Air Liquide Sa · EURONEXT:AI
Air Liquide Sa — H1 2008 Earnings Presentation
36 slides from Air Liquide Sa's earnings presentation, Aug 4, 2008
Slide 1: First Half Results 2008: A strong performance in the first half
First Half Results 2008: A strong performance in the first half ALMA gaining momentum August 4th, 2008
Slide 2: Agenda
First half results 2008 Agenda DA strong performance in the first half John Glen DALMA gaining momentum Benoît Potier 2 First Half Results 2008 - August 4, 2008
Slide 3: H1 2008: a strong performance
H1 2008: a strong performance
Slide 4: Accelerated growth in Q2
Accelerated growth in Q2 +9.9% 10% +9.1% +9.1% +7.9% 8% +6.3% 6% +5.3% 4% 2% 0% Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Gas and Services revenue comparable growth* *excluding impact of currency and natural gas 4 First Half Results 2008 - August 4, 2008
Slide 5: All business lines performed well
All business lines performed well Industrial Merchant: 42% of revenue Large Industries: 33% of revenue 10% 20% 17.2% 6.5% 6.5% 15% 5.1% 5.4% 10.6% 10.6% 5% 4.3% 4.3% 10% 5.5% 5.9% 6.4% 5% 0% 0% Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 mid-term r
Slide 6: 1st half 2008: strong performance
1st half 2008: strong performance In €m H1 2008 H1 08/07 H1 08/07 H1 08/07 as published excl. currency comparable* Group DRevenue 6 370 +13.2% +16.7% +8.3% DOIR 950 +11.0% +14.1% G&S DRevenue 5 343 +8.8% +12.6% +9.5% DOIR margin excl. nat. gas 18.0% +40 bps Net profit 601 +8.1% +11.3% Dilute
Slide 7: Europe: double digit growth
Europe: double digit growth Industrial Merchant Q2 Europe revenue: €1 491m +10.6% D North and Eastern Europe: Industrial good volume and pricing Merchant +2.1% Large D South Europe: stable activity Industries +26.1% Healthcare +9.6% Large Industries Electronics +1.1% D Major ramp-ups in hydrogen
Slide 8: Americas: demand remains strong
Americas: demand remains strong Q2 Industrial Merchant Americas revenue: €675m +8.5% D Strong volumes and pricing in the US Industrial Merchant +10.7% D Sustained double digit Large Industries +5.6% growth in South America Healthcare +12.4% Large Industries Electronics +7.7% D Strong hydrogen de
Slide 9: Asia: buoyant demand
Asia: buoyant demand Q2 Industrial Merchant Asia-Pacific revenue: €482m +9.7% D +19% growth in emerging Asia Industrial +9.3% D Stable activity in Japan Merchant Electronics Electronics +5.4% D ESG and carrier gases Large +20.6% Industries recurring business performed well: +10.7% 0% 6% 12% 18%
Slide 10: Engineering & Construction: remains fully loaded
Engineering & Construction: remains fully loaded Lurgi fully integrated: 1st hydrogen project with Lurgi technology In €m H1 08 Q1 08 Q2 08 Third party revenue 504 189 315 Total order-intake* 800 Total orders in hand* 5 500 Total orders in hand breakdown* ASU 12% HyCO 16% Traditional Energy 43% Al
Slide 11: Further margin progress, in core business
Further margin progress, in core business +30 bps -70 bps +40 bps 15.2% 15.2% Natural gas impact 14.9% as published 0% 13% H1 2007 Gas & Others E&C mix H1 2008 OIR margin Services OIR margin 11 First Half Results 2008 - August 4, 2008
Slide 12: Double digit EPS growth
Double digit EPS growth In €m H1 07 H1 08 H1 08/07 H1 08/07 excl. currency Operating Income Recurring 856 950 +11.0% +14.1% Other non-recurring operating expenses 25 (7) Net finance costs and other net financial expenses (105) (114) Income taxes (211) (220) Share of profit of associates 16 14 Profit
