Air Liquide SA · EURONEXT:AI
Air Liquide SA — H1 2015 Earnings Presentation
49 slides from Air Liquide SA's earnings presentation, Jul 30, 2015
Slide 1: H1 2015: Sustained sales and earnings growth
H1 2015 Sustained sales and earnings growth Paris, July 30, 2015
Slide 2: 2015 H1 activity
2015 H1 activity Paris, July 30, 2015 Benoît Potier l Chief Executive Officer Sustained sales and earnings growth • Sales +8% • Strong operating margin at 17.4% • Net profit +12% • Major new projects and pursued acquisitions
Slide 3: Sequential sales improvement
Sequential sales improvement Second quarter G&S sales: +9.3% In €m 3 800 +3.5% 3,708 +8.5% Better sales growth in Q2 3 600 Higher Forex tailwind -2.7% Softened by lower energy 3,391 3 400 prices Stronger comparable 3 200 growth 3 000 Q2 14 FX Energy Comp. Q2 15 Growth 3 July 30, 2015 H1 2015
Slide 4: An uncertain global economic environment
An uncertain global economic environment Industrial Production 8 Year on Year in % (3-month rolling average) Softening manufacturing in 6 China Low Brazilian economy 4 Low growth in South East Asia 2 Low oil price impact in North America 0 Weak mining industry in World -2 United States Aus
Slide 5: Delivering strong performance
Delivering strong performance Group sales Operating income Net profit (Group Share)(1) recurring In €bn In €m In €m €8.1bn € 1,409 m € 849 m 8 800 1 400 7 +8.1% +12.3% +12.5% 1 200 600 6 5 1 000 400 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2
Slide 6: Q2 2015 Growth
Q2 2015 Growth Fabienne Lecorvaisier l Chief Financial Officer Europe Developing Healthcare Electronics Economies H +3% +10% +7% +12% Sales growth excluding currency, energy and significant M&A impacts. 6 July 30, 2015 H1 2015 Results World leader in gases, technologies and services for Industry and
Slide 7: Sustained sales growth
Sustained sales growth H1 2014 H1 2015 H1 15/14 H1 15/14 Q2 15/14 Sales in €m as published comparable (1) comparable (1) Gas & Services 6,807 7,340 +7.8% +3.1% +3.5% Engineering & Technology 405 477 +17.6% +10.5% +6.0% Other Activities 294 298 +1.6% -3.3% -3.0% Group Total 7,506 8,115 +8.1% +3.2% +3
Slide 8: Higher start-up and ramp-up contribution
Higher start-up and ramp-up contribution G&S quarterly growth analysis 7.0% 2013 2014 2015 12 5.0% start-ups in H1 15 3.0% Base business Start-ups, 1.0% Ramp-ups, Site takeovers, Small acquisitions Significant M&A -1.0% -3.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 As of January 1, 2015, the base business has
Slide 9: Progressive recovery in Europe, low IM in North America
Progressive recovery in Europe, low IM in North America H1 15 G&S comparable sales growth(1) Europe: € 3,390 m Better LI -1% -1% +2% Bulk volumes improvement Strong Eastern Europe +3% Q1 Q2 Q3 Q4 +1% Bolt-on acquisitions in Healthcare 0% 0% Q1 Q2 -2% -2% Americas: € 1,813 m Progressive
Slide 10: Contrasted Asia, major start-up in Middle-East
Contrasted Asia, major start-up in Middle-East H1 15 G&S comparable sales growth(1) Asia-Pacific: € 1,914 m China still strong despite softening +12% +11% +6% +14% ramp-ups +13% +11% +9% +7% Japan positive 5% Continuous IM market adjustment in Australia Q1 Q2 Q3 Q4 Q1 Q2 Strong momentum in
Slide 11: Strong Healthcare and Electronics
Strong Healthcare and Electronics H1 15 G&S comparable growth(1) Healthcare: € 1,382 m +4% +4% +7% Positive impact of bolt-on +7% +7% acquisitions +5% Strong Home Healthcare and +4% +3% +3% Hygiene Better medical gases 19% Q1 Q2 Q3 Q4 Q1 Q2 H1 10% Electronics: € 733 m 2015 +12% +12% +13% +
Slide 12: Recovery in Large Industries, slow-down in Industrial Merchant
