Air Liquide Sa · EURONEXT:AI
Air Liquide Sa — Investor Day (March 2022)
80 slides from Air Liquide Sa's investor day presentation, Mar 22, 2022
Slide 1: Capital Markets Day 2022
CAPITAL MARKETS DAY 2022 22 MARCH 2022
Slide 2: Delivering Strong Financials, Creating Value and Growth
01 DELIVERING STRONG FINANCIALS, CREATING VALUE AND GROWTH Benoît Potier François Jackow CAPITAL MARKETS DAY 2022 Jérôme Pelletan 2
Slide 3: Major Achievements over the Past 5 Years
Major Achievements over the Past 5 Years Fundamentals <1 Leadership Safety(2) LTA(3) frequency Business rate +6.5% ✔ CAGR 2016-2019 Sales Growth(1) Strategic Model moves Customers(2) +35pts ✔ >1.1bn€ 2017-2019 Group Efficiencies & >300m$ synergies + NPS(4) Resilience in Covid-19 “ A” ✔ range confirmed
Slide 4: Sharp Profitability Improvement
Sharp Profitability Improvement OIR / Sales(1) ROCE(1) Integration Integration Leveraging pricing, efficiencies, portfolio management (1) As published ratios until 2020; 2021 OIR/sales at the energy price of 2020 4
Slide 5: Delivering Shareholder Value
Delivering Shareholder Value Share price evolution Base 100 in 2016 Total Shareholder Return(1) Dow Jones +14.8% over 5 years Air Liquide CAC 40 +12.3% over 10 years +11.4% over 20 years 2016 2017 2018 2019 2020 2021 (1) Growth rate of an investment in Air Liquide shares, including reinvested divide
Slide 6: Many Opportunities in Post Covid World
Many Opportunities in Post Covid World Climate urgency awareness Opportunities Localisation of industrial Reinvent Manufacturing footprint ▪ Low-carbon ▪ Semiconductors ▪ Productivity by digital Digital Healthcare ▪ Home Healthcare ▪ Access Oxygen Healthcare availability Hydrogen Space Tech 6
Slide 7: New Rules of the Game
New Rules of the Game Pre-Covid Post-Covid and geopolitical reconfiguration ▪ Growth from industrial capacity ▪ Growth from capturing new markets & supporting Energy Transition roadmaps of customers / countries ▪ Industrial Gases market consolidation ▪ New competitors ▪ Leaner and leaner organisation
Slide 8: Ideally Positioned to Capture Growth
Ideally Positioned to Capture Growth Innovation Europe H2 sales & Patents #1 Large Europe Healthcare Industries in Deep Tech North America Medical Industrial Oxygen Merchant Asia Electronics CSR 8
Slide 9: Setting A New Standard
Setting A New Standard Delivering financial performance And beyond, Decarbonizing the planet Unlocking progress via technologies Acting for all 9
Slide 10: Performance Objectives
Performance Objectives Sales growth +5-6% CAGR(1) ROCE CO2 >10% emissions by 2023 inflection and forward(2) around 2025 (1) Group comparable sales growth 2021-2025 CAGR (2) Recurring ROCE based on Recurring Net Profit 10 10
Slide 11: Focusing on Enablers Supporting ROCE Objective
Focusing on 2 Enablers Supporting ROCE Objective Capital >+160 bps Efficiency margin improvement over 4 years(1) (1) Calculated as the sum of yearly OIR margin improvements at the energy price of the previous year; over the period 2022-2025 11
Slide 12: Stepping up Margin Improvement
Stepping up Margin Improvement 5 year (2) 4 year (3) s s + 160 bps(1) underlying >+160 bps(1) Integration additional contributions while managing challenges Airgas Covid cost Inflation, synergies containment Energy Transition, 100 bps 40 bps Geopolitics 2016 2017 2018 2019 2020 2021 2022 2023 2024 20
Slide 13: Accelerating Growth
Accelerating Growth Group Comparable Sales Growth H2 GM&T Mobility E&C EL HC +8-9% +4-5% IM +4-5% LI +4-5% +5-6% +4.5% CAGR(1) 4y CAGR(2) Excluding Airgas scope 2021 2025 (1) Excluding the scope impact from Airgas acquisition (2) Group comparable sales growth 2021-2025 CAGR 13
Slide 14: A Step Change in EBITDA Generation
A Step Change in EBITDA Generation EBITDA (in €) >+30% in 2025 vs. 2021 in € +23% DA EBIT in 2021 vs. 2017 Acquisition 14
Slide 15: Enhanced Efficiencies Through Strong Execution
Enhanced Efficiencies Through Strong Execution From €300m to €400m per year >€1.6bn 4 years Cumulated efficiencies over 4 years 2022-2025 €1.5bn 15
