Air Liquide Sa · EURONEXT:AI
Air Liquide Sa — Debt Investor Presentation (May 2021)
56 slides from Air Liquide Sa's debt investor presentation, May 17, 2021
Slide 1: Potential Bond Issue through our Sustainable Financing Framework
Potential Bond Issue through our Sustainable Financing Framework Global Investor Call • May 17th 2021 1
Slide 2: Disclaimer
Disclaimer The information contained herein has been prepared by L’Air Liquide SA (“Air Liquide”) solely for use at presentations held in connection with the proposed offering of notes of Air Liquide Finance (the “Transaction”). The information herein is only a summary and does not purport to be com
Slide 3: Speakers
Speakers v Fabienne Ashutosh MISRA Jacques MOLGO LECORVAISIER Group Vice President Sustainable Deputy Chief Financial Officer Development Chief Financial Officer Executive Vice President, in charge of Finance, Operations Control and General Secretariat Global Investor Call • May 17th 2021 3
Slide 4: Agenda
Agenda 1 Air Liquide at a glance 2 Sustainable business strategy 3 Sustainable Financing Framework 4 Group Credit Profile 5 Potential Bond Issue summary 6 Case Studies 7 Appendices Global Investor Call • May 17th 2021 4
Slide 5: Air Liquide at a glance
Air Liquide at a glance Global Investor Call • May 17th 2021 5
Slide 6: A world leader in gases, technologies and services
A WORLD LEADER 78 64,400 >3.8 m ~€20,5 bn IN GASES, Countries Employees Customers of Sales in 2020 TECHNOLOGIES and Patients AND SERVICES FOR INDUSTRY & HEALTH >€2.4 €5,2 ~€60 bn bn bn Net Profit Cash Flow Market in 2020 in 2020* Capitalization** * cash flow from operating activities before changes of
Slide 7: A strong business model
A STRONG BUSINESS MODEL Mutualize 1 assets Liquefaction 2 piggyback Distributors, 3 bolt-on acquisitions (a) SMR: Hydrogen and carbon monoxide production unit (Steam Methane Reformer) (b) ASU: Air gases production unit (Air Separation Unit) (c) On-site: Small local production unit (d) ESG: Electroni
Slide 8: FY 2020 Gas & Services revenue breakdown by region
FY 2020 GAS & SERVICES REVENUE BREAKDOWN BY REGION Europe Americas Europe 35% 40% €6.8bn Americas Asia-Pacific €7.8bn €4.5bn €19,656m Gas & Services v Revenue 5% 2% 11% 31% 29% 33% 16% 68% 39% Africa Middle-East Asia-Pacific 28% 4% 34% 3% 22% Industrial Merchant Large Industries Healthcare Electronics
Slide 9: Outstanding 2020 performance facing Covid-19 situation
OUTSTANDING 2020 PERFORMANCE FACING COVID-19 SITUATION -5% Sales resisting -6.5% -1.3% Global IP plunged(1) FY 2020 Comparable +80 Improved OIR margin(2) bps v High net profit growth +8.6% Investment decisions >€3bn (1) Industrial Production, Source: Coe-Rexecode (2) Change in Operating Income Recurr
Slide 10: Pursued recovery in Q1
PURSUED RECOVERY IN Q1 Q1 21/20 Q1 21/20 Sales in €m Q1 20 Q1 21 As published Comparable Gas & Services 5,191 5,103 -1.7% +2.8% Engineering & Construction 52 76 +44.5% +48.5% Global Markets & Technologies 127 155 +22.0% +25.7% Group Total 5,370 5,334 -0.7% +3.8% Impacts on Q1 Group Sales: -5.1% FX v
Slide 11: Most of the activities are back to growth
MOST OF THE ACTIVITIES ARE BACK TO GROWTH Comparable sales value (€m) Q1 19 comparable sales value (€m) v Group comparable sales growth (%) Group comparable sales value (€m) Global Investor Call • May 17th 2021 11
Slide 12: Acceleration of pre-Covid trends benefitting our activities
