Air Liquide Sa · EURONEXT:AI
Air Liquide Sa — Debt Investor Presentation (July 2024)
58 slides from Air Liquide Sa's debt investor presentation, July 2024
Slide 1: Credit Investors Presentation H1 2024
Credit Investors Presentation Confirmation of Investment Potential Strong Financial performance H1 2024 1 Credit Investors Presentation - H1 2024
Slide 2: Agenda
Agenda 1 Introduction 2 Strategic and Operational Review 3 Strong Financial H1 2024 performance 4 Group Credit Profile 5 Appendix 2 THIS DOCUMENT IS PUBLIC Credit Investors Presentation - H1 2024
Slide 3: Introduction
01 Introduction 3 THIS DOCUMENT IS PUBLIC Credit Investors Presentation - H1 2024
Slide 4: A World Leader in Gases, Technologies and Services for Industry & Health
A World Leader in Gases, Technologies and Services for Industry & Health 72 67,800 >4m ~€27.6bn Customers Countries Employees of Sales in 2023 and Patients ~€3.1bn ~€6.4bn ~€92bn Net Profit in 2023 Cash Flow in 2023* Market Capitalization** * cash flow from operating activities before changes of worki
Slide 5: A Strong Business Model
A Strong Business Model 5 THIS DOCUMENT IS PUBLIC Credit Investors Presentation - H1 2024
Slide 6: A Resilient Business Model
A Resilient Business Model Large industries - 30%(1) Healthcare - 16%(1) ● Serving 2m patients & 20,000 hospitals ● Long-term contracts >15 years ● Growth driven by aging population and the rise of chronic diseases ● Take-or-Pay clauses & Monthly Fees ● A balanced mix of accreditations and mid-term
Slide 7: FY 2023 - Beneficial Mix of Geographies and Activities
FY 2023 - Beneficial Mix of Geographies and Activities 2023 Gas & Services Revenue €26,360m 3% Global Markets & Technologies Engineering & Construction 2% 9% Electronics Europe Asia-Pacific 43% Industrial Americas Merchant €9.7bn Africa €5.4bn €10.2bn 15% Healthcare Middle-East €27,608m €1.0bn 2023 Gr
Slide 8: Regular and Sustained performance
Regular and Sustained performance CAGR over 30 years(1) Revenue (in €m) EPS (2) (in €) +6.1% +7.2% Cash Flow (in €m) Dividend Per Share(2) (in €) +7.2% +8.7% (1) Calculated according to prevailing accounting rules over 30 years (2) Based on current year results and proposed for payment the following
Slide 9: Doubling the ADVANCE Margin Improvement Ambition
Doubling the ADVANCE Margin Improvement Ambition Confirmed objectives Acceleration of margin improvement and investments decisions ✔ Sales growth +5-6% CAGR(1) ■ +320 over 4 years(4) bps ✔ ROCE >10% by 2023 and forward(2) ■ ✔ CO2 emissions inflection around 2025 ■ ✔ €16bn investment decisions(3) ■ x2
Slide 10: Strategic and Operational Review
02 Strategic and Operational Review 10 THIS DOCUMENT IS PUBLIC Credit Investors Presentation - H1 2024
Slide 11: H1 2024: Strong Execution Delivering High Performance
H1 2024: Strong Execution Delivering High Performance Resilience Strong Performance Building the future Comparable Group OIR Recurring Investment Sales growth margin(2) ROCE(3) Backlog + % 3 (1) + 100 10.7% >€4bn bps In line with CO2 trajectory (1) Including +2% contribution from Argentina (2) Opera
Slide 12: H1 2024: Confirmation of Investment Potential
H1 2024: Confirmation of Investment Potential xx Baytown low-C Ultra pure Carrier D’Artagnan oxygen platform Gases solution CO2 hub $850m >$250m >€400m capex capex capex Growth, renewal, efficiency mid size projects >80% of H1 2024 decisions 12 THIS DOCUMENT IS PUBLIC Credit Investors Presentation - H
Slide 13: H1 2024: Structural Group Transformation to Boost Performance