Slide 16: Efficiencies, Harvesting the Seeds of NEOS
Efficiencies, Harvesting the Seeds of NEOS ▪ Enhanced pricing agility supported by digitalization Pricing Pricing ▪ 100% of sales teams incentivized on margin Mix ▪ Mix improvement: >250 new small on-sites contracts by 2025 ▪ One global integrated Digital Solution in all 75 countries Procurement ▪ >8
Slide 17: Pursue Active Portfolio Management
Pursue Active Portfolio Management Selected transactions over 2016-2020 132 Acquisitions 28 Divestitures ■ Tech Air, USA, 2019 ■ Schülke, Germany, 2020 ■ Southern Industrial gas, Malaysia, 2019 ■ Japan reorganization, 2020 Supplement margin ■ Medidis, Netherlands, 2019 ■ CryoPDP, France, 2020 ■ Oxym
Slide 18: Supported by Increased Investment Decisions
Supported by Increased Investment Decisions (1) ~+ 45% €3.8bn average yearly industrial investment decisions €2.6bn average yearly 13-15% Industrial Capex / Sales industrial investment decisions 12% Industrial Capex / Sales (1) Average yearly industrial investment decisions over the period 2022-2025
Slide 19: Investments Driven by Energy Transition and Electronics
Investments Driven by Energy Transition and Electronics Industrial Investment Decisions Focus on above €5m Large Industries Energy Transition H2 mobility ROCE >10% Others thereof ~1/2 IM Electronics (1) Total investment decisions € 16bn 2022-2025 CO2 inflection around 2025 (1) Cumulated industrial an
Slide 20: Cash Flexibility to Finance Growth and Reward Shareholders
Cash Flexibility to Finance Growth and Reward Shareholders New sales 23-26% Cash Flow / Sales(1) Priority focus on 3-4% WCR of sales Capex 6-8% Shareholders Net Debt / Shareholders reward of sales 13-15% CAPEX "A" category rating CAPEX of sales (1) Cumulated cash flow from operating activities before
Slide 21: Financial Performance And Beyond, Decarbonizing the Planet
Financial performance And beyond, Decarbonizing the planet Unlocking progress via technologies Acting for all 21
Slide 22: Decarbonizing the Planet
02 DECARBONIZING THE PLANET Leading: Decarbonization of manufacturing Energy Transition Hydrogen solutions Mike Graff Pascal Vinet CAPITAL MARKETS DAY 2022 François Venet 22
Slide 23: Decarbonization, Priority of the Industry
Decarbonization, Priority of the Industry Dominant trends in society With some challenges ahead Renewable Access to Availability power CO2 sinks End consumer Trade demand Low-carbon considerations Corporate Economic product social Regulations premium Long-lived responsibility capital assets Society
Slide 24: Decarbonization, a Significant Potential Market
Decarbonization, a Significant Potential Market Hard to abate industries (Gt CO2) Each month from 2030 to 2050, net zero implies an additional 10 industrial plants equipped with CCUS, 3 additional fully hydrogen‐based industrial Chemical plants and Others Buildings Others 1.3 2 GW of extra electrolys
Slide 25: Air Liquide Solutions along the Low Carbon Chain
Air Liquide Solutions along the Low Carbon Chain Reminder 2 1 Low-carbon process transformation Low-carbon Low-carbon Products & Fuels Industrial Gas Supply 3 Carbon Capture as a service Customers Geographies Energy / Refining Europe Chemicals Americas Steel Middle East Cement Asia 1st mover 1st move
Slide 26: Quick Start from Refining towards Sustainable Fuels
1 Quick Start from Refining towards Sustainable Fuels Strengthening Customers sites New opportunities Regulation Conversion for Air Liquide Red II - Renewable content HVO(2) X 3 in EU transportation fuels by 2030 Biojet 14% 28%(1) eFuels biofuels Renewable H2 by 2030(3) Low-carbon H2 Carbon content G
Slide 27: Air Liquide, Solutions Provider for Refining Decarbonization
1 Air Liquide, Solutions Provider for Refining Decarbonization Accompany Neste in its journey towards renewable fuels production ▪ Act as a partner and understand customer’s needs Peter Vanacker ▪ Supply low-carbon H2 President and CEO ▪ Continuously adjust volumes to Neste requirements 27
