Corporate Performance

% change YoY
  • Corporate Sales
  • Corporate Operating Income
,Corporate Sales ,Corporate Operating Income 2014 Q1,2.6%,-9.2% 2014 Q2,1.6%,2.2% 2014 Q3,0.8%,4.0% 2014 Q4,-1.4%,5.8% 2015 Q1,-9.7%,9.4% 2015 Q2,-8.5%,10.6% 2015 Q3,-7.4%,14.4% 2015 Q4,-8.4%,13.1% 2016 Q1,-5.5%,23.1% 2016 Q2,-0.8%,21.0% 2016 Q3,-0.6%,11.9% 2016 Q4,0.9%,6.2% 2017 Q1,11.4%,3.6% 2017 Q2,10.8%,9.2% 2017 Q3,13.1%,10.7% 2017 Q4,17.7%,12.8% 2018 Q1,8.9%,12.3% 2018 Q2,6.5%,11.2% 2018 Q3,4.3%,3.2% 2018 Q4,0.3%,5.1% 2019 Q1,1.5%,13.4% 2019 Q2,-1.5%,9.8% 2019 Q3,-0.7%,18.4% 2019 Q4,1.4%,15.9% 2020 Q1,1.3%,5.2% 2020 Q2,-7.1%,-4.8%
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Total reported corporate sales at $2.07Bn in CY20 Q2 (AP FY20 Q3) down significantly YoY (-7%). Covid impact -9% on sales

Overall corporate volume down -3% (including estimated +1% contribution to reported growth from US acquisition) and pricing up +2% were compounded by -4% energy pass-through and -2% unfavourable currency impact

Reported group Operating Income at nearly $540m in Q2 was down     -5½% YoY 

Significant new debt financing of around $5Bn to cover debt maturities and major equity investment for announced JVs in S.Arabia 



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Corporate Operating Margin

% of sales
  • Corporate Operating Margin
,Corporate Operating Margin 2014 Q1,14.0% 2014 Q2,15.0% 2014 Q3,16.4% 2014 Q4,16.7% 2015 Q1,16.9% 2015 Q2,18.2% 2015 Q3,20.3% 2015 Q4,20.6% 2016 Q1,22.0% 2016 Q2,22.2% 2016 Q3,22.9% 2016 Q4,21.7% 2017 Q1,20.5% 2017 Q2,21.9% 2017 Q3,22.4% 2017 Q4,20.8% 2018 Q1,21.1% 2018 Q2,22.8% 2018 Q3,22.2% 2018 Q4,21.8% 2019 Q1,23.6% 2019 Q2,25.5% 2019 Q3,26.4% 2019 Q4,24.9% 2020 Q1,24.5% 2020 Q2,26.1%
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Corporate operating margin in Q2 recovered back towards its peak of over 26% – driven by mix of real price increases and also continuing productivity gains offseting volume declines impacted by Covid 

Operating Income for gases up sequentially to over $565m with margin back over 27% and again up YoY by 200bp in Q1

Adjusted total group EBITDA up +8 YoY at nearly $895m but sequentially margin remained marginally above 40% - helped by lower energy cost pass which accounted for over half of the improvement

Reported group ROCE remained close to 13½% in Q1



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Gases Revenue Growth Drivers

