Solid Gas & Services sales growth
2016 objective confirmed
Regulatory News:
Air Liquide (Paris:AI):
Q3 2016 key
figures*
- Group revenue: +26.8%5,077 million euros
- of which Gas & Services: +33.1%4,783 million euros
- Industrial Merchant: +79.0%
- Healthcare: +19.1%
- Gas & Services revenue : +2.0%(excluding
Airgas)
Q3 2016 highlights
- Airgas: completion of acquisition refinancing and
disposal of assets in the United States to Matheson Tri-Gas.
- Portfolio management: negotiations with Montagu Private
Equity for Aqua Lung disposal.
- New developments in Industry and Healthcare: hydrogen
unit for a refinery customer (Argentina), pure helium storage
(Germany), specialty ingredient production plant for cosmetic &
pharmaceutical markets (United States).
- Innovation and Digital: investment in big data company
(France).
* Variation Q3 2016/Q3 2015 excluding currency and energy
impact
Commenting on the third quarter of 2016, Benoît Potier,
Chairman and CEO of Air Liquide, said:
“This quarter has been characterized by the successful
refinancing of the Airgas acquisition, the disposal of certain
assets in the United States executed under excellent conditions,
and the operational merger of Airgas since October
1st. In addition, for the first time, Airgas
contributed to the Group's performance over a full quarter.
“In the context of continued moderate global growth, Gas
& Services sales posted solid growth, primarily driven by
ramp-ups of our Large Industries plants, the strength of the
Healthcare business and by the developing economies, in particular
China. The Group continues to generate recurring efficiency gains,
which contribute to operational performance.
“Today, a new phase begins. Priorities include delivering
Airgas synergies in accordance with our plan and continued
implementation of NEOS, our corporate program. The investment
backlog, amounting to 2.2 billion euros, and innovations aimed at
enriching the customer experience, will contribute to growth in the
coming years.
“Following the completion of the acquisition of Airgas, Air
Liquide is confident in its ability to generate growth in 2016,
both in net profit and net earnings per share, including the effect
of the capital increase finalized in early October.”
Q3 2016 Group revenue, which includes Airgas sales for
the full quarter, reached 5,077 million euros. It rose
+23.9% on a reported basis and +26.8%, excluding the currency and
energy impact, compared with third quarter 2015. Excluding Airgas
and the currency and energy impact, Group revenue fell slightly by
-1.1%, impacted by slower sales in Engineering &
Construction.
Gas & Services sales, which reached 4,783 million
euros, were up +29.9% on a reported basis and +33.1% as
adjusted for currency and energy impact and compared with third
quarter 2015. Excluding Airgas, comparable1 growth is +2.0%. The
unfavorable currency effect (-0.4%) and the negative impact
of energy prices (-2.8%) this quarter were attenuated as
compared with the first half of 2016.
Developing economies posted solid growth, with Gas &
Services sales up +6.7% on a comparable basis.
Overall, the comparable growth in Gas & Services
sales was driven by Large Industries and Healthcare in the third
quarter:
- Large Industries, up
+5.0%, benefited from the ramp-up of our production units,
notably in Eastern Europe, North and South America, and
Asia-Pacific. Thanks to high volumes, Large Industries sales
progressed in China by nearly +10%. Finally, revenue growth was
solid in Middle East & Africa.
- Following the acquisition of Airgas,
Industrial Merchant sales rose by nearly +80% during the
quarter. Excluding Airgas, revenue fell by -2.0% on a
comparable basis. Industrial Merchant revenue was contrasted by
country and market segments.Europe, penalized by the negative
impact of working days over the third quarter, continued to see
bulk volumes progress while the cylinder business remained weak, in
particular for acetylene sales. In North America, markets related
to energy and metal fabrication are still down, while Agri-Food and
Pharmaceuticals sectors continue to grow. The activity in this
region posted a slight positive inflection over the third quarter
as compared to average sales over the prior 12 months. In Asia
Pacific, growth was driven by higher volumes in China and Japan.
