Air Liquide SA · EURONEXT:AI
Air Liquide SA — FY2016 Earnings Presentation
51 slides from Air Liquide SA's earnings presentation, Feb 15, 2017
Slide 1: Full Year 2016 Results
Full Year 2016 Results Solid Performance in 2016 after Airgas Integration Increase in Revenue, Net Profit and EPS Paris, 15 February 2017
Slide 2: Agenda
Agenda 1 2016, a successful transformational year 2 Solid operational performance 3 Improved investment portfolio profile 4 2017: delivering NEOS 2 15 February 2017 Full Year 2016 Results The world leader in gases, technologies and services for Industry and Health
Slide 3: 2016, a Successful Transformational Year
2016, a Successful Transformational Year Benoît Potier Chairman & Chief Executive Officer 3 15 February 2017 Full Year 2016 Results The world leader in gases, technologies and services for Industry and Health
Slide 4: Major Steps Successfully Achieved
Major Steps Successfully Achieved Divestiture of Other Activities US divestitures ● ● Customer-centric ● Focus on ● Rights issue transformation Gas & Services Rights ● 2020 ambition and GMT ● € and US$ bonds issue Issue ● New organization ● Merger of operations 4 15 February 2017 Full Year 2016 Resu
Slide 5: 2016 Highlights
2016 Highlights Group Sales Cash Flow €bn 19 €18.1bn 18 17 +14.6% Strong performance 20.4% 16 of sales 15 14 2013 2014 2015 2016 Net Profit Gearing In line with guidance +5.0% Gearing back <100% 90% +2.7%* NB: 2015 figures have been restated to account for IFRS 5, discontinued operations 5 15 Februa
Slide 6: Increased Dividend Proposal
Increased Dividend Proposal Dividend(1) (in € per share over 20 years) 2,8 20 yrs €2.6(2) CAGR 2,4 +9.5% +2.7% 2,0 1,6 Global 1,2 pay-out 0,8 ratio 0,4 56% 0,0 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 (1) Historical data adjusted for attribution of free shares and for a factor of 0,974
Slide 7: Starting 2017 on a Solid Foundation
Starting 2017 on a Solid Foundation 2015 2016 2017 IP stabilizing Organization in place Sustainable scope Ambitious growth objectives More balanced investment portfolio FX & Energy turning favorable New visual identity 7 15 February 2017 Full Year 2016 Results The world leader in gases, technologies
Slide 8: Solid Operational Performance
Solid Operational Performance Fabienne Lecorvaisier Chief Financial Officer 8 15 February 2017 Full Year 2016 Results The world leader in gases, technologies and services for Industry and Health
Slide 9: Sales Growth Above Market
Sales Growth Above Market INDUSTRIAL PRODUCTION FY 2016 (1) +0.5% Sales in €m FY 15 FY 16 FY 16/15 FY 16/15 Q4 16/15 as published comparable (2) comparable (2) Gas & Services 14,752 17,331 +17.5% +2.7% +1.7% Engineering & Construction 775 474 -38.8% -38.0% -34.5% Global Markets & Technologies 292 33
Slide 10: Stabilizing Economic Backdrop
Stabilizing Economic Backdrop FX Impact* Industrial Production Year on Year in % (3-month rolling average) 8% -1.4% +0.1% 6% FY 2016 Q4 2016 4% World United States 2% Euro Zone Energy Impact* 0% Developing Economies -2% -2.2% -4% +0.4% 2013 2014 2015 2016 FY 2016 Q4 2016 Source Coe-Rexecode as of Ja
Slide 11: Strong Growth Drivers in 2016
