Air Liquide SA · EURONEXT:AI
Air Liquide SA — FY2020 Earnings Presentation
44 slides from Air Liquide SA's earnings presentation, Feb 10, 2021
Slide 1: Full Year 2020 Results
Full Year 2020 Results Outstanding performance Resilient business model Well positioned for future growth Paris, 10 February 2021 February 10, 2021 FY 2020 Results A world leader in gases, technologies and services for Industry and Health Medical O2 delivery to hospitals
Slide 2: Outstanding Year in a Global Crisis Environment
Outstanding Year in a Global Crisis Environment Benoît Potier Chairman & Chief Executive Officer 2 February 10, 2021 FY 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 3: Strong 2020 Performance, Well Positioned for the Future
Strong 2020 Performance, Well Positioned for the Future • Significant performance improvement • Strength of business model and portfolio with a mix of growth (HC, EL, GM&T) and resilience pillars • Acceleration of pre-Covid trends benefitting our activities • Well positioned for future growth and for
Slide 4: Outstanding 2020 Performance Facing Covid-19 Situation
Outstanding 2020 Performance Facing Covid-19 Situation Global IP plunged(1) -5% Sales resisting FY 2020 - 6.5% - 1.3% Comparable Improved OIR margin(2) + 80bps High net profit growth + 8.6% Investment decisions >€3bn (1) Industrial Production, Source: Coe-Rexecode (2) Change in Operating Income Recur
Slide 5: Business Model Validated, Sales Growth in Q4 2020
Business Model Validated, Sales Growth in Q4 2020 + 1.6% G&S comparable sales growth in Q4 2020 Strong HC Solid Recovery Recovery continuing Europe in Western in North America Europe Driven by +4.3% Growing Asia-Pacific EL & China Americas Eastern Europe +2.3% Improving -1.2% rest of Asia Middle-East
Slide 6: Acceleration of pre-Covid Trends Benefitting our Activities
Acceleration of pre-Covid Trends Benefitting our Activities ENERGY TRANSITION LI - Low carbon hydrogen offers ACCELERATION GMT - Decarbonization projects HEALTHCARE - Digital care development HC - Acceleration of value-based offers NEW DYNAMISM EL IM - Digital as a value lever for all activities INCR
Slide 7: Positioning for Future Growth
Positioning for Future Growth Investment Opportunities(1) Shift towards Shift towards Energy Transition and Europe and Asia Electronics 14% 17% 22% 13% 30% 39% 14% 39% €2.9bn €3.1bn €2.9bn €3.1bn 25% 61% 21% 44% 27% 34% (1) see definition in appendix 7 February 10, 2021 FY 2020 Results A world leader
Slide 8: Sustainability at the Forefront
Sustainability at the Forefront Sustainability Day Making progress on current KPIs rd on March 23 Carbon Intensity Safety Gender Diversity 6.3 1.9 30% Addressing: 4.4 (2) ● Decarbonization ● H2 ambition 4.4 ● Societal contribution 0.9 24% ● Governance 2015 * 2025 2010 2015 2010 2015 Initial Carbon L
Slide 9: Staying Committed to Shareholders on the long term
Staying Committed to Shareholders on the long term €2.75(2) ✔ Dividend fully paid in 2020, +12.4% increase Dividend(1) in € per share ✔ New dividend increase proposed in 2021(2) ○ +1.9% increase ○ 55% Payout Ratio ○ +7.8% CAGR over 20 years ✔ Free share attribution in June 2022 (1) Historical data a
Slide 10: Serving Short Term and Preparing Long Term
Serving Short Term and Preparing Long Term Based on 2018-2020 cash flow from operations Net debt reduction and other items* 10% Acquisitions Shareholder 6% Remuneration 30% Cash Flows 2018-2020 €14bn Industrial Capex 54% * including change in working capital requirement, divestitures, capital increas