Slide 28: Beyond Refining, all Markets Onboarded in Decarbonization
1 Beyond Refining, all Markets and Activities Onboarded in Decarbonization Large Industries ■ 30% to 40% CO2 ■ Low-carbon H2 and ■ Carbon free Oxygen reduction over 10 years renewable H2 supply produced ■ Renewable power ■ Carbon Capture as a from Renewable capacity service Energy Industrial Merchant
Slide 29: A Unique Position to Decarbonize Customers' Processes
2 A Unique Position to Decarbonize Customers' Processes… Carbon Capture as a service Energy Biofuels Advanced biofuels, eFuels Refining HVO* H2 Low-Carbon H2 & NH3 O2 N2 H2 Chemicals Biofeedstocks H Off gases decarbonization O2 2 Steel EAF* O2 BF* & DRI* with CCS* O2 DRI* H2 H2 Cement Oxycombustion O
Slide 30: Accompany Customers in New Energy Transition Markets
2 … and to Accompany Customers in New Energy Transition Markets Example Battery manufacturing A rapidly expanding market... EV(1) vs. ICE(2) gas intensity in € of gas / car ■ +19% CAGR 2020-30 for battery production ■ 30 EV battery gigafactories planned in Europe Gas intensity with additional upside
Slide 31: Sustainable Battery Production for Electric Vehicles
2 Sustainable Battery Production for Electric Vehicles, a New Growing Market Supplying additional air gases to new BASF state-of-the-art battery material plant in Germany Jürgen Fuchs ▪ Capturing growth linked to electrical vehicles expansion Chairman of the Management Board, BASF Schwarzheide GmbH
Slide 32: Carbon Capture as a Service Becoming a Reality
3 Carbon Capture as a Service Becoming a Reality Horisont Energy Large-scale Carbon Capture projects in Europe First mover in flagship Carbon Capture projects Northern Lights St Fergus For Air Liquide but also Customers’ assets & Peterhead Strongly supported by European fundings Similar dynamics star
Slide 33: Leveraging our Technologies
Leveraging our Technologies: the Backbone of Air Liquide Solutions Innovative Low-carbon Carbon Air Gases Electrolysis Solutions H2 Capture Technos ▪ Renewable Electricity ▪ ATR* / POX* with ▪ The most complete ▪ PEM* partnership intermittency Carbon Capture for Carbon Capture offer with management
Slide 34: Building Synergies at Scale in Key Basins
Building Synergies at Scale in Key Basins Example Normandy Basin Normandy basin 2 SMR 4 Normand'Hy Takeover First Worldwide Low-Carbon H2 Network North Sea Le Havre Electrolyzer twork Gonfreville and Carbon Capture as a service leveraging on: H 2 ne ork Port-Jérôme ■ Innovative technologies 5 3 netw
Slide 35: Large Industries, Deliver Growth and Prepare for Energy Transition
Large Industries, Deliver Growth and Prepare for the Acceleration in Energy Transition Leverage on Business Comparable Sales growth and projects signing Fundamentals ▪ Execute flawlessly backlog of projects ▪ Pursue operational excellence +4-5% Large Take early positions Industries in Energy Transiti
Slide 36: Tech to Unlock New Markets
03 TECH TO UNLOCK NEW MARKETS Matthieu Giard Emilie Mouren-Renouard Diana Schillag CAPITAL MARKETS DAY 2022 Marcelo Fioranelli 36
Slide 37: Innovation and Technologies Will Create New Markets
Innovation and Technologies Will Create New Markets Focusing on Mobility Electronics Healthcare Industrial Deep tech / Merchant Innovation 37
Slide 38: Innovation and Technologies Will Create New Markets
Innovation and Technologies Will Create New Markets Focusing on Mobility Electronics Healthcare Industrial Deep tech / Merchant Innovation 38
Slide 39: H2 Mobility: a Pillar in Air Liquide H2 Strategy
H2 Mobility: a Pillar in Air Liquide H2 Strategy 2021 2025 2030 100tpd H2 ~2,000 tpd H2 between 15,000 tpd H2 & 50,000 tpd Light Rail Buses Maritime Commercial Cars Heavy Duty Aviation 2021 2025 2030 2035 Seize short term opportunities while investing now for the market tipping point 39
Slide 40: Remaining the Clear Leader in H2 for Mobility
