A Step Change in Sales with Improved Performance Airgas Synergies Ahead of Plan

Transcription

1 Full Year 2017 Results A Step Change in Sales with Improved Performance Airgas Synergies Ahead of Plan Paris, 15 February 2018

2 Agenda 1. Highlights performance priorities and outlook 2

3 Highlights Benoît Potier Chairman & Chief Executive Officer 3

4 Highlights Sales reached a new level in 2 nd half with improved operating margin Increased dividend proposal Strong cash-flow, reduced net debt and continued improvement in ROCE Airgas synergies ahead of plan NEOS, delivering in the short-term and investing for the long-term 4

5 Improved Performance Step-up in sales growth in 2 nd half Improved Operating Margin (1) Excluding Energy Impact 4% 5% 4% +70bps 3% 3% 17% 16.8% Excl. energy impact 2% 2% 1% 0% % 0% Q1 17 Q2 17 Q3 17 Q % 16.1% 16.5% As published Comparable sales growth Group Gas & Services 15% (1) Group margin vs adjusted group margin 5

6 Increased Dividend Proposal Net Profit Dividend Growth: +12% 2.2bn As published Dividend (1) in per share 2,8 2,4 2,0 1,6 20 yrs CAGR +9.5% (2) , % +10% 0,8 0,4 As published Excluding non-cash non-recurring items & taxes 0, (1) Historical data adjusted for attribution of free shares and for a factor reflecting the value of the rights of the capital increase completed in October 2016 (2) Subject to approval at the combined shareholders meeting scheduled for 16 May

7 Improved Cash Flow and Balance Sheet <25> <20> <15> <10> <5> In bn Reduced Net Debt and Gearing 57% 151% 90% Dec. 15 June 16 Dec. 16 Dec. 17 Airgas acquisition Net debt 80% <13.4> Gearing 160% 140% 120% 100% 80% 80% Gearing comfort 60% 60% range 40% 20% 0% Continued Improvement in ROCE 10% Excl positive impact on net profit of non-cash one-off items 8% 6% 10.3% 6.9% Dec. 15 Dec. 16 adjusted Airgas acquisition 7.4% (1) 7.7% >10% June 17 Dec /22 NEOS objective (1) As published 2017 ROCE = 8.2% 7

8 Airgas Synergies Ahead of Plan Synergies US$40m ahead of initial 2017 target Cost synergies delivered faster Cumulated synergies end of 2019: in excess of US$300m pace and higher level of cost synergies US$ 215m Cumulated Synergies Dec revenues synergies ramping Leveraging the Airgas model Expansion of customer centric management in the Group 8 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health

9 Delivering in the Short-Term Mega trends Energy & Healthcare Digital Group Biogas Energy efficiency Smart Innovative Operations (SIO) Voice of the Customer (VoC) Strategic asset review New organization E-health E-business websites 9 15 February 2018 Full Year 2017 Results

10 and Investing for the Long-Term Research & Development Renewal of R&D centers Over 3 years Cumulative 130m investments Innovation 2017 ~ 290m spending in innovation ALIAD: cumulative ~ 80m investments in start-ups Energy Transition Hydrogen Council CO 2 capture Digital Data analytics Transforming operations February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health

11 2017 Performance Fabienne Lecorvaisier Executive Vice President & Chief Financial Officer 11

12 Sales Growth Accelerating in G&S, E&C Stabilizing (1) Refer to appendix for definitions 12

13 Better Economic Environment Step-up in IP growth, expected to stabilize in 2018 Industrial Production Year on Year in % (3-month rolling average) Negative FX Impact (1) -1.6% -5.4% FY 2017 Q Low Energy impact in Q4 (1) +1.5% +0.5% FY 2017 Q (1) On Group sales, based on 2016 adjusted sales 13

14 Key Growth Drivers in Q % +11% +8% +5% +6% +7% Comparable sales growth INDUSTRIAL MERCHANT AMERICAS GLOBAL MARKETS & TECHNOLOGIES ASIA DEVELOPING ECONOMIES ELECTRONICS 14

