H1 2020 Proven Resilience and Margin Improvement Benoît Potier, Chairman & Chief Executive Officer Fabienne Lecorvaisier, Executive VP Paris, July 30, 2020 July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health
Proven Resilience and Margin Improvement Benoît Potier Chairman & Chief Executive Officer July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health 2
Resilient H1 Performance During Unprecedented Crisis • Proven resilience across businesses Delivery of significant margin improvement • • Healthcare teams continuing to fight the pandemic • High and increasing number of investment opportunities Full Year 2020 guidance confirmed • July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health 3
H1 2020 Key Figures in a Challenging Environment - 3.2 % Limited sales decrease (1) Group + 50 bps margin (2) Stable Operating Income Recurring + 60 bps G&S margin (2) + 1.8 % Preserved Net Profit + 170 bps CF/Sales (3) 23.1 % Strong Cash Flow on Sales (3) (1) On a comparable basis (excluding currency, energy and significant scope impacts) (2) Operating Income Recurring on Sales, excluding energy impact (3) Cash flow from operating activities before changes in working capital on Sales, compared to restated H1 2019 July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health 4
Contrasted Sales Evolution C-19 G&S comparable sales growth in H1 2020 Progressive recovery in China Europe Contrasted recovered Europe situation in the US +0.2% Asia-Pacific Americas -2.1% -5.1% Part of Asia Africa Middle-East under confinement -7.3% South America in midst of crisis On-going lockdowns July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health 5
Significant Margin Improvement Despite Crisis ● Pursued Efficiencies program in place + 50 bps Agility to quickly deploy the Cost ● Containment program Operating Margin (1) Sustained IM pricing ● (1) Operating Income Recurring on Sales, excluding energy impact July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health 6
Very Active Business Development NLMK in Russia LI Higher level of Investment LI Opportunities (1) Steel Dynamics IM LI in the U.S. LI 12-month portfolio Major EL IM EL investment LI in Taiwan € 2.9 bn 25 new IM long-term contracts for On-Site gas supply worldwide (1) See definitions in appendix July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health 7
Pandemic Not Over But New Era Already Starting Pre-Covid-19 trends emerge stronger Healthcare Energy Transition Digital Transformation accelerating ● Global pandemic / Local ● H 2 momentum ● New ways of working response ● Decarbonizing processes ● Electronics growing fast ● Extensive use of AI & Platforms ● Takeover opportunities ● Investment in B2B & B2G ● Equipment Manufacturing footprint July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health 8
H1 2020 Performance Fabienne Lecorvaisier Executive Vice President & Chief Financial Officer July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health 9
Resilient Business Models - Peak of Crisis in Q2 H1 20/19 H1 20/19 Q2 20/19 Sales in €m H1 19 H1 20 As published Comparable Comparable Gas & Services 10,536 9,920 -5.8% -2.7% -6.5% Engineering & 176 104 -41.0% -41.3% -38.4% Construction Global Markets & 240 249 +3.5% +3.2% -5.7% Technologies Group Total 10,952 10,273 -6.2% -3.2% -6.9% Impacts on H1 Group Sales: ▪ +0.1% FX ▪ -2.7% Energy ▪ -0.4% Significant Scope July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health 10
Q2 – Americas Most Impacted G&S comparable sales growth C-19 ﹘ Low O 2 volumes bottoming-up ● LI Americas – 1 st signs of US recovery in May, flat in June ﹘ Start-up in Argentina ﹘ Strong volume decline esp. Hardgoods ● IM H1 20: -5% Sales ﹘ Positive rentals; strong +4.1% pricing Q2 2020 ﹘ Slight recovery led by consumer markets €1,853m ﹘ Improved Medical O 2 in the U.S. end of Q2 ● HC ﹘ Strong Latin America ﹘ High Advanced Materials and E&I ● EL Europe – Progressive recovery since May C-19 ﹘ Weak Steel , low Chemicals and ● LI Refineries H1 20: +0% ﹘ Very low bulk & PG volumes Sales ● IM ﹘ Resilient Food & Pharma Q2 2020 ﹘ Solid Pricing at +1.4% €1,649m ﹘ >+10% driven by Hygiene & Equipment ● HC ﹘ Lower sales of Medical O 2 July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health 11
