Air Liquide Sa · EURONEXT:AI
Air Liquide Sa — Q3 2016 Earnings Presentation
40 slides from Air Liquide Sa's earnings presentation, Oct 25, 2016
Slide 1: Q3 2016 Activity
Q3 2016 Activity Airgas Operations Merged Solid Gas & Services Sales Growth Paris, 25 October 2016
Slide 2: Q3 2016 Highlights
Q3 2016 Highlights Paris, 25 October 2016 Fabienne Lecorvaisier l Chief Financial Officer Airgas operations merged Q3 2016 solid activity • Group sales up +24% as published • Comparable G&S sales growth at +2% • Continued unfavorable Fx and Energy impact • Efficiencies in line; selective investments
Slide 3: Airgas Operations Merged
Airgas Operations Merged 25 October 2016 Pierre Dufour l Senior Executive Vice President Airgas integration on track • Operations merged October 1st • First cost synergies realized • Revenue synergies plan initiated Majority of divestitures completed Successful refinancing < 5 months
Slide 4: Operations Merged - First Cost Synergies Realized
Operations Merged - First Cost Synergies Realized ■ Integration IM & HC operations merged ■ Supply Chain 17 site closures ■ Back Office Synergies started Full cost synergies delivered by end 2018 4 25 October 2016 Q3 2016 Activity World leader in gases, technologies and services for Industry and Hea
Slide 5: Operations Merged - Revenue Synergies Plan Initiated
Operations Merged - Revenue Synergies Plan Initiated INDUSTRIAL MERCHANT Cross-selling to Canada & Mexico First on-site offers Sales force training HEALTHCARE Group offers being deployed • Extended services • Smart cylinders 5 25 October 2016 Q3 2016 Activity World leader in gases, technologies and
Slide 6: Majority of Divestitures Completed
Majority of Divestitures Completed ■ Divestitures to date • 18 ASUs in 16 locations • 2 NO & 6 CO2 plants; 3 stores • Value: US$781m • Net gain: US$250m ■ Divestitures remaining - only 2 • 2 liquid CO2 plants • FTC comment period expiring 17 November 6 25 October 2016 Q3 2016 Activity World leader i
Slide 7: Airgas Refinancing Successfully Completed
Airgas Refinancing Successfully Completed 13 September 28 September 11 October 6 June 22 September €3.0bn Bonds US$4.5bn Bonds Average maturity: 7.3 years Average maturity: 10.6 years Average rate: 0.65% Average rate: 2.3% New shares €3.3bn Rights Issue issued ~12.5% of the existing share capital Ov
Slide 8: Q3 2016 Solid Activity
Q3 2016 Solid Activity 25 October 2016 Fabienne Lecorvaisier l Chief Financial Officer • Group sales up +24% as published • Comparable G&S sales growth at +2% • Continued unfavorable Fx and Energy impact 8 25 October 2016 Q3 2016 Activity World leader in gases, technologies and services for Industry
Slide 9: Comparable G&S Sales Growth: +2%
Comparable G&S Sales Growth: +2% (1) +1.0% Q3 2016 Q3 15 Q3 16 Q3 16/15 Q3 16/15 YTD 16 Sales in €m as published comparable (2) comparable(2) Gas & Services (3) 3,682 4,783 +29.9% +2.0% +3.1% Engineering & Construction (3) 219 105 -52.0% -51.9% -39.0% Global Markets & Technologies (3) 67 73 +10.0% +
Slide 10: Moderate Global Growth Environment
Moderate Global Growth Environment Q3 16 G&S Sales Industrial Production Year on Year in % (3-month rolling average) 8% 6% 4% -0.4% 2% 0% -2% -4% 2013 2014 2015 2016 Source Coe-Rexecode, until end of August 2016 Inflation Year on Year in % Year on Year in % 6% -2.8% 5% 4% Emerging economies 10 3% 2%
Slide 11: First Full Quarter Contribution of Airgas
First Full Quarter Contribution of Airgas Group Sales (in €m) In €m +26.8% +2.0% +1,142 5,077 4,097 +75 <120> <17> <100> 3,935 Air Liquide G&S E&C, GM&T FX Energy Air Liquide Airgas Air Liquide standalone Q3 2015 & other activities Q3 2016 Q3 2016 11 25 October 2016 Q3 2016 Activity World leader in
Slide 12: Key Growth Drivers
Key Growth Drivers +5%* +5%* Large Industries Healthcare +7%* Developing Economies * Gas & Services sales growth, excluding currency, energy, and significant scope impact. 12 25 October 2016 Q3 2016 Activity World leader in gases, technologies and services for Industry and Health
Slide 13: Full Airgas Contribution
