Air Liquide SA · EURONEXT:AI
Air Liquide SA — H1 2017 Earnings Presentation
50 slides from Air Liquide SA's earnings presentation, Jul 28, 2017
Slide 1: H1 2017 Results: Solid Revenue and Net Profit Growth
H1 2017 Results Solid Revenue and Net Profit Growth Executing Mid-term Strategic Plan Air Liquide supporting Energy Observer, first Hydrogen vessel around the world Paris, 28 July 2017
Slide 2: Agenda
Agenda 1. One year after Airgas closing, executing mid-term strategic plan 2. H1 2017 Improved performance 3. Pursued investments 4. 2017 Outlook 2 28 28 July July 2017 2017 Activity H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor f
Slide 3: One Year After Airgas Closing, Executing Mid-term Strategic Plan
One Year After Airgas Closing, Executing Mid-term Strategic Plan Benoît Potier Chairman & Chief Executive Officer 3 28 28 July July 2017 2017 Activity H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor forIndustry Industryand andHealth
Slide 4: Focus on Growth and Performance
Executing Mid-term Strategic Plan 2016 2017 ● Operational merger ● First synergies delivered Focus on ● All entities aligned Growth and ● Customer centric Performance Portfolio ● G&S focus 4 28 July 2017 H1 2017 Results The world leader in gases, technologies and services for Industry and Health
Slide 5: H1 2017 Highlights
H1 2017 Highlights Group Sales Net Profit €10.3bn +28.4% +14.5% Operating Margin Cash Flow(2) Improved margin(1) +70bps +31.2% (1) Group margin vs. 2016 adjusted margin, excluding energy impact (2) After changes in Working Capital Requirements 5 28July 28 July2017 2017 H1 2017 Results The world The
Slide 6: H1 2017 Improved Performance
H1 2017 Improved Performance Fabienne Lecorvaisier Executive Vice President & Chief Financial Officer 6 26 28 April July 2017 Activity H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor forIndustry Industryand andHealth Health
Slide 7: Strengthening Performance, IM Recovering
Strengthening Performance, IM Recovering H1 2017 Group sales up +28.4% as published • +2.8% G&S comparable growth to adjusted H1 2016* • IM recovering at +3.1% in Q2, higher daily sales +70 bps OIR margin improvement excluding energy Delivering efficiencies & synergies Strong Cash Flow growt
Slide 8: G&S Revenue Step Change
G&S Revenue Step Change +31.0% Published growth In €m Comparable growth +2.8% +2.3% +1.8% +6.9% Refer to appendix for definitions 8 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor forIndustry Industryand andH
Slide 9: Confirmed Improvement in G&S
Confirmed Improvement in G&S Refer to appendix for definitions 9 28July 28 July2017 2017 H1 2017 Results The world The leader world leaderiningases, gases,technologies technologies and and services forIndustry services for Industryand andHealth Health
Slide 10: Better Economic Indicators and End Markets
Better Economic Indicators and End Markets 2016 2017 Industrial Production vs. 2015 vs. 2016 Year on Year in % (3-month rolling average) Food & Pharma Materials & +1.3% Energy Automotive & Manufacturing Technology & Research Professionals & Distributors 10 28July 28 July2017 2017 H1 2017 Results The
Slide 11: Multiple Growth Drivers in H1 2017
Multiple Growth Drivers in H1 2017 +16% +3% +7% +17% +18% LARG E HEALTHCARE INDUSTRIAL ELECTRONICS G LOBAL MARKETS INDUSTRIES DEVELOPING MERCHANT G REATER & TECHNOLOG IES NORTH ECONOMIES WORLDWIDE CHINA AMERICA Refer to appendix for definitions 11 28July 28 July2017 2017 H1 2017 Results The world Th
Slide 12: Stronger Base Contribution in H1 2017
Stronger Base Contribution in H1 2017 H1 17 comparable growth 9 based on 2016 adjusted sales +14% +31% +29% START-UPS in H1 17 G&S Quarterly Growth Analysis 12 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor
Slide 13: Q2 - IM Recovering in North America and Europe
Q2 - IM Recovering in North America and Europe +95% As published AMERICAS EUROPE H1 2017 H1 2017 €4,251m €3,371m G&S Comparable Sales Growth Robust North America Improved underlying activity, less working days • LI: record volumes for air gases, lower CoGen, • LI: better volumes; stoppage in Ukraine
Slide 14: Q2 - Solid Asia, Stronger Middle-East
Q2 - Solid Asia, Stronger Middle-East MIDDLE-EAST AS I A - P AC I F I C & AF R I C A H1 2017 H1 2017 €2,032m €324m G&S Comparable Sales Growth Improved IM and EL Yanbu driving performance • LI: maintenance turnarounds in China • Yanbu (KSA) running at full capacity • IM: very strong bulk and cylinde
Slide 15: Q2 - Solid LI, IM Driving Growth
Q2 - Solid LI, IM Driving Growth +60% As published L AR G E INDUSTRIAL INDUSTRIES M E R C H AN T H1 2017 H1 2017 €2,694m €4,757m G&S Comparable Sales Growth Strong volumes in all regions Continued improvement in IM • High global demand for air • Recovering in North America, gases and hydrogen Europe
Slide 16: Q2 - Sound HC, Positive Momentum in EL
Q2 - Sound HC, Positive Momentum in EL +17% As published H E AL T H C AR E E L E C TR O N I C S H1 2017 H1 2017 €1,690m €837m G&S Comparable Sales Growth Strong growth in developing economies Robust Carrier Gases and Advanced Materials • Solid underlying activity • 3 start-ups in Carrier Gases • Wor
Slide 17: Order Intake Improving again in E&C
Order Intake Improving again in E&C Group and Third Party Orders E&C GMT • Group projects • Space equipment (mainly Ariane 6) • Energy and Chemical projects for 3rd parties • Maritime tanks (China, Korea) • Biogas purification, hydrogen recharging stations 17 28July 28 July2017 2017 H1 2017 H1 2017
Slide 18: Improved OIR Margin
Improved OIR Margin NB: 2016 figures have been restated to account for IFRS 5, discontinued operations. 18 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor forIndustry Industryand andHealth Health
Slide 19: Efficiencies Aligned with NEOS
Efficiencies Aligned with NEOS H1 Efficiencies Cumulative Efficiencies €1,200m 2020 €900m 2019 €148m €600m 2018 €300m 2017 €148m June 30 19 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor forIndustry Industry
Slide 20: Cumulated Synergies Since Merger = US$138m
Cumulated Synergies Since Merger = US$138m Cost Synergies Cumulative Synergies CYLINDER BULK PROCESS BACK +$300m OPERATIONS OPERATIONS & OFFICE 2019 PROCUREMENT +$235m 2018 • Implemented >90% • Next major step in • Best practices under • Implemented >90% Q4 2017: merger of deployment • 19 site closu
Slide 21: Net Profit Up +14.5%
Net Profit Up +14.5% NB: 2016 figures have been restated to account for IFRS 5, discontinued operations. H1 2016 earnings per share restated for the impact of the preferential subscription rights allocated to shareholders as part of the capital increase. 21 28July 28 July2017 2017 H1 2017 Results Th
Slide 22: Strong Cash Flow Growth
Strong Cash Flow Growth CASH FLOW +31% Gearing(1) Gearing Gearing(1) 151% 90% 90% (1) June 30 gearings adjusted for dividend seasonality; June 30 2017 gearing excluding Forex. (2) Including acquisitions, transactions with minority shareholders, net of divestitures. (3) Including share purchases and
Slide 23: Pursued Investments
Pursued Investments Fabienne Lecorvaisier Executive Vice President & Chief Financial Officer 23 26 28 April July 2017 Activity H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor forIndustry Industryand andHealth Health
Slide 24: Stable Portfolio, Selective Decisions
