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Credit Investor Presentation Strong Cash Flow Significant Debt Reduction Full Year 2017 The World Leader in Gases, Technologies and Services for Industry & Health Established in 1902 >20bn Sales 80+ Countries 16.5 % OIR ~ 65,000
Full Year 2017
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
>€20bn 16.5%
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The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
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 Credit Investor Full Year 2017
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
4
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
+7.5%
CAGR
+6.9%
CAGR
+8.6%
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 5
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
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Group Gas & Services Comparable sales growth
(1) Group margin vs. 2016 adjusted group margin
15% 16% 17% 2016 2017
Excluding Energy Impact +70bps
16.1% 16.8%
0% 1% 2% 3% 4% 2016 2017
0% 1% 2% 3% 4% 5% Q1 17 Q2 17 Q3 17 Q4 17
16.5%
As published
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
7 (1) Refer to appendix for definitions
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
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FY 2017 Q4 2017
+1.5% FY 2017 Q4 2017
(1) On Group sales, based on 2016 adjusted sales
Industrial Production Year on Year in % (3-month rolling average)
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 9
Comparable sales growth
ASIA INDUSTRIAL MERCHANT AMERICAS ELECTRONICS
GLOBAL MARKETS & TECHNOLOGIES
DEVELOPING ECONOMIES
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
AMERICAS
FY 2017
€8,150m
EUROPE
FY 2017
€6,776m
Strong IM and LI in Americas
cylinder volumes up
acquisitions
Improved underlying activity
G&S Comparable Sales Growth FY as published
+31%
10 Excluding the impact of the one–off in Q4 2016
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
Very good momentum in all WBLs
and pricing; low equipment sales in Japan
dynamic Advanced Materials, high E&I
High growth in all WBLs
start-up in South Africa end December
the region
ASIA-PACIFIC
FY 2017
€4,081m
MIDDLE-EAST & AFRICA
FY 2017
€635m
G&S Comparable Sales Growth
11
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
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Group Gas & Services Comparable sales growth
(1) Group margin vs. 2016 adjusted group margin
15% 16% 17% 2016 2017
Excluding Energy Impact +70bps
16.1% 16.8%
0% 1% 2% 3% 4% 2016 2017
0% 1% 2% 3% 4% 5% Q1 17 Q2 17 Q3 17 Q4 17
16.5%
As published
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 13
FY 17 Efficiencies NEOS Cumulated Efficiencies
2020 2019 2018 2017
>€1,200m >€600m >€900m €323m
+€
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 14
~US$190m
~US$25m
initial target
faster than expected
2016 2017 2018 2019
45m >175m >235m >300m 45m
215m
270m
Initial target Update
In US$
+US$
In US$
(1)
(1) Defined in 2016
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 15
Recurring FY 2017 = FY 2017 excluding non-cash one-off items FY 2016 Earnings Per Share adjusted for free share attribution of October 2, 2017.
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
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16
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 17
57% 151% 90%
0% 20% 40% 60% 80% 100% 120% 140% 160%
<5> <10> <15> <20> <25>
June 16
Net debt Gearing
6% 8% 10%
adjusted June 17 Dec. 17 2021/22 NEOS
>10%
In €bn
Airgas acquisition Airgas acquisition
10.3% 6.9% 7.4%
(1)
(1) As published 2017 ROCE = 8.2%
Gearing comfort range 80% 60%
€13.4bn €15.4bn
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 18
Investment Opportunities(1)
12-month portfolio
2017 Investment Decisions(1) 2017 Start-up/Ramp-up Sales Growth Contribution
Europe and Asia
accelerating in H2
forecasted
1 major in AME
(1) See definitions in appendix
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 19
> €
Q1 Q2 Q3 Q4
Sasol
RSA
OCI
U.S.
Fujian Shenyuan
China
Pemex
Mexico
Chinese Project Electronics Projects
Asia
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
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The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
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
21
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%
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 22
CASH FLOW
+15%
(1) Including acquisitions, transactions with minority shareholders, net of divestitures. (2) Including share purchases and capital increases.
GEARING
GEARING
Net Debt 31 Dec. 2016 Net Debt 31 Dec. 2017
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
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BANK DEBT
10%
PRIVATE PLACEMENTS OTHERS(1) COMMERCIAL PAPER (1) Others: Finance leases and put options granted to minority shareholders.
(gross debt)
FIXED RATE
86%
VARIABLE RATE
14%
BONDS
MARKET DEBT
90%
78% 9% 2% 1%
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
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EUR
31%
USD
52%
JPY
3%
RMB
5%
OTHERS
9%
2,00% 3,00% 4,00% 5,00% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
+30bps 3.2%
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
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CASH AND CASH EQUIVALENT
34%
CONFIRMED CREDIT LINES
66%
facilities for €1.8bn and a €1.3bn Revolving Credit Facility.
In €m
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
26 In €m
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
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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 specialty chemical companies” ○ 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 adjusted FFO to debt of about 25% in the next three years.
