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Full Year 2018 Results
Strong growth reinforced throughout the yearand solid performance
Paris, 14 February 2019
Agenda
1. Profitable, consistent and responsible growth
2. Strong growth reinforced throughout the yearand solid performance
Strengthening efficiency program
Dynamic business development
3. 2019 outlook
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health2
3
Profitable, consistent and responsible growth
Benoît PotierChairman & Chief Executive Officer
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
FY 2018 Highlights
4
+6.1% +60bps
+30bps +22%
Strong sales growth in all markets and geographies
ROCEramping up
Improved G&SOperational margin
Record level ofinvestment decisions
(1) Group comparable sales growth(2) Excluding energy impact
(2)
(1) (3)
(3) Excluding FX impact and positive impact on 2017 net profit of non-cash one-off items
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
High Sales Growth, Markets Well Oriented
5
Group
Gas & Services
Comparable sales growth
-1%
0%
1%
2%
3%
4%
5%
6%
7%
H1 16 H2 16 H1 17 H2 17 H1 18 H2 18
Sales growth Markets
Chemicals
Oil & gas
Steel
Metal Fab.
Construction
Energy
Food & Pharma
Integrated Circuit
OutlookH1 19
IM
LI
EL
FY +6.1%
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
FY 2018 – All Performance Indicators Further Improving
6
ROCEG&S OIR/sales
+30bps
Net profit Net debt
+4.2%<€836m>
69%Excl. energy
Gearing
(1)
(1) Compared to recurring 2017 net profit, excluding non cash non recurring items and taxes
8.0%
+8.7%Excl. FX 8.3%
7
Dividend Proposal, 1 Free Share for 10 in 2019
(1) Excluding non-cash non-recurring items & taxes
(2) 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
(3) Subject to approval at the combined shareholders’ meeting scheduled for 7 May 2019
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Dividend Growth
0,0
0,4
0,8
1,2
1,6
2,0
2,4
2,8
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
20 yrsCAGR
+8.8%Dividend(2)
in € per share
€2.65
Net Profit
€2.1bn
(3)
As published
+ 4.2%
Compared to 2017 Recurring Net Profit(1)
8
Record Level for Investment Decisions, >€3bn
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Reinforcing presence in key basins
Strategic positionsin growing markets
Opening innovative new markets
~40%
2018 investment decisions
~40%
~20%
Large Industries
Industrial Merchant
Electronics
Global Markets & Technologies
9
2019 - Focus On NEOS Objectives
14 February 2019
Strategic investments to support growth
Strengthening efficiencies
Focus on ROCE
Profitable growth
Consistentgrowth
Responsiblegrowth
Solid and resilient Business Model
Innovation and digital
Operational excellence
Climate objectives, 2015-2025
o Reduce carbon intensity by 30%
o Develop new low carbon solutionsfor customers and ecosystems
A world leader in gases, technologies and services for Industry and HealthFY 2018 Results
10
Strong Growth Reinforced throughout the Year and Solid Performance
Fabienne LecorvaisierExecutive Vice President &Chief Financial Officer
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Growth at the Top of NEOS Range
11 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Note: NEOS sales growth objective between +6% and +8% CAGR 2016-2020, including Airgas scope effect in 2017 contributing +2% to the CAGR(1) Comparable sales growth: excluding currency, energy and significant scope impacts
(1) (1)
Positive Environment, Softening FX Headwind
World IP at High Level in 2018
12 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Neutral Forex Impact in Q4 2018(2)
Q4 2018
-0.1%
FY 2018
-3.6%
Higher Positive Energy impact(2)
+2.4% +1.3%
Q4 2018 FY 2018
Industrial Production growth in % YTD 2018(1)
+4.0%+3.0%
U.S.World
+4.5%+1.2%
DevelopingEconomiesEuro zone
(1) End of Nov. 2018, except U.S. end of Dec. 2018 (2) On Group sales
13
Q4 - Strong Growth Drivers Across Geographies and WBLs
Comparable G&S sales growth
ASIA
INDUSTRIALMERCHANT
AMERICAS
HEALTHCARE +5%
+9%
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
+13%
DEVELOPING ECONOMIES
+6%
ELECTRONICS
+5%
LARGE INDUSTRIES +3%
+18%
14
Base Business Operating at Highest Level
