Regulatory News:
Air Liquide (Paris:AI):
Key Figures
(in millions of euros)
Q1 2024
2024/2023 as published
2024/2023
comparable(a)
Group Revenue
6,650
-7.3%
+2.1%
of which Gas & Services
6,358
-7.8%
+2.0%
of which Engineering &
Construction
92
+5.2%
+6.5%
of which Global Markets &
Technologies
200
+3.7%
+4.7%
(a) Change excluding the currency, energy
(natural gas and electricity) and significant scope impacts, see
reconciliation in appendix.
Commenting on sales in the first quarter of 2024, François
Jackow, Chief Executive Officer of the Air Liquide
Group, stated:
“With a proven resilient business model, Air Liquide delivers
once again a solid performance in the first quarter. The Group
thus maintains its growth trajectory despite an uncertain
environment, and continues to prepare a sustainable future
thanks to an investment momentum supported by numerous projects
in the energy transition. Air Liquide’s teams are moreover
fully mobilized on continuous performance improvement and
structural efficiency projects undertaken as part of our
ADVANCE strategic plan, of which the original margin increase
ambition we doubled at the beginning of the year(1).
Group sales increased by +2.1% on a comparable basis -
the first quarter of last year having been particularly dynamic.
Published sales were down -7.3%, due to the decline in energy
prices - for which variations are contractually passed through to
Large Industries customers - as well as negative currency impacts.
Revenue reached 6.65 billion euros, including 6.36 billion
euros for the Gas & Services business.
The Gas & Services business, which represents 96% of
the Group’s revenue, was up +2.0% on a comparable basis.
Geographically, growth was notably driven by the dynamism of the
Americas. By business line, Healthcare in particular
stood out, with Industrial Merchant and Large
Industries also contributing to the increase in sales on a
comparable basis.
In line with the ADVANCE renewed ambition announced in
February this year, Air Liquide is pursuing the continuous
improvement of its operational performance by implementing new
structural actions to deliver savings in the coming
quarters. Over the first three months of the year, the Group
notably generated efficiencies amounting to 112 million euros,
ahead of its average annual target of 400 million euros. It also
continued the active management of its business portfolio and the
adjustment of its prices in Industrial Merchant, leveraging its
ability to create value for customers.
Still very high at 4.1 billion euros, the Group’s
backlog is diversified and well balanced among activities
and geographies. Investment decisions amounted to close
to 900 million euros, up +11% compared to last year. The
12-month portfolio of investment opportunities remains high
at 3.4 billion euros. More than 40% of these opportunities
are related to the energy transition with, in
particular, the first decarbonization projects in the United States
and Europe. This portfolio includes projects in Electronics in
Asia, as well as in the United States and Europe.
In 2024, Air Liquide is confident in its ability to further
increase its operating margin and to deliver recurring net profit
growth, at constant exchange rates(2).”
Highlights
- Corporate
- Project to divest Air Liquide's
businesses in 12 countries in Africa. Annual sales in these
countries represent less than 10% of the Group’s revenue in
Africa.
- Electronics
- Announcement of an investment of more
than 50 million euros to build a new innovative production unit
in Singapore and to transform existing facilities located in Malta
(New York, United States), in order to supply ultra-pure
nitrogen to GlobalFoundries. These projects will enable
GlobalFoundries to benefit from greater energy efficiency.
- Sustainable development
- Announcement by Air Liquide and
Sasol of long-term contracts (PPA) with Enel Green Power RSA
for a total capacity of 110 MW of renewable electricity for the
Sasol site in Secunda, South Africa.
- Continued expansion of Air Liquide’s
biomethane production capacities in the United States, with the
construction of two production units in line with a circular
economy approach.
- Hydrogen
- Announcement by Air Liquide and
TotalEnergies of the launch of the TEAL Mobility joint
venture to create the leader in hydrogen distribution with a
network of 100 truck stations in Europe.
- As the Paris 2024 Olympic and Paralympic
Games approach, reopening ceremony for the Air Liquide hydrogen
refueling station on Place de l’Alma, Paris.
- Decarbonizing industry
- As part of the renewal of a long-term
agreement with Dow, investment of nearly 40 million
euros to increase efficiency and reduce the CO2 emissions of
the Air Liquide industrial gas production site in Stade,
Germany.
Group revenue totaled 6,650 million euros in the
1st quarter of 2024, posting a growth of +2.1% on a
comparable basis with the 1st quarter of 2023. The Group’s
published sales were down -7.3% in the 1st quarter of
2024, affected by unfavorable energy (-5.5%) and currency (-3.9%)
impacts. There was no significant scope impact. The favorable
impact on comparable growth of proactive price increases to counter
hyperinflation(3) in Argentina is estimated at approximately
+1.7%.
