- Solid performance demonstrating the resilience of the
business model
- Outlook supported by record investment decisions
Regulatory News:
Air Liquide (Paris:AI):
Key Figures
(in millions of euros)
Q3 2023
2023/2022 as
published
2023/2022
comparable(a)
Group Revenue
6,811
-17.4%
+1.5%
of which Gas & Services
6,483
-17.9%
+1.7%
of which Engineering &
Construction
110
-5.3%
-0.8%
of which Global Markets &
Technologies
218
-7.1%
-3.9%
(a) Change excluding the currency, energy
(natural gas and electricity) and significant scope impacts, see
reconciliation in the appendices.
Commenting on sales in the third quarter of 2023, François
Jackow, Chief Executive Officer of the Air Liquide Group,
stated:
“Air Liquide achieved a solid performance in the third
quarter, highlighting the resilience of its diversified business
model and its ability to prepare for future growth in a
challenging macroeconomic and geopolitical environment. The Group’s
performance this quarter was characterized by growth of its
activity on a comparable basis and a record level of
investment decisions. In line with its ADVANCE strategic plan, the
Group continued its actions to steadily improve operating
performance, in particular to generate efficiencies.
Revenue reached 6.81 billion euros, an increase of +1.5% on a
comparable basis in the third quarter. On a published basis, it
stood at -17.4%, mainly due to the drop in energy prices
(whose variations are contractually passed through to Large
Industries customers) as well as negative currency impacts.
The Gas & Services activity, which represented 95% of
the Group’s revenue, was up +1.7% on a comparable basis.
Industrial Merchant and Healthcare were the growth
drivers of this activity.
Constantly improving its operating performance, the Group has
notably generated significant efficiencies of 320 million
euros over nine months, which represents an increase of +22%,
despite an inflationary environment unfavorable to cost savings on
purchases. It also continued the dynamic management of its business
portfolio, while its ability to create value enabled it to adjust
its prices in Industrial Merchant. Cash flow(1) grew by
+8.6% excluding the currency impact.
The Group’s investment momentum was particularly
strong, reflecting its commitment to climate and paving
the way for future growth. The project backlog, at 4.2
billion euros, and investment decisions, at 1.3 billion
euros this quarter, reached record levels. With more than
40% of projects linked to the energy transition, 12-month
investment opportunities are also numerous and total 3.4 billion
euros.
In 2023, 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
- Hydrogen
- Announcement of an investment of more
than 400 million euros for the construction of the Air
Liquide Normand’Hy electrolyzer, in the context of the signing
of a Memorandum of Understanding notably to provide renewable and
low-carbon hydrogen to the TotalEnergies refinery in Gonfreville,
Normandy. In the framework of the Important Project of Common
European Interest (IPCEI) approved by the European Commission,
the project received the support of the French State for an
amount of 190 million euros, as part of the “Plan de
Relance”.
- Partnership with INPEX Corporation, LSB
Industries Inc., Vopak Moda Houston LLC to study the development
of a large-scale low-carbon ammonia production and export
project in Houston in the United States, with direct access to
the Gulf of Mexico. As part of this project, Air Liquide will in
particular provide its ATR technology, one of the most suitable
solutions for large-scale production of low-carbon hydrogen (H2),
which is then combined with nitrogen (N2) to produce low-carbon
ammonia (NH3). Once transported, the ammonia can be converted back
into hydrogen to help decarbonize industry and mobility.
- Air Liquide is a partner of a record
number of six out of seven renewable and low-carbon hydrogen
hubs (Clean Hydrogen Hubs) selected for funding negotiation by
the U.S. Department of Energy to receive up to 7 billion USD in
Bipartisan Infrastructure Law (BIL) funding.
- Signature with Trillium Energy Solutions
of a Memorandum of Understanding (MoU) to develop the hydrogen
fueling market for heavy-duty vehicles in the United States,
focusing on both hydrogen supply and fueling infrastructure.
- Energy transition & sustainable
development
- Through an investment of more than 140
million euros, announcement in October of the establishment in
Bécancour, Québec, Canada, of a breakthrough production platform of
low-carbon industrial gases to primarily supply, through long term
contracts, customers manufacturing battery components for
electric vehicles. Completing the Group’s 20 MW PEM
electrolyzer, this infrastructure will include a new air separation
unit powered by hydroelectricity to produce renewable oxygen and
nitrogen, as well as liquid storage capacity, connected by a
local pipeline network to best serve its customers.
