Air Liquide SA · EURONEXT:AI
Air Liquide SA — Q1 2017 Earnings Presentation
39 slides from Air Liquide SA's earnings presentation, Apr 26, 2017
Slide 1: 2017 Q1 Activity: Revenue Growth +38.5%
2017 Q1 Activity Revenue Growth +38.5% Better Activity in a more Favorable Economic Environment Paris, 26 April 2017
Slide 2: 2017 Q1 Activity
2017 Q1 Activity Fabienne Lecorvaisier Chief Financial Officer 2 26 April 2017 Q1 2017 Activity The world leader in gases, technologies and services for Industry and Health
Slide 3: Revenue Growth +38.5% as published
Revenue Growth +38.5% as published Better Activity in a more Favorable Economic Environment Group sales growth +38.5% and +42.2% in G&S • +2.8% comparable G&S growth to adjusted Q1 2016* • IM growth pick-up in Americas and in Europe • Efficiencies & synergies well on track • Significant increase o
Slide 4: Adjusted Sales Used as a Comparison Basis
Adjusted Sales Used as a Comparison Basis Published growth Comparable growth(2) As of January 1st, 2016 Published Airgas Airgas Adjusted Published Q1 16(1) consolidated divestments Air Liquide Q1 17 (1) Excluding Air Liquide Welding and Aqua Lung Q1 16 (2) Excluding currency and energy price fluctua
Slide 5: G&S Step Change
G&S Step Change Published +42.2% growth in €m +130 +116 0 5,046 5 000 +132 +1,120 4,668 +2.5% 4 500 +2.8% 4 000 Comparable 3,548 growth 3 500 3 000 2 500 +2.8% 2 0000 Q1 2016 Adjustment Adjusted Comparable Energy Currency Significant Q1 2017 Q1 2016 growth perimeter Refer to slide 4 for definitions
Slide 6: Confirmed Improvement in G&S
Confirmed Improvement in G&S I N D U S TR I AL P R O D U C TI O N Q1 2017 +1.8% (1) Sales in €m Q1 17/16 Q1 17/16 Q1 16 Q1 17 as published comparable Gas & Services 3,548 5,046 +42.2% +2.8% Engineering & Construction 124 53 -57.4% -58.4% Global Markets & Technologies 65 77 +18.8% +19.2% Group Total
Slide 7: Better Economic Indicators
Better Economic Indicators Industrial Production Consumer Price Inflation Year on Year in % (3-month rolling average) Year on Year in % 6% 4% 4% 2% 2% 0% 0% -2% -4% -2% 2015 2016 Q1 2017 2016 Q1 2017 World United States Germany United States Euro Zone Developing Economies France Canada Japan Source
Slide 8: Energy & Forex Impact Turned Positive
Energy & Forex Impact Turned Positive Energy Impact on FX Impact on Group sales Group sales -2.2% +2.7% -1.4% +2.4% FY 2016 Q1 2017 FY 2016 Q1 2017 8 26 April 2017 Q1 2017 Activity The world leader in gases, technologies and services for Industry and Health
Slide 9: Growth Drivers in Q1 2017
Growth Drivers in Q1 2017 +5.5% +3 % +19% +3 % AIRG AS LARG E INDUSTRIAL HEALTHCARE G LOBAL MARKETS CON SOLIDATION IN DU STRIES MERCHANT & TECHNOLOG IES Refer to slide 4 for definitions 9 26 April 2017 Q1 2017 Activity The world leader in gases, technologies and services for Industry and Health
Slide 10: Industrial Merchant Main Contributor to G&S Growth
Industrial Merchant Main Contributor to G&S Growth Sales by WBL Contribution to G&S growth Electronics 3% -0.0% Large +0.9% Healthcare Industries 2% €5,046m +2.8% +1.2% Q1 2017 1% +0.7% 0% Industrial LI IM HC EL G&S Merchant Refer to slide 4 for definitions 10 26 April 2017 Q1 2017 Activity The worl
Slide 11: Stronger Base Contribution