ACCELERATION OF PRE-COVID TRENDS BENEFITTING OUR ACTIVITIES ENERGY TRANSITION LI ▪ Low carbon hydrogen offers ACCELERATION GMT ▪ Decarbonization projects HEALTHCARE ▪ Digital care development NEW DYNAMISM HC ▪ Acceleration of value-based offers INCREASING STAKE EL IM ▪ Digital as a value lever for a
Slide 13: Positioning for future growth: investment opportunities
POSITIONING FOR FUTURE GROWTH Investment Opportunities(1) Shift towards Shift towards Energy Transition and Electronics Europe and Asia 14% 17% 22% 13% v 30% 39% 14% 39% €2.9bn €3.1bn €2.9bn €3.1bn 25% 61% 21% 44% 27% 34% End of 2019 End of 2020 End of 2019 End of 2020 (1) see definition in appendix
Slide 14: Sustainable business strategy
Sustainable business strategy Global Investor Call • May 17th 2021 14
Slide 15: Time to act for a sustainable future
TIME TO ACT FOR A SUSTAINABLE FUTURE Performing in the present and preparing A GROWTH HISTORY the future thanks to a deeply resilient PERFORMANCE & 1 and diversified business model SUSTAINABILITY OUR AMBITION IS TO INVENTING 2 MAKE A MEANINGFUL 3 AND SHAPING DIFFERENCE THE FUTURE All stakeholders sha
Slide 16: Sustainable development commitments structured around main priorities
SUSTAINABLE DEVELOPMENT COMMITMENTS STRUCTURED AROUND 3 MAIN PRIORITIES 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 Global Investor Call • May 17th 2021 16
Slide 17: Abatement of CO2 emissions
ABATEMENT OF CO2 EMISSIONS SETTING A TRAJECTORY TO REACH CARBON NEUTRALITY 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 val
Slide 18: Hydrogen as a cornerstone of the energy transition
HYDROGEN AS A CORNERSTONE OF THE ENERGY TRANSITION… Becancour Electrolyzer … AND A TREMENDOUS GROWTH POTENTIAL LH2 storage Power Our ENGAGEMENT generation, buffering 2050 Decarbonize our production assets Transportation to develop a competitive low-carbon H2 offering at large scale. 18 % Industry en
Slide 19: Hydrogen business to more than triple before 2035
HYDROGEN BUSINESS TO MORE THAN TRIPLE BEFORE 2035 Before 2035 Today At Capturing demand: ▪ Low Carbon + Renewable H2 offer Least ▪ New H2 industrial applications 3x ▪ Carbon Capture as a service Sales ~€ 2bn >€ 6bn ▪ H2 mobility Capturing additional value by decreasing customers CO2 footprint Invest
Slide 20: But opportunities go far beyond hydrogen
Takeover & decarbonize Low-Carbon/Renewable H2 for refining Low-Carbon/Renewable O2 and H2 for steel and chemicals CO2 capture as a service BUT OPPORTUNITIES GO FAR BEYOND On-site generation for IM customers HYDROGEN enScribe offer for Electronics customers AliveTM: ASU + Energy Storage Biogas upgrad
Slide 21: Care for patients
CARE … FOR PATIENTS Our ENGAGEMENT Improve the quality of life of chronic In mature economies patients at home through Value-based care In low & middle Facilitate access to oxygen for rural income countries communities Global Investor Call • May 17th 2021 21
Slide 22: Leverage healthcare societal role in low and middle income countries
LEVERAGE HEALTHCARE SOCIETAL ROLE IN LOW AND MIDDLE INCOME COUNTRIES Facilitating access to O2 for rural communities Up to 800,000 deaths of child pneumonia every year and lack of access to oxygen in rural areas By equipping with O2 primary care facilities in villages Air Liquide Access Oxygen Progr
Slide 23: Trust as the base to engage with our employees