- Announcement in October of the signing
with Vattenfall, one of the European leaders in the production and
distribution of electricity in Europe, of a long-term renewable
electricity purchase agreement (PPA) in Benelux for an installed
offshore wind capacity of approximately 115 MW. In total, Air
Liquide has now signed PPAs for a total installed capacity of 270
MW in Benelux. It will provide energy representing more than 70% of
the Group's existing electricity consumption in this region, which
includes Belgium, the Netherlands and Luxembourg.
- Air Liquide’s biodiversity commitments
are recognized by Act4nature International, an initiative led
by business networks, scientific partners and environmental
NGOs.
- Corporate
- Amelia Irion is appointed Human
Resources Director of the Air Liquide Group. This appointment
complements several Changes within the Air Liquide Executive
Committee since September 1, 2023.
Group revenue amounted to 6,811
million euros in the 3rd quarter 2023 and posted a comparable
growth of +1.5%, which demonstrated the resilience of the
portfolio of activities in a challenging environment. The Group’s
revenue as published was down -17.4%, impacted by
very unfavorable energy (-13.3%) and currency (-6.3%) impacts, the
significant perimeter impact being slightly positive at +0.7%.
Gas & Services revenue in the 3rd quarter 2023
reached 6,483 million euros, up by +1.7% on a
comparable basis.
- Gas & Services revenue in the Americas totaled
2,556 million euros in the 3rd quarter, up +1.8% on a
comparable basis. Large Industries sales (-5.2%) were impacted by
relatively low demand and customer turnarounds. Revenue in the
Industrial Merchant business posted growth of +3.6%, driven by
higher prices (+5.1%) and resilient gas volumes. In Healthcare, the
increase in prices in proximity care in the United States and the
dynamism of the businesses in Latin America contributed to the very
strong increase in sales (+11.7%). Electronics revenue was down by
-10.2% compared to very high sales in the 3rd quarter 2022, in a
context of slowing demand from memory manufacturers.
- Revenue in Europe was up +2.9% on a comparable
basis during the 3rd quarter 2023 and reached 2,331 million
euros. In Large Industries, activity stabilized in a difficult
environment, with sales up slightly by +0.5%. The +6.5% growth In
Industrial Merchant sales benefited from a price impact maintained
at a high level (+9.9%) and resilient volumes excluding helium and
liquefied CO2, whose supply has been tight. Healthcare business
revenue increased by +5.2%, driven by the dynamism of Home
Healthcare and the increase in medical gas prices in line with
inflation.
- Revenue in Asia Pacific amounted to 1,313
million euros in the 3rd quarter 2023, a -2.0%
decrease on a comparable basis. Large Industries sales (-6.4%) were
impacted by relatively low demand and customer turnarounds. The
Industrial Merchant business posted strong sales growth of +6.8%,
supported by high price rises (+ 5,7 %) and a sharp increase in
volumes in China. Electronics revenue was down -5.2% compared to
very high sales in the 3rd quarter 2022, in the context of a sharp
slowdown in the memory market, which penalized sales of specialty
and advanced Materials.
- Revenue in the Middle East and Africa posted a sharp
increase of +7.8% to 283 million euros
in the 3rd quarter 2023. All business lines grew. Large Industries
benefited from solid activity. In Industrial Merchant, a high price
impact (+11.9%) and a strong increase in volumes made it possible
to fully absorb the impact of the divestiture of businesses in the
Middle East in the 3rd quarter 2022 and achieve solid sales
growth.
In the 3rd quarter 2023, sales growth in the Industrial
Merchant activity (+4.9%) was solid and continued to
benefit from a high price impact which stood at
+6.5%. Gas volumes remained resilient, affected by an
unfavorable working day impact. Sales of Large Industries
were down by -1.7% on a comparable basis, impacted by
customer turnarounds and a relatively low demand which had globally
stabilized since the 1st quarter 2023. Healthcare revenue
posted a strong growth of +7.3%, driven by the dynamic
development of Home Healthcare and price increases of medical gases
in an inflationary environment. Electronics revenue was down
-5.0% compared to very high sales in the 3rd quarter 2022,
in a context of marked slowdown in the memory sector which
penalized particularly specialty and advanced materials sales.
Consolidated revenue from Engineering & Construction
amounted to 110 million euros in the 3rd quarter and
remained stable (-0.8%) compared to the 3rd quarter
2022.
Global Markets & Technologies revenue reached 218
million euros in the 3rd quarter 2023, down by -3.9% on
a comparable basis. However, revenue saw an organic growth
of +6.3% excluding the impact of divestitures finalized in
the 4th quarter 2022.
