Regulatory News:
Air Liquide (Paris:AI):
Key Figures (in millions of
euros)
FY 2019
2019/2018 as published
2019/2018 comparable
(a)
Group Revenue
21,920
+4.3%
+3.2%
of which Gas & Services
21,040
+4.6%
+3.5%
Operating Income Recurring
(OIR)
3,794
+10.0%
+7.5%
Group OIR Margin
17.3%
+90 bps
Variation excluding energy
+70 bps
Net Profit (Group Share)
2,242
+6.1%
Net Profit Recurring (Group Share) (b)
2,307
+9.2%
+11.1%
Earnings per Share (in euros)
4.76
+5.9%
2019 proposed Dividend per Share (in
euros) (c)
2.70
+12.4%
Cash Flow before change in working capital
requirements (d)
4,859
+14.5%
Net Debt
€ 12.4 Bn
Recurring ROCE (e)
8.6%
+60 bps
(a) Change excluding the currency, energy
(natural gas and electricity) and significant scope impacts, see
reconciliation in appendix. (b) Excluding exceptional and
significant transactions that have no impact on the operating
income recurring, see reconciliation in appendix. (c) 2018 figures
restated for the impact of the free share attribution in October
2019. (d) Excluding IFRS16, the change would be +8.3%. (e) Based on
the recurring net profit, see reconciliation in appendix.
Commenting on the results for 2019, Benoît Potier, Air
Liquide Chairman and CEO, stated:
“2019 is a landmark year, characterized simultaneously by a
significant improvement in performance, a high level of investments
to serve our customers and strengthen our efficiency, and the
operational implementation of our climate action plan.
2019 sales were driven by the development of Gas & Services
and Global Markets & Technologies. On a comparable basis,
all Gas & Services activities, which account for
96% of Group revenue, progressed over the
year, with particularly dynamic Electronics and
Healthcare. Geographically, every region grew, notably the
Europe and Asia-Pacific regions.
Overall, and despite the expected global economic slowdown
observed in the 4th quarter, the Group delivered robust
results, confirming the relevance of its economic model and
strategy.
The improvement in the Group’s operating margin reflects
the dynamic management of both pricing and product mix, the asset
portfolio, and efficiencies. The latter reached 433
million euros. Cash flows were high and the debt to equity
ratio declined substantially. The Group’s balance sheet is solid.
ROCE continues to improve. 2019 performance is in
line with all of the targets of the NEOS program and the
Group’s Climate objectives.
In a context where industrial opportunities remain high,
investment decisions rose sharply, to 3.7 billion euros. The
new projects that have been signed with our clients in Large
Industry and Electronics will allow us to further strengthen our
position in our major industrial basins.
Assuming no major change in the environment and the
international health situation is under control, Air Liquide is
confident in its ability to further increase its operating margin
and to deliver net profit growth in 2020, at constant exchange
rates.”
2019 Highlights
- Large Industries: Signature of numerous long-term
contracts, in Russia with Severstal, in the Gulf Coast with
Marathon Petroleum Company, Gulf Coast Growth Ventures (GCGV),
LyondellBasel and Methanex, and in Kazakhstan with Kazakhstan
Petrochemical Industries (KPI). Sale to Fujian Shenyuan of the
production center.
- Industrial Merchant: Acquisition by Airgas of Tech Air
in the United States and acquisition of Southern Industrial Gas in
Malaysia. Launch of Qlixbi, a disruptive innovation that combines
technical and digital innovation in the field of welding.
Inauguration of the first robotic order preparation line at Feyzin
(France).
- Healthcare: Acquisitions in home healthcare of Megamed
AG in Switzerland, of Dialibre in Spain, and of Medidis in the
Netherlands. E-health: deployment in France of Chronic Care
Connect, a remote medical monitoring system.
- Innovation: Inauguration in Japan of the new Tokyo
Innovation Campus. Inauguration of Accelair, the deep tech start-up
accelerator of the Paris Innovation Campus. Signature of more than
30 contracts for cryogenic equipment based on the Turbo Brayton
technology, which lowers LNG boil-off and the greenhouse gas
emissions of LNG carriers.
- Climate: Participation in three innovative projects
designed to fight climate change: the Northern Lights project for
the capture and storage of CO2 in Norway, with thyssenkrupp Steel
for the use of hydrogen to reduce carbon emissions in steel
production, and with ArcelorMittal for the capture and recycling of
carbon emissions related to the production of steel.
- Hydrogen Energy: Acquisition of a nearly 20% equity
stake in the Canadian company Hydrogenics Corporation, which
specializes in equipment used to produce hydrogen by electrolysis.
Construction in Canada of the largest membrane electrolysis plant
in the world. Development of hydrogen mobility in China with the
creation of the joint venture Air Liquide Houpu Hydrogen Equipment
Co. and a memorandum of understanding with Sinopec. Partnership in
France with Engie and the Durance Luberon Verdon urban area to
produce green hydrogen on an industrial scale (HyGreen
project).
- Corporate: Appointment of 4 new members of the Executive
Committee effective September 1. 500 million dollar bond issue at a
historically low rate to finance long-term growth. Inclusion of a
correlation mechanism in the Group’s 2 billion euro syndicated
line, between its financial costs and three of its CSR targets, in
the areas of carbon intensity, gender diversity, and safety.
Group revenue for 2019 totaled 21,920 million euros, up
+3.2% on a comparable basis. Gas & Services enjoyed
robust comparable sales growth of +3.5% despite the slowing
economic environment in the 4th quarter of 2019. In Engineering
& Construction, sales to third-party customers were down
compared with 2018, with resources mainly allocated to internal
projects. Global Markets & Technologies continued its dynamic
development with growth of +14.9%. The currency impact was
positive at +2.1%, whereas the energy impact was unfavorable
(-1.4%). The acquisition of Tech Air in the United States at the
end of the 1st quarter of 2019 and the disposal of Fujian Shenyuan
in September generated a significant scope impact of +0.4% over the
year. The Group's published revenue growth was therefore up
+4.3% for 2019.
Gas & Services revenue reached 21,040 million euros
in 2019, up +3.5% on a comparable basis. As published
sales were up +4.6% in 2019, with the unfavorable
energy impact (-1.5%) more than offset by the favorable currency
(+2.1%) and significant scope (+0.5%) impacts.
- Revenue in the Americas totaled 8,460 million
euros in 2019, an increase of +1.5% in comparable
growth. Large Industries sales were stable in 2019, due to several
customer maintenance turnarounds in the United States during the
2nd half of the year. Industrial Merchant revenue growth was
resilient at +0.7%, driven mainly by higher prices. Electronics
growth stood at +2.1% and Healthcare continued to improve strongly
(+9.7%), in particular in Medical Gases in the United States and
Latin America.
- Revenue in Europe reached 7,172 million euros
over 2019, up +3.4% on a comparable basis driven mainly by
good Healthcare sales momentum (+5.2%) and a solid growth in
Industrial Merchant (+3.4%), notably thanks to high price impacts
and robust volumes. Large Industries sales (+1.7%) were driven by
higher hydrogen volumes for refineries in Benelux, whereas demand
remained weaker in the Steel and Chemical sectors.
- Revenue in the Asia Pacific zone totaled 4,794
million euros in 2019, up +7.7% on a comparable basis.
Large Industries sales grew strongly (+9.7%) thanks to the ramp-up
of several units in China. Industrial Merchant growth was solid
(+3.7%), in particular in China and South-East Asia. Electronics
revenue maintained its very dynamic growth momentum in 2019
(+10.4%) despite a major decline in Equipment & Installations
sales in the 4th quarter compared with record high sales in
2018.
- Revenue in the Middle East and Africa zone amounted to
614 million euros, up +1.5% over 2019 on a comparable
basis. Industrial Merchant remained very dynamic in the Middle
East, Egypt and India, with strong helium sales in particular.
Activity was up slightly in Large Industries, with the major units
in the region, located in Saudi Arabia and South Africa, now
operating at full capacity. The Healthcare business continued to
grow in Egypt and Saudi Arabia.
All businesses contributed to growth in 2019, in particular
Healthcare and Electronics. Large Industries (+3.4%)
benefited notably from sustained hydrogen volumes in Europe and
Asia and from the ramp-up of several new units. In a less favorable
economic environment in the 4th quarter 2019, Industrial Merchant
growth reached +1.9% over the year, driven mainly by
efficient price management (+3.6%), including helium. Strong
healthcare growth (+5.7%) was due to organic sales growth,
in particular in Home Healthcare in Europe and Latin America and in
Medical Gases in the United States. Electronics revenue maintained
a very dynamic growth momentum over the year (+7.9%) with
double-digit growth for Carrier Gases and Advanced Materials
sales.
Consolidated Engineering & Construction revenue, at
328 million euros, was down compared with 2018, with
resources mainly allocated to internal projects in Large Industries
and Electronics. Total sales including Group projects were up,
boosted by a record-high level of investment decisions, in
particular in Large Industries.
Global Markets & Technologies revenue was up
+14.9% in 2019 on a comparable basis, at 552 million
euros. Biomethane grew strongly thanks to the ramp-up of
several units in Europe. Sales of equipment related to the Turbo
Brayton technology, which reduces greenhouse gas emissions when
transporting natural gas by sea, also strongly contributed to this
growth.
In 2019, efficiencies increased markedly by +23.4%
to 433 million euros, compared with 351 million euros in
2018. These represented savings of 2.7% of the cost base and
largely exceeded the objective, which had been set at more than 400
million euros after the reinforcement of the program at the
beginning of the year. The main drivers of this increase in
efficiencies are the roll-out of digital tools, the continuation of
the realignment plans and the ramp-up of Airgas within the
program.
The Group’s operating income recurring (OIR) reached
3,794 million euros for 2019, a published increase of
+10.0%, or +7.5% on a comparable basis. The operating margin
(OIR to revenue) stood at 17.3%, a marked improvement of
+90 basis points compared to 2018 and of +70 basis
points excluding the energy impact, including +10 basis points
from the application of IFRS 16. The Gas & Services
operating margin stood at 19.1%, an improvement
+60 basis points compared with 2018 excluding the energy
impact.
Net profit (Group share) amounted to 2,242 million
euros in 2019, an increase of +6.1% as published and
+6.7% excluding the application of IFRS 16.