15 Base Business Contribution Firming-Up G&S Quarterly Growth Analysis +14% +31% +29% 19 START-UPS in FY17 Strongest base business since Q (1) Comparable growth based on 2016 adjusted sales 15

16 Q4 - Accelerating Americas, Sustained IM in Europe +31% FY as published AMERICAS FY ,150m EUROPE FY ,776m G&S Comparable Sales Growth Excluding the impact of the one off in Q Strong IM and LI in Americas LI: rebounding after hurricanes IM: growth accelerating to >+6% EL: dynamic Advanced Materials, low E&I Strong HC in Latin America and Canada Improved underlying activity LI: solid H 2 demand; high comparison effect IM: sustained growth above +3%; bulk and cylinder volumes up Solid HC, still low contribution from acquisitions 16

17 Q4 - Very Strong Asia and Middle-East ASIA- PACIFIC FY ,081m MIDDLE-EAST & AFRICA FY m G&S Comparable Sales Growth Very good momentum in all WBLs LI: ramp-ups in China, high volumes IM: China driving growth with strong volumes and pricing; low equipment sales in Japan EL: accelerated growth, strong Carrier Gases, dynamic Advanced Materials, high E&I High growth in all WBLs LI: high loading at Yanbu (KSA); major start-up in South Africa end December IM: volumes improvement throughout the region Strong HC in South Africa 17

18 Q4 - IM Driving Growth, LI Outlook Positive +22% FY as published INDUSTRIAL MERCHANT FY ,261m LARGE INDUSTRIES FY ,336m Continued increase in IM Accelerating in North America Very strong China, dynamic developing economies All end-markets up Firming pricing, +1.7% G&S Comparable Sales Growth High volumes offset by Q one-off High air gases and H2 volumes in Americas Ramp-ups in China Major start-up in South Africa Europe: sales slightly up excl. exceptionals 18

19 Q4 - Very Dynamic HC and EL +9% FY as published HEALTHCARE FY ,401m ELECTRONICS FY ,644m G&S Comparable Sales Growth Steady activity, high contribution from acquisitions Double-digit growth in Asia Very strong Americas Dynamic development in Asia High growth in Medical Gases Ramp-ups in Carrier Gases New contracts in Asia, high E&I Strong Advanced Materials 19

20 Low E&C, Developing GMT Sales and Order intake (1) in m 500 E&C 500 GMT H1-15 H2-15 H1-16 H2-16 H1-17 H2-17 Sales Order intake (1) Group and third-party order intake 0 H1-15 H2-15 H1-16 H2-16 H1-17 H2-17 Sales Order intake 20

21 Improved OIR Margin in line with NEOS 21

22 Efficiencies Above NEOS Target FY 17 Efficiencies NEOS Cumulated Efficiencies 2020 > 1,200m 323m > 900m > 600m m + 23m 22

23 2017 Airgas Cumulated Synergies Ahead of Plan US$ 215m 2019 Initial target >300m (1) Update >300m 270m Costs Revenue ~US$190m ~US$25m 2017 costs synergies US$40m above initial target >235m >175m 215m +US$ 40m Higher procurement synergies Cylinder management integration faster than expected m 45m (1) Defined in 2016 In US$ 23 In US$

24 Positive Non-cash Exceptionals, Net Profit Recurring +10% Recurring FY 2017 = FY 2017 excluding non-cash one-off items FY 2016 Earnings Per Share adjusted for free share attribution of October 2,

25 2017 Non-Cash Exceptional Items and Taxes Extended strategic review of assets portfolio 2017 impact of U.S. tax reform Tax rate adjustment on deferred taxes Repatriation tax Impact of U.S. tax reform onwards 2018: US$50m to US$70m tax reduction February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health