The overall price effect remains low at +0.2% against a global
environment of low inflation.
- Electronics, impacted this
quarter by decreased equipment and installations sales, was
quasi-stable at -0.5%. Excluding these sales, growth was
+3.0%, marked by stable sales of specialty gases after a period of
strong increase. Electronics maintains strong fundamentals; sales
of carrier gases are solid and benefit from ramp-ups of new units.
Demand for advanced materials in Asia remains dynamic, with growth
of more than +30% in sales of this product line.
- Healthcare revenue rose +19.1%
including the contribution of Airgas via its sales of medical gases
to hospitals in the United States, and excluding currency effect.
On a comparable basis, growth was robust at +5.2%, boosted
by high demand for home healthcare services and strong hygiene and
specialty ingredient sales, which rose +12%.
Engineering & Construction revenue reached 105
million euros, a sharp reduction compared with the third
quarter of 2015, adversely impacted by the slowdown in large-scale
projects related to energy and by the low number of new
projects.
For Global Markets & Technologies, revenue reached
73 million euros, an increase of +10.6% on a
comparable basis, driven by sales of biogas and maritime
markets.
The Group, which continues to reinforce its competitiveness, has
generated 223 million euros in recurrent efficiency
gains over the first nine months of 2016, contributing to
operational performance. In addition to these efficiencies, the
first benefits of the Airgas synergies recorded this quarter
will ramp-up in the fourth quarter. The Airgas integration process
is well underway and the full Airgas cost synergies are
expected to be delivered by the end of 2018, earlier than
initially anticipated.
1 Adjusted for currency, energy (natural gas and electricity)
and significant M&A impacts (Airgas)
Q3 2016 revenue
In
millions of euros
Q3 2016/2015
reported
Q3 2016/2015
excluding currency and energy
impact
Q3 2016/2015
comparable1
Group revenue
of which Gas & Services
5,077 M€
4,783 M€
+23.9%
+29.9%
+26.8%
+33.1%
-1.1%
+2.0%
1 Adjusted for currency, energy, and significant M&A impact
(Airgas).
________
The presentation of the publication is
available starting at 9:00 am (Paris time) on the Air Liquide
website airliquide.com
Throughout the year, follow Air Liquide news
on Twitter: @AirLiquideGroup
UPCOMING EVENTS
Actionaria trade show, Paris, FranceNovember 18 and 19,
2016
2016 Annual resultsFebruary 15, 2017
The world leader in gases, technologies and services for
Industry and Health, Air Liquide is present in 80 countries with
approximately 68,000 employees and serves more than 3 million
customers and patients*. Oxygen, nitrogen and hydrogen are
essential small molecules for life, matter and energy. They embody
Air Liquide’s scientific territory and have been at the core of the
company’s activities since its creation in 1902.
Air Liquide’s ambition is to lead its industry, deliver
long-term performance and contribute to sustainability. The
company’s customer-centric transformation strategy aims at
profitable growth over the long term. It relies on operational
excellence, selective investments, open innovation and a network
organization implemented by the Group worldwide. Through the
commitment and inventiveness of its people, Air Liquide leverages
energy and environment transition, changes in healthcare and
digitization, and delivers greater value to all its
stakeholders.
Air Liquide’s revenues amounted to €16.4 billion in 2015, and
its solutions that protect life and the environment represented
more than 40% of sales. On 23 May 2016, Air Liquide completed its
acquisition of Airgas, which had revenues amounting to $5.3 billion
(around €4.8 billion) for the fiscal year ending 31 March 2016.
Air Liquide is listed on the Paris Euronext stock exchange
(compartment A) and belongs to the CAC 40 and Dow Jones Euro Stoxx
50 indexes.
*Following the acquisition of Airgas on 23 May 2016
www.airliquide.comFollow us on Twitter
@AirLiquideGroup
Third Quarter 2016 Revenue
The quarter was marked by several major advances in the Airgas
integration process with the effective merger of the two
organizations in Industrial Merchant and Healthcare as of 1st
October, successful refinancing of the acquisition, and asset
disposals in the United States executed under excellent
conditions.
