Air Liquide SA · EURONEXT:AI
Air Liquide SA — FY2018 Earnings Presentation
50 slides from Air Liquide SA's earnings presentation, Feb 14, 2019
Slide 1: Full Year 2018 Results
Full Year 2018 Results Strong growth reinforced throughout the year and solid performance Paris, 14 February 2019
Slide 2: Agenda
Agenda 1. Profitable, consistent and responsible growth 2. Strong growth reinforced throughout the year and solid performance Strengthening efficiency program Dynamic business development 3. 2019 outlook 2 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for In
Slide 3: Profitable, consistent and responsible growth
Profitable, consistent and responsible growth Benoît Potier Chairman & Chief Executive Officer 3 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 4: FY 2018 Highlights
FY 2018 Highlights Strong sales growth in all ROCE markets and geographies ramping up (1) (3) +6.1% +60bps Improved G&S Record level of Operational margin investment decisions (2) +30bps +22% (1) Group comparable sales growth (3) Excluding FX impact and positive impact on 2017 (2) Excluding energy i
Slide 5: High Sales Growth, Markets Well Oriented
High Sales Growth, Markets Well Oriented Outlook Sales growth Markets H1 19 7% FY +6.1% Chemicals 6% LI Oil & gas 5% 4% Steel 3% 2% Metal Fab. Construction 1% IM 0% Energy -1% H1 16 H2 16 H1 17 H2 17 H1 18 H2 18 Food & Pharma Comparable sales growth Group EL Integrated Circuit Gas
Slide 6: FY 2018 – All Performance Indicators Further Improving
FY 2018 – All Performance Indicators Further Improving (1) G&S OIR/sales Net profit Net debt ROCE <€836m> +30bps +4.2% Gearing 8.0% Excl. energy 69% Excl. FX +8.7% 8.3% (1) Compared to recurring 2017 net profit, excluding non cash non recurring items and taxes 6 14 February 2019 FY 2018 Results A wo
Slide 7: Dividend Proposal, 1 Free Share for 10 in 2019
Dividend Proposal, 1 Free Share for 10 in 2019 Net Profit Dividend Growth (3) €2.65 €2.1bn 2,8 20 yrs CAGR 2,4 Dividend(2) 2,0 +8.8% As published in € per share 1,6 1,2 0,8 + 4.2% 0,4 0,0 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Compared to 2017 Recurring Net Profit(1) (1) Excluding no
Slide 8: Record Level for Investment Decisions, >€3bn
Record Level for Investment Decisions, >€3bn ~40% ~40% Reinforcing presence in key basins ~20% Strategic positions in growing markets Opening innovative new markets Large Industries Electronics Industrial Merchant Global Markets & Technologies 2018 investment decisions 8 14 February 2019 FY 20
Slide 9: 2019 - Focus On NEOS Objectives
2019 - Focus On NEOS Objectives Strategic investments to support growth Profitable Strengthening efficiencies growth Focus on ROCE Solid and resilient Business Model Consistent Innovation and digital growth Operational excellence Climate objectives, 2015-2025 Responsible o Reduce carbo
Slide 10: Strong Growth Reinforced throughout the Year and Solid Performance
Strong Growth Reinforced throughout the Year and Solid Performance Fabienne Lecorvaisier Executive Vice President & Chief Financial Officer 10 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 11: Growth at the Top of NEOS Range
Growth at the Top of NEOS Range (1) (1) Note: NEOS sales growth objective between +6% and +8% CAGR 2016-2020, including Airgas scope effect in 2017 contributing +2% to the CAGR (1) Comparable sales growth: excluding currency, energy and significant scope impacts 11 14 February 2019 FY 2018 Results A
Slide 12: Positive Environment, Softening FX Headwind
Positive Environment, Softening FX Headwind World IP at High Level in 2018 Neutral Forex Impact in Q4 2018(2) Industrial Production growth in % YTD 2018(1) World U.S. -0.1% -3.6% +3.0% +4.0% Q4 2018 FY 2018 Higher Positive Energy impact(2) Developing Euro zone Economies +2.4% +1.3% +1.2% +4.5% Q4 20
Slide 13: Q4 - Strong Growth Drivers Across Geographies and WBLs
Q4 - Strong Growth Drivers Across Geographies and WBLs +13% INDUSTRIAL MERCHANT +5% +9% LARGE INDUSTRIES +3% +6 % HEALTHCARE +5% ELECTRONICS +18% AMERICAS DEVELOPING ASIA ECONOMIES Comparable G&S sales growth 13 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for
Slide 14: Base Business Operating at Highest Level
Base Business Operating at Highest Level G&S Quarterly Sales Growth Analysis +14% +31% +29% (1) Comparable growth based on 2016 adjusted sales 14 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 15: Q4 – Strong Momentum in Americas, Solid Europe
