Air Liquide SA · EURONEXT:AI
Air Liquide SA — Q3 2014 Earnings Presentation
38 slides from Air Liquide SA's earnings presentation, Oct 24, 2014
Slide 1: 2014 3rd Quarter: Continued growth in a more contrasted economic environment
2014 3rd Quarter Continued growth in a more contrasted economic environment Paris, October 24, 2014
Slide 2: 2014 Q3 activity
2014 Q3 activity Paris, October 24, 2014 Fabienne Lecorvaisier l Chief Financial Officer Continued growth in a more contrasted economic environment • Focusing on key markets while continuously adapting to new dynamics • Update on portfolio management and China • Investing for the future 2 October
Slide 3: A more contrasted environment…
A more contrasted environment… Industrial Production 20 6 Year on Year in % (3-month rolling average) 15 3 10 0 5 0 -3 2013 2014 -5 -10 World United States Western 31% Euro Zone YTD Europe -15 Developing Economies GSI 2014 -20 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 201
Slide 4: Continued growth outperforming the market
Continued growth outperforming the market (2) +2.8% Q3 2014 Q3 13 Q3 14 Q3 14/13 Q3 14/13 YTD 14/13 Sales in €m as published Comparable (1) Comparable (1) Gas & Services 3,444 3,446 +0.1% +3.6% +4.3% Engineering & Technology 184 213 +15.6% +18.0% +15.1% Other Activities 137 142 +3.8% +3.5% -0.8% Gro
Slide 5: Third quarter in line with Q2...
Third quarter in line with Q2... G&S comparable growth(1) 8% 2012 2013 2014 7% 6% 5.7% 5% 4.6% 4.4% Average +4.3% 4.0% 4.0% 3.9% 4% 3,7% 3,6% Average +3.5% Average +2.8% 3% 2% 1.6% 1.5% 0.9% 1% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 (1) Excluding currency, natural gas and significant M&A impacts 5 Octo
Slide 6: ...supported by sustained contribution of start-ups
...supported by sustained contribution of start-ups G&S quarterly growth analysis 7,0% 2012 2013 2014 5 5,0% start-ups in Q3 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 Q3 6 October 24, 2014 Q3 2014 revenue
Slide 7: Focusing on key markets
Focusing on key markets GSI in Asia Americas Electronics developing economies +15% +13% +7 % +12% Q3 2014 Q3 2014 Q3 2014 Q3 2014 Gas & Services sales growth, excluding currency, natural gas and significant M&A impacts. GSI: Gas & Services for Industries = Large Industries + Industrial Merchant + El
Slide 8: Strong progression in Americas and Asia
Strong progression in Americas and Asia G&S comparable sales growth(1) Americas: € 2,511m YTD Asia-Pacific: € 2,527m YTD +9% YTD USA H2 +12% YTD Dynamic Turnarounds 14% 13% China 12% 11% 7% 8% Healthcare Strong 7% > +10% Electronics 3% activity Mexico taking off Japan FY 2013 Q1 Q2 Q
Slide 9: Robust Large Industries & Healthcare
Robust Large Industries & Healthcare G&S comparable sales growth(1) Large Industries: € 3,710m YTD Overall solid oxygen and +3% FY +4% YTD hydrogen volumes Ramps-ups in developing 6% 5% economies 3% 3% 3% 3% 4% Turnarounds in USA & Germany Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 35% 2014 Healthcare: € 1,9
Slide 10: Slower Industrial Merchant, confirmed dynamism in Electronics
Slower Industrial Merchant, confirmed dynamism in Electronics G&S comparable growth(1) Industrial Merchant: € 3,756m YTD Soft summer in Europe +3% FY +3% YTD Robust Oil well services and Automotive 4% 4% 4% 4% Very strong developing 3% 2% Asia 1% Positive pricing: +1.4% 37% Q1 Q2 Q3 Q4 Q1
Slide 11: E&T in line
E&T in line E&T order intake(1) Third party E&T sales 1,905 895 803 618 In €m In €m 750 750 667 516 500 448 500 354 274 267 274 225 247 230 250 250 147 184 213 175 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2013 2014 2013 2014 Selected new projects Robust sales recognition (1) Group and Third-par
