Air Liquide SA · EURONEXT:AI

Air Liquide SA — FY2014 Earnings Presentation

57 slides from Air Liquide SA's earnings presentation, Feb 17, 2015

  1. Slide 1: 2014 Full Year: Solid performance in a mixed environment

    2014 Full Year Solid performance in a mixed environment Paris, February 17, 2015

  2. Slide 2: 2014 Full Year

    2014 Full Year Paris, February 17, 2015 Solid performance and sustained shareholder return in a mixed environment Sales growth, enhanced competitiveness Strong cash flow model Pursued investment 2015 Priorities and outlook 2 February 17, 2015 2014 Results World leader in gases, technologies and serv

  3. Slide 3: 2014: In a mixed environment…

    2014: In a mixed environment… 2014 Euro / USD exchange rate 2014 WTI oil price (USD/bbl) 1,45 120 1,4 110 100 1,35 90 1,3 80 1,25 70 1,2 60 1,15 50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 Europe industrial production Regional tensions 102

  4. Slide 4: 2014: …a solid performance

    2014: …a solid performance Group sales Group Operating Net profit (Group share) In €bn margin 15.4 In% In €m 1,665 15 1600 17.0% 13 (1) (1) +4.5% 17.1% 1350 +3.8% 11 1100 16.5% 9 850 7 5 16.0% 600 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 2013 2014 (1) Growth, excluding currency, natural gas

  5. Slide 5: Sustained double digit shareholder return

    Sustained double digit shareholder return Dividend (1) (in € per share, over 20 years) Share price(1) (in € per share, over 20 years) 2.55 € +10% +10% in 2014 120 2,50 100 2,00 80 1,50 60 1,00 40 0,50 20 0,00 0 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 1995 2004 2014 Total Shareholder R

  6. Slide 6: Sales growth, enhanced competitiveness; Strong cash flow model

    Sales growth, enhanced competitiveness Strong cash flow model Paris, February 17, 2015 Fabienne Lecorvaisier l Chief Financial Officer

  7. Slide 7: Continued growth outperforming our market

    Continued growth outperforming our market (2) +2.6% FY 2014 FY 13 FY 14 FY 14/13 FY 14/13 Q4 14/13 Sales in €m as published comparable (1) comparable (1) Gas & Services 13,837 13,867 +0.2% +4.1% +3.3% Engineering & Technology 803 912 +13.6% +15.6% +16.6% Other activities 585 579 -1.1% -1.0% -1.8% Gr

  8. Slide 8: Sustained progression despite a more volatile environment

    Sustained progression despite a more volatile environment Annual G&S activity indicator(1) G&S comparable growth(2) 130 2012 2013 2014 6% 2012 2013 2014 5% 125 +4.1% 4% +3.1% 120 3% +2.8% 2% 115 1% 110 0% (1) Revenue (excluding currency and natural gas impacts), adjusted for the (2) Excluding curren

  9. Slide 9: Positive base business throughout the year

    Positive base business throughout the year G&S quarterly growth analysis 7,0% 2012 2013 2014 20 5,0% start-ups in 2014 3,0% Base business Start-ups, 1,0% Ramp-ups, Site takeovers, Small acquisitions -1,0% Significant M&A -3,0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 9 February 17, 2015 2014 Results Worl

  10. Slide 10: Pursued momentum in growing markets

    Pursued momentum in growing markets FY 2014 GSI in Asia Americas Electronics developing economies +14% +12% +8% +12% Gas & Services sales growth, excluding currency, natural gas and significant M&A impacts. GSI: Gas & Services for Industries = Large Industries + Industrial Merchant + Electronics. 10

  11. Slide 11: Q4: Progression driven by Americas and Asia

    Q4: Progression driven by Americas and Asia G&S comparable sales growth(1) Americas: € 3,416m Asia-Pacific: € 3,444m LI turnarounds Very strong +8% FY +12% FY and low China +14% +12% electricity +11% +13% Japan positive +7% +8% +9% +7% Strong IM in Electronics +5% North America +3% start-ups and Rob