Q4 – Strong Momentum in Americas, Solid Europe AMERICAS EUROPE FY 2018 FY 2018 €7,982m €7,111m G&S Comparable Sales Growth Dynamic activity in all WBLs High IM and HC • LI: high H2, start-ups in air gases • LI: HyCO turnarounds, start-up in Turkey • IM: high growth with increased pricing; most marke
Slide 16: Q4 – Very Dynamic Asia, Major Start-Up in South Africa
Q4 – Very Dynamic Asia, Major Start-Up in South Africa FY 18 : +15.5% MIDDLE-EAST AS I A - P AC I F I C & AF R I C A FY 2018 FY 2018 €4,359m €655m G&S Comparable Sales Growth IM boosted by China, buoyant EL Full impact of major start-up in LI • LI: 3 start-ups including Fujian but major • LI: Sasol
Slide 17: Q4 – Strong IM, Solid LI
Q4 – Strong IM, Solid LI FY 18 : +4.5% INDUSTRIAL L AR G E M E R C H AN T I N D U S TR I E S FY 2018 FY 2018 €9,181m €5,685m G&S Comparable Sales Growth Favorable environment with price hikes Robust growth, several start-ups All end markets positive • 5 SUs, contribution only Very strong fabrication
Slide 18: Q4 – Steady HC Growth, Buoyant EL
Q4 – Steady HC Growth, Buoyant EL H E AL TH C AR E E L E C TR O N I C S FY 2018 FY 2018 €3,486m €1,755m G&S Comparable Sales Growth Very solid organic activity Record sales growth • Double-digit growth in HHC, • Strong demand from low level of bolt-on acquisitions IC market • Solid business model •
Slide 19: Continued Recovery in E&C, High Growth in GM&T
Continued Recovery in E&C, High Growth in GM&T E&C - Strong Improvement GM&T - Strong Sales and Order Intake €430m +31% €474m +30% Sales FY 2018* Sales FY 2018* €807m +11% €460m +31% Order Intake FY 2018 Order Intake FY 2018 * Comparable sales growth 19 14 February 2019 FY 2018 Results A world leade
Slide 20: Improved OIR Margin in line with NEOS
Improved OIR Margin in line with NEOS Note: Group FY 18 OIR Margin as published at 16.4% 20 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 21: $300m Airgas Synergies Fully Delivered Beginning 2019
$300m Airgas Synergies Fully Delivered Beginning 2019 End of 2018 Cumulated synergies $ 290m Costs ~$230m Revenue ~$60m $300m synergies expected in Q1 2019, one year ahead initial target Airgas fully integrated From 2019, future Airgas contribution to the efficiency program 21 14 February
Slide 22: Efficiencies Outpaced NEOS Target of €300m per Year
Efficiencies Outpaced NEOS Target of €300m per Year NEOS Cumulated Efficiencies FY 2018 Efficiencies as defined in initial target >€1,200m 2020 >€900m 2019 €351m €674m as of 31/12/2018 2018 2017 22 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and H
Slide 23: Strengthened Efficiency Program Starting in 2019
Strengthened Efficiency Program Starting in 2019 Annual target Cumulated NEOS forecast in 2020 >€400m Update 400 50% Airgas >€300m efficiencies >€1.5bn Update 300 50% 200 o Organization >€1.2bn agility – 100 Mutualization o Leverage on 0 digital Initial target New target 23 14 February 2019 FY 2
Slide 24: Net Profit Recurring Excluding Currency +8.7%
Net Profit Recurring Excluding Currency +8.7% (1) Excluding non-cash one-off items in 2017 net profit 24 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 25: Significant Debt and Gearing Reduction
Significant Debt and Gearing Reduction GEARING CASH FLOW 80% +10.9% GEARING 69% Net Debt Net Debt 31 Dec. 2017 31 Dec. 2018 (1) Including acquisitions, transactions with minority shareholders, net of divestitures. (2) Including share purchases and capital increases. 25 14 February 2019 FY 2018 Resul
Slide 26: Delivering NEOS ROCE Objective
Delivering NEOS ROCE Objective ROCE – After tax 10.3% >10% 10% +60bps 8.3% excl. FX 8% 7.7%(1) 8.0% as published 6.9% 6% Dec. 15 Dec. 16 Dec. 17 Dec. 18 2021/22 2021/2022 adjusted NEOS Airgas objective acquisition (1) Excluding positive impact on 2017 net profit of non-cash one-off items 26 14 Febru
Slide 27: Dynamic Business Development
Dynamic Business Development 27 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 28: Very High Decisions & Increasing Opportunities
Very High Decisions & Increasing Opportunities Investment 2018 2018 Investment Opportunities(1) Start-up/Ramp-up Decisions(1) 12-month portfolio Sales Growth Contribution €2.6bn €3.1bn €270m • Selectivity in thriving • Record level • 17 start-ups bidding activity • Very high in LI, EL and GM&T • Med
Slide 29: Strong Backlog
Strong Backlog Decisions Start-ups €2.3bn €2.2bn €2.1bn €2.1bn in €bn € 0.9bn Dec 2015 Dec 2016 Dec 2017 Decisions Start-ups Dec 2018 Yearly Sales Backlog(1) after full Ramp-ups (1) See definitions in appendix 29 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for
Slide 30: Start-Ups Outlook for 2019