Full Airgas Contribution 2015 2016 7% 3 +14%* +31% Start-ups in Q3 16 5% Base business 3% Start-ups, Ramp-ups, Site takeovers, Small acquisitions 1% Airgas Q1 Q2 Q3 Q4 Q1 Q2 Q3 -1% G&S growth over the first 3 quarters of 2015 are restated to account for the creation of the new activity (GM&T). *Q2 2
Slide 14: Positive Europe, Robust LI and HC in Americas
Positive Europe, Robust LI and HC in Americas G&S Q3 comparable sales growth(1) Europe Q3 2016: €1,601m +1% YTD LI: planned turnarounds in Germany and Poland +3% +2% +2% IM: stronger bulk volumes, fewer +0.5% working days FY 2015 Q1 Q2 Q3 Solid organic growth in HC Americas Q3 2016: €2,042m +2% YTD
Slide 15: Strong LI but Low EL in Asia, Contrasted MEA
Strong LI but Low EL in Asia, Contrasted MEA G&S Q3 comparable sales growth(1) Asia-Pacific Q3 2016: €997m +5% YTD Strong LI throughout region supported by ramp-ups +7% +6% +6% High E&I sales in Q3 2015, +4% stable ESG sales following a period of strong increase FY 2015 Q1 Q2 Q3 China +7% Middle-Eas
Slide 16: Robust LI in Asia and Americas, Contrasted IM
Robust LI in Asia and Americas, Contrasted IM G&S Q3 comparable sales growth(1) Large Industries Q3 2016: €1,261m Strong air gases volumes +6% YTD +9% Ramp-up of new units in Americas and Asia +5% +5% +4% 27% Europe stable Q3 2016 FY 2015 Q1 Q2 Q3 48% Industrial Merchant Q3 2016: €2,308m -2% YTD Con
Slide 17: Sound HC, Solid Carrier Gases but Low E&I in EL
Sound HC, Solid Carrier Gases but Low E&I in EL G&S Q3 comparable sales growth(1) Healthcare Q3 2016: €814m Pursued development in Home +5% YTD Healthcare Q3 incl. +19% Airgas Strong Hygiene and Specialty +8% +4% +5% +5% Ingredients Low contribution from bolt-on FY 2015 Q1 Q2 Q3 17% M&A Q3 8% Electr
Slide 18: Low Activity in E&C, Pursued Development in GM&T
Low Activity in E&C, Pursued Development in GM&T Order Intake(1) Sales €693m €245m €601m €359m In €m In €m 300 255 300 266 243 219 205 200 200 177 172 173 E&C 119 124 130 105 100 73 100 53 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2016 2015 2016 One-off sale of a LI project YTD 2015 YTD 201
Slide 19: Q3 2016 Solid Activity - Combined Performance
Q3 2016 Solid Activity - Combined Performance 25 October 2016 Fabienne Lecorvaisier l Chief Financial Officer • Solid cash flow and high efficiencies • Stable portfolio of selective investments • Resilient backlog to fuel future growth • Advancing towards NEOS 19 25 October 2016 Q3 2016 Activity Wor
Slide 20: Solid Cash Flow and High Efficiencies
Solid Cash Flow and High Efficiencies Q3 2016 YTD 2016 Cost & Capex Solid G&S sales growth Efficiency gains Excluding Fx and Energy impact €223m +33.1% Cash flow on sales(1) 18.6% First Airgas synergies Net Capex = €1.3bn 12.8% of sales (1) Operating Cash Flow before change in Working Capital Requir
Slide 21: Stable Portfolio of Selective Investments
Stable Portfolio of Selective Investments Investment Q3 2016 YTD 2016 opportunities (1) Investment Start-up / ramp-up - decisions(1) sales growth 12 months portfolio contribution €2.2bn ~€620m ~€200m New entries offset H2 in South America 3 start-ups in Q3 2016 decisions ASU in Europe 2 LI units in
Slide 22: Resilient Backlog to Fuel Future Growth
Resilient Backlog to Fuel Future Growth Investment Backlog (1) YTD 2016 €2.7bn €2.8bn €2.3bn €2.2bn Decisions(1) Start-ups ~€0.9bn Yearly Sales Backlog(1) Dec 2013 Dec 2014 Dec 2015 Decisions Start-ups September after full Ramp-ups 2016 (1) See definitions in appendix. 22 25 October 2016 Q3 2016 Act
Slide 23: Advancing Towards NEOS
Advancing Towards NEOS Q3 2016 Performance +5% sales growth Growth and cash New long-term contract in South America Customer reach Airgas operations merged and competitiveness Strong efficiencies +19% sales growth including Airgas Expansion New investment in US Sales mix favorable to margins Premium
Slide 24: 2016 Outlook
2016 Outlook 25 October 2016 Fabienne Lecorvaisier l Chief Financial Officer 24 25 October 2016 Q3 2016 Activity World leader in gases, technologies and services for Industry and Health
Slide 25: 2016 Outlook