Gas & Services revenue improved +29.9% as published,
benefiting from the consolidation of Airgas sales over the full
quarter, and +2.0% on a comparable basis. Currency (-0.4%) and
energy (-2.8%) impact continued to affect published growth.
The start-ups and ramp-ups of units in Large Industries and
sustained strong sales in Healthcare were solid growth drivers
during the quarter, with both business lines increasing +5%. Sales
also strongly increased in developing economies (+6.7%), notably in
China. Electronics was quasi-stable over the quarter (-0.5%),
impacted by a decrease in Equipment and Installation sales.
Excluding these sales, growth was +3.0%, marked by stable sales of
specialty gases after a period of strong increase. Carrier gases
were solid and benefited from the ramp-up of new units. Demand for
advanced materials remained dynamic, with double-digit growth. In
Industrial Merchant, sales were down -2.0% over the quarter with
situations contrasted by country and market segment. Europe was
penalized by a working day impact over the quarter.
The activity level remained weak in Engineering &
Construction as compared to 2015 sales which were reinforced by the
exceptional conversion of a Large Industries project to sale of the
unit to the customer. Overall, the comparable change in Group
revenue stood at -1.1% and published growth integrating Airgas
contribution reached +23.9%.
Productivity efforts were pursued throughout the Group, leading
to 80 million euros in efficiencies this quarter, or 223
million euros year-to date, in line with annual objectives of more
than 250 million euros. Furthermore, the first cost synergies of
Airgas have materialized. Cash flow from operating activities
before changes in working capital amounted to 18.6% of sales.
The investment opportunities at 12-months reached
2.2 billion euros at the end of September and were stable as
compared with the end of June 2016. Investment decisions including
Airgas totaled approximately 620 million euros for the quarter
and 1.7 billion euros year-to-date. The investment backlog
stood at 2.2 billion euros, up slightly as compared with the
end of June.
Revenue
(in millions of euros)
Q3 2015 Q3 2016 Q3
2016/2015published
change
Q3 2016/2015
comparable
change((a)
Gas and Services 3,682 4,783 29.9 % +
2.0 % Engineering & Construction 219 105 -
52.0 % - 51.9 % Global Markets & Technology 67
73 + 10.0 % + 10.6% Other Activities
129 116 - 10.5 % - 9.7 %
TOTAL REVENUE
4,097 5,077 + 23.9 %
- 1.1 %
(a) Comparable change: excluding the impact of currency, energy
and significant scope
Revenue Analysis
Group
Group revenue for the 3rd quarter 2016 reached
5,077 million euros, up +23.9% on a published basis. It
benefited from the consolidation of Airgas sales over a full
quarter, but remained penalized by negative currency impact of
-0.5% and adverse energy impact of -2.4%. Excluding currency and
energy impact, growth stood at +26.8%.
The change in revenue was -1.1%, excluding Airgas,
currency and energy impact. The activity level remained weak in
Engineering & Construction in contrast with the high level of
sales in the third quarter 2015, reinforced by an exceptional
conversion of a Large Industries project to sale of the unit to the
customer.
Gas & Services
Unless otherwise stated, all changes in revenue commented
below are all based on comparable changes: excluding currency and
energy (natural gas and electricity) impact and excluding effect
from Airgas consolidation.
Gas & Services revenue totaled 4,783 million
euros, up +29.9% as published as compared with the 3rd quarter
2015. It benefited from the consolidation of Airgas sales but was
penalized by negative currency impact of -0.4% and adverse energy
impact of -2.8%. Growth excluding currency and energy impact was
+33.1%.
