Full Year 2017 Results A Step Change in Sales with Improved Performance Airgas Synergies Ahead of Plan Paris, 15 February 2018
Agenda 1. Highlights 2. 2017 performance 3. 2018 priorities and outlook 2 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Highlights Benoît Potier Chairman & Chief Executive Officer 3 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Highlights Sales reached a new level in 2 nd half with improved operating margin Increased dividend proposal Strong cash-flow, reduced net debt and continued improvement in ROCE Airgas synergies ahead of plan NEOS, delivering in the short-term and investing for the long-term 4 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Improved Performance Step-up in sales growth in 2 nd half Improved Operating Margin (1) Excluding Energy Impact 5% + 70 bps 4% 4% 17% 3% 16.8% 3% Excl. energy impact 2% 2% 16.5% As published 1% 1% 16% 16.1% 0% 0% 2016 2017 Q1 17 Q2 17 Q3 17 Q4 17 Comparable sales growth Group 15% 2016 2017 Gas & Services (1) Group margin vs. 2016 adjusted group margin 5 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Increased Dividend Proposal Net Profit Dividend Growth: +12% (2) € 2.65 € 2.2 bn 20 yrs 2,8 CAGR 2,4 + 9.5 % Dividend (1) 2,0 As published in € per share 1,6 1,2 0,8 + 19.3 % + 10 % 0,4 0,0 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 As published Excluding non-cash non-recurring items & taxes (1) 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 (2) Subject to approval at the combined shareholders’ meeting scheduled for 16 May 2018 6 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Improved Cash Flow and Balance Sheet Reduced Net Debt and Gearing Continued Improvement in ROCE Excl. 2017 positive impact on net profit of non-cash one-off items 151% <25> 160% 10.3% >10% 140% 10% <20> 120% 80 % 90% 100% (1) 7.7 % Gearing <15> 80% 80% <13.4> 8% comfort 7.4% 60% 60% range 57% 6.9% <10> 40% 20% 6% <5> Dec. 15 Dec. 16 June 17 Dec. 17 2021/22 0% Dec. 15 June 16 Dec. 16 Dec. 17 adjusted NEOS In €bn Airgas Airgas objective acquisition Net debt Gearing acquisition (1) As published 2017 ROCE = 8.2% The world leader in gases, technologies and services for Industry and Health 7 15 February 2018 Full Year 2017 Results
Airgas Synergies Ahead of Plan Synergies US$40m ahead of initial 2017 target US$ Cost synergies delivered faster 215 m Cumulated synergies end of 2019: in excess of US$300m Cumulated Synergies pace and higher level of cost synergies Dec. 2017 revenues synergies ramping Leveraging the Airgas model Expansion of customer centric management in the Group 8 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Delivering in the Short- Term… Mega trends Energy & Healthcare Digital Group Smart Innovative Biogas Operations Strategic (SIO) asset review Voice of the Energy Customer efficiency (VoC) New organization E-health E-business websites 9 15 February 2018 Full Year 2017 Results
… and Investing for the Long -Term Research & Innovation Energy Transition Development • Renewal of R&D • 2017 ~ €290m • Hydrogen Council centers spending in innovation • CO 2 capture Over 3 years • ALIAD: cumulative ~ € 80m investments in Cumulative €130m start-ups investments Digital ● Data analytics ● Transforming operations 10 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
2017 Performance Fabienne Lecorvaisier Executive Vice President & Chief Financial Officer 11 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Sales Growth Accelerating in G&S, E&C Stabilizing (1) Refer to appendix for definitions 12 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Better Economic Environment Step-up in IP growth, expected to stabilize in 2018 Negative FX Impact (1) Industrial Production Year on Year in % (3-month rolling average) -1.6% -5.4% FY 2017 Q4 2017 Low Energy impact in Q4 (1) +1.5% + 0.5% FY 2017 Q4 2017 (1) On Group sales, based on 2016 adjusted sales 13 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Key Growth Drivers in Q4 2017 + 12 % + 11 % + 8 % + 7 % + 6 % + 5 % INDUSTRIAL AMERICAS GLOBAL ASIA DEVELOPING ELECTRONICS MERCHANT MARKETS & ECONOMIES TECHNOLOGIES Comparable sales growth The world leader in gases, technologies and services for Industry and Health 14 15 February 2018 Full Year 2017 Results
Base Business Contribution Firming-Up G&S Quarterly Growth Analysis +14% +31% +29% 19 START-UPS in FY17 Strongest base business since Q1 2014 (1) Comparable growth based on 2016 adjusted sales 15 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Q4 - Accelerating Americas, Sustained IM in Europe +31% FY as published AMERICAS EUROPE FY 2017 FY 2017 €8,150m €6,776m Excluding the impact of the one – off in Q4 2016 G&S Comparable Sales Growth Strong IM and LI in Americas Improved underlying activity • LI : rebounding after hurricanes • LI : solid H 2 demand ; high comparison effect • IM: growth accelerating to >+6% • IM: sustained growth above +3% ; bulk and cylinder volumes up • EL: dynamic Advanced Materials , low E&I • Solid HC , still low contribution from • Strong HC in Latin America and Canada acquisitions 16 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Q4 - Very Strong Asia and Middle-East MIDDLE-EAST ASIA-PACIFIC & AFRICA FY 2017 FY 2017 €4,081m €635m G&S Comparable Sales Growth Very good momentum in all WBLs High growth in all WBLs • LI : ramp-ups in China, high volumes • LI : high loading at Yanbu (KSA); major start-up in South Africa end December • IM : China driving growth with strong volumes and pricing ; low equipment sales in Japan • IM : volumes improvement throughout the region • EL : accelerated growth, strong Carrier Gases, dynamic Advanced Materials, high E&I • Strong HC in South Africa 17 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Q4 - IM Driving Growth, LI Outlook Positive +22% FY as published INDUSTRIAL LARGE MERCHANT INDUSTRIES FY 2017 FY 2017 €9,261m €5,336m G&S Comparable Sales Growth Continued increase in IM High volumes offset by Q4 2016 one-off • Accelerating in North America • High air gases and H2 volumes in Americas • Very strong China , dynamic developing economies • Ramp-ups in China • All end-markets up • Major start-up in South Africa • Firming pricing , +1.7% • Europe: sales slightly up excl. exceptionals 18 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Q4 - Very Dynamic HC and EL +9% FY as published HEALTHCARE ELECTRONICS FY 2017 FY 2017 €3,401m €1,644m G&S Comparable Sales Growth Steady activity, high contribution from acquisitions Double-digit growth in Asia • Very strong Americas • Ramp-ups in Carrier Gases • Dynamic development in Asia • New contracts in Asia, high E&I • High growth in Medical Gases • Strong Advanced Materials 19 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Low E&C, Developing GMT Sales and Order intake (1) – in €m 500 500 E&C GMT 400 400 300 300 200 200 100 100 0 0 H1-15 H2-15 H1-16 H2-16 H1-17 H2-17 H1-15 H2-15 H1-16 H2-16 H1-17 H2-17 Sales Order intake Sales Order intake (1) Group and third-party order intake 20 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Improved OIR Margin in line with NEOS 21 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
Efficiencies Above NEOS Target FY 17 Efficiencies NEOS Cumulated Efficiencies >€1,200m 2020 >€900m 2019 € 323 m >€600m 2018 € 323 m +€ 23 m 2017 22 15 February 2018 Full Year 2017 Results The world leader in gases, technologies and services for Industry and Health
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