Recovery in Large Industries, slow-down in Industrial Merchant H1 15 G&S comparable sales growth(1) Large Industries: € 2,565 m Increasing air gases volumes +5% +3% +3% (Northern Europe, North America) Robust growth in China, +6% +5% ramp-up effects softening +3% +4% Yanbu hydrogen start-up
Slide 13: Robust activity in E&T
Robust activity in E&T E&T order intake(1) E&T orders in hand(1) 541 600 In €m 600 11% 464 1% 14% 42% 400 354 310 €5.3bn 274 290 267 9% 200 23% ASU HyCO 0 Q1 Q2 Q3 Q4 Q1 Q2 Traditional energy Alternative energy Renewable energy aB&T 2014 2015 Order intake: +11% Orders in hand: +7% (1) Group and Thir
Slide 14: Performance
Performance Fabienne Lecorvaisier l Chief Financial Officer Group sales Competitiveness Cash Flow growth • Margin on sales(2) +8.1% 17.4% 19.4% • Efficiencies Comparable sales growth(1): +3.2% €132m (1) Sales growth excluding currency, energy and significant M&A impacts. (2) Cash Flow before changes
Slide 15: Strong margin for the Group…
Strong margin for the Group… In €m H1 2014 H1 2015 H1 15/14 H1 15/14 comparable(1) Revenue 7,506 8,115 +8.1% +3.2% Purchases (2,920) (3,041) +4.1% Personnel expenses (1,370) (1,521) Other net income and expenses (1,344) (1,451) +9.5% Operating profit before depreciation 1,872 2,102 +12.3% Depreciati
Slide 16: … and for Gas & Services
… and for Gas & Services G&S OIR margin 19.0% 19.5%(1) in €m +116 1,432 1 400 0 +121 +8 1 300 1,294 14 +13 G&S G&S 1 200 <120> 1 100 12% retention 1 000 0 OIR Volume Energy Cost Price Efficiencies Currency OIR mix effect increase excl. and H1 2014 energy Others H1 2015 OIR = Operating Income Recurri
Slide 17: Pursued operational efficiencies
Pursued operational efficiencies In €m 160 140 Comparable to H1 2014 120 50 % industrial efficiency 100 (optimization, logistics) 80 60 Realignment plans payback confirmed 40 20 0 H1 2014 H1 2015 Industrial Procurement Others Operational efficiencies 17 July 30, 2015 H1 2015 Results World lead
Slide 18: Positive leverage
Positive leverage H1 15/14 In €m H1 2014 H1 2015 H1 15/14 Comparable(1) In €m 2012 2013 Revenue 7,506 8,115 +8.1% +3.2% Operating Income Recurring 1,254 1,409 +12.3% +4.7% Other non-recurring operating income & expenses (6) (7) Operating Income 1,248 1,402 +12.3% Net financial costs (146) (157) and
Slide 19: Net debt impacted by FX and E&C cash out
Net debt impacted by FX and E&C cash out Net debt In €m In €m 19.4% <350> <7,927> of sales <1,047> <6,797> +1,621 <1,188> <6,306> +1,575 Gearing ratio(3) <610> 57% Gearing ratio Gearing ratio (3) 53% 59% Net Debt Net Debt Cash flow WCR Net Dividends (2) Currency Net Debt, June 30, 2014 Dec 31, 2014
Slide 20: Major new projects and pursued acquisitions
Major new projects and pursued acquisitions Paris, July 30, 2015 Benoît Potier l Chief Executive Officer
Slide 21: Pursued investment decisions
Pursued investment decisions Investment H1 2015 2015 opportunities (1) Investment Start-up / Ramp-up decisions (1) sales growth contribution € 2.9bn € 1.3bn ~ € 350m (1) See definitions in appendix. 21 July 30, 2015 H1 2015 Results World leader in gases, technologies and services for Industry and He
Slide 22: Major new projects and pursued acquisitions
Major new projects and pursued acquisitions H1 2015 major investment H1 2015 main acquisitions (1) decisions (1) Sasol (South Africa) Optimal Medical Shandong Fangyuan Therapies (Germany) (Shandong, China) Nyrstar (Australia) Baywater Healthcare Ireland Limited (Ireland) GlobalFoundries
Slide 23: Major state-of-the-art syngas plant start-ups in H1 2015
