Air Liquide Sa · EURONEXT:AI
Air Liquide Sa — FY2010 Earnings Presentation
56 slides from Air Liquide Sa's earnings presentation, Feb 15, 2011
Slide 1: 2010 Results
2010 Results Solid performance New momentum established Paris, February 15, 2011 Benoît Potier, Chairman and CEO
Slide 2: Solid 2010 performance
Solid 2010 performance Back to more sustained growth Further improvement in operating performance New momentum established Structural improvements Investment cycle recovery Confirmation of growth drivers and launch of ALMA 2015 Air Liquide, the world leader in gases for industry, health and the envi
Slide 3: Back to more sustained growth in G&S
Back to more sustained growth in G&S… Gas & Services sales In €m 11,886 12 000 11,028 11 000 9,999 10,192 10 000 9,628 9 000 8 000 7 000 6 000 5 000 0 4 000 2006 2007 2008 2009 2010 Air Liquide, the world leader in gases for industry, health and the environment 2010 Results – February 15, 2011 3
Slide 4: … and solid activity in other areas
… and solid activity in other areas Engineering & Construction Other Activities sales total sales In €m In €m 972 995 1 800 1 000 941 851 1 500 789 750 1 200 900 500 600 1,081 995 831 250 751 300 380 0 0 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Third-party sales Welding - Cutting Internal s
Slide 5: Strong recovery in all economies
Strong recovery in all economies … Comparable* G&S Share of G&S sales in sales growth (2010 / 2009) developing economies 19% +9% +6% +10% 15% 16% +9% +41% +15% +19% 2008 2009 2010 Advanced economies Developing economies +7% +29% * Excluding forex and natural gas Air Liquide, the world leader in gase
Slide 6: Operating performance, financing growth
… operating performance financing growth … Gas & Services sales Efficiencies 2010 objective: In €bn > 200 €m 11.9 In €m 12 11.0 335 10.2 300 280 280 10 +10.3% (1) 230 200 8 GOAL GOAL 100 GOAL 6 4 0 2008 2009 2010 2008 2009 2010 Net Capex (2) Operating Cash Flow (3) In €bn In €bn 2.7 2.1 2,5 2.5 2.2
Slide 7: Strong growth in net profit
… and generating strong growth in net profit Net profit (Group share): +14% 1 500 In €m 1,404 1 250 1 000 +8.5% CAGR over 5 years 750 500 250 0 2006 2007 2008 2009 2010 Dividend: +11% 2,5 2.5 In € 2.35 €(1) 2,0 +9,7% annual growth over 1,5 1.5 5 years(2) 1,0 0,5 0.5 Pay-out ratio 48.7% 0,0 0.0
Slide 8: Solid 2010 performance
Solid 2010 performance Back to more sustained growth Further improvement of operating performance Fabienne LECORVAISIER, Chief Financial Officer
Slide 9: Solid 2010 results
Solid 2010 results 2010 change vs 2010 10/09 In €m 2009 2008 Change Comparable* Group revenue 13,488 +12.6% +7.0% +0.3% Gas & Services revenue 11,886 +16.6% +10.3% +5.0% Operating Income recurring 2,252 +15.6% Published Net profit 1,404 +14.1% +14.1% +15.0% (Group share) Dividend per share** (in €)
Slide 10: Return to growth confirmed
Return to growth confirmed Comparable G&S sales growth* 2008: +9.1% 2009: - 4.8% 2010: +10.3% 12% +11.3% +10.7% +11.0% +9.1% +9.9% +9.6% 10% +8.3% +7.9% 8% 6% 4% 2% 0% -2% -4% - 4.2% - 4.6% -6% - 5.1% - 5.2% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2
Slide 11: Trend maintained through to year-end
Trend maintained through to year-end Gas & Services monthly activity index, 2008 average base 100* 115 110 2010 average 105 2008 average 100 95 2009 average 90 85 J F M A M J J A S O N D J F M A M J J A S O N D 2009 2010 * Comparable revenue, adjusted for the number of days per month Air Liquide, th