TRUST … AS THE BASE TO ENGAGE WITH OUR EMPLOYEES Lost-Time Frequency Rate of AL Employees Our ENGAGEMENT 1.9 0.9 Safety as a prerequisite for action 2010 2015 2020 Provide a common basis of care coverage for all employees Commitment: 100% of employees with a common basis of care coverage package by
Slide 24: Trust as a base to build a best in class governance
TRUST … AS A BASE TO BUILD A BEST IN CLASS GOVERNANCE Board A diversified and independent Board & Shareholders Shareholders: loyalty, close relationship Ethics in business Promote a responsible dialogue with our business ▪ With customers and patients stakeholders ▪ With suppliers Contribute to Develo
Slide 25: Sustainable Financing Framework
Sustainable Financing Framework Global Investor Call • May 17th 2021 25
Slide 26: Rationale for a Sustainable Financing Framework
RATIONALE FOR A SUSTAINABLE FINANCING FRAMEWORK In line with its sustainability strategy and its new ‘ACT for a Sustainable future’ program published in 2021, Air Liquide has established a Align funding strategy with Contribute Sustainable Financing mission, sustainability to the development of Fram
Slide 27: Overview of Sustainable Financing Framework
OVERVIEW OF SUSTAINABLE FINANCING FRAMEWORK Air Liquide Sustainable Financing Framework is aligned with the Green Bond Principles (2018), Green Loan Principles (2020), Social Bond Principles (2020), Social Loan Principles (2021) and Sustainability Bond Guidelines (2018) Process for evaluation Manage
Slide 28: Air Liquide green eligible projects
1- AIR LIQUIDE GREEN ELIGIBLE PROJECTS Air Liquide Green Eligible Projects are primarily capital expenditures but may also include maintenance costs, equity shares and investment in dedicated funds as well as R&D and innovation expenses for projects related to the Abatement of CO 2 emissions pillar
Slide 29: Green projects eligibility criteria
1- GREEN PROJECTS ELIGIBILITY CRITERIA Eligible Green Projects Eligibility Criteria Anaerobic Digestion of Bio-waste ▪ Biogas Anaerobic Digesters aligned with the EU Taxonomy criteria Biogas Landfill Gas Capture and UtiliSation ▪ Capture of landfill gas for the generation of electricity or heat 1 Ca
Slide 30: Air Liquide social eligible projects
1- AIR LIQUIDE SOCIAL ELIGIBLE PROJECTS Home Air Liquide eligible Social Projects aims Healthcare at providing socioeconomic advancement and empowerment, access to essential services and job creation along the Care for patients Access to Supporting Air Liquide pillar of the ACT Strategy essential En
Slide 31: Eligible social projects
1- ELIGIBLE SOCIAL PROJECTS Eligible Social Projects Eligibility Criteria Target Population ▪ Development of home healthcare Home Healthcare and Proximity / ▪ Person in need of medical care, services and of proximity / community Community Care Services including the most vulnerable care services ▪ S
Slide 32: Project selection and management of proceeds
2 - PROJECT SELECTION AND MANAGEMENT OF PROCEEDS Process for Project Selection and Evaluation Management of proceeds ▪ Air Liquide Sustainable Financing working group will evaluate ▪ An amount equivalent to each financing net proceeds will be and select the Eligible Projects. It will be chaired by Ai
Slide 33: Reporting
3 - REPORTING Allocation Report Impact Report Air Liquide will provide an annual update on the following: An Impact Report will also be provided to support the allocation ▪ The list of outstanding Green, Social and Sustainability report above. This report will include both impact and output financing