Excluding the contribution from Airgas, currency and energy
impact, growth on a comparable basis was +2.0%, sustained by
solid sales growth in Large Industries and Healthcare. Sales in
Electronics were quasi-stable (-0.5%), impacted by the decrease in
sales of Equipment & Installations. Excluding these sales,
growth was +3.0%, marked by stable sales of Specialty Gases after a
period of strong increase. Growth in Carrier Gases was solid,
sustained by ramp-ups of new plants. Demand for Advanced Molecules
remained dynamic, sales improved at a rhythm in excess of +10%. In
Industrial Merchant, sales were down by -2.0% over the quarter with
contrasted situations by country and market segment; Europe
penalized by the working day impact. Moreover, sales grew across
all geographic regions.
Revenue
(in millions of euros)
Q3 2015 Q3 2016 Q3
2016/2015published
change
Q3 2016/2015
comparable
change(a)
Europe
1,670 1,601 - 4.1 %
+ 0.5 % Americas
897 2,042
+ 127.6 % + 3.2 % Asia-Pacific
963
997 + 3.6 % + 3.5 % Middle East and
Africa
152 143 - 6.4 % +
2.0 %
Gas and Services 3,682
4,783 + 29.9 % + 2.0 % Large
Industries
1,312 1,261 - 3.9 %
+ 5.0 % Industrial Merchant
1,293
2,308 + 78.6 % - 2.0 % Healthcare
692 814 + 17.7 % + 5.2 %
Electronics
385 400 + 3.7 %
-0.5%
(a) Comparable change: excluding the impact of currency, energy
and significant scope
Europe
At 1,601 million euros, revenue in Europe, penalized
by a negative working day impact, was up +0.5%,. The
environment remained difficult for the cylinder activity and Large
Industries sales were impacted by temporary turnaround of a major
customer in Germany. Healthcare sales pursued solid progression
this quarter.
- Large Industries revenue was
quasi-stable at -0.2%. Demand for air gases continued to
improve, in particular for oxygen in Germany, France and Italy.
However, the temporary turnaround of a HyCO customer in Germany, as
well as weaker volumes for refineries in the Benelux penalized
revenue growth. Sales in Eastern Europe pursued dynamic growth,
particularly in Russia.
- Sales in the Industrial Merchant
business line were down -1.1%, penalized by a negative
working day impact. Liquid volumes continued to rise in an
environment of prices oriented downwards. The cylinder activity
remained weak, in particular for acetylene used in Welding and
Metal Fabrication. Eastern European countries continued their
steady growth. The price impact in the region was -0.8% in an
environment of virtually zero inflation.
- Healthcare recorded growth of
+4.3%, superior to the 1st half of the year. The Home
Healthcare activity continued organic development, with relatively
low incremental contribution from bolt-on acquisitions this
quarter. In Medical Gases for hospitals, pricing pressure continued
to penalize revenue. Hygiene and Specialty Ingredients activities
grew substantially with growth exceeding +10%.
Americas
Gas & Services revenue in the Americas reached
2,042 million euros, up +131% excluding currency
and energy impact, and excluding Airgas, up +3.2%. Large
Industries growth was strong whereas Industrial Merchant sales
remained sluggish in North America, with manufacturing output still
slow in the United States and Canada. In South America, sales
continued to improve with growth exceeding +18%.
- Large Industries revenue pursued
strong development, with growth of +7.1%. Sales benefitted
from the ramp-up of several units in North America and South
America. Volumes were up in all countries.
- The Industrial Merchant activity
grew +263% excluding currency impact and contracted to
-3.0% excluding Airgas. Performance was contrasted by
country. In the United States and Canada, slow manufacturing output
penalized industrial customers in the Energy, Mining, Metal
Fabrication and Technology sectors. Conversely, the gas
requirements of customers in the Food a nd Pharmaceuticals sectors
continued to grow. We note a slight positive inflection this
quarter in North American activity as compared to the average sales
over twelve months. In South America, revenue progressed more than
+10%. The pricing variation in the Americas remained positive at
+1.6%.
