Air Liquide Sa · EURONEXT:AI
Air Liquide Sa — Investor Presentation (2018)
58 slides from Air Liquide Sa's investor presentation, 2018
Slide 1: Air Liquide at a Glance
Air Liquide at a Glance Investor Presentation FY 2017
Slide 2: Air Liquide in Brief
1 Air Liquide in Brief 2 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 3: The World Leader in Gases, Technologies and Services for Industry & Health
The World Leader in Gases, Technologies and Services for Industry & Health FY 2017 Group Figures Established in 1902 >2 M Clients >€20bn 16.5% 80 countries ~65,000 Employees 1.5 M Patients Sales OIR margin 3 Air Liquide at a glance The world leader in gases, technologies and services for Industry an
Slide 4: Air Liquide at a glance
4 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 5: A Balanced Footprint by Business Line and Geography
A Balanced Footprint by Business Line and Geography Gas & Services revenue in 2017 9% 47% 96% 21% 35% of Group Revenue 41% 5 Air liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 6: Regular and Sustained Performance
Regular and Sustained Performance 21 000 Revenue (in €m) +6.0% EPS(1) (in €) +7.5% 18 000 C AG R C AG R 5,0 15 000 over 30 years (2) (2) over 30 years 4,0 12 000 3,0 9 000 2,0 6 000 1,0 3 000 0 0,0 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 1987 1989 1991 1993 19
Slide 7: Airgas: A Game-Changing Acquisition
2 Airgas: A Game-Changing Acquisition May 2016 7 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 8: Airgas: A Key Industrial Merchant Player in the U.S.
Airgas: A Key Industrial Merchant Player in the U.S. ● Major player in the U.S. market ● Solid track record of value creation – Leader in packaged gas – Unparalleled sales growth since 1982 – Major supplier of hardgoods – Proven operational excellence ● Multi-channel distribution network ● Unrivalle
Slide 9: Strong Business Fit between Airgas and Air Liquide
Strong Business Fit between Airgas and Air Liquide Primary production • Air Liquide: focus on upstream • Airgas: focus on downstream Liquid bulk Liquid bulk • Highly complementary businesses • Implied synergies Pipeline & Fill plant Fill plant Fill plant on-sites • Improved customer reach Bulk deliv
Slide 10: Expected Synergies > US$300m
Expected Synergies > US$300m Cost Synergies >70% Revenue Synergies • Cross-selling P ROCESS CYLINDER BU LK & BACK • Product availability OPERATIONS OPERATIONS OFFICE PROCUREMENT • Gas applications • Small on-site generators Timeline for delivery of synergies 2016 2017 2018 2019 Costs Synergies Reven
Slide 11: NEOS 2016-2020 A Customer-Centric Transformation
3 NEOS 2016-2020 A Customer-Centric Transformation 11 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 12: Air Liquide Ambition
Air Liquide Ambition Lead our industry Deliver long-term performance Contribute to sustainability 12 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 13: Strategy: a Customer-Centric Transformation
Strategy: a Customer-Centric Transformation For Profitable Growth over the Long-term o Customer experience Operational Excellence o Cost competitiveness Selective Investments o Aligned with Air Liquide new business profile o Core Open Innovation o Disruptive o Digital workplace Network Organ
Slide 14: Financial Objectives
Financial Objectives Efficiencies >€300m on average/year(2) + Airgas synergies >$300m +6% to +8% CAGR 2016-2020(1) >10% Maintain after 5-6 years “A” range rating Capex/Sales 2017-2020: 10% to 12% (1) Including Airgas scope effect in 2017 contributing +2% to the CAGR (2) Over the 2017-2020 period 14
Slide 15: Corporate Sustainability Objectives
Corporate Sustainability Objectives For better health For better environment e.g. e.g. • Foster clean mobility • Help customers lower • Develop Healthcare GHG* emissions • Grow with reduced carbon intensity e.g. • Continue to improve Safety • Do business responsibly • Extend Air Liquide Foundation *
Slide 16: FY 2017 Highlights