Gas & Services revenue reached 6,358 million
euros, up by + 2.0% on a comparable basis. As
published revenue for Gas & Services were down
-7.8% in the 1st quarter of 2024, penalized by unfavorable
energy (-5.7%) and currency (-4.1%) impacts. There was no
significant scope impact.
Comparable growth(4) in the Industrial Merchant
(+1.5%) business continued in the 1st quarter of 2024 with
slightly lower volumes and a price effect (+3.7%) that eased
sequentially. Americas is the region contributing the most to the
price effect (+6.5%) with proactive price increase campaigns, in
particular in the United States (Airgas for +3%) and Argentina to
counter hyperinflation (for +3%). Revenue from Large
Industries (+0.9%) benefited from the start-up of two
new units but was impacted by customer turnarounds and the
divestiture of a cogeneration unit in Europe, while activity
remained broadly stable. The Healthcare business was the
growth driver in the 1st quarter, with an increase in sales of
+8.1%, supported by the growth of all therapies in Home
Healthcare and the increase in the prices of medical gases in an
inflationary environment. Lastly, revenue from the
Electronics business was slightly down by -2.0%
against a very high basis of comparison in the 1st quarter of 2023:
the decrease in sales of materials in a context of soft demand from
memory manufacturers was partially offset by the +6% growth in
carrier gas sales.
- Gas & Services revenue in the Americas increased by
+6.3% and reached 2,550 million euros in the 1st
quarter of 2024. All businesses grew in the region. Large
Industries (+4.8%) benefited from strengthening demand over the
quarter and from the start-up of an Air Separation Unit. In
Industrial Merchant, revenue increased by +4.8%, supported by a
price effect that remained very solid (+6.5%) and resilient gas
volumes. The strong growth in Healthcare (+20.4%) was notably
driven by the dynamic development of sales of Medical Gases in the
United States and Home Healthcare in Latin America. Solid growth in
Electronics (+3.3%) benefited from higher sales of carrier gases,
equipment and installations.
- In Europe, sales were down slightly by -1.6% in
the 1st quarter of 2024 and reached 2,250 million euros. In
Large Industries, revenue (-1.1%) was impacted by the divestiture
of a cogeneration unit, partially offset by slightly higher volumes
of hydrogen. In Industrial Merchant (-6.4%), prices were down (due
to contractual indexation on energy price for the bulk), and
volumes were affected by an unfavorable working day impact. The
Healthcare business posted very solid sales growth (+4.3%),
supported by the increase in the number of patients in Home
Healthcare and the increase in volumes and prices of medical gases
in an inflationary context.
- Revenue in the Asia-Pacific region was flattish
(-0.9%) in the 1st quarter of 2024 and amounted to 1,291
million euros. In Large Industries (-1.0%), the start-up of a
new unit in March partially offset weak demand and customer
turnarounds. Industrial Merchant’s sales were up by +0.7%,
supported by higher prices and increased volumes excluding helium.
Electronics revenue decreased by -1.7% against a very high basis of
comparison in the 1st quarter of 2023, the growth in carrier gas
sales partially offsetting lower sales of specialty materials,
equipment and installations.
- Revenue in the Middle East & Africa region increased
sharply by +10.5% to 267 million euros in the 1st
quarter of 2024. All business lines grew.
Revenue in Global Markets & Technologies totaled
200 million euros in the 1st quarter, up
+4.7%. Order intake for Group projects and third-party
customers amounted to 176 million euros.
Consolidated revenue from Engineering & Construction
totaled 92 million euros in the 1st quarter of 2024, up
+6.5% compared to the 1st quarter of 2023. Order intake for
the Group and third-party customers reached 342 million
euros.
Efficiencies(5) reached 112 million euros
in the 1st quarter of 2024, up +22.2% compared to the 1st
quarter of 2023. The price effect in the Industrial
Merchant business stood at +3.7% and came in addition to
the significant price increase of +12.9% in the 1st quarter of
2023. This price effect eased sequentially. Portfolio
management of businesses continued in the 1st quarter with 3
acquisitions in Industrial Merchant in the United States and
China, and 2 divestitures, technological activities for the
Aeronautics sector (Global Markets & Technologies) and the
welding equipment rental activity in Industrial Merchant in
Europe.
Cash flows from operating activities before changes in
working capital amounted to 1,608 million euros, up by
+0.5% as published compared to the 1st quarter of 2023 and by
+6.1% excluding the currency impact and two exceptional
indemnity payments received in the 1st quarter of 2023 and 2024
respectively. This growth was higher than comparable sales growth
(+2.1%) in the 1st quarter. This leverage effect reflects the
contribution of the three drivers of margin improvement,
namely pricing, efficiencies and portfolio management.