Stable Portfolio, Selective Decisions Investment H1 2017 Investment H1 2017 Start-up/ Opportunities(1) Decisions(1) Ramp-up Sales Growth 12-month portfolio Contribution €2.1bn €1.1bn €71m • Mainly small to medium • Long-term contracts in Belgium • Americas main region size projects and Oman ~40% • O
Slide 25: Start-Ups: Higher Sales Contribution in 2018
Start-Ups: Higher Sales Contribution in 2018 Fujian Shenyuan Major LI China Projects 2017 2018 Q3 Q4 Q1 Q2 Q3 Q4 Chinese Projects Sasol OCI Chinese Projects Latin America South U.S. Project Africa €170m Yearly Sales to >€370m Contribution €190m 25 28July 28 July2017 2017 H1 2017 Results The world Th
Slide 26: Backlog in Line with Growth Expectations
Backlog in Line with Growth Expectations Investment Backlog in €bn (1) €0.8bn Yearly Sales Backlog(1) after full Ramp-ups (1) See definitions in appendix 26 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor for
Slide 27: 2017 Outlook
2017 Outlook NEOS fully deployed “Assuming a comparable H1 IM recovering 2017 environment, 2017 Air Liquide is confident Efficiencies and synergies in its ability to deliver net on track profit growth in 2017” Strong Cash Flow growth 27 28July 28 July2017 2017 H1 2017 Results The world The w
Slide 28: H1 2017 Appendix
H1 2017 Appendix 28 26 28 April July 2017 Activity H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor forIndustry Industryand andHealth Health
Slide 29: Details: Adjusted Sales Used as a Comparison Basis (1/2)
Details: Adjusted Sales Used as a Comparison Basis (1/2) F Published growth E Comparable growth (2) As of January 1st, 2016 A B C D Published Airgas Airgas Adjusted Published H1 16 (1) consolidated divestments Air Liquide H1 17 H1 16 (1) Excluding Air Liquide Welding and Aqua Lung (2) Excluding curr
Slide 30: Details: Adjusted Sales Used as a Comparison Basis (2/2)
Details: Adjusted Sales Used as a Comparison Basis (2/2) Published H1 16 Published H1 16 Air Liquide sales excluding Air Liquide Welding and A excluding Air Liquide Aqua Lung (IFRS 5, discontinued operations) Welding and Aqua Lung Airgas consolidated Published H1 16 Airgas sales with divestments ful
Slide 31: Impact of Currency and Energy on G&S Revenue
Impact of Currency and Energy on G&S Revenue Refer to appendix for definitions 31 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor forIndustry Industryand andHealth Health
Slide 32: Consolidated P&L
Consolidated P&L (1) H1 2016 Basic earnings per share restated for the impact of the preferential subscription rights allocated to shareholders as part of the capital increase 32 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and se
Slide 33: Consolidated Balance Sheet Simplified - In €m
Consolidated Balance Sheet Simplified - In €m * Including fair value of derivatives 33 28July 28 July2017 2017 H1 H1 2017 2017 Results Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor forIndustry Industryand andHealth Health
Slide 34: Cash Flow Statement
Cash Flow Statement * PPE: Property, plant and equipment. (a) The cash flow statement for the 1st half 2016 has been restated in accordance with IAS 8 in order to include the restated net cost of financial indebtedness from the Airgas acquisition. 34 28July 28 July2017 2017 H1 2017 Results The world
Slide 35: Q2 - G&S Step Change
Q2 - G&S Step Change +21.2% Published growth In €m Comparable growth +2.7% +2.0% +1.1% Refer to appendix for definitions 35 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor forIndustry Industryand andHealth He
Slide 36: Revenue Analysis by Quarter and by Business Line
Revenue Analysis by Quarter and by Business Line Refer to appendix for definitions 36 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor forIndustry Industryand andHealth Health
Slide 37: Revenue Analysis by Quarter and by Geography