Strong Growth Drivers in 2016 +14% +5% +5% +8% AIRG AS LARG E G LOBAL MARK E TS HEALTHCARE DE VE LOP IN G IN TE G RATION IN DU STRIE S & TE CH N OLOG IE S E CON OMIE S Sales Growth excluding Currency, Energy and Airgas impact. Comparable sales growth for Americas for Q4 16 and FY16 are estimated due
Slide 12: Q4 - Better Europe, Stable Americas
Q4 - Better Europe, Stable Americas +2% FY +2% FY EUROPE +4% AMERICAS Q4 incl. Airgas FY 2016 FY 2016 +3% +3% +3% +2% +2% +120% €6,593m €6,230m +1% +0.5% +0.3% Q4 FY2015 Q1 Q2 Q3 Q4 FY2015 Q1 Q2 Q3 Q4 -0.2% -0,2% G&S Comparable Sales Growth(1) Improved Q4 IM still weak but positive signals • LI: goo
Slide 13: Q4 - Solid Fundamentals in Asia, Turnaround in MEA
Q4 - Solid Fundamentals in Asia, Turnaround in MEA +4% FY +8% FY +24% +45% +7% +6% +6% MIDDLE-EAST ASIA-PACIFIC & AFRICA FY 2016 +4% FY 2016 +3% +2% €3,936m €572m Q4 +0.5% FY2015 Q1 Q2 Q3 FY2015 Q1 Q2 Q3 Q4 -8% G&S Comparable Sales Growth(1) Positive underlying activity Yanbu turnaround in KSA • Tur
Slide 14: Q4 - Solid LI, Slightly Better IM
Q4 - Solid LI, Slightly Better IM +5% FY -2% FY Q4 incl. Airgas +9% +74% LARGE INDUSTRIAL INDUSTRIES MERCHANT FY 2016 +5% +5% FY 2016 +4% +4% -1% -1% -1% €5,037m €7,565m -2% -3% FY2015 Q1 Q2 Q3 Q4 FY2015 Q1 Q2 Q3 Q4 G&S Comparable Sales Growth(1) Turnarounds compensated by one-off Positive signals i
Slide 15: Q4 - Sound HC, Steady Underlying in EL
Q4 - Sound HC, Steady Underlying in EL +5% FY Q4 incl. Airgas +4% FY +8% +13% +17% +11% +9% HEALTHCARE +5% +5% +5% ELECTRONICS FY 2016 +4% FY 2016 €3,111m €1,618m Q3 Q4 FY2015 Q1 Q2 -1% FY2015 Q1 Q2 Q3 Q4 -3% G&S Comparable Sales Growth(1) Solid organic growth Growth of recurring sales 18% • Increas
Slide 16: E&C Low, GMT Developing
E&C Low, GMT Developing E&C GMT 936 389 280 405 In €m In €m 300 300 266 255 243 Order 200 172 200 161 Intake(1) 144 119 113 104 100 88 85 100 73 53 55 44 35 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2015 2016 Sales €775m €474m €292m €330m (1) Group and Third Party Orders. 16 15 F
Slide 17: OIR Margin Reflecting New Mix with Airgas Consolidation
OIR Margin Reflecting New Mix with Airgas Consolidation In €m 2015 2016 FY 16/15 Revenue 15,819 18,135 +14.6% Purchases (5,890) (6,693) +13.6% Personnel expenses (2,929) (3,659) +19.6% Other net income and expenses (2,785) (3,172) Operating profit before depreciation 4,215 4,611 +9.4% Airgas Depreci
Slide 18: Level of Efficiencies Aligned with NEOS
Level of Efficiencies Aligned with NEOS Breakdown of Efficiencies In €m €315m 350 300 Procurement 250 Industrial Others 200 150 100 Industrial Merchant 50 Large Industries 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Healthcare Electronics Objective Efficiencies E&C, GMT, Corporate NB: 2015 f
Slide 19: First Airgas Synergies Delivered in 2016
First Airgas Synergies Delivered in 2016 Cost Synergies on track PROCESS CYLIN DE R $45m OP E RATION S BU LK OP E RATION S & BACK OFFICE PROCUREMENT • 18 site closures • Sourcing • Business & • Leverage on IT administrative • Logistics • Primary process review • Shared services optimization producti
Slide 20: 2017-2019: Synergies > US$300m Confirmed
2017-2019: Synergies > US$300m Confirmed Cost Synergies Revenue Synergies • Cross-selling P ROCE SS CYLIN DE R BU LK & BACK • Product availability OP E RATION S OP E RATION S OFFICE PROCUREMENT • Gas applications • Small on-site generators Timeline for delivery of synergies US$45m >US$130m >US$60m >