Stronger Base Contribution Q1 2017 comparable growth based on 2016 adjusted sales +14% +31% +29% 2 6% START-UPS in Q1 17 4% Base business Start-ups, Ramp-ups, 2% Site takeovers, Small acquisitions Significant M&A 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2015 2016 2017 G&S Quarterly Growth Analysis 11 26 April
Slide 12: Q1 - Improved Underlying Activity
Q1 - Improved Underlying Activity FY 16: +2% +4% +160% FY 16: +2% +3% AMERICAS As EUROPE +4% published Q1 2017 Q1 2017 +3% +3% +2% +2% €2,142m +1% €1,710m +0.5% Q4 Q1 Q2 Q3 Q1 Q1 Q2 Q3 Q4 Q1 -0.2% G&S Comparable Sales Growth Solid industrial activity in North America Sound HC and positive IM • LI: v
Slide 13: Q1 - Better Asia, Growing MEA
Q1 - Better Asia, Growing MEA FY 16: +4% +2% FY 16: +8% +3% +45% +7% +6% MIDDLE-EAST AS I A - P AC I F I C & AF R I C A Q1 2017 +4% Q1 2017 +3% +2% €1,024m €170m Q4 +0.5% Q1 Q2 Q3 Q1 Q1 Q2 Q3 Q4 Q1 -8% G&S Comparable Sales Growth Contrasted situation Yanbu reloading • Solid LI with limited contribut
Slide 14: Q1 - Sound LI, Pick-up in IM
Q1 - Sound LI, Pick-up in IM FY 16: +5% +3% FY 16: -2% +3% +93% As +9% published L AR G E INDUSTRIAL INDUSTRIES M E R C H AN T Q1 2017 +5% Q1 2017 +4% +4% -1% -1% €1,392m €2,384m -2% -3% Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 G&S Comparable Sales Growth Contrasted growth by region IM growing in North America
Slide 15: Q1 - Solid HC, Stable EL
Q1 - Solid HC, Stable EL FY 16: +5% +5.5% +22% FY 16: +4% -0.4% +13% As published 9% H E AL T H C AR E +5% +5% +5% E L E C TR O N I C S Q1 2017 +4% Q1 2017 €850m €420m Q3 Q4 Q1 Q1 Q2 -0.5% Q1 Q2 Q3 Q4 Q1 -3% G&S Comparable Sales Growth Pursued strong growth Strong underlying activity 17% • Increased
Slide 16: Increased Bidding, Higher E&C Order Intake
Increased Bidding Higher Year-on-Year E&C Order Intake E&C GMT 389 405 In €m In €m 300 300 Order 200 200 161 Intake(1) 144 119 107 104 100 85 78 100 73 53 55 0 0 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Sales €124m €53m €65m €77m (1) Group and Third Party Orders 16 26 April 2017
Slide 17: Efficiencies and Synergies Well On Track
Efficiencies and Synergies Well On Track Q1 Efficiencies Q1 Synergies €67m US$45m • Main contributors: industrial • First contribution from operations & supply chain growth synergies • Higher savings from re-organizations 17 26 April 2017 Q1 2017 Activity The world leader in gases, technologies and
Slide 18: Significant Cash Flow Increase
Significant Cash Flow Increase Cash Flow(1) Net Capex €920m €630m • Increased by +1/3rd • Of which €70m for acquisitions • Decreasing gearing (1) Operating Cash Flow before change in Working Capital Requirements, as of 31 March 2017 18 26 April 2017 Q1 2017 Activity The world leader in gases, techno
Slide 19: Stable Portfolio, Selective Decisions
Stable Portfolio, Selective Decisions Investment Q1 2017 Investment Q1 2017 Start-up/ Opportunities(1) Decisions(1) Ramp-up Sales Growth 12-month portfolio Contribution €2.1bn €0.5bn € 31m • Mainly small to medium • N2 long-term contract in Oman • Americas ~50% size projects • Americas ~50% • Airgas
Slide 20: Backlog in line with Growth Expectations and Capex Strategy
