Air Liquide SA · EURONEXT:AI
Air Liquide SA — H1 2014 Earnings Presentation
49 slides from Air Liquide SA's earnings presentation, Jul 31, 2014
Slide 1: H1 2014 Activity progressing
H1 2014 Activity progressing Performance in line with full year outlook Paris, July 31, 2014
Slide 2: Activity progressing…
Activity progressing… Quarterly G&S activity indicator(1) G&S comparable growth(2) 2012 2013 2014 2012 2013 2014 Base 100, average 2008 130 6% 125 5% 4,7% 4,2% 120 4% 115 3,1% 3% 2,4% 110 2,0% 2% 105 1% 100 95 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 H1 H2 H1 H2 H1 (1) Revenue (excluding forex and natural g
Slide 3: ...relying on a confirmed base business recovery
...relying on a confirmed base business recovery G&S quarterly growth analysis 7,0% 2012 2013 2014 11 5,0% start-ups in H1 3,0% Base business Start-ups, 1,0% Ramp-ups, Site takeovers, Small acquisitions -1,0% Significant M&A -3,0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 3 July 31, 2014 H1 2014 Results World l
Slide 4: Performance in line with full year outlook
Performance in line with full year outlook Group sales H1 operating income Net profit (Group Share)(2) In €bn In €m In €m 8 1,254 800 1,250 755 7.5 (1) 1,200 +5.2% (1) 7 (1) +5.0% +4.8% 1,150 600 1,100 6 1,050 5 1,000 400 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 2010 2011 2012 2013 2014 2010 201
Slide 5: H1 2014 Growth
H1 2014 Growth Fabienne Lecorvaisier l Chief Financial Officer Developing Americas Japan Electronics economies recovery +14% +10% +6% +12% Sales growth, excluding currency, natural gas and significant M&A impacts. 5 July 31, 2014 H1 2014 Results World leader in gases, technologies and services for I
Slide 6: Continued outperformance
Continued outperformance G&S comparable growth(1) 120 115 Air Liquide 110 World IP Index (2) Positive signs 105 in Euro zone Growth in the USA 100 and China Continued improvement 95 in Japan 2010 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2012 2013 2014 Base 100 in 2010 (1) Excluding currency, n
Slide 7: Robust sales against strong FX headwinds
Robust sales against strong FX headwinds H1 2013 H1 2014 H1 14/13 H1 14/13 Q2 14/13 Sales in €m as published comparable (1) comparable (1) Gas & Services 6,885 6,807 -1.1% +4.7% +3.7% Engineering & Technology 372 405 +9.0% +13.7% +7.2% Other Activities 304 294 -3.7% -2.7% -4.6% Group Total 7,561 7,5
Slide 8: Americas and Asia momentum
Americas and Asia momentum G&S comparable sales growth(1) Americas Asia-Pacific Middle-East & Africa +4% +10% +10% +2% +6% +12% +16% +8% +4% 17% 16% 14% 12% 12% 11% 11% 9% 8% 8% 7% 3% 5% 5% 4% 3% 2% 1% Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q1 13 Q2 13 Q3 13 Q4 13 Q1
Slide 9: European growth profile
European growth profile GSI G&S comparable sales growth breakdown(1) East GSI Healthcare 5% North 30% 36% -0.7% -1.0% +0.2% +0.8% -0.5% 29% +0.3% GSI South One-off impacts -1.0% H1 H1 2013 GSI GSI Healthcare GSI Electricity Divestiture H1 2014 sales South North East (Cogen) sales (1) Excluding curre
Slide 10: Large Industries & Healthcare: solid trend
Large Industries & Healthcare: solid trend G&S comparable sales growth(1) Large Industries Sound Oxygen and Hydrogen volumes. +2% +3% +5% H1 Developing economies up 6% +19% (China, Brazil…) 5% 3% 3% 3% 3% 37% Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 H1 2014 Healthcare +5% +6% +4% H1 19% 7% 7% Home Health
Slide 11: Industrial Merchant steady, Electronics recovery
Industrial Merchant steady, Electronics recovery G&S comparable growth(1) Industrial Merchant On-going momentum in +2% +4% +4% H1 developing economies Strong quarter in Japan and 4% 4% 4% 4% 3% China 36% Pricing: +1.3% 1% Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 H1 Electronics 2014 -5% +7% +12% H1 13% 8%
Slide 12: Focus on executing projects