Major state-of-the-art syngas plant start-ups in H1 2015 Dormagen (Germany) Yanbu (Saudi Arabia) Carbon monoxide for Bayer Hydrogen for Yasref Achieved flexibility in line with Tested feedstock to date: customer’s expectations natural gas, butane and mixture Hydrogen by-product Ramp-up in li
Slide 24: Investment backlog adjusting due to major start-ups
Investment backlog adjusting due to major start-ups Investment backlog H1 2015 Decisions Start-ups € 2.7bn € 2.8bn € 2.3bn € 2.1bn ~ €0.9bn Yearly sales backlog Dec 2012 Dec 2013 Dec 2014 Decisions Start-ups Investment after full ramp-ups backlog June 2015 See definitions in appendix. 24 July 30, 20
Slide 25: 2015 Outlook
2015 Outlook H1 2015 ■ Sustained sales and earnings growth ■ Solid performance, strong operating margin ■ Major new projects and pursued acquisitions 2015 objective Assuming a comparable economic environment, Air Liquide is confident in its ability to deliver another year of net profit growth in 2
Slide 26: Air Liquide
AIR LIQUIDE Creative Origen
Slide 27: H1 2015 Appendix
H1 2015 Appendix 27 July 30, 2015 H1 2015 Results World leader in gases, technologies and services for Industry and Health
Slide 28: Impact of currency and energy on G&S revenue
Impact of currency and energy on G&S revenue Currency In €m Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 €/USD (21) (28) (0) +51 +110 +130 €/CAD (21) (18) (8) +1 +12 +15 €/JP¥ (34) (17) (11) (10) +11 +9 Others (85) (80) (19) +22 +118 +137 Total currency impact (161) (143) (38) +64 +251 +291 Average rate Q1 1
Slide 29: Consolidated P&L
Consolidated P&L In €m H1 2014 H1 2015 Revenue 7,506 8,115 Cost of goods (5,634) (6,013) Operating income recurring before depreciation 1,872 2,102 Depreciation and amortization expense (618) (693) Operating income Recurring 1,254 1,409 Net non-recurring operating income (6) (7) Operating income 1,2
Slide 30: Consolidated Balance Sheet
Consolidated Balance Sheet In €m ASSETS 31/12/14 30/06/15 EQUITY AND LIABILITIES 31/12/14 30/06/15 Goodwill 5,259 5,566 Shareholders’ equity 11,537 11,793 Fixed assets 15,318 16,407 Minority interests 290 358 Other non-current assets* 862 955 Total equity 11,827 12,151 Total non-current assets 21,43
Slide 31: Cash Flow statement
Cash Flow statement H1 H1 In €m 2014 2015 Funds provided by operations 1,394 1,575 Changes in Working Capital (232) (578) Other items (15) (32) Net cash from operating activities 1,147 965 Purchase of PPE* and intangible assets (934) (1,006) Purchase of financial assets (58) (198) Proceeds from sale
Slide 32: Growth in H1 2015 G&S revenue
Growth in H1 2015 G&S revenue in €m 7400 +542 7,340 0 7200 +208 <217> +7.8% 7000 published 6,807 growth 6800 -3.2% +7.9% 6600 +3.1% comparable (1) 6400 6200 0 6000 H1 2014 Comparable(1) Energy Currency Significant H1 2015 growth perimeter (1) Excluding currency, energy and significant M&A impacts. 3
Slide 33: Revenue analysis by quarter and by geography
Revenue analysis by quarter and by geography Q2 15/14 Sales in €m Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q2 15/14 comparable 1) ( Europe 1,701 1,645 1,601 1,693 1,696 1,694 +3.0% +3.3% Americas 814 833 864 905 895 918 +10.2% +0.4% Asia-Pacific 816 821 890 917 946 968 +17.9% +5.0% Middle-East 85 92 91 9
Slide 34: Revenue analysis by quarter and by Business Line
Revenue analysis by quarter and by Business Line Q2 15/14 Sales in €m Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q2 15/14 comparable(1) Large Industries 1,285 1,208 1,217 1,270 1,264 1,301 +7.7% +5.0% Industrial 1,229 1,251 1,276 1,327 1,327 1,333 +6.6% -1.6% Merchant Healthcare 626 637 638 669 685 697 +9.