Excluding the capital loss on the disposal of the Fujian
Shenyuan units in 2019 and the non-recurring financial gain in
2018, recurring net profit1 Group share was up
+11.1%.
Cash flow from operating activities before changes in working
capital requirement totaled 4,859 million euros and
stood at 22.2% of Group sales (21.0% excluding the
application of IFRS 16). This represented strong published growth
of +14.5% (+8.3% excluding the application of IFRS 16).
In 2019, gross industrial capital expenditure for the
Group amounted to 2,636 million euros, a major increase of
+17.2% compared to 2018. It represented 12.0% of
sales. The net debt-to-equity ratio stood at
64.0% at the end of December 2019, an improvement of -480
basis points compared to the end of 2018.
Industrial and financial investment decisions represented
a total of 3.7 billion euros in 2019, a +19.8%
increase compared with 2018. Industrial investment decisions
reached a record high of 3,157 million euros, with major
investments for long-term contracts with Large Industries
customers, mainly in strategic basins where the Group is already
present. The 12-month portfolio of opportunities remained
strong and totaled 2.9 billion euros, an increase compared
with 2.6 billion euros at the end of 2018.
Recurring ROCE(2) which excludes the capital loss on the
disposal of the Fujian Shenyuan units on net profit, stood at
8.6%, i.e. a +60 basis points improvement compared to
the end of December 2018. This improvement is in line with the
Group’s NEOS target of returning to a ROCE of above 10% by
2021-2022.
Regarding to the extra financial performance of the
Group, lost time accident frequency improved and reached 1.2 at the
end of 2019. This represents the lowest employees lost time
accident frequency rate of the last 20 years. In 2019, the
Group’s carbon intensity declined further and reached 4.6
kg of CO2 equivalent per euro of EBITDA(3). It is lower than
the initial forecast, notably from the disposal of the Fujian
Shenyuan units but also because of several customer maintenance
turnarounds, leading to lower production volumes. In January 2020,
the Group's commitment has been rewarded twice by the
CDP(4), who gave Air Liquide the highest grade "A"
both for its actions in favor of climate and its sustainable
management of water. In addition, Air Liquide had 29% of
women among engineers and managers in 2019 and aims to reach
35% by 2025.
Air Liquide’s Board of Directors, which met on February
10, 2020, approved the audited financial statements for the 2019
fiscal year. The Statutory Auditors are in the process of issuing a
report with an unqualified opinion.
At the next Annual General Meeting the payment of a dividend of
2.70 euros per share will be proposed. Following the free
share attribution of 1 for 10 in October 2019, the proposed
dividend shows a strong growth of +12.4% compared with last
year. The ex-dividend date is scheduled for May 11, 2020 and the
payment is scheduled for May 13, 2020.
The Board also approved the draft resolutions that will be
submitted for a vote by the General Meeting on May 5, 2020,
concerning in particular:
- the proposed reappointment, for a four-year term, of Mr.
Brian Gilvary, a member of the company’s Board of Directors
since 2016 and a member of the Audit and Accounts Committee since
2017;
- the proposed appointment, for a four-year term, of Ms.
Anette Bronder and Ms. Kim-Ann Mink. Ms.
Bronder will bring to the Board her strong digital expertise, as
well as her experience of large international groups in the fields
of IT and telecom. Ms. Mink will bring to the Board, in addition to
her scientific academic background and her experience in research
and innovation, her strong leadership skills and deep understanding
of the chemical sector.
The Board of Directors has, moreover, taken note that the terms
of office of Mr. Pierre Dufour and Ms. Karen Katen will expire at
the close of the 2020 General Meeting. The Board thanked them
warmly for their considerable contribution to the work of the Board
and its Committees. The Board stated its intention, furthermore, to
appoint Ms. Annette Winkler as a replacement for Mr.
Pierre Dufour as Chairman of the Environment and Society Committee,
Mr. Xavier Huillard as a member of the Appointments
and Governance Committee as a replacement for Ms. Karen Katen, and
Mr. Brian Gilvary as a member of the Remuneration Committee
as a replacement for Ms. Annette Winkler, with effect from that
date.
At the close of the General Meeting on May 5 , 2020, the Board
of Directors would thus have 12 members, of whom 11 are
elected and one is an employee Director. The Board of Directors
would include 6 women and 6 foreign members.
Furthermore, the Board of Directors will propose that the
General Meeting bring the articles of association into line with
the provisions of the PACTE law, in order to provide for the
appointment of a second employee Director, if the number of
Directors is more than 8 members, the said Director to be appointed
by the European Works’ Council.
Finally, in accordance with the new provisions resulting from
the PACTE law, the Board of Directors will submit for the vote of
the General Meeting the elements of Mr. Benoît Potier’s
remuneration for 2019, in his capacity as Chairman and Chief
Executive Officer, together with the information relating to the
remuneration for all the corporate officers. The General Meeting
will also be invited to decide upon the remuneration policy for the
corporate officers which will apply to Mr. Benoît Potier and to the
Company’s Directors.
1 See definition and reconciliation in
Appendix.
2 See definition and reconciliation in the
Appendix.
3 At 2015 exchange rate.
4 A non-profit organization that evaluates
companies based on their climate action.
Management Report’s Table of
Content
PERFORMANCE
7
Key Figures
7
Income Statement
8
2019 Cash Flow and Balance Sheet
18
Environment and society
20
INVESTMENT CYCLE AND FINANCING
21
Investments
21
2019 Financing
24
OUTLOOK
26
APPENDICES
27
Impact of IFRS16
27
Performance indicators
27
4th Quarter 2019 Revenue
31
Geographic and Segment Information
31
Consolidated Income Statement
32
Consolidated Balance Sheet
33
Consolidated Cash Flow Statement
34
Performance
Unless otherwise specified, all variations
on revenue commented below are made on a comparable basis,
which excludes the currency, energy (natural gas and electricity)
and significant scope impacts. The reference to Airgas
corresponds to the Group Industrial Merchant and Healthcare
activities in the United States.
Key Figures
(in millions of euros)
FY 2018
FY 2019
2019/2018 published
change
2019/2018 comparable change
(a)
Total Revenue
21,011
21,920
+4.3%
+3.2%
Of which Gas & Services
20,107
21,040
+4.6%
+3.5%
Operating Income Recurring
3,449
3,794
+10.0%
+7.5%
Operating Income Recurring (as % of
Revenue)
16.4%
17.3%
+90 bps
Variation excluding energy
+70 bps
Other Non-Recurring Operating Income and
Expenses
(162)
(188)
Net Profit (Group Share)
2,113
2,242
+6.1%
Recurring Net Profit (Group Share) (b)
2,113
2,307
+9.2%
+11.1%
Adjusted Earnings per Share (in euros)
4.49
4.76
+5.9%
Adjusted Net Dividend per Share (in
euros) (c)
2.40
2.70
+12.4%
Cash Flow before change in working capital
requirements (d)
4,242
4,859
+14.5%
Net Capital Expenditure (e)
2,272
2,616
Net Debt
12,535
12,373
Net Debt to Equity ratio
68.8%
64.0%
Recurring ROCE (f)
8.0%
8.6%
+60 bps
(a) Change excluding the currency, energy
(natural gas and electricity) and significant scope impacts, see
reconciliation in appendix.
(b) Excluding exceptional and significant
transactions that have no impact on the operating income recurring,
see reconciliation in appendix.
(c) 2019 proposed dividend. 2018 figures
restated for the impact of the free share attribution in October
2019.
(d) Data from 2018 restated. Excluding
IFRS16, the change would be +8.3%.
(e) Including transactions with minority
shareholders.
(f) Based on the recurring net profit, see
reconciliation in appendix.
Income Statement
REVENUE
Revenue
(in millions of euros)
FY 2018
FY 2019
2019/2018 published
change
2019/2018 comparable
change
Gas & Services
20,107
21,040
+4.6%
+3.5%
Engineering & Construction
430
328
-23.7%
-25.0%
Global Markets & Technologies
474
552
+16.5%
+14.9%
TOTAL REVENUE
21,011
21,920
+4.3%
+3.2%
Revenue by quarter
(in millions of euros)
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Gas & Services
5,237
5,299
5,242
5,262
Engineering & Construction
93
83
81
71
Global Markets & Technologies
111
129
131
181
TOTAL REVENUE
5,441
5,511
5,454
5,514
2019/2018 Group published
change
+8.6%
+7.0%
+3.5%
-1.1%
2019/2018 Group comparable
change
+5.0%
+4.7%
+3.5%
-0.1%
2019/2018 Gas & Services comparable
change
+4.8%
+5.0%
+3.5%
+0.9%
Group
Group revenue for 2019 totaled 21,920 million euros, up
+3.2% on a comparable basis. Gas & Services enjoyed
robust comparable sales growth of +3.5% despite a slowing
economic environment in the 4th quarter of 2019. In Engineering
& Construction, sales to third-party customers were down
compared with 2018, with resources mainly allocated to internal
projects, industrial investment decisions having reached a record
high in 2019, in particular in Large Industries. Global Markets
& Technologies continued its dynamic development with growth of
+14.9%.
The currency impact was positive at +2.1%, whereas the energy
impact was unfavorable (-1.4%). The acquisition of Tech Air in the
United States at the end of the 1st quarter of 2019 and the
disposal of Fujian Shenyuan in September generated a significant
scope impact of +0.4% over the year. The Group's published
revenue growth was therefore up +4.3% for 2019.
Gas & Services
Gas & Services revenue reached 21,040 million euros
in 2019, up +3.5% on a comparable basis. All activities
contributed to growth, in particular Healthcare and Electronics.
Large Industries (+3.4%) benefited notably from sustained
hydrogen volumes in Europe and Asia and from the ramp-up of several
new units. In a less favorable economic environment in the 4th
quarter 2019, Industrial Merchant growth reached +1.9%,
driven mainly by efficient price management (+3.6%),
including helium. Strong healthcare growth (+5.7%) was due
to organic sales growth, in particular in Home Healthcare in Europe
and Latin America and in Medical Gases in the United States.
Electronics revenue maintained a very dynamic growth momentum over
the year (+7.9%) with double-digit growth for Carrier Gases
and Advanced Materials sales.