  • Reported Growth
  • Natural Gas
  • Currency
  • Acquisition/Divest
  • Underlying Growth
,Reported Growth,Natural Gas,Currency,Acquisition/Divest,Underlying Growth 2014 Q1,4.7%,4.4%,-0.4%,-1.0%,1.7% 2014 Q2,2.9%,0.0%,0.5%,-0.9%,3.4% 2014 Q3,1.1%,0.4%,-0.6%,-0.5%,1.7% 2014 Q4,2.5%,0.0%,-2.3%,0.0%,4.8% 2015 Q1,-7.2%,-6.3%,-4.9%,0.0%,4.0% 2015 Q2,-10.0%,-5.0%,-6.6%,0.0%,1.7% 2015 Q3,-8.6%,-4.3%,-7.3%,0.0%,3.0% 2015 Q4,-11.1%,-6.1%,-6.3%,0.0%,1.4% 2016 Q1,-6.2%,-4.1%,-3.9%,0.0%,1.8% 2016 Q2,-3.6%,-3.8%,-2.4%,0.0%,2.6% 2016 Q3,-2.8%,-0.8%,-1.3%,0.0%,-0.8% 2016 Q4,0.7%,1.9%,-3.1%,0.0%,1.9% 2017 Q1,6.9%,4.8%,-1.0%,0.0%,3.2% 2017 Q2,12.4%,5.5%,-1.5%,0.0%,8.4% 2017 Q3,16.3%,1.0%,1.8%,0.0%,13.5% 2017 Q4,21.5%,0.0%,3.6%,0.0%,10.8% 2018 Q1,17.8%,-0.5%,6.2%,0.0%,12.0% 2018 Q2,11.1%,-1.9%,3.0%,0.0%,10.0% 2018 Q3,7.7%,1.3%,-1.3%,0.0%,7.8% 2018 Q4,3.5%,4.9%,-2.6%,-1.6%,2.8% 2019 Q1,4.0%,1.5%,-4.3%,-2.1%,8.9% 2019 Q2,-0.2%,-1.2%,-4.1%,-2.6%,7.7% 2019 Q3,-0.6%,-3.3%,-2.5%,-3.0%,8.2% 2019 Q4,-0.6%,-4.8%,-1.6%,-1.0%,6.8% 2020 Q1,-1.3%,-5.2%,-2.5%,0.7%,5.7% 2020 Q2,-9.1%,-4.4%,-2.7%,1.0%,-3.0%
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Total reported gases sales (ex SOE business) down again YoY by around -9% in CY Q2

Negative underlying growth in Q2 was compounded by continued negative energy pass-through (-4½%) and negative currency effects (over -2½%) only partially offset by positive of acquisition of PBF Energy H2 plants in the USA

Negative currency impact primarily due to Chinese RMB, Chilean Peso, Korean Won and the Euro 

Reported and underlying growth negative YoY in Q2 in all three geographic regions



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Gases Underlying Growth Drivers

% YoY Growth
  • Total Underling Growth
  • Volume
  • Price
,Total Underling Growth,Volume,Price 2014 Q1,1.7%,0.7%,0.9% 2014 Q2,3.4%,2.3%,1.1% 2014 Q3,1.7%,0.6%,1.1% 2014 Q4,4.8%,3.5%,1.3% 2015 Q1,4.0%,4.0%,0.0% 2015 Q2,1.7%,1.6%,0.1% 2015 Q3,3.0%,2.3%,0.7% 2015 Q4,1.4%,0.9%,0.5% 2016 Q1,1.8%,1.1%,0.7% 2016 Q2,2.6%,2.4%,0.2% 2016 Q3,-0.8%,-0.8%,0.0% 2016 Q4,1.9%,1.9%,0.0% 2017 Q1,3.2%,2.8%,0.5% 2017 Q2,8.4%,8.0%,0.4% 2017 Q3,13.5%,11.5%,2.0% 2017 Q4,10.8%,8.7%,2.1% 2018 Q1,12.0%,10.5%,1.5% 2018 Q2,10.0%,8.0%,2.0% 2018 Q3,7.8%,6.3%,1.5% 2018 Q4,2.8%,1.1%,1.7% 2019 Q1,8.9%,5.5%,3.4% 2019 Q2,7.7%,3.4%,4.3% 2019 Q3,8.2%,5.0%,3.2% 2019 Q4,6.8%,3.8%,3.0% 2020 Q1,5.7%,3.0%,2.7% 2020 Q2,-3.0%,-5.0%,2.0%
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Underlying gases growth weakened significantly  to be down -3% in Q2 driven by global economic weakness primarily due to the Covid pandemic

The fall in volumes had a -5% negative impact on gas revenues. Merchant volumes lowered by -13% by Covid – signs of smaller merchant decline in July

