Air Liquide SA · EURONEXT:AI
Air Liquide SA — H1 2000 Earnings Presentation
64 slides from Air Liquide SA's earnings presentation, Sep 8, 2000
Slide 1: Information Session: 1st half-year 2000 results
INFORMATION SESSION 7 AIR LIQUIDE 1%" half-year 2000 results +) -= September 8t, 2000
Slide 2: Note
Note The forward-looking statements contained in this document are based on current expectations regarding important risk factors. Actual results may differ materially from those expressed. Important risk factors and uncertainties include the impact of worldwide economic growth, pricing of both the
Slide 3: Introduction
ntroduction º Alain Joly b 1st half-year 2000 results º Benoît Potier b Results by businesses b Results by geographical areas º Alain Joly b 2000 objectives 2
Slide 4: Alain Joly, Chairman and Chief Executive Officer
Chairman and Chief Executive Officer Alain Joly
Slide 5: 1st half-year 2000: key facts
st half-year 2000: key facts º A very strong growth of all figures º Decrease of capital expenditure º End of BOC operation º Confirmation of our accelerated growth strategy º Development of services º Evolution of the management team 4
Slide 6: 1st half-year 2000: key numbers (euros)
st half-year 2000 : key numbers In millions of euros (€) Million 2000/99 euros % Gases and services sales 3,103 +25.5% Operating income 530 +22.9% Net earnings 296 +14.0% Cash flow 726 +23.1% EPS (in €) 3.27 +14.3% 5
Slide 7: 1st half-year 2000: key numbers (FRF)
st half-year 2000: key numbers In millions of FRF Million 2000/99 FRF % Gases and services sales 20,357 +25.5% Operating income 3,475 +22.9% Net earnings 1,942 +14.0% Cash flow 4,761 +23.1% EPS (in FRF) 21.47 +14.3% 6
Slide 8: Executive committee
xecutive committee Paul du Saillant Marketing R&D - Development - Engineering South Europe - Large Industries Europe Jean-Marc de Royere Healthcare - Services Colin Kennedy North - East Asia / Pacific Alain Joly Benoît Potier Pierre Dufour Chairman & Chief Executive Officer Chief Executive North Ame
Slide 9: Benoit Potier, Chief Executive
Chief Executive Benoit Potier
Slide 10: Gases and services sales: acceleration of growth
ases and services sales: acceleration of growth In millions of euros (€) 2000 1998 1999 1,598 1,600 1,505 1,500 1,479 1,400 1,275 1,302 1,300 1,192 1,201 1,206 1,198 1,200 1,169 1,100 1,000 Q1 98 Q2 98 Q3 98 Q4 98 Q1 99 Q2 99 Q3 99 Q4 99 Q1 00 Q2 00 Growth +10.8% +10.3% +4.9% -1.7% +0.5% +6.2% +11.4
Slide 11: Gases and Services: sales by segment
ases and Services: sales by segment H1 H2 H1 H1 99/98 99/98 2000 / 99 2000 / 99 Ex. forex º Large Industries +7.1% +31.5% +43.6% +32.4% º Electronics -3.9% +24.3% +60.4% +37.8% º Small to medium size Industries +1.4% +8.0% +10.2% +4.6% Total industry +2.3% +16.5% +25.5% +16.3% º Healthcare +10.5% +2
Slide 12: High growth segments represent more than 50% of sales
igh growth business segments represent more than 50% of gas and services sales º H1 1999 º H1 2000 14 % 24 % 14 % 28 % 10 % 13 % 45 % 52 % Large industry industries Small Small andand medium medium size industry industries Electronics Healthcare Healthcare 11
Slide 13: Large industries: key facts 1st half-year 2000
28% Large industries º Key facts 1st half-year 2000 b Strong growth (+32.4% ex. forex) fueled by large contracts gathering steam : – Oxygen: new applications (iron & steel, IGCC, waste treatment) – Hydrogen: strong demand (refining, chemicals) – Carbon monoxyde and energy (deregulation): outsourcing
Slide 14: Impact of contracts signed 1995-1998 on large contracts sales
Impact of contracts signed in 1995 - 1998 on large contracts and pipeline sales In millions of euros (€) 610 1,600 500 335 1,400 (obj. 315) 170 1,200 10 1,000 800 600 400 200 0 1997 1998 1999 2000 2001 New contracts 13