Slide 35: G&S Revenue growth by quarter and by impact
G&S Revenue growth by quarter and by impact Growth as Natural Electricity Currency Significant Comparable published Gas perimeter growth(1) Q3 2013 - 1.3% - 0.6% - 5.8% + 1.2% + 3.9% Q4 2013 - 2.1 % - 1.0% - 5.2% - 0.4% + 4.4% Q1 2014 + 0.3% + 0.7% - 4.7% - 1.4% + 5.7% Q2 2014 - 2.5% - 0.8% - 4.1% -
Slide 36: H1 2015 Revenue breakdown by region
H1 2015 Revenue breakdown by region Gas & Services 25% Americas H1 2015 Revenue: € 7,340 m Europe 46% 26% Asia 3% Middle-East and Africa Europe: € 3.4 bn Americas: € 1.8 bn Asia: € 1.9 bn 31% 33% 34% 35% 39% 45% 3% 10% 4% 32% 10% 24% Industrial Merchant Large Industries Healthcare Electronics 36 Jul
Slide 37: Europe in Q2
Europe in Q2 Electronics Q2 Gas & Services sales: € 1,694 m 3% Industrial Merchant ■ Industrial Merchant 32% 31% Healthcare Better bulk in Spain, France, Benelux, Nordics Large Dynamic Eastern Europe 34% Industries Cylinders still difficult ■ Large Industries Q2 15/14 Comparable change (1): +3
Slide 38: Americas in Q2
Americas in Q2 Electronics Q2 Gas & Services sales: € 918 m Healthcare 10% ■ Industrial Merchant 10% 45% Industrial Merchant Lower liquid volumes due to OWS Soft manufacturing in North America 35% Still slightly negative Brazil Large Industries ■ Large Industries Q2 15/14 Comparable change (1)
Slide 39: Asia-Pacific in Q2
Asia-Pacific in Q2 Q2 Gas & Services sales: € 968 m Electronics ■ Industrial Merchant 24% 33% Industrial Merchant Volumes growth in China and South- Healthcare 4% East Asia Pressure on pricing Large Industries 39% Mining and oil industry impacted (Australia, Singapore) Q2 15/14 Comparable chan
Slide 40: Industrial Merchant pricing
Industrial Merchant pricing Q2 2015 H1 2015 -0.2% Europe -0.3% +3.7% Americas +4.4% -1.1% Asia-Pacific -1.3% +2.4% Middle-East and Africa +1.9% +0.9% Total Industrial Merchant +1.0% 40 July 30, 2015 H1 2015 Results World leader in gases, technologies and services for Industry and Health
Slide 41: Engineering & Technology
Engineering & Technology In €m H1 2014 H1 2015 Consolidated revenues 405 477 OIR(1) margin 6.9% 7.0% Total order intake 541 600 Total orders-in-hand 4,982 5,330 ASU Total Orders-in-hand 11% HyCO breakdown 1% Traditional energy 14% 42% at June 30, 2015 Alternative energy 9% Renewable energy aB&T 23%
Slide 42: Operating margin – energy effect
Operating margin – energy effect Group, in €m H1 2014 H1 2015 Revenue 7,506 8,115 Incl. energy (217) Operating income recurring 1,254 1,409 Operating margin 16.7% 17.4% Operating margin excluding energy 16.8% Gas and services, in €m H1 2014 H1 2015 Revenue 6,807 7,340 Incl. energy effect (217) Opera
Slide 43: Operating margin (OIR/Revenue)
Operating margin (OIR/Revenue) H1 12 H2 12 2012 Group 16.5% 16.9% 16.7% 2012 Gas & Services 18.7% 19.0% 18.8% H1 13 H2 13 2013 Group 16.6% 17.3% 16.9% 2013 Gas & Services 18.7% 19.6% 19.2% H1 14 H2 14 2014 Group 16.7% 17.6% 17.1% 2014 Gas & Services 19.0% 20.4% 19.7% As Excl. Published Energy Group
Slide 44: 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 replacements or
Slide 45: Gas & Services capex by geography
Gas & Services capex by geography G&S H1 2015 capex(1) G&S capex(1) / sales €1.1bn H1 2014 H1 2015 Middle East - Africa Europe 11.8% 13.2% 5% Europe Americas 17.4% 25.2% Asia-Pacific 16% 39% Asia-Pacific 16.7% 9.6% Middle East and 30.8% 22.9% 40% Africa Total 14.8% 15.5% Americas (1) Gross industria
Slide 46: Financing structure
Financing structure At 30 June 2015 Sources Maturity Fixed/variable In €m rates Bank Market 9000 debt: Fixed rate debt 82% 8000 > July 1st, Others(1) 15% 7000 1% 2020 Commercial 6000 70% paper 14% 48% 5000 From July 1st 4000 2016 to June, 30th 30% Private 22% 3000 2020 placements Bonds 2000 < June,
Slide 47: Regular and sustained performance
Regular and sustained performance Revenue (in €m) EPS (1) (in €) 15 000 6 +5.6% CAGR over 30 years(2) +7.7% CAGR over 30 years(2) 12 500 5 10 000 4 7 500 3 5 000 2 2 500 1 0 0 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 1984 1986 1988 1990 1992 1994 1996 1998 2000
Slide 48: For further information, please contact
For further information, please contact: Investor Relations Communications 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 Jérôme Zaman + 33 (0)1 40 62 59 38 www.airliquide.com Follow us on Twit
Slide 49: Air Liquide
AIR LIQUIDE Creative Origen