- Healthcare revenue pursued its
dynamic development, increasing to +119% excluding currency
impact and +13.8% excluding Airgas. Sales in Canada were
sustained by solid organic growth and contribution from an
acquisition in Home Healthcare. The activity expanded in South
America, with double-digit growth in Brazil and Argentina.
- Electronics sales progressed
+4.5% over the quarter.
Asia-Pacific
Revenue in the Asia-Pacific region progressed
+3.5% to 997 million euros. Large Industries
reported growth close to +10%; notably in China. Industrial
Merchant sales were slightly down, with a situation contrasted by
country. Electronics showed limited improvement, due to significant
decrease in Equipment & Installation sales and weak demand for
Specialty Gases.
- Large Industries sales were up
+9.5%. In China, they benefited from the ramp-up of new
production units. Volumes were also up in Singapore.
- Industrial Merchant revenue was
slightly down by -0.8%, with a situation contrasted by
country. China grew, notably in cylinder activity, and sales were
up in Japan. However, revenue in Singapore was down, with negative
comparison basis due to major equipment sales in the 3rd quarter
2015. Sales in Australia stabilized. The pricing effect remained
negative, at -0.4% in the 3rd quarter.
- Electronics was up slightly by
+0.8%. The activity was impacted by a drop in Equipment and
Installation sales of more than -10%, especially in Japan, China
and Taiwan. Excluding E&I sales, growth was close to +3.0%,
marked by stable sales of Specialty Gases after a period of strong
increase. Growth in Carrier Gases was solid and Advanced Materials
sales pursued dynamic development with growth greater than
+30%.
Middle-East and Africa
Middle-East and Africa revenue totaled 143 million
euros, up +2.0%. This performance was linked to dynamic
Egypt where sales benefitted from pre-loading a Large Industries
plant and development of Industrial Merchant activity with glass
and steel manufacturing customers. Activity in South Africa was
contrasted with strong growth in Large Industries but a difficult
environment in other activities. In Industrial Merchant, the
oil-related markets were particularly weak in the region. Also, it
must be noted that the region no longer benefits from the ramp-up
impact of Yanbu hydrogen unit after 18 months of operation and that
a temporary turnaround is planned for the customer’s unit in 4th
quarter 2016.
Engineering & Construction
Engineering & Construction revenue totaled
105 million euros, down -51.9% as compared with
the 3rd quarter 2015. It was affected by the slowdown in major
energy-related projects and the low number of new projects in a
more difficult global environment. The comparison effect with the
3rd quarter 2015 was also unfavorable, as sales had been reinforced
by the conversion of a Large Industries project into an exceptional
sale of the unit to the customer.
Total order intake reached 119 million euros in the 3rd quarter
2016 and 245 million euros at the end of September 2016.
Global Markets & Technologies
Global Markets & Technologies pursued its development with
revenue up +10.6% at 73 million euros, with
significant sales in biogas and maritime.
Other Activities
Other Activities revenue in the 3rd quarter 2016 declined
by -9.7% to reach 116 million euros.
- Welding sales decreased
-10.4%, due to weak activity, notably in Western
Europe.
- Diving (Aqua LungTM) posted a
decline in sales of -8.6%, as the geopolitical context was
less favorable to the growth of diving activities in certain
regions.
Revenue
(in millions of euros)
Q3 2015 Q3 2016 Q3
2016/2015published
change
Q3 2016/2015
comparable
change(a)
Welding
82 73 - 11.3 % -
10.4 % Diving
47 43 - 9.0 %
- 8.6 %
TOTAL OTHERS 129
116 - 10.5 % - 9.7
% (a) Comparable change: excluding the impact of
currency
Quarterly Highlights
Airgas
Successful refinancing of the transaction:
- On 12 September 2016, Air Liquide
announced the share capital increase with preferential subscription
rights for existing shareholders (the “Rights Issue”) as part of
the refinancing of the Airgas acquisition. This transaction
constituted the 2nd step of refinancing of this acquisition
following a 3 billion euro bond issue placed successfully on
June 6, 2016. The subscription period from 14 September to 28
September included, with parity of 1 new share for 8 existing
shares and a subscription unit price of 76 euros for each new
share. The final gross proceeds amounted to 3,283 million
euros resulting in the issuance of 43,202,209 new shares. The
total subscription rate reached 191.2 %.