Slide 15: New large contracts put on stream in 2000
16 new large contracts put on stream in 2000 H2 2000 10 new plants Swe. Boliden (O2 ) Bulg . Union Minière (O2 ) Ger. Norddeutsche (O2 ) . Ital Limito (O2 ) Fra BP (energy) Fra. Rhodia (H2/CO) Canada Shell (energy) Canada Shell (O2 ) H1 2000 Taiw. Chang Bin (O2 ) 6 new plants Sing. Exxon (O2 ) Belg
Slide 16: Large industries: Bergen-Op-Zoom site
arge industries Bergen-Op-Zoom site (Belgium) H2 / CO 15
Slide 17: Electronics: key facts 1st half-year 2000
lectronics 13% º Key facts 1st half-year 2000 b Strong growth (+37.8% ex. forex) fueled by the market recovery: – extension of existing fabs – very strong growth of specialty gases and equipment – development of services ("TGCM") b 14 contracts signed 16
Slide 18: Semiconductors: a cyclical high growth market
emiconductors: a cyclical high growth market CAGR 1994-1999 = +8% 9 % In bn US $ R =1 CAG 355 350 0 4 9-20 19 9 301 300 272 250 250 202 200 + 23% R = CAG 144 132 137 149 5 150 0-199 126 199 102 100 77 51 55 60 50 0 90 91 92 93 94 95 96 97 98 99 00* 01* 02* 03* 04* * Estimates Source : Chips manufact
Slide 19: Semiconductors: expanded offer boosts sales
emiconductors: Air Liquide expanded offer boosts its sales Sales in millions of euros (€) CAGR 1994-1999 = +19.3% +5% +10% 600 +21% 500 +25% +60% 399 400 +40% 300 248 200 100 0 94 95 96 97 98 99 H1 1999 H1 2000 18 Note: excluding Joint-Ventures
Slide 20: Semiconductors: sales by segment
emiconductors : Air Liquide sales by segment +10% Basis 100 in 1994 (ex. forex. +1%) excl. Joint-Ventures +5.4% 245 250 +21% 223 225 212 +60% 200 175 -17% 175 +27% -34% 150 +103% 125 +28% 100 +46% +5% 75 +17% 50 + 53% 25 0 1996 1997 1998 1999 H1 1999 H1 2000 Equipment Liquid chemicals Gases and inst
Slide 21: Small and medium size industries: key facts
mall and medium size industries 45% º Key facts 1st half-year 2000 b Moderate growth (+4.6% ex. forex) supported by: – increase of volumes (favourable business conditions and new applications) – reversal of price trend – tight control of investments – technology innovations – growth of on-site produ
Slide 22: Small and medium industries: transformation of the business
Small and medium size industries: transformation of the business INNOVATION Integrated regulator ◗ easier use ◗ safety Traceability WEB ◗ reliability ◗ wap ◗ ownership ◗ E-commerce 21
Slide 23: Small and medium industries: transformation of the business
mall and medium size industries: transformation of the business SERVICES 22
Slide 24: Healthcare: key facts 1st half-year 2000
14% ealthcare º Key facts 1st half-year 2000 b Strong growth (+20.5% ex. forex) in : – homecare • consolidation impact of Orkyn' (september 1999) • development of business – hospital • development of services 23
Slide 25: Healthcare: continuation of growth
ealthcare: continuation of growth In millions of euros (€) +19.7% 1,000 965 +7.5% Disinfection +21.2% 834 776 Equipment +18.0% 640 +30.1% Gases and Services 562 541 500 homecare 432 Homecare +46.3% Gases and Services for hospitals 0 H1 1999 H1 2000 1995 1996 1997 1998 1999 24
Slide 26: Services: key facts 1st half-year 2000
ervices º Key facts 1st half-year 2000 b Very strong growth in all markets b Joint-Ventures and acquisitions in the IT field – Joint-Venture with Gemplus : traceability solutions – Acquisition of Ortec : logistics flows optimization – Stake in Napac : industrial data transmission and remote monitori
Slide 27: Services
ervices In millions of euros (€) H1 H1 H1 1999 2000 2000/1999 % Healthcare 151 218 + 44% Industry 118 158 + 34% Energy solutions 94 172 + 83% Services sales 363 549 + 51% % of Gases and Services 15% 18% sales 26