4 FY 2017 Highlights 16 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 17: Highlights
Highlights Sales reached a new level in 2nd half with improved operating margin Increased dividend proposal Strong cash-flow, reduced net debt and continued improvement in ROCE Airgas synergies ahead of plan NEOS, delivering in the short-term and investing for the long-term 17 Air Liquide
Slide 18: Improved Performance
Improved Performance Step-up in sales growth in 2nd half Improved Operating Margin(1) Excluding Energy Impact 5% +70bps 4% 4% 3% 17% 3% 16.8% Excl. energy impact 2% 2% 16.5% As published 1% 1% 16% 16.1% 0% 0% 2016 2017 Q1 17 Q2 17 Q3 17 Q4 17 Comparable sales growth Group 15% Gas & Services 2016 201
Slide 19: Increased Dividend Proposal
Increased Dividend Proposal Net Profit Dividend Growth: +12% (2) €2.65 €2.2bn 2,8 20 yrs CAGR 2,4 Dividend(1) 2,0 +9.5% As published in € per share 1,6 1,2 0,8 +19.3% +10% 0,4 0,0 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 As published Excluding non-cash non-recurring items & taxes (1) H
Slide 20: Improved Cash Flow and Balance Sheet
Improved Cash Flow and Balance Sheet Reduced Net Debt and Gearing Continued Improvement in ROCE Excl. 2017 positive impact on net profit of non-cash 151% one-off items <25> 160% 10.3% >10% 140% 10% <20> 120% 90% 80% 100% (1) <15> 80% Gearing 80% 7.7% <13.4> comfort 8% 60% 60% range 7.4% 57% 6.9% <10
Slide 21: Airgas Synergies Ahead of Plan
Airgas Synergies Ahead of Plan Synergies US$40m ahead of initial 2017 target Cost synergies delivered faster US$ Cumulated synergies end of 2019: 215m in excess of US$300m Cumulated Synergies pace and higher level of cost synergies Dec. 2017 revenues synergies ramping Leveraging the Airgas
Slide 22: Delivering in the Short-Term…
Delivering in the Short-Term… Mega trends Energy & Healthcare Digital Group Smart Biogas Innovative Operations Strategic (SIO) asset review Voice of Energy the efficiency Customer (VoC) New organization E-health E-business websites 22 Air Liquide at a glance The world leader in gases, technologies a
Slide 23: … and Investing for the Long-Term
… and Investing for the Long-Term Research & Innovation Energy Transition Development • Renewal of R&D • 2017 ~€290m • Hydrogen Council centers spending in innovation • CO2 capture Over 3 years • ALIAD: cumulative Cumulative €130m ~€80m investments in investments start-ups Digital ● Data analyti
Slide 24: Focus on Q4 2017 Sales
5 Focus on Q4 2017 Sales 24 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 25: Key Growth Drivers in Q4 2017
Key Growth Drivers in Q4 2017 +12% +11% +8% +6% +7 % +5% INDUSTRIAL AMERICAS GLOBAL ASIA DEVELOPING ELECTRONICS MERCHANT MARKETS & ECONOMIES Comparable sales growth TECHNOLOGIES 25 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 26: Q4 - Accelerating Americas, Sustained IM in Europe
Q4 - Accelerating Americas, Sustained IM in Europe +31% FY as published AMERICAS EUROPE FY 2017 FY 2017 €8,150m €6,776m Excluding the impact of the one–off in Q4 2016 G&S Comparable Sales Growth Strong IM and LI in Americas Improved underlying activity • LI: rebounding after hurricanes • LI: solid H
Slide 27: Q4 - Very Strong Asia and Middle-East
Q4 - Very Strong Asia and Middle-East MIDDLE-EAST AS I A - P AC I F I C & AF R I C A FY 2017 FY 2017 €4,081m €635m G&S Comparable Sales Growth Very good momentum in all WBLs High growth in all WBLs • LI: ramp-ups in China, high volumes • LI: high loading at Yanbu (KSA); major • IM: China driving gro
Slide 28: Q4 - IM Driving Growth, LI Outlook Positive
Q4 - IM Driving Growth, LI Outlook Positive +22% FY as published INDUSTRIAL L AR G E M E R C H AN T I N D U S TR I E S FY 2017 FY 2017 €9,261m €5,336m G&S Comparable Sales Growth Continued increase in IM High volumes offset by Q4 2016 one-off • Accelerating in North America • High air gases and H2 v
Slide 29: Q4 - Very Dynamic HC and EL