In the 1st quarter of 2024, industrial and financial
investment decisions amounted to 888 million euros, an
increase of +11.4% compared to those of the 1st quarter of 2023.
The investment backlog stood at a very high level of 4.1
billion euros, compared to 3.5 billion euros in the 1st
quarter of 2023.
The additional contribution to sales of unit start-ups
and ramp-ups totaled 53 million euros in the 1st quarter of
2024. Over the year, it is expected to be between 270 and 290
million euros.
The portfolio of 12-month investment opportunities
remained stable at a high level of 3.4 billion euros at the
end of March.
In order to decarbonize its production units, the Group
decided on the electrification of a third Air Separation
Unit in China, which will reduce Scope 2 emissions by around
340,000 tonnes of CO2 per year. Air Liquide and Sasol also
announced that they had signed new long-term renewable power
purchase agreements in South Africa, bringing the total
capacity for the Secunda site to approximately 690 MW,
corresponding to a reduction of more than 1.2 million tonnes per
year of CO2 emissions for Air Liquide. Furthermore, in order to
actively contribute to the decarbonization of mobility, the
Group decided to invest in the logistics chain downstream of the
Normand’Hy electrolyzer in France and created the TEAL joint
venture with TotalEnergies, which aims to roll out more than 100
hydrogen refueling stations in Europe in the next 10 years.
Analysis of 1st quarter 2024
revenue
Unless otherwise stated, all variations in revenue outlined
below are on a comparable basis, excluding currency, energy
(natural gas and electricity) and significant scope impacts.
REVENUE
Revenue
(in millions of euros)
Q1 2023
Q1 2024
2024/2023 published
change
2024/2023 comparable
change
Gas & Services
6,893
6,358
-7.8%
+2.0%
Engineering & Construction
87
92
+5.2%
+6.5%
Global Markets & Technologies
194
200
+3.7%
+4.7%
TOTAL REVENUE
7,174
6,650
-7.3%
+2.1%
Group
Group revenue totaled 6,650 million euros in the
1st quarter of 2024, posting a growth of +2.1% on a
comparable basis with the 1st quarter of 2023. Global Markets
& Technologies sales were up +4.7% and
Engineering & Construction revenue from third party
customers increased by +6.5%.
The Group’s published sales were down -7.3% in the
1st quarter of 2024, affected by unfavorable energy (-5.5%) and
currency (-3.9%) impacts. There was no significant scope impact.
The favorable impact on comparable growth of proactive price
increases to counter hyperinflation(6) in Argentina is estimated at
approximately +1.7%.
Gas & Services
Gas & Services revenue reached 6,358 million
euros, up by + 2.0% on a comparable basis.
Growth in the Industrial Merchant (+1.5%) business
continued in the 1st quarter of 2024 with slightly lower volumes
and a price effect (+3.7%) that eased sequentially. Americas is the
region contributing the most to the price effect (+6.5%) with
proactive price increase campaigns, in particular in the United
States (Airgas for +3%) and Argentina to counter hyperinflation
(for +3%). Revenue from Large Industries (+0.9%)
benefited from the start-up of two new units but was impacted by
customer turnarounds and the divestiture of a cogeneration unit in
Europe, while activity remained broadly stable. The
Healthcare business was the growth driver in the 1st
quarter, with an increase in sales of +8.1%, supported by
the growth of all therapies in Home Healthcare and the increase in
the prices of medical gases in an inflationary environment. Lastly,
revenue from the Electronics business was slightly down by
-2.0% against a very high basis of comparison in the 1st
quarter of 2023: the decrease in sales of materials in a context of
soft demand from memory manufacturers was partially offset by the
+6% growth in carrier gas sales.
As published revenue for Gas & Services were
down -7.8% in the 1st quarter of 2024, penalized by
unfavorable energy (-5.7%) and currency (-4.1%) impacts. There was
no significant scope impact.
Revenue by geography and business
line
(in millions of euros)
Q1 2023
Q1 2024
2024/2023 published
change
2024/2023 comparable
change
Americas
2,629
2,550
-3.0%
+6.3%
Europe
2,639
2,250
-14.7%
-1.6%
Asia Pacific
1,385
1,291
-6.8%
-0.9%
Middle East & Africa
240
267
+11.3%
+10.5%
GAS & SERVICES REVENUE
6,893
6,358
-7.8%
+2.0%
Large Industries
2,202
1,736
-21.1%
+0.9%
Industrial Merchant
3,038
2,975
-2.1%
+1.5%
Healthcare
1,016
1,051
+3.5%
+8.1%
Electronics
637
596
-6.5%
-2.0%
Americas
Gas & Services revenue in the Americas increased by
+6.3% and reached 2,550 million euros in the 1st
quarter of 2024. All businesses grew in the region and are
benefiting in particular from proactive price increases,
particularly in the United States, and in Argentina to counter
hyperinflation. Large Industries (+4.8%) benefited from
strengthening demand over the quarter and from the start-up of an
Air Separation Unit. In Industrial Merchant, revenue increased by
+4.8%, supported by a price effect that remained very solid (+6.5%)
and resilient gas volumes. The strong growth in Healthcare (+20.4%)
was notably driven by the dynamic development of sales of Medical
Gases in the United States and Home Healthcare in Latin America.