Focus on executing projects E&T order intake(1) Third party E&T sales 1,905 541 803 405 In €m In €m 750 750 667 516 500 448 500 274 267 274 225 247 230 250 250 147 184 175 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 2013 2014 2013 2014 Group Capex controlled Regular progress of projects Selectivity in t
Slide 13: Performance
Performance Fabienne Lecorvaisier l Chief Financial Officer Growth Margin Debt • Sales • Efficiency • Stable debt +4.8% € 152m € 6.8bn • Margin improvement +10bps Sales growth excluding currency, natural gas and significant M&A impacts. Margin improvement excluding natural gas impact. 13 July 31, 20
Slide 14: Margin improving
Margin improving In €m H1 2013 H1 2014 H1 14/13 H1 14/13 comparable Revenue 7,561 7,506 -0.7% +4.8% Purchases (2,960) (2,920) -1.3% Personnel expenses (1,374) (1,370) Other net income and expenses (1,351) (1,344) -0.4% Operating profit before depreciation 1,876 1,872 -0.2% Depreciation and amortizat
Slide 15: Efficiencies ahead of full year objective
Efficiencies ahead of full year objective G&S OIR margin in €m 18.7% +30bps 19.0% (1) 1,400 +143 +26 0 58 1,291 1,294 1,300 <82> +32 G&S G&S 1,200 <117> 41% retention 1,100 +2.3% +0.5% +2.9% 1,000 0 OIR Volume Energy Cost Price Efficiencies Currency OIR mix effect increase excl. and H1 2013 energy O
Slide 16: Continuous realignment plans
Continuous realignment plans Europe efficiencies Japan efficiencies € 65m € 15m Margin back on rise Resource intensity improved (1) 2,5 21% 2 20% 19% 1,5 18% 1 17% 0,5 16% 15% 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 H1 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 H1 2014 2014 (1) Resourc
Slide 17: Net Profit up despite FX and taxes
Net Profit up despite FX and taxes H1 14/13 H1 14/13 In €m H1 2013 H1 2014 comparable In €m 2012 2013 Revenue 7,561 7,506 -0.7% +4.8% Operating Income Recurring 1,256 1,254 -0.2% Other non-recurring operating income & expenses (41) (6) (1) Operating Income 1,215 1,248 +2.7% +8.3% Net financial costs
Slide 18: Net debt slightly below June 2013 level
Net debt slightly below June 2013 level Net debt In €m In €m <6,837> <948> +8 <6,797> <6,062> +1,394 <942> +735 Gearing ratio (3) <247> 60% Gearing ratio Gearing ratio (3) 56% 57% Net Debt Net Debt Cash flow WCR Net Dividends (2) Currency Net Debt, June 30, 2013 Dec 31, 2013 + others Investments(1)
Slide 19: Pursued development initiatives
Pursued development initiatives Paris, July 31, 2014 Benoît Potier l Chief Executive Officer
Slide 20: Selective investment aligned with strategy
Selective investment aligned with strategy Pursue investment in Seize growth Imagine tomorrow core business, aligned opportunities in usages and future with market trends adjacent markets markets Larger projects for Innovation and Targeting growth energy conversion entrepreneurship boosters Distribu
Slide 21: Solid investment backlog to support future growth
Solid investment backlog to support future growth H1 2014 Investment backlog Decisions Start-ups € 2.7bn € 2.6bn € 2.3bn € 2.1bn ~ €1.2bn Sales in hand after full ramp-up Dec 2011 Dec 2012 Dec 2013 Decisions Start-ups Investment backlog June 2014 See definitions in appendix 21 July 31, 2014 H1 2014
Slide 22: US Gulf Coast: New Air Liquide investment
US Gulf Coast: New Air Liquide investment Petrochemicals industry momentum Up to $100bn proposed investment along the USGC, 25% already decided Air Liquide strengths Recent Air Liquide Beaumont wins Houston 3 major gas contracts: 2 for Oxygen 1 for Syngas 3,200 km Megamethanol® of pipeline technolog
Slide 23: Europe: boosting growth with new developments
Europe: boosting growth with new developments Growing segments Diabetes Offshore services Hydrogen mobility •First nationwide network •Decarbonate d Hydrogen H1 Growth: +11% H1 Growth: +80% Supported by: Paris-Saclay Research Center €100m New technology centers 23 July 31, 2014 H1 2014 Results World
