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 flow • Business Development Acceleration and Quality Investment Opportunities 3 Group Credit Profile 4 Appendix 2 Credit investor September 2018 The world leader in gases, technologies and services for Industry and Health
A Proven Business Model for Sustainability 3 Credit investor September 2018 The world leader in gases, technologies and services for Industry and Health
The World Leader in Gases, Technologies and Services for Industry & Health Established in 1902 >€20bn Sales 80+ Countries 16.5 % OIR ~ 65,000 3,5M+ margin 1 Employees Customers & patients (1) Adjusted FY 2017 figures 4 Credit investor September 2018 The world leader in gases, technologies and services for Industry and Health
A Strong Business Model ESG (d) Chemical Electricity ESG (d) Producer Refinery Natural gas Filling center Water Metal Producer Mutualize assets 1 SMR (a) Home healthcare ASU (b) Patient Liquefaction ASU (b) 2 piggyback Electronics Customer Hospital Filling center On-site (c) Filling Distributors, customer center bolt-on 3 acquisitions Air Liquide Activities Large Industries Industrial Merchant Bulk and Cylinder Healthcare Customer Electronics (b) ASU: Air gases production unit (Air Separation Unit) ( a) SMR: Hydrogen and carbon monoxide production unit (Steam Methane Reformer) (c) On-site: Small local production unit (d) ESG: Electronic Specialty Gases Credit investor 5 September 2018 The world leader in gases, technologies and services for Industry and Health
Regular and Sustained Performance Revenue (in €m) EPS (1) (in €) + 6.0 % + 7.5 % 21 000 18 000 CAGR CAGR 5,0 over 30 years (2) years (2) over 30 15 000 4,0 12 000 3,0 9 000 2,0 6 000 1,0 3 000 0,0 0 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Cashflow (in €m) Dividend (1) (in € per share) + 6.9 % + 8.6 % 3,0 4 500 4 000 CAGR CAGR 2,5 over 30 years (2) years (2) 3 500 over 30 2,0 3 000 2 500 1,5 2 000 1,0 1 500 1 000 0,5 500 0,0 0 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 (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. Credit investor 6 September 2018 The world leader in gases, technologies and services for Industry and Health
H1 2018 Solid Performance and Strong Cash Flow Credit investor 7 September 2018 The world leader in gases, technologies and services for Industry and Health
Strong Growth and Solid Performance in H1 2018 Growth in all + 5.8 % + 12.1 % As published Business Lines Sales (1) Net Profit Driven by efficiencies + 11.1 % + 30 bps From operations and synergies G&S Operating Margin (2) Cash Flow (3) (1) Comparable growth (2) Excluding energy impact (3) After change in Working Capital Requirements 8 Credit investor September 2018 The world leader in gases, technologies and services for Industry and Health
Highlights Group sales up ~+6% Strong momentum in all activities High base business growth Improved G&S OIR margin Strong operating cash flow and improved ROCE Quality investment opportunities 9 Credit investor September 2018 The world leader in gases, technologies and services for Industry and Health
Growth at the Top of NEOS Range Note: NEOS sales growth objective between +6% and +8% CAGR 2016-2020, including Airgas scope effect in 2017 contributing +2% to the CAGR Credit investor 10 September 2018 The world leader in gases, technologies and services for Industry and Health
Favorable Global Environment, Softening FX Headwind Lower Negative FX Impact (1) in Q2 High Industrial Production Level Industrial Production Year on Year in % (3-month rolling average) (2) - 3 to - 4 % - 6.8 % Estimated H1 2018 FY 2018 (1) On Group sales (2) With an annual average EUR/USD exchange rate estimated at 1.19 Credit investor 11 September 2018 The world leader in gases, technologies and services for Industry and Health
Accelerating Growth Drivers in Q2 + 14 % + 4.5 % INDUSTRIAL MERCHANT + 11 % + 5 % + 7 % HEALTHCARE + 8 % ELECTRONICS AMERICAS DEVELOPING ASIA ECONOMIES Comparable G&S sales growth Credit investor 12 September 2018 The world leader in gases, technologies and services for Industry and Health