H1 2024: Structural Group Transformation to Boost Performance Simplified Foster agility, accelerate decision making organization and increase efficiency Single worldwide Optimize industrial processes ensuring highest Industrial Direction standards of safety, quality & reliability Global IT, Procurement
Slide 14: Further Progress in Sustainability in H1 2024
Further Progress in Sustainability in H1 2024 Decarbonization achievements Reducing Air Liquide emissions Supporting customers’ decarbonization 1. Asset 2. Carbon Capture Management Usage / Storage -7 m tons/y of CO2 emissions(2) ⅓ ⅓ ▪ Modernization/ ▪ Decarbonization of the Baytown, US 3 electrifica
Slide 15: H1 2024 Key Takeaways
H1 2024 Key Takeaways Active deployment of ADVANCE strategic plan ▪ Resilient sales growth ▪ Delivering a significant +100bps OIR margin ▪ Successful development of major projects ▪ Ongoing structural efficiency projects 15 THIS DOCUMENT IS PUBLIC Credit Investors Presentation - H1 2024
Slide 16: Accelerating to Deliver Key Milestones
Accelerating to Deliver Key Milestones 2024 guidance Air Liquide is confident in its ability to further increase its operating margin and to deliver recurring net profit growth, at constant exchange rates.(1) Enhanced 2025 objectives (1) Operating margin excluding energy passthrough impact. Recurring
Slide 17: Strong Financial H1 2024 Performance
03 Strong Financial H1 2024 Performance 17 THIS DOCUMENT IS PUBLIC Credit Investors Presentation - H1 2024
Slide 18: Resilient Comparable Sales Growth
Resilient Comparable Sales Growth Sales in €m H1 23 H1 24 H1 24/23 H1 24/23 Q2 24/23 As published Comparable Comparable (1) Gas & Services 13,405 12,796 -4.5% +2.6% +3.4% Engineering & 180 197 +9.3% +9.9% +13.1% Construction Global Markets & 395 386 -2.3% -2.0% -8.5% Technologies (1) Group Total 13,
Slide 19: Delivering a Significant +100bps OIR Margin Improvement
Delivering a Significant +100bps OIR Margin Improvement H1 24/23 H1 24/23 In €m H1 23 H1 24 As published Comparable Revenue 13,980 13,379 -4.3% +2.6% Purchases (5,737) (4,975) -13.3% Personnel Expenses (2,546) (2,599) +2.1% Other net income and expenses (1,987) (1,977) -0.5% Operating profit before de
Slide 20: Focused on Execution
Focused on Execution IM Pricing Efficiencies Portfolio Management YTD +4.2% €233m +8.4% +13% YoY 9 acquisitions H1 23 +14.7% ■ 2 in USA ■ 4 in China ■ 1 in Canada ■ 1 in Italy +3.6% ■ 1 in Austria €400m 2021 2022 2023 2024 H1 Cumulative IM pricing effect base 100 Year 2020 3 divestitures ▪ High but mo
Slide 21: Continued Active Management of IM Pricing in Q2
Continued Active Management of IM Pricing in Q2 Sequential increase of IM pricing Continued accretive margin Total vs. +3.7% in Q1 contribution Industrial Merchant Value-added offers & service quality ina focus to customers as ent Airg Arg Americas +4.0% +3.5% Europe In Europe Pricing from Asia-Paci
Slide 22: Recurring Net Profit Growth
Recurring Net Profit Growth H1 24/23 H1 24/23 H1 24/23 In €m H1 23 H1 24 Excl. FX As published Excl. FX & Argentina Operating income recurring 2,481 2,601 +4.9% +6.2% +10.6% Other non-recurring operating income & expenses 33 (87) Operating income 2,514 2,514 Net financial costs and other net financial
Slide 23: Increasing ROCE to 10.7%
Increasing ROCE to 10.7% Recurring ROCE after tax(1) (2) 10.7% 11.0% 10.0% 9.0% 8.0% 7.0% Airgas acquisition (1) Recurring ROCE based on Recurring Net Profit (2) No impact from Argentina 23 THIS DOCUMENT IS PUBLIC Credit Investors Presentation - H1 2024
Slide 24: High Investment Backlog >€4bn, Record Level of Opportunities
