Air Liquide SA · EURONEXT:AI
Air Liquide SA — Shareholder Meeting (2019)
129 slides from Air Liquide SA's shareholder meeting presentation, 2019
Slide 1: Annual General Meeting
Pfs At Annual General Meeting @Aiirtiquide
Slide 2: Official Opening
2018 Activity & Results Official / ieee 7 Strategy & Outlook Opening > =e Remuneration Benoit Potier Sy Ars Chairman and CEO ee Questions & Answers Vote on Resolutions Official Opening ==
Slide 3: Annual General Meeting
Pfs At Annual General Meeting @Aiirtiquide
Slide 4: Official Opening: Ordinary Shareholders' Meeting
== OFFICIAL OPENING ORDINARY SHAREHOLDERS’ MEETING + Board of Directors’ reports + Renewal of the term of office of two Directors + Statutory Auditors’ reports + Statutory Auditors’ Special Report on agreements covered by ticles L. 225-38 et seq. of the French C jal Cod + Approval of the Company fin
Slide 5: Extraordinary Shareholders' Meeting
EXTRAORDINARY SHAREHOLDERS’ MEETING ORDINARY SHAREHOLDERS’ MEETING + Authorization granted to the Board of Directors for a period of 24 months to reduce the share capital by cancellation of treasury shares + Delegation of authority granted to the Board of Directors for a period of 26 months in order
Slide 6: Pre-General Meeting Survey
== PRE-GENERAL MEETING SURVEY TOP5 a ~~ OF POPULAR THEMES / 54% \ ofthe respondents | =, hold more than ol Sy SHS GOMES: 250shares / io ys \ A = (1) \ 2018 Group Strategy i as 22% | = ON-LINE \ Answer rate } Shareholders policy of the Group 5 go Yo \ QUESTIONNAIRE N y \ sent to \ i ofthe respondents
Slide 7: Agenda
== AGENDA 2018 ACTIVITY STRATEGY QUESTIONS & RESULTS & OUTLOOK REMUNERATION & ANSWERS TESTIMONIAL GOVERNANCE STATUTORY OF OUR CUSTOMER AUDITORS’ REPORTS STMicroelectronics
Slide 8: Agenda
== AGENDA 2018 ACTIVITY STRATEGY QUESTIONS & RESULTS & OUTLOOK REMUNERATION & ANSWERS TESTIMONIAL GOVERNANCE STATUTORY OF OUR CUSTOMER AUDITORS’ REPORTS STMicroelectronics
Slide 9: Agenda
== AGENDA 2018 ACTIVITY STRATEGY QUESTIONS & RESULTS & OUTLOOK REMUNERATION & ANSWERS TESTIMONIAL GOVERNANCE STATUTORY VOTE ON OF OUR CUSTOMER AUDITORS’ REPORTS RESOLUTIONS STMicroelectronics
Slide 10: Gilbert, a shareholder
Gilbert, a shareholder for more than 20 years, passing on shares and the taste for it to his grandson Robin!
Slide 11: 2018 Activity & Results
2018 Activity & Results Fabienne Lecorvaisier Executive Vice-President and Chief Financial.Officer Official Opening 2018 Activity & Results Customer's Testimonial Strategy & Outlook Governance Remuneration Statutory Auditor's Reports Questions & Answers Vote on Resolutions
Slide 12: Annual General Meeting
AGM} Annual General Meeting @Alir Liquide
Slide 13: Group activity was particularly dynamic in 2018
== GROUP ACTIVITY WAS PARTICULARLY DYNAMIC IN 2018 GROUP SALES‘) SALES GROWTH in € bn is (2) i €21bn On comparable basis‘ As Published 22 2015 2016 2017
Slide 14: Markets are well oriented
== MARKETS ARE WELL ORIENTED SOLID GROWTH IN GAS & SERVICES ACTIVITY INDUSTRIAL LARGE MERCHANT INDUSTRY HEALTHCARE ELECTRONICS €3.5bn Medical gases Home Healthcare ‘Sales growth on a comparable basis: excluding currency, energy (natural gas and electricity) and significant scope impacts
Slide 15: 2018 Gas & Services sales contribution
2018 GAS & SERVICES SALES CONTRIBUTION == GROWTH IS STRONG IN ALL GEOGRAPHIES Americas Europe 8 35% COMPARABLE GAS & > U a SERVICES SALES GROWTH g BB > 2018/2017 5 ER Bg - & q a € 20.1 x bn Middle East Asia Pacific & Africa ae pm eee 3% Sec ce see cain es on ene eee ee
Slide 16: Global activities recording strong growth