  12. Slide 12: Q4: Consistent Healthcare & Large Industries

    Q4: Consistent Healthcare & Large Industries G&S comparable sales growth(1) +5% in Q4 excl. small perimeter Large Industries: € 4,980m effect and electricity price +3% FY13 +4% FY14 decrease Oxygen volumes up despite +6% +5% turnarounds (USA, Italy) +3% +3% +3% +4% Strong start-ups effect in China +

  13. Slide 13: Q4: Solid Industrial Merchant, buoyant Electronics

    Q4: Solid Industrial Merchant, buoyant Electronics G&S comparable growth(1) Industrial Merchant: € 5,083m Strong bulk volumes in North +3% FY13 +3% FY14 America and China, better in Europe +4% +4% +4% +4% Developing economies: +9% +3% +3% +2% Pricing: +1.2% FY +1% 37% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY Elec

  14. Slide 14: E&T in line

    E&T in line E&T order intake(1) Third party E&T sales (2) 1,905 1,359 803 912 +16% FY 2014 In €m In €m 750 750 667 516 500 448 464 500 354 274 274 294 267 225 247 230 250 250 147 184 213 175 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2013 2014 Selected new projects Robust sales re

  15. Slide 15: Continued margin improvement

    Continued margin improvement In €m 2013 2014 FY 14/13 FY 14/13 comparable (1) Revenue 15,225 15,358 +0.9% +4.5% Purchases (5,985) (6,007) +0.4% Personnel expenses (2,751) (2,653) Other net income and expenses (2,672) (2,825) +1.0% Operating profit before depreciation 3,817 3,873 +1.5% Depreciation a

  16. Slide 16: Supported by 36% efficiency retention in G&S

    Supported by 36% efficiency retention in G&S G&S OIR margin in €m 19.2% +40 bps 19.6% (1) +298 2,738 2,750 +45 108 2,655 <70> 0 +65 2,500 <255> G&S 2,250 36% retention G&S 2,000 1,750 0 OIR Volume Energy Cost Price Efficiencies Currency OIR mix effect increase excl. and 2013 energy Others 2014 OIR =

  17. Slide 17: High efficiencies level, plans delivering

    High efficiencies level, plans delivering Efficiency gains In €m 400 € 321m FY 2014 Exceeded € 250m objective 350 Realignment plans delivering 300 as planned, € 69m contribution 250 in 2014 200 50% industrial efficiencies 150 (plant optimization, logistics) 100 Reiterate objective 50 above € 250m fo

  18. Slide 18: Net Profit progression

    Net Profit progression FY 14/13 In €m 2013 2014 FY 14/13 comparable (1) In €m 2012 2013 Revenue 15,225 15,358 +0.9% +4.5% Operating Income Recurring 2,581 2,634 +2.1% +5.1% Other non-recurring operating income & expenses 26 16 Operating Income 2,607 2,650 +1.7% Net financial costs (305) (251) and ot

  19. Slide 19: Strong cash flow model

    Strong cash flow model Net debt +2.3% (1) In €m +244 In €m <6,306> <202> <6,062> +2,943 <941> <1,931> <113> Gearing ratio Gearing ratio 56% 53% Net Debt Cash flow WCR Net Dividends (3) Currency + Net Debt, Dec 31, 2013 + others Investments (2) Scope Dec 31, 2014 (1) Excluding currency impact. (2) In

  20. Slide 20: High cash flow returns maintained

    High cash flow returns maintained InCash €m Flow / Sales Free 2012 Cash Flow2013 21% 1,200 20% 19.2% 1,000 19% 800 18% 600 17% 400 16% 200 15% 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Regular cash flow generated Strong free cash flow in li

  21. Slide 21: Pursued value creation over the long term

    Pursued value creation over the long term After Tax ROCE(1) Capital employed: €18.1bn (2) 20 14% 11.1% 12% 15 10% 410bps 8% 570bps 10 Industrial assets 6% Construction 4% 5 in progress 2% Goodwill 0% 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 WCR & Others Value Creation ROCE WACC

  22. Slide 22: Pursued investment: High level of backlog

    Pursued investment High level of backlog Paris, February 17, 2015 Pierre Dufour l Senior Executive Vice-President