Pricing impact on Q2 YoY revenue growth at +2% - continuing the slowing contribution from this in recent quarters



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Reported Sales Growth by Business

% change YoY
  • Americas Gases
  • EMEA Gases
  • Asia Gases
,Americas Gases,EMEA Gases,Asia Gases 2014 Q1,11.2%,4.4%,-7.0% 2014 Q2,8.0%,2.3%,-7.6% 2014 Q3,4.4%,-1.7%,1.0% 2014 Q4,6.3%,-8.9%,0.9% 2015 Q1,-13.8%,-17.3%,7.5% 2015 Q2,-15.6%,-15.3%,14.0% 2015 Q3,-13.0%,-11.6%,7.1% 2015 Q4,-16.6%,-12.2%,4.0% 2016 Q1,-10.4%,-6.0%,3.8% 2016 Q2,-7.3%,-6.1%,7.2% 2016 Q3,-2.8%,-10.0%,4.8% 2016 Q4,3.3%,-9.1%,5.7% 2017 Q1,11.5%,-1.8%,6.9% 2017 Q2,11.8%,5.7%,20.3% 2017 Q3,8.6%,24.3%,23.0% 2017 Q4,5.3%,29.1%,46.8% 2018 Q1,2.6%,35.6%,27.9% 2018 Q2,2.0%,24.2%,15.9% 2018 Q3,3.6%,7.8%,14.6% 2018 Q4,8.7%,1.6%,-2.6% 2019 Q1,8.6%,-12.0%,12.2% 2019 Q2,0.7%,-11.9%,8.9% 2019 Q3,-5.0%,-11.8%,15.6% 2019 Q4,-5.4%,-4.9%,10.5% 2020 Q1,-6.0%,-0.3%,5.2% 2020 Q2,-11.0%,-13.1%,-4.0%
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·         Americas represent 44% of gas sales, Asia for 33% and Europe 24%

·         In all three regions the combined impact of non-operational factors (currency, energy cost pass-through, acquisitions/divestments) on reported income has again been net negative in Q2

·         Americas sales growth weakened further to be down -11% YoY in Q2 – its slowest growth since late-2015 – negative impact from energy cost pass-through reduced marginally to -6% combined with continued unfavourable currency impact (-2%).

·         Reported EMEA sales growth weakened significantly again to be down –13% similar to the first half of 2019 - driven by -3% unfavourable currency and -6% energy cost pass-through. Previous quarters’ major swings were also due to changes in the impact reporting of an Indian H2 project

Asia reported sales down -4% YoY impacted by further unfavourable currency impact of -3% 


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Underlying Growth by Business

% change YoY
  • Americas Gases
  • Europe Gases
  • Asia Gases
,Americas Gases,Europe Gases,Asia Gases 2014 Q1,8.6%,-2.0%,7.0% 2014 Q2,6.4%,0.0%,5.0% 2014 Q3,4.4%,4.0%,1.0% 2014 Q4,7.0%,0.0%,5.0% 2015 Q1,2.2%,0.0%,12.0% 2015 Q2,0.2%,2.0%,9.0% 2015 Q3,0.0%,2.0%,13.0% 2015 Q4,-1.1%,0.0%,8.5% 2016 Q1,-1.0%,1.0%,9.0% 2016 Q2,0.0%,0.0%,12.0% 2016 Q3,-2.8%,-4.0%,7.0% 2016 Q4,-2.0%,-2.0%,9.0% 2017 Q1,2.0%,1.0%,8.0% 2017 Q2,3.0%,2.0%,22.0% 2017 Q3,7.0%,8.7%,23.0% 2017 Q4,5.0%,6.0%,15.0% 2018 Q1,4.0%,9.0%,20.0% 2018 Q2,6.0%,7.0%,10.0% 2018 Q3,5.0%,2.7%,17.0% 2018 Q4,4.0%,3.0%,-1.0% 2019 Q1,8.0%,3.0%,17.0% 2019 Q2,4.0%,6.0%,15.0% 2019 Q3,1.0%,9.0%,19.0% 2019 Q4,4.0%,9.0%,13.0% 2020 Q1,5.0%,7.0%,8.0% 2020 Q2,-6.0%,-4.0%,-1.0%
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Americas underlying growth weakened to -3%, its weakest performance in recent years. Estimated +2% impact from acquisition of PBF Energy H2 plants appears to be included in volume growth from April – implies adjusted volumes may be down -5% in Q2

