Air Liquide SA · EURONEXT:AI
Air Liquide SA — FY2017 Earnings Presentation
51 slides from Air Liquide SA's earnings presentation, Feb 15, 2018
Slide 1: Full Year 2017 Results
Full Year 2017 Results A Step Change in Sales with Improved Performance Airgas Synergies Ahead of Plan Paris, 15 February 2018
Slide 2: Agenda
Agenda 1. Highlights 2. 2017 performance 3. 2018 priorities and outlook 2 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 3: Highlights
Highlights Benoît Potier Chairman & Chief Executive Officer 3 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 4: 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 4 15 February 2
Slide 5: 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 6: 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 7: 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 8: 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 9: 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 9 15 February 2018 Full Year 2017 Results
Slide 10: … 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 11: 2017 Performance
2017 Performance Fabienne Lecorvaisier Executive Vice President & Chief Financial Officer 11 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 12: Sales Growth Accelerating in G&S, E&C Stabilizing
Sales Growth Accelerating in G&S, E&C Stabilizing (1) Refer to appendix for definitions 12 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 13: 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 14: 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 14 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 15: 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 15 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Indus
Slide 16: 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 17: 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 18: 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 19: 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 20: 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 20 15 February 2018 Full Year 2017 Result
Slide 21: Improved OIR Margin in line with NEOS
Improved OIR Margin in line with NEOS 21 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 22: 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 22 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 23: 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 24: 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. 24 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services fo
Slide 25: 2017 Non-Cash Exceptional Items and Taxes
2017 Non-Cash Exceptional Items and Taxes Extended strategic review of assets portfolio 2017 impact of U.S. tax reform Tax rate adjustment on deferred taxes Repatriation tax Impact of U.S. tax reform onwards 2018: US$50m to US$70m tax reduction 25 15 February 2018 Full Year 2017 Results Th
Slide 26: 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. 26 15 February 2018 Full Year 2017 Results The
Slide 27: 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 28: 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 28 15 February 2018 Full Year 2017 Results The world le
Slide 29: 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 29 15 February 2018 Full Year 2017 Results
Slide 30: 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 31: FY 2017 Appendix
FY 2017 Appendix 31 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 32: 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, energy
Slide 33: 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 34: 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 34 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 35: Consolidated P&L
Consolidated P&L (1) FY 2016 Basic earnings per share adjusted for the free share attribution of October 2, 2017 35 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 36: Operating Margin (OIR/Revenue)
Operating Margin (OIR/Revenue) FY 2017 operating margin excluding energy improved +70bps compared to adjusted FY 2016 NB: 2016 figures have been restated to account for IFRS 5, discontinued operations. 36 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services fo
Slide 37: Consolidated Balance Sheet Simplified - In €m
Consolidated Balance Sheet Simplified - In €m * Including fair value of derivatives 37 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 38: Cash Flow Statement
Cash Flow Statement * PPE: Property, plant and equipment. 38 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 39: Impact of Currency and Energy on G&S Revenue
Impact of Currency and Energy on G&S Revenue Refer to appendix for definitions 39 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 40: Revenue Analysis by Quarter and by Business Line
Revenue Analysis by Quarter and by Business Line Refer to appendix for definitions 40 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 41: Revenue Analysis by Quarter and by Geography
Revenue Analysis by Quarter and by Geography Refer to appendix for definitions 41 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 42: G&S Revenue Growth by Quarter and by Impact
G&S Revenue Growth by Quarter and by Impact Refer to appendix for definitions 42 15 February 2018 Full Year 2017 Results 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 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
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 FY 2017 capex(1) G&S capex(1) / sales €1.9bn (1) Gross industrial investments. 48 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 49: Financing Structure
Financing Structure As of December 31, 2017 (1) Others: Finance leases and put options granted to minority shareholders. 49 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 50: 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 51: For further information, please contact
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