Industrial and financial investment decisions totaled a
very high level of 1.3 billion euros in the 3rd
quarter 2023 and 3.1 billion euros since the beginning of the year,
thus exceeding 3 billion euros for the first time at the end of
September. The investment backlog hit a record high
of 4.2 billion euros.
The additional contribution to sales of unit start-ups
and ramp-ups totaled 200 million euros at the end of the 3rd
quarter. The contribution expected for full-year 2023 has
been revised to approximately 270 million euros.
The portfolio of 12-month investment opportunities
remained high, at 3.4 billion euros at the end of
September 2023 and the portfolio beyond 12 months was
strengthened.
The price impact in the Industrial Merchant activity
stood at +6.5% in the 3rd quarter 2023 and was in
addition to the record price increase of +18.0% in the 3rd quarter
2022. Prices were also increasing in the other Gas &
Services business lines. Efficiencies(3) amounted to
320 million euros in the first nine months of the year, up
sharply by +22.1% compared to the same period in 2022. The
Group continued the active management of its portfolio in
2023 with the integration of 11 small acquisitions and the
divestitures of its business in Trinidad and Tobago and of its
stake in the company Hydrogenics in the first half.
Cash flow from operating activities before changes in
working capital reached 4,754 million euros at the end
of September 2023, an increase of +4.1% and +8.6% excluding
currency impact. It notably ensures the payment of
industrial investments, which totaled 2,431 million
euros.
Net debt amounted to 10,168 million euros, a
decrease of 382 million euros compared to 10,550 million euros as
of June 30, 2023.
In the 3rd quarter of 2023, the Group continued to deploy its
energy transition strategy, particularly with investment
decisions concerning new low-carbon and renewable industrial
gas production units. Furthermore, Air Liquide's commitments
made in 2022 regarding biodiversity were recognized and
validated by the Act4nature International initiative.
Analysis of 3rd quarter 2023 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)
Q3 2022
Q3 2023
2023/2022
published
change
2023/2022
comparable
change
Gas & Services
7,897
6,483
-17.9%
+1.7%
Engineering & Construction
115
110
-5.3%
-0.8%
Global Markets & Technologies
235
218
-7.1%
-3.9%
TOTAL REVENUE
8,247
6,811
-17.4%
+1.5%
Revenue by Quarter
(in millions of euros)
Q1 2023
Q2 2023
Q3 2023
Gas & Services
6,893
6,512
6,483
Engineering & Construction
87
93
110
Global Markets & Technologies
194
201
218
TOTAL REVENUE
7,174
6,806
6,811
2023/2022 Group published
change
+4.2%
-7.0%
-17.4%
2023/2022 Group comparable
change
+6.2%
+3.8%
+1.5%
2023/2022 Gas & Services comparable
change
+6.7%
+4.1%
+1.7%
Group
Group revenue amounted to 6,811 million euros in
the 3rd quarter 2023 and posted a comparable growth of +1.5%
which demonstrated the resilience of the portfolio of activities in
a challenging environment.
Sales of the Global Markets & Technologies activity
were down by -3.9% on a comparable basis and posted an
organic growth of +6.3% which excludes the impact of
divestitures finalized in the 4th quarter 2022. Engineering
& Construction consolidated sales were stable
(-0.8%) compared with the 3rd quarter 2022.
The Group’s revenue as published was down -17.4%,
impacted by very unfavorable energy (-13.3%) and currency (-6.3%)
impacts, the significant perimeter impact being slightly positive
at +0.7%.
Gas & Services
Gas & Services revenue in the 3rd quarter of 2023
reached 6,483 million euros, up by +1.7% on a
comparable basis.
In the 3rd quarter 2023, sales growth in the Industrial
Merchant activity (+4.9%) was solid and continued to
benefit from a high price impact which stood at
+6.5%. Gas volumes remained resilient, affected by an
unfavorable working day impact. Sales of Large Industries
were down by -1.7% on a comparable basis, impacted by
customer turnarounds and a relatively low demand which had globally
stabilized since the 1st quarter 2023. Healthcare revenue
posted a strong growth of +7.3%, driven by the dynamic
development of Home Healthcare and price increases of medical gases
in an inflationary environment. Electronics revenue was down
-5.0% compared to very high sales in the 3rd quarter 2022,
in a context of marked slowdown in the memory sector which
penalized particularly specialty and advanced materials sales.