Q2 – Resilient Asia, Solid LI in AME G&S comparable sales growth Asia – China back to growth, Robust EL ﹘ China back to growth ● LI ﹘ Low volumes in Japan & SEA ﹘ China +6% ● IM Sales ﹘ Part of Asia under C-19 H1 20: -2% Q2 2020 ﹘ Resilient Techno & Research market €1,097m ﹘ Positive pricing , fading Helium ﹘ >+10% growth excl. E&I ● EL ﹘ Strong AM and CG over the region AME – Positive LI and HC, IM strongly impacted by C-19 H1 20: -7% ﹘ High loading rate of 2 major units in ● LI Sales South Africa and KSA Q2 2020 €130m ﹘ Significant hit over the region ● IM C-19 July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health 12
Q2 – Solid EL & Resisting LI, Price Mitigating Impact on IM G&S comparable sales growth Industrial Merchant Large Industries Electronics Sales - Q2 2020 Sales - Q2 2020 Sales - Q2 2020 €2,107m €1,136m €509m H1 20: -8% H1 20: -2% H1 20: +2% C-19 C-19 ● Positive China, low volumes in all China back to growth ● other geographies ● +8.0% growth excl. E&I ● Weak volumes of air gases in ● Resilient Food, Pharma, Opto vs. Europe, US & Japan due to low ● Strong Carrier Gases weak Construction and Metal Fab Steel and Chemicals & Advanced Materials ● Strong pricing at +2.9% Softer decline of H 2 volumes in ● Lower E&I globally vs. high Q2 19 ● ● Lower Helium demand, resisting Europe & US pricing July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health 13
Q2 – Healthcare Teams Fully Mobilized to Fight Pandemic G&S comparable sales growth C-19 Sales - Q2 2020 ● Strong Medical O 2 volumes to fight the €977m virus partially offset by postponed H1 20: +9% elective procedures ● Continued high demand for Hygiene products and Ventilators manufacturing ● HHC : fewer new installations partially offset by new needs linked to Covid-19 Very progressive return to normal in ● Europe starting end of Q2 14 July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health
Delivering a Strong Performance in H1 2020 Group Sales Performance as published OIR/sales (1) CF/sales (2) Net Profit as published - 6.2 % + 50 bps + 1.8 % + 170 bps (1) Excluding energy impact (2) Cash Flow from Operations before changes in Working Capital Requirement on Sales, compared to restated H1 2019 July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health 15
Significant Improvement of OIR margin H1 20/19 In €m H1 19 H1 20 H1 20/19 Comparable Revenue 10,952 10,273 -6.2% -3.2% Purchases (4,230) (3,631) -14.2% Personnel Expenses (2,184) (2,183) -0.0% Other net income and expenses (1,660) (1,562) -5.9% Operating profit before depreciation 2,878 2,897 +0.7% Depreciation and amortization (1,064) (1,084) +1.9% Operating income recurring 1,814 1,813 -0.0% +0.2% Group OIR margin 16.6% 17.6% +100bps Group OIR margin excluding energy 16.6% 17.1% +50bps G&S OIR margin excluding energy 18.4% 19.0% +60bps July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health 16
Efficiencies and Cost Containment to Improve Margins Structured Crisis Operating Margin (1) existing plan Management Pricing + 50 bps Group Cost containment + ➤ Efficiencies plan quick response to the context + 60 bps G&S Portfolio management (1) Operating Income Recurring on Sales, excluding energy impact July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health 17
Continued Focus on Performance IM Portfolio Efficiencies Price/Mix management € 200 m Divestiture of: + 2.9 % Schülke , on-going €400m CRYOPDP , about to close H1 2020 Entities in Czech In line with objective ● 2016 2017 2018 2019 2020 Republic and Slovakia, despite C-19 closed Strong pricing in the ● Digital transformation ● Americas, very solid in Bolt-on acquisitions : delivering Europe 3 in the US and in China Cumulated efficiencies ● Continued helium ● € 1.3 bn (2017 - H1 2020) contribution at +0.9% 3 in Europe July 30, 2020 H1 2020 Results A world leader in gases, technologies and services for Industry and Health 18
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