As published sales were up +4.6% in 2019,
with the unfavorable energy impact (-1.5%) more than offset by the
favorable currency (+2.1%) and significant scope (+0.5%) impacts
which included the consolidation of Tech Air and the disposal of
Fujian Shenyuan.
Revenue by geography and business
line
(in millions of euros)
FY 2018
FY 2019
2019/2018 published
change
2019/2018 comparable
change
Americas
7,982
8,460
+6.0%
+1.5%
Europe
7,111
7,172
+0.9%
+3.4%
Asia-Pacific
4,359
4,794
+10.0%
+7.7%
Middle East & Africa
655
614
-6.3%
+1.5%
GAS & SERVICES REVENUE
20,107
21,040
+4.6%
+3.5%
Large Industries
5,685
5,629
-1.0%
+3.4%
Industrial Merchant
9,181
9,754
+6.3%
+1.9%
Healthcare
3,486
3,693
+6.0%
+5.7%
Electronics
1,755
1,964
+11.9%
+7.9%
Americas
Gas & Services revenue in the Americas totaled 8,460
million euros in 2019, an increase of +1.5%. Large
Industries sales were stable in 2019, due to several customer
maintenance turnarounds in the United States during the 2nd half of
the year. Industrial Merchant revenue growth was resilient at
+0.7%, driven mainly by higher prices. Electronics growth stood at
+2.1% and Healthcare continued to improve strongly (+9.7%), in
particular in Medical Gases in the United States and Latin
America.
- Large Industries revenue was stable compared with 2018.
Activity was dynamic throughout the year in Latin America, in
particular with the start-up of a hydrogen-supply contract in
Mexico in the 2nd quarter, and the ramp-up of Air Separation Units
in Brazil and Columbia. The situation in North America was more
contrasted. The solid growth in oxygen volumes during the 1st half
of 2019 did not offset the high prices of the 1st half of 2018, due
to severe weather conditions. The 2nd half saw a decline in
hydrogen sales, as the numerous customer maintenance turnarounds
penalized sales growth by more than 4% over the half year.
Cogeneration sales strongly improved over the year.
- Industrial Merchant sales growth was resilient at
+0.7% in a slower industrial environment, driven by high
prices, which were up +4.3% over the year. In North America, sales
grew strongly in consumer-related markets such as Food and
Pharmaceuticals as well as in the Research sector. In contrast,
hardgoods revenue declined significantly in the United States, due
to the slowdown in industrial sectors such as Construction and
Metal Fabrication. In South America, double-digit growth was driven
in particular by a strong increase in liquid gas volumes in
Brazil.
- Healthcare revenue grew strongly by +9.7%, with
no significant contribution from acquisitions. Medical Gases sales
growth was high in the United States, in particular to proximity
care players, where the digital interface cylinder offering has
enjoyed significant success. Activity remained very dynamic in
Latin America, in particular in Colombia.
- Electronics sales were up +2.1% over the year,
driven by strong Carrier Gases growth, whereas Equipment &
Installation sales in the 4th quarter were down markedly, compared
with record level seen in the same period in 2018.
Americas
- Mid-June, Air Liquide announced the signature of two
long-term supply agreements with Marathon Petroleum Company for
a total of up to 900 tonnes per day of oxygen for Marathon
Petroleum’s Refineries in Texas City, Texas and Garyville,
Louisiana. The two agreements nearly double the amount of
oxygen that Air Liquide will supply to Marathon Petroleum in
total. Both sites are located on the Gulf Coast.
- Air Liquide and Shell Chemicals announced in late July
the renewal of contracts for the supply of oxygen,
nitrogen, steam and electricity to Shell’s Scotford facility in
Alberta, Canada. To support this renewed long‑term
commitment, Air Liquide will further enhance its Scotford site
operations, which will support future growth in this key industrial
basin and create additional operational efficiencies.
Europe
Revenue in Europe reached 7,172 million euros over 2019,
up +3.4% on a comparable basis driven by good Healthcare
sales momentum (+5.2%) and a solid growth in Industrial Merchant
(+3.4%), notably thanks to high price impacts and robust volumes.
Large Industries sales (+1.7%) were driven by higher hydrogen
volumes for refineries in Benelux, whereas demand remained weaker
in the Steel and Chemical sectors.
- Large Industries revenue was up +1.7% over the
year. Hydrogen sales were boosted by high demand among refiners
connected to the pipeline network in the Benelux. Activity was
weaker in the Steel sector in Germany and Italy and in Chemicals in
Germany. Sales growth continued in the East, in particular with
final contributions from the ramp-up of an oxygen unit in Turkey
and the takeover of a hydrogen unit in Kazakhstan.
- Industrial Merchant sales growth was very solid in 2019
(+3.4%), driven mainly by high prices (+3.2%) and the
further development of the Food and Pharmaceuticals markets.
Several initiatives creating significant value for both customers
and the Group were launched, focusing the customer portfolio on
applications which justify higher price impacts. At the same time,
the carbon dioxide market recovered from a difficult 2018. Almost
all countries contributed to growth, in particular Eastern Europe
and the United Kingdom which enjoyed double-digit growth.
- Healthcare sales enjoyed strong, fully organic growth of
+5.2%. Growth momentum in Home Healthcare was very dynamic,
notably thanks to a strong increase in the number of patients
treated for diabetes in Scandinavia and France, and for sleep apnea
in France and Spain. Sales of Medical Gases for hospitals improved
despite constant pressure on pricing. The Hygiene activity grew
strongly, through the German subsidiary Schülke.
Europe
- Air Liquide and PAO Severstal, a steel and mining company and
long-term partner of the Group, have announced the signature, in
March, of a new long-term contract for the supply of oxygen,
nitrogen and argon in Cherepovets (Russia). Air Liquide will
invest around 50 million euros in the construction of a
state-of-the art Air Separation Unit (ASU), which will improve
significantly the energy efficiency of the production process and
reduce CO2 emissions by 20,000 tons per year. The new
signature illustrates the Group’s development strategy in key
industrial basins and demonstrates its ability to create value for
its customers.
- In October, Air Liquide announced the signature of a
long-term contract in Kazakhstan. Air Liquide
Munay Tech Gases, a company jointly owned by Air Liquide (75%)
and the Kazakhstan national oil & gas company (25%), will
build, own and operate a new nitrogen unit in a growing chemical
basin, requiring a 15 million euros investment. This new
unit will supply up to 8,000 Nm3/h nitrogen and should be
operational in 2021.
- Air Liquide is pursuing its development in home healthcare
in Europe by broadening its range of services for diabetes
patients in Germany, Belgium, the Netherlands and Luxembourg. The
Group provides home care for 1.7 million patients with
chronic diseases around the world. Air Liquide leverages its
experience in the support of patients with respiratory
diseases, which combines expertise in medical equipment,
personalized patient follow-up and development of associated
digital services.
Asia Pacific
Revenue in the Asia Pacific zone totaled 4,794 million
euros in 2019, up +7.7%. Large Industries sales grew
strongly (+9.7%) thanks to the ramp-up of several units in China.
Industrial Merchant growth was solid (+3.7%), in particular in
China and South-East Asia. Electronics revenue maintained its very
dynamic growth momentum in 2019 (+10.4%) despite a major decline in
Equipment & Installations sales in the 4th quarter compared
with record high sales in 2018.
- Large Industries sales (+9.7%) were driven in
particular by the recent ramp-up of three production units in
China, including the contribution from Fujian Shenyuan, which was
disposed of in early September. Hydrogen sales to refiners also
rose strongly in Singapore.
- In Industrial Merchant, revenue was up by +3.7%
thanks notably to the strong increase in cylinder gas volumes in
China. Liquid gas volumes were up in the Chinese market but did not
offset prices that are now returning to normal levels compared with
high previous years. In South-East Asia, revenue also enjoyed
sustained growth, particularly in Singapore and Malaysia, whereas
the Japanese and Australian markets remained more challenging. The
region benefited from a positive price impact of +1.1%, partly
driven by helium.
- Electronics revenue was up +10.4%, thanks to the
double-digit growth of Carrier Gases which benefited from the
ramp-up of several units, and the growth of Advanced Materials with
the success of the new enScribe™ offering for the etching of
electronic chips, in particular in Korea. Following a strong 1st
half-year, Equipment & Installation sales were down towards the
end of the year compared with the record level seen during the 4th
quarter of 2018.
Asia-Pacific
- In mid-September, Air Liquide announced the signature of a
long-term contract for the supply of hydrogen to Shell’s
Tabangao refinery in the Philippines. Air Liquide will
invest 30 million euros in the construction of a
state-of-the-art Hydrogen Manufacturing Unit (HMU) that will be
fitted with a CO2 recovery unit that mitigates direct carbon
emission levels by capturing and liquifying the CO2 for other
uses.
- Air Liquide announced in late-October the acquisition of
Southern Industrial Gas Sdn Bhd (SIGSB), a key Malaysian
industrial gas player with approximately 20 million euros of
annual revenue. This operation doubles Air Liquide’s Packaged
Gases filling capacity in Malaysia and is expected to deliver
significant synergies with its current operations in the country,
which now covers most of Malaysia.
Middle East and Africa
Revenue in the Middle East and Africa zone amounted to 614
million euros, up +1.5% over 2019. Industrial Merchant
remained very dynamic in the Middle East, Egypt and India, with
strong helium sales in particular. Activity was up slightly in
Large Industries, with the major units in the region, located in
Saudi Arabia and South Africa, now operating at full capacity. The
Healthcare activity continued to grow in Egypt and Saudi
Arabia.
Engineering & Construction
Consolidated Engineering & Construction revenue, at
328 million euros, was down compared with 2018, with
resources mainly allocated to internal projects in Large Industries
and Electronics. Total sales including Group projects were up,
boosted by a record-high level of investment decisions, in
particular in Large Industries.
Order intake for Group projects and third-party customers
totaled 838 million euros at the end of December 2019, a
slight increase compared with 2018. They came from Asia, followed
by Europe and the Americas. These orders are mainly related to Air
Separation Units for the Chemicals and Metals industries, and
ultra-pure nitrogen production units for the semiconductor
industry.