Remaining the Clear Leader in H2 for Mobility #1 ■ Large Industries strategic basins Build on H2 2021 KEY FIGURES Industrial Merchant supply chain industrial ■ Deep H2 industrial know-how legacy ■ ■ Ability to offer any type of low-carbon H2 1.2m tonnes/year >2,000 km H2 pipeline Leverage ■ Full por
Slide 41: Walking the Talk
Walking the Talk Market development Leveraging on existing footprint and 15 priority basins Accelerate H2 road mobility Partnerships with retailers in Partnerships with automotive players Activate H2 Aviation, Maritime and Rail Partnership with industry leaders First commercial projects Liquefaction
Slide 42: Develop a Complete Ecosystem for Hydrogen Trucks
Develop a Complete Ecosystem for Hydrogen Trucks First high pressure hydrogen refueling station for long haul trucks in Europe ▪ 20 refuelings per day of trucks with low-carbon hydrogen ▪ Reduce CO2 emissions by >1,500 tons per year HyAMMED ▪ Partnerships with industrial actors, carriers and large r
Slide 43: Confirmed Hydrogen Ambition for Industry and Mobility
Confirmed Hydrogen Ambition for Industry and Mobility Before 2035 By 2030(a) Reminder Sales Capex Electrolysis >3x +~€8bn 3GW 6 >€ bn (a) Including 1 GW decided still under construction 43
Slide 44: Innovation and Technologies Will Create New Markets
Innovation and Technologies Will Create New Markets Focusing on Mobility Electronics Healthcare Industrial Deep tech / Merchant Innovation 44
Slide 45: Digital Acceleration Driving Significant Opportunities
Digital Acceleration Driving Significant Opportunities IoT A growth driver Buoyant IC market for Air Liquide 5G ▪ Chips needed everywhere ▪ Volume and Advanced Materials ▪ Race for improved Automotive chip performance ▪ New molecules for improved performance ▪ $700bn investments announced in new mega
Slide 46: Leveraging Leading Position to Capture Growth
Leveraging Leading Position to Capture Growth Carrier Gases Specialty ▪ Accelerate investments in new technologies: ▪ Energy efficient on-site gas generators Gases ▪ Low-carbon on-site hydrogen generators ▪ Reinforce positions in key basins ▪ Finalize SIO(1) deployment for operational Services excelle
Slide 47: Leverage #1 Position for Next Generation Chips
Leverage #1 Position for Next Generation Chips Example ZyALD, a zirconium precursor Zirconium Advanced Designed to Materials deposit zirconium on chip Molecule Continuous Flow Pulsed Flow For Two Different « CVD »(1) « ALD »(2) deposition Processes Uniform coverage Non-uniform whatever the thickness
Slide 48: How Air Liquide Helps Electronics Customer to Grow
How Air Liquide Helps Electronics Customer to Grow Design small, think big ▪ “To innovate you have to work as a team and the team includes your customer” ▪ “What we do best is shaking the periodic table to come up Advanced Materials with innovative new materials” ▪ “One of our key focus is operation
Slide 49: Outstanding Growth over and Beyond
Outstanding Growth over and Beyond Comparable Sales growth and projects signing Enhance on Electronics #1 Business Position +8-9% Sales CAGR(1) Contribute to Group margin improvement Leverage long term customer relationships (1) Electronics comparable sales growth 2021-2025 - 4 year CAGR 49
Slide 50: Innovation and Technologies Will Create New Markets
Innovation and Technologies Will Create New Markets Focusing on Mobility Electronics Healthcare Industrial Deep tech / Merchant Innovation 50
Slide 51: Transforming Home Healthcare
Transforming Home Healthcare Drivers ▪ Rising chronic diseases with aging Chronic Patients Worldwide 2020 populations and changing lifestyles ▪ Patients actors of their health, Diabetes empowered by digital Sleep apnea ▪ Need for value transformation for better 537m budget allocation and resilient h
Slide 52: Air Liquide Unique Positioning in Healthcare
Air Liquide Unique Positioning in Healthcare Unique proximity with chronic patients 1.8m Home Healthcare patients Presence along Community care & the cycle of care & other HHC Respiratory Infusion 12% 7% 2021 sales Personalized care 15,000 plans with human 21% ~€2bn 60% hospitals & digital support D