Revenue Analysis by Quarter and by Geography Refer to appendix for definitions 37 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor forIndustry Industryand andHealth Health
Slide 38: G&S Revenue Growth by Quarter and by Impact
G&S Revenue Growth by Quarter and by Impact Refer to appendix for definitions 38 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor forIndustry Industryand andHealth Health
Slide 39: H1 2017 G&S Revenue Breakdown by Region
H1 2017 G&S Revenue Breakdown by Region EUROPE €3.4bn ASIA- AMERICAS PACIFIC €4.3bn €2.0bn €9,978m Industrial Merchant Large Industries Healthcare Electronics 39 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfo
Slide 40: A Re-balanced Footprint
A Re-balanced Footprint H1 2017 G&S Revenue 97% of Group Revenue 40 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor forIndustry Industryand andHealth Health
Slide 41: Americas
Americas Q2 Gas & Services Sales: €2,109m INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE ELECTRONICS • IM recovering in North • +5% growth in H1, modest Q2 • Dynamic South America: • Double-digit growth in America • Solid air gases volumes, Brazil and Argentina Advanced Materials • Bulk and cylinde
Slide 42: Europe
Europe Q2 Gas & Services Sales: €1,661m INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE • Despite fewer working days, • High volumes in air gases (steel) and • Strong growth in Home Healthcare positive Q2 growth hydrogen (refineries) • Medical gases impacted by fewer working • Increased daily sales
Slide 43: Asia-Pacific
Asia-Pacific Q2 Gas & Services Sales: €1,008m INDUSTRIAL MERCHANT LARGE INDUSTRIES ELECTRONICS • Buoyant China (+17% in Q2) • Strong demand from customers • Double digit growth excluding with very strong growth both in in Korea and Japan E&I cylinders and bulk • Ramp-up of a new unit in • Very dynam
Slide 44: Industrial Merchant Pricing
Industrial Merchant Pricing Refer to appendix for definitions 44 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor forIndustry Industryand andHealth Health
Slide 45: Operating Margin (OIR/Revenue)
Operating Margin (OIR/Revenue) H1 2017 operating margin excluding energy improved +70bps compared to adjusted H1 2016 NB: 2016 figures have been restated to account for IFRS 5, discontinued operations. 45 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,techno
Slide 46: 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 replac
Slide 47: Gas & Services Industrial Capex by Geography
Gas & Services Industrial Capex by Geography G&S H1 2017 capex(1) G&S capex(1) / sales Asia-Pacific Africa 27% Middle-East 9% €1.0bn 28% 36% Europe Americas (1) Gross industrial investments. 47 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,technologies tech
Slide 48: Financing Structure
Financing Structure As of June 30, 2017 (1) Others: Finance leases and put options granted to minority shareholders. 48 28July 28 July2017 2017 H1 2017 Results The world The worldleader leaderiningases, gases,technologies technologies and services servicesfor forIndustry Industryand andHealth Health
Slide 49: Regular and Sustained Performance
Regular and Sustained Performance 18 000 Revenue (in €m) +6.0% EPS(1) (in €) +7.2% 6 C AG R C AG R 15 000 over 30 years (2) 5 (2) over 30 years 12 000 4 9 000 3 6 000 2 3 000 1 0 0 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 1986 1988 1990 1992 1994 1996 1998 2000
Slide 50: For further information, please contact: Investor Relations
For further information, please contact: Investor Relations Communication Aude Rodriguez + 33 (0)1 40 62 57 08 Anne Bardot + 33 (0)1 40 62 50 93 Louis Laffont + 33 (0)1 40 62 57 18 Annie Fournier + 33 (0)1 40 62 51 31 Jérôme Zaman + 33 (0)1 40 62 59 38 Joseph Marczely + 1 610 263 8277 ww