Air Liquide Sa · EURONEXT:AI
Air Liquide Sa — L'Air Liquide Ord — H1 2020 Earnings Presentation
42 slides from Air Liquide Sa's earnings presentation, Jul 30, 2020
Slide 1: H1 2020 Proven Resilience and Margin Improvement
H1 2020 Proven Resilience and Margin Improvement Benoît Potier, Chairman & Chief Executive Officer Fabienne Lecorvaisier, Executive VP Paris, July 30, 2020 July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 2: Proven Resilience and Margin Improvement
Proven Resilience and Margin Improvement Benoît Potier Chairman & Chief Executive Officer 2 July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 3: Resilient H1 Performance During Unprecedented Crisis
Resilient H1 Performance During Unprecedented Crisis • Proven resilience across businesses • Delivery of significant margin improvement • Healthcare teams continuing to fight the pandemic • High and increasing number of investment opportunities • Full Year 2020 guidance confirmed 3 July 30, 2020 H1 202
Slide 4: H1 2020 Key Figures in a Challenging Environment
H1 2020 Key Figures in a Challenging Environment Limited sales decrease(1) -3.2% Group +50bps margin(2) Operating Income Recurring Stable G&S +60bps margin(2) Preserved Net Profit +1.8% Strong Cash Flow on Sales(3) 23.1% +170bps CF/Sales(3) (1) On a comparable basis (excluding currency, energy and si
Slide 5: Contrasted Sales Evolution
Contrasted Sales Evolution C-19 G&S comparable sales growth in H1 2020 Progressive recovery in China Contrasted Europe Europe recovered situation in the US +0.2% Asia-Pacific Americas -2.1% -5.1% Africa Part of Asia Middle-East under confinement South America in -7.3% midst of crisis On-going lockdown
Slide 6: Significant Margin Improvement Despite Crisis
Significant Margin Improvement Despite Crisis ● Pursued Efficiencies program in place +50bps ● Agility to quickly deploy the Cost Containment program Operating Margin(1) ● Sustained IM pricing (1) Operating Income Recurring on Sales, excluding energy impact 6 July 30, 2020 H1 2020 Results A world leade
Slide 7: Very Active Business Development
Very Active Business Development NLMK in Russia Higher level of LI Investment LI Opportunities(1) IM LI Steel Dynamics 12-month portfolio in the U.S. LI Major EL IM EL investment LI in Taiwan €2.9bn 25 new IM long-term contracts for On-Site (1) See definitions in appendix gas supply worldwide 7 July
Slide 8: Pandemic Not Over But New Era Already Starting
Pandemic Not Over But New Era Already Starting Pre-Covid-19 trends emerge stronger Healthcare Energy Transition Digital Transformation ● Global pandemic / Local ● H2 momentum ● New ways of working accelerating response ● Decarbonizing processes ● Electronics growing fast ● Extensive use of AI & Plat
Slide 9: H1 2020 Performance
H1 2020 Performance Fabienne Lecorvaisier Executive Vice President & Chief Financial Officer 9 July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 10: Resilient Business Models - Peak of Crisis in Q2
Resilient Business Models - Peak of Crisis in Q2 H1 20/19 H1 20/19 Q2 20/19 Sales in €m H1 19 H1 20 As published Comparable Comparable Gas & Services 10,536 9,920 -5.8% -2.7% -6.5% Engineering & 176 104 -41.0% -41.3% -38.4% Construction Global Markets & 240 249 +3.5% +3.2% -5.7% Technologies Group T
Slide 11: Q2 – Americas Most Impacted
Q2 – Americas Most Impacted G&S comparable sales growth C-19 ● LI ﹘ Low O2 volumes bottoming-up Americas – 1st signs of US recovery in May, flat in June ﹘ Start-up in Argentina H1 20: -5% ● IM ﹘ Strong volume decline esp. Hardgoods Sales ﹘ Positive rentals; strong +4.1% pricing Q2 2020 ﹘ Slight recov
Slide 12: Q2 – Resilient Asia, Solid LI in AME
Q2 – Resilient Asia, Solid LI in AME G&S comparable sales growth Asia – China back to growth, Robust EL ● LI ﹘ China back to growth ﹘ Low volumes in Japan & SEA Sales ● IM ﹘ China +6% Q2 2020 ﹘ Part of Asia under C-19 H1 20: -2% ﹘ Resilient Techno & Research market €1,097m ﹘ Positive pricing, fading
Slide 13: Q2 – Solid EL & Resisting LI, Price Mitigating Impact on IM
Q2 – Solid EL & Resisting LI, Price Mitigating Impact on IM G&S comparable sales growth Industrial Merchant Large Industries Electronics Sales - Q2 2020 Sales - Q2 2020 Sales - Q2 2020 €2,107m €1,136m €509m H1 20: -8% H1 20: -2% H1 20: +2% C-19 C-19 ● Positive China, low volumes in all other geograp