Slide 53: Air Liquide Value Transformation - Illustrations
Air Liquide Value Transformation - Illustrations Optimizing patient outcomes Technology as a key enabler Personalizing care pathways Optimizing operational excellence 53
Slide 54: Sustained Sales Growth and Value Transformation
Sustained Sales Growth and Value Transformation +4-5% Healthcare Sales CAGR(1) Drive strong organic growth +5 -6 % with Home Healthcare Sales CAGR(2) excl. Covid Pioneer in Value-based Healthcare to generate future growth excl. Covid Consolidate our geographic positions Sources of HHC sales growth V
Slide 55: Innovation and Technologies Will Create New Markets
Innovation and Technologies Will Create New Markets Focusing on Mobility Electronics Healthcare Industrial Deep tech / Merchant Innovation 55
Slide 56: Industrial Merchant Unlocks Potential of New Markets
Industrial Merchant Unlocks Potential of New Markets and New Usages €10bn New market potential(1) Water Treatment Battery Manufacturing acceleration Additive Manufacturing New food & usages Combustion & Energy Emission Testing Management Sustainability and Societal trends are shaping the future IM i
Slide 57: Operating Digitally at Scale to Deliver Growth and Performance
Operating Digitally at Scale to Deliver Growth and Performance Perfect playground Growth for data & digital ▪ Manage churn and pricing # customers ▪ Deliver an outstanding customer # transactions experience by making every interaction # assets valuable # markets # geographies ▪ New data-enabled offe
Slide 58: IM Solid Fundamentals Support Air Liquide Performance
IM Solid Fundamentals Support Air Liquide Performance Diversity of markets, geographies, customers Solidity of business model Global Boosted business reach Pricing combined with Long term market vision capacities Proven local density to capture new growth resilience potentials during Covid crisis Ba
Slide 59: IM Growth Acceleration over Advance Period
IM Growth Acceleration over Advance Period Growth Comparable Sales growth ▪ Seize volume in new markets ▪ Enhance and sustain pricing Industrial Merchant Performance +4-5% Sales CAGR (1) ▪ Continuously improve operational excellence by 2025 ▪ Optimize end-to-end supply chain ▪ Contribute to margin i
Slide 60: Innovation and Technologies Will Create New Markets
Innovation and Technologies Will Create New Markets Focusing on Mobility Electronics Healthcare Industrial Deep tech / Merchant Innovation 60
Slide 61: Space: Supporting the Way to More Sustainable Solutions
Space: Supporting the Way to More Sustainable Solutions The new Space shift Application Domains Air Liquide strengths Launchers Recognized cryogenic Exponential need ■ All Cryo propellants, equipment, expertise and technological for connectivity services developments ■ From micro to heavy launchers
Slide 62: Leading in Innovation to Support Business and Operations
Leading in Innovation to Support Business and Operations Energy Transition Digital ~33% ~21% >300m€ Advanced >50% in 2021 Materials New applications and ~8% of Innovation industrial safety expenses dedicated to ~19% Healthcare Energy Transition and Digital ~19% 62
Slide 63: Acting for All
04 ACTING FOR ALL Fabienne Lecorvaisier CAPITAL MARKETS DAY 2022 Armelle Levieux 63
Slide 64: An ESG Commitment Structured around Main Priorities
An ESG Commitment Structured around 3 Main Priorities Reminder 1 Abatement of CO2 emissions 2 Care for patients Trust to engage with our employees 3 as the base to build a best-in-class governance 64
Slide 65: Abatement of CO2: Setting a Trajectory to Reach Carbon Neutrality
Abatement of CO2 Setting a Trajectory to Reach Carbon Neutrality Reminder CO2 emissions start Reach Carbon Air Liquide decreasing in absolute value Neutrality by 2050 Commitments ~2025 2035 2050 -30% Carbon intensity Decrease scope 1 & 2 in kg CO2/€ EBITDA(a) CO2eq emissions in vs 2015 absolute valu
Slide 66: Decarbonizing the Planet
