H1 2019 Activity Sustained Sales Growth Combined with Step-up in Margin Paris, 30 July 2019
Agenda Group transformation accelerating and delivering Sustained sales growth Step-up in margin Very active business development 2019 outlook confirmed 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health 2
Group Transformation Accelerating and Delivering Benoît Potier Chairman & Chief Executive Officer 3 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Very Solid Performance in H1 2019 Operations Balance Sheet + 7.8 % Sustained sales growth (1) + 4.9 % Comparable (1) + 30 bps (4) ROCE ramping up + 70 bps (2) Step-up in margin 71 % (5) Improved gearing at + 12 % (3) Recurring Net Profit growth (1) Group and G&S sales growth in H1 19 (3) Excluding exceptional items: Fujian in 2019 and financial gain in 2018 (2) Operating Income Recurring on Sales; including (4) Excluding Fujian exceptional impact in H1 2019; see reconciliation in appendix of Activity Report +10bps from IFRS16; no energy impact in H1 2019 (5) Compared to June 2018 and adjusted for dividend seasonality; excluding lease liabilities (IFRS16) 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health 4
Sustained Sales Growth from all WBLs G&S Comparable Sales Growth H1 2019 Growth per World Business Lines + 5.0 % 6% 5% +5.4% Large Industries 4% +2.6% Industrial Merchant 3% +13.5% Electronics 2% +6.0% Healthcare 1% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2017 2018 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health 5
Step-up in Margin (1) + 70 bps OIR margin Efficiencies Portfolio Management Price/Mix (1) Operating Income Recurring on Sales; including +10bps from IFRS16; no energy impact in H1 2019 6 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Very Active Investment Decisions Investment Decisions - €bn Split by Geography (excluding Tech Air) €1.8 bn 1.8 Including 1.6 Tech Air 1.4 1.2 36% 1.0 44% H1 2019 0.8 0.6 0.4 0.2 17% 0.0 H2 16 H1 17 H2 17 H1 18 H2 18 H1 19 Financial Investments Industrial Investments Americas Asia Europe AME 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health 7
Group Transformation Accelerating and Delivering Deployment of High level of signing transformation projects S&P outlook revised Portfolio management to Positive A Climate Objectives ASSETS C Investment alignment CUSTOMERS Enhanced innovation E ECOSYSTEMS 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health 8
2019 H1 Performance Fabienne Lecorvaisier Executive Vice President & Chief Financial Officer 9 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Highlights Sustained comparable sales growth of +5% in Q2 Step-up in OIR margin Solid cash flow Increased ROCE Very active business development 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health 10
Sustained Sales Growth +2.5% FX Impact in H1 Neutral Energy Impact in H1 11 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Robust Markets Through H2 2019 Markets Outlook H2 2019 Chemicals Contrasted Chemicals LI Oil & gas High demand from Oil & Gas in Europe Steel Active projects signing Metal Fab. Softer markets due to low investments in the Construction short-term IM Energy Solid consumption-related sectors Food & Pharma Specific dynamic in China Techno & Research Strong Carrier Gases & Advanced Materials EL Integrated Circuit Slightly lower E&I sales growth A world leader in gases, technologies and services for Industry and Health 12 30 July 2019 H1 2019 Results
Confirmed Growth Levers in Q2 G&S comparable sales growth WBLs Main Geographies contributing Industrial + 2 % Asia, Europe, Middle East Merchant Large + 6 % Asia, Europe Industries + 7 % Healthcare Europe, Americas + 13 % Electronics Asia, Americas 13 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Very Solid Level of Base Business G&S quarterly growth analysis Tech Air acquisition (1) Comparable growth based on 2016 adjusted sales 14 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Q2 - Steady Americas and Strong Europe G&S comparable sales growth - high O 2 volumes LI Americas – Solid HC, Pricing in IM - H 2 Start-Up in Mexico - strong pricing IM Sales - contrasted end markets H1 2019 - solid U.S. €4,217m HC - strong HHC in South America EL - still solid E&I - high Carrier Gases Europe – All WBLs Driving Growth LI - high H 2 for refining in Benelux Sales - Ramp-Ups in Turkey and Kazakhstan H1 2019 IM - high pricing €3,611m - positive underlying volumes HC - high organic growth in HHC 15 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Q2 – High Growth in Asia, Dynamic IM in AME G&S comparable sales growth Asia – Strong LI and EL LI - O 2 Ramp-Ups in China for Chemicals - strong cylinder volumes in China IM Sales - solid growth in South East Asia H1 2019 €2,405m - strong growth across the region EL - >+15% in Carrier Gases and Advanced Materials - high E&I AME – Major LI Turnaround LI Sales - major turnaround in South Africa H1 2019 - continuous high growth in Middle-East, IM €303m Egypt and India 16 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Q2 - Resilient IM, High Growth in LI G&S comparable sales growth Stronger pricing at +4.1% Industrial Merchant – Solid Performance Contrasted end markets: Sales - Strong Food & Pharma H1 2019 - Flat automotive - Construction and Metal Fab €4,827m . lower in the U.S. . solid in Europe and Canada . strong in China Large Industries – High contribution from Ramp-Ups Strong Oil & Gas in Benelux with high Sales H 2 volumes H1 2019 Chemicals driven by Ramp-ups in China €2,904m Softer Metals in Europe 17 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Q2 - Strong HC, High Growth in EL G&S comparable sales growth Healthcare – Organic Growth Strong HHC across all of Europe , Sales diabetes therapy in Nordics H1 2019 Solid Medical Gases in Americas €1,821m Electronics – High Carrier Gases & Advanced Materials >+13% growth in Carrier Gases; 2 Start-Ups Sales Double digit growth in Advanced H1 2019 €984m Materials Solid sales to Integrated Circuit Memory market Strong FPD in China 18 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
+70 bps OIR Margin improvement H1 2019 - including +10bps from IFRS 16 - no Energy impact 19 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Pro-active Management of Pricing and Product Mix IM pricing momentum +4.1% Pricing aligned with cost inflation +3.3% Focus of sales teams Leveraging competitive position on +2.1% Helium market Priority to added value services and +1.2% products +0.5% Gas applications in China Inteliox cylinders in US Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2016 2018 2019 2017 20 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
€ 197m Delivered Efficiencies in H1 19 Accelerated Examples momentum Transformation Closing of PG filling centers, logistics Continuous improvement Leveraging on 4 SIO centers 14k employees trained Business Support Centers extended Asia & Europe out of 30k targeted Mutualization of WBLs technical teams Europe, Japan Optimization Extended procurement scope 3,000 Airgas trucks with on-board computers Investment in efficiencies Big data from LI production to IM logistics Italy Argon production & supply chain +63% vs. H1 2018 US, Canada, France, Vietnam Optimization of technicians’ time HHC Europe 21 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
Continuous Portfolio Management Divestitures over last 2 years Focus on core business Europe - Intega EL E&I Densification of operations: - 3 active projects Airgas swap, bolt-on acquisitions China - Refrigerant activity Accretive impact on margin - Fujian assets - Onsite safety services AME - Ophthalmic protection - IM JV swap Contribution to ROCE - 2 active projects equipment improvement - 1 active project 22 30 July 2019 H1 2019 Results A world leader in gases, technologies and services for Industry and Health
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