Air Liquide SA · EURONEXT:AI
Air Liquide SA — H1 2019 Earnings Presentation
47 slides from Air Liquide SA's earnings presentation, Jul 30, 2019
Slide 1: H1 2019 Activity: Sustained Sales Growth Combined with Step-up in Margin
H1 2019 Activity Sustained Sales Growth Combined with Step-up in Margin Paris, 30 July 2019
Slide 2: Agenda
Agenda Group transformation accelerating and delivering Sustained sales growth Step-up in margin Very active business development 2019 outlook confirmed 2 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 3: Group Transformation Accelerating and Delivering
Group Transformation Accelerating and Delivering Benoît Potier Chairman & Chief Executive Officer 3 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 4: Very Solid Performance in H1 2019
Very Solid Performance in H1 2019 Operations Balance Sheet Sustained sales growth(1) +7.8% Comparable(1) +4.9% ROCE ramping up +30bps(4) Step-up in margin +70bps(2) Improved gearing at 71%(5) Recurring Net Profit growth +12%(3) (1) Group and G&S sales growth in H1 19 (3) Excluding exceptional items:
Slide 5: Sustained Sales Growth from all WBLs
Sustained Sales Growth from all WBLs G&S Comparable Sales Growth H1 2019 Growth per World Business Lines +5.0% 6% 5% Large Industries +5.4% 4% Industrial Merchant +2.6% 3% Electronics +13.5% 2% Healthcare +6.0% 1% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2018 2019 5 30 July 2019 H1 2019 Results A world
Slide 6: Step-up in Margin
Step-up in Margin (1) +70bps OIR margin Price/Mix Efficiencies Portfolio Management (1) Operating Income Recurring on Sales; including +10bps from IFRS16; no energy impact in H1 2019 6 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 7: Very Active Investment Decisions
Very Active Investment Decisions Investment Decisions - €bn Split by Geography (excluding Tech Air) €1.8bn 1.8 1.6 Including Tech Air 1.4 1.2 1.0 36% 44% 0.8 H1 2019 0.6 0.4 0.2 17% 0.0 H2 16 H1 17 H2 17 H1 18 H2 18 H1 19 Financial Investments Industrial Investments Americas Asia Europe AME 7 30 Jul
Slide 8: Group Transformation Accelerating and Delivering
Group Transformation Accelerating and Delivering High level of signing Deployment of transformation projects S&P outlook revised Portfolio management to Positive A Climate Objectives ASSETS C Investment alignment CUSTOMERS E Enhanced innovation ECOSYSTEMS 8 30 July 2019 H1 2019 Results A
Slide 9: 2019 H1 Performance
2019 H1 Performance Fabienne Lecorvaisier Executive Vice President & Chief Financial Officer 9 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 10: Highlights
Highlights Sustained comparable sales growth of +5% in Q2 Step-up in OIR margin Solid cash flow Increased ROCE Very active business development 10 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 11: Sustained Sales Growth
Sustained Sales Growth +2.5% FX Impact in H1 Neutral Energy Impact in H1 11 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 12: Robust Markets Through H2 2019
Robust Markets Through H2 2019 Markets Outlook H2 2019 Chemicals Contrasted Chemicals LI Oil & gas High demand from Oil & Gas in Europe Steel Active projects signing Metal Fab. Softer markets due to low investments in the Construction short-term IM Energy Solid consumption-rel
Slide 13: Confirmed Growth Levers in Q2
Confirmed Growth Levers in Q2 G&S comparable sales growth WBLs Main Geographies contributing Industrial Merchant + 2% Asia, Europe, Middle East Large Industries + 6% Asia, Europe Healthcare + 7% Europe, Americas Electronics +13% Asia, Americas 13 30 July 2019 H1 2019 Results A world leader in gases,
Slide 14: Very Solid Level of Base Business
Very Solid Level of Base Business G&S quarterly growth analysis Tech Air acquisition (1) Comparable growth based on 2016 adjusted sales 14 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 15: Q2 - Steady Americas and Strong Europe
Q2 - Steady Americas and Strong Europe G&S comparable sales growth - high O2 volumes Americas – Solid HC, Pricing in IM LI - H2 Start-Up in Mexico - strong pricing Sa les H1 2 0 1 9 IM - contrasted end markets €4,217m - solid U.S. HC - strong HHC in South America - still solid E&I EL - high