Decarbonizing the Planet ~2025 ~20% For our operations Inflection of CO2 emissions Air Liquide Fleet converted in absolute value to alternative fuels by 2025 For our customers ~50% of investments in Energy Transition(1) For our employees and shareholders (1) among industrial investment decisions for
Slide 67: Acting For Customers
Acting For Customers From … To Customer-centric transformation… Customer-engraved DNA Acting upon the Voice of Customer Customer insights-driven Improving Customer’s Effortless & valuable customer Journey interactions by design Building a Customer-centric Empowered employees Mindset to take action C
Slide 68: Offer Tangible Daily Support to Customers
Offer Tangible Daily Support to Customers Airgas as key supplier for 25 years ▪ Attentive listening to customer’s needs Joel McLeod ▪ Immediate and efficient responsiveness on daily basis Corporate Welding Specialist ▪ Products, experts and digital solutions to improve customer’s process 68
Slide 69: Commitments to Engage With Our Employees
Commitments to Engage With Our Employees Diversity, 35% of women among a source of managers & performance 31% professionals 2021 2025 by 2025 Wellbeing 100% of employees under a beyond the common basis of care workplace 34% coverage by 2025 Safety 2021 2025 One ambition: zero accident 100% of employ
Slide 70: Develop Technical Expertise to Support Ambitions
Develop Technical Expertise to Support Ambitions Technical Community Leaders program A dedicated Human Resources program to support core business ▪ Identify and develop experts in technical fields sustaining our technical leadership ▪ Dynamic program, evolving to serve the business strategy ▪ >3,000
Slide 71: Committed To Create Value For Shareholders
Committed To Create Value For Shareholders A diversified shareholder base Dividend(1) ~2/3 Institutional ~1/3 Individual (in € per share) 30-year CAGR(2) +8.3% Free share attribution every other year(3) 10% loyalty bonus after 2 years on dividends and free share attribution Best-In-Class governance (
Slide 72: Acting For Global Society
Acting For Global Society Close relationships built with key stakeholders Local Taking action communities With the Air Liquide Foundation ■ Research and Jobs-integration ■ Drawing on Air Liquide expertise and teams International With 30 partner organizations NGOs ■ Agencies ■ One-off programs: Covid
Slide 73: Conclusion
05 CONCLUSION François Jackow CAPITAL MARKETS DAY 2022 Benoît Potier 73
Slide 74: Setting A New Standard
Setting A New Standard Delivering financial performance And beyond, Decarbonizing the planet Unlocking progress via technologies Acting for all 74
Slide 75: Delivering Financial Performance while Reducing CO2 Emissions
Delivering Financial Performance while Reducing CO2 Emissions 3 Performance Objectives 2 Key Enablers Sales growth +5-6% CAGR(1) Capital efficiency Margin Improvement ROCE CO2 emissions >10% by 2023 and forward inflection around 2025 (1) Group comparable sales growth 2021-2025 CAGR 75 75
Slide 76: Management's Priorities
Management’s Priorities Deliver and invest Allocate resources ■ Talents ■ Capital Onboard all stakeholders Act now and invent the future 76 76
Slide 77: Airtiquide
©) Air Liquide Airtiquide ADVANCE fe 2) lif PIITiity I _
Slide 78: Appendices
06 APPENDICES CAPITAL MARKETS DAY 2022 06 78
Slide 79: Assumptions for Ambitions Over 2022-2025
Extra-financial ▪ Competitive access to low-carbon electricity ▪ CO2 storage availability ▪ Supporting regulations Inflation & Forex ▪ +2-3% average yearly inflation Assumptions for ▪ 1.18 USD for 1€ Ambitions Over Industrial Production ▪ ~+2% CAGR 2022-2025 Energy Price ▪ 2021 average market prices Ge
Slide 80: Disclaimer
Disclaimer This presentation may contain forward-looking statements (including objectives and trends) about Air Liquide’s financial situation, operating results, business activities and strategy. Although Air Liquide believes that the expectation reflected in such forward-looking statements are reason