Slide 11: Outstanding 2020 Performance Validation of the Business Model
Outstanding 2020 Performance Validation of the Business Model Fabienne Lecorvaisier Executive Vice President & Chief Financial Officer 11 February 10, 2021 FY 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 12: Group Sales Progressive Recovery since Q2
Group Sales Progressive Recovery since Q2 Group comparable sales growth FY 19: +3.2% FY 20: -1.3% 12 February 10, 2021 FY 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 13: Comparable Sales Close to FY 2019
Comparable Sales Close to FY 2019 FY 20/19 FY 20/19 Q4 20/19 Sales in €m FY 19 FY 20 As published Comparable Comparable Gas & Services 21,040 19,656 -6.6% -1.2% +1.6% Engineering & 328 250 -23.7% -23.0% +24.1% Construction Global Markets & 552 579 +5.0% +6.0% +5.9% Technologies Group Total 21,920 20
Slide 14: Q4 – Improving Americas, Strong Europe
Q4 – Improving Americas, Strong Europe G&S comparable sales growth Americas – Continued sequential recovery ● LI ﹘ Underlying volumes improving sequentially ﹘ Start-up in Argentina FY 19: +1.5% FY 20: -3.7% Sales ● IM ﹘ Recovering, esp. in Packaged Gas Q4 2020 ﹘ Growing Food, Pharma, improved Metal
Slide 15: Q4 – Strong China and Recovering Rest of Asia
Q4 – Strong China and Recovering Rest of Asia G&S comparable sales growth Asia – China and EL driving growth ● LI ﹘ High volumes in Korea and Singapore ﹘ Flat China due to turnarounds FY 19: +8% FY 20: -0.1% Sales ﹘ Back to growth in Q4 ● IM ﹘ China +10% Q4 2020 ﹘ Improving rest of Asia €1,130m ﹘ +1
Slide 16: Q4 – Further IM Recovery, LI Back to Growth
Q4 – Further IM Recovery, LI Back to Growth G&S comparable sales growth Industrial Merchant - Progressive Recovery Large Industries - Better Underlying Volumes Sales - Q4 2020 Sales - Q4 2020 €2,233m €1,330m FY 19: +2% FY 20: -6.3% FY 19: +3% FY 20: -0.1% ● All regions back to growth, Air gases and
Slide 17: Q4 – Continued High Contribution from HC & EL
Q4 – Continued High Contribution from HC & EL G&S comparable sales growth Healthcare - Sustained Mobilization Electronics - Continuous momentum ex. E&I Sales - Q4 2020 Sales - Q4 2020 €899m €497m FY 19: +6% FY 20: +8.5% FY 19: +8% FY 20: +3.9% ● Strong Medical Gases sales ● Recovering Proximity care
Slide 18: Significant OIR Margin Improvement at +80bps
Significant OIR Margin Improvement at +80bps FY 20/19 In €m FY 19 FY 20 FY 20/19 Comparable Revenue 21,920 20,485 -6.5% -1.3% Purchases (8,154) (7,198) -11.7% Personnel Expenses (4,411) (4,240) -3.9% Other net income and expenses (3,423) (3,119) -8.9% Operating profit before depreciation 5,932 5,928 -
Slide 19: Margin Up from Structural Efficiencies and Cost Containment
Margin Up from Structural Efficiencies and Cost Containment (1) (1) Structured +60bps Covid-19 +20bps Operating existing plan Crisis Margin(2) Pricing Cost containment plan quick response Efficiencies + to the context ➤ Group +80bps Impact on Portfolio product mix management (1) Management best estimate
Slide 20: Performance Plan Delivering in 2020
Performance Plan Delivering in 2020 IM Efficiencies Portfolio Price/Mix management €441m 9 divestitures: Schülke +2.2% Reorganization in Japan CryoPDP, Czech Rep. and Slovakia 2016 2017 2018 2019 2020 23 bolt-on acquisitions: ● Pursued management of ● Business transformations pricing delivering (Digit
Slide 21: Strong Net Profit Growth at +8.6% as published
Strong Net Profit Growth at +8.6% as published FY 20/19 In €m FY 19 FY 20 FY 20/19 Excl. FX Revenue 21,920 20,485 -6.5% Operating income recurring 3,794 3,790 -0.1% Other non-recurring operating income & expenses (188) (140) Operating income 3,606 3,650 Net financial costs and other net financial expen