  23. Slide 23: Pursued investment

    Pursued investment Investment opportunities (1) FY 2014 Investment decisions (1) € 3.2bn € 2.1bn Investment opportunities Step-up in Q4 maintained 75% dedicated to growth Translated into decisions (1) See definitions in appendix. 23 February 17, 2015 2014 Results World leader in gases, technologies

  24. Slide 24: Solid investment backlog to support future growth

    Solid investment backlog to support future growth FY 2014 Investment backlog Decisions Start-ups € 2.8bn € 2.7bn € 2.3bn € 2.1bn ~ €1.2bn Sales backlog after full ramp-up Dec 2011 Dec 2012 Dec 2013 Decisions Start-ups Investment backlog December 2014 See definitions in appendix. 24 February 17, 2015

  25. Slide 25: Large projects contribute to growth

    Large projects contribute to growth Larger projects trend Large Small > € 50m 2007 to 2011 to < € 50m 2010 2014 Triggering longer ramp-ups Start-ups & ramp-ups Typical cash flow profile Small project Large project ~ € 350m 25 February 17, 2015 2014 Results World leader in gases, technologies and ser

  26. Slide 26: Two large projects under execution: Yanbu, Fujian

    Two large projects under execution Yanbu Fujian Largest AL Hydrogen plant E&T and Large Industries integration Decided in 2010, Start-up in Q2 2015 6 technology bricks from Air Liquide Revenues dependent on feedstock Full OTF Profit not dependent on Decided in 2013, Start-up feedstock scheduled in 2

  27. Slide 27: 2015 Priorities: Reiterated growth outlook

    2015 Priorities Reiterated growth outlook Paris, February 17, 2015 Benoît Potier l Chief Executive Officer

  28. Slide 28: Low oil price impact

    Low oil price impact Short term Longer term + Increased hydrogen volumes at Higher consumption expected refiners All major signed projects + Improved competitiveness of should continue Air Liquide customers Investment opportunities: + Reduced transportation cost − Slower decision for some − Lower ac

  29. Slide 29: 2015 Priorities

    2015 Priorities Improve Accelerate Accompany competitiveness growth energy transition Selected initiatives Deliver on e-Health: Hydrogen economy: realignment plans • Telemonitoring multiple initiatives • Takeo • Hydrogen infrastructure for Tight cost management Arcal generation: FCEV * 4 offers to c

  30. Slide 30: 2015 Outlook

    2015 Outlook 2014 ■ Solid performance in a mixed environment ■ Enhanced competitiveness ■ Strong cash flow model ■ Pursued investment 2015 objective Assuming a comparable economic environment, Air Liquide is confident in its ability to deliver another year of net profit growth in 2015 30 February 17

  31. Slide 31: Our sustainable development approach

    Our sustainable development approach AA Member of Sustainability Yearbook 31 February 17, 2015 2014 Results World leader in gases, technologies and services for Industry and Health

  32. Slide 32: AIR LIQUIDE

    AIR LIQUIDE

  33. Slide 33: 2014 Full year Appendix

    2014 Full year Appendix 33 February 17, 2015 2014 Results World leader in gases, technologies and services for Industry and Health

  34. Slide 34: Good activity level in a mixed environment

    Good activity level in a mixed environment Quarterly G&S activity indicator(1) base 100, 2010 2011 2012 2013 2014 average 2008 130 125 120 115 110 105 100 95 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 4 quarters moving average (1) Revenue (excluding forex and natural gas), adjusted

  35. Slide 35: 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

  36. Slide 36: Impact of currency and natural gas on G&S revenue

    Impact of currency and natural gas on G&S revenue Currency In €m Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 €/USD (26) (21) (28) (0) +51 €/CAD (17) (21) (18) (8) +1 €/JP¥ (65) (34) (17) (11) (10) Others (77) (85) (80) (19) +22 Total currency impact (185) (161) (143) (38) +64 Average rate Q4 13 Q1 14 Q2 14 Q3 14

  37. Slide 37: Consolidated P&L

    Consolidated P&L In €m 2013 2014 Revenue 15,225 15,358 Cost of goods (11,408) (11,485) Operating income recurring before depreciation 3,817 3,873 Depreciation and amortization expense (1,236) (1,239) Operating income Recurring 2,581 2,634 Net non-recurring operating income 26 16 Operating income 2,6