Start-Ups Outlook for 2019 Major start-ups 2019 2018 Q1 Q2 Q3 Q4 Yanchang Fujian EL Pemex EL LI LI Steel EL LI Shenyuan Projects TO Projects TO Projects Projects Projects Project China China Asia Mexico Asia China Middle- Europe Asia Argentina East Sales growth contribution €270m >€300m FY 2018 FY 2
Slide 31: 2019 Outlook
2019 Outlook Profitable, consistent and Continue to focus on 2018 responsible growth 2019 growth and operational excellence Solid performance with continued margin Strengthening efficiency improvement and strong program cash flow Continue to seize strategic Dynamic business opportunities
Slide 32: FY 2018 Appendix
FY 2018 Appendix 32 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 33: FY 2018 G&S Revenue Breakdown by Region
FY 2018 G&S Revenue Breakdown by Region EUROPE €7.1bn ASIA- AMERICAS PACIFIC €8.0bn €4.4bn €20,107m Industrial Merchant Large Industries Healthcare Electronics 33 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 34: Americas
Americas Q4 Gas & Services Sales: €2,091m INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE ELECTRONICS • Very solid activity for all products: • Strong volumes of hydrogen • Solid growth in the U.S. and • Double-digit sales growth bulk, cylinders and hardgoods in the U.S. and high cogen in Canada for
Slide 35: Europe
Europe Q4 Gas & Services Sales: €1,868m INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE • Growth in all countries • High number of customer • Very strong HHC, particularly in turnarounds in HyCO Air Liquide’s largest markets: • ~+1 working day • Softer volumes from steel sleep apnea and diabetes • A
Slide 36: Asia-Pacific
Asia-Pacific Q4 Gas & Services Sales: €1,153m INDUSTRIAL MERCHANT LARGE INDUSTRIES ELECTRONICS • Double-digit growth in China : • 3 SUs in China • Double-digit growth in Carrier Gases very strong volumes in cylinders ; high • H2 customer turnarounds and Advanced Materials in all countries demand for
Slide 37: Industrial Merchant Pricing
Industrial Merchant Pricing 37 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 38: Progressive Improvement in E&C, Dynamic GM&T
Progressive Improvement in E&C, Dynamic GM&T Sales and Order intake(1) – in €m E&C GM&T 200 200 100 100 0 0 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Sales Order intake Sales Order intake (1) Group and third-party order intake 38 14 February 2019
Slide 39: Consolidated P&L
Consolidated P&L 39 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 40: Operating Margin (OIR/Revenue)
Operating Margin (OIR/Revenue) G&S FY 2018 operating margin excluding energy improved +30bps compared to FY 2017 40 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 41: Consolidated Balance Sheet Simplified - In €m
Consolidated Balance Sheet Simplified - In €m * Including fair value of derivatives 41 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 42: Cash Flow Statement
Cash Flow Statement * PPE: Property, plant and equipment 42 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 43: Impact of Currency and Energy on G&S Revenue
Impact of Currency and Energy on G&S Revenue 43 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 44: Revenue Analysis by Quarter and by Business Line
Revenue Analysis by Quarter and by Business Line 44 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 45: Revenue Analysis by Quarter and by Geography
Revenue Analysis by Quarter and by Geography 45 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 46: G&S Revenue Growth by Quarter and by Impact
G&S Revenue Growth by Quarter and by Impact 46 14 February 2019 FY 2018 Results A 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: Financing Structure
Financing Structure As of December 31, 2018 > 5 years Between 1 and 5 years < 1 year (1) Others: finance leases and put options granted to minority shareholders 48 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Slide 49: Regular and Sustained Performance - 2018
Regular and Sustained Performance - 2018 24 000 Revenue (in €m) +5.8% EPS(1) (in €) +6.9% 20 000 C AG R 5,0 C AG R over 30 years (2) (2) over 30 years 16 000 4,0 12 000 3,0 8 000 2,0 4 000 1,0 0 0,0 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 1988 1990 1992 1994 1
Slide 50: For further information, please contact: Investor Relations
For further information, please contact: Investor Relations Communication Aude Rodriguez + 33 (0)1 40 62 57 08 Alexandra Rocca + 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 Muriel Légeron + 33 (0)1 40 6