2016 Outlook Q3 2016 ■ Airgas operations merged, successful refinancing ■ Group sales up +24% as published ■ Solid comparable G&S sales growth at +2% ■ Performance in line Net profit growth and EPS growth after rights issue as of 2016 25 25 October 2016 Q3 2016 Activity World leader in gases, techno
Slide 26: Air Liquide
AIR LIQUIDE
Slide 27: Q3 2016 Appendix
Q3 2016 Appendix 27 25 October 2016 Q3 2016 Activity World leader in gases, technologies and services for Industry and Health
Slide 28: 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 29: Impact of Currency and Energy on G&S Revenue
Impact of Currency and Energy on G&S Revenue Currency In €m Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 €/USD +110 +91 +14 (14) (3) €/CNY +52 +36 (10) (28) (23) €/JP¥ +3 +17 +14 +22 +42 Others +4 (22) (89) (98) (32) Total Currency Impact +169 +122 (71) (119) (16) Average rate Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 €/USD 1
Slide 30: Revenue Analysis by Quarter and by Geography
Revenue Analysis by Quarter and by Geography Sales in €m Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 16/15 Q3 16/15 comparable(1) Europe 1,670 1,713 1,614 1,611 1,601 -4.1% +0.5% Americas 897 899 824 1,361 2,042 +127.6% +3.2% Asia-Pacific 963 995 966 954 997 +3.6% +3.5% Middle-East and Africa 152 161 144 144 1
Slide 31: Revenue Analysis by Quarter and by Business Line
Revenue Analysis by Quarter and by Business Line Sales in €m Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 16/15 Q3 16/15 comparable(1) Large Industries 1,312 1,324 1,207 1,181 1,261 -3.9% +5.0% Industrial Merchant 1,293 1,314 1,238 1,726 2,308 +78.6% -2.0% Healthcare 692 725 695 756 814 +17.7% +5.2% Electronics
Slide 32: G&S Revenue Growth by Quarter and by Impact
G&S Revenue Growth by Quarter and by Impact Growth as Natural Significant Comparable Electricity Currency published Gas perimeter growth(1) Q4 2014 +2.8% -1.2% +1.8% -0.9% +3.3% 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%
Slide 33: Q3 2016 Revenue by Region
Q3 2016 Revenue by Region Middle-East and Africa Gas & Services 3% Q3 2016 Revenue: €4,783m 21% 33% Asia- Pacific Europe 43% Americas Europe: €1,601m Americas: €2,042m Asia-Pacific: €997m 3% 4% 9% 17% 27% 35% 31% 37% 4% 31% 70% 32% Large Industries Industrial Merchant Healthcare Electronics 33 25 Oc
Slide 34: Europe in Q3 2016
Europe in Q3 2016 ■ Healthcare Q3 Gas & Services sales: €1,601m Solid organic growth Electronics Low contribution from bolt-on M&A Strong Hygiene and Specialty 3% Large Ingredients 31% Industries 35% Healthcare ■ Industrial Merchant Increased liquid volumes, continued 31% negative pricing Industrial
Slide 35: Americas in Q3 2016
Americas in Q3 2016 ■ Industrial Merchant Q3 Gas & Services sales: €2,042m North America: slight positive inflection Electronics Volumes down in Energy, Mining, Metal Healthcare 4% Fab, Technologies; and up in Food and 9% Industrial Pharmacy Large Merchant Industries 17% Growth in South America, bet
Slide 36: Asia-Pacific in Q3 2016
Asia-Pacific in Q3 2016 ■ Large Industries Q3 Gas & Services sales: €997m Strong growth, close to +10% Healthcare Continued ramp-ups in China 4% Volumes up in South Korea and Large Industries Singapore 27% 37% Electronics ■ Industrial Merchant 32% Growth in China and Japan Decrease in Singapore due
Slide 37: Industrial Merchant Pricing
Industrial Merchant Pricing Q3 2016 YTD 2016 -0.8% Europe -0.7% +1.6% Americas* +2.4% -0.4% Asia-Pacific -0.8% +1.4% Middle-East and Africa +0.9% +0.2% Total Industrial Merchant +0.3% * Excluding Airgas. 37 25 October 2016 Q3 2016 Activity World leader in gases, technologies and services for Industr
Slide 38: Regular and Sustained Performance
Regular and Sustained Performance Revenue (in €m) EPS (1) (in €) 6 15 000 +5.8% CAGR over 30 years(2) +7.4% 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 39: www.airliquide.com
For further information, please contact: Investor Relations Aude Rodriguez + 33 (0)1 40 62 57 08 Communications Erin Sarret + 33 (0)1 40 62 57 37 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 Jérôme Zaman + 33 (0)1 40 62 59 38 Caroline Phi
Slide 40: Air Liquide
AIR LIQUIDE