Air Liquide Sa · EURONEXT:AI
Air Liquide Sa — FY2015 Earnings Presentation
58 slides from Air Liquide Sa's earnings presentation, Feb 16, 2016
Slide 1: Full Year 2015 Solid Performance & Major Initiatives
Full Year 2015 Solid Performance & Major Initiatives Paris, 16 February 2016
Slide 2: Agenda
Agenda Highlights Performance Investments Robust results Growth in a Selective challenging investments Major initiatives environment for the Controlled long-term Solid cash flow capital expenditures 2 16 February 20162 FY 2015 Results World leader in gases, technologies and services for
Slide 3: 2015 Solid Performance
2015 Solid Performance Group Sales Group Operating Margin Net Profit (Group share) In €bn €16.4bn In% € 2,890 m In €m € 1,756 m 1800 16 17.5% (1) 1700 (1) +6.7% 17.6% +5.5% 14 17.0% 1600 12 16.5% 1500 10 16.0% 1400 (1) 2012 2013 2014 2015 2012 2013 2014 2015 2012 2013 2014 2015 Solid sales growth, I
Slide 4: Major Initiatives: US Expansion - Innovation
Major Initiatives US Expansion - Innovation Airgas: signing of merger agreement Global Markets & Technologies (GM&T) Space, aeronautics, maritime, extreme cryogenics New markets 4 16 February 2016 FY 2015 Results World leader in gases, technologies and services for Industry and Health
Slide 5: Airgas: Strong Industrial & Market Logic
Airgas: Strong Industrial & Market Logic Long-term value Primary production Primary production creation Enlarged US presence Liquid bulk Liquid bulk Pipeline & on-sites Increased customer Fill plant Fill plant Fill plant reach Bulk deliveries Direct delivery Retail Telesales e-commerce Suppo
Slide 6: Global Markets & Technologies
Global Markets & Technologies Develop existing Open new markets markets Space, aeronautics Hydrogen energy Maritime Clean transportation Bio-NGV Extreme cryogenics Biofuels Implement innovation more effectively 6 16 February 2016 FY 2015 Results World leader in gases, technologies and se
Slide 7: Increased Dividend Proposal
Increased Dividend Proposal CAGR 5 years (1) Dividend (2) (in € per share over 20 years) 3.00 Dividend: +6.1% 2.6 € Net profit: +4.6% 2.50 2.00 Pay-out € 52.4% 1.50 Average 5 years (1) 1.00 - Pay-out: 50.7% 0.50 0.00 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 (1) 2011-2015 (2) Subject t
Slide 8: 2015 Full Year
2015 Full Year Paris, 16 February 2016 Fabienne Lecorvaisier l Chief Financial Officer Strengthening sales growth through the year Strong operating performance in a challenging environment Net profit growth Solid cash flow Stable adjusted ROCE
Slide 9: Global Environment Remains Challenging
Global Environment Remains Challenging Industrial Production WTI Oil Price (USD/bbl) 8% 120 6% 100 4% 80 2% 60 0% 40 -2% 20 -4% 0 2011 2012 2013 2014 2015 01/01/2014 01/07/2014 01/01/2015 01/07/2015 01/01/2016 World Adv. economies Dev. economies Europe US Inflation Convergence of Industrial 8% Pro
Slide 10: Impact of Low Energy Price
Impact of Low Energy Price Prior Actual forecast Customer competitiveness v Short-Term Activity in OWS (1) v Hydrogen volumes v v Reduced costs v Expected Consumption v Long-Term Investment opportunities v Major signed projects v v (1) OWS = Oil Well Servic
Slide 11: Sales Growth Above Market
Sales Growth Above Market (1) +1.0% FY2015 FY 14 FY 15 FY 15/14 FY 15/14 Q4 15/14 Sales in €m as published comparable (2) comparable (2) Gas & Services (3) 13,800 14,752 +6.9% +3.8% +4.8% Engineering & Construction (3) 723 775 +7.1% -0.7% -27.4% Global Markets & Technologies (3) 256 292 +14.0% +11.4
Slide 12: Strengthening G&S Sales Growth