Slide 22: Record Cash Flow, Significant Deleveraging
Record Cash Flow, Significant Deleveraging Cash Flow Gearing 24.1% of sales 64.0% +190bps Gearing <12,373> +4,932 55.8% <1,380> <282> +204 <10,609> <1,971> +273 (1) Including acquisitions, transactions with minority shareholders, net of divestitures (2) Including share purchases and capital increases
Slide 23: Surge in Energy Transition and Electronics Investments
Surge in Energy Transition and Electronics Investments Investment Investment Investment Opportunities(1) Decisions(1) 12-month portfolio Backlog(1) • Increased level of opportunities • Q4: high level of decisions • Increased Backlog • Driven by Energy transition at 44% especially for EL and Biogas •
Slide 24: 2020 Start-Up Contribution to Sales Above Expectations
2020 Start-Up Contribution to Sales Above Expectations Start-up/Ramp-up Start-up date of Sales Contribution major projects 2019 2021 Q4 2020 €58m Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 Canada Asia US Asia Russia US FY 2020 €191m Kazakhstan T/O US Asia Russia FY 2021 ~€250m + ~€100m from Sasol ASUs takeover Forecas
Slide 25: Achievement of NEOS Objectives at the End of 2019
Achievement of NEOS Objectives at the End of 2019 ✔ ✔ +6.5% >1.1bn€ >300m€ +6% to +8% 2016-2019 >300m$ per year increased to >400m€ from 2019 onwards CAGR A customer-centric Airgas synergies 2016-2020 >300m$ transformation strategy >10% ✔ Maintain by 2021-2022 Target “A” “A” range Maintained range r
Slide 26: 2021 Guidance
2021 Guidance “In a context of limited local Assumptions: lockdowns in 1st half and recovery in ● 1st half impacted by 2nd half, Air Liquide is confident in Covid-19 its ability to further increase its ● Recovery in 2nd half operating margin and to deliver ● Pursued pricing, efficiency recurring net pr
Slide 27: Appendix
Appendix 27 February 10, 2021 FY 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 28: FY 2020 G&S Revenue Breakdown by Region
FY 2020 G&S Revenue Breakdown by Region Europe Europe Americas €6.8bn Asia-Pacific Americas 35% 40% €4.5bn €7.8bn €19,656m Gas & Services Revenue 5% 2% 11% 31% 29% Africa 33% 16% 39% Middle-East 68% 3% Asia-Pacific 4% 22% 28% 34% Industrial Merchant Large Industries Healthcare Electronics 28 February
Slide 29: Strong Base Business Improvement
Strong Base Business Improvement Breakdown of G&S Sales Growth Base business: +0.9% 2018 2019 2020 29 February 10, 2021 FY 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 30: Americas
Americas Q4 2020 G&S comparable sales growth INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE ELECTRONICS • Progressive recovery in • Air gases underlying volumes • Exceptional sales of • Strong Carrier North America esp. cylinders improving sequentially Medical O2 throughout Gases and E&I • >+10% in
Slide 31: Europe
Europe Q4 2020 G&S comparable sales growth INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE • Solid recovery, balanced • One-off sale in Russia • Very strong demand for between cylinders and bulk • Signs of recovery in Chemicals Medical O2 • Back to growth (+0.7%) excl. and Steel driven by Automotive
Slide 32: Asia-Pacific
Asia-Pacific Q4 2020 G&S comparable sales growth INDUSTRIAL MERCHANT LARGE INDUSTRIES ELECTRONICS • Growth in Q4, driven by volumes • Volume growth in Korea • +10% growth in • China +10% and Singapore ✓ Carrier Gases • Recovering rest of Asia, growing • Flat China with Air gases (China, Taiwan, Singa