Slide 12: Q3 wrap-up: Growth and reinforced competitiveness
Q3 wrap-up: Growth and reinforced competitiveness Group Sales Q3 growth (1) Q3 margins under control Efficiencies in line with objective +4.3% € 233m YTD 2014 In €m 250 200 81 150 8 83 More contrasted environment 100 69 Impact on base business 50 0 Sustained start-ups and ramp-ups Q1 Q2 Q3
Slide 13: Q3 wrap-up: Managed cash flow and capex
Q3 wrap-up: Managed cash flow and capex Operating Cash flow (1) Net Industrial Capex € 678m € 554m In €m Q3 2014 Q3 2014 2000 1500 1000 8 325 Solid cash flow: +6.5% excl. Fx 471 500 Disbursements for realignment 0 plans Q1 Q2 Q3 €1.3bn YTD, in line with €2bn guidance (1) Operating Cash Flow af
Slide 14: Update on Portfolio management and China
Update on Portfolio management and China Paris, October 24, 2014 Pierre Dufour l Senior Executive Vice-President
Slide 15: Continuous portfolio management
Continuous portfolio management Divestitures: 709m€ Acquisitions: 1,564m€ Since January 1, 2011 15 October 24, 2014 Q3 2014 revenue World leader in gases, technologies and services for Industry and Health
Slide 16: Portfolio management: focus on strategic priorities
Portfolio management: focus on strategic priorities Criterias Priorities Development Technology potential Expanding technology offers Synergies, Growing Market integration New therapies LI takeovers Geographic footprint Densification Healthcare bolt-on acquisitions Critical Distributor buy
Slide 17: Capturing China growth…
Capturing China growth… Yichun >+15% Shenyang Air Liquide Liaoyang in China today Erdos Beijing Dalian > 4,000 employees Datong Tianjin Baoding 85 medium and large Yulin DongYing, Qingdao, Weihai Rizhao, Lianyungang plants in 40 cities Linfen Huai’An Nanjing, Jiangyin, Yangzhou Zhumadian Shangha
Slide 18: … and adapting to the Chinese market evolution
… and adapting to the Chinese market evolution Accelerating Leadership in Strengthening growth in LI Electronics IM From Steel to Accompanying China From wholesale to Chemicals and Energy development applications 10,000 tpd capacity Won most of carrier gas Loading installed started early
Slide 19: Investing for the future
Investing for the future Paris, October 24, 2014 Pierre Dufour l Senior Executive Vice-President Q3 2014 Investment opportunities (1) Investment decisions (1) € 3.4 bn € 590 m (1) See definitions in appendix 19 October 24, 2014 Q3 2014 revenue World leader in gases, technologies and services for Ind
Slide 20: Solid investment backlog to support future growth
Solid investment backlog to support future growth YTD 2014 Investment backlog Decisions Start-ups € 2.8bn € 2.7bn € 2.3bn € 2.1bn ~ €1.3bn Sales backlog after full ramp-up Dec 2011 Dec 2012 Dec 2013 Decisions Start-ups Investment backlog September 2014 See definitions in appendix 20 October 24, 2014
Slide 21: 2014 Outlook
2014 Outlook Q3 2014 ■ More contrasted economic environment ■ Focusing on key markets while continuously adapting to new dynamics ■ Investing for the future 2014 objective Barring a degradation of the environment, Air Liquide is confident in its ability to deliver another year of net profit growth
Slide 22: Air Liquide
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Slide 23: Q3 2014 Appendix
Q3 2014 Appendix 23 October 24, 2014 Q3 2014 revenue World leader in gases, technologies and services for Industry and Health
Slide 24: Good activity level in a more contrasted environment