Strengthening G&S Sales Growth G&S 4% +4.8% comparable +4.5% growth +3.5% 2% Worldwide Industrial +2.4% Production growth 0% Q1 Q2 Q3 Q4 G&S comparable growth Monthly Worldwide Industrial Production growth YoY Source Coe-Rexecode as of January 2016 G&S growth through the first 3 quarters of 2015 are
Slide 13: Sustained Start-up and Ramp-up Contributions
Sustained Start-up and Ramp-up Contributions G&S quarterly growth analysis 7% 2013 2014 2015 19 5% Start-ups in FY 15 3% Base business Start-ups, 1% Ramp-ups, Site takeovers, Small acquisitions Significant M&A -1% -3% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 G&S growth through the first 3 quarters of 201
Slide 14: Strong Growth Drivers
Strong Growth Drivers Q4 2015 Europe Developing Large Healthcare Economies Industries - Electronics +5% +11% +9% +8% each Gas & Services sales growth, excluding currency, energy and significant M&A impacts. 14 16 February 2016 FY 2015 Results World leader in gases, technologies and services for Indu
Slide 15: Q4: Improving Europe, Low IM in US and Canada
Q4: Improving Europe, Low IM in US and Canada G&S comparable sales growth(1) Europe: € 6,749m +3% FY Ramp-ups in LI +5% +5% +3% Positive IM FY 2014 +1% Strong Home Healthcare & Q1 Q2 Q3 Q4 Hygiene -1% Americas: € 3,595m +0.3% FY Sustained H2 volumes +8% IM highly impacted in US, Canada and
Slide 16: Q4: Continued Growth in Asia, Ramp-ups in MEA
Q4: Continued Growth in Asia, Ramp-ups in MEA G&S comparable sales growth(1) Asia-Pacific: € 3,850m +6% FY China +8% +12% +7% Japan positive +6% +5% +5% Dynamic Electronics FY 2014 Q1 Q2 Q3 Q4 Middle-East & Africa: € 558m +24% FY +36% Further loading of Yanbu H2 +35% +21% plant Better Egyp
Slide 17: Q4: Pursued Uplift in LI, Low IM
Q4: Pursued Uplift in LI, Low IM G&S comparable sales growth(1) Large Industries: € 5,201 m +9% Growth acceleration in Q4 +5% FY Start-ups / Ramp-ups in all +6% +5% regions +4% Strong H2/CO volumes +0.2% 35% FY 2014 Q1 Q2 Q3 Q4 FY 2015 Industrial Merchant: € 5,229 m 36% Improved bulk sales i
Slide 18: Q4: Strong Momentum in HC, High Activity in EL
Q4: Strong Momentum in HC, High Activity in EL G&S comparable sales growth(1) Healthcare: € 2,799 m +8% FY Increased number of patients in Home Healthcare +7% +7% +8% +8% Bolt-on acquisitions +4% Growth in Hygiene >+20% 19% FY 2014 Q1 Q2 Q3 Q4 FY 10% 2015 Electronics: € 1,523 m +11% FY +14%
Slide 19: E&C and GM&T: Resilient Order Intake
E&C and GM&T: Resilient Order Intake E&C GM&T In €m 1,104 936 In €m 255 280 Order 400 400 Intake (1) 327 341 266 255 241 243 195 200 172 200 123 113 79 88 26 27 44 35 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2014 2015 Sales € 723 M € 775 M € 256 M € 292 M (1) Group and Third Par
Slide 20: Positive Leverage on OIR
Positive Leverage on OIR In €m 2014 2015 FY 15/14 FY 15/14 Comparable (1) Revenue 15,358 16,380 +6.7% +3.3% Purchases (6,007) (6,164) +2.6% Personnel expenses (2,653) (3,069) Other net income and expenses (2,825) (2,885) +8.7% Operating profit before depreciation 3,873 4,262 +10.1% Depreciation and
Slide 21: Improved OIR margin
Improved OIR margin G&S OIR margin +60 bps in €m 19.5% 20.1% 3 000 +181 2,960 +266 +53 2 750 2,697 +29 +37 2 500 <274> G&S G&S 2 250 11% retention 2 000 1 750 0 OIR Volume Cost Price Efficiencies Currency OIR mix increase excl. and FY 2014 energy Others FY 2015 OIR = Operating Income Recurring 2014
Slide 22: High Level of Efficiencies
High Level of Efficiencies Breakdown of efficiencies In €m 400 350 €298m Procurement 300 Industrial 250 Energy Procurement 200 Others 150 Large Industries 100 Industrial Merchant 50 Electronics 0 2005 2007 2009 2011 2013 2015 Healthcare Others (1) Objective Efficiencies (1) Others: Engineering & Con
