Air Liquide SA · EURONEXT:AI
Air Liquide SA — Debt Investor Presentation (July 2007)
30 slides from Air Liquide SA's debt investor presentation, Jul 3, 2007
Slide 1: Delivering accelerating growth: Credit Update, July 2007
Delivering accelerating growth Credit Update, July 2007 John Glen, Group Finance Director Robert Shaw, Director Corporate Finance & Treasury July 3rd 2007
Slide 2: Air Liquide in Brief
mar LIQUIDE Air Liquide in Brief
Slide 3: Air Liquide in Brief
Air Liquide in Brief Leading industrial and medical gas company Diverse geographic and customer base Air Liquide has more than one million customers worldwide Top ten customers account for less than 15% of revenues Diverse and stable shareholders (38% individual shareholders) Strong corpor
Slide 4: Gas and services: 88% of total revenue
Gas and services: 88% of total revenue Industrial Merchant (45% of G&S) Bulk & cylinders deliveries Serving a wide variety of customers Large Industry (30% of G&S) Large dedicated plants at customer sites Air gases and Hydrogen Pipeline network Healthcare (16% of G&S) Dedicated medical s
Slide 5: Business mix by region
Business mix by region 2006 Total Revenue 10.9 bn € 2006 Gas & Services revenue 9.6 bn € Europe: Americas: Asia: €5.2 bn €2.6 bn €1.7 bn 4% 6% 7% 31% 23% 44% 45% 46% 5% 29% 42% 18% Industrial Merchant Large Industries Healthcare Electronics 5 Credit Update July 3rd 2007
Slide 6: New ambitions, communicated last February
New ambitions, communicated last February
Slide 7: Market shifts in a growing investment portfolio
Market shifts in a growing investment portfolio Portfolio €2.5 bn Negotiating first projects €1 bn in Energy gasification >€1 bn €1.8 bn Adding O2 opportunities In €M to H2 refining 1800 500 Accelerating decisions in emerging markets 400 Global capability 50 900 Recent major wins 400 500 60
Slide 8: Boost revenue growth: Opportunities in Energy
o re m Do Boost revenue growth Mid-term growth +8 to 10% p.a. Opportunities in Energy +2 to 3% Emerging countries Leveraging trends +1% in Healthcare & Electronics Current growth +5 to 6% Mid-term growth: +8 to 10% 8 Credit Update July 3rd 2007
Slide 9: Recent acquisitions
Recent acquisitions Finalized acquisitions Amount (M€) 45% of Japan Air Gases 590 South East Asia JVs 275 Singapore, Thailand, Vietnam & Brunei Linde UK 105 Total YTD 970 Lurgi (expected to be closed in July) 200 9 Credit Update July 3rd 2007
Slide 10: Large Industries
Large Industries Leader in Large Industries Steel Major basin Clean Fuel Clean Fuel Major basin Chemicals Steel Clean Fuel Chemicals Major basin Chemicals Steel Steel Coal to Liquid Exploit existing basins Expand in emerging markets 10 Credit Update July 3rd 2007
Slide 11: Operating leverage: from OPAL (2005-07)
t t er o be Operating leverage: from OPAL (2005-07)… D 2005 - 2007: OPAL to deliver > €400 M Cumulative OPAL Efficiency improvements M€ European restructuring Purchasing 500 400 2008 - 2010: New program 300 200 WBL organization to improve operational efficiency 100 Extend efforts on purchas
Slide 12: New momentum from stronger growth
New momentum from stronger growth Revenue OIR Margin Net profit €16-18 bn 16-17% €1.6-1.8 bn CAGR +8-10% 15% CAGR +10-13% €11 bn €1 bn 2006 2011 2006 2011 2006 2011 More opportunities in Operating leverage Energy Emerging countries Cost reduction Leveraging trends in Healthcare and Elect
Slide 13: Better capital efficiency in this growth phase
Better capital efficiency in this growth phase Funds from operations Debt/Equity: Maintain ROCE Maintain dividend payout 11 to 12% Share buy-backs Capex/revenue: 14 to 16%* up to 80% 12% 50% 14 to 16% +17 to 18% Equity % of revenue 6% 4 to 5% 4% Net Debt 0% FFO Dividend Buy-back Capex 2006 2
Slide 14: Balance Sheet Management to support growth
Balance Sheet Management to support growth Priority will be on growth investment Maintain dividend payout 45% to 50% Share repurchase 2 to 2.5% of share capital per year Gross share repurchase before exercise of options Up to 80% net debt to Equity 14 Credit Update July 3rd 2007
Slide 15: Financial and Rating Policies
Financial and Rating Policies Ratings S&P Long Term: A, stable outlook S&P Short Term: A-1 Moody's Short Term: P-1, negative outlook Air Liquide is committed to maintain an “A level” rating Long term customer relationships Sustained value creation / cash flow generation Air Liquide mainta
Slide 16: Generating solid and sustained performance