Q4 - Very Dynamic HC and EL +9% FY as published H E AL T H C AR E E L E C TR O N I C S FY 2017 FY 2017 €3,401m €1,644m G&S Comparable Sales Growth Steady activity, high contribution from acquisitions Double-digit growth in Asia • Very strong Americas • Ramp-ups in Carrier Gases • Dynamic development
Slide 30: 2017 Performance and Investment Update
6 2017 Performance and Investment Update 30 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 31: Improved OIR Margin in line with NEOS
Improved OIR Margin in line with NEOS 31 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 32: Efficiencies Above NEOS Target
Efficiencies Above NEOS Target FY 17 Efficiencies NEOS Cumulated Efficiencies >€1,200m 2020 >€900m € 2019 323m >€600m 2018 € 323m +€ 2017 23m 32 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 33: 2017 Airgas Cumulated Synergies Ahead of Plan
2017 Airgas Cumulated Synergies Ahead of Plan Initial(1) Update target US$ >300m 215m 2019 >300m 270m >235m Costs ~US$190m 2018 215m +US$ Revenue ~US$25m 2017 >175m 40m • 2017 costs synergies US$40m above initial target Higher procurement synergies Cylinder management integration 45m 45m 201
Slide 34: Positive Non-cash Exceptionals, Net Profit Recurring +10%
Positive Non-cash Exceptionals, Net Profit Recurring +10% Recurring FY 2017 = FY 2017 excluding non-cash one-off items FY 2016 Earnings Per Share adjusted for free share attribution of October 2, 2017. 34 Air Liquide at a glance The world leader in gases, technologies and services for Industry and H
Slide 35: Significant Debt Reduction
Significant Debt Reduction GEARING CASH FLOW 90% +15% GEARING 80% Net Debt Net Debt 31 Dec. 2016 31 Dec. 2017 (1) Including acquisitions, transactions with minority shareholders, net of divestitures. (2) Including share purchases and capital increases. 35 Air Liquide at a glance The world leader in
Slide 36: Selected Investments for the Future
Selected Investments for the Future Investment 2017 Investment 2017 Start-up/Ramp-up Opportunities(1) Decisions(1) Sales Growth 12-month portfolio Contribution € € € 2.1bn 2.6bn 190m • Continued active bidding • Long-term contracts • Above the €170m • Small to medium size projects • 2 take-overs for
Slide 37: Starting-up Major LI Units in a Dynamic Environment
Starting-up Major LI Units in a Dynamic Environment 2018 2017 Q1 Q2 Q3 Q4 Sasol Fujian OCI Pemex Chinese Electronics RSA Shenyuan U.S. Mexico Project Projects China Asia >€ 2018 forecasted additional sales 370m Increased bidding activity on new projects 37 Air Liquide at a glance The world leade
Slide 38: 2018 Outlook
2018 Outlook Step change in sales Deliver major LI start-ups 2017 with improved 2018 Continue to focus on growth & performance operational excellence Airgas synergies ahead Pursue business transformation; of plan leverage the Airgas model Moving forward with While investing for the fut
Slide 39: Appendix
Appendix 39 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 40: Sales Growth Accelerating in G&S, E&C Stabilizing
Sales Growth Accelerating in G&S, E&C Stabilizing (1) Refer to appendix for definitions 40 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 41: Better Economic Environment
Better Economic Environment Step-up in IP growth, expected to stabilize in 2018 Negative FX Impact(1) Industrial Production Year on Year in % (3-month rolling average) -1.6% -5.4% FY 2017 Q4 2017 Low Energy impact in Q4(1) +1.5% +0.5% FY 2017 Q4 2017 (1) On Group sales, based on 2016 adjusted sales
Slide 42: Base Business Contribution Firming-Up
Base Business Contribution Firming-Up G&S Quarterly Growth Analysis +14% +31% +29% 19 START-UPS in FY17 Strongest base business since Q1 2014 (1) Comparable growth based on 2016 adjusted sales 42 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 43: Americas
Americas Q4 Gas & Services Sales: €1,931m INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE ELECTRONICS • IM accelerating in U.S. • Back to growth following • Dynamic South America: • Very Strong Advanced • Bulk and cylinder volumes up hurricanes Brazil and Argentina Materials • Positive pricing • Hig