Slide 21: Net Profit Up +5.0%
Net Profit Up +5.0% 2016 In €m 2015 2016 FY 16/15 one-off costs fully Revenue 15,819 18,135 +14.6% covered Operating Income Recurring 2,856 3,024 +5.9% Other non-recurring operating income & expenses (123) 36 Operating Income 2,733 3,060 +12.0% Net financial costs and other net financial expenses (2
Slide 22: Gearing at 90%
Gearing at 90% GEARING <1,019> +3,365 90% <11,580> CASH FLOW <563> <15,368> GEARING +30.5% 57% <7,239> +3,523 <2,028> +173 Net Debt Cash Flow WCR Net Airgas Dividends Rights Currency Net Debt 31 Dec 2015 + Others investments acquisition Issue & Scope 31 Dec 2016 excl. Airgas net of acquisition(1) di
Slide 23: Improved Investment Portfolio Profile
Improved Investment Portfolio Profile Fabienne Lecorvaisier Chief Financial Officer 23 15 February 2017 Full Year 2016 Results The world leader in gases, technologies and services for Industry and Health
Slide 24: Improved Investment Portfolio Profile
Improved Investment Portfolio Profile Investment FY 2016 Investment FY 2016 Start-up/ Opportunities(1) Decisions(1) Ramp-up Sales Growth 12 months portfolio Contribution €2.4bn €2.2bn €2.2bn ~€225m 2015 2016 • Smaller projects • Increased selectivity on • ASUs in Americas and • Lower risk projects A
Slide 25: Investment Backlog Adjusting for Start-ups
Investment Backlog Adjusting for Start-ups Investment Backlog(1) FY 2016 Decisions Start-ups €2.8bn €2.7bn €2.3bn €2.1bn ~€ 0.8bn Dec 2013 Dec 2014 Dec 2015 Decisions Start-ups Dec 2016 Yearly Sales Backlog(1) after full Ramp-ups (1) See definitions in appendix. 25 15 February 2017 Full Year 2016 Re
Slide 26: Focus on ROCE
Focus on ROCE ROCE In €m >10% 10% ROCE after 5-6 years 7.8%* • Short-term impact of Airgas acquisition Value 350 bps 5% creation • Expected lower capex on sales • Focus on delivering efficiencies WACC and synergies 0% 2016 2017… * Published ROCE vs. “pro forma” ROCE of 6.9% 26 15 February 2017 Full
Slide 27: 2017: Delivering NEOS
2017: Delivering NEOS Benoît Potier Chairman & Chief Executive Officer 27 15 February 2017 Full Year 2016 Results The world leader in gases, technologies and services for Industry and Health
Slide 28: 2016: Transition to NEOS
2016: Transition to NEOS LI IM HC EL GMT G ROW TH CU STOME R P RE MIU M NEW & CASH RE ACH & E XP AN SION VALU E BU SIN E SSE S COMPETITIVENESS • +5.4% • >US$45m • >+13% • >+19% • >+13% sales growth of synergies sales growth Advanced sales growth 2016 including Airgas Materials • New long-term • Airg
Slide 29: 2017 Outlook
2017 Outlook ● Acquisition fully completed ● Steady underlying activity 2016 ● Solid operational performance 2017 ● Positive signals from ● Improved investment portfolio customers profile ● Delivering expected ● Transition to NEOS efficiencies and synergies ● Focus on value creation “Assuming a comp
Slide 30: FY 2016 Appendix
FY 2016 Appendix 30 15 February 2017 Full Year 2016 Results The world leader in gases, technologies and services for Industry and Health
Slide 31: 2017: Delivering NEOS