Backlog in line with Growth Expectations and Capex Strategy Investment Backlog(1) Q1 2017 €2.8bn Decisions Start-ups €2.3bn €2.1bn €2.0bn ~€ 0.8bn Dec 2014 Dec 2015 Dec 2016 Decisions Start-ups March 2017 Yearly Sales Backlog(1) after full Ramp-ups (1) See definitions in appendix 20 26 April 2017 Q1
Slide 21: Re-balanced Geographical & Business Footprint
Re-balanced Geographical & Business Footprint Fabienne Lecorvaisier Chief Financial Officer 21 26 April 2017 Q1 2017 Activity The world leader in gases, technologies and services for Industry and Health
Slide 22: A Re-balanced Footprint
A Re-balanced Footprint 2016 G&S Adjusted Revenue Electronics 9% Healthcare Large Industries 17% 26% 96% Industrial Merchant 48% Africa Middle-East 3% of Group Revenue Asia Pacific Americas 41% 21% out of which U.S. 36% Europe 35% Refer to slide 4 for definitions 22 26 April 2017 Q1 2017 Activity Th
Slide 23: Focus on Improving Margin and ROCE
Focus on Improving Margin and ROCE Group OIR margin improvement plan ROCE>10% after 5-6 years 2016 2016 Starting 16.1% Starting 6.9% point point • >US$300m Airgas synergies • Lower capital intensive growth • >€300m yearly efficiencies • Focus on efficiencies and synergies • Significant work on fixed
Slide 24: 2017 Outlook
2017 Outlook ● G&S step change “Assuming a comparable Q1 17 ● IM picking up in Americas and 2017 environment, Europe Air Liquide is confident in ● Delivering efficiencies and its ability to deliver net synergies profit growth in 2017” ● Significant increase in cash flow ● Re-balanced footprint 24 26
Slide 25: Q1 2017 Appendix
Q1 2017 Appendix 25 26 April 2017 Q1 2017 Activity The world leader in gases, technologies and services for Industry and Health
Slide 26: Details: Adjusted Sales Used as a Comparison Basis (1/2)
Details: Adjusted Sales Used as a Comparison Basis (1/2) F Published growth E Comparable growth (2) As of January 1st, 2016 A B C D Published Airgas Airgas Adjusted Published Q1 16 (1) consolidated divestments Air Liquide Q1 17 Q1 16 (1) Excluding Air Liquide Welding and Aqua Lung (2) Excluding curr
Slide 27: Details: Adjusted Sales Used as a Comparison Basis (2/2)
Details: Adjusted Sales Used as a Comparison Basis (2/2) Published Q1 16 Published Q1 16 Air Liquide sales excluding Air Liquide Welding and A excluding Air Liquide Aqua Lung (IFRS 5, discontinued operations) Welding and Aqua Lung Airgas consolidated Published Q1 16 Airgas sales with divestments ful
Slide 28: Impact of Currency and Energy on G&S Revenue
Impact of Currency and Energy on G&S Revenue Currency In €m Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 €/US$ +14 (14) (3) +10 +64 €/CNY (10) (28) (23) (20) (7) €/JP¥ +14 +22 +42 +30 +13 Others (89) (98) (32) (17) +46 Total currency impact (71) (119) (16) +3 +116 Average rate Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 €/US$ 1
Slide 29: Revenue Analysis by Quarter and by Business Line
Revenue Analysis by Quarter and by Business Line Q1 17/16 Sales in €m Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 as Q1 17/16 published comparable Large Industries 1,207 1,181 1,261 1,388 1,392 +15.3% +2.7% Industrial Merchant 1,238 1,726 2,308 2,293 2,384 +92.6% +2.6% Healthcare 695 756 814 846 850 +22.4% +5.5%
Slide 30: Revenue Analysis by Quarter and by Geography