Global Markets & Technologies
Global Markets & Technologies revenue was up +14.9%
in 2019 at 552 million euros. Biomethane grew strongly
thanks to the ramp-up of several units in Europe. Sales of
equipment related to the Turbo Brayton technology, which reduces
greenhouse gas emissions through the reliquefaction of natural gas
when transported by sea, also strongly contributed to this
growth.
Order intake for Group projects and third-party customers was up
+13.7% and totaled 523 million euros, of which more than 100
million euros are for equipment based on the Turbo Brayton
technology.
Innovation and Global Markets & Technologies
- Air Liquide inaugurated in March its Tokyo Innovation Campus
in Japan. This newest Campus, representing an investment of
50 million euros, illustrates the Group’s open innovation
approach, with a focus on energy transition and environment,
healthcare, digital transformation and development of Advanced
Materials for Electronics. It will gather nearly 200
employees in a state-of-the art new 8,000‑square-meter
site.
- In April, Air Liquide announced having signed more than 20
contracts worth a total of 100 million euros thanks to a
solution that reduces greenhouse gas emissions for the maritime
industry. The Group developed a refrigeration and liquefying
technology based on the Turbo-Brayton physical principle, which
reliquefies the evaporated natural gas in LNG (Liquefied Natural
Gas) vessels and keeps it under its liquid form in the container.
With these contracts, Air Liquide is helping to prevent more
than 120,000 tonnes of CO2‑equivalent emissions per year.
- Air Liquide and Houpu (Chengdu Huaqi Houpu Holding co.)
announced at the end of April the finalization of the creation of
Air Liquide Houpu Hydrogen Equipment, a joint venture for the
development, production and distribution of hydrogen refueling
stations for Fuel Cell Electric Vehicles. This collaboration
will combine Air Liquide’s global technological expertise in clean
hydrogen mobility solutions with Houpu’s leadership in the
production and construction of natural gas refilling stations on
the Chinese market.
- In early September, Air Liquide signed a Memorandum of
Understanding with Equinor and its partners (Shell and Total) to
explore collaboration in a CO2 capture and storage project,
Northern Lights. The Northern Lights project is aimed to mature
the development of offshore carbon storage on the Norwegian
Continental Shelf and has the potential to be the first storage
project site in the world receiving CO2 from industrial sources in
several European countries.
- In mid-September, Air Liquide announced the launch of
Qlixbi, a breakthrough packaged gas offer including a new
generation of gas cylinder and a suite of digital solutions
designed to revolutionize the customer experience in welding.
Developed in collaboration with more than 700 welding customers,
this innovation will improve the way they use and manage gases in
their daily operations thanks to a revolutionary connector (“Click
& Weld”), a reserve indicator on the cylinder combined with an
IoT (“Internet of Things”) system and a digital application.
- In November, Air Liquide and Sinopec have signed a
Memorandum of understanding in order to accelerate the
deployment of hydrogen mobility solutions in China. Under
the agreement, Air Liquide will provide its expertise so as to
develop competitive hydrogen solutions for the world’s largest
mobility market. It will reinforce the long-term partnership
between Air Liquide and Sinopec.
- Air Liquide, the Durance, Luberon, Verdon urban area (DLVA)
and Engie have entered into an ambitious partnership in
November to develop the “HyGreen Provence'' project, which
aims at producing, storing and distributing green hydrogen.
Initiated in 2017, it will make possible the production of 1,300
GWh of solar electricity as well as the production of
renewable hydrogen on an industrial scale through water
electrolysis. It will meet a very broad spectrum of needs from
transportation to heating. The first deliverable stages should
occur by the end of 2021.
OPERATING INCOME RECURRING
Operating income recurring before depreciation and
amortization reached 5,932 million euros, up by a strong
+13.7% as published compared with 2018 and +8.6%
excluding the application of IFRS 16. Under IFRS 16, operating
expenses linked to lease contracts are now accounted for as
depreciation and amortization and financial expenses, which
explains the minor increase of +1.5% in other operating expenses
and income. Purchases were down -1.5%, thanks mainly to the
decrease in natural gas prices, lower hardgoods sales and the
impact of the efficiency program. Personnel costs were up
+6.4%, mainly due to acquisitions, in particular that of Tech Air
in the United States, and the increase in the number of employees
to support the growth of Home Healthcare which is a labor-intensive
business.
Depreciation and amortization reached 2,138 million
euros, up markedly by +21.0% due to the application of IFRS 16.
Despite the impact of the start-up and ramp-up of new production
units, the increase in depreciation and amortization was limited to
+4.5% excluding the currency impact and the application of IFRS
16.
In 2019, efficiencies increased markedly by +23.4%
to 433 million euros, compared with 351 million euros in
2018. These represented savings of 2.7% of the cost base and
largely exceeded the objective, which had been set at more than 400
million euros after the reinforcement of the program at the
beginning of the year. The main drivers of this increase in
efficiencies are the roll-out of digital tools, the continuation of
the realignment plans and the ramp-up of Airgas within the program.
In total, more than 60% of efficiencies are from industrial
projects, which target in particular a decrease in logistics costs
and the optimization of production units, around 30% relate to
purchasing gains and almost 10% to transformation initiatives,
notably the restructuring of operations. The contribution from the
roll-out of digital tools is increasing. In addition, employee
training on continuous improvement initiatives supported the
efficiency program.
Efficiencies
- Early May, Air Liquide and STMicroelectronics announced a
collaborative initiative on digital transformation to
accelerate the development of digital solutions for industrial
applications. This cooperation will extend the long-standing
business relationship established over the past decades between
both companies.
The Group’s operating income recurring (OIR) reached
3,794 million euros for 2019, a published increase of
+10.0%, or +7.5% on a comparable basis. The operating margin
(OIR to revenue) stood at 17.3%, a marked improvement of
+90 basis points compared to 2018 and of +70 basis
points excluding the energy impact, including +10 basis points
from the initial application of IFRS 16.
The improvement in operating margin was driven by three factors:
an increase in prices as part of a process to create value for
customers and measures in favor of the product mix; the first
results from the strengthening of the efficiencies program; and
active business portfolio management.
Gas & Services
Operating income recurring for Gas & Services amounted to
4,028 million euros, an increase of +9.5% as published, and
+7.2% on a comparable basis compared to 2018. The Gas &
Services operating margin stood at 19.1%, an
improvement of +80 basis points and of +60 basis
points excluding the energy impact, including +10 basis points
from the initial application of IFRS 16.
Gas & Services Operating margin
(a)
2018
2019
2019, excluding energy
impact
2019/2018 change, excluding
energy impact
Americas
17.2%
18.2%
18.1%
+90 bps
Europe
19.2%
20.0%
19.5%
+30 bps
Asia-Pacific
19.2%
19.8%
19.8%
+60 bps
Middle East & Africa
16.0%
17.9%
16.1%
+10 bps
TOTAL
18.3%
19.1%
18.9%
+60 bps
(a) Operating income recurring/revenue, as
published figures
Operating income recurring for the Americas region stood
at 1,537 million euros for 2019, a strong increase of
+12.2% as published due in particular to the acquisition of
Tech Air in the United States at the end of the 1st quarter of
2019. Excluding the energy impact, the operating margin stood at
18.1%, an increase of +90 basis points. This improvement was
notably thanks to Airgas, which deployed a voluntarist price
management approach in Industrial Merchant as well as major
efficiencies generated in all business lines, and to portfolio
management. The decrease in hardgoods sales in the United States
generated a positive mix impact on the margin.
Operating income recurring in Europe reached 1,431
million euros, an increase of +4.6%. Excluding the
energy impact, the operating margin stood at 19.5%, a +30 basis
points increase mainly due to the rollout of applications
offering higher added value which generated stronger price impacts
in Industrial Merchant as well as efficiencies generated across all
business lines.
Operating income recurring in Asia Pacific stood at
951 million euros, an increase of +13.6%. The
operating margin excluding the energy impact reached 19.8%, up
+60 basis points. Price impacts were sustained in Industrial
Merchant, in particular for helium, and all business lines
contributed to margin improvement with high levels of efficiencies.
Several Large Industries and Electronics start-ups also contributed
to the margin improvement.
Operating income recurring for the Middle East and Africa
region amounted to 109 million euros, representing an
increase of +4.5%. Excluding the energy impact, the
operating margin was 16.1%, an increase of +10 basis points
due to high price impacts, in particular in Healthcare.
Engineering & Construction
Engineering & Construction generated an operating income
recurring of 9 million euros in 2019. The business line
benefited from the Group’s investment momentum and the increase in
order intake. The operating margin stood at 2.7% and should
continue to improve progressively to reach a medium-term margin of
between 5% and 10%.
Global Markets & Technologies
Operating income recurring for Global Markets & Technologies
stood at 67 million euros with an operating margin at 12.2%,
representing a significant increase of +170 basis points
compared to 2018. A portion of these activities is in the start-up
phase and the margin level, which depends on the nature of the
projects carried out during the period, may vary significantly.
Research & Development and Corporate costs
Research & Development expenses and Corporate costs stood at
311 million euros, a +12.3% increase compared to 2018, due
mainly to the development of innovation and the ramping-up of the
Group’s digital transformation.
Research & Development
- Early June, Air Liquide inaugurated, at its new Paris
Innovation Campus, Accelair, an entity dedicated
exclusively to deeptech start-ups. In line with its open
innovation strategy, the Group will welcome approximately twenty
start-ups, which will benefit from dedicated workspaces and a
support program with Air Liquide experts.
- Three winners of the 2018 Scientific Challenge were
rewarded at the end of June by Air Liquide out of more than 132
proposals from 34 countries. Teams of researchers, start-ups and
private or public institutes were invited to submit scientific
research projects aimed at improving air quality and fighting
climate change. The three winners received the “Air Liquide
Scientific Prize” endowed with 50,000 euros and have signed a
partnership agreement with the Group that will enable them to
receive 1.5 million euros in funding, shared between the three
projects.
NET PROFIT
Other operating income and expenses showed a net
balance of -188 million euros. This notably included 95 million
euros in expenses relating to realignment plans in various
countries and businesses as well as the capital loss on the
disposal of the Fujian Shenyuan units which was completed in
September 2019.