- On 23 September, Air Liquide announced
the successful placement of five USD-denominated senior bonds for
an aggregate amount of 4.5 billion U.S. dollars, which
constitute the 3rd and last step in refinancing its acquisition of
Airgas. These bond issuances have maturities ranging from 3 to
30 years, for an average weighted maturity of 10.6 years
and an average weighted rate of 2.3 %.
Within the framework of the Airgas acquisition and pursuant to
the request of the American anti-trust authorities,
Air Liquide has completed the divestiture of certain U.S.
assets to Matheson Tri-Gas, Inc in early September. This
transaction included the sale of eighteen air separation units in
sixteen locations; two nitrous oxide production facilities; six
carbon dioxide production facilities; and three Airgas retail
packaged welding gas stores in Alaska. Under the terms of the
agreement, Matheson has acquired production facilities, equipment,
inventory, distribution assets, and customer contracts, and has
also hired employees related to the divested assets.
The transaction, valued at 781 million U.S. dollars,
generated a net gain versus book value of approximately
250 million U.S. dollars for Air Liquide. This gain
will offset the totality of the exceptional costs relative to the
Airgas acquisition for the year.
On 18 October, the American anti-trust authorities published a
request for comment for Air Liquide’s proposal to sell the
remaining assets to Reliant Holdings, Ltd and its subsidiary
Reliant Processing, Ltd. This transaction concerns two liquid
carbon dioxide plants in Iowa. The request for comment period
should end 17 November.
Industrial Developments
In July 2016, Air Liquide announced the commissioning of a world
premiere pure helium storage facility in Gronau-Epe in the North
Rhine-Westphalia region, 120 kilometers from Düsseldorf,
Germany. This site offers its customers service to secure their
helium supply. With this initiative, Air Liquide will better
address customer needs in offering reliable and complete
helium provisioning.
Air Liquide recently signed a new long-term contract with Axion
Energy Argentina, subsidiary of Bridas Corporation and leading
refiner in Argentina. Under the terms of the new contract, Air
Liquide will invest 55 millions euros in a second hydrogen
production unit (Steam Methane Reformer - SMR) for Axion. Implanted
in Campana, Buenos Aires, this SMR will raise the hydrogen
production capacity of the site to 37,000 Nm³ per hour.
Operations are expected to start in the second half of 2018.
Healthcare Developments
Air Liquide announced on 13 October that its subsidiaries
SEPPIC, healthcare specialty ingredients manufacturer, and Schülke,
hygiene specialist, broke ground on a shared state of the art
production facility in Sandston, Henrico County - Virginia, United
States. This plant is expected to start operations in the first
half of 2018 and will produce ingredients destined to the cosmetic
and pharmaceutical markets. The planned investment is over
60 million U.S. dollars.
Innovation
Through ALIAD, the Group’s venture capital, Air Liquide
announced an investment in Proxem, a leading French software
publisher specializing in the semantic analysis of textual big data
for companies. A player in big data, artificial intelligence and
digital transformation, it helps companies extract relevant
information in real time, from a large volume of textual data in
the field of customer knowledge, market intelligence and human
resources. This investment is inscribed in the digital
transformation program of the Group.
Portfolio Management
In early October, Air Liquide announced that it had entered
exclusive negotiations with Montagu Private Equity, a leading
European private equity firm, for the potential sale of Aqua Lung™,
a key player in personal aquatic equipment for recreational and
professional use. If realized, the transaction will permit Montagu
Private Equity to accompany the next phase of growth and
transformation of Aqua Lung™ to become a major consumer products
player.