Solid growth in Electronics (+3.3%) benefited from higher sales of
carrier gases, equipment and installations.
Americas Gas & Services Q1 2024 Revenue
- Revenue from Large Industries grew by +4.8% and
demand strengthened over the quarter. In North America, the
start-up and ramp-up of Air Separation Units (ASU) offset the
impact of customer turnarounds, particularly in Refining. In Latin
America, hydrogen volumes were down due to the nationalization of a
production unit in Mexico at the end of 2023.
- In the Industrial Merchant business, sales increased by
+4.8%, supported by a very solid price effect at +6.5%. Gas
volumes (excluding hardgoods) remained resilient. In the United
States, gas volumes are increasing mainly in the Industrial
Construction and Aeronautics sectors.
- In the Healthcare business, sales were up sharply
(+20.4%). The rise in prices in Proximity Care in the United
States and the dynamism of Home Healthcare in Latin America were
the main contributors.
- The Electronics business showed solid revenue growth
(+3.3%). Carrier gas sales increased, supported by the
ramp-up of new units and the increase in helium volumes. High sales
of equipment and installations also contributed to the growth,
while sales of materials remained low.
Europe
In Europe, sales were down slightly by -1.6% in the 1st
quarter of 2024 and reached 2,250 million euros. In Large
Industries, revenue (-1.1%) was impacted by the divestiture of a
cogeneration unit, partially offset by slightly higher volumes of
hydrogen. In Industrial Merchant (-6.4%), prices were down and
volumes were affected by an unfavorable working day impact. The
Healthcare business posted very solid sales growth (+4.3%),
supported by the increase in the number of patients in Home
Healthcare and the increase in volumes and prices of medical gases
in an inflationary context.
Europe Gas & Services Q1 2024 Revenue
- In the 1st quarter 2024, revenue for Large Industries
decreased slightly by -1.1%. Hydrogen volumes increased in
Chemicals compared to a low level in the 1st quarter of 2023 and
were broadly stable in Refining. Demand for air gases from
customers in the Chemicals and Steel industries also remained
stable. Furthermore, sales were impacted by the divestiture of a
cogeneration unit.
- Sales in the Industrial Merchant business were down by
-6.4%, the price effect stood at -1.9%. The decrease in the
price of bulk (indexed to energy prices) was partly offset by the
proactive increase in the price of packaged gases, with a specific
focus on the creation of value through innovation and on the
quality of service to customers. Volumes were affected by an
unfavorable working day effect of -1%. They declined in the
Metallurgy, Glass and, to a lesser extent, Food markets, but
increased in the Manufacturing, Research and Aeronautics
sectors.
- In the Healthcare business, sales increased by
+4.3%. Home Healthcare continued its dynamic growth, with a
sharp increase in the number of patients cared for, particularly
for diabetes and sleep apnea. Growth in sales of medical gases
remained solid, supported by a balanced contribution from volumes
and prices in an inflationary context.
Europe
- Air Liquide is continuing its development with the
acquisition of two Homecare entities in Belgium and
the Netherlands. With this operation, the Group broadens its
presence and offer in these countries. The acquired entities
support 10,000 patients living with respiratory
insufficiency, sleep apnea syndrome or requiring infusion. With a
turnover of more than 10 million euros in 2023, they are supported
by around fifty employees.
Asia-Pacific
Revenue in the Asia-Pacific region was flattish (-0.9%)
in the 1st quarter of 2024 and amounted to 1,291 million
euros. In Large Industries (-1.0%), the start-up of a new unit
in March partially offset weak demand and customer turnarounds.
Industrial Merchant’s sales were up by +0.7%, supported by higher
prices and increased volumes excluding helium. Electronics revenue
decreased by -1.7% against a very high basis of comparison in the
1st quarter of 2023, the growth in carrier gas sales partially
offsetting lower sales of specialty materials, equipment and
installations.
Asia-Pacific Gas & Services Q1 2024 Revenue
- Large Industries revenue was down slightly by
-1.0%. In China, several customer turnarounds were offset by
the contribution of the start-up of a new hydrogen production unit
in March. In Japan, oxygen volumes for steel production were down,
while hydrogen volumes for Refining increased in Singapore.