2017: Delivering NEOS ● Airgas synergies ● “LI Connect” ● Open innovation ● Efficiencies ● i-Lab initiatives ● ALIAD ● Customer reliability ● Connected cylinder ● Hydrogen Council ● Focus on ROCE ● e-Health ● Biogas 31 15 February 2017 Full Year 2016 Results The world leader in gases, technologies a
Slide 32: Impact of Currency and Energy on G&S Revenue
Impact of Currency and Energy on G&S Revenue Currency In €m Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 €/US$ +109 +129 +110 +91 +14 (14) (3) +10 €/CNY +52 +76 +52 +36 (10) (28) (23) (20) €/JP¥ +11 +9 +3 +17 +14 +22 +42 +30 Others +78 +76 +4 (22) (89) (98) (32) (17) Total currency impact +250 +2
Slide 33: Consolidated P&L
Consolidated P&L In €m 2015 2016 Revenue 15,819 18,135 Cost of Goods (11,604) (13,524) Operating income recurring before depreciation 4,215 4,611 Depreciation and amortization expense (1,359) (1,587) Operating income Recurring 2,856 3,024 Net non-recurring operating income (123) 36 Operating income
Slide 34: Consolidated Balance Sheet
Consolidated Balance Sheet - In €m ASSETS 31/12/15 31/12/16 EQUITY AND LIABILITIES 31/12/15 31/12/16 Goodwill 5,730 13,890 Shareholders’ equity 12,406 16,742 Minority interests 365 383 Fixed assets 16,555 22,003 Other non-current assets* 936 960 Total equity 12,771 17,125 Total non-current assets 23
Slide 35: Cash Flow Statement
Cash Flow Statement In €m 2015 2016 Funds provided by operations 3,150 3,523 Changes in Working Capital (258) 331 Other items (60) (158) Net cash from operating activities 2,832 3,696 Purchase of PPE* and intangible assets (2,028) (2,259) Purchase of financial assets and the impact of changes in sco
Slide 36: Growth in Q4 G&S Revenue
Growth in Q4 G&S Revenue Comparable Published growth(1) growth in €m (1) +1,081 4,930 5 000 +1.7% +30.8% 4 500 4 000 3,768 +63 +15 +3 3 500 +0.4% +0.0% +28.7% 3 000 2 500 2 000 0 Q4 2015 Comparable (1) growth Energy Currency Significant perimeter Q4 2016 (1) Comparable growth: excluding Currency, En
Slide 37: Revenue Analysis by Quarter and by Geography
Revenue Analysis by Quarter and by Geography Sales in €m Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q4 16/15 Q4 16/15 comparable(1) Europe 1,713 1,614 1,611 1,601 1,767 +3.2% +4.2% Americas 899 824 1,361 2,042 2,003 +122.9% -0.2% Asia-Pacific 995 966 954 997 1,019 +2.4% +0.5% Middle-East and Africa 161 144 144 1
Slide 38: Revenue Analysis by Quarter and by Business Line
Revenue Analysis by Quarter and by Business Line Sales in €m Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q4 16/15 Q4 16/15 comparable(1) Large Industries 1,324 1,207 1,181 1,261 1,388 +4.8% +4.2% Industrial Merchant 1,314 1,238 1,726 2,308 2,293 +74.5% -1.1% Healthcare 725 695 756 814 846 +16.7% +4.8% Electronics
Slide 39: G&S Revenue Growth by Quarter and by Impact
G&S Revenue Growth by Quarter and by Impact Growth as Significant Comparable Natural Gas Electricity Currency published perimeter growth (1) Q1 2015 + 6.2% - 3.4% - 0.2% + 7.3% 0.0% + 2.6% Q2 2015 + 9.3% - 2.2% - 0.5% + 8.5% 0.0% + 3.5% Q3 2015 +7.4% -1.6% -0.4% + 4.9% 0.0% + 4.5% Q4 2015 +4.9% -3.2
Slide 40: FY 2016 G&S Revenue Breakdown by Region
FY 2016 G&S Revenue Breakdown by Region EUROPE 38% E U ROP E AMERICAS 36% €6.6bn AME RICAS ASIA-PACIFIC €17,331m €6.2bn €3.9bn GAS & SERVICES FY 2016 REVENUE 31% 36% 64% MIDDLE EAST & AFRICA ASIA 31% 5% 21% 3% 23% 32% 35% 6% 9% 3% 27% Industrial Merchant Large Industries Healthcare Electronics 40 15