The financial result amounted to -468 million
euros compared with -353 million euros in 2018. Cost of net
debt, at -362 million euros, was up 58 million euros, mainly
due to a non-recurring gain of around 55 million euros relating to
debt restructuring in the United States in 2018. The average
cost of net debt, at 3.0%, was stable compared to 2018
and down slightly excluding the impact of hyperinflation in
Argentina. Other financial income and expenses amounted to
-106 million euros compared with -49 million euros in 2018. This
increase was mainly due to the application of IFRS 16 for close to
40 million euros.
Income tax expense stood at 802 million euros,
which corresponds to an effective tax rate of 25.5% in 2019.
This +60 basis points increase compared to 2018 was notably due to
the non-deductibility of the capital loss on the disposal of the
Fujian Shenyuan units.
The share of profit of associates amounted to 1 million euros
and the share of minority interests in net profit reached
96 million euros, stable compared to 2018 excluding the
currency impact.
Net profit (Group share) amounted to 2,242 million
euros in 2019, an increase of +6.1% as published and
+6.7% excluding the application of IFRS 16.
Excluding the capital loss on the disposal of the Fujian
Shenyuan units in 2019 and the non-recurring financial gain in
2018, recurring net profit(5) Group share, was up
+11.1%.
Net earnings per share, at 4.76 euros, were up
significantly (+5.9%) compared to 2018, in line with the
increase in net profit (Group share). The average number of
outstanding shares used for the calculation of net earnings per
share as of December 31, 2019 was 471,214,966.
5 See definition and reconciliation in the
Appendix.
Change in the number of shares
2018
2019
Average number of outstanding shares
(a)
426,674,123
471,214,966
Number of shares as of December 31,
2018
429,423,434
Options exercised during the year, prior
to the free share attribution
430,376
Cancellation of treasury shares
(953,000)
Free shares issued
44,117,721
Options exercised during the year, after
the free share attribution
86,983
Number of shares as of December 31,
2019
473,105,514
(a) Used to calculate net earnings per
share and adjusted in 2018 for the free share attribution that took
place on October 9, 2019.
DIVIDEND
At the Annual General Meeting on May 5, 2020, the payment of a
dividend of 2.70 euros per share will be proposed to
shareholders for the fiscal year 2019. Following the free share
attribution of 1 for 10 in October 2019, the proposed dividend
shows a strong growth of +12.4% compared with last year. The total
estimated pay-out taking into account share buybacks and
cancellations would amount to 1,311 million euros,
representing a pay-out ratio of 58% of the published
net profit. The ex-dividend date is scheduled for May 11, 2020 and
the payment is scheduled for May 13, 2020.
2019 Cash Flow and Balance
Sheet
(in millions of euros)
2018 restated (a)
2019
Cash flow from operating activities
before change in working capital
4,242
4,859
Change in working capital requirement
613
(37)
Other cash items
(139)
(110)
Net cash flow from operating
activities
4,716
4,712
Dividends
(1,234)
(1,237)
Purchases of property, plant and equipment
and intangible assets, net of disposals (b)
(2,271)
(2,616)
Increase in share capital
138
39
Purchase of treasury shares
(64)
(148)
Lease liabilities repayments and net
interests paid on lease liabilities
(287)
Impact of exchange rate changes and net
indebtedness of newly consolidated
companies & restatement of net finance
costs
(449)
(301)
Change in net debt
836
162
Net debt as of December 31
(12,535)
(12,373)
Debt-to-equity ratio as of December
31
69%
64%
(a) The adjustment for income and expenses
with no cash impact related to IAS19 and IFRS2 have been
reclassified from Other cash items to Other non cash items in 2018.
See data published in 2018 in appendix.
(b) Including transactions with minority
shareholders.
NET CASH FLOW FROM OPERATING ACTIVITIES AND CHANGES IN
WORKING CAPITAL REQUIREMENT
Cash flow from operating activities before changes in working
capital requirement totaled 4,859 million euros and stood at
22.2% of Group sales (21.0% excluding the application of
IFRS 16). This represented strong published growth of +14.5%
(+8.3% excluding the application of IFRS 16).
Working capital requirement (WCR) increased by 37 million
euros in 2019. In Engineering & Construction, advances from
third-party customers were lower due to a refocus of the activity
on internal projects. Gas & Services WCR also increased, in
line with the growth of the activity. Working capital requirements
excluding tax came to 4.4% of sales, in line with the 2018
level.
Net cash flow from operating activities after changes in
working capital requirement amounted to 4,712 million
euros and reached 21.5% of sales. Note that working
capital requirements had been reduced markedly in 2018 due to the
implementation of a program to dispose of significant receivables,
in particular at Airgas. These programs stabilized in 2019.
Therefore, in 2019, the strong growth in cash flow from operating
activities coupled with the marginal change in WCR has allowed to
generate a high level of net cash flow from operating activities
after changes in working capital requirement, stable compared
with 2018.
CAPITAL EXPENDITURE
Gross capital expenditure totaled 3,205 million
euros, including transactions with minority shareholders. This
reflects a marked increase in industrial investments and the
acquisition of Tech Air, which contributes significantly in
expanding Airgas’ geographical coverage in the United States.
(in millions of euros)
Industrial investments
Financial
investments(a)
Total capital
expenditures(a)
2015
2,028
395
2,423
2016
2,259
12,180
14,439
2017
2,183
144
2,327
2018
2,249
131
2,380
2019
2,636
568
3,205
(a) Including transactions with minority
shareholders
Proceeds from the sale of fixed assets totaled 584
million euros, mainly due to the disposal of Fujian Shenyuan’s
units which was finalized in September. These also included, to a
lesser extent, the disposal of an Airgas safety services business.
A total of six divestitures were completed in 2019, reflecting the
Group’s active business portfolio management.
Net capital expenditure, including the buyout of minority
interests, amounted to 2,616 million euros.
Industrial capital expenditure
In 2019, gross industrial capital expenditure for the Group
amounted to 2,636 million euros, a major increase of +17.2%
compared to 2018. It represented 12.0% of sales. For Gas
& Services, this expenditure totaled 2,411 million euros
and its geographical split is described below.
Gas & Services
(in millions of euros)
Europe
Americas
Asia Pacific
Middle East and Africa
Total
2018
676
861
461
73
2,071
2019
815
946
588
62
2,411
Financial investments
Financial investments reached 537 million euros in 2019,
mainly due to the acquisition of Tech Air in the United States. A
total of 24 acquisitions were completed in 2019.
NET DEBT
Net debt at December 31, 2019 reached 12,373 million
euros. Despite a major increase in the level of investments and
an unfavorable currency impact, net debt was down -162 million
euros compared to the end of 2018, thanks to the marked increase in
cash flow from operating activities in 2019. The net
debt-to-equity ratio stood at 64.0% at the end of
December 2019, an improvement of -480 basis points compared to the
end of 2018.
ROCE
The return on capital employed after tax (ROCE)(6) was 8.4% at
the end of 2019. Recurring ROCE(6) which excludes the
capital loss on the disposal of the Fujian Shenyuan units on net
profit, stood at 8.6%, i.e. a +60 basis points
improvement compared to the end of December 2018. This improvement
is in line with the Group’s NEOS target of returning to a ROCE of
above 10% by 2021-2022.
6 See definition and reconciliation in
Appendix.
Environment and society
SAFETY
Employees lost time accident frequency rate(7) improved and
reached 1.2 at the end of 2019. This represents the lowest lost
time accident frequency rate of the last 20 years. This
improvement is particularly noticeable at Airgas, which has now
deployed the overall Air Liquide protocol.
CLIMATE
Air Liquide announced its Climate objectives on November 30,
2018, including in particular the reduction of its carbon
intensity by 30% between 2015 and 2025. As part of its
global approach to climate, the Group not only seeks to reduce the
carbon intensity of its assets, but also to act with its customers
towards a sustainable industry and to contribute to the development
of a low-carbon society.
In 2019, the Group’s carbon intensity declined further
and reached 4.6 kg of CO2 equivalent per euro of EBITDA(8).
It is lower than the initial forecast, notably from the disposal of
the Fujian Shenyuan units but also because of several customer
maintenance turnarounds, leading to lower production volumes.
In January 2020, the Group's commitment has been rewarded twice
by the CDP(9), who gave Air Liquide the highest grade
"A" both for its actions in favor of climate and its
sustainable management of water. More than 8,400 companies made
data about their environmental impacts available to CDP (with a
focus on climate, water and forests) for independent assessment
purposes. Of those companies, only 38 scored a triple or double
“A”, among which 3 French companies, including Air Liquide.
Climate
- In July, Air Liquide and thyssenkrupp Steel announced to
join forces in a pioneering project to develop lower carbon
steel production. For the first time, hydrogen will be injected
to partially replace pulverized coal at a large scale in the blast
furnace during steel production reducing CO2 emissions. Air Liquide
will ensure to its client a stable supply of hydrogen from its 200
km network in the Rhine-Ruhr Area.
- Air Liquide announced in mid-October a partnership with
ArcelorMittal in a pilot project in Belgium to capture
carbon emissions from the steelmaking process and recycle them into
bioethanol. Air Liquide Engineering & Construction will
provide a technology solution to purify the offgas coming from the
blast furnace. These gases will then be injected into a bioreactor
to produce bioethanol.
HUMAN RESOURCES
As part of its NEOS program, the Group has set objectives that
promote age and gender diversity. With this in mind, the Group
targets to hire 33% of young graduates among managers and
professionals by 2025. In addition, Air Liquide had 29% of women
among engineers and managers in 2019 and aims to reach 35% by
2025.
7 Number of lost-time accidents with at
least one lost day per million hours worked by Group employees.
8 At 2015 exchange rate.
9 A non-profit organization that evaluates
companies based on their climate action.
INVESTMENT CYCLE AND FINANCING
Investments
The strong momentum of investment projects continued and was
reflected in the high level of the main indicators described
below.
INVESTMENT DECISIONS AND INVESTMENT BACKLOG
(in billions of euros)
Industrial investment
decisions
Financial investment decisions
(acquisitions)
Total investment
decisions
2015
1.9
0.5
2.4
2016
2.0
12.2
14.2
2017
2.4
0.2
2.6
2018
3.0
0.2
3.1
2019
3.2
0.6
3.7
Industrial and financial investment decisions represented
a total of 3.7 billion euros in 2019, a +19.8%
increase compared with 2018.
