Air Liquide SA · EURONEXT:AI
Air Liquide SA — H1 2007 Earnings Presentation
26 slides from Air Liquide SA's earnings presentation, Aug 3, 2007
Slide 1: First Half Results 2007
First Half Results 2007 John Glen, Group Finance Director August 3rd, 2007
Slide 2: Good 1st half
Good 1st half Number of significant new steps taken to deliver our new growth ambitions: DEnhanced technology with Lurgi acquisition and new US R&T center DReinforced existing positions with Asian JVs and Homecare Germany DSignificant new contracts signed DEntered new markets • Healthcare in UK an
Slide 3: Key figures in 1st half 2007
Key figures in 1st half 2007 07/06 In €M 07/06 H1 07 excluding as published Forex Group revenue 5,629 +2.7% +6.3%* Operating Income Recurring 856 +6.1% + 9.0% Margin 15.2% +50 bps Net Profit 556 +15.9% + 18.7% FFO 1,012 +7.6% Net debt as of 30/06 4,807 3 • * excluding Forex and Natural Gas impact H1
Slide 4: Strong currency translation effect in H1 2007
Strong currency translation effect in H1 2007 -182 M€ on H1 revenue Appreciation of euro relative to all main currencies D€ / USD: + 8.2% vs H1 06 D€ / CAN$: +7.7% vs H1 06 D€ / Yen: +12.7% vs H1 06 Both revenue and results impacted 4 H1 results - August 3, 2007
Slide 5: Operating margin improvement highlights
Operating margin improvement highlights OIR/revenue: 15.2%, +50 basis points World Business Lines (WBL) progress: DLarge Industries: mix effect from increased hydrogen volumes DElectronics: OPAL purchasing and product mix DHealthcare: OPAL purchasing in France & hygiene, European equipment platf
Slide 6: H1 Net profit up +15.9%
H1 Net profit up +15.9% H1 07/06 In €M H1 06 H1 07 H1 07/06 Excluding forex Operating Income Recurring 807 856 +6.1% +9.0% Other non-recurring operating expenses 5 25 Net finance costs and other net financial expenses (99) (105) Income taxes (212) (211) Share of profit of associates 14 16 Profit att
Slide 7: Acceleration of revenue growth in Q2
Acceleration of revenue growth in Q2 Q1 07 Q2 07 Q1 07/06 Q2 07/06 Q1 07/06 Q2 07/06 In €M Revenue Revenue as published as published comparable comparable Gas & Services 2,452 2,460 +0.3% +3.5% +5.3% +6.3% Related Activities 339 378 +3.1% +13.4% +4.5% +14.8% Group 2,791 2,838 +0.6% +4.7% +5.2% +7.3%
Slide 8: Confirmed improvement in Europe
Confirmed improvement in Europe Europe Gas & Services: €1,323 M Revenue growth* Q2 07/06 Q2 revenue trends Europe: +5.2% DIndustrial Merchant: mixed environment, Industrial strong in Germany, lackluster in France Merchant +4.6% and Italy Large Industries +5.2% DLarge Industries: a late start-up an
Slide 9: New capacities decided in Americas
New capacities decided in Americas Americas Gas & Services: €641 M Revenue growth* Q2 07/ 06 Q2 revenue trends Americas: +4.5% DMixed in USA Industrial • Industrial Merchant: capacity fully Merchant +5.2% utilized due to strong demand; new capacity under construction for Large Industries +2.0% sta
Slide 10: Asia continues to perform
Asia continues to perform Asia-Pacific Gas & Services: €450 M Revenue growth* Q2 07/06 Q2 revenue trends Asia-Pacific: D Steady environment in Japan +11.1% • Firm pricing Industrial Merchant +5.2% • Electronics industry well oriented Electronics +13.9% D Rest of Asia, sustained high double digit g
Slide 11: End market trends expected to continue
End market trends expected to continue H1 H2 2007 2007 Large Industries Steel Back to “normal” growth Chemicals Demand more measured Oil and gas Heavier crude and increasing standards Electronics Volumes looking better Industrial Merchant Continuing industrial growth but capacity Americas constraint
Slide 12: 2007 outlook
2007 outlook 2nd Half: Q2 revenue growth trend continuing OIR margin: D improvement in Gas and Services (OPAL) D dilution from consolidation of Lurgi at Group level We maintain our guidance for 2007 of “double digit growth in net profit” 12 H1 results - August 3, 2007