== GLOBAL ACTIVITIES ARE RECORDING A STRONG GROWTH © ENGINEERING & CONSTRUCTION (eo) GLOBAL MARKETS & TECHNOLOGIES + Strong activity @ O° Biomethane * Order intake stabilizing lo + Hydrogen for mobility + High order intake SALES GROWTH” SALES GROWTH” € 430m -at5) € 470m (1) Sales growth on a compara
Slide 17: Performance progression visible in all key indicators
== PERFORMANCE PROGRESSION IS VISIBLE IN ALL KEY INDICATORS +6% NET PROFIT -+- 9 % CASHFLOW -- ] ] % (1) Sales growth on a comparable basis: excluding currency, energy (natural gas and electricity) and significant scope impacts (2) Variation excluding currency effect and compared to 2017 recurring n
Slide 18: Operating margins are improving
== OPERATING MARGINS ARE IMPROVING, IN LINE WITH OBJECTIVES Revenue 20,349 21,011 +3.3% +6:1% Purchases zen) (8,276) 47.2% Personnel expenses (4138) (4146) ] 40.4% Other Expenses (3348) (3,374) Operating income recurring before depreciation and 4p = ae amortization Depreciation and amortization expe
Slide 19: Synergies and efficiencies ahead of expectations
== SYNERGIES AND EFFICIENCES ARE AHEAD OF EXPECTATIONS Airgas REINFORCED EFFICIENCY PROGRAM SYNERGIES Cumulated efficiencies rc for the 2017-2020 period Sy 59am >€ 400m 20S $290 » aa M100 u | \ mM / >€1.5 bn > € 1.2) Target reached one year ahead of initial plan 2018 2017-2020 2019-2020 Initial Targ
Slide 20: Net profit is increasing steadily
== NET PROFIT IS INCREASING STEADILY NET PROFIT 2018 nem Revenue Operating income recurring Other non-recurring operating income and expenses Operating income 2018/2017 +4% recurring : ing Net finance costs plus other financial income and expenses Recurring? Income taxes Tax rate Share of profit of
Slide 21: Debt levels continue to decrease
== DEBT LEVELS CONTINUE TO DECREASE 2018 Net debt / equity In€bn Sy — 80% Cash flow eo — Gross industrial capital \ i : Feenseeeteemeret | ) Case aeTnce -13.4 +41 | y a a 0.4 12.5 9% — . {o] +0.6 of sales nee in line with Net Debt as of Cash Flow WCR+Other Netinvestmentst” Dividends Currency &Scope
Slide 22: Group balance sheet is reinforced
== THE GROUP BALANCE SHEET IS REINFORCED ASSETS (in € M) LIABILITIES (in € M) 31/12/17 31/12/18 31/12/17 31/12/18 Non-current assets 34,036 Non-current liabilities 33,882 Goodwill 12,840 13,345 Shareholders’ equity” and minority interests 16,718 18,207 Property, Plant, Equipment and others 21196 21,
Slide 23: Return on capital employed continues to improve
== RETURN ON CAPITAL EMPLOYED CONTINUES TO IMPROVE he 2021/2022 RETURN ON CAPITAL EMPLOYED « ROCE » ROCE OBJECTIVE = \ Excluding currency effect +60 bps 2016 ajusted () Calculated by consolidating the Airgas acquisition over the full year (2) Excluding positive impact on 2017 ret profit of non-cash
Slide 24: Investment decisions reaching a record level
== INVESTMENT DECISIONS ARE REACHING A RECORD LEVEL INDUSTRIAL AND FINANCIAL 12-MONTH PORTFOLIO INVESTMENT DECISIONS OF INVESTMENT OPPORTUNITIES for industrial € 3 a ] bn investment decisions + Long-term contracts in Large Industry and Electronics + Selective investments strategy + Development of th
Slide 25: 2018 has been a remarkable year
== 2018 HAS BEEN A REMARKABLE YEAR FOR AIR LIQUIDE VERY DYNAMIC ACTIVITY GROUP PERFORMANCE IMPROVMENT BUSINESS DEVELOPMENT PERSPECTIVES Group Sales Comparable growth Operating margin High level of ACCELERATING 2018 2018/2017 2018 synergies and (excluding energy) efficiencies 2018 Ai rgas Investment
Slide 26: Suzy, an enthusiastic shareholder
Toe " ‘ei Suzy, * eS an enthusiastic s] \ f areholder é the ee of Ai dt Liquide €..