Slide 23: Net Profit up +5.5%
Net Profit up +5.5% FY 15/14 In €m 2014 2015 FY 15/14 comparable (1) In €m 2012 2013 Revenue 15,358 16,380 +6.7% +3.3% Operating Income Recurring 2,634 2,890 +9.8% +3.9% Other non-recurring operating income & expenses 16 (132) Operating Income 2,650 2,758 +4.1% Net financial costs (251) (268) and ot
Slide 24: Solid Cash Flow Model
Solid Cash Flow Model Net Debt In €m +7% <405> <7,239> <1,068> In €m <6,306> +3,150 <2,292> <318> Gearing Gearing 53% 57% Net Debt Cash Flow WCR Net Dividends (2) Currency Net Debt Dec 31, 2014 and others Investments (1) and Scope Dec 31, 2015 (1) Including acquisitions, transactions with minority s
Slide 25: High Cash Flow Returns and Pursued Value Creation
High Cash Flow Returns and Pursued Value Creation In €m Cash Flow / Sales (1) Adjusted ROCE: 10.8% (2) 21% 14% 19.2% 20% 12% 10% 19% 410bps 8% 500bps 18% 6% 17% 4% 16% 2% 15% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Value C
Slide 26: Selective Investments to Generate Future Growth
Selective Investments to Generate Future Growth Paris, 16 February 2016 Pierre Dufour l Senior Executive Vice President Continued selective investments Sustained contribution to growth Generating future revenues
Slide 27: Continued Selective Investments
Continued Selective Investments FY 2015 Investment Opportunities (1) Investment Decisions (1) € 2.6bn € 2.4bn Quality projects under 14% of sales discussion Industrial investments at Balanced portfolio across 2014 level business lines Higher bolt-on acquisitions (€0.5 bn) (1) See definitio
Slide 28: Sustained Contribution to Growth
Sustained Contribution to Growth Start-up / Ramp-up sales growth contribution In €m € 380m 400 300 200 100 0 2012 2013 2014 2015 2016 (1) 2017 (1) (1) Based on current forecasts of future Start-ups. 28 16 February 2016 FY 2015 Results World leader in gases, technologies and services for Industry and
Slide 29: Generating Future Revenues
Generating Future Revenues New Long-term Contracts Healthcare Bolt-on Acquisitions Sasol (South Africa) Optimal Medical Therapies (Germany) Shandong Fangyuan copper (China) Baywater Healthcare (Ireland) Yan’an Energy & Chemical (China) Bochemie (Czech Republic) Several clients in E
Slide 30: Investment Backlog Adjusting for Major Start-ups
Investment Backlog Adjusting for Major Start-ups Investment Backlog (1) FY 2015 Decisions (1) Start-ups € 2.7bn € 2.8bn € 2.3bn € 2.3bn ~€1.0bn Yearly Sales Backlog (1) after full Ramp-ups Dec 2012 Dec 2013 Dec 2014 Decisions Start-ups Dec 2015 (1) See definitions in appendix. 30 16 February 2016 FY
Slide 31: 2016 Priorities & Outlook
2016 Priorities & Outlook Paris, 16 February 2016 Benoît Potier l Chairman & Chief Executive Officer
Slide 32: 2016 Priorities
2016 Priorities Airgas Enhanced Value Innovation acquisition Creation Deal Execution of GM&T completion projects deployment Financing Improved Technical return on innovations Launch of capital in LI integration process Launch of new Ramp-up of strategic plan Technology initiatives
Slide 33: 2016 Outlook
2016 Outlook 2015 ■ Strong operating performance in a challenging environment ■ Enhanced competitiveness ■ Solid cash flow ■ Continued selective investments 2016 Excluding the impact of Airgas acquisition and financing, and assuming a comparable environment, Air Liquide is confident in its ability t
Slide 34: Cautionary Note Regarding Forward-Looking Statements
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This document contains certain statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. L’Air Liquide S.A. (“Air Liquide”)