Investment Cycle
Investment Opportunities
The investment opportunities at 12-months amounted to
2.2 billion euros at the end of September 2016, stable
compared with the end of June 2016. New projects entering the
portfolio offset those signed by the Group, awarded to the
competition or delayed. The global portfolio, including projects
which may be signed before or after 12 months, remains solid,
covering between 4.5 and 5 billion euros.
A little over 60% of the investment opportunities at 12-months
are located in developing economies. China remains the leading
region and represents approximately one-third of the investment
opportunities, followed by Americas and Europe.
Moreover, the average investment amount in the portfolio of
opportunities is 25 million euros and only a few projects exceed
100 million euros.
Investment Decisions and Investment Backlog
Industrial and financial investment decisions totaled
approximately 620 million euros for the quarter.
Industrial decisions accounted for 90% of this amount. These
projects concern notably Large Industries in Argentina and
Electronics in China.
Investment decisions reached 1.7 billion euros from
the beginning of the year.
The investment backlog represented a total of
2.2 billion euros, slightly up compared with the end of
June. This backlog should bring future sales contribution of around
0.9 billion euros per year, once ramp-ups are fully
completed.
Start-Ups
Three new units started up during the 3rd quarter 2016; two
Large Industries units (one in United States and one in Australia)
and a new plant for Electronics in Singapore. The sales
contribution of start-ups and ramp-ups reached approximately
40 million euros over the quarter and
200 million euros at the end of September, in line with
our expectations for 2016.
Operating Performance
The key event of the quarter is the pursued integration process
of Airgas following the effective merger of the two organizations
as of 1st October. In parallel, productivity efforts are pursued
throughout the Group.
The Group’s efficiency gains reached 80 million
euros in the 3rd quarter and 223 million euros at
the end of September, in line with the annual target of more than
250 million euros. This performance is part of an ongoing
effort and includes numerous projects throughout the Group. It
constitutes a solid base to reach the NEOS objective of
300 million euros average per year as of 2017. The
efficiencies are principally realized this quarter in industrial
operations (production, logistics) and procurement. The
restructuring of certain activities contributed to just over 10% of
efficiencies generated.
In addition to these efficiencies, the first cost synergies
with Airgas should be entirely achieved before the end of 2018,
earlier than initially anticipated. The integration process
took a major step with the effective merger of the two
organizations on 1st October. The Group’s Industrial Merchant and
Healthcare customers in the United States are now served by this
new organization. Operational integration is going according to
plan, notably with the closure of 17 cylinder filling or storage
sites in order to optimize the flow of products, which contributes
to logistical synergies. The projects which will permit the
generation of revenue synergies have also begun, in particular with
the launch of the Group’s on-site offering (FloxalTM) to Airgas
customers and the training of sales teams. These teams will be
fully trained in all combined product offerings by the end of the
year.
Cash-flow from operations before changes in working capital
requirements reached 18.6% of sales for the first nine
months of 2016. It notably ensures the financing of net investments
which reached 611 million euros for the quarter, of which 568
million euros were industrial investments.
Outlook
This quarter has been characterized by the successful
refinancing of the Airgas acquisition, the disposal of certain
assets in the United States executed under excellent conditions,
and the operational merger of Airgas since October 1st. In
addition, for the first time, Airgas contributed to the Group's
performance over a full quarter.
In the context of continued moderate global growth, Gas &
Services sales posted solid growth, primarily driven by ramp-ups of
Large Industries plants, the strength of the Healthcare business
and by the developing economies, in particular China. The Group
continues to generate recurring efficiency gains, which contribute
to operational performance.
Today, a new phase begins. Priorities include delivering Airgas
synergies in accordance with plan and continued implementation of
NEOS, the Group’s corporate program. The investment backlog,
amounting to 2.2 billion euros, and innovations aimed at enriching
the customer experience, will contribute to growth in the coming
years.
Following the completion of the acquisition of Airgas, Air
Liquide is confident in its ability to generate growth in 2016,
both in net profit and net earnings per share, including the effect
of the capital increase finalized in early October.