Slide 14: Q2 – Healthcare Teams Fully Mobilized to Fight Pandemic
Q2 – Healthcare Teams Fully Mobilized to Fight Pandemic G&S comparable sales growth Sales - Q2 2020 C-19 ● Strong Medical O2 volumes to fight the €977m H1 20: +9% virus partially offset by postponed elective procedures ● Continued high demand for Hygiene products and Ventilators manufacturing ● HHC:
Slide 15: Delivering a Strong Performance in H1 2020
Delivering a Strong Performance in H1 2020 Group Sales Performance as published OIR/sales(1) Net Profit CF/sales(2) as published -6.2% +50bps +1.8% +170bps (1) Excluding energy impact (2) Cash Flow from Operations before changes in Working Capital Requirement on Sales, compared to restated H1 2019 15
Slide 16: Significant Improvement of OIR margin
Significant Improvement of OIR margin H1 20/19 In €m H1 19 H1 20 H1 20/19 Comparable Revenue 10,952 10,273 -6.2% -3.2% Purchases (4,230) (3,631) -14.2% Personnel Expenses (2,184) (2,183) -0.0% Other net income and expenses (1,660) (1,562) -5.9% Operating profit before depreciation 2,878 2,897 +0.7% De
Slide 17: Efficiencies and Cost Containment to Improve Margins
Efficiencies and Cost Containment to Improve Margins Structured Crisis Operating existing plan Management Margin(1) Pricing Group +50bps Cost containment Efficiencies + plan quick response to the context ➤ G&S +60bps Portfolio management (1) Operating Income Recurring on Sales, excluding energy impact 1
Slide 18: Continued Focus on Performance
Continued Focus on Performance IM Efficiencies Portfolio Price/Mix management +2.9% €200m Divestiture of: Schülke, on-going €400m CRYOPDP, about to H1 2020 close ● In line with objective Entities in Czech 2016 2017 2018 2019 2020 despite C-19 Republic and Slovakia, ● Strong pricing in the closed Ameri
Slide 19: Preserved Net Profit at +1.8%
Preserved Net Profit at +1.8% In €m H1 19 H1 20 H1 20/19 Revenue 10,952 10,273 -6.2% Operating income recurring 1,814 1,813 -0.0% Other non-recurring operating income & expenses (86) (92) Operating income 1,728 1,721 Net financial costs and other net financial expenses (239) (217) Income taxes (385) (3
Slide 20: Strong Cash Flow
Strong Cash Flow Gearing(3) Gearing(3) Cash Flow 70.7% 23% of sales 64.5% +170bps(4) <13,699> <13,176> <1,374> <142> <131> <12,373> +2,371 <1,309> <218> (1) Including acquisitions, transactions with minority shareholders, net of divestitures (2) Including share purchases and capital increases (3) Ju
Slide 21: Capturing Growth Opportunities
Capturing Growth Opportunities Investment Investment Investment Opportunities(1) Decisions(1) 12-month portfolio Backlog(1) €2.9bn • Well balanced by geography • High level of industrial decisions • Increased Backlog • Increased share of Electronics focused on growth: • €1.0bn of yearly sales and Cl
Slide 22: Confirmed FY 2020 Guidance for Start-Ups Contribution
Confirmed FY 2020 Guidance for Start-Ups Contribution Start-up/Ramp-up Confirmed start-up date of Sales Growth Contribution major projects 2020 2019 H1 2020 €80m 2021 Q1Q1 Q2 Q2 Q3 Q3 Q4 Q4 LI Asia LI South EL Asia LI US America Confirmed LI Europe ~€300m €150m EL Asia FY 2020 - LI Canada Guidance €180
Slide 23: 2020 Guidance Confirmed
2020 Guidance Confirmed “In a context of limited local Updated assumptions: lockdowns and progressive recovery during the 2nd half of 2020, Strong peak impact in Q2 Air Liquide is confident in its ability Limited local lockdowns during H2 2020 to further increase its operating Progressive recovery mar
Slide 24: Crisis Management Measures: #WeFightTogether
Crisis Management Measures: #WeFightTogether Keep our employees safe Stay close to our patients & customers No compromise on safety 24 July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 25: Appendix
Appendix 25 July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 26: H1 2020 G&S Revenue Breakdown by Region
H1 2020 G&S Revenue Breakdown by Region Europe Europe Americas €3.4bn Asia-Pacific 35% Americas 40% €2.2bn €4.0bn €9,920m Gas & Services Revenue 5% 2% 11% 30% 29% Africa 41% 33% Middle-East 15% 69% 3% Asia-Pacific 4% 22% 27% 34% Industrial Merchant Large Industries Healthcare Electronics 26 July 30, 2
Slide 27: Covid-19 Impact on Base Business, Contribution from SU/RU
Covid-19 Impact on Base Business, Contribution from SU/RU Breakdown of G&S Sales Growth Includes Fujian in Q2 2020 Base business: -7.1% 2018 2019 2020 27 July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 28: Americas