Slide 33: Industrial Merchant Pricing
Industrial Merchant Pricing Americas Europe Asia-Pacific Middle-East & Africa Total Industrial Merchant Q4 2020 33 February 10, 2021 FY 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 34: Q4 2020 E&C and GM&T Activities
Q4 2020 E&C and GM&T Activities Engineering Global Markets & Construction & Technologies ● Sales(1) back to growth ● Sales(1) driven by dynamic Biogas activity €86m +24% €187m +6% ● Strong increase of order ● Order intake in line with Q3 intake 2020 €393m +16% €113m -30% (1) Comparable growth 34 Feb
Slide 35: Backlog Increasing at €3.1bn
Backlog Increasing at €3.1bn Decisions Start-ups €1.0bn Yearly Sales Backlog after full Ramp-ups See definitions in appendix 35 February 10, 2021 FY 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 36: Consolidated P&L
Consolidated P&L In €m FY 19 FY 20 Revenue 21,920 20,485 Operating costs (15,988) (14,557) Operating profit before depreciation 5,932 5,928 Depreciation and amortization (2,138) (2,138) Operating income recurring 3,794 3,790 Other non-recurring operating income & expenses (188) (140) Operating incom
Slide 37: Consolidated Balance Sheet Simplified
Consolidated Balance Sheet Simplified ASSETS 12/31/2019 12/31/2020 EQUITY AND LIABILITIES 12/31/2019 12/31/2020 Goodwill 13,943 13,087 Shareholders' equity 18,870 18,543 Fixed assets 22,673 21,401 Minority interests 454 462 Other non-current assets * 1,083 1,123 Total equity 19,324 19,005 Total non-c
Slide 38: Cash Flow Statement
Cash Flow Statement In €m FY 19 FY 20 Funds provided by operations 4,859 4,932 Changes in Working Capital (37) 364 Other cash items (110) (90) Net cash from operating activities 4,712 5,206 Purchases of PPE* and intangible assets (2,637) (2,630) Purchases of financial assets and the impact of change
Slide 39: Impact of Currency and Energy on G&S Revenue
Impact of Currency and Energy on G&S Revenue in €m Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 €/USD +138 +107 +81 +52 +55 +30 (86) (126) €/JP¥ +16 +14 +22 +18 +11 +11 (11) (9) €/ARS (28) (20) (29) (16) (16) (23) (10) (26) €/BRL (6) (2) +3 (4) (11) (22) (25) (23) Others +21 +4 +30 +31 +1 (26) (6
Slide 40: 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 replace
Slide 41: Financing Structure as of December 31, 2020
Financing Structure as of December 31, 2020 > 5 years Between 1 and 5 years < 1 year (1) Others: put options granted to minority shareholders. 41 February 10, 2021 FY 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 42: Regular and Sustained Performance
Regular and Sustained Performance CAGR over 30 years(1) Revenue (in €m) +5.3% EPS(2) (in €) +6.7% Cashflow (in €m) +6.5% Dividend(2) (in € per share) +8.4% (1) Calculated according to prevailing accounting rules over 30 years. (2) Adjusted for the 2-for-1 share split in 2007, for free share attributi
Slide 43: Disclaimer
Disclaimer This presentation may contain forward-looking statements (including objectives and trends) about Air Liquide’s financial situation, operating results, business activities and strategy. Although Air Liquide believes that the expectation reflected in such forward-looking statements are reason
Slide 44: For further information, please contact
For further information, please contact: Investor Relations Communication IRTeam@airliquide.com Media@airliquide.com Upcoming events Sustainability Day: March 23, 2021 2021 First Quarter Revenue: April 23, 2021 www.airliquide.com Follow us on Twitter @AirLiquideGroup Corporate Headquarters: 75, Quai