Slide 35: Air Liquide
AIR LIQUIDE Creative Origen
Slide 36: FY 2015 Appendix
FY 2015 Appendix 36 February 16, 2016 FY 2015 Results World leader in gases, technologies and services for Industry and Health
Slide 37: Impact of currency and energy on G&S revenue
Impact of currency and energy on G&S revenue Currency In €m Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 €/USD (21) (29) (0) +50 +109 +129 +110 +91 €/CNY (4) (15) (2) +19 +52 +76 +52 +36 €/JP¥ (34) (17) (11) (10) +11 +9 +3 +17 Others (102) (81) (25) +4 +78 +76 +4 (22) Total currency (161) (142) (
Slide 38: Consolidated P&L
Consolidated P&L In €m 2014 2015 Revenue 15,358 16,380 Cost of goods (11,485) (12,118) Operating income recurring before depreciation 3,873 4,262 Depreciation and amortization expense (1,239) (1,372) Operating income Recurring 2,634 2,890 Net non-recurring operating income 16 (132) Operating income
Slide 39: Consolidated Balance Sheet
Consolidated Balance Sheet In €m ASSETS 31/12/14 31/12/15 EQUITY AND LIABILITIES 31/12/14 31/12/15 Goodwill 5,259 5,730 Shareholders’ equity 11,537 12,406 Fixed assets 15,318 16,556 Minority interests 290 365 Other non-current assets* 862 936 Total equity 11,827 12,771 Total non-current assets 21,43
Slide 40: Cash Flow statement
Cash Flow statement In €m 2014 2015 Funds provided by operations 2,943 3,150 Changes in Working Capital 74 (258) Other items (187) (60) Net cash from operating activities 2,830 2,832 Purchase of PPE* and intangible assets (1,902) (2,028) Purchase of financial assets (179) (384) Proceeds from sale of
Slide 41: Growth in Q4 2015 G&S revenue
Growth in Q4 2015 G&S revenue in €m 4000 +172 <118> +122 0 3,768 3750 3,592 -3.3% +3.4% 3500 +4.9% 3250 published growth 3000 +4.8% comparable growth (1) 2750 2500 0 2250 Q4 2014 Comparable (1) Energy Currency Significant Q4 2015 growth perimeter (1) Excluding currency, energy and significant scope
Slide 42: Revenue analysis by quarter and by geography
Revenue analysis by quarter and by geography Sales in €m Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q4 15/14 Q4 15/14 comparable(1) Europe 1,681 1,684 1,682 1,670 1,713 +1.9% +4.6% Americas 894 888 911 897 899 +0.5% 0.0% Asia-Pacific 905 936 956 963 995 +10.0% +6.0% Middle-East and Africa 113 106 139 152 161 +43
Slide 43: Revenue analysis by quarter and by Business Line
Revenue analysis by quarter and by Business Line Sales in €m Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q4 15/14 Q4 15/14 comparable(1) Large Industries 1,270 1,264 1,301 1,312 1,324 +4.2% +9.3% Industrial Merchant 1,306 1,309 1,313 1,293 1,314 +0.7% -2.1% Healthcare 669 685 697 692 725 +8.3% +8.3% Electronics 3
Slide 44: G&S Revenue growth by quarter and by impact
G&S Revenue growth by quarter and by impact Growth as Natural Electricity Currency Significant Comparable published Gas perimeter growth(1) Q1 2014 + 0.2% + 0.7% - 4.7% - 1.4% + 5.6% Q2 2014 - 2.7% - 0.8% - 4.1% - 1.4% + 3.6% Q3 2014 - 0.1% - 1.2% - 1.1% - 1.3% + 3.5% Q4 2014 + 2.8% - 1.2% + 1.8% -
Slide 45: FY 2015 Revenue breakdown by region
FY 2015 Revenue breakdown by region Gas & Services Americas 24% FY 2015 Revenue: € 14,752 m Europe 46% 26% Asia 4% Middle-East and Africa Europe: € 6.7 bn Americas: € 3.6 bn Asia: € 3.8 bn 31% 33% 35% 32% 38% 44% 3% 10% 5% 33% 11% 25% Industrial Merchant Large Industries Healthcare Electronics 45 16
Slide 46: Europe in Q4
Europe in Q4 Electronics Q4 Gas & Services sales: € 1,713 m 3% Industrial Merchant ■ Industrial Merchant 33% 31% Healthcare Confirmed bulk volume growth Cylinder activity still weak Large Slightly negative pricing 33% Industries ■ Large Industries Q4 15/14 Comparable change (1): +4.6% Sales