Good activity level in a more contrasted environment Quarterly G&S activity indicator(1) Base 100, Average 2008 2010 2011 2012 2013 2014 130 125 120 115 110 105 100 95 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 4 quarters rolling average (1) Revenue (excluding currency and natural gas
Slide 25: 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 26: 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 Q3 14 €/USD (3) (10) (30) (26) (21) (28) (0) €/CAD (2) (5) (16) (17) (21) (18) (8) €/JP¥ (40) (55) (74) (65) (34) (17) (11) Others (20) (27) (82) (77) (85) (80) (19) Total currency (65) (97) (202) (1
Slide 27: Growth in Q3 2014 G&S revenue
Growth in Q3 2014 G&S revenue in €m +124 <40> 3600 <38> <44> 3,444 -1.2% 3,446 -1.1% -1.3% 3400 +3.6% comparable (1) +0.1% published growth 3200 30000 (1) Q3 2013 Comparable Natural gas Currency Significant Q3 2014 growth perimeter (1) Excluding currency, natural gas and significant M&A impacts. 27
Slide 28: Revenue analysis by quarter (1)
Revenue analysis by quarter (1) Q3 14/13 Sales in €m Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q3 14/13 comparable(1) Europe 1,769 1,778 1,745 1,766 1,701 1,645 1,601 -8.3% -2.4% Americas 766 824 813 822 814 833 864 +6.3% +7.3% Asia-Pacific 780 782 796 826 816 821 890 +11.7% +12.5% Middle-East 91 95
Slide 29: Revenue analysis by quarter (2)
Revenue analysis by quarter (2) Q3 14/13 Sales in €m Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q3 14/13 comparable(1) Large Industries 1,225 1,236 1,218 1,261 1,285 1,208 1,217 -0.1% +3.6% Industrial 1,254 1,284 1,274 1,269 1,229 1,251 1,276 +0.2% +1.8% Merchant Healthcare 659 685 667 678 626 637 63
Slide 30: 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) 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% +3.9% Q4 2013 -2.1 % -1.0% -5.2% -0.4% +
Slide 31: YTD 2014 Revenue breakdown by region
YTD 2014 Revenue breakdown by region Gas & Services 24% Americas YTD 2014 Revenue €10,253m Europe 48% 25% Asia 3% Middle-East and Africa Europe: € 4.9bn Americas: € 2.5bn Asia: € 2.5bn 32% 35% 37% 34% 39% 44% 2% 10% 22% 5% 31% 9% Industrial Merchant Large Industries Healthcare Electronics 31 October
Slide 32: Europe in Q3
Europe in Q3 Q3 Gas & Services sales: €1,601m Electronics 2% ■ Industrial Merchant Healthcare 31% 33% Industrial Merchant Soft summer in the West Activity improving in Spain (Automotive) and UK Large Industries 34% Strong Rare Gases and Offshore services sales Q3 14/13 Comparable change (1): -
Slide 33: Americas in Q3
Americas in Q3 Electronics Q3 Gas & Services sales: €864m Healthcare 9% 10% Industrial Merchant ■ Industrial Merchant 45% Strong Oil well services activity in Canada 36% Large Industries Mexico strongly ramping-up Solid price effect Q3 14/13 Comparable change (1): +7.3% ■ Large Industries +5.8
Slide 34: Asia-Pacific in Q3
Asia-Pacific in Q3 Electronics Q3 Gas & Services sales: €890m Industrial Merchant 22% 33% Healthcare 5% ■ Industrial Merchant Double digit growth in China 40% Large Industries Japan remains positive Q3 14/13 Comparable change (1): +12.5% ■ Large Industries +3.5% Industrial Merchant Ramp-ups in
Slide 35: Industrial Merchant pricing
Industrial Merchant pricing Q3 2014 YTD 2014 -0.1% Europe 0.0% +5.1% Americas +4.3% -0.6% Asia-Pacific -0.3% +1.7% Middle-East and Africa +2.4% +1.4% Total Industrial Merchant +1.3% 35 October 24, 2014 Q3 2014 revenue World leader in gases, technologies and services for Industry and Health
Slide 36: 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 37: For further information, please contact
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 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 www.airliquide.com Follow us on Tw
Slide 38: Air Liquide
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