- In Industrial Merchant, sales increased by +0.7%.
The price effect (+1.3%) eased sequentially, in particular due to
the marked decrease in helium prices. In China, the dynamism of the
Automotive, Food and Secondary Electronics sectors supported the
strong growth in volumes excluding helium, which reached +4%.
- Sales in Electronics were down -1.7% in the 1st
quarter of 2024 compared to a very high basis of comparison in the
1st quarter of 2023. Sales of specialty materials were impacted by
the low activity of memory manufacturers and sales of equipment and
installations were down. However, sales of carrier gases continued
to be up sharply (+5%), driven by the start-up of two new units in
the 1st quarter, and sales of advanced materials returned to
growth.
Middle East and Africa
Revenue in the Middle East & Africa region increased sharply
by +10.5% to 267 million euros in the 1st quarter of
2024. All business lines grew. In Large Industries, hydrogen
volumes in Saudi Arabia were high. The strong performance of
Industrial Merchant reflects a high price effect and the increase
in volumes. In Healthcare, the rise in medical gas volumes in South
Africa and the development of diabetes treatment in Saudi Arabia
were the main contributors to revenue growth.
Middle East and Africa
- Air Liquide and Sasol have announced new renewable Power
Purchase Agreements (PPAs) with Enel Green Power
RSA for the long term supply of an additional
capacity of 110 MW to Sasol’s Secunda site in
South Africa. This is the fourth set of PPAs signed by Air
Liquide and Sasol after those announced in 2023. Together, these
PPAs represent a total renewable power capacity of around 690
MW. For Air Liquide, these contracts will enable an annual
reduction of approximately 1.2 million tonnes in its CO2
emissions and will largely contribute to the objective to
reduce the local emissions of its air separation units by 30% to
40% by 2031.
Global Markets & Technologies
Revenue in Global Markets & Technologies totaled 200
million euros in the 1st quarter, up +4.7%. The
increase in sales of technological equipment (Turbo-Braytons,
biogas equipment, hydrogen refueling stations, etc.) and the sharp
increase in hydrogen volumes for mobility in the United States
offset the divestiture of the aerospace technology activities at
the end of February and the decrease in biogas prices.
Order intake for Group projects and third-party customers
amounted to 176 million euros, below the very high level of
240 million euros in the 1st quarter of 2023. This includes more
than 10 Turbo-Brayton LNG reliquefactors, special systems for the
Electronics industry and equipment for the transportation and
distribution of hydrogen and air gases.
Engineering & Construction
Consolidated revenue from Engineering & Construction totaled
92 million euros in the 1st quarter of 2024, up +6.5%
compared to the 1st quarter of 2023.
Order intake for the Group and third-party customers reached
342 million euros. They include in particular a hydrogen
refueling center, Air Separation Units (ASU) and gas purification
and liquefaction equipment. The share of orders for the Group
increased and represents a large majority of new projects.
Investment cycle
INVESTMENT DECISIONS AND INVESTMENT BACKLOG
In the 1st quarter of 2024, industrial and financial
investment decisions amounted to 888 million euros, an
increase of +11.4% compared to those of the 1st quarter of
2023.
The industrial investment decisions for the 1st quarter
of 2024 amounted to 864 million euros. In Large
Industries they concern in particular the electrification of an
existing Air Separation Unit (ASU) in China which currently
consumes steam produced by the customer from coal. It is the third
ASU of this type to be electrified in China and will contribute to
the reduction of CO2 emissions accounted for under Scope 2. In the
Industrial Merchant business line, the decisions include
on-site units, in particular two units to supply oxygen to a
customer in the Pharmaceuticals sector in Europe, as well as
investments in the production and distribution of argon in Europe
and the United States. The construction of a new advanced materials
production unit in the United States is the main investment decided
in Electronics in the 1st quarter. Lastly, in the Global
Markets and Technologies business, investments in the logistics
chain, downstream of the Normand’Hy electrolyzer in France, were
decided to develop hydrogen mobility.
Financial investment decisions totaled 24
million euros in the 1st quarter of 2024. They include
several small acquisitions in China and the United States in
Industrial Merchant and a capital contribution to the joint
venture created with TotalEnergies, which will deploy a network of
refueling stations for hydrogen mobility of heavy-duty vehicles in
Europe.
The investment backlog stood at a very high level of
4.1 billion euros, compared to 3.5 billion euros in
the 1st quarter of 2023. The geographical footprint is well
balanced. Large Industries represents around 45% of the total and
includes major projects at the heart of the energy transition. The
share of Electronics stands at around 36%, mainly with investments
in carrier gas production units. In Industrial Merchant (12% of the
total), the projects currently being implemented are predominantly
on-site gas generators. Finally, the Global Markets &
Technologies activity represents 7% of current investments with
projects linked to hydrogen mobility and biomethane production.