Slide 34: Impact reporting output indicators
3 - IMPACT REPORTING OUTPUT INDICATORS Eligible Projects Description of eligible projects Possible Output Indicators Anaerobic Digestion of Bio-waste Annual production of biogas (MWh) Biogas Landfill Gas Capture and Utilization Annual amount of landfill gas produced (m3) Capture of CO2 Annual amount
Slide 35: Group Credit Profile
Group Credit Profile Global Investor Call • May 17th 2021 35
Slide 36: Net debt ratios under control
NET DEBT RATIOS UNDER CONTROL AS OF DEC 31, 2020 (in M€) 12,373 10,609 1.79x Global Investor Call • May 17th 2021 36
Slide 37: Record cash flow, significant deleveraging
RECORD CASH FLOW, SIGNIFICANT DELEVERAGING (in M€) Cash Flow Gearing 24.1% of sales 64.0% +190bps Gearing <12,373> +4,932 55.8% <282> +204 <1,380> <10,609> <1,971> +273 (1) Including acquisitions, transactions with minority shareholders, net of divestitures (2) Including share purchases and capital
Slide 38: A well-diversified financing structure
A WELL-DIVERSIFIED FINANCING STRUCTURE AS OF DECEMBER 31, 2020 Sources - Gross debt Currencies - Net debt Other 11% JPY 2% EUR 47% USD 40% Others: put options granted to minority shareholders. Global Investor Call • May 17th 2021 38
Slide 39: Diversified capital market debt well spread over time
DIVERSIFIED CAPITAL MARKET DEBT WELL SPREAD OVER TIME MATURITY SCHEDULE AS OF DEC 31, 2020 (in M€) 2046 2038 Global Investor Call • May 17th 2021 39
Slide 40: "A" long term credit rating commitment
“A” LONG TERM CREDIT RATING COMMITMENT ■ Long-term rating: A- ■ Long-term rating: A3 ■ Short-term rating: A-2 ■ Short-term rating: P-2 ■ Outlook: Positive on 24 July 2020 ■ Outlook: Positive on 4 May 2021 ■ Rationale: ■ Rationale: ▪ “The resilient business model will limit the downside of the ▪ “Air
Slide 41: Potential Bond Issue Summary
Potential Bond issue Summary Global Investor Call • May 17th 2021 41
Slide 42: Potential bond issue summary
POTENTIAL BOND ISSUE SUMMARY Issuer / Guarantor Air Liquide Finance (the “Issuer”), guaranteed by L’Air Liquide S.A. (the “Parent Guarantor”) Form of Issue Green bond Senior, Unsecured Global Notes Documentation EMTN programme Active Bookrunners Crédit Agricole, BNP Paribas, HSBC, Société Générale,
Slide 43: A well balanced portfolio expected for our inaugural green bond
A WELL BALANCED PORTFOLIO EXPECTED FOR OUR INAUGURAL GREEN BOND Categories allocation Financing and Refinancing Breakdown Green Innovation - R&D Energy efficiencies Refinancing Biogas Carbon Capture Green Buildings Hydrogen Air Gases Financing Global Investor Call • May 17th 2021 43
Slide 44: Case studies
Case studies Global Investor Call • May 17th 2021 44
Slide 45: Fontanella
FONTANELLA FROM TONS OF MANURE TO FERTILIZER AND TRUCK FUEL ▪ An Air Liquide investment in the overall biomethane value chain, in partnership with DIS, long term AL partner ▪ 23 GWh/yr biomethane capacity equivalent to the yearly consumption of 35 HEAVY-DUTY VEHICLES ▪ Participates to make Air Liqui
Slide 46: Leading the hydrogen ecosystem development
LEADING THE HYDROGEN ECOSYSTEM DEVELOPMENT Electrolysis CCU + Low-Carbon H2 CCS + Low-Carbon H2 Denmark France (In Devt.) Antwerp / Benelux KEY FIGURES 1.2 MW 1 CO2 Capture “Cryocap” CO2 Capture Electrolysis Bécancour, QC 1x 20MW 1.2 Mt of H2/year Large scale 1,850 km H2 electrolysis (In Devt.) H2V