EMEA underlying sales were down -4% YoY, weakest performance since mid-2016. Previous four quarters have been boosted by the bolt-on acquisition of ACP

Asia underlying growth slipped back again to -1% in Q2 due to continued Covid impact 

Global Gases business (primarily SOE ASU) up by a third in Q2 due to higher project activity. New LNG projects also drove Corporate unit sales up by +50% 

Onsites account for over half of total group sales with around two-thirds of AP gas sales in Americas and Asia and 40% in Europe



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Volume Growth by Business

% change YoY
  • Americas Gases
  • Europe Gases ex India H2
  • Asia Gases
,Americas Gases,Europe Gases ex India H2,Asia Gases 2014 Q1,4.8%,-1.0%,6.0% 2014 Q2,2.2%,-1.0%,6.0% 2014 Q3,0.2%,3.0%,2.0% 2014 Q4,4.0%,0.0%,6.0% 2015 Q1,1.0%,-1.0%,15.0% 2015 Q2,-1.0%,1.0%,11.0% 2015 Q3,-2.0%,1.0%,15.0% 2015 Q4,-2.8%,-1.0%,10.5% 2016 Q1,-2.0%,-1.0%,10.0% 2016 Q2,-1.0%,-1.0%,14.0% 2016 Q3,-3.0%,-4.0%,7.0% 2016 Q4,-2.0%,-2.0%,10.0% 2017 Q1,1.0%,1.0%,8.0% 2017 Q2,3.0%,3.0%,20.0% 2017 Q3,7.0%,9.0%,17.0% 2017 Q4,5.0%,6.0%,8.0% 2018 Q1,4.0%,8.0%,17.0% 2018 Q2,6.0%,4.0%,6.0% 2018 Q3,4.0%,2.0%,14.0% 2018 Q4,2.0%,1.0%,-2.0% 2019 Q1,5.0%,0.0%,12.0% 2019 Q2,0.0%,2.0%,10.0% 2019 Q3,-2.0%,5.0%,16.0% 2019 Q4,1.0%,6.0%,9.0% 2020 Q1,2.0%,4.0%,6.0% 2020 Q2,-8.0%,-7.0%,-3.0%
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Americas volume slipped significantly to be down -5% YoY in Q2, its weakest performance in recent years. This includes the positive impact of the acquisition of PBF Energy H2 plants from April, estimated at around +3% contribution to the region growth – implying underlying growth was down by up to -8% with merchant volumes down -15% 

Europe reported underlying volume growth impact slipped to -7% YoY in Q2. Covid impact estimated at -13% with merchant down -20% including packaged gases down by a greater rate

Asia underlying volume growth impact slipped to -3% in Q2, its weakest performance in recent years



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Pricing Growth Impact by Business

% change YoY
  • Americas Gases
  • Europe Gases
  • Asia Gases
,Americas Gases,Europe Gases,Asia Gases 2014 Q1,3.8%,-1.0%,1.0% 2014 Q2,4.2%,1.0%,-1.0% 2014 Q3,4.2%,1.0%,-1.0% 2014 Q4,3.0%,0.0%,-1.0% 2015 Q1,1.2%,1.0%,-3.0% 2015 Q2,1.2%,1.0%,-2.0% 2015 Q3,2.0%,1.0%,-2.0% 2015 Q4,1.7%,1.0%,-2.0% 2016 Q1,1.0%,2.0%,-1.0% 2016 Q2,1.0%,1.0%,-2.0% 2016 Q3,0.2%,0.0%,0.0% 2016 Q4,0.0%,0.0%,-1.0% 2017 Q1,1.0%,0.0%,0.0% 2017 Q2,0.0%,-1.0%,2.0% 2017 Q3,0.0%,-0.3%,6.0% 2017 Q4,0.0%,0.0%,7.0% 2018 Q1,0.0%,1.0%,3.0% 2018 Q2,0.0%,3.0%,4.0% 2018 Q3,1.0%,0.7%,3.0% 2018 Q4,2.0%,2.0%,1.0% 2019 Q1,3.0%,3.0%,5.0% 2019 Q2,4.0%,4.0%,5.0% 2019 Q3,3.0%,4.0%,3.0% 2019 Q4,3.0%,3.0%,4.0% 2020 Q1,3.0%,3.0%,2.0% 2020 Q2,2.0%,3.0%,2.0%
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Pricing contribution remains positive in all three regions but slowing