As published revenue for Gas & Services were down
-17.9% in the 3rd quarter, impacted by strongly negative
energy and currency impacts which respectively stood at -13.9% and
-6.4%. The significant scope impact was positive but limited to
+0.7%.
Revenue by geography and business
line
(in millions of euros)
Q3 2022
Q3 2023
2023/2022
published
change
2023/2022
comparable
change
Americas
2,936
2,556
-12.9%
+1.8%
Europe
3,266
2,331
-28.6%
+2.9%
Asia Pacific
1,474
1,313
-10.9%
-2.0%
Middle East & Africa
221
283
+28.1%
+7.8%
GAS & SERVICES REVENUE
7,897
6,483
-17.9%
+1.7%
Large Industries
3,112
1,882
-39.5%
-1.7%
Industrial Merchant
3,092
2,988
-3.4%
+4.9%
Healthcare
999
1,013
+1.4%
+7.3%
Electronics
694
600
-13.4.%
-5.0%
Americas
Gas & Services revenue in the Americas totaled 2,556
million euros in the 3rd quarter, up +1.8%. Large
Industries sales (-5.2%) were impacted by relatively low demand and
customer turnarounds. Revenue in the Industrial Merchant business
posted growth of +3.6%, driven by higher prices (+5.1%) and
resilient gas volumes. In Healthcare, the increase in prices in
proximity care in the United States and the dynamism of the
businesses in Latin America contributed to the very strong increase
in sales (+11.7%). Electronics revenue was down by -10.2% compared
to very high sales in the 3rd quarter 2022, in a context of slowing
demand from memory manufacturers.
Americas Gas & Services Q3 2023 Revenue
- Sales in Large Industries were down -5.2% in the
3rd quarter 2023, impacted in particular by customer turnarounds
and the divestiture of the activity in Trinidad and Tobago.
Business was also marked by relatively low demand from customers in
the Chemicals and Steel industries.
- The Industrial Merchant business posted sales growth of
+3.6%. Price impact was maintained at a high level at
+5.1%. Gas volumes (excluding hardgoods) were resilient
(-0.7%) and penalized by an unfavorable working day impact of
around -1%. Volumes were notably up in the Construction and
Aeronautics sectors.
- Sales in the Healthcare business saw very strong growth
(+11.7%) in the 3rd quarter 2023. The main contributors to
this growth were the rise in prices in Proximity Care in the United
States and the dynamism of Home Healthcare and Medical Gases in
Latin America.
- Revenue from Electronics was down -10.2% compared
to very high sales in the 3rd quarter 2022, which were up +10.3%.
Sales of specialty and advanced materials were strongly impacted by
the memory manufacturer production slowdown. Growth in sales of
Carrier Gases continued its steady rise.
Americas
- Through an investment of more than 140
million euros, Air Liquide announced that it will establish in
Bécancour (Canada), a breakthrough platform supplying low-carbon
industrial gases including hydrogen, oxygen, nitrogen and argon. In
addition to the existing Group’s 20 MW PEM electrolyzer,
currently the world’s largest in operation, the infrastructure
created by Air Liquide will include a new air separation
unit producing renewable oxygen and nitrogen and a local
pipeline network. This Air Liquide low-carbon production platform,
in line with the industrial and port zone's drive to decarbonize,
will primarily supply customers manufacturing battery components
for electric vehicles via long term contracts.
- In the context of the U.S.
government’s announcement to support seven regional Clean
Hydrogen Hubs to accelerate low-carbon hydrogen development,
Air Liquide is a partner in a record 6 out of the 7 Hubs.
This achievement is a recognition of Air Liquide’s commitment to
hydrogen development. Air Liquide’s participation in these regional
hubs supports its ambition to create a reliable hydrogen network in
the industry and bring it to scale.
- Air Liquide and Trillium Energy
Solutions, a leading supplier of sustainable fueling
infrastructure in the U.S., have signed a Memorandum of
Understanding (MoU) to pursue the development of the
heavy-duty hydrogen fueling market in the U.S.. This
significant collaboration marks a pivotal milestone in accelerating
the decarbonization of the transportation sector while bolstering
the hydrogen mobility market. The ambition through this partnership
is to initially support the development of 150 tons per day of
hydrogen production and the refueling infrastructure
capable of supplying more than 2,000 heavy-duty
vehicles.