Slide 44: Europe
Europe Q4 Gas & Services Sales: €1,748m INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE • Despite 1 less working day, • Decline as expected due to high • Solid Healthcare positive Q4 growth comparison effect – customer • Lower M&A, tariff pressure indemnity • Broad-based strength, especially • Medic
Slide 45: Asia-Pacific
Asia-Pacific Q4 Gas & Services Sales: €1,039m INDUSTRIAL MERCHANT LARGE INDUSTRIES ELECTRONICS • China again >+15% with very • Several ramp-ups in China • Double digit growth (China, strong growth both in cylinders • High air gas volumes in Korea, Japan, Singapore) and bulk Singapore • Very dynamic
Slide 46: Industrial Merchant Pricing
Industrial Merchant Pricing Refer to appendix for definitions 46 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 47: Low E&C, Developing GMT
Low E&C, Developing GMT Sales and Order intake(1) – in €m 500 500 E&C GMT 400 400 300 300 200 200 100 100 0 0 H1-15 H2-15 H1-16 H2-16 H1-17 H2-17 H1-15 H2-15 H1-16 H2-16 H1-17 H2-17 Sales Order intake Sales Order intake (1) Group and third-party order intake 47 Air Liquide at a glance The world lead
Slide 48: Stable Backlog despite Major LI Start-Up in Q4
Stable Backlog despite Major LI Start-Up in Q4 Investment Backlog(1) in €bn Increasing Investment Decisions 1000 800 600 400 200 € 0.8bn 0 In €m Q1-17 Q2-17 Q3-17 Q4-17 Yearly sales backlog(1) after full ramp-ups (1) See definitions in appendix 48 Air Liquide at a glance The world leader in gases, t
Slide 49: FY 2017 G&S Revenue Breakdown by Region
FY 2017 G&S Revenue Breakdown by Region EUROPE €6.8bn ASIA- AMERICAS PACIFIC €8.1bn €4.1bn €19,642m Industrial Merchant Large Industries Healthcare Electronics 49 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 50: Pipeline Networks – More than 9,300 km
Pipeline Networks – More than 9,300 km Benelux ≈ 2,300 km France ≈ 1,600 km France Northern Europe Networks Germany Italy Normandy Italy ≈ 600 km France - Belgium - Netherlands Ruhr Genova - Padova Feyzin Germany ≈ 500 km Fos-Lavéra Richemond Spain ≈ 45 km Canada Hamilton Korea Yochon USA Gulf Coast
Slide 51: Both Growth and Resilience
Both Growth and Resilience Air Liquide Sales & OIR versus Worldwide Industrial Production over 10 Years 200 (Base 100 in 2005) 190 180 170 160 150 140 130 120 110 100 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Worldwide IP* Sales OIR *Source: coe-rexecode 51 Air Liquide at a glance The w
Slide 52: Consolidated P&L
Consolidated P&L (1) FY 2016 Basic earnings per share adjusted for the free share attribution of October 2, 2017 52 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 53: Consolidated Balance Sheet Simplified - In €m
Consolidated Balance Sheet Simplified - In €m * Including fair value of derivatives 53 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 54: Cash Flow Statement
Cash Flow Statement * PPE: Property, plant and equipment. 54 Air Liquide at a glance The world leader in gases, technologies and services for Industry and Health
Slide 55: Adjusted Sales Used as a Comparison Basis (1/2)
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 2016 (1) consolidated divestments Air Liquide 2017 2016 (1) Excluding Air Liquide Welding and Aqua Lung (2) Excluding currency and ene
Slide 56: Adjusted Sales Used as a Comparison Basis (2/2)
Adjusted Sales Used as a Comparison Basis (2/2) Published 2016 Published 2016 Air Liquide sales excluding Air Liquide Welding and Aqua Lung A excluding Air Liquide (IFRS 5, discontinued operations) Welding and Aqua Lung Airgas consolidated Published 2016 Airgas sales with divestments fully completed
Slide 57: 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 58: For further information, please contact: Investor Relations
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 Ludmilla Binet + 33 (0)1 40 62 57 37 Jérôme Zaman + 33 (0)1 40 62 59 3