Financial investment decisions totaled 580 million
euros and included the acquisition of Tech Air in the United
States at the end of the 1st quarter, one of the largest
independent distributors of industrial gases and welding supplies
in the United States. The Group also acquired a stake of almost 20%
in the capital of Canada-based Hydrogenics, a leader in equipment
for hydrogen production through PEM (Proton Exchange Membrane)
electrolysis. Other bolt‑on acquisitions were carried out, in
particular in Industrial Merchant in Asia and North America and in
Healthcare in Europe.
Financial Investment decisions
- Airgas, an Air Liquide company, completed in March the
acquisition of Tech Air, one of the largest independent
distributors of industrial gases and welding supplies serving
various geographies in the United States. Serving more than
45,000 customers and generating annual revenue of
approximately 190 million US dollars, Tech Air will allow
Airgas to further strengthen its network in the United States with
a complementary footprint to better serve customers while
generating very significant efficiencies.
- In January 2019, Air Liquide announced the acquisition of a
nearly 20% stake in the capital of the Canadian company Hydrogenics
Corporation, representing an investment of 20.5 million US
dollars (18 million euros). In February, the Group announced
the construction in Canada of the largest membrane-based
electrolyzer in the world to develop its carbon-free
hydrogen production. This 20 megawatts electrolyzer,
with Hydrogenics technology, allows the Group to reaffirm
its long-term commitment to the hydrogen energy markets and its
ambition to be a major player in the supply of carbon-free
hydrogen.
- Mid-June, Air Liquide announced the acquisition of Medidis
in the Netherlands, a major player for the treatment of
respiratory diseases at home and the production and supply of
medical oxygen. The acquisition of this Dutch actor, employing more
than 70 people and generating revenue of approximately 11
million euros in 2017, allows Air Liquide, present in the home
healthcare market in the Netherlands for more than 20 years, to
strengthen its position in a growing market.
- Air Liquide continues to develop its home healthcare activity
in Europe with the acquisition of Sleep & Health SA and
Megamed AG, two historic players in this sector and based in
Switzerland. These acquisitions enable the Group to serve more than
3,000 new patients and strengthen the position of Air
Liquide, leader in home healthcare in Europe, in a growing market
within a mature healthcare system.
- Air Liquide, Europe’s leader in home healthcare, announced in
April the acquisition of the Spanish startup DiaLibre. With
this acquisition, the Group reinforces its service offering
throughout the diabetic patient's care pathway, from the
distribution of medical equipment to the personalized support of
diabetic patients. DiaLibre’s offering combines personalized
therapeutic support programs and medical follow‑up for patients
using innovative technologies.
Industrial investment decisions reached a record high of
3,157 million euros, with major investments for long-term
contracts with Large Industries customers, mainly in strategic
basins where the Group is already present. More than 410 million US
dollars were invested in the United States for new Air Separation
Units and the development of the Gulf Coast pipeline
network. Between 2015 and 2022, Air Liquide will have almost
doubled its oxygen production capacity in the United States.
Investments in Electronics continued, mainly in Asia, and those
contributing to efficiencies were up by nearly +45%
compared with 2018. Investments contributing to efficiencies now
represent more than 10% of the amount of industrial
decisions. The number of decisions relating to contract renewals
also increased. Finally, close to 30% of industrial
investment decisions contributed to the Group’s Climate
objectives.
Industrial investment decisions
- Air Liquide has signed a long-term agreement with Gulf Coast
Growth Ventures (GCGV) at the beginning of July, a 50/50 joint
venture between ExxonMobil and SABIC. The Group will supply
2,000 tons per day of oxygen and 900 tons per day of nitrogen
from its industrial gas pipeline network to GCGV’s planned
ethane cracker facility located near Corpus Christi, in Texas. To
support the new agreement and additional volumes, Air Liquide plans
to invest nearly 140 million US dollars to build a new
world-scale Air Separation Unit and related infrastructure
investments.
- In mid-September, Air Liquide announced an investment of
more than 270 million US dollars in the U.S. Gulf Coast to
support a new long-term agreement with Methanex Corporation
to supply oxygen, nitrogen and utilities. To serve Methanex
and its other customers in the industrial basin that encompases
Geismar and Baton Rouge, Air Liquide will build two new Air
Separation Units with a capacity of 2,500 tons/day of oxygen
each and invest in connected infrastructure assets -
increasing the company’s Mississippi River Pipeline’s
supply capacity by more than 25%.
The total investment backlog amounted to 2.8 billion
euros, a marked increase of more than 600 million euros
compared with the end of 2018, as new investment decisions more
than offset the start-up of new units. These investments should
lead to a future contribution to annual sales of approximately
0.9 billion euros per year after the full ramp-up of the
units.
START-UPS
There were 18 start-ups during 2019. These included
several production units for Electronics in Asia and for
Large Industries in most regions. A new pipeline network at
a major industrial basin in Saudi Arabia was also commissioned in
2019.
The contribution to sales of unit start-ups and ramp-ups
totaled 336 million euros for 2019. This mainly included
additional sales for Large Industries in China particularly
with the final contributions from Fujian Shenyuan, the disposal of
which was finalized in September 2019, in Mexico with the start-up
of a hydrogen-supply contract, and in Eastern Europe.
Electronics sales also benefited from several unit start-ups
and ramp-ups in Asia.
For 2020, the contribution to sales of unit start-ups and
ramp-ups is forecasted at around 230 million euros, and
should be higher in 2021, boosted by several major start-ups.
INVESTMENT OPPORTUNITIES
The 12-month portfolio of opportunities remained strong
and totaled 2.9 billion euros, an increase compared with 2.6
billion euros at the end of 2018. New projects entering the
portfolio exceeded those signed by the Group, awarded to the
competition or delayed.
The portfolio of opportunities is fairly well balanced
geographically: Europe and Asia are the leading regions within the
portfolio, followed by the Americas and Middle East & Africa
with similar levels of opportunities. Almost two‑thirds of the
portfolio of opportunities came from projects in Large Industries,
in particular for Chemicals; Electronics was the second largest
contributor, followed closely by Global Markets &
Technologies.
Around half the value of the portfolio came from projects with
investment amounts of less than 50 million euros, and several
projects are above 100 million euros. The portfolio included some
asset takeover opportunities that would have a faster contribution
to growth. A positive contribution to the Group’s Climate
objectives was identified for around a quarter of the amount of
investment opportunities.
2019 Financing
“A” CATEGORY FINANCIAL RATING CONFIRMED
Air Liquide is rated by two
main rating agencies, Standard & Poor’s and Moody’s. The
long-term rating from Standard & Poor’s is “A-” and from
Moody’s is “A3”. These are in line with the Group’s strategy. The
short-term ratings are “A2” for Standard & Poor’s and “P2” for
Moody’s. Standard & Poor’s confirmed its rating on July 22,
2019 and upgraded its outlook from stable to positive. Moody’s
confirmed its ratings on June 28, 2019 and maintained its stable
outlook.
DIVERSIFYING AND SECURING FINANCIAL SOURCES
As of December 31, 2019, financing through capital markets
accounted for 92% of the Group’s total debt, for a total
amount of outstanding bonds of 12.1 billion euros, under
several programs, and 0.2 billion euros of commercial
paper.
The total amount of credit facilities was stable at 3.6
billion euros. At the beginning of December, five bilateral
credit facilities, for a total amount of 500 million euros, were
included in the syndicated credit facility negotiated in 2018 for
an initial amount of 2 billion euros. The first one-year extension
option has been applied to this facility, which now amounts to
2.5 billion euros, maturing in December 2024, with a second
extension option possible. On this occasion, this credit facility
was indexed to Corporate Social Responsability (CSR) criteria.
New financing mecanism
- In early December, Air Liquide signed an amendment to its
syndicated credit line that implements from now on a
correlation scheme between its financial costs and three of its
CSR targets regarding its carbon intensity, gender diversity
and safety. Air Liquide testifies through this initiative its
willingness to combine performance and responsibility.
The amount of total debt maturing in the next 12 months is 1.8
billion euros, a marked decrease compared to the amount at December
31, 2018.
2019 issues
In June 2019, under its EMTN program, the Group issued an 11
year public bond for an amount of 600 million euros. In
September 2019, the Group also issued a 10 year bond in 144A format
in the US market, for an amount of 500 million US
dollars.
Moreover, as of the end of 2019, outstanding bonds issued under
the EMTN program amounted to 6.4 billion euros (nominal
amount).
Bonds
- In early September, Air Liquide issued bonds on the American
market for an amount of 500 million US dollars with a 10-year
maturity at a yield of 2.362%. With this transaction, the Group
confirms its willingness to foster long-term relationships with
American credit investors.
Net debt by currency as of December 31
31/12/2018
31/12/2019
Euro
45%
45%
US dollar
37%
40%
Chinese renminbi
3%
0%
Japanese Yen
3%
2%
Other
12%
13%
TOTAL
100%
100%
Investments are generally funded in the currency in which the
cash flows are generated, creating a natural currency hedge.
In 2019, net debt in euros was stable in terms of volume and
percentage. Debt in US dollars increased slightly, mainly due to
currency impact. Net debt in Chinese renminbi decreased, due to the
divestiture of the Fujian Shenyuan units by Air Liquide China. Debt
denominated in Japanese yen decreased in volume and percentage, as
the cash flows generated were used to repay a portion of the
debt.
CENTRALIZATION OF CASH AND FUNDING
Air Liquide Finance pools the cash balances of Group entities.
In 2019, Air Liquide included the New Zealand dollar in its daily
cash pooling, which now covers 15 currencies.
As of December 31, 2019, Air Liquide Finance had granted to
Group entities, directly or indirectly, the equivalent of 15.3
billion euros in loans and received 3.9 billion euros in
excess cash as deposits from them. These transactions were
denominated in 29 currencies (primarily the euro, US dollar,
Singapore dollar and Chinese renminbi). 390 Group entities lend,
borrow or are included in the Group cashpooling, directly or
indirectly (including subsidiaries where cash pooling is carried
out locally before being centralized at Air Liquide Finance).
DEBT MATURITY AND SCHEDULE
The average of the Group’s debt maturity was 6.2 years at
December 31, 2019, an increase compared to December 31, 2018.
Indeed, some bond issues matured in 2019 without renewal, thanks to
the generation of net cash flow in 2019.