High Investment Backlog >€4bn, Record Level of Opportunities 12-months investment Investment Decisions(1) Investment Backlog(1) Opportunities(1) € 4.0 € 1.6 € 4.1 bn bn bn H1 2024 H1 2024 H1 2024 Record level of opportunities: Diversity of projects: Stable at high level: ▪ Well balanced between: ▪ E
Slide 25: Start-up / Ramp-up Contribution to Sales
Start-up / Ramp-up Contribution to Sales Start-up date of major projects Sales Contribution(1) 2024 Q1 Q1 Q2 Q2 Q3 H2 Q4 H1 2024 €108m Asia, Asia Americas (1) Americas Americas, FY 2024 €230 AMEI Asia Asia Outlook - 250m Europe, Americas Americas, Asia FY 2025 Large Industries Electronics GM&T estim
Slide 26: Group Credit Profile
04 Group Credit Profile 26 THIS DOCUMENT IS PUBLIC Credit Investors Presentation - H1 2024
Slide 27: Net Debt Ratios Under Control
Net Debt Ratios Under Control As of Dec 31, 2023 (€m) 10,261 9,221 1.22x DEBT DEBT DEBT DEBT DEBT DEBT DEBT DEBT DEBT / EQUITY / EQUITY / EQUITY / EQUITY / EQUITY / EQUITY / EQUITY / EQUITY / EQUITY 57% 90% 80% 69% 64% 56% 48% 42% 37% 27 THIS DOCUMENT IS PUBLIC Credit Investors Presentation - H1 202
Slide 28: Strong Cash Flow Allocated to Capex and Dividends
Strong Cash Flow Allocated to Capex and Dividends As of June 30, 2024 (€m) 24% Cash Flow/ <10,550> Sales <1,922> <138> <150> <10,156> <9,221> +3,155 <1,634> +64 Gearing(3) 39.2% <310> Gearing Gearing(3) 36.8% 35.2% Net Debt Net Debt Cash Flow WCR + Other Net Industrial Net Financial Dividends(2) Lea
Slide 29: A well-Diversified Financing Structure
A well-Diversified Financing Structure As of June 30, 2024 Currencies / Net Debt Fixed / Variable rates Sources (as of Dec 31, 2023) (gross debt) Private placements Others 15% Commercial 7% paper Fixed rate 15% JPY 3% EUR 52% 81%(2) Bank debt 13% Others(1) 1% Bonds USD 30% Variable 64% Market debt ra
Slide 30: Debt Maturity Profile and Strong Available Liquidity
Debt Maturity Profile and Strong Available Liquidity As of June 30, 2024 (€m) Group gross debt Available liquidity maturity profile €1.6bn Cash and Cash Equivalent €5.3bn €3.7bn Confirmed Credit Lines 30 THIS DOCUMENT IS PUBLIC Credit Investors Presentation - H1 2024
Slide 31: Diversified Capital Market Debt well spread over time
Diversified Capital Market Debt well spread over time As of June 30, 2024 690 31 THIS DOCUMENT IS PUBLIC Credit Investors Presentation - H1 2024
Slide 32: "A" Long term Credit Rating Commitment
“A” Long term Credit Rating Commitment Credit metrics well in line with our “A” range commitment Long-term rating: A Short-term rating: A-1 Long-term rating: A2 Short-term rating: P-1 Long-term rating: A Short-term rating: S-1 Outlook: Stable on 28 July 2021 Outlook: Stable on 6 September 2022 Outlo
Slide 33: 2024 Sustainable Financing Framework
2024 Sustainable Financing Framework Context and Rationale of the update 2021 In line with its sustainability strategy and its new sustainable projects with a clear benefit to ‘ACT for a Sustainable future’ program decided in environment and society. In the aftermath, the 2021, Air Liquide establishe
Slide 34: 2024 Sustainable Financing Framework
2024 Sustainable Financing Framework Overview Air Liquide Sustainable Financing Framework is aligned with the Green Loan Principles (2023) and the Social Loan Principles (2021) overseen by the Loan Market Association (LMA) and with the Green Bond Principles (2021, GBP), the Social Bond Principles (2
Slide 35: 2024 Sustainable Financing Framework
2024 Sustainable Financing Framework See more details on eligibility criteria on appendix Green eligible categories Air Gases Hydrogen aladeieiddddddd Carbon capture as a service Air separation units to deliver Low carbon and renewable hydrogen will To face the climate emergency, industries are the