26 Significant Debt Reduction GEARING 90% CASH FLOW +15% GEARING 80% Net Debt 31 Dec Net Debt 31 Dec (1) Including acquisitions, transactions with minority shareholders, net of divestitures. (2) Including share purchases and capital increases. 26

27 Selected Investments for the Future Investment Opportunities (1) 12-month portfolio 2017 Investment Decisions (1) 2017 Start-up/Ramp-up Sales Growth Contribution 2.1bn 2.6bn 190m Continued active bidding Small to medium size projects Americas 1 st geography, then Europe and Asia (1) See definitions in appendix Long-term contracts 2 take-overs EL contracts in Asia and Americas Acquisitions in HC and IM accelerating in H2 Above the 170m forecasted 19 start-ups including 1 major in AME 27

28 Stable Backlog despite Major LI Start-Up in Q4 Investment Backlog (1) in bn Increasing Investment Decisions 0.8bn In m Q1-17 Q2-17 Q3-17 Q4-17 Yearly sales backlog (1) after full ramp-ups (1) See definitions in appendix 28

29 Starting-up Major LI Units in a Dynamic Environment Q1 Q2 Q3 Q4 Sasol RSA Fujian Shenyuan China OCI U.S. Pemex Mexico Chinese Project Electronics Projects Asia 2018 forecasted additional sales > 370m Increased bidding activity on new projects 29

30 Outlook Step change in sales with improved performance Airgas synergies ahead of plan Moving forward with NEOS 2018 Deliver major LI start-ups Continue to focus on growth & operational excellence Pursue business transformation; leverage the Airgas model While investing for the future Assuming a comparable environment, Air Liquide is confident in its ability to deliver net profit growth in 2018, calculated at constant exchange rate and excluding 2017 exceptionals (1). (1) exceptional non-cash items having a net positive impact on 2017 net profit 30

31 FY 2017 Appendix 31

32 Adjusted Sales Used as a Comparison Basis (1/2) F Published growth E Comparable growth (2) As of January 1 st, 2016 A B C D Published Airgas Airgas Adjusted 2016 (1) consolidated divestments Air Liquide 2016 (1) Excluding Air Liquide Welding and Aqua Lung (2) Excluding currency, energy price fluctuation and significant M&A impacts Published

33 Adjusted Sales Used as a Comparison Basis (2/2) A B C D E F Published 2016 excluding Air Liquide Welding and Aqua Lung Airgas consolidated - Airgas divestments Adjusted Air Liquide sales Published 2017 Comparable growth Published growth Published 2016 Air Liquide sales excluding Air Liquide Welding and Aqua Lung (IFRS 5, discontinued operations) Published 2016 Airgas sales with divestments fully completed as of January 1 st, starting point: A + B Published 2017 Air Liquide sales Growth between 2016 adjusted Air Liquide sales and published 2017 sales D excluding change, energy and significant M&A versus Growth between published 2016 Air Liquide sales, excluding Air Liquide Welding and Aqua Lung, and published 2017 Air Liquide sales D versus A C 2016 comparable sales growth excluding currency, energy price fluctuation and Airgas impact 33

34 FY 2017 G&S Revenue Breakdown by Region EUROPE AMERICAS 6.8bn ASIA- PACIFIC 19,642m 8.1bn 4.1bn Industrial Merchant Large Industries Healthcare Electronics 34

35 Consolidated P&L (1) FY 2016 Basic earnings per share adjusted for the free share attribution of October 2,

36 Operating Margin (OIR/Revenue) FY 2017 operating margin excluding energy improved +70bps compared to adjusted FY 2016 NB: 2016 figures have been restated to account for IFRS 5, discontinued operations. 36

