Credit Investor Presentation Strong Growth in Line with NEOS Solid - - PowerPoint PPT Presentation
Credit Investor Presentation Strong Growth in Line with NEOS Solid Performance Business Development Acceleration September 2018 Agenda 1 A Proven Business Model for Sustainability 2 H1 2018 Activity Solid performance, strong cash
September 2018
The world leader in gases, technologies and services for Industry and Health September 2018 Credit investor 2
Group Credit Profile
Appendix
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(1) Adjusted FY 2017 figures
The world leader in gases, technologies and services for Industry and Health September 2018 Credit investor
Electricity Natural gas Water ESG(d) Healthcare Large Industries Industrial Merchant Electronics
Air Liquide Activities
Home healthcare Patient Filling center SMR(a) ASU(b) Filling center On-site (c) customer Hospital Bulk and Cylinder Customer Metal Producer Refinery Chemical Producer ESG(d) Filling center Electronics Customer ASU(b)
Mutualize assets Liquefaction piggyback Distributors, bolt-on acquisitions 1 2 3
(a) SMR: Hydrogen and carbon monoxide production unit (Steam Methane Reformer) (b) ASU: Air gases production unit (Air Separation Unit) (c) On-site: Small local production unit (d) ESG: Electronic Specialty Gases
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The world leader in gases, technologies and services for Industry and Health September 2018 Credit investor
0,0 0,5 1,0 1,5 2,0 2,5 3,0 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 0,0 1,0 2,0 3,0 4,0 5,0 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
3 000 6 000 9 000 12 000 15 000 18 000 21 000 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
Revenue (in €m) EPS(1) (in €) Cashflow (in €m)
(1) Adjusted for the 2-for-1 share split in 2007, for attributions of free shares and for a factor of 0.974 reflecting the value of the rights of the capital increase completed in October 2016. (2) Calculated according to prevailing accounting rules over 30 years.
Dividend(1) (in € per share)
CAGR
+6.0%
CAGR
years(2)
+7.5%
CAGR
+6.9%
CAGR
years(2)
+8.6%
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Net Profit Cash Flow(3) G&S Operating Margin(2)
(1) Comparable growth (2) Excluding energy impact (3) After change in Working Capital Requirements
Sales(1)
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Note: NEOS sales growth objective between +6% and +8% CAGR 2016-2020, including Airgas scope effect in 2017 contributing +2% to the CAGR
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Industrial Production Year on Year in % (3-month rolling average)
H1 2018
Estimated FY 2018
(2)
(1) On Group sales (2) With an annual average EUR/USD exchange rate estimated at 1.19
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Comparable G&S sales growth
ASIA INDUSTRIAL MERCHANT AMERICAS HEALTHCARE
DEVELOPING ECONOMIES
ELECTRONICS
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G&S Quarterly Growth Analysis
+29% +31% +14%
(1) Comparable growth based on 2016 adjusted sales
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AMERICAS
H1 2018
€3,874m
EUROPE
H1 2018
€3,464m
Dynamic IM and HC, high EL
contribution
pricing
Scandinavia
Very high organic HC and solid IM
G&S Comparable Sales Growth
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Very strong momentum in all activities
and Australia
and volumes; improving Australia
Full impact of major start-up in LI
in Saudi Arabia
ASIA-PACIF I C
H1 2018
€2,107m
MIDDLE-EAST & AFRICA
H1 2018
€324m
G&S Comparable Sales Growth
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LARGE INDUSTRIES
H1 2018
€2,718m
INDUSTRIAL MERCHANT
H1 2018
€4,501m
Strong contribution from SU/RU
and China
Chemicals market
Europe and the U.S.