Slide 36: 2024 Sustainable Financing Framework
2024 Sustainable Financing Framework See more details on eligibility criteria on appendix Social eligible categories Home healthcare and proximity /community care services As a leader in home healthcare in Europe, Air Liquide provides care at home for people with chronic diseases. Air Liquide’s Home
Slide 37: Green Bond Issue Summary
Green Bond Issue Summary Air Liquide Finance (the “Issuer”), guaranteed by L’Air Liquide S.A. Categories allocation Carbon Capture Issuer / Guarantor (the “Parent Guarantor”) Form of Issue Green bond Senior, Unsecured Global Notes Air Gases Hydrogen Documentation EMTN programme HSBC & Natixis (ESG S
Slide 38: Appendix
05 Appendix 38 THIS DOCUMENT IS PUBLIC Credit Investors Presentation - H1 2024
Slide 39: H1 2024 - Beneficial Mix of Geographies and Activities
H1 2024 - Beneficial Mix of Geographies and Activities H1 2024 Gas & Services Revenue €12,796m 3% Global Markets & Technologies Engineering & Construction 1% 9% Electronics Europe Asia-Pacific 45% Industrial Americas Merchant €4.5bn Africa €2.6bn €5.2bn 16% Healthcare Middle-East €13,379m €0.6bn H1 20
Slide 40: Q2 Sales and H1 2024 OIR by Geographies
Q2 Sales and H1 2024 OIR by Geographies Americas Europe Asia 5% 2% 11% IM 33% 33% 34% 28% LI Q2 sales €2,625m €2,225m €1,302m 14% split HC 70% EL 32% 4% 34% +9.5% -1.0% -0.7% incl. +6.2% from Argentina(1) Q2 24/23 +2% +4% Comparable +4% Sales Growth Growth as Comparable Growth as Comparable Growth a
Slide 41: Q2 – Continued Strength in Americas, Soft Industrial Demand in Europe
Q2 – Continued Strength in Americas, Soft Industrial Demand in Europe Americas All activities contributing to growth ▪ 1 major ASU start-up in Q1, improved H2 base volumes ● LI ▪ Customer turnarounds in LATAM FY 23: +5.1% FY 24: +10% ▪ Increased +8.1% pricing Sales ● IM ▪ Resilient gas volumes Q2 20
Slide 42: Q2 – Soft Asia, Continued Growth in AMEI
Q2 – Soft Asia, Continued Growth in AMEI Asia Growth in EL, start-up in LI offsetting low activity ▪ Major start-up in China in March FY 24: ● LI ▪ Low activity, customer turnarounds in China FY 23: +1.8% Sales ▪ -1.1% pricing, impacted by Helium Q2 2024 ● IM ▪ PG (1) volumes strongly up in China €1
Slide 43: Q2 – Continued Growth in IM, Resilient LI
Q2 – Continued Growth in IM, Resilient LI Industrial Merchant Large Industries Higher growth from sequential increase of pricing Stable at low level Sales FY 24: Sales FY 23: +8.5% FY 23: -1.8% Q2 2024 Q2 2024 €3,024m €1,721m ● +4.7% pricing on top of +8.6% in Q2 23 ● Contribution from 2 Start-ups i
Slide 44: Q2 – Electronics Back to Positive, Continued Momentum in Healthcare
Q2 – Electronics Back to Positive, Continued Momentum in Healthcare Electronics Healthcare (1) E&I and AM largest growth contributors in Q2 Pursued balanced growth between HHC & Medical gases FY 24: Sales FY 24: Sales FY 23: +2.4% FY 23: +8.4% Q2 2024 Q2 2024 €623m €1,070m ● Solid contribution from
Slide 45: Summary of Argentina Impacts
Summary of Argentina Impacts H1 24/23 H1 24/23 Growth in % Energy impact FX impact As published Comparable Argentina Excl. Argentina Excl. Argentina Excl. Group Group Group Group impact Argentina impact Argentina impact Argentina Revenue -4.3% -3.5% +0.4% -3.9% -3.4% -2.3% -1.1% +2.6% +2.1% +0.5% Op
Slide 46: Consolidated P&L
Consolidated P&L In €m H1 23 H1 24 Revenue 13,980 13,379 Operating costs (10,270) (9,551) Operating profit before depreciation 3,710 3,828 Depreciation and amortization (1,229) (1,227) Operating income recurring 2,481 2,601 Other non-recurring operating income & expenses 33 (87) Operating income 2,51