Slide 12: Continued growth in all regions
Continued growth in all regions 2010 G&S sales Comparable growth* 2010/09 Q4 2010/Q4 2009 Site takeovers (Germany) and start-ups (Italy, Poland) Europe +6% Slow recovery in Industrial Merchant +8% €6,201m Homecare growth Strong Large Industries growth and Electronics recovery Americas +10%
Slide 13: Volume recovery still contrasted
Volume recovery still contrasted Base 100, average 2008 Industrial Merchant, Cylinder Large Industries gas volumes and Bulk volumes 130 130 Hydrogen 120 120 O2 + N2 Bulk 110 110 100 100 Oxygen 90 90 O2 Cylinders 80 80 70 70 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 08 0
Slide 14: Gas & Services sales up +10.3% in 2010
Gas & Services sales up +10.3% in 2010 Industrial Merchant: +4.7% Large Industries: +17.4% +8% +21% +22% 8% 20% +5% +5% +16% +3% +14% +13% +2% 15% 3% 10% -2% 5% +2% +1% -3% -4% -7% -7% 0% -8% -9% -5% -12% -11% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2008 2009 2009 2009 2009 2010 2
Slide 15: Engineering & Construction: confirmed recovery of order intake
Engineering & Construction: confirmed recovery of order intake Third-party E&C sales E&C order intake and operating margin Sales Margin In €m in €m 4.8% 8.3% 9.0% in % 1500 1,374 1200 1,081 1,228 995 1250 1000 1000 800 751 826 750 600 400 500 200 250 0 0 2008 2009 2010 2008 2009 2010 Sales in line
Slide 16: Further improvement in Group operating margin
Further improvement in Group operating margin In €m Change 2008 2009 2010 10 vs 09 Revenue 13,103 11,976 13,488 +12,6% Purchases 5,547 4,563 5,240 +14.8% Personnel expenses 2,177 2,237 2,378 +6.3% Other net income and expenses 2,437 2,207 2,495 +13.0% Operating Income Recurring before depreciation a
Slide 17: Significant 2010 efficiencies: €280m
Significant 2010 efficiencies: €280m Group efficiencies 2010 breakdown In €m Industrial & Reorganizations 335 supply chain efficiency and general expenses Focus 3C* 300 280 230 200 180 120 100 90 0 Procurement 2005 2006 2007 2008 2009 2010 globalization *3C: plan « Cash Cost Capex » Air Liquide, the
Slide 18: Maintained high Gas & Services operating margin
Maintained high Gas & Services operating margin… G&S OIR margin 19.4%* 19.6% in €m +77 2,281 +250 2 200 +163 0 +47 + XX 1,994 2 000 <189> <14> G&S G&S G&S 1 800 1 600 0 OIR Volume Energy Cost Price Efficiencies Forex OIR effect effect increase excl. and 2009 energy Others 2010 OIR = Operating Income
Slide 19: Adjusted for the natural gas effect
… adjusted for the natural gas effect Gas & Services OIR Margin* In % EOS OPAL GOAL 20% At 1999 natural gas 20.4% constant prices 19.2% 18% 16% As published 14% 12% 10% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 * Operating Income Recurring (after depreciation and amortization) / Sa
Slide 20: Increase in Business Line margins
Increase in Business Line margins OIR margin 20% 19.2% 18% G&S margin 16% Large industries 27% 22% 24% 14% Industrial Merchant 14% 16% 17% Healthcare 16% 17% 19% 12% Electronics 10% 12% 13% 10% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Air Liquide, the world leader in gases for ind
Slide 21: Positive leverage on revenue
Positive leverage on revenue Change In €m 2009 2010 10 vs 09 Revenue 11,976 13,488 +12.6% Operating Income recurring 1,949 2,252 +15.6% Other non-recurring operating income & 10 2 expenses Operating Income 1,959 2,254 +15.1% Net financial costs (275) (311) and other net financial expenses Income tax
