2017 Q3 Activity Accelerating Sales Growth in Gas & Services Paris, 25 October 2017
2017 Q3 Activity Fabienne Lecorvaisier Executive Vice President & Chief Financial Officer 28 July 2017 H1 2017 Activity 2 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health The world leader in gases, technologies and services for Industry and Health
G&S Sales Growth Accelerating in Q3 G&S sales up +4.0%* , after +2.7% in Q2 Improvement in all business lines , in particular: Continued ramp-up of IM in all regions, +4.3% EL sales growth back to high level at +7.2% Operational efficiencies in line, Airgas synergies ahead of plan * Comparable growth; refer to appendix for definitions 28 July 2017 H1 2017 Results 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health The world leader in gases, technologies and services for Industry and Health 3
Sales Growth Accelerating in G&S Refer to appendix for definitions 28 July 2017 H1 2017 Results The world leader in gases, technologies and services for Industry and Health 4 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health
Strengthening IP – Negative FX & Softening Energy Industrial Production FX Impact on Group sales Year on Year in % (3-month rolling average) +1.7% -4.0% H1 2017 Q3 2017 Energy Impact on Group sales +2.2% + 1.0% H1 2017 Q3 2017 28 July 2017 H1 2017 Results The world leader in gases, technologies and services for Industry and Health 5 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health
Key Growth Drivers in Q3 2017 +8% +4% +13% +7% +10% GLOBAL INDUSTRIAL DEVELOPING ASIA ELECTRONICS MARKETS MERCHANT ECONOMIES & TECHNOLOGIES Refer to appendix for definitions 28 July 2017 H1 2017 Results 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health The world leader in gases, technologies and services for Industry and Health 6
Strong Base Business Contribution 2017 comparable growth 7 based on 2016 adjusted sales +14% +31% +29% START-UPS in Q3 17 G&S Quarterly Growth Analysis 28 July 2017 H1 2017 Results 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health The world leader in gases, technologies and services for Industry and Health 7
Q3 - IM Pursued Ramp-up in North America and Europe AMERICAS EUROPE Q3 2017 Q3 2017 €1,968m €1,657m G&S Comparable Sales Growth Robust North America IM strengthening • +4% growth excl. hurricanes • LI : high demand of H 2 • LI : limited U.S. hurricane impact; high volumes in • IM +4.2% : solid growth of bulk and cylinder Canada ( O 2 ) and South America (H 2 ) volumes, +0.6% pricing • IM: continued growth trajectory • Sound HC with few bolt-on acquisitions • Strong HHC in South America and Canada 28 July 2017 H1 2017 Results 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health The world leader in gases, technologies and services for Industry and Health 8
Q3 - Thriving Asia, Robust Middle-East MIDDLE-EAST ASIA-PACIFIC & AFRICA Q3 2017 Q3 2017 €1,010m €152m G&S Comparable Sales Growth Strong activity in all WBL Strong LI and IM • LI : several start-ups and sustained demand • High loading at Yanbu (KSA) • IM : very high bulk & cylinder volume growth and • Start-up in Egypt increased pricing in China • Strong HC in South Africa • EL : new contracts, dynamic Advanced materials 28 July 2017 H1 2017 Results 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health The world leader in gases, technologies and services for Industry and Health 9
Q3 Focus - China Towards Higher Value End-Markets >+ 15 %* >+ 15 %* ELECTRONICS HEALTHCARE EL HC • Leadership position • Solid backlog of projects in semi- >+ 10 % * conductors and flat panels LARGE INDUSTRIES ~€ 1.5 Bn • >35 plants (ASU & SMR); ~170 km Annual sales IM pipeline networks LI >+ 15 % * • Hangzhou Engineering Center INDUSTRIAL MERCHANT fully loaded • 3 ASU start-ups in 2017 • Strong volumes and pricing • Increasing outsourcing trend > 4,000 employees • Densifying in a fragmented market • Shanghai R&D center boosting technical applications *Q3 2017 comparable sales growth 28 July 2017 H1 2017 Results 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health The world leader in gases, technologies and services for Industry and Health 10
Q3 - Robust LI, IM Driving Growth LARGE INDUSTRIAL INDUSTRIES MERCHANT Q3 2017 Q3 2017 €1,286m €2,265m G&S Comparable Sales Growth High volumes & start-ups IM strengthening • Sales per day increasing in • Solid demand in H 2 North America • ASU start-ups in China & Egypt • Very strong growth in China • Temporary impact of • Positive pricing hurricanes in U.S., ceased operations in Ukraine 28 July 2017 H1 2017 Results 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health The world leader in gases, technologies and services for Industry and Health 11
Q3 Focus - Strengthening IM Activity in Key Geographies + 4.3 % Q3 2017 Sales growth* 0% +5% +10% * On a comparable basis 28 July 2017 H1 2017 Results 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health The world leader in gases, technologies and services for Industry and Health 12
Q3 - Solid HC, EL Back to High Growth HEALTHCARE ELECTRONICS Q3 2017 Q3 2017 €833m €403m G&S Comparable Sales Growth Strong growth in Carrier Gases and Sound growth, slightly higher M&A Advanced materials • Sustained development • 2 start-ups in Carrier Gases • Strong growth in developing • Advanced materials economies double-digit growth • Strategic acquisition in Japan 28 July 2017 H1 2017 Results 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health The world leader in gases, technologies and services for Industry and Health 13
Order Intake Continues to Recover in E&C Group and Third Party Orders E&C GMT • Biogas purification • Group projects • Chemical & biodiesel projects for 3 rd parties • Maritime tanks 28 July 2017 H1 2017 Results The world leader in gases, technologies and services for Industry and Health 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health 14
2017 Q3 Performance and Investment Up-Date Fabienne Lecorvaisier Executive Vice President & Chief Financial Officer 28 July 2017 H1 2017 Activity 15 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health The world leader in gases, technologies and services for Industry and Health
Efficiencies Aligned with NEOS Cumulated Efficiencies Q3 17 Cumulated Efficiencies €1,200m 2020 €900m 2019 €229m €600m 2018 €300m 2017 €229m . Sept 30 28 July 2017 H1 2017 Results 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health The world leader in gases, technologies and services for Industry and Health 16
Cumulated Synergies Ahead of Plan at US$177m • Accelerated delivery of cost synergies • Revenue synergies in line with plan 28 July 2017 H1 2017 Results 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health The world leader in gases, technologies and services for Industry and Health 17
Solid Cash Flow, Net Debt Below €15bn YTD 2017 figures Cash Flow on Sales (1) Net CAPEX Net Debt 18.7% €1.6bn €14.9bn • Gearing <90% (2) • €2.9bn (1) • 10.7% of sales (1) Operating Cash Flow before changes in Working Capital Requirements, as of 30 September 2017 (2) Adjusted for dividend seasonality 28 July 2017 H1 2017 Results 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health The world leader in gases, technologies and services for Industry and Health 18
Increased Activity in Portfolio of Opportunities Investment Q3 Investment Q3 Start-up/Ramp-up Opportunities (1) Decisions (1) Sales Growth 12-month portfolio Contribution €2.1bn ~610m €51m • Increased bidding • LI in Americas and EL in Asia • 7 start-ups including 1 take over • Small to medium size projects • M&A: HC in Japan, 3 IM at Airgas • Americas 1 st geography, then • Mid-size units • Portfolio management: divestiture Europe and Asia of Airgas Refrigerants business (1) See definitions in appendix 28 July 2017 H1 2017 Results 25 October 2017 Q3 2017 Activity The world leader in gases, technologies and services for Industry and Health The world leader in gases, technologies and services for Industry and Health 19
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