Slide 27: Customer's Testimonial
Customer's Testimonial Jean-Marc Chéry Chairman of the board and CEO, STMicroelectronics Statutory Auditor's Reports Questions & Answers Vote on Resolutions
Slide 28: A long-term partnership with Air Liquide
Along-term partnership with Air Liquide
Slide 29: STMicroelectronics, European semiconductor leader
STMicroelectronics, European leader semiconductor producer
Slide 30: STMicroelectronics Fab in Crolles
STMicroelectronics Fab in Crolles (France)
Slide 31: Slide 31
Slide 32: Agenda: Strategy & Outlook
v 2018 Activity & Results Official Opening ‘Customer's Testimonial Strategy & Outlook Governance Remuneration Statutory Auditor's Reports Questions & Answers Vote on Resolutions
Slide 33: Re-inventing oneself
RE-INVENTING ONESELF
Slide 34: Re-inventing oneself
RE-INVENTING ONESELF
Slide 35: Customer digital innovation
os 3 CUSTOMER DIGITAL INNOVATION
Slide 36: Listening and prompt answer
7 Listening & prompt answer Data analysis Customized approach
Slide 37: Production units and remote control centers
400 production units Data analysis 4 remote control centers France - Malaysia Dubai - China
Slide 38: Customer journey digital acceleration
Slide 39: Digital acceleration: working better together
== _ DIGITAL ACCELERATION ..== WORKING BETTER TOGETHER
Slide 40: The choice of open innovation
== THE CHOICE OF OPEN INNOVATION € 300 M expenses Se | in 2018 4,000 people SECTOR ee OY leams LEADER a | IN INNOVATION : Opened on the ecosystem 5 renovated Campuses
Slide 41: Areas of innovation
== AREAS OF INNOVATION == (an i @® 4b RY, at {ea} Mi {lo} 4 iol | activities and | 5 4 | Energy & E-Health Electronics Cryogenics Digital ‘ Cppicarous i ecological transformation \ / transition J SS ye
Slide 42: Annual General Meeting
Dial fiz Annual General Meeting @fAlir Liquide
Slide 43: Profitable, consistent, responsible growth
PROFITABLE CONSISTENT RESPONSIBLE = GROWTH -=
Slide 44: Consistent growth
= CONSISTENT GROWTH
Slide 45: Air Liquide, a unique business model
== AIR LIQUIDE, A UNIQUE BUSINESS MODEL == ¢ Diversity of customers, applications : * Managment of the entire value chain: and geographies H from Production to Distribution * Strong involvement in growing markets ° Optimized management of Indusirial assets * Long term contracts (up to 25 years) E in
Slide 46: 66,000 committed employees
== 66,000 COMMITTED EMPLOYEES == Pa 150 nationalities vA 2025 _ 2.7 days / OBJECTIVES of training /year/employee Diversity of PYOFCS ba ; ° ec « My Voice » Program pe ae ie 93% retention rate) (9, Among managers and profesionals (@) Among managers and profesicnals hires
Slide 47: Air Liquide activity in 1st quarter 2019
GAS & SERVICES REVENUE GROWTH GROUP SALES Europe Middle East st a €5.4 +2.8% Pacific AIR LIQUIDE aa ACTIVITY IN +3.8% billion 15T QUARTER 2019 A wi - y —— ‘ % as published comparable
Slide 48: A solid risk management process
== A SOLID RISK MANAGEMENT PROCESS, ANCHORED IN THE FIELD A 3-STEP PROCESS SUBSIDIARY & GROUP INTERACTIONS 0 @D = : eS i > i Risk Assessment Progress of : PROCESS ey eine identification of the level of action plans i Y risk control Susidiaries Nason (ie >90% of sales)
Slide 49: 2018 risk mapping: focus on main risks
== 2018 RISK MAPPING: FOCUS ON MAIN RISKS RISK Prevention . Stronger D of corruption | () Protection of digital assets MANAGEMENT Industrial ree = x accident BS @ i aa ier ‘ Competition law @ i i} Employee and site security \ iy cat, enge Projects (1) \ Fd Supplier qualification | Ss i} Intemal cont
Slide 50: Outlook
201" ~ OUTLOOK
Slide 51: 2019 Outlook
2019 OUTLOOK Pea
Slide 52: 2019 Outlook: healthcare
2019 OUTLOOK 1.6 million patients 15,000 hospitals & clinics
Slide 53: 2019 Outlook: industrial merchant
