGCs carriers* with charter contract ending by 2023
35
30 | ||||||||||||||
25 | ||||||||||||||
20 | MEGI/XDF | |||||||||||||
15 | DFDE | |||||||||||||
Steam Turbine | ||||||||||||||
10 | ||||||||||||||
14 | 13 | 13 | 14 | |||||||||||
5 | ||||||||||||||
0 | ||||||||||||||
2020 | 2021 | 2022 | 2023 | |||||||||||
* Above 50k cbm | Source: Wood Mackenzie |
42
LNG short term charter rates
Spot charter rates
Source: Poten
43
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 unique position in the LNG ecosystem, nurtured by 50 years of experience, expertise and customer orientation
1 As at 30 December 2019
44
FSRUs - A flexible solution for opening quickly new access to energy
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 available and skilled workforce
Courtesy of Excelerate Energy
More than 40 FSRUs currently in service or under construction
FSRUs market outlook
Worldwide development
Asia (India, China, …)
Europe
(Turkey, Croatia, …)
South & West Africa
LatAm & Carribeans
Source: Poten 2018
45
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 distribution
Markets | POWER |
- Industry Company
- Captive Power
BUNKERING
- LNG as fuel
Location | LOCATION | |
• Islands, remote costal areas, isolated industrial needs (ex.: mining), … | ||
46
Focus on GTT's competitive advantages on LNGCs
GTT's technology positioning (1)
GTT | ||||||
Moss | SPB | KC-1 | ||||
▶ Integrated tank | ▶ Self supported spheric tank | ▶ Self supported prismaticl tank | ▶ Integrated tank | |||
Technology | (membrane) | (membrane) | ||||
▶ Atmospheric pressure | ▶ Atmospheric pressure | |||||
▶ Atmospheric pressure | ▶ Atmospheric pressure | |||||
▶ Requires less steel and | ▶ Slightly higher costs | |||||
CAPEX | aluminum than tanks for | ▶ Higher costs | ▶ Higher costs | |||
than GTT | ||||||
a given LNG capacity | ||||||
▶ More efficient use of | ▶ Higher opex due to | |||||
OPEX | space | ▶ Higher fuel / fee costs | ▶ Higher fuel / fee costs | |||
BOR (0.16%) | ||||||
▶ Limited BOR (0.07%) | ||||||
LNGCs in | ▶ 115 | ▶ 0 | ▶ 0 | ▶ 0 | ||
construction | ||||||
LNGCs in | ▶ 384 | ▶ 129 | ▶ 4 (+2 small) | ▶ 2 (on repair) | ||
operation | ||||||
▶ Higher centre of gravity; | ▶ Huge losses and delays on | ▶ Korean technology with | ||||
Other | ▶ Value added services | vessels in orderbook. | ||||
harder to navigate | little experience at sea | |||||
No significant experience | ||||||
GTT technologies : cost effective, volume optimisation and high return of experience
Source: Company data and comment (December 31, 2019), Clarksons
(1) Other technologies are being developed, however are not known to have obtained final orders to date (e.g. DSME's Solidus). Excludes vessel orders below 50,000 m3
47
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 market |
New LNG Brick®
dedicated to medium-sized merchant vessels test phase completed
48
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 | 49 |
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: vacuum (smaller tanks) or |
foam (larger tanks) | |||
Space | ▶ High: Integrated tank and | ▶ Moderate to high : Inspection space, | ▶ Low: Cylindrical design, restricted filling |
optimization | unique design for each vessel | restricted filling limits (heel) | limits (pressurized) |
Boil off | ▶ Low | ▶ Low to medium | ▶ Uncertain on real value during operation |
▶ Moderate cost: Requires less | ▶ Higher cost, as much metal is used | ||
CAPEX | steel and aluminum than other | (Aluminum or Nickel) and many | ▶ Lower cost (foam), high cost for vacuum |