Generating solid and sustained performance 12 000 Revenues (in million €): EPS(1) (in €): 9 10 000 8 7 8 000 +8.6% CAGR over 30 years(2) 6 +9.8% CAGR over 30 years(2) 6 000 5 4 4 000 3 2 2 000 1 0 0 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 1976 1978 1980 1982 1
Slide 17: Strong balance sheet
Strong balance sheet M€ ASSETS 31/12/05 31/12/06 EQUITY & LIABILITIES 31/12/05 31/12/06 Shareholders' equity 5,931 6,286 Goodwill 2,646 2,615 Minority interests 278 281 Other intangible assets 386 367 Provisions & deferred tax liabilities 2,798 2,636 Property, plant & equipment 8,169 7,992 Non-curre
Slide 18: Ability to repay debt
Ability to repay debt 90% 6000 77% In M€ 2006 66% 60% Total debt reduction, excl. FX +192 53% 50% Movement share capital (23) 3000 37% FX/perimeter and other impacts 31% on net debt 124 Reduction in net debt +293 0 0% 2002 2003 2004 2005 2006 Net debt French GAAP Net debt IFRS Gearing ratio 18 Credi
Slide 19: Funding Policy
Funding Policy Diversification of funding sources and spreading of debt maturities in order to minimize refinancing risk, Backing of commercial paper with confirmed lines of credit, Hedging of interest rate risk to ensure that funding costs are in line with long-term investment decisions, Fu
Slide 20: Funding and liquidity profile (at December 31, 2006)
Funding and liquidity profile (at December 31, 2006) Total debt funding: €4 344 M Liquidity reserves: Cash & cash equivalents €898 M 2% CAN$ 1% Other Other In M€ By currency 250 (net indebtedness) 5% ¥ Bank debt 20% $ 698 Bonds 1,865 Private placement 757 Commercial Paper 72% € 774 Bonds & ass
Slide 21: Credit strengths
Credit strengths State-of-the-art technology Energy pass-through clauses in long term contracts Diversified customer & geographic base Growing markets Asset-based growth in core business Long-term predictable cash flows 21 Credit Update July 3rd 2007
Slide 22: Appendices
mar LIQUIDE Appendices
Slide 23: 2007: a good start to the year
2007: a good start to the year Q106 Q107 Q107/06 In M€ comparable Group 2,773 2,791 +5.2% Gas & Services 2,445 2,452 +5.3% A promising first quarter Very strong growth in Asia, slower recovery in Europe 23 Credit Update July 3rd 2007
Slide 24: Outlook
Outlook Q1 2007 revenue up +5.2% on a comparable basis Operating Income Recurring growing at a higher rate Same trends expected in Q2 2007 In second half 2007: Several Large Industries start-ups Full consolidation at latest Q3 of new acquisitions We maintain our guidance for 2007 of “dou
Slide 25: Main recent wins in the last 8 months
Main recent wins in the last 8 months Coal To Chemical China : Tianjin soda, 4000 T/D, ASU Steel China, Jiangsu : Shagang, 4000 T/D, O2 China, Dalian : Dongbei Special Steel Group, 550 T/D, O2 Brazil : ThyssenKrupp, 3000 T/D of O2 Chemical China : Bayer in Caojing, ASU Portugal : Dow Che
Slide 26: Large Industries: Oxygen opportunities in Energy
Large Industries Oxygen opportunities in Energy Carbon Diesel No sulphur Gas to Liquids + Naphtha, Lubs Coal Mine Coal to Liquids Chemicals & Methane Methanol Coal to Chemicals CO, CO2, H2, H2O Syngas Stranded Gas Electricity field Gasification Power Plant Residues, Coke Clean fuel Above $40 /bbl oi
Slide 27: Accelerating revenue growth to 2011
o re m Do Accelerating revenue growth to 2011 New mid-term revenue objectives Previous mid-term revenue objectives Industrial Merchant Large Industries 6% 15% +4 to 6% +8 to 15% 4% 10% 2% 5% 0% 0% 2003 2004 2005 2006 2007 2011 2003 2004 2005 2006 2007 2011 Group ambition: +8 to 10% Healthcare Electr
Slide 28: Source and use of funds
Source and use of funds M€ 2005 2006 Funds provided by operations 1,805 1,889 Changes in working capital 5 (109) Other items (90) (13) Net cash from operating activities 1,720 1,767 Purchase of tangible, intangible and financial assets (1,051) (1,201) Proceeds from sale of tangible, intangible and f
Slide 29: Income statement
Income statement H1 H2 M€ 2006 2006 2006 Revenue 5,483 5,466 10,949 Operating Income Recurring before depreciation 1,271 1,296 2,567 Depreciation & amortization (464) (444) (908) Operating Income Recurring 807 852 1,659 Other non-recurring operating expenses 5 (2) +3 Operating Income 812 850 1,662 N
Slide 30: Delivering accelerating growth
Delivering accelerating growth If you need more information, please contact the Corporate Finance Team: Robert Shaw, [email protected], +33 1 40 62 51 53 Bruce Duncan, [email protected], +33 1 40 62 53 48 Investor Relations Team: Virginia Jeanson, [email protected],