2019 OUTLOOK BOTs 09 n INDUSTRIAL | 20 million MERCHANT | cylinders 4 | 2 million customers pte worldwide EXPERIENCE _ WITH DIGITAL 20 industrial sectors
Slide 54: 2019 Outlook: large industries
2019 OUTLOOK 7 = Air Liquide postionned LARGE INDUSTRIES on the world largest — industrial basins ADDRESSING an ENERGY AND Dynamic context ENVIRONMENTAL Numerous 12-month CHALLENGES opportunities
Slide 55: Slide 55
Slide 56: Your Group's profitable growth
YOUR GROUP’S PROFITABLE GROWTH Gas & Services : Efficiency gains : margin objective increased to +30 bps®” > € 400M? excluding energy per year () vs 2017 (2) for the 2019 - 2020 period Return on Capital employed objective >10% by 2021/2022
Slide 57: Your Group's profitable growth: investment areas
I YOUR GROUP’S PROFITABLE GROWTH == Investment areas INVESTISSEMENT DECISIONS USA EAS Economic development Bees rae € 3 on & energy ‘ get ey Oor i) +22% OEE ASIA in 2018
Slide 58: Shareholder profitability: total shareholder return
== SHAREHOLDER PROFITABILITY == TOTAL Dividends + free shares + loyalty bonus SHAREHOLDER RETURN OVER 20 YEARS € 100 Share price evolution over 10 years (in €) Dividend invested in 1998 +8.3% € 630 annual growth Bonollo value 30-year average 04/2009 04/2014 04/2019 ie. +9.6% ‘See Air Liquide's Share
Slide 59: Proposed dividend and shareholder loyalty
Proposed Dividend \ \ \ | € 2.65 | per share ys SHAREHOLDER PROFITABILITY Attribution on October, 9 2019 | FREE SHARE for 10 shares held 30* attribution LOYALTY BONUS + 10% on dividends and free shares attributions For registered shareholders for > than 2 years
Slide 60: Promoting individual shareholding
Promoting individual shareholding PASSING ON = More than EXPLAINING 410,000 = Individual SUPPORTING THE FRENCH shareholders « PEA JEUNES » 32% Individual shareholders Capital breakdown as of Dec 31,2018 68% Institutional investors
Slide 61: Annual General Meeting
Pfs At Annual General Meeting @Aiirtiquide
Slide 62: Slide 62
Slide 63: Taking actions
TAKING | —~ ACTIONS ——
Slide 64: Taking actions for climate
Taking actions for climate MOST AMBITIOUS ! if. ~~ OBJECTIVES OF i : \a: } oP OUR INDUSTRY UCE’ |)! n A Contribu Sat y, NEW LOW- CARBON SOCIETY In 2025 compared to 2015
Slide 65: Taking actions for climate
Taking actions for climate THE 20'S OF THE 215' CENTURY WILL BE DECISIVE — Energy ‘Observer
Slide 66: Growing interest in hydrogen
¢ Pourquoi I'hydrogéne devient une technologie . . : oe q stratégique Taking CCtONS pau yn tegen Lavoitu for climate arriveds S — Merkel: We need to switch to electric or hydroget 7 +t are The Most Promising Uses oan powered fuel-cell cars For Hydrogen Fuel Cells? GROWING 5 ° INTEREST IN HYDROGEN HL
Slide 67: Slide 67
Slide 68: Taking actions for climate: investing in hydrogen
Taking actions for climate . AIR LIQUIDE ] 5 CARBON-FREE HYDROGEN ig ee H, REFILLING STATIONS IS INVESTING ] I] F CONSTRUCTION * (WORLDWIDE of world’s largest 600 membrane-based HYPE TAXIS dedicated electrolyzer to mobility (USA) (Canada) in Paris in 2020
Slide 69: Hydrogen market for mobility and industry
Taking actions for climate PPE bOGEN = MARKET HYDROGEN FOR S MOBILITY (cars, trucks, 2 5 500 buses, trains, ships) bn : BUT ALSO P [aenEFOR y AN ENERGY... HEAVY INDUSTRY — AND artificial intelligence, HEATING internet of things) Source : Hydrogen Council
Slide 70: Environment, health, science, education
ENVIRONMENT ' HEALTH / BREATHIN! SCIENCE EDUCATION LOCAL —' 52 COUNTRIES
Slide 71: Annual General Meeting
Pfs At Annual General Meeting @Aiirtiquide
Slide 72: Slide 72
Slide 73: Governance
Governance Benoit Potier Chairman and CEO Officicl Opening 2018 Activity & Results Customer's Testimonial Strategy & Outlook Governance Remuneration Statutory Auditor's Reports Questions & Answers Vote on Resolutions