Slide 16: Q2 – High Growth in Asia, Dynamic IM in AME
Q2 – High Growth in Asia, Dynamic IM in AME G&S comparable sales growth Asia – Strong LI and EL LI - O2 Ramp-Ups in China for Chemicals Sa les H1 2 0 1 9 IM -- strong cylinder volumes in China solid growth in South East Asia €2,405m - strong growth across the region EL - >+15% in Carrier Gases
Slide 17: Q2 - Resilient IM, High Growth in LI
Q2 - Resilient IM, High Growth in LI G&S comparable sales growth Industrial Merchant – Solid Performance Stronger pricing at +4.1% Contrasted end markets: Sales - Strong Food & Pharma H1 2 0 1 9 - Flat automotive €4,827m - Construction and Metal Fab . lower in the U.S. . solid in Europe and Cana
Slide 18: Q2 - Strong HC, High Growth in EL
Q2 - Strong HC, High Growth in EL G&S comparable sales growth Healthcare – Organic Growth Sa les Strong HHC across all of Europe, H1 2 0 1 9 diabetes therapy in Nordics €1,821m Solid Medical Gases in Americas Electronics – High Carrier Gases & Advanced Materials >+13% growth in Carrier Gases;
Slide 19: +70 bps OIR Margin improvement
+70 bps OIR Margin improvement H1 2019 - including +10bps from IFRS 16 - no Energy impact 19 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 20: Pro-active Management of Pricing and Product Mix
Pro-active Management of Pricing and Product Mix IM pricing momentum +4.1% +3.3% Pricing aligned with cost inflation Focus of sales teams +2.1% Leveraging competitive position on Helium market +1.2% Priority to added value services and products +0.5% Gas applications in China Inteliox cyl
Slide 21: €197m Delivered Efficiencies in H1 19
€197m Delivered Efficiencies in H1 19 Accelerated Examples momentum Transformation Continuous improvement Closing of PG filling centers, logistics Leveraging on 4 SIO centers 14k employees trained Business Support Centers extended Asia & Europe out of 30k targeted Mutualization of WBLs techn
Slide 22: Continuous Portfolio Management
Continuous Portfolio Management Divestitures over last 2 years Europe Focus on core business - Intega EL E&I Densification of operations: - 3 active projects Airgas swap, bolt-on acquisitions - Refrigerant activity China - Onsite safety services - Fujian assets Accretive impact on margin AME -
Slide 23: Strong Recurring Net Profit
Strong Recurring Net Profit * * * Recurring Net profit +12.1% Excluding one-offs: - Fujian in 2019 - financial gain in 2018 23 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 24: Solid Cash Flow
Solid Cash Flow GEARING (1)(4) CASH FLOW 71% +14.8% +8.6% excl. IFRS 16 Gearing(1) 79% Gearing 69% (1) June 30 gearings adjusted for dividend seasonality (3) Including share purchases and capital increases (2) Including acquisitions, transactions with minority shareholders, net of divestitures (4) N
Slide 25: ROCE Improvement
ROCE Improvement ROCE – After tax 10.3% >10% 10% +30bps 8.3%(2) 8.0% 8% 7.7%(1) 6.9% 6% Dec. 15 Dec. 16 Dec. 17 Dec. 18 Jun. 19 2021/22 2021/2022 adjusted NEOS Airgas objective acquisition (1) Excluding positive impact on 2017 net profit of non-cash one-off items (2) Excluding Fujian exceptional imp
Slide 26: Very Active Business Development
Very Active Business Development Investment H1 2019 H1 2019 Investment Opportunities(1) Start-up/Ramp-up Decisions(1) 12-month portfolio Sales Growth Contribution €2.7bn €1.8bn €185m H1 2018 H1 2019 H1 2018 H1 2019 H1 2018 H1 2019 • Well-balanced by geography • High level of signings • 5 Start-Ups i
Slide 27: Confirmed Start-Ups Forecast
Confirmed Start-Ups Forecast Major Start-Ups 2019 Q1 Q2 Q3 Q4 EL Pemex EL LI Steel LI EL LI Projects T/O Projects Projects Project T/O Projects Project Asia Mexico Asia Middle- Europe China Asia Argentina East Sales growth contribution - FY 2019 Steady Backlog >€2bn € 0.85bn ~€ 300m Yearly Sales Bac
Slide 28: 2019 Outlook
2019 Outlook H1 2019 2019 Sustained sales growth “Assuming a comparable environment, Air Liquide is Step-up in margin confident in its ability ROCE improvement to deliver net profit growth in 2019, calculated at Very active business constant exchange rate” development 28 30 July 2019 H1 2019