Europe
Revenue in Europe was up +2.9% during the 3rd quarter
2023 and reached 2,331 million euros. In Large Industries,
activity stabilized in a difficult environment, with sales up
slightly by +0.5%. The +6.5% growth in Industrial Merchant sales
benefited from a price impact maintained at a high level (+9.9%)
and resilient volumes excluding helium and liquefied CO2, whose
supply has been tight. Healthcare business revenue increased by
+5.2%, driven by the dynamism of Home Healthcare and the increase
in medical gas prices in line with inflation.
Europe Gas & Services Q3 2023 Revenue
- Revenue for Large Industries rose slightly by
+0.5% compared to the 3rd quarter 2022. Hydrogen volumes for
Refining increased, while demand from Steel and Chemicals customers
remained weak, with natural gas prices remaining higher than to
their pre-energy crisis level. Sales of cogeneration units were
down, penalized by electricity prices that were below their very
high level of the 3rd quarter 2022. The combined effect, which was
exceptionally high in the 3rd quarter 2022 due to the steep
increase in energy prices, was not significant this quarter, as
relatively stable volumes neutralized the effect of the sharp drop
in energy prices(4).
- Industrial Merchant sales saw strong growth of
+6.5%, driven by a price impact that remained high
(+9.9%) and which came on top of the record increase of
+29.9% in the 3rd quarter 2022. Volumes excluding helium and
liquefied CO2, whose supply has been tight for several months,
remained resilient (-1%). They were penalized by one working day
less during the 3rd quarter, with an impact on volumes estimated at
around -1%. Volumes were up in the Automotive, Manufacturing and
Pharmaceuticals markets, and down notably in the Food sector.
- In the Healthcare business, sales were up sharply by
+5.2%. They benefited notably from the dynamism of the Home
Healthcare business, in particular for the treatment of diabetes
and sleep apnea. Growth in Medical Gas revenue was supported by
rising prices in an inflationary context and increased
volumes.
Europe
- On the occasion of the signing of a Memorandum of Understanding
to supply the TotalEnergies refinery in Gonfreville,
Normandy, France, with renewable and low-carbon hydrogen,
Air Liquide announced an investment of over 400 million
euros for the construction of its Normand’Hy
electrolyzer. With a capacity of 200 MW, it will be the
largest PEM electrolyzer ever built and will integrate equipment
manufactured in the frame of the joint-venture between Air Liquide
and Siemens Energy. Connected to the Air Liquide local hydrogen
network, this electrolyzer will contribute to the decarbonization
of the industry and transportation. Normand’hy was recognized as an
Important Project of Common European Interest (IPCEI) by the
European Commission and received support from the French State
for an amount of 190 million euros.
Asia Pacific
Revenue in Asia Pacific amounted to 1,313 million
euros in the 3rd quarter 2023, a -2.0% decrease. Large
Industries sales (-6.4%) were impacted by relatively low demand and
customer turnarounds. The Industrial Merchant business posted
strong sales growth of +6.8%, supported by high price rises and a
sharp increase in volumes in China. Electronics revenue was down
-5.2% compared to very high sales in 3rd quarter 2022, in the
context of a sharp slowdown in the memory market, which penalized
sales of specialty and advanced Materials.
Asia Pacific Gas & Services Q3 2023 Revenue
- Revenue for Large Industries decreased by -6.4%
during the 3rd quarter. Trends observed in the 1st half-year
continued, demand remaining weak in the region. Sales of air gases
were impacted by customer turnarounds, including one extended
stoppage in China.
- Industrial Merchant sales were up sharply by
+6.8%. They benefited from high price rises of
+5.7% in addition to the strong +9.3% increase in the 3rd
quarter 2022. In China, the marked increase in volumes,
particularly in the Manufacturing sector, explains the dynamic
growth in sales.
- Revenue from the Electronics business was down
-5.2% albeit compared to record sales in the 3rd quarter
2022, which benefited from growth of +21.8%. Volumes of specialty
and advanced Materials were temporarily penalized by the slowdown
in demand from memory manufacturers. Equipment & Installation
sales were also down compared to a high level in 2022. Sales of
Carrier Gases, whose business model resilience is comparable to
that of Large Industries, remained very solid.
Middle East and Africa
Revenue in the Middle East and Africa posted a sharp increase of
+7.8% to 283 million euros in the 3rd
quarter 2023. All business lines grew. Large Industries benefited
from solid activity. In Industrial Merchant, a high price impact
(+11.9%) and a strong increase in volumes made it possible to fully
absorb the impact of the divestiture of businesses in the Middle
East in the 3rd quarter 2022 and achieve solid sales growth. In the
Healthcare business, the development of diabetes treatment in Saudi
Arabia and non recurring sales in Egypt were the main drivers of
strong sales growth.