Slide 74: Board of Directors composition
aVe G28, 12 MEMBERS EXPERTISE 6 nationalities Varied profiles and sectors 8 independant directors Considerable experience 5 women Complementarity of expertise 1 director representing the employ
Slide 75: Renewals of terms of office
== RENEWALS OF TERMS OF OFFICE GENEVIEVE BERGER Attendance rate = ' ‘ 5 100% resolution resolution AP SIAN HERBERT-JONES La =
Slide 76: The Board of Directors' work in 2018
== THE BOARD OF DIRECTORS’ WORK IN 2018 Monitoring of day-to-day management 6 Mid-term strategy and M€OS objectives Meetings Meeting at Airgas head office & Site visits Attendance rate Capital increase reserved for employees 96% Climate Objectives Governance
Slide 77: Work of the Audit and Accounts Committee
== WORK OF THE AUDIT AND ACCOUNTS COMMITTEE 4 Meetings Attendance rate 87.5% SIAN HERBERT-JONES Committee chair SIN LENG LOW THIERRY PEUGEOT s > BRIAN - j GILVARY 75% Independant members
Slide 78: Work of the Environment and Society Committee
== WORK OF THE ENVIRONMENT AND SOCIETY COMMITTEE 3 Meetings Attendance rate 100% PIERRE DUFOUR Chairman PHILIPPE DUBRULLE GENEVIEVE BERGER Sustainable development Strategy Climate Objectives Environmental and societal risk mapping Duty of vigilance 2018 extra-financial performance declaration
Slide 79: Work of the Appointments and Governance Committee
== WORK OF THE APPOINTMENTS AND GOVERNANCE COMMITTEE 3 Meetings Attendance rate 100% JEAN-PAUL AGON Chairman ANNETTE WINKLER 100% Independant members
Slide 80: Work of the Remuneration Committee
== WORK OF THE REMUNERATION COMMITTEE 3 Meetings Attendance rate 100% XAVIER HUILLARD Chairman ANNETTE WINKLER JEAN-PAUL AGON 100% Independant members
Slide 81: Slide 81
Slide 82: Customer journey digital acceleration
Slide 83: Profitable growth
Slide 84: Responsible growth
Slide 85: Taking actions for climate: Hydrogen Council
Slide 86: Nelly, a shareholder
Slide 87: Change in Executive Committee
Slide 88: Soukaina, a recent shareholder
Slide 89: Remuneration
Slide 90: Executive Officers' Remuneration
Slide 91: Executive Officers' Remuneration: Airgas acquisition
Slide 92: 2018 Fixed Remuneration - Benoît Potier
Slide 93: 2018 Variable Remuneration - Benoît Potier
Slide 94: 2018 Long-Term Remuneration - Benoît Potier
Slide 95: Stabilization of 2019 Target Total Remuneration
Slide 96: Change in 2019 Remuneration Policy - Variable Remuneration
Slide 97: Change in 2019 Remuneration Policy - Long-Term Remuneration
Slide 98: Related Party Agreements and Commitments
Slide 99: Authorisations to Grant Stock-Options and Performance Shares
Slide 100: Authorisations to Grant Stock-Options and Performance Shares
Slide 101: Nicolas, an employee shareholder
Slide 102: Statutory Auditor's Reports
Slide 103: Statutory Auditors' Reports
Slide 104: Reports on the Parent Company & Consolidated Financial Statements
Slide 105: Special Report on Related Party Agreements and Commitments
Slide 106: Reports Related to Operations on the Share Capital
Slide 107: Claude and Annie, shareholders
Slide 108: Questions & Answers
Slide 109: Annual General Meeting
Slide 110: Annual General Meeting
Slide 111: Annual General Meeting
Slide 112: Laurence, shareholder for 10 years
Slide 113: Vote on Resolutions
Slide 114: Annual General Meeting
Slide 115: Vote on Resolutions
Slide 116: First Resolution
Slide 117: Second Resolution
Slide 118: Third Resolution
Slide 119: Fourth Resolution
Slide 120: Fifth Resolution
Slide 121: Slide 121
Slide 122: Slide 122
Slide 123: Slide 123
Slide 124: Slide 124
Slide 125: Slide 125
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