Slide 47: Consolidated Balance Sheet Simplified
Consolidated Balance Sheet Simplified In €m ASSETS 31/12/2023 30/06/2024 EQUITY AND LIABILITIES 31/12/2023 30/06/2024 Goodwill 14,194 14,447 Shareholders' equity 24,321 24,697 Fixed assets 25,284 26,179 Minority interests 722 716 Other non-current assets * 1,137 1,201 Total equity 25,043 25,413 Total
Slide 48: Cash Flow Statement
Cash Flow Statement in €m H1 23 H1 24 Funds provided by operations 3,211 3,155 Changes in Working Capital (299) (282) Other cash items 48 (28) Net cash from operating activities 2,960 2,845 Purchases of PPE* and intangible assets (1,714) (1,656) Purchases of financial assets (32) (43) Proceeds from s
Slide 49: Impact of Currency and Energy on G&S Revenue
Impact of Currency and Energy on G&S Revenue in €m Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 €/ARS (40) (62) (97) (182) (153) (161) €/Rmb (18) (51) (83) (42) (36) (12) €/USD +102 (50) (177) (121) (27) +26 €/JP¥ (20) (17) (26) (21) (27) (23) €/TRY (5) (13) (9) (7) (12) (1) €/ZAR (14) (31) (29) (14) (10) +1
Slide 50: Supporting ExxonMobil Low-Carbon H2 Project
Supporting ExxonMobil Low-Carbon H2 Project… 1/4 Low-carbon NH3 $850m low-carbon O2 platform production for export CO2 O2 sequestration LMA LMA 9,000 t/d CO2 H2 H2 capture N2 ATR ATR Low-C electricity LMA LMA 6,500 t/d Low-C H2 Low-C H2 900 kt/y Argon, Kr, Xe Ethylene Low-C NH3 plant. Refinery. crack
Slide 51: A Game Changing Project
A Game Changing Project 2/4 ▪ Supporting ExxonMobil first low-carbon H2 project: -7m tons/year of CO2 emissions ▪ +50% of Air Liquide O2 capacity in the USGC(1) ▪ - 2/3 of CO2 footprint per ton of O2 ▪ #1 source of Argon ▪ Strategic source of Kr, Xe ▪ Access for customers to the largest source of low
Slide 52: Air Liquide's Key Success Factors
Air Liquide’s Key Success Factors 3/4 Innovative technology #1 Industrial Merchant ■ -25% energy ■ Argon & Rare gases ■ Modular design distribution capabilities Extensive H2 pipelines Customer focus ■ >500 kms ■ Long term ■ Oversized by design ■ Partnership 52 THIS DOCUMENT IS PUBLIC Credit Investor
Slide 53: Partnering with ExxonMobil to Support Decarbonization of Industry
Partnering with ExxonMobil to Support Decarbonization of Industry 4/4 Potentially largest Air Liquide’s investment Leading the way on U.S. Gulf Coast decarbonization Illustration of Air Liquide’s leadership in Energy Transition 53 THIS DOCUMENT IS PUBLIC Credit H1Investors 2024 Results Presentation
Slide 54: Green Projects Eligibility Criteria
Green Projects Eligibility Criteria Eligible Green Projects Eligibility Criteria Production of air gases for the ● Manufacture of O2 and N2 through energy efficient Air Separation Units (ASUs) contributing to the value chain decarbonization of industries involved in the of industrial processes and/or
Slide 55: Social Projects Eligibility Criteria
Social Projects Eligibility Criteria 1 Eligible Social Projects Eligibility Criteria Target Population Home Healthcare and Development of home healthcare Each and every person in need of medical Proximity / services and of proximity / care, including the most vulnerable. It Community Care community
Slide 56: 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 replaceme
Slide 57: For further information, please contact:
For further information, please contact: Investor Relations Communication IRTeam@airliquide.com Media@airliquide.com Group Financing and Rating www.airliquide.com Guillaume Serey guillaume.serey@airliquide.com Follow us Linkedin Thomas Lemée thomas.lemee@airliquide.com Corporate Headquarters: Chloé
Slide 58: 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