Engineering & Construction
Consolidated revenue from Engineering & Construction
amounted to 110 million euros in the 3rd quarter and
remained stable (-0.8%) compared to the 3rd quarter
2022.
Order intake in the 3rd quarter reached their highest level in
10 years at 647 million euros and mainly included projects
for the Group. These include notably a large-scale electrolyzer
(200 MW) for Large Industries and several air separation units for
the Gas & Services activities.
Global Markets & Technologies
Global Markets & Technologies posted a -3.9% decrease
in revenue to 218 million euros in the 3rd quarter 2023.
However, excluding the impact of the divestitures of the mobility
biogas distribution and the manufacture of small-scale cryogenic
tank businesses in the 4th quarter 2022, revenue saw organic
growth of +6.3%. Sales of technological equipment, in
particular Turbo-Braytons, were up sharply and the ramp-up of the
hydrogen liquefier in the United States contributed to the dynamic
growth of Hydrogen mobility.
Order intake for Group projects and for third-party customers
amounted to 224 million euros and includes Turbo-Brayton LNG
reliquefaction units, biogas processing equipment and cryogenic
equipment for an advanced research laboratory.
Investment Cycle
INVESTMENT DECISIONS AND INVESTMENT BACKLOG
Industrial and financial investment decisions totaled a
very high level of 1.3 billion euros in the 3rd quarter 2023
and 3.1 billion euros since the beginning of the year, thus
exceeding 3 billion euros for the first time at the end of
September.
Industrial investment decisions included three major
projects and reached a record level of 1,273 million
euros over the quarter, up sharply compared to 1,074 million
euros in the 3rd quarter 2022. In Large Industries, two
significant projects related to the energy transition were decided
this quarter: a first large-scale electrolyzer (200 MW) to produce
low-carbon and renewable hydrogen in France and a new renewable air
gas production unit in Canada for battery material manufacturers.
These two projects are part of the decarbonization of dynamic
industrial basins. In Electronics, decisions included
investments in carrier gas production units in Asia, in Europe and
in the Americas, including a large-scale unit. In Industrial
Merchant, new contracts were awarded for gas generators on
customer sites. In Healthcare, investments in distribution
equipment were approved to support the growth of medical gas sales,
particularly in South Africa and the United States.
Financial investment decisions amounted to 30 million
euros in the 3rd quarter and included in particular small
acquisitions in Industrial Merchant in Canada and China,
which will strengthen the density of Group local presence and thus
improve the business efficiency.
The investment backlog hit a record high of 4.2
billion euros. The breakdown is well balanced between Large
Industries projects located in all regions and those in
Electronics, mainly in Asia and America.
START-UPS
The main start-ups in the 3rd quarter 2023 included an Air
Separation Unit (ASU) for a Large Industries customer manufacturing
battery materials in Germany, a carrier gas production unit for a
Semiconductor customer in the United States and the Group’s first
biomethane unit in China.
The additional contribution to sales of unit start-ups
and ramp-ups totaled 200 million euros at the end of the 3rd
quarter. The contribution expected for full-year 2023 has
been revised to approximately 270 million euros, reflecting
the delayed start-up of a major unit for a Large Industries
customer in the Americas and a more moderate contribution from the
ramp-up of units already in operation, in the context of a slowdown
in demand in industry and Semiconductors. These sales are delayed
to 2024.
INVESTMENT OPPORTUNITIES
The portfolio of 12-month investment opportunities
remained high, at 3.4 billion euros at the end of
September 2023. The development of projects in the energy
transition, which represent more than 40% of the portfolio, was
very dynamic in Europe and the Americas. Investment opportunities
in Electronics are not only in Asia but also in Europe and the
United States, supported by incentive programs (Chips Acts). The
portfolio beyond 12 months was strengthened and includes in
particular significant projects related to the Inflation Reduction
Act and the Chips Act in the United States and the energy
transition in Europe and Canada.
Operating Performance
In an inflationary environment, the Group continues its
active price management. Thus, the price impact in the
Industrial Merchant activity stood at +6.5% in the 3rd
quarter 2023 and was in addition to the record price increase of
+18.0% in the 3rd quarter 2022. Prices were also increasing in
the other Gas & Services business lines.
