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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


  1. H1 2019 Activity Sustained Sales Growth Combined with Step-up in Margin Paris, 30 July 2019

  2. 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

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

  11. 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

  12. 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

  13. 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

  14. 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

  15. 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

  16. 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

  17. 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

  18. 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

  19. +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

  20. 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

  21. € 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

  22. 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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