Slide 41: Europe
Europe Q4 Gas & Services Sales: €1,767m INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE • Confirmed bulk volume increase • Good volumes in air gases • Steady organic growth • Encouraging signs in cylinder • Positive one-off • Low contribution from bolt-on M&A business • Robust growth in Eastern Euro
Slide 42: Americas
Americas Q4 Gas & Services Sales: €2,003 m INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE ELECTRONICS • Still weak in North America • Record volumes of air • Dynamic South America • Low E&I sales • Better bulk volumes in US gases in US • Solid organic growth and • Volumes low in Energy, • Several H
Slide 43: Asia-Pacific
Asia-Pacific Q4 Gas & Services Sales: €1,019m INDUSTRIAL MERCHANT LARGE INDUSTRIES ELECTRONICS • Back to slight growth • Several maintenance • Flat growth • Bulk & cylinder volume turnarounds • Low E&I & ESM in NE Asia growth >+9% in China • Ramp-up of a new unit in • High neon price in Q4 2015 Aust
Slide 44: Industrial Merchant Pricing
Industrial Merchant Pricing Europe -0.7% -0.7% Americas +2.6% +2.5% Asia-Pacific +0.9% -0.3% Middle-East and Africa +3.7% +1.6% TOTAL Q4 2016 +0.9% FY 2016 INDUSTRIAL +0.5% MERCHANT 44 15 February 2017 Full Year 2016 Results The world leader in gases, technologies and services for Industry and Healt
Slide 45: Operating Margin – Energy Effect
Operating Margin – Energy Effect Group, in €m 2015 2016 Revenue 15,819 18,135 Incl. energy effect -406 -356 Operating income recurring 2,856 3,024 Operating margin 18.1% 16.7% Operating margin excluding energy 16.4% Gaz & Services, in €m 2015 2016 Revenue 14,752 17,331 Incl. energy effect -406 -356
Slide 46: Operating Margin (OIR/Revenue)
Operating Margin (OIR/Revenue) H1 15 H1 15 H2 15 H2 15 2015 2015 Group 17.7% 18.4% 18.1% 2015 Gas & Services 19.4% 20.7% 20.1% H1 H1 16 16 H2 16 H2 16 2016 2016 Group 17.0% 16.4% 16.7% 2016 Gas & Services 19.1% 18.3% 18.7% OIR Margin Reflecting New Mix with Airgas Consolidation NB: 2015 figures have
Slide 47: 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 48: Gas & Services Industrial Capex by Geography
Gas & Services Industrial Capex by Geography G&S 2016 capex(1) €2.1bn G&S capex(1) / sales AMERICAS 36% 2015 2016 Europe 8.1% 8.6% EUROPE Americas 20.3% 11.8% 28% Asia-Pacific 12.3% 15.2% Middle-East and Africa 23.1% 27.1% Total 12.8% 11.9% ASIA MIDDLE EAST 29% & AFRICA 8% (1) Gross industrial inves
Slide 49: Financing Structure
Financing Structure As of 31 December 2016 Sources Maturity Fixed/variable rates BANK DEBT (gross debt) OTHERS(1) 9% MARKET DEBT In €m FIXED COMMERCIAL PAPER 90% 16000 RATE 1% 4% 84% > 2021 PRIVATE PLACEMENTS 11% 12000 8000 2018 à 2021 75% BONDS 4000 2017 VARIABLE 0 RATE 16% (1) Others: Finance leas
Slide 50: Regular and Sustained Performance
Regular and Sustained Performance 18 000 Revenue (in €m) +6.0% EPS(1) (in €) +7.2% 6 15 000 CAGR CAGR over 30 years(2) 5 over 30 years(2) 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 2002
Slide 51: 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 Erin Sarret + 33 (0)1 40 62 57 37 Jérôme Zaman + 33 (0)1 40 62 59 38 Joseph Marcze