Slide 24: Asia: initiatives to capture demand
Asia: initiatives to capture demand +10% +17% Japan H1 2014 China H1 2014 IM sales growth IM sales growth 10% 15% 5% 10% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 5% 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 -5% 4-quarter moving average 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 -10% 2012 2012 2012 2012 2013 2
Slide 25: 2014 Outlook
2014 Outlook H1 2014 ■ Activity progressing ■ Performance in line with FY outlook ■ Selective investment in line with strategy ■ Strong backlog 2014 objective Barring a degradation of the environment, Air Liquide is confident in its ability to deliver another year of net profit growth in 2014 25 Jul
Slide 26: AIR LIQUIDE
AIR LIQUIDE
Slide 27: H1 2014 Appendix
H1 2014 Appendix 27 July 31, 2014 H1 2014 Results World leader in gases, technologies and services for Industry and Health
Slide 28: Impact of currency and natural gas on G&S revenue
Impact of currency and natural gas on G&S revenue Currency In €m Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 €/USD (3) (10) (30) (26) (21) (28) €/CAD (2) (5) (16) (17) (21) (18) €/JP¥ (40) (55) (74) (65) (34) (17) Others (20) (27) (82) (77) (85) (80) Total currency impact (65) (97) (202) (185) (161) (143) A
Slide 29: Consolidated P&L
Consolidated P&L In €m H1 2013 H1 2014 Revenue 7,561 7,506 Cost of goods (5,685) (5,634) Operating income recurring before depreciation 1,876 1,872 Depreciation and amortization expense (620) (618) Operating income Recurring 1,256 1,254 Net non-recurring operating income (41) (6) Operating income 1,
Slide 30: Consolidated Balance Sheet
Consolidated Balance Sheet In €m ASSETS 31/12/13 30/06/14 EQUITY AND LIABILITIES 31/12/13 30/06/14 Goodwill 5,090 5,140 Shareholders’ equity 10,625 10,430 Fixed assets 13,939 14,326 Minority interests 263 267 Other non-current assets* 1,061 945 Total equity 10,888 10,697 Total non-current assets 20,
Slide 31: Cash Flow statement
Cash Flow statement H1 H1 In €m 2013 2014 Funds provided by operations 1,501 1,394 Changes in Working Capital (266) (232) Other items (41) (15) Net cash from operating activities 1,194 1,147 Purchase of PPE* and intangible assets (982) (934) Purchase of financial assets (109) (58) Proceeds from sale
Slide 32: Growth in H1 2014 G&S revenue
Growth in H1 2014 G&S revenue in €m +323 <5> <303> 7200 -0.1% 7000 6,885 <93> -4.4% 6,807 6800 -1.4% +4.7% comparable (1) 6600 -1.1% published 6400 growth 6200 60000 (1) H1 2013 Comparable Natural gas Currency Significant H1 2014 growth perimeter (1) Excluding currency, natural gas and significant M
Slide 33: Revenue analysis by quarter (1)
Revenue analysis by quarter (1) Sales in €m Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q2 14/13 Q2 14/13 comparable(1) Europe 1,769 1,778 1,745 1,766 1,701 1,645 -7.4% -1.8% Americas 766 824 813 822 814 833 +1.1% +8.4% Asia-Pacific 780 782 796 826 816 821 +4.9% +11.2% Middle-East 91 95 90 94 85 92 -3.8% +5
Slide 34: Revenue analysis by quarter (2)
Revenue analysis by quarter (2) Sales in €m Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q2 14/13 Q2 14/13 comparable(1) Large Industries 1,225 1,236 1,218 1,261 1,285 1,208 -2.3% +3.4% Industrial Merchant 1,254 1,284 1,274 1,269 1,229 1,251 -2.6% +2.7% Healthcare 659 685 667 678 626 637 -6.9% +2.6% Electron
Slide 35: G&S Revenue growth by quarter (3)
G&S Revenue growth by quarter (3) Growth as Natural Currency Significant Comparable published Gas scope growth(1) Q3 2012 +6.5% -0.3% +4.9% +0.3% +1.6% Q4 2012 +8.2% +0.2% +1.8% +1.6% +4.6% Q1 2013 -1.1% -0.6% -1.9% +1.4% +0.0% Q2 2013 +2.5% -0.2% -2.9% +1.6% +4.0% Q3 2013 -1.3% -0.6% -5.8% +1.2% +3
Slide 36: H1 2014 Revenue breakdown by region
H1 2014 Revenue breakdown by region Gas & Services 24% Americas Europe H1 2014 Revenue €6,807m 49% 24% Asia 3% Middle-East and Africa Europe: € 3.3bn Americas: € 1.6bn Asia: € 1.6bn 32% 36% 34% 38% 39% 44% 2% 9% 22% 5% 30% 9% Industrial Merchant Large Industries Healthcare Electronics 36 July 31, 20