Robust activity
Metal Fabrication markets
G&S Comparable Sales Growth
+4% +4,5% Q1 18 Q2 18
H1 18 : +4%
+6% +4% Q1 18 Q2 18
H1 18 : +5%
+4.5%
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Very strong organic activity
Ingredients
Double-digit growth in Asia
materials
HEALTHCARE
H1 2018
ELECTRONICS
H1 2018
€836m €1,714m
G&S Comparable Sales Growth
+5% +7% Q1 18 Q2 18
H1 18 : +6%
+6% +8% Q1 18 Q2 18
H1 18 : +7%
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H1 18 Efficiencies NEOS Cumulated Efficiencies
2020 2019 2018 2017
>€1,200m >€600m >€900m
€497m
€323m Target
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~US$215m
~US$45m
2016 2017 2018 2019
45m >175m >235m >300m 45m 215m
Initial target Update
In US$
In US$
(1)
(1) Defined in 2016
>280m
Mid- 2019
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CASH FLOW +11.1%
Gearing
80%
Gearing(1)
79%
(1) June 30 gearings adjusted for dividend seasonality. (2) Including acquisitions, transactions with minority shareholders, net of divestitures. (3) Including share purchases and capital increases.
Gearing(1)
90%
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6% 8% 10%
adjusted June 17
June 18 2021/22 NEOS
>10%
Airgas acquisition
10.3% 6.9% 7.4%
ROCE
(1) Excluding 2017 positive impact on net profit of non-cash one-off items.
7.7%(1)
(1)
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0% 1% 2% 3% 4% 5% 6% H2 16 H1 17 H2 17 H1 18 +5.8% +4.0%
Group Sales Comparable Growth Investment Decisions - in €bn
1,0 1,2 1,4 H2 16 H1 17 H2 17 H1 18
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Investment Opportunities(1)
12-month portfolio
H1 2018 Investment Decisions(1) H1 2018 Start-up/Ramp-up Sales Growth Contribution
EL Carrier Gas contracts in Asia
Middle-East
(1) See definitions in appendix
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Q1 Q2 Q3 Q4
Sasol
RSA
OCI
U.S.
Fujian Shenyuan
China
Pemex
Mexico
Chinese Project Electronics Projects
Asia
Q1 Q2
Middle- East Projects
Yanchang
China
Electronics Projects
Asia
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(1) See definitions in appendix
Investment Backlog(1) in €bn
Dec 2015 Dec 2016 Dec 2017 Decisions Start-ups June 2018
Start-ups Decisions
Yearly Sales Backlog(1) after full Ramp-ups
€2.3bn €2.1bn €2.1bn €2.3bn € 0.9bn
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(1) Exceptional non-cash items having a net positive impact on 2017 net profit
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1,49 1,47 1,61 1,59 1,63 1,70 3,30 2,60x 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 2010 2011 2012 2013 2014 2015 2016 2017 Net Debt Net Debt / EBITDA
31
DEBT / EQUITY
55%
DEBT / EQUITY
53%
DEBT / EQUITY
58%
DEBT / EQUITY
56%
DEBT / EQUITY
53%
DEBT / EQUITY
57%
DEBT / EQUITY
80%
In €m
DEBT / EQUITY
90% Following the acquisition of
15,368 13,371
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BANK DEBT
9%
PRIVATE PLACEMENTS OTHERS(1) COMMERCIAL PAPER (1) Others: Finance leases and put options granted to minority shareholders
BONDS
MARKET DEBT
91%
72% 11% 7% 1%
(gross debt)
FIXED RATE
86%
VARIABLE RATE
14%
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CASH AND CASH EQUIVALENT
28%
CONFIRMED CREDIT LINES
72%
facilities for €1.8bn and a €1.3bn Revolving Credit Facility
2018 >2022 2019 to 2022
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As of June 30, 2018
2,00% 3,00% 4,00% 5,00% 2009 2010 2011 2012 2013 2014 2015 2016 H1 17 2017 H1 18
3% 3,1%
*Excluding a non-recurring gain of around €55mn generated by the unwinding of hedging instruments relating to the debt reorganization in the US
RMB
5%
As of December 31, 2017
EUR
31%
USD
52%
JPY
3%
OTHERS
9%
The world leader in gases, technologies and services for Industry and Health September 2018 Credit investor
35 In €m January 2038 September 2046
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■ Long-term rating: A- ■ Short-term rating: A-2 ■ Outlook: Stable on July 7, 2017 ■ Rationale:
○ Excellent Business Risk as well as adequate Liquidity and a significant Financial Risk. “S&P places a strong emphasis
generation when analyzing its profitability and financial
than that of most specialtychemicalcompanies” ○ The stable outlook reflects S&P‘s expectation that the company will report overall resilient performance and positive free operating cash flow generation, leading to adjustedFFO to debt of about 25% in the next three years.