Revenue Analysis by Quarter and by Geography Q1 17/16 Sales in €m Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 as Q1 17/16 published comparable Americas 824 1,361 2,042 2,003 2,142 +160.0% +3.7% Europe 1,614 1,611 1,601 1,767 1,710 +5.9% +2.6% Asia-Pacific 966 954 997 1,019 1,024 +6.1% +1.6% Middle-East and Africa
Slide 31: G&S Revenue Growth by Quarter and by Impact
G&S Revenue Growth by Quarter and by Impact Growth as Natural Gas Electricity Currency Significant Comparable published perimeter Growth Q1 2016 -1.8% -3.0% -1.0% -2.0% 0.0% +4.2% Q2 2016 +10.3% -2.6% -0.9% -3.2% +13.9% +3.1% Q3 2016 +29.9% -2.3% -0.5% -0.4% +31.1% +2.0% Q4 2016 +30.8% +0.4% +0.0% +
Slide 32: Q1 2017 G&S Revenue Breakdown by Region
Q1 2017 G&S Revenue Breakdown by Region EUROPE 34% EUROP E AMERICAS 42% €1.7bn AMERICAS ASIA-PACIFIC €5,046m €2.1bn €1.0bn GAS & SERVICES Q1 2017 REVENUE 32% 37% 69% MIDDLE EAST & AFRICA ASIA-PACIFIC 31% 5% 4% 20% 17% 30% 34% 5% 9% 3% 28% Industrial Merchant Large Industries Healthcare Electronics 3
Slide 33: Americas
Americas Q1 Gas & Services Sales: €2,142m INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE ELECTRONICS • Growth pick-up in North • Very strong sales • Dynamic South America: • Double-digit growth in America, especially in March • Very high sales of H2 and Brazil and Argentina Advanced Materials and •
Slide 34: Europe
Europe Q1 Gas & Services Sales: €1,710m INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE • +4% growth with extra working • Good volumes in air gases in some • Very solid performance days countries (France, Germany, Spain) • Organic growth in Home Healthcare • Bulk and cylinders volumes with steel dem
Slide 35: Asia-Pacific
Asia-Pacific Q1 Gas & Services Sales: €1,024m INDUSTRIAL MERCHANT LARGE INDUSTRIES ELECTRONICS • China: solid growth both in • H2 growth for refining in • Low E&I & ESM bulk and cylinders Singapore and O2 growth for • High neon price in Q1 2016 in • Growing developing steel in Japan Japan impacting
Slide 36: Industrial Merchant Pricing
Industrial Merchant Pricing +1.8% Americas +2.5% -0.1% Europe -0.7% -0.0% Asia-Pacific -0.3% Middle-East and Africa +2.9% +1.6% TOTAL Q1 2017 +1.2% FY 2016 INDUSTRIAL +0.5% MERCHANT Refer to slide 4 for definitions 36 26 April 2017 Q1 2017 Activity The world leader in gases, technologies and service
Slide 37: Investment Cycle – Definitions
Investment Cycle – Definitions ● Investment opportunities at end of the period – Investment opportunities under consideration by the Group for decision within 12 months. – Industrial projects with investment value > €5m for Large Industries and > €3m for other business lines. – Includes asset replac
Slide 38: Regular and Sustained Performance
Regular and Sustained Performance 18 000 Revenue (in €m) +6.0% EPS(1) (in €) +7.2% 6 C AG R C AG R 15 000 over 30 years (2) 5 (2) over 30 years 12 000 4 9 000 3 6 000 2 3 000 1 0 0 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 1986 1988 1990 1992 1994 1996 1998 2000
Slide 39: For further information, please contact
For further information, please contact: Investor Relations Communication Aude Rodriguez + 33 (0)1 40 62 57 08 Anne Bardot + 33 (0)1 40 62 50 93 Louis Laffont + 33 (0)1 40 62 57 18 Annie Fournier + 33 (0)1 40 62 51 31 Erin Sarret + 33 (0)1 40 62 57 37 Jérôme Zaman + 33 (0)1 40 62 59 38 J