Confirmed High Base Business Growth G&S Quarterly Growth Analysis +14% +31% +29% Strongest base business since Q2 11 (1) Comparable growth based on 2016 adjusted sales 13 Credit investor September 2018 The world leader in gases, technologies and services for Industry and Health
Q2 - Very Robust Growth in Americas, Solid Europe AMERICAS EUROPE H1 2018 H1 2018 €3,874m €3,464m G&S Comparable Sales Growth Dynamic IM and HC, high EL Very high organic HC and solid IM • LI : H 2 customer turnarounds in the U.S. • LI : numerous H 2 customer turnarounds • IM : high growth , broad-based end market • IM : solid despite CO 2 shortage; improving contribution pricing • HC : dynamic in the U.S., Canada and South America • HC : strong in Germany, South Europe and Scandinavia • EL : thriving E&I , high carrier gases • Dynamic Developing Europe 14 Credit investor September 2018 The world leader in gases, technologies and services for Industry and Health
Q2 - Booming Asia, Major Start-Up in South Africa MIDDLE-EAST ASIA-PACIF I C & AFRICA H1 2018 H1 2018 €2,107m €324m G&S Comparable Sales Growth Very strong momentum in all activities Full impact of major start-up in LI • LI : high volumes in China, Singapore, South Korea • LI : Sasol start-up in South Africa in Q4 17 and Australia • IM : solid growth in South Africa and Egypt • IM : China driving growth with strong pricing • HC : strong; contribution from acquisition and volumes ; improving Australia in Saudi Arabia • EL : buoyant activity in all segments, very high E&I 15 Credit investor September 2018 The world leader in gases, technologies and services for Industry and Health
Q2 - Solid IM, Turnarounds in LI H1 18 : +4% H1 18 : +5% +6% +4.5% +4,5% +4% +4% INDUSTRIAL LARGE MERCHANT INDUSTRIES H1 2018 H1 2018 €4,501m €2,718m Q1 18 Q2 18 Q1 18 Q2 18 G&S Comparable Sales Growth Robust activity Strong contribution from SU/RU • Strong Manufacturing and • Ramp-ups in South Africa Metal Fabrication markets and China • CO 2 shortage in Europe • Strong air gases volumes to Chemicals market • Pricing +1.7% • H 2 customer turnarounds in Europe and the U.S. 16 Credit investor September 2018 The world leader in gases, technologies and services for Industry and Health
Q2 - Very Dynamic HC and EL H1 18 : +6% H1 18 : +7% +8% +7% +6% +5% HEALTHCARE ELECTRONICS H1 2018 H1 2018 €1,714m €836m Q1 18 Q2 18 Q1 18 Q2 18 G&S Comparable Sales Growth Very strong organic activity Double-digit growth in Asia • Dynamic HHC despite pricing pressure • Very strong IC and FPD markets • High Medical Gases • Booming E&I • Strong Hygiene and Specialty • High growth of gases and Ingredients materials 17 Credit investor September 2018 The world leader in gases, technologies and services for Industry and Health
Improved G&S OIR Margin 18 Credit investor September 2018 The world leader in gases, technologies and services for Industry and Health
Efficiencies above NEOS Target H1 18 Efficiencies NEOS Cumulated Efficiencies >€1,200m 2020 >€900m 2019 € 174 m >€600m 2018 € 497 m Target € 323 m 2017 19 Credit investor September 2018 The world leader in gases, technologies and services for Industry and Health
Airgas Synergies Further Accelerated US$300m now by mid-2019 Initial Update (1) target >300 m Mid - >300m 2019 US$ 2019 > 280 m 260 m >235m 2018 215m >175m 2017 Costs ~US$215m Revenue ~US$45m 45m 45m • H1 2018 synergies = US$45m 2016 In US$ In US$ (1) Defined in 2016 20 Credit investor September 2018 The world leader in gases, technologies and services for Industry and Health
Net Profit +12% 21 Credit investor September 2018 The world leader in gases, technologies and services for Industry and Health
Strong Cash Flow CASH FLOW + 11.1 % Gearing (1) 90 % Gearing Gearing (1) 80 % 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. 22 Credit investor September 2018 The world leader in gases, technologies and services for Industry and Health
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