The following chart shows the Group’s debt maturity schedule.
The single largest annual maturity represented approximately 13% of
total debt.
OUTLOOK
2019 is a landmark year, characterized simultaneously by a
significant improvement in performance, a high level of investments
to serve customers and strengthen efficiency, and the operational
implementation of the Group’s climate action plan.
2019 sales were driven by the development of Gas & Services
and Global Markets & Technologies. On a comparable basis,
all Gas & Services activities, which account for
96% of Group revenue, progressed over the
year, with particularly dynamic Electronics and
Healthcare. Geographically, every region grew, notably the
Europe and Asia‑Pacific regions.
Overall, and despite the expected global economic slowdown
observed in the 4th quarter, the Group delivered robust
results, confirming the relevance of its economic model and
strategy.
The improvement in the Group’s operating margin reflects
the dynamic management of both pricing and product mix, the asset
portfolio, and efficiencies. The latter reached 433
million euros. Cash flows were high and the debt to equity
ratio declined substantially. The Group’s balance sheet is solid.
ROCE continues to improve. 2019 performance is in
line with all of the targets of the NEOS program and the
Group’s Climate objectives.
In a context where industrial opportunities remain high,
investment decisions rose sharply, to 3.7 billion
euros. The new projects that have been signed with clients in
Large Industry and Electronics will allow the Group to further
strengthen its position in major industrial basins.
The Group starts the year with confidence in a context
characterized by a new uncertainty related to the Coronavirus
epidemic. This provides us with the opportunity to commend the
professionalism of our Chinese colleagues, fully
mobilized.
Assuming no major change in the environment and the
international health situation is under control, Air Liquide is
confident in its ability to further increase its operating margin
and to deliver net profit growth in 2020, at constant exchange
rates.
APPENDICES
Impact of IFRS16
As of January 1, 2019, the Group financial statements include
the impacts of the mandatory adoption of the standard IFRS16 «
Leases » issued on January 13, 2016 with no restatement of prior
period financial statements. The standard does not affect
the recognition of revenue for the Group.
The main impact of the application of IFRS16 for the Group as a
lessee consists of the recognition on the balance sheet of all
lease contracts, without distinction between finance and operating
leases. In the course of its activity, the Group as a lessee enters
in contracts mainly for the following type of assets:
- Land, buildings and offices;
- Transportation equipment, in particular for Industrial Merchant
and Healthcare;
- Other equipment.
Any contract containing a lease leads to the recognition on
the lessee’s balance sheet of a lease liability measured at the
present value of the remaining lease payments and a right-of-use
asset measured at the amount equal to the lease liability,
adjusted by the amount of any prepaid or accrued lease payments as
well as of any provision for onerous leases recognized in the
balance sheet as of December 31, 2018.
Impacts on the Group financial statements on December 31,
2019 are detailed in the following 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:
- Currency, energy and significant scope impacts
- Comparable sales change and comparable operating income
recurring change
- Operating margin and operating margin excluding energy
- Recurring net profit Group share
- Return on Capital Employed (ROCE)
- Recurring ROCE
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 euro zone. The
currency effect 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 index to energy
year (N-1) x (Average energy price over the year (N) - Average
energy price over the year (N-1))
This indexation effect of electricity and natural gas does not
impact the operating income recurring.
The significant scope effect 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 AND COMPARABLE OPERATING INCOME
RECURRING CHANGE
Comparable changes for sales and the operating income recurring
exclude the currency, energy and significant scope impacts
described above. For 2019, the calculations are the
following:
(in millions of euros)
FY 2019
FY 2019/2018 Published
Growth
Currency impact
Natural gas impact
Electricity impact
Significant scope
impact
FY 2019/2018 Comparable
Growth
Revenue
Group
21,920
+4.3%
446
(293)
(8)
95
+3.2%
Impacts in %
+2.1%
-1.4%
+0.0%
+0.4%
Gas & Services
21,040
+4.6%
433
(293)
(8)
95
+3.5%
Impacts in %
+2.1%
-1.4%
-0.1%
+0.5%
Operating Income Recurring
Group
3,794
+ 10.0 %
71
-
-
17
+ 7.5 %
Impacts in %
+2.0%
+0.5%
Gas & Services
4,028
+ 9.5 %
68
-
-
17
+ 7.2 %
Impacts in %
+1.8%
+0.5%
Comparable sales change for the 4th quarter 2019 is calculated
as follow:
(in millions of euros)
Q4 2019
Q4 2019/2018 Published
Growth
Currency impact
Natural gas impact
Electricity impact
Significant scope
impact
Q4 2019/2018 Comparable
Growth
Revenue
Group
5,514
-1.1%
84
(129)
(30)
19
-0.1%
Impacts in %
+1.5%
-2.3%
-0.5%
+0.3%
Gas & Services
5,262
-0.2%
81
(129)
(30)
19
+0.9%
Impacts in %
+1.5%
-2.4%
-0.6%
+0.4%
OPERATING MARGIN AND OPERATING MARGIN EXCLUDING
ENERGY
The operating margin is the ratio of the operating income
recurring divided by revenue. The operating margin excluding energy
corresponds to the operating income recurring, not affected by the
indexation effect of electricity and natural gas, divided by
revenue excluding the energy impact (including currency
impact):
(in millions of euros)
2019
Natural gas impact
Electricity impact
2019 excluding energy
Revenue
Group
21,920
(301)
(11)
22,232
Gas & Services
21,040
(301)
(11)
21,352
Operating Income
Recurring
Group
3,794
-
-
3,794
Gas & Services
4,028
-
-
4,028
OIR Margin
Group
+17.3 %
+17.1 %
Gas & Services
+19.1 %
+18.9 %
RECURRING NET PROFIT GROUP SHARE
The recurring net profit Group share corresponds to the net
profit Group share excluding exceptional and significant
transactions that have no impact on the operating income
recurring.
The recurring net profit Group share in 2019 excluded the
after-tax loss on the Fujian Shenyuan divestment. It reached
2,307.4 million euros.
The comparable growth takes the net profit Group share in 2018
excluding the exceptional gain after-tax of 35.7 million euros due
to the debt restructuring in the U.S. It reaches 2,077.7 million
euros.
The comparable growth of the 2019 recurring net profit Group
share reached 2,307.4 / 2,077.7 - 1 = +11.1%.
RETURN ON CAPITAL EMPLOYED (ROCE)
Return on capital employed after tax is calculated based on the
Group’s consolidated financial statements, by applying the
following ratio for the period in question. For the numerator: net
profit excluding IFRS16 - net finance costs after taxes for the
period in question. For the denominator: the average of (total
shareholders' equity excluding IFRS16 + net debt) at the end of the
past three half‑years.
2018
H1 2019
2019
ROCE Calculation
(in millions of euros)
(a)
(b)
(c)
Net Profit excluding IFRS16
2,352.0
2 352,0
Net finance costs
(361.6)
(361.6)
Effective tax rate (1)
25.0%
25.0%
Net financial costs after tax
(271.2)
(271.2)
Net Profit - Net financial
costs after tax
2,623.2
2,623.2
Denominator
((a)+(b)+(c))/3
Total equity excluding IFRS16
18,207.4
17,966.0
19,338.8
18,504.1
Net debt
12,534.9
13,698.8
12,373.3
12,869.0
Average of (total equity + net
debt)
31,373.1
ROCE
8.4%
(1) excluding non-recurring tax impact
RECURRING ROCE
The recurring ROCE is calculated in the same manner than the
ROCE using the recurring net profit for the numerator.