Slide 13: Accelerating capex
Accelerating capex Major increase in capex in 2007 In €M €10 bn capex 2000 €1 bn 1000 €0.6 bn 0 average of 2007 2008 2009 2010 2011 last 4 years Investments Acquisitions Expected investments 13 H1 results - August 3, 2007
Slide 14: Optimizing shareholder returns
Optimizing shareholder returns Value creation through high pay-out and share buy-backs While maintaining an A rating Average 2007-11 Net profit +10-13% p.a. H1 2007 Equity Equity Gearing Gearing Capex ≈80% 75% FFO ar e b uyback H1 Sh Debt acquisitions Debt Dividend 2006 14 H1 results - August 3,
Slide 15: Major strategic steps taken in H1
Major strategic steps taken in H1 Lurgi: new proprietary technologies: Mid-term growth: Hydrogen, gasification, Bio-fuels. +8 to 10% 1,300 additional engineers Ö Technology New Research & Technology center in the US Emerging countries & Energy IM capacity expansions in Russia, China +2 to 3% and Vie
Slide 16: Conclusion
Conclusion We are confident in our capacity to deliver our new ambitions announced in February… … and well-positioned for progressive acceleration of growth from 2008 16 H1 results - August 3, 2007
Slide 17: Appendices
A AIR LIQUIDE Appendices
Slide 18: Geographical breakdown of sales
Geographical breakdown of sales 2007 Q2 Gas & Services revenue € 2,460 M 2% Europe 18% Americas Asia-Pacific 54% Africa & 26% Middle East 18 H1 results - August 3, 2007
Slide 19: Q2 revenue growth by BL and Geography
Q2 revenue growth by BL and Geography Industrial Large Comparable growth Electronics Healthcare Merchant Industries Europe +4.6% +5.2% +0.9% +7.1% Americas +5.2% +2.0% +15.7% +5.3% Asia-Pacific +5.2% +19.9% +13.9% +14.8% % of Q2 2007 revenues Europe Americas Asia-Pacific €1,323 M €641 M €450 M 4% 6%
Slide 20: Income statement
Income statement In €M H1 06 H1 07 07/06 07/06 comparable basis* Revenue 5,483 5,629 +2.7% +6.3% Operating Income Recurring 1,271 1,320 +3.8% before depreciation Depreciation & amortization (464) (464) Operating Income Recurring 807 856 +6.1% Other non-recurring operating expenses 5 25 Operating Inc
Slide 21: Source and use of funds
Source and use of funds In €M H1 06 H1 07 07/06 Funds provided by operations 941 1,012 7.6% Changes in working capital (192) (195) Other items (2) (28) Net cash from operating activities 747 789 Purchase of PPE and intangible assets (492) (575) Purchase of financial assets (33) (1,103) Proceeds from
Slide 22: Consolidated balance sheet
Consolidated balance sheet €M ASSETS 31/12/06 30/06/07 EQUITY & LIABILITIES 31/12/06 30/06/07 Goodwill 2,615 3,252 Shareholders' equity 6,286 6,208 PPE and intangible assets 8,359 8,689 Minority interests 281 147 Other non current assets 814 805 Total equity 6,567 6,355 Total non-current assets 11,7
Slide 23: Operating income recurring margin
Operating income recurring margin In % H1 05 H2 05 FY Group 14.9% 14.2% 14.5% 2005 Gas & Services 17.6% 16.7% 17.1% In % H1 06 H2 06 FY Group 14.7% 15.6% 15.2% 2006 Gas & Services 17.3% 17.9% 17.6% In % H1 07 Group 15.2% 2007 Gas & Services 17.6% 23 H1 results - August 3, 2007
Slide 24: Continued devaluation of USD and Yen
Continued devaluation of USD and Yen Currency In €M Q1 07 Q2 07 €/USD (41) (35) €/CAD (14) (6) €/JP¥ (27) (30) Others (19) (10) Currency impact (101) (81) Average exchange rates for the period Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 €/USD 1.20 1.25 1.27 1.29 1.31 1.35 €/CAD 1.38 1.41 1.42 1.46 1.54 1.48
Slide 25: Tax rate
Tax rate H1 2006 H1 2007 Tax rate 29.7% 27.2% Current income taxes + Deferred taxes Profit before taxes – share of profit of associates 25 H1 results - August 3, 2007
Slide 26: Share capital evolution
Share capital evolution H1 2006* H1 2007* Share buyback Number 461,946 2,083,552 M€ 38 187 Average price € 82.62 89.83 Average number of shares outstanding 240,287,652 240,587,699 * Adjusted for share split on 13th June 2007, 2 for 1 26 H1 results - August 3, 2007