Slide 22: Net debt reduction excluding Forex
Net debt reduction excluding Forex In €m <5,039> <4,891> <296> <534> + 2,661 <1,738> Gearing ratio Gearing ratio 63% 55% <241> Net Debt Cash flow WCR Net Dividends Forex Net Debt, Dec 31, 2009 Investments* net of capital + IFRS** Dec 31, 2010 increases * Including transactions with minority sharehol
Slide 23: 2010: solid performance
2010: solid performance G&S Sales Sustained growth Efficiency Ongoing efficiency gains ROCE 12.1% Increase in ROCE to 12.1% Air Liquide, the world leader in gases for industry, health and the environment 2010 Results – February 15, 2011 23
Slide 24: New momentum established
New momentum established Structural improvements Investment cycle recovery Growth drivers confirmed and launch of ALMA 2015 Benoît Potier, Chief Executive Officer
Slide 25: New momentum established: Structural improvements
New momentum established Structural improvements
Slide 26: Regular structural improvement in G&S
Regular structural improvement in G&S EOS OPAL GOAL 200 G&S operating income recurring 180 G&S sales * 160 G&A expenses 140 Depreciation & 120 amortisation 100 80 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Cumulated improvement in G&S operating margin* +30 pbs +240 pbs +350 pbs since 200
Slide 27: Optimized cash management
Optimized cash management WCR* and WCR/G&S sales in €m WCR WCR/G&S sales in % of sales 1 400 12% 11.2% 11.0% 11.1% 1 200 10.8% 10.8% 11% 1 000 10.0% 9.4% 10% 800 9.9% 8.7% 9% 600 8.4% 8% 400 7% 200 0 6% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 * G&S working capital requirement excluding tax
Slide 28: Better use of assets
Better use of assets Group ROCE(1) 13% WACC (2) Value creation 12.1% 12% 11% 10% 9% 8% 7% 6% 5% 0% 4% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (1) Return On Capital Employed after tax: (Net profit before minority interests – net finance costs after taxes) / wei
Slide 29: Sustainable development
Sustainable development TSR (1) Energy efficiency (3) In % In % 13.0% 12.7% 102 Crisis 100 impact 10.2% 100 10 8.7% 100 99 8.1% 98 Air Liquide 6 95 2 CAC 40 90 2006 2007 2008 2009 2010 -2 1996- 1997- 1998- 1999- 2000- 2006 2007 2008 2009 2010 Accident frequency (2) Innovation spending (4) Rate In %
Slide 30: New momentum established: Investment cycle recovery
Panama New momentum established Investment cycle recovery Snore Australia Oxea, Germany H2 energy Albee SGS, South Korea
Slide 31: 2010 Investment decisions: €2.2bn (1/2)
2010 Investment decisions : €2.2 bn* (1/2) H2 Yanbu project in Saudi Arabia 2010 G&S decisions ¨ Outsourcing by Business line ¨ Developing economies Large Industries FutureGen 2.0 47% Oxycombustion project study ¨ CO2 capture Air Liquide supplies: 3 site takeovers Syngas Steam H2 O2 N2 pipelin
Slide 32: 2010 Investment decisions: €2.2bn (2/2)
2010 Investment decisions: €2.2 bn* (2/2) 14 projects/acquisitions Industrial Merchant 2010 G&S decisions ¨ Market share in by Business line growth regions Industrial Merchant 4 Healthcare acquisitions 36% ¨ Accelerated expansion Electronics : 20 contracts in Asia 11% 1 major European Healthca
Slide 33: Recovery in investment cycle
Recovery in investment cycle Developing economies Advanced economies 12-month porfolio of Start-ups ** Investment decisions* opportunities In €bn In €bn 24 3.0 3.9 19 6 3.7 3.5 2.4 3.3 0.9 2.2 0.7 2.1 1.6 15 0.9 9 1.7 1.0 1.5 6 1.8 9 9 1.7 1.1 18 3.0 3.0 0.8 4 2.4 0.6 5 1.8 1.4 10 1.2 9 1.0 0.8 5 0.