Slide 37: Europe in Q2
Europe in Q2 Electronics Q2 Gas & Services sales: €1,645m 2% ■ Industrial Merchant Healthcare Industrial Merchant 31% 32% Southern Europe still slow Northern growing Dynamic Eastern Europe (Poland, 35% Large Industries Russia) Strong Helium sales Q2 14/13 Comparable change (1): -1.8% ■ Large Industr
Slide 38: Americas in Q2
Americas in Q2 Electronics Q2 Gas & Services sales: €833m Healthcare 9% ■ Industrial Merchant 10% Industrial Merchant Sustained activity across the region 44% Bolt-on acquisitions in South America 37% Solid pricing effect Large Industries ■ Large Industries Q2 14/13 Comparable change (1): +8.4% Stro
Slide 39: Asia-Pacific in Q2
Asia-Pacific in Q2 Electronics Q2 Gas & Services sales: €821m Industrial Merchant 22% 34% Healthcare 5% ■ Industrial Merchant Japan picking up 39% Large Industries Double digit growth in China Q2 14/13 Comparable change (1): +11.2% ■ Large Industries +6.3% Industrial Merchant Start-ups in China Larg
Slide 40: Industrial Merchant pricing
Industrial Merchant pricing Q2 2014 H1 2014 +0.2% Europe + 0,0 % +3.3% Americas +3.9% -0.3% Asia-Pacific -0.1% +0.4% Middle-East and Africa +2.7% +1.0% Total Industrial Merchant +1.3% 40 July 31, 2014 H1 2014 Results World leader in gases, technologies and services for Industry and Health
Slide 41: Engineering & Technology
Engineering & Technology In €m H1 2013 H1 2014 Consolidated revenues 372 405 OIR(1) margin 8.9% 6.9% Total order intake 964 541 Total orders-in-hand 4,919 4,982 Total Orders-in-hand ASU 2% 10% HyCO breakdown Traditional energy 14% 39% at June 30, 2014 Alternative energy 10% Renewable energy aB&T 25%
Slide 42: Operating margin – natural gas effect
Operating margin – natural gas effect Group, in €m H1 2013 H1 2014 Revenue 7,561 7,506 Incl. Natural gas effect (29) (5) Operating income recurring 1,256 1,254 Operating margin 16.6% 16.7% Operating margin excluding natural gas 16.7% Gas and services, in €m H1 2013 H1 2014 Revenue 6,885 6,807 Incl.
Slide 43: Operating margin (OIR/Revenue)
Operating margin (OIR/Revenue) H1 11 H2 11 2011 2011 Group 16.7% 16.6% 16.7% Gas & Services(1) 19.0% 18.8% 18.9% H1 12 H2 12 2012 2012 Group 16.5% 16.9% 16.7% Gas & Services 18.7% 19.0% 18.8% H1 13 H2 13 2013 2013 Group 16.6% 17.3% 16.9% Gas & Services 18.7% 19.6% 19.2% As Excl. Published Nat. Gas G
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 replacements or
Slide 45: Gas & Services capex by geography
Gas & Services capex by geography G&S H1 2014 capex(1) G&S capex(1) / sales €1.1bn H1 2013 H1 2014 Middle East - Africa Europe 11.8% 11.8% 5% Europe Americas 16.0% 17.4% Asia-Pacific 39% 27% Asia-Pacific 16.6% 16.7% Middle East and 57.9% 30.8% 29% Africa Americas Total 15.1% 14.8% (1) Gross industri
Slide 46: Financing structure
Financing structure At 30 June 2014 Sources Maturity(2) Fixed/variable In €m rates Bank debt Market 8000 debt: Fixed rate & others (1) 81% 7000 19% After 6000 July 1, 2019 76% > 2016 5000 Commercial 9% paper 59% 4000 13% 3000 Bonds July 1, 2015 24% Private to 2000 June 30, 2019 placements 1000 Up to
Slide 47: Regular and sustained performance
Regular and sustained performance Revenue (in €m) EPS (1) (in €) 15 000 6 +6.1% CAGR over 30 years(2) +8.4% CAGR over 30 years(2) 12 500 5 10 000 4 7 500 3 5 000 2 2 500 1 0 0 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 1983 1985 1987 1989 1991 1993 1995 1997 1999
Slide 48: www.airliquide.com
For further information, please contact: Investor Relations Communications Virginia Jeanson + 33 (0)1 40 62 57 37 Anne Bardot + 33 (0)1 40 62 50 93 Annie Fournier + 33 (0)1 40 62 57 18 Jérôme Zaman + 33 (0)1 40 62 59 38 www.airliquide.com Follow us on Twitter @AirLiquideGroup L’Air Liquide S.A. Corp
Slide 49: AIR LIQUIDE
AIR LIQUIDE