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
G&S Quarterly Sales Growth Analysis
(1) Comparable growth based on 2016 adjusted sales
+29%+31%+14%
Q4 – Strong Momentum in Americas, Solid Europe
AMERICASFY 2018
€7,982m
EUROPEFY 2018
€7,111m
Dynamic activity in all WBLs
• LI: high H2, start-ups in air gases
• IM: high growth with increased pricing; most markets well-oriented, very strong Metal Fabrication
• Dynamic HC in the U.S. and South America
• EL: high Advanced Materials, buoyant E&I
• LI: HyCO turnarounds, start-up in Turkey
• IM: growth in all countries; high bulk and cylinders; stronger pricing
• HC: HHC driving growth especiallydiabetes in Nordics
High IM and HC
G&S Comparable Sales Growth
15 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Q4 – Very Dynamic Asia, Major Start-Up in South Africa
IM boosted by China, buoyant EL
• LI: 3 start-ups including Fujian but majorH2 turnaround in Singapore
• IM: China driving growth with high cylinder volumes, softer pricing; dynamic SEA
• EL: buoyant activity with double-digit growthin CG and AM, very dynamic E&I
Full impact of major start-up in LI
• LI: Sasol start-up in South Africa in Dec. 17
• IM: high growth in Egypt and India
• HC: major contribution from acquisition in Saudi Arabia
ASIA-PACIFICFY 2018
€4,359m
MIDDLE-EAST& AFRICA
FY 2018
€655m
G&S Comparable Sales Growth
16 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
FY 18 : +15.5%
17
Q4 – Strong IM, Solid LI
LARGEINDUSTRIES
FY 2018
€5,685m
INDUSTRIALMERCHANT
FY 2018
€9,181m
Robust growth, several start-ups
• 5 SUs, contribution onlyend of Q4
• Strong H2 in Americas
• HyCO turnarounds in Europe and Asia
Favorable environment with price hikes
All end markets positive
Very strong fabrication market
Strong bulk, cylinders catching up
Increased pricing at +3.3%
G&S Comparable Sales Growth
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
FY 18 : +4.5%
18
Q4 – Steady HC Growth, Buoyant EL
Very solid organic activity
• Double-digit growth in HHC,low level of bolt-on acquisitions
• Solid business model
• High Medical Gases in Americasdriven by Proximity Care
Record sales growth
• Strong demand fromIC market
• Very high growth ofCG and AM
• Very dynamic E&I
HEALTHCAREFY 2018
ELECTRONICSFY 2018
€1,755m€3,486m
G&S Comparable Sales Growth
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Continued Recovery in E&C, High Growth in GM&T
19 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
E&C - Strong Improvement
Sales FY 2018*
+31%
Order Intake FY 2018
+11%
GM&T - Strong Sales and Order Intake
+30%
+31%
Sales FY 2018*
Order Intake FY 2018
€807m €460m
€430m €474m
* Comparable sales growth
20
Improved OIR Margin in line with NEOS
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Note: Group FY 18 OIR Margin as published at 16.4%
21
$300m Airgas Synergies Fully Delivered Beginning 2019
14 February 2019
$290m
Costs ~$230m
Revenue ~$60m
$300m synergies expected in Q1 2019, one year ahead initial target
Airgas fully integrated
From 2019, future Airgas contribution to the efficiency program
Cumulatedsynergies
End of 2018
FY 2018 Results A world leader in gases, technologies and services for Industry and Health
22
Efficiencies Outpaced NEOS Target of €300m per Year
€351m
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
FY 2018 Efficiencies
NEOS Cumulated Efficiencies
as defined in initial target
2020
2019
2018
2017
>€1,200m
>€900m
€674mas of 31/12/2018
23
Strengthened Efficiency Program Starting in 2019
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
0
100
200
300
400
Initial target New target
50% Airgas efficiencies
50% o Organization
agility –Mutualization
o Leverage on digital
>€300m
>€400m
Annual target Cumulated NEOS forecast in 2020
Update
>€1.2bn
>€1.5bn
Update
24
Net Profit Recurring Excluding Currency +8.7%
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
(1) Excluding non-cash one-off items in 2017 net profit
25
Significant Debt and Gearing Reduction
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
CASH FLOW
+10.9%
(1) Including acquisitions, transactions with minority shareholders, net of divestitures. (2) Including share purchases and capital increases.