Slide 47: Americas in Q4
Americas in Q4 Electronics Q4 Gas & Services sales: € 899 m Healthcare 12% ■ Industrial Merchant 10% Bulk volumes impacted by slowdown 43% Industrial Merchant in Oil Well Services and metal fab. Weak Industrial Production in US, 35% Canada and Brazil Large Industries Positive pricing Q4 15/14
Slide 48: Asia-Pacific in Q4
Asia-Pacific in Q4 Electronics Q4 Gas & Services sales: € 995 m 26% ■ Industrial Merchant 32% Industrial Merchant Good volume increase in China and Healthcare 4% South-East Asia Large Industries Sales down in Australia (mining 38% sector) and Singapore (oil business) Pricing pressure: -2.2% Q4
Slide 49: Industrial Merchant Pricing
Industrial Merchant Pricing Q4 2015 FY 2015 -0.5% Europe -0.6% +2.6% Americas +4.0% -2.2% Asia-Pacific -2.0% -1.2% Middle-East and Africa +0.8% +0.0% Total Industrial Merchant +0.6% 49 16 February 2016 FY 2015 Results World leader in gases, technologies and services for Industry and Health
Slide 50: Engineering & Construction
Engineering & Construction In €m 2014 2015 Consolidated revenues 723 775 OIR(1) margin 11.9% 8.7% Total order intake 1,104 936 Total orders-in-hand 4,751 4,073 2% ASU Total Orders-in-hand breakdown HyCO 21% at Dec 31, 2015 Traditional energy 49% 10% Alternative energy 18% Renewable energy (1) Includ
Slide 51: Operating Margin – Energy Effect
Operating Margin – Energy Effect Group, in €m 2014 2015 Revenue 15,358 16,380 Incl. energy effect -87 -406 Operating income recurring 2,634 2,890 Operating margin 17.1% 17.6% Operating margin excluding energy 17.2% Gas and services, in €m 2014 2015 Revenue 13,800 14,752 Incl. energy effect -87 -406
Slide 52: Operating Margin (OIR/Revenue)
Operating Margin (OIR/Revenue) H1 14 H2 14 2014 Group 16.7% 17.6% 17.1% 2014 Gas & Services 18.8% 20.3% 19.5% H1 15 H2 15 2015 Group 17.4% 17.9% 17.6% 2015 Gas & Services 19.4% 20.7% 20.1% G&S data over 2014 are restated to account for the creation of the new activity (GM&T). 52 16 February 2016 FY
Slide 53: 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 replacements or
Slide 54: Gas & Services Capex by Geography
Gas & Services Capex by Geography G&S 2015 capex(1) €2.1bn G&S capex(1) / sales 2014 2015 Middle East - Africa Europe 11.5% 11.0% 6% Americas 18.6% 21.1% Asia-Pacific 23% Europe Asia-Pacific 14.0% 12.5% 35% Middle East and 26.3% 23.8% 36% Africa Americas Total 14.3% 14.3 % (1) Gross industrial and f
Slide 55: Financing Structure
Financing Structure At 31 December 2015 Sources Maturity Fixed/variable In €m rates Bank Market 9000 debt debt: 85% 8000 Others(1) Fixed rate > January 1% 14% 7000 1st, 2021 Commercial 73% 6000 paper 11% 50% 5000 From January 4000 1st 2017 to December, 27% 24% Private 3000 31th 2020 placements Bonds
Slide 56: Regular and Sustained Performance
Regular and Sustained Performance Revenue (in €m) EPS (1) (in €) 6 15 000 +5.8% CAGR over 30 years(2) +7.8% CAGR over 30 years(2) 5 12 500 4 10 000 7 500 3 5 000 2 2 500 1 0 0 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 1985 1987 1989 1991 1993 1995 1997 1999 2001
Slide 57: For further information, please contact
For further information, please contact: Investor Relations Communications Aude Rodriguez + 33 (0)1 40 62 57 08 Anne Bardot + 33 (0)1 40 62 50 93 Erin Sarret + 33 (0)1 40 62 57 37 Annie Fournier + 33 (0)1 40 62 51 31 Louis Laffont + 33 (0)1 40 62 57 18 Caroline Philips + 33 (0)1 40 62 50
Slide 58: Air Liquide
AIR LIQUIDE Creative Origen