Efficiencies(5) totaled 114 million euros
in the 3rd quarter. They amounted to 320 million euros in
the first nine months of the year, up sharply by +22.1%
compared to the same period in 2022 and they are in advance
compared with the annual target of 400 million euros. At the end of
September, they represent a saving of 1.9% of the cost base.
Industrial efficiencies increased and accounted for more
than 50% of the total. They included in Large Industries energy
efficiency and production optimization projects and in Industrial
Merchant supply chain improvements. The Group's digital
transformation continued: in Large Industries with the
contribution of remote operation centers (Smart Innovative
Operations, SIO), in Industrial Merchant and in Healthcare with the
implementation of tools to optimize delivery routes for bulk and,
increasingly, cylinders. The continued implementation of shared
service centers also contributes to efficiencies as well as the
global continuous improvement program which is supported by a
digital platform facilitating the replication of best
initiatives.
During the first 9 months of the year, the Group continued the
active management of its portfolio with the integration of
11 small acquisitions, in Industrial Merchant, Home Healthcare and
Hydrogen Mobility. Furthermore, in the first half, the Group
divested its business in Trinidad and Tobago and its stake in the
company Hydrogenics.
Cash flow from operating activities before changes in
working capital reached 4,754 million euros at the end
of September 2023, an increase of +4.1% and +8.6% excluding
currency impact. It notably ensures the payment of
industrial investments, which totaled 2,431 million
euros.
Net debt amounted to 10,168 million euros, a
decrease of 382 million euros compared to 10,550 million euros as
of June 30, 2023.
In the 3rd quarter of 2023, the Group continued to deploy its
energy transition strategy, particularly with investment
decisions concerning new low-carbon and renewable industrial
gas production units. Furthermore, Air Liquide's commitments
made in 2022 regarding biodiversity were recognized and
validated by the Act4nature International initiative.
Outlook
Air Liquide achieved a solid performance in the third
quarter, highlighting the resilience of its diversified business
model and its ability to prepare for future growth in a
challenging macroeconomic and geopolitical environment. The Group’s
performance this quarter was characterized by growth of its
activity on a comparable basis and a record level of
investment decisions. In line with its ADVANCE strategic plan, the
Group continued its actions to steadily improve operating
performance, in particular to generate efficiencies.
Revenue reached 6.81 billion euros, an increase of +1.5% on a
comparable basis in the third quarter. On a published basis, it
stood at -17.4%, mainly due to the drop in energy prices
(energy costs being contractually passed through to Large
Industries customers) as well as negative currency impacts.
The Gas & Services activity, which represented 95% of
the Group’s revenue, was up +1.7% on a comparable basis.
Industrial Merchant and Healthcare were the growth
drivers of this activity.
Constantly improving its operating performance, the Group has
notably generated significant efficiencies of 320 million
euros over nine months, which represents an increase of +22%,
despite an inflationary environment unfavorable to cost savings on
purchases. It also continued the dynamic management of its business
portfolio, while its ability to create value enabled it to adjust
its prices in Industrial Merchant. Cash flow(6) grew by
+8.6% excluding the currency impact.
The Group’s investment momentum was particularly
strong, reflecting its commitment to climate and paving
the way for future growth. The project backlog, at 4.2
billion euros, and investment decisions, at 1.3 billion
euros this quarter, reached record levels. With more than
40% of projects linked to the energy transition, 12-month
investment opportunities are also numerous and total 3.4 billion
euros.
In 2023, Air Liquide is confident in its ability to further
increase its operating margin and to deliver recurring net profit
growth, at constant exchange rates(7).
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
- 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 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 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 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.
Note: exceptionally, the acquisition of Sasol air separation
units in 2021 had an impact in 2 steps on Group sales. After the
acquisition of the assets in June 2021 (1st step), devices were
installed on the units in 2022 in order to measure the energy
consumed which, from October 2022 (2nd step), could be re-invoiced
to the customer according to the standard Large Industries
contractual frame. For the sake of transparency in financial
communication, sales related to energy consumed and contractually
re-invoiced to the customer are identified within the significant
scope and are therefore excluded from the comparable growth. This
element will thus be accounted for in the significant scope during
12 months from October 2022.
Comparable sales change
Comparable sales change excludes the currency, energy and
significant scope impacts described above.