Slide 28: France: Gases and Services
21% rance: Gases and Services In millions of euros (€) % sales Sales Operating income 1,200 +21.6% 200 +14.7% 180 1,000 160 140 133 800 116 654 120 600 538 100 80 400 60 40 200 20 0 0 H1 1999 H1 2000 H1 1999 H1 2000 27
Slide 29: France: key facts 1st half-year 2000
rance: Gases and Services º Key facts 1st half-year 2000 b Strong growth in all markets b Energy large contracts gathering steam (Rhodia in Feyzin, Lyondell in Fos-sur-Mer) b Strong growth of homecare (acquisition of 'Orkyn' in September 1999: integration phase) b Development of services b LPG : lag
Slide 30: Europe (ex France): Gases and Services
urope (ex France): Gases and Services 28% % sales In millions of euros (€) Sales Operating income +16.0% +17.7% (+ 15.6% ex. forex) (+17.4% ex. forex) 1,200 200 177 1,000 180 875 160 151 754 800 140 120 600 100 80 400 60 200 40 20 0 0 H1 1999 H1 2000 H1 1999 H1 2000 29
Slide 31: Europe (ex. France): key facts
urope (ex. France): Gases and Services º Key facts 1st half-year 2000 b Sustained growth in most countries b Large contracts ramping up (Italy) b Acquisition of Lamers (electronics) in The Netherlands b Continuation of margins improvements, especially in Germany 30
Slide 32: Americas: Gases and Services
mericas: Gases and Services 34% % sales In millions of euros (€) Sales Résultat Operating d'exploitation income + 35.8% +35.4% 1,200 (+19.8% ex. forex) (+20.0% ex. forex) 1,043 200 1,000 180 160 800 768 140 128 120 600 100 94 400 80 60 200 40 20 0 0 H1 1999 H1 2000 H1 1999 H1 2000 31
Slide 33: Americas (1): key facts
mericas: Gases and Services (1) º Key facts 1st half-year 2000 North America USA b Strong growth of sales to Large Industries (Hydrogen) and to electronics customers b Increase of energy prices passed through to Large Industry customers (contracts indexation), without impact on margins, partly passe
Slide 34: Americas (2): key facts
mericas: Gases and Services (2) º Key facts 1st half-year 2000 South America b Strong growth in Brazil and Argentina thanks to large contracts gathering steam and good business conditions 33
Slide 35: Asia Pacific: Gases and Services
16% sia Pacific: Gases and Services In millions of euros (€) % sales 1,200 Sales Operating income 200 +31.2% +48% 1,000 (+8.3% ex. forex) 180 (+24.4% ex. forex) 160 800 140 120 600 488 100 372 80 400 55 60 37 200 40 20 0 0 H1 1999 H1 2000 H1 1999 H1 2000 34
Slide 36: Asia Pacific: key facts
sia Pacific : Gases and Services º Key facts 1st half-year 2000 Japan b Moderate growth supported by the electronics business b Improvement of margins thanks to cost reduction programs b Strong exchange impact of the yen Asia excluding Japan b Continuation of the strong growth in Taïwan b Recovery i
Slide 37: By business: sales and operating income
y business : sales and operating income In millions of euros (€) H1 1999 H1 2000 2000/99 2000/99 Sales % % ex. forex Gases and services 2,473 3,103 +25.5% +16.9% Welding 316 348 +10,1% + 4.4% Engineering & construction 62 84 +35.5% +29.0% Others 218 286 +31.2% +27.1% Total 3,069 3,821 +24.5% +16.6%
Slide 38: By business: sales and operating income (FRF)
y business : sales and operating income In millions of FRF H1 1999 H1 2000 2000/99 2000/99 Sales % % ex. forex Gases and services 16,218 20,357 +25.5% +16.9% Welding 2,076 2,284 +10.1% +4.4% Engineering & Construction 407 551 +35.5% +29.0% Others 1,428 1,870 +31.2% +27.1% Total 20,129 25,062 +24.5%
Slide 39: Summarized P&L
ummarized P&L H1 H1 H1 H1 In millions of euros (€) 1999 2000 2000/99 2000/99 ex.forex Sales 3,069 3,821 +24.5% +16.6% – natural gas (+3%) – acquisitions (+3%) Operating income before depreciation and amortization 744 908 +22.0% +15.4% – depreciation and amortization (+21%) Operating income after dep