37 Consolidated Balance Sheet Simplified - In m * Including fair value of derivatives 37

38 Cash Flow Statement * PPE: Property, plant and equipment. 38

39 Impact of Currency and Energy on G&S Revenue Refer to appendix for definitions 39

40 Revenue Analysis by Quarter and by Business Line 40 Refer to appendix for definitions

41 Revenue Analysis by Quarter and by Geography Refer to appendix for definitions 41

42 G&S Revenue Growth by Quarter and by Impact Refer to appendix for definitions 42

43 Americas Q4 Gas & Services Sales: 1,931m INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE ELECTRONICS IM accelerating in U.S. Bulk and cylinder volumes up Positive pricing All end-markets positive Hardgoods significantly up Back to growth following hurricanes High air gases and H2 volumes Very strong growth in South America and Canada Dynamic South America: Brazil and Argentina Canada: solid growth Very Strong Advanced Materials Lower E&I sales vs. high Q (1) (1) Refer to appendix for definitions (2) Excluding impact of energy and compared to the adjusted 2016 operating margin 43

44 Europe Q4 Gas & Services Sales: 1,748m INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE Despite 1 less working day, positive Q4 growth Broad-based strength, especially Eastern Europe Bulk and cylinder volumes up All end-markets growing Decline as expected due to high comparison effect customer indemnity Solid H2 demand Eastern Europe impacted by stoppage in Ukraine Solid Healthcare Lower M&A, tariff pressure Medical gases impacted by 1 less working day Solid Hygiene and Specialty Ingredients (1) (2) (1) Refer to appendix for definitions (2) Excluding impact of energy 44

45 Asia-Pacific Q4 Gas & Services Sales: 1,039m INDUSTRIAL MERCHANT LARGE INDUSTRIES ELECTRONICS China again >+15% with very strong growth both in cylinders and bulk Strong pricing Flat Australia, decreasing Japan Several ramp-ups in China High air gas volumes in Singapore Positive Australia Double digit growth (China, Korea, Japan, Singapore) Very dynamic Advanced Materials Strong growth in carrier gases High level of E&I sales (1) (2) (1) Refer to appendix for definitions (2) Excluding impact of energy 45

46 Industrial Merchant Pricing Refer to appendix for definitions 46

47 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 efficiency projects. Excludes maintenance and safety. Investment backlog at end of the period Cumulated industrial investment value of projects decided but not yet started. Industrial projects with value > 10m, including asset replacements or efficiency projects, excluding maintenance and safety. Sales backlog Cumulated expected sales per year generated by the current investment backlog after full ramp-up. Decisions of the period Cumulated value of industrial and financial investment decisions. Industrial, growth and non-growth projects including asset replacements, efficiency, maintenance and safety. Financial decisions (acquisitions). 47

48 Gas & Services Industrial Capex by Geography G&S FY 2017 capex (1) G&S capex (1) / sales 1.9bn (1) Gross industrial investments. 48

49 Financing Structure As of December 31, 2017 (1) Others: Finance leases and put options granted to minority shareholders. 49

50 Regular and Sustained Performance Revenue (in m) +6.0% EPS (1) (in ) CAGR over 30 years (2) ,0 4,0 3,0 2,0 1,0 +7.5% CAGR over 30 years (2) 0, Cashflow (in m) +6.9% CAGR over 30 years (2) ,0 2,5 2,0 1,5 1,0 0,5 Dividend (1) (in per share) +8.6% CAGR over 30 years (2) 0, (1) Adjusted for the 2-for-1 share split in 2007, for attributions of free shares and for a factor of reflecting the value of the rights of the capital increase completed in October (2) Calculated according to prevailing accounting rules over 30 years. 50

51 For further information, please contact: Investor Relations Aude Rodriguez + 33 (0) Louis Laffont + 33 (0) Ludmilla Binet + 33 (0) Jérôme Zaman + 33 (0) Joseph Marczely Communication Anne Bardot + 33 (0) Annie Fournier + 33 (0) Follow us on L Air Liquide S.A. Corporation for the study and application of processes developed by Georges Claude with registered capital of 2,356,439, euros Corporate Headquarters: 75, Quai d Orsay Paris Cedex 07 Tel : +33 (0) RCS Paris February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health