tanks for a given LNG capacity | workers required for welding | ||
▶ Reinforced foam for LNG fuel | ▶ Tank shape | ▶ Tank shape | |
Sloshing | tanks | ||
▶ Metallic structure | ▶ Metallic structure | ||
▶ Chamfers | |||
LNG fueled | ▶ High experience with >400 | ▶ Limited experience at sea (few | ▶ 175 (mainly with tanks <1k cbm, |
vessels in | vessels in operation (LNGCs, | LNGCs, with delays and high cost | |
vacuum) | |||
operation | FSRUs, …) | overrun during construction) | |
LNG fueled | ▶ 200 (mainly with tanks <1k cbm, | ||
vessels in | ▶ 19 (18 + 1 conversion) | ▶ 11 | |
vacuum) | |||
construction | |||
▶ High metal content => high price and | ▶ Exposed to salinity, meteorology (if tank | ||
Others | ▶ High end design | weight, complex welding, thermal | on deck) |
resistance, long cooling down,… | ▶ Easier for conversion if tank on deck | ||
▶ Potential outer tank corrosion | ▶ Generic technology | ||
Source: Company data and comment (December 31, 2019), Clarksons, DNV GL | 50 |
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 | |||
10000 | studies | royalties | |||
8000 | Ship | ||||
launching | |||||
6000 | |||||
Keel laying | |||||
4000 | |||||
Steel cutting | |||||
2000 | |||||
0 | Months from receipt of order | ||||
0 | 5 | 10 | 15 | 20 | 25 |
Cash collection | Revenue IFRS 15 |
Revenue is recognized pro-rata temporis between construction milestones
Initial payment collected from shipyards at the effective date of order of a particular vessel (10%)
Steel cutting (20%)
Keel laying (20%)
Ship launching (20%)
Delivery (30%)
Source: Company
(1) Illustrative cycle for the first LNGC ordered by a particular customer, including engineering studies completed by GTT
51
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 | ||||||||||||||||||||||||||||
47 | 51 | |||||||||||||||||||||||||||
44 | ||||||||||||||||||||||||||||
37 | ||||||||||||||||||||||||||||
Evolution of new | 34 | 26 | 35 | |||||||||||||||||||||||||
21 | ||||||||||||||||||||||||||||
GTT orders (1)(2) | 19 | |||||||||||||||||||||||||||
4 | 1 | 7 | 5 | |||||||||||||||||||||||||
2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||
LNGC/VLEC | FSRU/FLNG | Onshore storage / GBS | Barge | Backlog (# of orders) | ||||||||||||||||||||||||
65% | 64% | |||||||||||||||||||||||||||
57% | 55% | 58% | 50% | |||||||||||||||||||||||||
51% | 52% | 51% | 50% | |||||||||||||||||||||||||
42% | 44% | |||||||||||||||||||||||||||
Evolution of | 31% | 33% | ||||||||||||||||||||||||||
288 | ||||||||||||||||||||||||||||
revenue (in € M) | 251 | 246 | ||||||||||||||||||||||||||
222 | 218 | 227 | 226 | 237 | 232 | |||||||||||||||||||||||
and net margin (4) | ||||||||||||||||||||||||||||
163 | 142 | |||||||||||||||||||||||||||
75 | 56 | 89 | ||||||||||||||||||||||||||
2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||
Revenue | Net Margin | |||||||||||||||||||||||||||
Source: Company
- Orders received by period / Core business
- Excl. vessel conversions
- Represents order position as at December based on company data, including LNGC, VLEC, FLNG, FSRU and on-shore storage units
- Figures presented in IFRS consolidated from 2016 to 2018, IFRS from 2010 to 2015, French GAAP from 2006 to 2009
52
Contact: information-financiere@gtt.fr/ +33 1 30 23 20 87
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GTT – Gaztransport & Technigaz SA published this content on 30 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 August 2020 14:03:02 UTC