Slide 40: Summarized financial information
ummarized financial information In millions of euros (€) Cash flow : +23.1% H1 1999 H1 2000 Cash flow 590 726 Distribution (245) (276) Acquisitions of fixed assets (608) (437) Investments (192) (78) Net before financing (457) (56) Change in indebtedness (722) (164) Balance sheet 12/31/1999 06/30/200
Slide 41: Investments
nvestments In millions of euros (€) Commitments Payments 1,600 1,512 1,434 1,438 1,400 1,345 1,268 1,200 1,000 1,045 1,000 1,000 974 920 800 600 400 200 0 1996 1997 1998 1999 Est 2000 1996 1997 1998 1999 Est 2000 Fixed assets Acquisitions 40
Slide 42: Alain Joly, Chairman and Chief Executive Officer
Chairman and Chief Executive Officer Alain Joly
Slide 43: Outlook 2000
utlook 2000 º Large contracts gathering steam º Growth of services º Cost reduction program º Good industrial business conditions Objective : a double digit growth of EPS 42
Slide 44: 3 years objectives (1999-2002)
years objectives (1999-2002) º A very strong increase of EPS (+12% per year, 40% in 3 years) º ROE : 14% in 2002 º ROCE : +0.5% per year 43
Slide 45: Growth objective for ROCE
growth objective for ROCE ROCE (%) Investments (millions of euros) 12.5 1,800 1,600 12 1,400 11.5 1,200 11 1,000 10.5 800 10 600 9.5 400 1993 1994* 1995 1996 1997 1998 1999 2000 2001 2002 ROCE Investments 44 *1994 including the purchase of minority shares SAF and SOAEO
Slide 46: Cash flow increases faster than investments
ash flow increases faster than investments In millions of euros (€) 1,800 1,600 1,400 1,200 1,000 800 600 400 1993 1994* 1995 1996 1997 1998 1999 2000 2001 2002 Cash flow Investments *1994 including the purchase of minority shares SAF and SOAEO 45
Slide 47: Strategy of delivering increasing added value services
strategy of delivering increasing added value services to its customers Expanded offer: Traditionnal H2, H2/CO A new generation of offer of services with a high energy, gases content of IT hygiene, services + added-value for 1 million of Industry and Healthcare customers 46
Slide 48: Appendixes
APPENDIXES
Slide 49: Financial data
inancial data H1 1999 H1 2000 Exchange rates(1) (in euros) USD 0.92 1.04 Yen (1,000) 7.74 9.76 Amortization of goodwill In millions of euros 13.1 16.3 Capitalized financial charges In millions of euros 12.8 8.2 Tax rate (%) 34.1 34.9 Current income taxes + Deferred income taxes Earnings before taxes
Slide 50: Statement of consolidated earnings (1)
tatement of consolidated earnings (1) In millions of euros (€) H1 1999/98 H1 2000/99 2000/99 1999 % 2000 % % ex. forex Sales 3,069 0.7% 3,821 24.5% 16.6% Sales Gases and Services 2,473 3.3% 3,103 25.5% 16.9% Cost of products sold, operating expenses and innovation costs 2,325 -0.9% 2,913 25.3% 17.0%
Slide 51: Statement of consolidated earnings (2)
tatement of consolidated earnings (2) In millions of euros (€) H1 1999/98 H1 2000/99 2000/99 1999 % 2000 % % ex. forex Operating income 431 2.2 % 530 22.9 % 17.1% Financial results -42 -66 Companies by the equity method 19 21 Other income 9 0 Earning before income taxes 417 - 1,5 % 485 16.3% 11.4% I
Slide 52: Statement of consolidated earnings (1) FRF
tatement of consolidated earnings (1) In millions of FRF H1 1999/98 H1 2000/99 2000/99 1999 % 2000 % % ex. forex Sales 20,129 0.7% 25,062 24.5% 16.6% Sales Gases et Services 16,218 3.3% 20,357 25.5% 16.9% Cost of products sold, operating expenses and innovation costs 15,246 -0.9% 19,107 25.3% 17.0%
Slide 53: Statement of consolidated earnings (2) FRF
tatement of consolidated earnings (2) In millions of FRF H1 1999/98 H1 2000/99 2000/99 1999 % 2000 % % ex. forex Operating income 2,829 2.2% 3,475 22.9% 17.1% Financial results -278 -430 Companies by the equity method 125 140 Other income 61 -3 Earnings before income taxes 2,737 -1.5% 3,182 16.3% 11