Slide 29: H1 2019 Appendix
H1 2019 Appendix 29 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 30: H1 2019 G&S Revenue Breakdown by Region
H1 2019 G&S Revenue Breakdown by Region Europe €3.6bn Asia- Americas Pacific €4.2bn €2.4bn €10,536m Industrial Merchant Large Industries Healthcare Electronics 30 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 31: Americas
Americas Q2 Gas & Services Sales: €2,148m INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE ELECTRONICS • Strong pricing +4.8% • High O2 volumes in U.S. • Very solid medical gases in • High growth in • Helium contributing to growth • Strong cogen in U.S. and the U.S. for Proximity care Carrier Gases •
Slide 32: Europe
Europe Q2 Gas & Services Sales: €1,782m INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE • Further accelerated pricing • High H2 sales for refining in Benelux • High organic growth in HHC with at +3.8% • Softer O2 volumes from steel strong diabetes activity in Nordics • Positive underlying volumes cu
Slide 33: Asia-Pacific
Asia-Pacific Q2 Gas & Services Sales: €1,211m INDUSTRIAL MERCHANT LARGE INDUSTRIES ELECTRONICS • Strong cylinder volumes in China • O2 Ramp-Ups in China • Strong growth in China, Korea, • High helium volume and price • High volumes for Chemicals Singapore, Taiwan and very solid across the region Jap
Slide 34: Industrial Merchant Pricing
Industrial Merchant Pricing +4.8% Americas +4.3% Q2 2019 +3.8% Europe H1 2019 +3.5% Asia-Pacific +1.5% +1.4% Africa Middle-East +5.4% +5.4% TOTAL +4.1% IN DUS T RIAL M ERCH AN T +3.7% 34 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 35: Q2 2019 – E&C and GM&T Activities
Q2 2019 – E&C and GM&T Activities E&C GM&T €83m -12% €129m +7% Sales to third parties Sales €233m -8% €134m +27% Order Intake Order Intake 35 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 36: Steady Backlog > €2bn
Steady Backlog > €2bn Decisions Start-ups €2.2bn €2.2bn €2.1bn €2.1bn € 0.85bn Dec 2016 Dec 2017 Dec 2018 Decisions Start-ups June 2019 Yearly Sales Backlog after full Ramp-ups See definitions in appendix 36 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry
Slide 37: Consolidated P&L
Consolidated P&L 37 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 38: Consolidated Balance Sheet Simplified - In €m
Consolidated Balance Sheet Simplified - In €m (1) (2) (1) * Including fair value of derivatives (1) Excluding lease liabilities (IFRS16) (2) Adjusted for dividend seasonality 38 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 39: Cash Flow Statement
Cash Flow Statement * PPE: Property, plant and equipment. 39 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 40: Impact of Currency and Energy on G&S Revenue
Impact of Currency and Energy on G&S Revenue 40 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 41: Revenue Analysis by Quarter and by Business Line
Revenue Analysis by Quarter and by Business Line 41 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 42: Revenue Analysis by Quarter and by Geography
Revenue Analysis by Quarter and by Geography 42 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 43: G&S Revenue Growth by Quarter and by Impact
G&S Revenue Growth by Quarter and by Impact 43 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 44: 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 45: Financing Structure
Financing Structure As of June 30, 2019 > 5 years Between 1 and 5 years < 1 year Net debt excluding lease commitments (IFRS) (1) Others: put options granted to minority shareholders. 45 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Slide 46: Regular and Sustained Performance
Regular and Sustained Performance CAGR over 30 years(1) 24,000 Revenue (in €m) +5.8% EPS(2) (in €) +6.9% 20,000 5.0 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 1996 1998 2000 2002 2004 2006 2008 2
Slide 47: 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 Ludmilla Binet + 33 (0)1 40 62 57 37 Annie Fournier + 33 (0)1 40 62 51 31 Muriel Légeron + 33 (0)1 40 62 50 18 Joseph Marczely + 1 610 263