Investments
- Air Liquide announced an investment of over 50 million
euros to build a new innovative plant in Singapore and
revamp its existing facilities in Malta (New York,
U.S.), supplying high purity nitrogen to
GlobalFoundries (GF). These Air Liquide projects will enable
GlobalFoundries to benefit from higher energy efficiencies.
START-UPS
The main start-ups carried out in the 1st quarter of 2024
in Large Industries include in the Americas an Air Separation Unit
and, in China in March, a major hydrogen and CO production unit
integrating a CO2 capture and recycling system. In Electronics,
they included in particular a large ultra-pure carrier gas unit in
Japan.
The additional contribution to sales of unit start-ups
and ramp-ups totaled 53 million euros in the 1st quarter of
2024. Over the year, it is expected to be between 270 and 290
million euros.
INVESTMENT OPPORTUNITIES
The portfolio of 12-month investment opportunities
remained stable at a high level of 3.4 billion euros at the
end of March. This reflects the dynamism of the development of
projects at the core of the energy transition, which
represented more than 40% of the portfolio, particularly in
the United States and Europe, with carbon capture and low-carbon
and renewable hydrogen production projects. Opportunities In
Electronics are now spread across Asia, Europe and the United
States.
The portfolio of opportunities at more than 12 months is
also stable at a very high level and includes in particular
significant projects in the energy transition and the Electronics
sector.
Operating Performance
Financial performance
The price effect in the Industrial Merchant
business stood at +3.7% and came in addition to the
significant price increase of +12.9% in the 1st quarter of 2023.
This price effect eased sequentially. The price of bulk, indexed in
particular to the price of energy, continued to increase in all
regions except Europe, where the evolution in the indexes was
negative. In other business segments, particularly packaged gases,
prices benefited from proactive increases in all regions. Specific
attention was also being paid to value creation through innovation
and quality of service to customers. Thus, active price management
contributed to the improvement of the margin.
Efficiencies(7) reached 112 million euros
in the 1st quarter of 2024, up +22.2% compared to the 1st
quarter of 2023. Efficiencies related to purchases, which
account for more than a quarter of the total, were high despite an
inflationary context. The Group continued its transformation
with the reorganization of Home Healthcare activities in France,
the rollout of digital tools for optimizing the supply chain and
the implementation of shared service and remote operations centers.
In addition, the cross-functional program of continuous
improvement actively supported the development of more than a
third of efficiencies, including a wide range of industrial
efficiency projects, thanks to a digital platform to help replicate
initiatives and a network of committed experts.
Portfolio management of businesses continued in the 1st
quarter with 3 acquisitions in Industrial Merchant in the
United States and China, and 2 divestitures, the aerospace
technology activities (Global Markets & Technologies) and the
welding equipment rental activity in Industrial Merchant in
Europe.
Divestitures
- Air Liquide has signed an agreement with Adenia Partners
Ltd regarding the project to sell its activities in the
following twelve countries in Africa: Benin, Burkina Faso,
Cameroon, Congo, Côte d'Ivoire, Gabon, Ghana, Madagascar, Mali,
Democratic Republic of Congo, Senegal and Togo. These activities
represent a total annual sales of about 60 million euros
(less than 10% of the Group’s sales in Africa). The proposed
divestiture remains subject to the usual regulatory and financial
approvals.
Cash flows from operating activities before changes in
working capital amounted to 1,608 million euros, up by
+0.5% as published compared to the 1st quarter of 2023 and by
+6.1% excluding the currency impact and two exceptional
indemnity payments received in the 1st quarter of 2023 and 2024
respectively. This growth was higher than comparable sales growth
(+2.1%) in the 1st quarter. This leverage effect reflects the
contribution of the three drivers of margin improvement,
namely pricing, efficiencies and portfolio management.
Extra-financial performance
In order to decarbonize its production units, the Group
decided on the electrification of a third Air Separation
Unit in China, which will reduce Scope 2 emissions by around
340,000 tonnes of CO2 per year. Air Liquide and Sasol also
announced that they had signed new long-term renewable power
purchase agreements in South Africa, bringing the total
capacity for the Secunda site to approximately 690 MW,
corresponding to a reduction of more than 1.2 million tonnes per
year of CO2 emissions for Air Liquide. Furthermore, in order to
actively contribute to the decarbonization of mobility, the
Group decided to invest in the logistics chain downstream of the
Normand’Hy electrolyzer in France and created the TEAL joint
venture with TotalEnergies, which aims to roll out more than 100
hydrogen refueling stations in Europe in the next 10 years.