Americas pricing impact slipped to +2% YoY, down on its recent peak with overall merchant pricing up +5% (vs +7% in Q4)

Europe pricing again contributed +3% to region growth - merchant pricing again up +4%

Asia pricing impact again contributed +2% to regional growth in Q2 - with merchant pricing gains at +4% YoY 

Only Asia region showed a measurable sequential increase in pricing between Q1 and Q2 – Americas and Europe only marginal increase sequentially



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Gases Profitability

%
  • OROS
  • EBITDA Margin
  • OROCE
,OROS,EBITDA Margin,OROCE 2014 Q1,16.2%,26.6%,10.0% 2014 Q2,17.3%,28.0%,10.7% 2014 Q3,19.1%,30.4%,12.1% 2014 Q4,19.2%,30.0%,12.1% 2015 Q1,19.1%,30.7%,11.2% 2015 Q2,21.6%,33.0%,12.6% 2015 Q3,22.5%,34.0%,14.5% 2015 Q4,24.3%,36.6%,14.8% 2016 Q1,25.0%,37.7%,14.4% 2016 Q2,26.0%,38.1%,15.3% 2016 Q3,24.5%,36.3%,13.4% 2016 Q4,23.7%,35.9%,12.6% 2017 Q1,22.3%,34.2%,10.4% 2017 Q2,22.9%,33.9%,11.7% 2017 Q3,24.1%,35.2%,12.4% 2017 Q4,22.0%,32.8%,11.3% 2018 Q1,21.9%,33.5%,10.8% 2018 Q2,23.4%,34.6%,11.9% 2018 Q3,23.0%,34.5%,12.0% 2018 Q4,22.5%,34.3%,11.6% 2019 Q1,25.1%,37.3%,12.6% 2019 Q2,27.1%,39.4%,13.5% 2019 Q3,27.7%,41.0%,14.3% 2019 Q4,26.3%,39.6%,12.9% 2020 Q1,27.1%,40.9%,13.1% 2020 Q2,28.7%,43.3%,10.2%
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Gases underlying EBIT slipped sequentially in Q2 to under $555m and  was down -4% YoY 

EBIT operating margin improved towards 29% in Q2, a new peak for recent years – again helped by the significant top line impact of reduced energy cost pass-through

EBITDA margin, the primary financial measure for the company, surged significantly to over 42% reflecting the sustained upward trend of recent years

Gases Capital Employed estimated to have risen sharply YoY and sequentially in Q2 to over $22Bn due to recent new capital financing. 

As a result, estimated underlying OROCE (on Gasworld methodology for comparability) slipping towards 10%, its lowest rate of recent years but similar to the average for the industry’s majors



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Reported Operating Margin by Business