■ Long-term rating: A3 ■ Short-term rating: P-2 ■ Outlook: Stable on May 19, 2017 ■ Rationale:
○ “Stable and predictable cash flow generation supported by high barriers to entry, the low exposure to cyclical end- markets, ongoing efficiency gains and the ability to pass on most of increased input costs to Large Industries and Bulk customers through price escalation clauses.” ○ “Combined credit metrics have weakened as a result of the closing of the Airgas acquisition, but will improve gradually to get back to levels more commensurate with the A3 rating by 2018. We also note the strong strategic rationale
the US market, a key success factor in this industry.”
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The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 29
(1) exceptional non-cash items having a net positive impact on 2017 net profit
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The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
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The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
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The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
(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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The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
GHG* emissions
carbon intensity
mobility
*GreenHouse Gas
For
etter en environm
ent For
etter hea ealth th
e.g. e.g. e.g.
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Smart Innovative Operations (SIO) New
Strategic asset review Voice of the Customer (VoC) E-health E-business websites Biogas Energy efficiency
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
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centers
Over 3 years Cumulative €130m investments
spending in innovation
~€80m investments in start-ups
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
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The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
AMERICAS
€8.1bn
EUROPE
€6.8bn
ASIA- PACIFIC
€4.1bn
Large Industries Electronics Healthcare Industrial Merchant
€19,642m
30
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 39
G&S Quarterly Growth Analysis
+29% +31% +14%
START-UPS in FY17
(1) Comparable growth based on 2016 adjusted sales
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 40
INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE ELECTRONICS
hurricanes
volumes
America and Canada
Brazil and Argentina
Materials
high Q4 2016
(1)
(1) Refer to appendix for definitions (2) Excluding impact of energy and compared to the adjusted 2016 operating margin
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 41
INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE
comparison effect – customer indemnity
stoppage in Ukraine
positive Q4 growth
Eastern Europe
working day
(1) Refer to appendix for definitions
(1) (2)
(2) Excluding impact of energy
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 42
INDUSTRIAL MERCHANT LARGE INDUSTRIES ELECTRONICS
Singapore
strong growth both in cylinders and bulk
Korea, Japan, Singapore)
Materials
(1) (2)
(1) Refer to appendix for definitions (2) Excluding impact of energy
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 43
LARGE INDUSTRIES
FY 2017
€5,336m
INDUSTRIAL MERCHANT
FY 2017
€9,261m
High volumes offset by Q4 2016 one-off
in Americas
exceptionals
Continued increase in IM
developing economies
G&S Comparable Sales Growth FY as published
+22%
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 44
Refer to appendix for definitions
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 45
Steady activity, high contribution from acquisitions
Double-digit growth in Asia
HEALTHCARE
FY 2017
ELECTRONICS
FY 2017
€1,644m €3,401m
G&S Comparable Sales Growth FY as published
+9%
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 46
Yearly sales backlog(1) after full ramp-ups
(1) See definitions in appendix
Investment Backlog(1) in €bn
200 400 600 800 1000 Q1-17 Q2-17 Q3-17 Q4-17
Increasing Investment Decisions
In €m
€
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017
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100 200 300 400 500 H1-15 H2-15 H1-16 H2-16 H1-17 H2-17 Sales Order intake 100 200 300 400 500 H1-15 H2-15 H1-16 H2-16 H1-17 H2-17 Sales Order intake (1) Group and third-party order intake
GMT E&C
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 48
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 49
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.
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 50
(1) FY 2016 Basic earnings per share adjusted for the free share attribution of October 2, 2017
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 51
(1) Historical data adjusted for attribution of free shares and for a factor 0.974 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 2018
0,0 0,4 0,8 1,2 1,6 2,0 2,4 2,8 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
20 yrs CAGR
+9.5%
Dividend(1)
in € per share
€2.65
€2.2bn
(2)
As published
+10% +19.3%
As published Excluding non-cash non-recurring items & taxes
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 52
* Including fair value of derivatives
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 53
G&S FY 2017 capex(1) G&S capex(1) / sales
(1) Gross industrial investments.
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 54
* PPE: Property, plant and equipment.
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(1) Excluding Air Liquide Welding and Aqua Lung (2) Excluding currency, energy price fluctuation and significant M&A impacts
Airgas divestments
Published
2016 (1)
Adjusted
Air Liquide 2016
Airgas consolidated
As of
January 1st, 2016 Published
2017
Comparable growth (2) Published growth
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 56
2016 comparable sales growth excluding currency, energy price fluctuation and Airgas impact
Published 2016 excluding Air Liquide Welding and Aqua Lung Published 2016 Air Liquide sales excluding Air Liquide Welding and Aqua Lung (IFRS 5, discontinued operations) Airgas consolidated
Adjusted Air Liquide sales Published 2017 Comparable growth Published growth
Published 2017 Air Liquide sales 2016 starting point:
+ Published 2016 Airgas sales with divestments fully completed as of January 1st, 2016 Growth between 2016 adjusted Air Liquide sales and published 2017 sales
excluding change, energy and significant M&A versus C
versus
Growth between published 2016 Air Liquide sales, excluding Air Liquide Welding and Aqua Lung, and published 2017 Air Liquide sales
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 57
– 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).
The world leader in gases, technologies and services for Industry and Health Credit Investor Full Year 2017 58
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