Outlook
With a proven resilient business model, Air Liquide delivered
once again a solid performance in the first quarter. The Group
thus maintained its growth trajectory despite an uncertain
environment, and continued to prepare a sustainable future
thanks to an investment momentum supported by numerous projects
in the energy transition. Air Liquide’s teams are moreover
fully mobilized on continuous performance improvement and
structural efficiency projects undertaken as part of our
ADVANCE strategic plan, of which the original margin increase
ambition was doubled at the beginning of the year(8).
Group sales increased by +2.1% on a comparable basis -
the first quarter of last year having been particularly dynamic.
Published sales were down -7.3%, due to the decline in energy
prices - for which costs are contractually passed through to Large
Industries customers - as well as negative currency impacts.
Revenue reached 6,650 million euros, including 6,358 million
euros for the Gas & Services business.
The Gas & Services business, which represented 96% of
the Group’s revenue, was up +2.0% on a comparable basis.
Geographically, growth was notably driven by the dynamism of the
Americas. By business line, Healthcare in particular stood out,
with Industrial Merchant and Large Industries also contributing to
the increase in sales on a comparable basis.
In line with the ADVANCE renewed ambition announced in February
this year, Air Liquide is pursuing the continuous improvement of
its operational performance by implementing new structural
actions to deliver savings in the coming quarters. Over the
first three months of the year, the Group notably generated
efficiencies amounting to 112 million euros, ahead of its average
annual target of 400 million euros. It also continued the active
management of its business portfolio and the adjustment of
its prices in Industrial Merchant, leveraging its ability to
create value for customers.
Still very high at 4.1 billion euros, the Group’s
investment backlog is diversified and well balanced among
activities and geographies. Investment decisions amounted to
close to 900 million euros, up +11% compared to 1st
quarter 2023. The 12-month portfolio of investment
opportunities remains high at 3.4 billion euros. More
than 40% of these opportunities are related to the energy
transition with, in particular, the first decarbonization
projects in the United States and Europe. This portfolio includes
projects in Electronics in Asia, as well as in the United States
and Europe.
In 2024, Air Liquide is confident in its ability to further
increase its operating margin and to deliver recurring net profit
growth, at constant exchange rates(9).
Appendices - Performance
indicators
Performance indicators used by the Group that are not directly
defined in the financial statements have been prepared in
accordance with the AMF position 2015-12 about alternative
performance measures.
The performance indicators are the following:
- Comparable sales change
- Currency, energy and significant scope impacts
- Efficiencies
Definition of Currency, energy and significant scope
impacts
Since industrial and medical gases are rarely exported, the
impact of currency fluctuations on activity levels and results is
limited to euro translation impacts with respect to the financial
statements of subsidiaries located outside the eurozone. The
currency impact is calculated based on the aggregates for the
period converted at the exchange rate for the previous period.
In addition, the Group passes on variations in the cost of
energy (electricity and natural gas) to its customers via indexed
invoicing integrated into their medium and long-term contracts.
This indexing can lead to significant variations in sales (mainly
in the Large Industries Business Line) from one period to another
depending on fluctuations in prices on the energy market.
An energy impact is calculated based on the sales of each
of the main subsidiaries in Large Industries. Their consolidation
allows the determination of the energy impact for the Group as a
whole. The foreign exchange rate used is the average annual
exchange rate for the year N-1. Thus, at the subsidiary level, the
following formula provides the energy impact, calculated for
natural gas and electricity respectively:
Energy impact = Share of sales indexed to energy year
(N-1) x (Average energy price in year (N) - Average energy price in
year (N-1))
This indexation effect of electricity and natural gas does not
impact the operating income recurring.
The significant scope impact corresponds to the impact on
sales of all acquisitions or disposals of a significant size for
the Group. These changes in scope of consolidation are
determined:
- for acquisitions during the period, by deducting from the
aggregates for the period the contribution of the acquisition,
- for acquisitions during the previous period, by deducting from
the aggregates for the period the contribution of the acquisition
between January 1 of the current period and the anniversary date of
the acquisition,
- for disposals during the period, by deducting from the
aggregates for the previous period the contribution of the disposed
entity as of the anniversary date of the disposal,
- for disposals during the previous period, by deducting from the
aggregates for the previous period the contribution of the disposed
entity.
Comparable sales change
Comparable changes for sales exclude the currency, energy and
significant scope impacts described above. The calculations are
the following:
(in millions of euros)
Q1 2024
Q1 2024/2023 Published
Growth
Currency impact
Natural gas impact
Electricity impact
Significant scope
impact
Q1 2024/2023 Comparable
Growth
Revenue
Group
6,650
-7.3%
(280)
(299)
(95)
0
+2.1%
Impacts in %
-3.9%
-4.2%
-1.3%
-
Gas & Services
6,358
-7.8%
(277)
(299)
(95)
0
+2.0%
Impacts in %
-4.1%
-4.3%
-1.4%
-
Efficiencies
Efficiencies represent a sustainable cost reduction
resulting from an action plan on a specific project. Efficiencies
are identified and managed on a per project basis. Each project is
followed by a team composed in alignment with the nature of the
project (purchasing, operations, human resources...).