Slide 47: Focus on a basin: the Belgium-Netherlands ecosystem
FOCUS ON A BASIN THE BELGIUM-NETHERLANDS ECOSYSTEM A favourable ecosystem ts gh H-vision ▪ Strong renewable energy potential Li n ▪ Major industrial & transportation hub er Porthos th ▪ Strong national & EU support for emission reduction or Electrolyzer N Large Air Liquide footprint HyTrucks ▪ 7 H2
Slide 48: H2 mobility: HyTrucks
H2 MOBILITY HyTRUCKS: HYDROGEN TO DECARBONISE A MAJOR LOGISTICS HUB 2025 picture Hydrogen for heavy-duty freight transport ▪ Large-scale deployment of hydrogen heavy-duty Port of Rotterdam trucks for drayage and regional operations 500 trucks, 10 HRS, 20tpd ▪ Deployment of refueling infrastructure ▪
Slide 49: Build low carbon hydrogen capacities: 20 MW Becancour electrolyzer
BUILD LOW CARBON HYDROGEN CAPACITIES THE 20 MW BECANCOUR ELECTROLYZER EXAMPLE Largest PEM electrolyzer running on hydropower (started in Q4 2020) Integration in existing AL basin, with H2 liquefier For industrial use and mobility > 100 MW 20 MW 1.2 MW 2018 2020 2022-23 Global Investor Call • May 17th
Slide 50: Focus: CO2 capture as a green activity
FOCUS: CO2 CAPTURE AS A GREEN ACTIVITY CO2 Capture & Storage is recognized as unavoidable in 1.5° Scenarios Cumulative CO2 stored in various 1.5° pathways ▪ “Hard-to-abate” heavy industry sectors ▪ Decarbonization of SMRs in parallel with electrolysis scale-up ▪ Key enabling technologies for future
Slide 51: New campus technologies in Grenoble
NEW CAMPUS TECHNOLOGIES IN GRENOBLE DEDICATED TO DEEP TECH AND ENERGY TRANSITION Together with the five Innovation Campuses in the Air Liquide group, this site is responsible for designing and manufacturing innovative high-tech solutions for the rising deep tech and energy transition markets. ▪ Total
Slide 52: Appendices
Appendices Global Investor Call • May 17th 2021 52
Slide 53: Regular and sustained performance
REGULAR AND SUSTAINED PERFORMANCE CAGR OVER 30 YEARS(1) Revenue (in €m) EPS(2) (in €m) +5.3% +6.7% Cashflow (in €m) Dividend(2) (in €m) +6.5% +8.4% (1) Calculated according to prevailing accounting rules over 30 years. (2) Adjusted for the 2-for-1 share split in 2007, for free share attributions and
Slide 54: Innovation at the heart of a new low-carbon world
INNOVATION AT THE HEART OF A NEW LOW-CARBON WORLD A Global ecosystem for Innovation 33% close to markets and customers Annual innovation Paris Frankfurt Yantai Seoul Tokyo expenses(1) for Energy Transition Recent major technology partnerships Shanghai Newark, DE Dubai 3 E&C manufacturing centers 6 I
Slide 55: Energy transition already supporting our growth
ENERGY TRANSITION ALREADY SUPPORTING OUR GROWTH Energy Transition Related Sales From Core Business 650m O2 for Blast O2 to Glass enScribe ~€ Furnace Float ~€440m and New Markets 2018 2021 Biomethane & estimate New Technologies H2 Mobility of energy transition projects in 2019 & 2020 +13% Sales CAGR
Slide 56: Investment opportunities: and accelerating
AND ACCELERATING Investment Opportunities 12-month portfolio Selectivity in the projects 2019 2020 Same expected returns Share of 44% Energy Transition 29% Leverage existing basins projects Apply Large Industries - Industrial Merchant 12-month combined business Portfolio ~€ 2.9bn ~€ 3.1bn model Glob