■ Long-term rating: A3 ■ Short-term rating: P-2 ■ Outlook: Stable on June 18, 2018 ■ Rationale:
○ “As a result of the acquisition Air Liquide's business profile is now stronger and, with higher revenue and stable profitability, the company was free cash flow positive in
revenue and profits from long-term energy-indexed take-or- pay contracts, a well-balanced geographic diversification, and customers fromvarious uncorrelatedend markets.” ○ “Air Liquide managed to maintain its Moody's adjusted EBITDA margin at 26% in 2017, despite integrating less profitable Airgas and energy price headwinds, by realizing higher-thanexpectedsynergies andcosts savings.”
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(1) Including Airgas scope effect in 2017 contributing +2% to the CAGR (2) Over the 2017-2020 period
CAGR 2016-2020(1)
after 5-6 years Efficiencies >€300m on average/year(2) + Airgas synergies >$300m
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GHG* emissions
carbon intensity
mobility
*GreenHouse Gas
For better environment For better health
e.g. e.g. e.g.
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AMERICAS
€3.9bn
EUROPE
€3.5bn
ASIA- PACIFIC
€2.1bn
Large Industries Electronics Healthcare Industrial Merchant
€9,769m
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Q2 Gas & Services Sales: €1,973m
INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE ELECTRONICS
and hardgoodsin the U.S.
particularly manufacturing, metal fabrication and construction in the U.S.
in the U.S. for cogen and H2
Chemicals
for medical gases and in Canada for HHC
bolt-on acquisitions
America
Installation sales
(1)
(1) Refer to appendix for definitions (2) Excluding impact of energy
(2)
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Q2 Gas & Services Sales: €1,711m
INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE
turnarounds in H2
and in Turkey
Eastern Europe
craftsman markets
especially in Northern Europe
(1) Refer to appendix for definitions
(1) (2)
(2) Excluding impact of energy
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Q2 Gas & Services Sales: €1,091m
INDUSTRIAL MERCHANT LARGE INDUSTRIES ELECTRONICS
and steel), South Korea, Singapore (refining) and Australia (mining)
increase in cylinders and in liquid argon ; higher prices
molecules particularly in Taiwan and South Korea
sales
(1) (2)
(1) Refer to appendix for definitions (2) Excluding impact of energy
+
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46 (1) H1 2017 Basic earnings per share adjusted for the free share attribution of October 2, 2017
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H1 2018 G&S operating margin excluding energy improved +30bps compared to H1 2017
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* Including fair value of derivatives
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* PPE: Property, plant and equipment.
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G&S H1 2018 capex(1) G&S capex(1) / sales
(1) Gross industrial investments.
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100 200 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Sales Order intake 100 200 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Sales Order intake (1) Group and third-party order intake
E&C GM&T
+33% +4%
(2) (2)
(2) Comparable growth
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– 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.
– 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.
– Cumulated expected sales per year generated by the current investment backlog after full ramp-up.
– Cumulated value of industrial and financial investment decisions. – Industrial, growth and non-growth projects including asset replacements, efficiency, maintenance and safety. – Financial decisions (acquisitions).
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For further information, please contact:
Investor Relations Aude Rodriguez + 33 (0)1 40 62 57 08 Louis Laffont + 33 (0)1 40 62 57 18 Ludmilla Binet + 33 (0)1 40 62 57 37 Jérôme Zaman + 33 (0)1 40 62 59 38 Joseph Marczely + 1 610 263 8277 Group Financing and Rating Jacques Molgo + 33 (0)1 40 62 57 75 Aude Revel + 33 (0)1 40 62 56 64 Aurélien de Chomereau + 33 (0)1 40 62 58 25
www.airliquide.com Follow us on Twitter @AirLiquideGroup
L’Air Liquide S.A. Corporation for the study and application of processes developed by Georges Claude with registered capital of 2,356,439,277.50 euros Corporate Headquarters: 75, Quai d’Orsay 75321 Paris Cedex 07 Tel : +33 (0)1 40 62 55 55 RCS Paris 552 096 281