Slide 13: Solid cash flow & balance sheet
Solid cash flow & balance sheet In €m H1 2007 H1 2008 08/07 Funds provided by operations 1 012 1 090 +7.7% WCR (195) (180) Others (28) (19) Net cash from operating activities 789 891 +12.9% Cash invested into business: (industrial capex) (575) (791) +37.4% Cash back to shareholders: (distributions &
Slide 14: ALMA gaining momentum
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Slide 15: ALMA delivering in H1
ALMA delivering in H1 Standardization and design to cost D7 ASUs in construction, cost -20% ROCE: 11-12% DSMR approved for Rotterdam, cost -15% DLow-cost filling stations installed in Africa and Poland €102m efficiencies delivered, €600m over in line with objective 3 years Gas & Services compa
Slide 16: Continued improvement of OIR margin
Continued improvement of OIR margin 20% 19% 19% 18,3% 18,0% 18% 17,8% 17,9% 18% 17,2% 17% 17% 16% 2004 2005 2006 2007 2008 H1 H2 Gas & Services OIR margin at constant 2004 natural gas price 16 First Half Results 2008 - August 4, 2008
Slide 17: Capex to fuel future growth
Capex to fuel future growth In €m 800 600 400 200 0 2004 2005 2006 2007 2008 9.3% 9.3% 10.3% 11.5% 12.4% H1 Annual capex to sales Industrial capex H1 H2 17 First Half Results 2008 - August 4, 2008
Slide 18: Transforming opportunities into growth
Transforming opportunities into growth In H1 Portfolio of Start-ups Decisions Capex opportunities & ramp-ups High level Increasing In line with Delivering growth ALMA 7 major start-ups Above €4bn €1.3bn €791m in H1 and 15 of investment +18% yoy +37% yoy expected in H2 opportunities at 22 23 30/06/08
Slide 19: Leading gas supplier in the Middle East
Leading gas supplier in the Middle East >$300m investment in last 5 years D5 start-ups and Pure Helium acquisition in 2008 $1bn investment in next 5 years Syria Lebanon since 1926 Iraq Iran Kuwait since 2006 Qatar since 2004 UAE since 2008 Egypt Saudi Arabia since 2002 since 2008 Oman since 2005
Slide 20: Solid trends in end-user markets
Solid trends in end-user markets H1 H2 2008 2008 Steel Continued strong demand Chemicals High capacity utilization but uncertainty Oil and gas Sustained demand with record oil prices Electronics Strong IC volume growth; strong TFT-LCD demand, DRAM inventory adjustments Industrial Merchant Americas D
Slide 21: 2008 outlook
2008 outlook “We remain confident in our ability to achieve double digit growth in 2008 net profit at constant exchange rates.” 21 First Half Results 2008 - August 4, 2008
Slide 22: Appendices
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Slide 23: Confirmation of long term growth drivers
Confirmation of 5 long term growth drivers Energy Health Hydrogen for refining Ageing population Alternative energy: Homecare development D Gasification Innovation in therapeutic gases D Oxycombustion Energy efficiency High Tech Environment Concentration of leading players in Asia-Paci
Slide 24: ALMA: growth projects delivering in Q2
ALMA: growth projects delivering in Q2 Mid-term Ö Energy & Hydrogen: major European long term contract with objectives Environment Lurgi technology Emerging economies Eastern Europe: long term contract in Poland & Energy Ö Emerging +2 to 3% economies Middle East: 4 start-ups in Egypt, Kuwait,
Slide 25: Geographical breakdown of sales
Geographical breakdown of sales H1 2008 Gas & Services revenue: €5 343m 2% 18% Europe Americas 55% Asia-Pacific 25% Middle East & Africa 25 First Half Results 2008 - August 4, 2008