% of sales
  • Americas Gases
  • EMEA Gases
  • Asia Gases
,Americas Gases,EMEA Gases,Asia Gases 2014 Q1,16.4%,16.1%,19.5% 2014 Q2,17.8%,15.9%,22.9% 2014 Q3,21.2%,17.8%,18.2% 2014 Q4,21.1%,16.2%,22.7% 2015 Q1,20.4%,15.8%,21.6% 2015 Q2,23.0%,19.2%,24.2% 2015 Q3,23.1%,19.7%,24.4% 2015 Q4,25.3%,21.0%,28.3% 2016 Q1,28.0%,21.3%,25.7% 2016 Q2,28.2%,24.2%,26.4% 2016 Q3,25.6%,23.7%,24.5% 2016 Q4,25.9%,22.0%,26.9% 2017 Q1,25.2%,20.9%,25.7% 2017 Q2,25.3%,21.3%,27.7% 2017 Q3,27.8%,23.4%,27.6% 2017 Q4,23.9%,20.3%,27.3% 2018 Q1,24.3%,20.8%,26.7% 2018 Q2,25.0%,21.2%,29.7% 2018 Q3,25.5%,19.1%,28.5% 2018 Q4,22.2%,20.1%,32.2% 2019 Q1,25.8%,24.8%,31.9% 2019 Q2,27.4%,24.9%,34.1% 2019 Q3,27.8%,24.7%,31.6% 2019 Q4,27.5%,24.2%,33.0% 2020 Q1,28.7%,25.3%,31.8% 2020 Q2,29.2%,24.5%,34.0%
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Over 40% of gases income is generated in Americas with over 35% in Asia and around 20% in EMEA region

Asia gas business margin maintained its position as the most profitable of the three geographic businesses with operating margin around 34% - close to peak rates. EBITDA margin rose to over 50% (+90bp YoY)

Americas gas businesses profitability continued its rise to over 29% operating margin - helped by the negative top line impact of energy cost pass-through (half of YoY improvement). EBITDA margin in Q2 rose significantly sequentially and YoY to over 48%

Europe Gases remains the lowest performing region at around 25% OROS and under 40% EBITDA margin – margins lower YoY after adjusting for energy cost pass-through impact



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Capital Expenditure

$M
  • Capex Spend
,Capex Spend 2010 Q1,192.4 2010 Q2,202.7 2010 Q3,230.9 2010 Q4,251.7 2011 Q1,233.8 2011 Q2,306.1 2011 Q3,316.9 2011 Q4,265.4 2012 Q1,292.3 2012 Q2,327.5 2012 Q3,269.0 2012 Q4,270.9 2013 Q1,258.9 2013 Q2,260.7 2013 Q3,277.9 2013 Q4,267.8 2014 Q1,281.5 2014 Q2,316.8 2014 Q3,287.1 2014 Q4,285.5 2015 Q1,237.3 2015 Q2,253.9 2015 Q3,255.8 2015 Q4,205.0 2016 Q1,210.9 2016 Q2,218.5 2016 Q3,215.2 2016 Q4,229.6 2017 Q1,281.3 2017 Q2,263.6 2017 Q3,223.6 2017 Q4,246.3 2018 Q1,303.3 2018 Q2,562.2 2018 Q3,393.9 2018 Q4,387.3 2019 Q1,537.7 2019 Q2,522.3 2019 Q3,462.8 2019 Q4,429.8 2020 Q1,463.6 2020 Q2,1070.0
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Capex spend rose sharply to over $1Bn in Q2 – AP definition of capex includes long term deposits which appears to have been impacted by significant funds generated by new long term debt financing in Q2. Ratio of capex to sales on this basis also rose significantly to unprecedented rate of over 50% 

Over $11Bn of total investment remaining to be spent on committed projects – with earlier spend made, this means AP has already achieved its 2018 capex target of $15Bn by 2022. Company indicates H2 for mobility earlier than expected at that time and asset buyback more significant

Recent and projected capex reflects substantial impact of gasification strategy and number of large scale plants due onstream in 2019-25, mainly in USA, S.Arabia and Asia (China, Korea, Indonesia and India) 

Completed major acquisition of 5 existing US H2 plants and long term supply agreement with PBF Energy at cost of $530m in April

Launched $7Bn project financing for substantial Jazan gasification project in S.Arabia with transaction expecting to close by October 

Major ASU/Gasifier project at Shanxi, China removed from project commitment list due to inability to secure coal reserves

New $2Bn project commitment for ASU/Gasifier/Methanol in Indonesia due onstream 2024

Also announced $5Bn JV project in Neom, S.Arabia for carbon-free H2 for global market due onstream 2025



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