Slide 54: 1st half-year 2000 results by geographical area
st half-year 2000 consolidated results by geographical area In millions of euros (€) H1 H1 2000/99 2000/99 1999 2000 % % ex. forex Sales France 759 923 21,6 21,6 Europe excluding France 947 1 083 14,4 14,0 Americas 903 1 214 34,4 18,4 Asia Pacific 409 553 35,2 12,2 Africa 51 48 - 5,9 - 7,8 Total 3,0
Slide 55: 1st half-year 2000 results by geographical area (FRF)
st half-year 2000 consolidated results by geographical area In millions of FRF H1 H1 2000/99 2000/99 1999 2000 % % ex. forex Sales France 4,978 6,056 21.6 21.6 Europe excluding France 6,210 7,100 14.4 14.0 Americas 5,924 7,958 34.4 18.4 Asia Pacific 2,682 3,624 35.2 12.2 Africa 335 324 -5.9 -7.8 Tot
Slide 56: Capital expenditure by geographical area
apital expenditure by geographical area In % of total H1 1999 consolidated 2000 consolidated Investments (Sales) Investments (Sales) France 21% ( 25%) 28% (24%) Europe (excluding France) 35% (30%) 28% (28%) Americas 33% (30%) 31% (32%) Asia Pacific 10% (14%) 12% (15%) Africa 1% (1%) 1% ( 1%) Note :
Slide 57: Consolidated balance sheet
onsolidated balance sheet In millions of euros (€) LIABILITIES & ASSETS 31/12 30/06 31/12 30/06 STOCKHOLDERS' 1999 2000 1999 2000 EQUITY Net assets 7,499 7,619 Stockholders' equity 4,927 5,037 Minority interests 344 344 in which net goodwill 728 745 Provisions and deferred 1,149 1,204 Others long-te
Slide 58: Consolidated balance sheet (FRF)
onsolidated balance sheet In millions of FRF LIABILITIES & ASSETS 31/12 30/06 STOCKHOLDERS' 31/12 30/06 1999 2000 1999 2000 EQUITY Net assets 49,193 49,977 Stockholders' equity 32,318 33,043 Minority interest 2,261 2,256 in which net goodwill 4,778 4,885 Provisions and deferred 7,539 7,898 income ta
Slide 59: Statement of changes in financial position (1)
tatement of changes in financial position (1) In millions of euros (€) H1 1999 H1 2000 Net earnings 100% 282 323 Depreciation and amortization 313 378 Deferred income taxes 33 44 Increase (decrease) on provisions (28) (8) Impact of equity in earnings (10) (11) Cash flow 590 726 58
Slide 60: Statement of changes in financial position (2)
tatement of changes in financial position (2) In millions of euros (€) H1 1999 H1 2000 Cash flow 590 726 Dividend distribution (245) (277) Capital expenditure (800) (515) BOC expenditures 112 Sales of fixed assets and investments & others 22 (2) Change in working capital (24) (100) Net before financ
Slide 61: Statement of changes in financial position (1) FRF
tatement of changes in financial position (1) In millions of FRF H1 1999 H2 2000 Net earnings 100 % 1,847 2,121 Depreciation and amortization 2,054 2,480 Deferred income taxes 215 290 Increase (decrease) on provisions (184) (55) Impact of equity in earnings (66) (75) Cash flow 3,866 4,761 60
Slide 62: Statement of changes in financial position (2) FRF
tatement of changes in financial position (2) In millions of FRF H1 1999 H1 2000 Cash flow 3,866 4,761 Dividend distribution (1,608) (1,816) Capital expenditure (5,247) (3,380) BOC expenditures 733 Sales of fixed assets and investments and others 149 (11) Change in working capital (155) (658) Net be
Slide 63: BOC operation: financial impact
operation : financial impact In millions of euros (€) 1999 2000 Total Financial charges 99 22 121 Commitment fees 42 7 49 Interest rate hedging 57 - 57 Foreign exchange hedging - 15 15 Costs (fees, integration) 13 26 39 Break fee - 55 55 Total 112 103 215 Cash settlement - 215 215 Interest rate hedg
Slide 64: From the molecule to high value-added services
From the molecule to high value-added services Continuous creation of value 63