  38. Slide 38: Consolidated Balance Sheet

    Consolidated Balance Sheet In €m ASSETS 31/12/13 31/12/14 EQUITY AND LIABILITIES 31/12/13 31/12/14 Goodwill 5,090 5,259 Shareholders’ equity 10,625 11,537 Fixed assets 13,939 15,318 Minority interests 263 290 Other non-current assets* 1,061 862 Total equity 10,888 11,827 Total non-current assets 20,

  39. Slide 39: Cash Flow statement

    Cash Flow statement In €m 2013 2014 Funds provided by operations 2,949 2,943 Changes in Working Capital (19) 74 Other items (127) (187) Net cash from operating activities 2,803 2,830 Purchase of PPE* and intangible assets (2,156) (1,902) Purchase of financial assets (392) (179) Proceeds from sale of

  40. Slide 40: Growth in Q4 2014 G&S revenue

    Growth in Q4 2014 G&S revenue in €m 3750 +115 <42> +64 <31> 3,614 3,508 -0.9% 3500 -1.2% +1.8% 3250 +3.0% published 3000 growth +3.3% comparable (1) 2750 2500 0 2250 Q4 2013 Comparable (1) Natural gas Currency Significant Q4 2014 growth perimeter (1) Excluding currency, natural gas and significant s

  41. Slide 41: Revenue analysis by quarter (1)

    Revenue analysis by quarter (1) Sales in €m Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q4 14/13 Q4 14/13 comparable(1) Europe 1,766 1,701 1,645 1,601 1,693 -4.2% -0.1% Americas 822 814 833 864 905 +10.1% +4.5% Asia-Pacific 826 816 821 890 917 +11.2% +9.3% Middle-East 94 85 92 91 99 +5.6% +3.7% & Africa Gas & Ser

  42. Slide 42: Revenue analysis by quarter (2)

    Revenue analysis by quarter (2) Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q4 14/13 Q4 14/13 Sales in €m comparable(1) Large Industries 1,261 1,285 1,208 1,217 1,270 +0.8% +1.2% Industrial Merchant 1,269 1,229 1,251 1,276 1,327 +4.5% +3.1% Healthcare 678 626 637 638 669 -1.4% +3.3% Electronics 300 276 295 315 34

  43. Slide 43: G&S Revenue growth by quarter (3)

    G&S Revenue growth by quarter (3) Growth as Natural Currency Significant Comparable published Gas scope growth(1) Q1 2013 -1.1% -0.6% -1.9% +1.4% +0.0% Q2 2013 +2.5% -0.2% -2.9% +1.6% +4.0% Q3 2013 -1.3% -0.6% -5.8% +1.2% +3.9% Q4 2013 -2.1 % -1.0% -5.2% -0.4% +4.4% Q1 2014 +0.3% +0.7% -4.7% -1.4% +

  44. Slide 44: Europe in Q4

    Europe in Q4 Electronics Q4 Gas & Services sales: €1,693m 3% Industrial Merchant 32% 31% ■ Industrial Merchant Healthcare Increasing liquid volumes Second quarter of growth in Spain Large 34% Industries Dynamic Eastern Europe ■ Large Industries Q4 14/13 Comparable change (1): -0.1% O2 volumes impact

  45. Slide 45: Americas in Q4

    Americas in Q4 Electronics Q4 Gas & Services sales: €905m Healthcare 10% ■ Industrial Merchant 10% 45% Industrial Increasing bulk volumes across the Merchant region, weak cylinders in Brazil 35% Mexico ramp-up Large Industries Solid pricing effect Q4 14/13 Comparable change (1): +4.5% ■ Large Indust

  46. Slide 46: Asia-Pacific in Q4

    Asia-Pacific in Q4 Electronics Q4 Gas & Services sales: €917m 23% 33% Industrial ■ Industrial Merchant Healthcare Merchant 5% Strong liquid volumes growth across the region Large Industries 39% Continued double digit growth in China in Q4 Q4 13/12 Comparable change (1): +9.3% ■ Large Industries +3.9