Slide 26: Business mix by region
Business mix by region H1 2008 Gas & Services revenue: €5.3bn Europe*: Americas: Asia-Pacific: €3.0bn €1.3bn €1.0bn 3% 6% 8% 22% 32% 42% 44% 42% 42% 5% 33% 21% Industrial Merchant Large Industries Healthcare Electronics * Including Middle-East & Africa First Half Results 2008 - August 4, 2008 26
Slide 27: Revenue breakdown
Revenue breakdown In €m Q1 08 Q2 08 H1 08 Gas & Services 2 649 2 694 5 343 Engineering & Construction 189 315 504 Others activities 253 270 523 Total Group 3 091 3 279 6 370 27 First Half Results 2008 - August 4, 2008
Slide 28: Income statement
Income statement In €m H1 07 H1 08 08/07 Revenue 5 629 6 370 +13.2% Operating Income Recurring 1 320 1 435 +8.7% before depreciation Depreciation & amortization (464) (485) Operating Income Recurring 856 950 +11,0% Other non-recurring operating expenses 25 (7) Operating Income 881 943 +7.1% Net fina
Slide 29: Source and use of funds
Source and use of funds In €m H1 07 H1 08 Funds provided by operations 1 012 1 090 Changes in working capital (195) (180) Other items (28) (19) Net cash from operating activities 789 891 Purchase of PPE* and intangible assets (575) (791) Purchase of financial assets (1 103) (114) Proceeds from sale
Slide 30: Consolidated balance sheet
Consolidated balance sheet In €m ASSETS 31/12/07 30/06/08 EQUITY & LIABILITIES 31/12/07 30/06/08 Goodwill 3 643 3 681 Shareholders' equity 6 328 6 179 PPE and intangible assets 9 098 9 225 Minority interests 148 154 Other non current assets 719 646 Total equity 6 476 6 333 Total non-current assets 1
Slide 31: Operating income recurring margin
Operating income recurring margin H1 06 H2 06 Full year Group 14.7% 15.6% 15.2% 2006 Gas & Services 17.3% 17.9% 17.6% H1 07 H2 07 Full year Group 15.2% 15.2% 15.2% 2007 Gas & Services 17.6% 18.8% 18.1% H1 2008 excl. Published nat. gas Group 14.9% 15.2% 2008 Gas & Services 17.5% 18.0% 31 First Half R
Slide 32: Industrial capex by geography
Industrial capex by geography 2006 2007 H1 2008 investments*/ investments* / investments* / total revenue total revenue total revenue Europe 9.8% 9.5% 10.2% Americas 9.4% 11.3% 9.4% Asia-Pacific 13.0% 17.5% 23.7% Middle East & Africa 11.9% 28.1% 29.6% Total 10.3% 11.5% 12.4% * Excluding financial in
Slide 33: Currency natural gas and Lurgi impact
Currency natural gas and Lurgi impact In €m Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 H1 08 €/USD (41) (35) (34) (53) (64) (73) (137) €/CAD (14) (6) (1) +4 +3 (9) (6) €/JP¥ (27) (30) (23) (20) (2) (1) (3) Others (19) (10) (6) (17) (21) (32) (53) Total (101) (81) (64) (86) (84) (115) (199) Natural gas impa
Slide 34: Share capital evolution
Share capital evolution H1 2008 Share buyback Number 1 289 483 €m 112.3 Average price in € 87.09 Average number of shares outstanding 259 710 436 Total number of shares outstanding at 30/06/08 260 504 389 34 First Half Results 2008 - August 4, 2008
Slide 35: Engineering Glossary
Engineering Glossary Orders in Hand represent the sum of the initial contracts value of all Group and Third Party contracts managed by the Engineering & Construction entities, excluding contracts under warranty The Order Intake represents the sum of the initial contracts value of all Group and T
Slide 36: First Half Results 2008: A strong performance in the first half
First Half Results 2008: A strong performance in the first half ALMA gaining momentum August 4th, 2008