Slide 34: Confirmation of growth drivers and launch of ALMA 2015
New momentum established Confirmation of growth drivers and launch of ALMA 2015
Slide 35: Growth drivers confirmed
Growth drivers confirmed Estimated market Air Liquide Growth drivers Market growth 2010-2015 activity Developing Industrial gases Economies Medical gases +13 – 14% CAGR Homecare Health +6% CAGR Medical gases Semi-conductors High Tech Flat screens +10% CAGR Solar panels Environment Large Industries +
Slide 36: 2015 objectives
2015 objectives Sales growth Efficiency +8 to +10% > € 200 m In a normal environment Per year on average ROCE Engagement in 12 - 13% Responsibility objectives Range in the period Air Liquide, the world leader in gases for industry, health and the environment 2010 Results – February 15, 2011 36
Slide 37: 2011 Outlook
2011 Outlook * Solid long-term investment cycle New dynamic introduced by ALMA 2015 Continued steady growth of net profit in 2011 * In a normal economic environment Air Liquide, the world leader in gases for industry, health and the environment 2010 Results – February 15, 2011 37
Slide 38: Ambition
Ambition Air Liquide, the world leader in gases for industry, health and the environment 2010 Results – February 15, 2011 38
Slide 39: Appendices
mar LIQUIDE Appendices
Slide 40: Growth in 2010 G&S revenue
Growth in 2010 G&S revenue +10.3% in €m comparable* 12 000 +531 11,886 +1,053 +110 11 000 10,192 10 000 +16.6% 9 000 published growth 8 000 7 000 6 000 5 000 4 000 0 2009 Comparable Natural gas Change 2010 *excluding forex and natural gas effects growth Air Liquide, the world leader in gases for ind
Slide 41: Exchange rate and natural gas impact on G&S sales
Exchange rate and natural gas impact on Gas & Services sales in €m 2009 Q1 10 Q2 10 Q3 10 Q4 10 2010 €/USD +74 (26) +30 +44 +35 +83 €/CAD (8) +14 +25 +20 +16 +75 €/JP¥ +120 (7) +31 +49 +44 +117 Others (45) 31 +71 +79 +75 +256 Total exchange rate Impact +141 +12 +157 +192 170 +531 Natural gas impact
Slide 42: Quarterly analysis of sales (1)
Quarterly analysis of sales (1) Q4 10/09 Q4 10/09 Sales in €m Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 published comparable* Europe 1,496 1,497 1,505 1,555 1,644 +9.9% +7.5% Americas 577 643 703 708 694 +20.2% +10.9% Asia-Pacific 522 558 655 697 733 +40.5% +22.0% Middle East & Africa 60 62 71 83 77 +26.0% +16.
Slide 43: Quarterly analysis of sales (2)
Quarterly analysis of sales (2) Q4 10/09 Q4 10/09 Sales in €m Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 comparable* published Industrial Merchant 1,088 1,106 1,208 1,217 1,222 +12.2% +4.7% Large Industries 848 936 950 1,036 1,097 +29.4% +21.7% Electronics 232 252 293 309 324 +39.5% +25.5% Healthcare 487 466 484
Slide 44: Activity by region
Activity by region 23 % Europe Americas 2010 Gas & Services revenue: Asia - Pacific 53 % €11.9bn Middle East and Africa 22 % 2% Europe: €6.2bn Americas: €2.7bn Asia: €2.6bn 4% 7% 10% 24% 28% 35% 41% 47% 4% 36% 37% 27% Industrial Merchant Large Industries Healthcare Electronics Air Liquide, the world
Slide 45: Europe in Q4: +7.5%
Europe in Q4 : +7.5% * Industrial Merchant D Recovery still contrasted by country D Cylinder activity still fragile in Gas & Services Revenue : €1,644.4m Western Europe D Slightly negative pricing Large Industries -0.4% Industrial Merchant D Start-up in Italy D Site takeover of Oxea in Germany i
Slide 46: Americas in Q4: +10.9%