Americas C-19 Q2 2020 G&S comparable sales growth INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE ELECTRONICS • Low volumes, esp. Hardgoods • Low O2 volumes to Steel • Low levels of elective • Strong Advanced • Mitigated by positive rentals and Chemicals procedures in North Materials and strong pric
Slide 29: Europe
Europe C-19 Q2 2020 G&S comparable sales growth INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE • Low gas volumes • Low air gases to Steel and • Strong Hygiene & Equipment • Cylinders hardly hit but also Chemicals • Medical O2 off peak levels of Q1 highest rebound since May • Weaker H2 demand from •
Slide 30: Asia-Pacific
Asia-Pacific Q2 2020 G&S comparable sales growth INDUSTRIAL MERCHANT LARGE INDUSTRIES ELECTRONICS • China +6%, strong cylinders & • Growing China driven by • >+10% growth excl. E&I on-sites local demand • Strong Advanced Materials in • Decline of volumes in part of • Low O2 for Steel in Japan Korea,
Slide 31: Industrial Merchant Pricing
Industrial Merchant Pricing Americas Europe Asia-Pacific Africa & Middle-East Total Industrial Merchant Q2 2020 % H1 2020 % 31 July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 32: Q2 2020 E&C and GM&T Activities
Q2 2020 E&C and GM&T Activities C-19 Engineering Global Markets & Construction & Technologies ● Sales to third parties(1) ● Sales(1) €52m -38% €122m -6% Total Sales(2) -22% ● Order Intake ● Order Intake €228m -2% €173m +29% (1) Comparable growth (2) Including internal sales 32 July 30, 2020 H1 2020
Slide 33: Backlog Slightly Increasing at €2.9bn
Backlog Slightly Increasing at €2.9bn Decisions Start-ups € 1.0bn Yearly Sales Backlog after full Ramp-ups See definitions in appendix 33 July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 34: Consolidated P&L
Consolidated P&L In €m H1 19 H1 20 Revenue 10,952 10,273 Operating costs (8,074) (7,376) Operating profit before depreciation 2,878 2,897 Depreciation and amortization (1,064) (1,084) Operating income recurring 1,814 1,813 Other non-recurring operating income & expenses (86) (92) Operating income 1,
Slide 35: Consolidated Balance Sheet Simplified
Consolidated Balance Sheet Simplified ASSETS 31/12/2019 30/6/2020 EQUITY AND LIABILITIES 31/12/2019 30/6/2020 Goodwill 13,943 13,915 Shareholders' equity 18,870 18,302 Fixed assets 22,673 22,432 Minority interests 454 454 Other non-current assets * 1,083 1,112 Total equity 19,324 18,756 Total non-cur
Slide 36: Cash Flow Statement
Cash Flow Statement In €m H1 19 Restated H1 20 Funds provided by operations 2,348 2,371 Changes in Working Capital (331) (157) Other cash items (59) (61) Net cash from operating activities 1,958 2,153 Purchases of PPE* and intangible assets (1,201) (1,320) Purchases of financial assets and the impac
Slide 37: Financing Structure as of June 30, 2020
Financing Structure as of June 30, 2020 > 5 years Between 1 and 5 years < 1 year (1) Others: put options granted to minority shareholders. 37 July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health
Slide 38: Impact of Currency and Energy on G&S Revenue
Impact of Currency and Energy on G&S Revenue in €m Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 €/USD +138 +107 +81 +52 +55 +30 €/JP¥ +16 +14 +22 +18 +11 +11 €/ARS (28) (20) (29) (16) (16) (23) €/BRL (6) (2) +3 (4) (11) (22) Others +21 +4 +30 +31 +1 (26) Currency Impact +141 +103 +107 +81 +40 (30) in €m Q1 1
Slide 39: 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 replace
Slide 40: Regular and Sustained Performance
Regular and Sustained Performance CAGR over 30 years(1) Revenue (in €m) +5.6% EPS(2) (in €) +6.7% Cashflow (in €m) +6.5% Dividend(2) (in € per share) +8.7% (1) Calculated according to prevailing accounting rules over 30 years. (2) Adjusted for the 2-for-1 share split in 2007, for free share attributi
Slide 41: 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
Slide 42: For further information, please contact: Investor Relations
For further information, please contact: Investor Relations Communication IRTeam@airliquide.com Media@airliquide.com Upcoming events 2020 Third Quarter Revenue: October 23, 2020 www.airliquide.com Follow us on Twitter @AirLiquideGroup Corporate Headquarters: 75, Quai d’Orsay L’Air Liquide S.A. 75321