Definitions
Portfolio of 12-month investment opportunities: cumulative value
of investment opportunities taken into account by the Group for a
decision within the next 12 months. Industrial projects with a
value of more than 5 million euros for Large Industries and more
than 3 million euros for other business lines, including
replacement assets and efficiency projects.
Investment decisions: cumulative value of industrial and
financial investment decisions. Growth and non-growth industrial
projects, including the renewal of assets, efficiency projects,
maintenance and safety, as well as financial decisions
(acquisitions).
Investment backlog: cumulative value of investments for projects
that have been decided but not yet started up. Industrial projects
of more than 10 million euros, including the renewal of assets and
efficiency projects.
Impact of hyperinflation in Argentina: estimation calculated by
capping the price increase in 2023 at 26% (an average annual level
of 26% over 3 years corresponds to the definition of
hyperinflation).
Sales and investments key figures
synthesis
The following tables gather data already available in
this report. They complement the key figures indicated in
the table on the first page.
Sales
Q1 2024 split of revenue and comparable
growth in %
Total
Large Industries
Industrial Merchant
Electronics
Healthcare
100%
14%
70%
5%
11%
Americas
+6.3%
+4.8%
+4.8%
+3.3%
+20.4%
100%
33%
33%
2%
32%
Europe
-1.6%
-1.1%
-6.4%
N.C.
+4.3%
100%
35%
28%
33%
4%
Asia Pacific
-0.9%
-1.0%
+0.7%
-1.7%
N.C.
100%
N.C.
N.C.
N.C.
N.C.
Middle-East and Africa
+10.5%
100%
27%
47%
9%
17%
Gas & Services
+2.0%
+0.9%
+1.5%
-2.0%
+8.1%
Engineering & Construction
+6.5%
Global Markets & Technologies
+4.7%
GROUP TOTAL
+2.1%
N.C.: Not communicated.
Investments
(in billion euros)
Q1 2024
12-month portfolio of investment
opportunities(a)
3.4
Investment decisions(b)
0.9
Investment backlog(a)
4.1
Additional contribution to revenue of unit
start-ups and ramp-ups(b) (in million euros)
53
(a) At the end of the reporting
period.
(b) Cumulated value from the beginning of
the calendar year until the end of the reporting period.
The slideshow that accompanies this release
is available as of 7:20 am (Paris time) at
www.airliquide.com. Throughout the year,
follow Air Liquide on LinkedIn.
UPCOMING EVENTS
Annual General Meeting of Shareholders: April 30,
2024
Dividend Ex-coupon Date: May 20, 2024
Dividend Payout Date: May 22, 2024
2024 First Half Revenue and Results: July 26, 2024
Air Liquide is a world leader in gases, technologies and
services for industry and healthcare. Present in 72 countries with
67,800 employees, the Group serves more than 4 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 Group’s
activities since its creation in 1902.
Taking action today while preparing the future is at the heart
of Air Liquide’s strategy. With ADVANCE, its strategic plan for
2025, Air Liquide is targeting a global performance, combining
financial and extra-financial dimensions. Positioned on new
markets, the Group benefits from major assets such as its business
model combining resilience and strength, its ability to innovate
and its technological expertise. The Group develops solutions
contributing to climate and the energy transition—particularly with
hydrogen—and takes action to progress in areas of healthcare,
digital and high technologies.
Air Liquide’s revenue amounted to more than 27.5 billion euros
in 2023. Air Liquide is listed on the Euronext Paris stock exchange
(compartment A) and belongs to the CAC 40, CAC 40 ESG, EURO STOXX
50, FTSE4Good and DJSI Europe indexes.
_________________________ 1Operating margin excluding energy
passthrough impact. 2Operating margin excluding energy
passthrough impact. Net profit recurring excluding exceptional and
significant transactions that have no impact on the operating
income recurring. 3See definition in appendix. 4Unless
otherwise stated, all variations in revenue outlined below are on a
comparable basis, excluding currency, energy (natural gas and
electricity) and significant scope impacts. 5See definition
in appendix. 6See definition in appendix. 7See
definition in appendix. 8Operating margin excluding energy
passthrough impact. 9Operating margin excluding energy
passthrough impact. Net profit recurring excluding exceptional and
significant transactions that have no impact on the operating
income recurring.
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Investor Relations IRTeam@airliquide.com
Media Relations media@airliquide.com
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