GEARING
80%GEARING
69%
Net Debt31 Dec. 2017
Net Debt31 Dec. 2018
26
Delivering NEOS ROCE Objective
14 February 2019
6%
8%
10%
Dec. 15 Dec. 16adjusted
Dec. 17 Dec. 18 2021/222021/2022NEOS
objective
>10%
Airgasacquisition
10.3%
6.9%
ROCE – After tax
(1) Excluding positive impact on 2017 net profit of non-cash one-off items
7.7%(1) 8.0%as published
8.3% excl. FX
+60bps
FY 2018 Results A world leader in gases, technologies and services for Industry and Health
27
Dynamic Business Development
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
28
Very High Decisions & Increasing Opportunities
InvestmentOpportunities(1)
12-month portfolio
2018 Investment Decisions(1)
2018Start-up/Ramp-up
Sales Growth Contribution
€270m€2.6bn
• Selectivity in thriving bidding activity
• Medium-size opportunities
• Record level
• Very high in LI, EL and GM&T
• 1/3 of decisions in the U.S.
• 17 start-ups
(1) See definitions in appendix
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
€3.1bn
29
Strong Backlog
(1) See definitions in appendix
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Dec 2015 Dec 2016 Dec 2017 Decisions Start-ups Dec 2018
Start-upsDecisions
Yearly Sales Backlog(1)
after full Ramp-ups
€2.3bn
€2.1bn €2.1bn
€2.2bn
€ 0.9bn
in €bn
30 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Start-Ups Outlook for 2019
Major start-ups
Sales growth contribution
€270m >€300m
FY 2019FY 2018
Note: TO = Take Over
LITO
China
FujianShenyuan
China
PemexTO
Mexico
20182019
Q1 Q2 Q3 Q4
Yanchang
China
LIProjects
Middle-East
ELProjects
Asia
ELProjects
Asia
SteelProjects
Europe
LIProjectArgentina
ELProjects
Asia
31
2019 Outlook
Profitable, consistent and responsible growth
Solid performance with continued margin improvement and strong cash flow
Dynamic business development
20192018
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
“Assuming a comparable environment, Air Liquide is confident in its abilityto deliver net profit growth in 2019, calculated at constant exchange rate.”
Continue to focus on growth and operational excellence
Strengthening efficiency program
Continue to seize strategic opportunities
32
FY 2018Appendix
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
33
FY 2018 G&S Revenue Breakdown by Region
AMERICAS
€8.0bn
EUROPE
€7.1bn ASIA-PACIFIC
€4.4bn
Large Industries ElectronicsHealthcareIndustrial Merchant
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
€20,107m
34
Americas
Q4 Gas & Services Sales: €2,091m
INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE ELECTRONICS
• Very solid activity for all products: bulk, cylinders and hardgoods
• Very strong pricing +4.2%
• Well-oriented end-markets, particularly Manufacturing,Metal Fabrication and Construction in the U.S.
• Strong volumes of hydrogen in the U.S. and high cogen in Canada
• Ramp-ups in Argentina and the U.S.