  47. Slide 47: FY 2014 Revenue breakdown by region

    FY 2014 Revenue breakdown by region Gas & Services 24% Americas Europe FY 2014 Revenue: €13,867m 48% 25% Asia 3% Middle-East and Africa Europe: € 6.6bn Americas: € 3.4bn Asia: € 3.4bn 32% 34% 35% 37% 39% 44% 2% 10% 22% 5% 31% 9% Industrial Merchant Large Industries Healthcare Electronics 47 February

  48. Slide 48: Industrial Merchant pricing

    Industrial Merchant pricing Q4 2014 FY 2014 -0.6% Europe -0.2% +4.8% Americas +4.4% -0.4% Asia-Pacific -0.3% -0.8% Middle-East and Africa +1.5% +1.0% Total Industrial Merchant +1.2% 48 February 17, 2015 2014 Results World leader in gases, technologies and services for Industry and Health

  49. Slide 49: Engineering & Technology

    Engineering & Technology In €m 2013 2014 Consolidated revenues 803 912 OIR(1) margin 10.8% 8.3% Total order intake 1,905 1,359 Total orders-in-hand 4,828 5,337 ASU Total Orders-in-hand 2% 11% HyCO breakdown Traditional energy 16% 39% at Dec 31, 2014 Alternative energy Renewable energy 9% aB&T 23% (1

  50. Slide 50: Operating margin - Natural gas effect

    Operating margin - Natural gas effect Group, in €m 2013 2014 Revenue 15,225 15,358 Incl. Natural gas effect -88 -87 Operating income recurring 2,581 2,634 Operating margin 16.9% 17.1% Operating margin excluding natural gas 17.1% Gas and services, in €m 2013 2014 Revenue 13,837 13,867 Incl. Natural g

  51. Slide 51: Operating margin (OIR/Revenue)

    Operating margin (OIR/Revenue) H1 11 H2 11 2011 2011 Group 16.7% 16.6% 16.7% Gas & Services (1) 19.0% 18.8% 18.9% H1 12 H2 12 2012 Group 16.5% 16.9% 16.7% 2012 Gas & Services 18.7% 19.0% 18.8% H1 13 H2 13 2013 Group 16.6% 17.3% 16.9% 2013 Gas & Services 18.7% 19.6% 19.2% H1 14 H2 14 2014 Group 16.7%

  52. Slide 52: Gas & Services capex by geography

    Gas & Services capex by geography G&S 2014 capex(1) €2.0bn G&S capex(1) / sales 2013 2014 Middle East - Africa Europe 12.2% 11.7% 5% Europe Americas 25.9% 18.6% Asia-Pacific 24% 39% Asia-Pacific 17.1% 14.1% Middle East and 50.6% 27.5% 32% Africa Americas Total 17.6% 14.4% (1) Gross industrial and fi

  53. Slide 53: Financing structure

    Financing structure At 31 December 2014 Sources Maturity Fixed/variable In €m rates Bank Market 8000 debt: Fixed rate debt 82% 7000 Others(1) 17% > 2018 1% 6000 79% Commercial > 2016 paper 5% 5000 57% 4000 20% Private 3000 2016 to 2018 21% placements Bonds 2000 1000 2015 Variable rate 0 (1) Others:

  54. Slide 54: Evolution of number of shares

    Evolution of number of shares In thousands of shares 32,096 945 344,873 312,832 <1,000> Average number of shares outstanding in 2014 343,214,086 shares Dec 31, 2013 Cancellation of Free Share Options exercised Dec 31, 2014 shares purchased by attribution the company 54 February 17, 2015 2014 Results

  55. Slide 55: Regular and sustained performance

    Regular and sustained performance Revenue (in €m) EPS (1) (in €) 15 000 6 +5.6% CAGR over 30 years(2) +7.7% CAGR over 30 years(2) 12 500 5 10 000 4 7 500 3 5 000 2 2 500 1 0 0 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 1984 1986 1988 1990 1992 1994 1996 1998 2000

  56. Slide 56: www.airliquide.com

    For further information, please contact: Investor Relations Communications Virginia Jeanson + 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 www.airliquide.com Follow us on Twitter @Air

  57. Slide 57: AIR LIQUIDE

    AIR LIQUIDE

Air Liquide — FY2014 Earnings Presentation on 6ix