(in millions of euros)
Q3 2023
Q3 2023/2022
Published
Growth
Currency
impact
Natural gas
impact
Electricity
impact
Significant
scope
impact
Q3 2023/2022
Comparable
Growth
Revenue
Group
6,811
-17.4%
(518)
(829)
(268)
53
+1.5%
Impacts in %
-6.3%
-10.0%
-3.3%
+0.7%
Gas & Services
6,483
-17.9%
(505)
(829)
(268)
53
+1.7%
Impacts in %
-6.4%
-10.5%
-3.4%
+0.7%
(in millions of euros)
YTD 2023
YTD 2023/2022
Published
Growth
Currency
impact
Natural gas
impact
Electricity
impact
Significant
scope
impact
YTD 2023/2022
Comparable
Growth
Revenue
Group
20,791
-7.4%
(820)
(1,388)
(379)
100
+3.7%
Impacts in %
-3.6%
-6.2%
-1.7%
+0.4%
Gas & Services
19,888
-7.5%
(799)
(1,388)
(379)
100
+4.0%
Impacts in %
-3.7%
-6.5%
-1.7%
+0.4%
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...).
Year to date revenue
By Geography
Revenue
(in millions of euros)
YTD 2022
YTD 2023
YTD
Published
change
YTD
Comparable
change
Americas
7,953
7,715
-3.0%
+4.9%
Europe
8,690
7,306
-15.9%
+4.1%
Asia Pacific
4,220
4,076
-3.4%
+1.8%
Middle East & Africa
634
791
+24.7%
+6.5%
GAS & SERVICES REVENUE
21,497
19,888
-7.5%
+4.0%
Engineering & Construction
336
290
-13.9%
-11.6%
Global Markets & Technologies
621
613
-1.1%
+1.0%
GROUP REVENUE
22,454
20,791
-7.4%
+3.7%
By Business Line
Revenue
(in millions of euros)
YTD 2022
YTD 2023
YTD
Published
change
YTD
Comparable
change
Large Industries
8,052
5,942
-26.2%
-2.9%
Industrial Merchant
8,602
9,038
+5.1%
+9.5%
Healthcare
2,924
3,047
+4.2%
+7.9%
Electronics
1,919
1,861
-3.0%
+2.2%
GAS & SERVICES REVENUE
21,497
19,888
-7.5%
+4.0%
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
Gas & Services
Q3 2023 split of revenue and comparable
growth in %
Total
Large
Industries
Industrial
Merchant
Electronics
Healthcare
Americas
100%
16%
70%
4%
10%
+1.8%
-5.2%
+3.6%
-10.2%
+11.7%
Europe
100%
36%
32%
2%
30%
+2.9%
+0.5%
+6.5%
N.C.
+5.2%
Asia Pacific
100%
34%
29%
33%
4%
-2.0%
-6.4%
+6.8%
-5.2%
N.C.
Middle-East and Africa
100%
N.C.
N.C.
N.C.
N.C.
+7.8%
Gas & Services
100%
29%
46%
9%
16%
+1.7%
-1.7%
+4.9%
-5.0%
+7.3%
Engineering & Construction
-0.8%
Global Markets & Technologies
-3.9%
GROUP TOTAL
+1.5%
N.C.: Not communicated.
Investments
(in billion euros)
YTD 2023
12-month portfolio of investment
opportunities(a)
3.4
Investment decisions since the beginning
of the year(b)
3.1
Investment backlog(a)
4.2
Additional contribution to revenue of unit
start-ups and ramp-ups(b) (in million euros)
200
(a) At the end of the reporting
period.
(b) Cumulated 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.
CONTACTS
Investor Relations
IRTeam@airliquide.com
+33 1 40 62 51 50
Media Relations
media@airliquide.com
+33 1 40 62 58 49
UPCOMING EVENTS
2023 Full Year results:
February 20, 2024
A world leader in gases, technologies and services for Industry
and Health, Air Liquide is present in 73 countries with
approximately 67,100 employees and serves more than 3.9 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.
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 29.9 billion euros in 2022. 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.
______________________________________ 1 Cash flows from
operating activities before changes in working capital. 2 Operating
margin excluding energy pass through impact. Net profit recurring
excluding exceptional and significant transactions that have no
impact on the operating income recurring. 3 See definition in the
appendices. 4 See the presentation dedicated to the combined effect
available on the Group website. 5 See definition in the appendices.
6 Cash flows from operating activities before changes in working
capital. 7 Operating margin excluding energy pass through impact.
Net profit recurring excluding exceptional and significant
transactions that have no impact on the operating income
recurring.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231024207863/en/
Investor Relations IRTeam@airliquide.com +33 1 40 62 51
50
Media Relations media@airliquide.com +33 1 40 62 58
49
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