Americas in Q4: +10.9% * Industrial Merchant DBulk sales up in North America (EOR in Canada) DPositive pricing Gas & Services Revenue : €693.7m DLatin America dynamic Large Industries DSite takeover in the US Industrial Merchant +8.0% DStong HyCo activity DRamp-ups in Brazil and Argentina Large
Slide 47: Asia-Pacific in Q4: +22.0%
Asia-Pacific in Q4: +22.0% * Industrial Merchant D Growth in bulk sales in China due to new capacity Gas & Services revenue: €733.3m D Strong recovery in Japan Large Industries D Strong growth in airgas in China due to Industrial Merchant start-ups +10.5% D Start-up of a hydrogen unit in Singapo
Slide 48: E&C: Orders in hands
E&C: Orders in hands Total orders in hands*: €4.1bn at end 2010 ASU 4% 10% HyCo 14% Traditional Energy 52% Alternative Energy 20% Renewable Energy * See glossary on next slide Air Liquide, the world leader in gases for industry, health and the environment 2010 Results – February 15, 2011 48
Slide 49: Engineering Glossary
Engineering Glossary Orders in Hand represent the sum of the initial contract value of all Group and Third Party contracts managed by the Engineering & Construction entities, excluding contracts under warranty Order Intake represents the sum of the initial contract value of all Group and Third P
Slide 50: Operating margin – natural gas effect
Operating margin – natural gas effect Group, in €m 2009 2010 Revenue 11,976 13,488 Natural gas effect +110 Operating income recurring 1,949 2,252 Operating margin 16.3% 16.7% Operating margin excluding natural gas 16.8% Gas and services, in €m 2009 2010 Revenue 10,192 11,886 Natural gas effect +110
Slide 51: Industrial Merchant pricing
Industrial Merchant pricing 2010 -1.3% Europe Americas 2.6% Asia-Pacific 0.7% -2.2% Middle East and Africa Total Industrial Merchant 0.0% Air Liquide, the world leader in gases for industry, health and the environment 2010 Results – February 15, 2011 51
Slide 52: Gas & Services capex by geography
Gas & Services capex by geography G&S 2010 Investments *: G&S €1.7bn Investments* / sales Middle East - Africa 2009 2010 Europe 9.5% 11.5% 5% Europe Asia-Pacific Americas 16.3% 15.3% 32% 38% Asia-Pacific 24.3% 20.0% 25% Middle East and 39.3% 28.9% Africa Americas Total 14.5% 14.7% * Industrial and f
Slide 53: Financing structure
Financing structure At 31 December 2010 Sources Maturity Fixed/variable rates En M€ Bonds 7000 Fixed rate 6000 58% > 2015 76% Private 5000 4% placements 4000 3000 2012 to 29% 24% 7% Bank debt 2015 2% 2000 Treasury bills 1000 Variable rate Minorities options 2011 0 Air Liquide, the world leader in ga
Slide 54: Evolution of number of shares
Evolution of number of shares Number of shares at 31/12/2009 264,254,354 Capital increase reserved for employees 712,958 Options exercised during the period 1,049,341 Free share issue 18,078,440 Number of shares at 31/12/2010 284,095,093 2009 2010 Average number of shares in circulation (1) 279,350,
Slide 55: Regular and sustained performance
Regular and sustained performance 16 000 Revenue (in €m): EPS(1) (in €): 5 14 000 12 000 +7.2% CAGR over 30 years(3) +8.6% CAGR over 30 years(3) 4 10 000 3 8 000 6 000 2 4 000 1 2 000 0 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 1980 1982 1984 1986 1988 1990 19
Slide 56: For further information, please contact
For further information, please contact: Investor Relations Communications Virginia Jeanson + 33 (0)1 40 62 57 37 Anne Lechevranton + 33 (0)1 40 62 50 93 Annie Fournier + 33 (0)1 40 62 57 18 Corinne Estrade-Bordry + 33 (0)1 40 62 51 31 Bastien Maurice + 33 (0)1 40 62 59 38 www.airliquide.com Corpora