2018
H1 2019
2019
ROCE Calculation
(in millions of euros)
(a)
(b)
(c)
Recurring Net Profit excluding
IFRS16
2,417.9
2,417.9
Net finance costs
(361.6)
(361.6)
Effective tax rate (1)
25.0%
25.0%
Net financial costs after tax
(271.2)
(271.2)
Recurring Net Profit - Net
financial costs after tax
2,689.1
2,689.1
Denominator
((a)+(b)+(c))/3
Total equity excluding IFRS16
18,207.4
17,966.0
19,338.8
18,504.1
Net debt
12,534.9
13,698.8
12,373.3
12,869.0
Average of (total equity + net
debt)
31,373.1
Recurring ROCE
8.6%
(1) excluding non-recurring tax impact
4th Quarter 2019 Revenue
BY GEOGRAPHY
Revenue
(in millions of euros)
Q4 2018
Q4 2019
Published change
Comparable change
Americas
2,091
2,106
+0.8%
-0.6%
Europe
1,868
1,819
-2.7%
+2.1%
Asia-Pacific
1,153
1,182
+2.5%
+1.9%
Middle East & Africa
160
155
-2.9%
+0.6%
Gas & Services Revenue
5,272
5,262
-0.2%
+0.9%
Engineering & Construction
145
71
-51.1%
-51.7%
Global Markets & Technologies
161
181
+12.3%
+11.1%
GROUP REVENUE
5,578
5,514
-1.1%
-0.1%
BY WORLD BUSINESS LINE
Revenue
(in millions of euros)
Q4 2018
Q4 2019
Published change
Comparable change
Large industries
1,513
1,351
-10.7%
+0.0%
Industrial Merchant
2,368
2,456
+3.7%
+0.1%
Healthcare
910
957
+5.3%
+5.1%
Electronics
481
498
+3.4%
+0.0%
GAS & SERVICES REVENUE
5,272
5,262
-0.2%
+0.9%
Geographic and Segment
Information
FY 2018
FY 2019
(in millions of euros and %)
Revenue
Operating income
recurring
OIR margin
Revenue
Operating income
recurring
OIR margin
Americas
7,982.1
1,369.4
17.2%
8,460.5
1,536.6
18.2%
Europe
7,111.4
1,367.9
19.2%
7,172.3
1,431.4
20.0%
Asia-Pacific
4,358.5
836.9
19.2%
4,793.7
950.8
19.8%
Middle East and Africa
654.9
104.8
16.0%
613.5
109.5
17.9%
Gas & Services
20,106.9
3,679.0
18.3%
21,040.0
4,028.3
19.1%
Engineering and Construction
430.2
(3.7)
-0.9%
328.1
8.9
2.7%
Global Markets & Technologies
474.0
49.8
10.5%
552.0
67.2
12.2%
R&D and Corporate costs
-
(276.6)
-
-
(310.6)
-
TOTAL GROUP
21,011.1
3,448.5
16.4%
21,920.1
3,793.8
17.3%
Consolidated Income
Statement
(in millions of euros)
2018
2019
2019 excluding IFRS16
Revenue
21,011.1
21,920.1
21,920.1
Other income
188.4
200.9
200.9
Purchases
(8,276.4)
(8,153.9)
(8,153.9)
Personnel expenses
(4,145.8)
(4,410.9)
(4,410.9)
Other expenses
(3,562.5)
(3,624.7)
(3,890.5)
Operating income recurring before
D&A
5,214.8
5,931.5
5,665.7
Depreciation and amortization expense
(1,766.3)
(2,137.7)
(1,895.0)
Operating income recurring
3,448.5
3,793.8
3,770.7
Other non-recurring operating income
4.6
1.5
1.5
Other non-recurring operating expenses
(166.4)
(189.0)
(188.6)
Operating income
3,286.7
3,606.3
3,583.6
Net finance costs
(303.4)
(361.6)
(361.6)
Other financial income
13.6
8.4
8.4
Other financial expenses
(62.9)
(114.5)
(72.8)
Income taxes
(730.7)
(801.7)
(806.3)
Share of profit of associates
4.1
0.7
0.7
PROFIT FOR THE PERIOD
2,207.4
2,337.6
2,352.0
- Minority interests
94.0
96.1
96.1
- Net profit (Group share)
2,113.4
2,241.5
2,255.9
Basic earnings per share (in
euros)
4.49
4.76
4.79
Consolidated Balance
Sheet
ASSETS (in millions of euros)
2018
2019
Goodwill
13,345.0
13,943.0
Other intangible assets
1,598.7
1,555.0
Property, plant and equipment
19,248.2
21,117.8
Non-current assets
34,191.9
36,615.8
Non-current financial assets
524.9
646.0
Investments in associates
142.1
154.4
Deferred tax assets
282.8
256.6
Fair value of non-current derivatives
(assets)
75.9
26.3
Other non-current assets
1,025.7
1,083.3
TOTAL NON-CURRENT ASSETS
35,217.6
37,699.1
Inventories and work-in-progress
1,460.1
1,531.5
Trade receivables
2,500.4
2,477.9
Other current assets
892.0
803.0
Current tax assets
140.7
98.0
Fair value of current derivatives
(assets)
44.2
31.3
Cash and cash equivalents
1,725.6
1,025.7
TOTAL CURRENT ASSETS
6,763.0
5,967.4
TOTAL ASSETS
41,980.6
43,666.5
EQUITY AND LIABILITIES (in millions of
euros)
2018
2019
Share capital
2,361.8
2,602.1
Additional paid-in capital
2,884.5
2,572.9
Retained earnings
10,544.4
11,582.7
Treasury shares
(121.0)
(128.8)
Net profit (Group share)
2,113.4
2,241.5
Shareholders' equity
17,783.1
18,870.4
Minority interests
424.3
454.0
TOTAL EQUITY
18,207.4
19,324.4
Provisions, pensions and other employee
benefits
2,410.7
2,521.2
Deferred tax liabilities
1,955.9
2,051.9
Non-current borrowings
11,709.6
11,567.2
Non-current lease liabilities
-
1,087.8
Other non-current liabilities
250.0
261.6
Fair value of non-current derivatives
(liabilities)
18.4
45.8
TOTAL NON-CURRENT LIABILITIES
16,344.6
17,535.5
Provisions, pensions and other employee
benefits
325.1
268.4
Trade payables
2,714.5
2,566.6
Other current liabilities
1,639.8
1,629.0
Current tax payables
171.2
200.1
Current borrowings
2,550.9
1,831.8
Current lease liabilities
-
243.6
Fair value of current derivatives
(liabilities)
27.1
67.1
TOTAL CURRENT LIABILITIES
7,428.6
6,806.6
TOTAL EQUITY AND LIABILITIES
41,980.6
43,666.5
Consolidated Cash Flow
Statement
2018
2018 restated (a)
2019
2019 excluding IFRS16
(in millions of euros)
Operating activities
Net profit (Group share)
2,113.4
2,113.4
2,241.5
2,255.9
Minority interests
94.0
94.0
96.1
96.1
Adjustments:
• Depreciation and amortization
1,766.3
1,766.3
2,137.7
1,895.0
• Changes in deferred taxes (b)
55.3
55.3
67.9
72.5
• Changes in provisions
(89.5)
(89.5)
(106.0)
(106.0)
• Share of profit of associates
(4.1)
(4.1)
(0.7)
(0.7)
• Profit/loss on disposal of assets
(9.6)
(9.6)
35.1
35.1
• Net finance costs
212.4
212.4
249.2
249.2
• Other non cash items
-
104.1
138.6
96.9
Cash flows from operating activities
before changes in working capital
4,138.2
4,242.3
4,859.4
4,594.0
Changes in working capital
612.9
612.9
(36.7)
(48.2) (c)
Other cash items
(34.7)
(138.8)
(110.5)
(110.5)
Net cash flows from operating
activities
4,716.4
4,716.4
4,712.2
4,435.3
Investing activities
-
Purchase of property, plant and equipment
and intangible assets
(2,249.2)
(2,249.2)
(2,636.4)
(2,646.4) (d)
Acquisition of consolidated companies and
financial assets
(129.2)
(129.2)
(536.9)
(536.9)
Proceeds from sale of property, plant and
equipment and intangible assets
98.0
98.0
584.0
584.0
Proceeds from sale of financial assets
5.1
5.1
0.4
0.4
Dividends received from equity
affiliates
5.1
5.1
4.1
4.1
Net cash flows used in investing
activities
(2,270.2)
(2,270.2)
(2,584.8)
(2,594.8)
Financing activities
-
Dividends paid
-
• L'Air Liquide S.A.
(1,159.4)
(1,159.4)
(1,163.0)
(1,163.0)
• Minority interests
(75.3)
(75.3)
(73.7)
(73.7)
Proceeds from issues of share capital
138.1
138.1
39.2
39.2
Purchase of treasury shares
(63.6)
(63.6)
(148.1)
(148.1)
Net financial interests paid
(167.1)
(167.1)
(225.4)
(225.4)
Increase (decrease) in borrowings
(1,149.8)
(1,149.8)
(891.0)
(891.0)
Lease liabilities repayments
-
-
(248.0)
-
Net interests paid on lease
liabilities
-
-
(38.9)
-
Transactions with minority
shareholders
(1.4)
(1.4)
(31.3)
(31.3)
Net cash flows from (used in) financing
activities
(2,478.5)
(2,478.5)
(2,780.2)
(2,493.3)
Effect of exchange rate changes and change
in scope of consolidation
65.2
65.2
0.7
0.7
Net increase (decrease) in net cash and
cash equivalents
32.9
32.9
(652.1)
(652.1)
NET CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE PERIOD
1,515.7
1,515.7
1,548.6
1,548.6
NET CASH AND CASH EQUIVALENTS AT THE
END OF THE PERIOD
1,548.6
1,548.6
896.5
896.5
(a) From 2019, the adjustment for income
and expenses with no cash impact related to IAS 19 and IFRS 2 (96.9
million euros in 2019) are reclassified from Other cash items
(Others in the 2018 Reference Document) to Other non cash
items.
(b) Changes in deferred taxes reported in
the consolidated cash flow statement do not include changes in
deferred taxes relating to disposals of assets and capitalized
finance costs.
(c) Including the effect of timing
differences between lease expenses and the corresponding
payments.
(d) Including the effect of cash outflows
following the exercise of purchase options for assets which were
previously leased.
Net cash and cash equivalents can be analyzed as
follows:
(in millions of euros)
December 31, 2018
December 31, 2019
Cash and cash equivalents
1,725.6
1,025.7
Bank overdrafts (included in current
borrowings)
(177.0)
(129.2)
NET CASH AND CASH EQUIVALENTS
1,548.6
896.5
Net debt calculation
(in millions of euros)
December 31, 2018
December 31, 2019
Non-current borrowings
(11,709.6)
(11,567.2)
Current borrowings
(2,550.9)
(1,831.8)
TOTAL GROSS DEBT
(14,260.5)
(13,399.0)
Cash and cash equivalents
1,725.6
1,025.7
TOTAL NET DEBT AT THE END OF THE
PERIOD
(12,534.9)
(12,373.3)
Statement of changes in net debt
(in millions of euros)
December 31, 2018
December 31, 2019
Net debt at the beginning of the
period
(13,370.9)
(12,534.9)
Net cash flows from operating
activities
4,716.4
4,712.2
Net cash flows used in investing
activities
(2,270.2)
(2,584.8)
Net cash flows used in financing
activities excluding changes in borrowings
(1,161.6)
(1,663.8)
Total net cash flows
1,284.6
463.6
Effect of exchange rate changes, opening
net debt of newly acquired companies and others
(236.2)
(62.4)
Adjustment of net finance costs
(212.4)
(239.6)
Change in net debt
836.0
161.6
NET DEBT AT THE END OF THE
PERIOD
(12,534.9)
(12,373.3)
Benoît Potier also comments on the Group’s
2019 results in a video interview, available in both French and
English at www.airliquide.com.
The presentation of the release is available
as of 8:00 am (Paris time) at www.airliquide.com
Throughout the year, follow Air Liquide news
on Twitter - @AirLiquideGroup
UPCOMING EVENTS
2020 First Quarter Revenue: April 24, 2020
Annual General Meeting of Shareholders: May 5, 2020
Dividend Ex-coupon Date: May 11, 2020
Dividend Payout Date: May 13, 2020
A world leader in gases, technologies and services for Industry
and Health, Air Liquide is present in 80 countries with
approximately 67,000 employees and serves more than 3.7 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 be a leader in its industry,
deliver long term performance and contribute to sustainability. The
company’s customer-centric transformation strategy aims at
profitable, regular and responsible 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 revenue amounted to 22 billion euros in 2019 and
its solutions that protect life and the environment represented
more than 40% of sales. Air Liquide is listed on the Euronext Paris
stock exchange (compartment A) and belongs to the CAC 40, EURO
STOXX 50 and FTSE4Good indexes.
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