Appendices
Currency, energy (energy & natural gas) plus significant
scope impact
In addition to the comparison of published figures, financial
information for 3rd quarter 2016 is provided before currency,
energy price fluctuations and significant scope impact. As of 1st
January 2015, the energy impact includes impact of natural gas and
electricity. In the future, it may also include other energy Large
Industries feedstocks.
Since gases for industry and health are rarely exported, the
impact of currency fluctuations on activity levels and results is
limited to euro translation impact with respect to the financial
statements of subsidiaries located outside the Euro zone.
Fluctuations in natural gas and electricity prices are passed on to
customers through price indexation clauses.
Consolidated 3rd Quarter 2016 revenue includes the following
impact:
In millions of
euros Revenue
Q3 2016
Q3 2016/2015 change Currency
Naturalgas Electricity
Significant scope (Airgas) Q3 2016/2015
comparablechange
(a)
Group
5,077 +23.9% (17) (82)
(18) 1,142 -1.1% Gas & Services
4,783 +29.9% (16) (82) (18)
1,142 +2.0%
(a) Excluding currency, energy (natural gas and electricity) and
significant scope impact
For the Group,
- The currency impact was -0.5%.
- The impact of natural gas price
fluctuations was -2.0%.
- The impact of electricity price
fluctuations was -0.4%.
- The significant scope impact was
+27.9%.
For Gas & Services,
- The currency impact was -0.4%.
- The impact of natural gas price
fluctuations was -2.3%.
- The impact of electricity price
fluctuations was -0.5%.
- The significant scope impact was
+31.1%.
Consolidated Revenue Year-to-Date 2016
Impact of currency, energy (natural gas and electricity) on
year-to-date 2016 revenue:
In millions of
euros YTD 2016
Sales
YTD 2016/2015
change
Currency Natural gas
Electricity Significant scope (Airgas)
YTD 2016/2015
Comparable
change (a)
Group
13,372 + 9.5 % (216) (285)
(86) + 1,654 + 0.8 % Gas & Services
12,401 + 12.9 % (206) (285) (86)
+ 1,654 + 3.1 %
(a) Excluding currency, energy (natural gas and electricity) and
significant scope impact
Revenue by World Business Line
In millions
d’euros
YTD 2015 YTD 2016 YTD
2016/2015 change
Published Comparable(a)
Large Industries
3,877 3 649 - 5.9 % + 5.8
% Industrial Merchant
3,915 5,272
+ 34.6 % - 1.7 % Healthcare
2,074
2,265 + 9.2 % + 4.9 % Electronics
1,118 1,215 + 8.6 % + 7.2
%
Gas & Services 10,984
12,401 + 12.9 % + 3.1 %
Engineering & Construction
601 359
- 40.2 % - 39.0 % Global Markets & Technology
199 219 + 10.3 % + 10.6 %
Other Activities
427 393 - 8.0 %
- 7.5 %
Total Group 12,211
13,372 + 9.5 % + 0.8 %
(a) Excluding currency, energy (natural gas and electricity) and
significant scope impact
G&S Revenue by Geographic
Region
In millions
d’euros
YTD 2015 YTD 2016 YTD
2016/15 change Published
Comparable(a) Europe
5,036
4,826 - 4.2 % + 1.3 % Americas
2,696 4,227 + 56.8 % + 2.4 %
Asia-Pacific
2,855 2,917 + 2.2 %
+ 5.4 % Middle-East and Africa
397
431 + 8.5 % + 13.8 %
Gas & Services
Revenue 10,984 12,401 +
12.9 % + 3.1 %
(a) Excluding currency, energy (natural gas and electricity) and
significant scope impact
This Activity Report is also available on our website
www.airliquide.com/investors/documents-presentations
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161024006413/en/
Air LiquideCorporate CommunicationsCaroline Philips, + 33
(0)1 40 62 50 84Annie Fournier, + 33 (0)1 40 62 51 31orInvestor
RelationsParis+33 (0)1 40 62 50 87Radnor+1 (0)610 263 8277
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