• Limited customer turnarounds
• Solid growth in the U.S. and Canada for medical gases
• Limited contribution from bolt-on acquisitions
• Strong momentum in medical gases and HHC in Brazil
• Double-digit sales growth in Advanced and Specialty Materials
• Buoyant E&I sales
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
(1) Excluding energy impact
(1)
35
Europe
Q4 Gas & Services Sales: €1,868m
INDUSTRIAL MERCHANT LARGE INDUSTRIES HEALTHCARE
• High number of customer turnarounds in HyCO
• Softer volumes from steel customers
• Start-up in Turkey
• Growth in all countries
• ~+1 working day
• All markets positive; high Manufacturing and Craftsmen
• Strengthened pricing at +2.6%
• Very strong HHC, particularly inAir Liquide’s largest markets:sleep apnea and diabetes
• Limited bolt-on acquisitions
• Increased number of patients,especially in Northern Europe
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
(1)
(1) Excluding energy impact
36
Asia-Pacific
Q4 Gas & Services Sales: €1,153m
INDUSTRIAL MERCHANT LARGE INDUSTRIES ELECTRONICS
• 3 SUs in China
• H2 customer turnarounds
• Double-digit growth in China :very strong volumes in cylinders ; high demand for small on-site generators ; softer pricing
• Slight decrease in Japan
• High Fabrication and Craftsmen markets
• Double-digit growth in Carrier Gases and Advanced Materials in all countries
• Multiple Ramp-ups
• Buoyant E&I sales
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
(1)
(1)
(1) Excluding energy impact
37
Industrial Merchant Pricing
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
Progressive Improvement in E&C, Dynamic GM&T
38
Sales and Order intake(1) – in €m
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
0
100
200
Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18
Sales Order intake
0
100
200
Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18
Sales Order intake
(1) Group and third-party order intake
E&C GM&T
39
Consolidated P&L
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
40
Operating Margin (OIR/Revenue)
G&S FY 2018 operating margin excluding energy improved +30bps compared to FY 2017
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
41
Consolidated Balance Sheet Simplified - In €m
* Including fair value of derivatives
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
42
Cash Flow Statement
* PPE: Property, plant and equipment
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
43
Impact of Currency and Energy on G&S Revenue
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
44
Revenue Analysis by Quarter and by Business Line
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
45
Revenue Analysis by Quarter and by Geography
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
46
G&S Revenue Growth by Quarter and by Impact
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
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).
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
48
Financing Structure
As of December 31, 2018
(1)Others: finance leases and put options granted to minority shareholders
14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
< 1 year
> 5 years
Between
1 and 5 years
0,0
0,5
1,0
1,5
2,0
2,5
3,0
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
0,0
1,0
2,0
3,0
4,0
5,0
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Regular and Sustained Performance - 2018
0
4 000
8 000
12 000
16 000
20 000
24 000
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
0
1 000
2 000
3 000
4 000
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
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)
CAGRover 30 years
(2)
+5.8%CAGR
over 30 years(2)
+6.9%
CAGRover 30 years
(2)
+6.5%CAGR
over 30 years(2)
+8.3%
49 14 February 2019 FY 2018 Results A world leader in gases, technologies and services for Industry and Health
50
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
Muriel Légeron + 33 (0)1 40 62 50 18
Jérôme Zaman + 33 (0)1 40 62 59 38
Joseph Marczely + 1 610 263 8277
Communication
Alexandra Rocca + 33 (0)1 40 62 50 93
Annie Fournier + 33 (0)1 40 62 51 31
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 2,361,264,235 euros
Corporate Headquarters:
75, Quai d’Orsay
75321 Paris Cedex 07
Tel : +33 (0)1 40 62 55 55
RCS Paris 552 096 281
A world leader in gases, technologies and services for Industry and Health14 February 2019 FY 2018 Results