Air Liquide continues its trajectory with another solid quarter, combining sales growth, performance improvement and investment momentum
Air Liquide (Paris:AI):
(in millions of euros) |
Q1 2024 |
2024/2023
|
2024/2023
|
Group Revenue |
6,650 |
-7.3% |
+2.1% |
of which Gas & Services |
6,358 |
-7.8% |
+2.0% |
of which Engineering & Construction |
92 |
+5.2% |
+6.5% |
of which Global Markets & Technologies |
200 |
+3.7% |
+4.7% |
(a) Change excluding the currency, energy (natural gas and electricity) and significant scope impacts, see reconciliation in appendix. |
Commenting on sales in the first quarter of 2024,
“With a proven resilient business model, Air Liquide delivers once again a solid performance in the first quarter. The Group thus maintains its growth trajectory despite an uncertain environment, and continues to prepare a sustainable future thanks to an investment momentum supported by numerous projects in the energy transition. Air Liquide’s teams are moreover fully mobilized on continuous performance improvement and structural efficiency projects undertaken as part of our ADVANCE strategic plan, of which the original margin increase ambition we doubled at the beginning of the year( 1 ) .
Group sales increased by +2.1% on a comparable basis -
the first quarter of last year having been particularly dynamic. Published sales were down -7.3%, due to the decline in energy prices - for which variations are contractually passed through to
The Gas & Services business, which represents 96% of the Group’s revenue, was up +2.0% on a comparable basis. Geographically, growth was notably driven bythe dynamism of the
In line with the ADVANCE renewed ambition announced in February this year,Air Liquide is pursuing the continuous improvement of its operational performance by implementing new structural actions to deliver savings in the coming quarters. Over the first three months of the year, the Group notably generated efficiencies amounting to
Still very high at
In 2024, Air Liquide is confident in its ability to further increase its operating margin and to deliver recurring net profit growth, at constant exchange rates( 2 ) .”
Highlights
|
Group revenue totaled
Gas & Services revenue reached
Comparable growth(4) in the Industrial Merchant (+1.5%)business continued in the 1st quarter of 2024 with slightly lower volumes and a price effect (+3.7%) that eased sequentially.
-
Gas & Services revenue in the
Americas increased by +6.3% and reached2,550 million euros in the 1st quarter of 2024. All businesses grew in the region.Large Industries (+4.8%) benefited from strengthening demand over the quarter and from the start-up of an Air Separation Unit. In Industrial Merchant, revenue increased by +4.8%, supported by a price effect that remained very solid (+6.5%) and resilient gas volumes. The strong growth in Healthcare (+20.4%) was notably driven by the dynamic development of sales of Medical Gases in theUnited States and Home Healthcare inLatin America . Solid growth in Electronics (+3.3%) benefited from higher sales of carrier gases, equipment and installations. -
In
Europe , sales were down slightly by -1.6% in the 1st quarter of 2024 and reached2,250 million euros . InLarge Industries , revenue (-1.1%) was impacted by the divestiture of a cogeneration unit, partially offset by slightly higher volumes of hydrogen. In Industrial Merchant (-6.4%), prices were down (due to contractual indexation on energy price for the bulk), and volumes were affected by an unfavorable working day impact. The Healthcare business posted very solid sales growth (+4.3%), supported by the increase in the number of patients inHome Healthcare and the increase in volumes and prices of medical gases in an inflationary context. -
Revenue in the Asia-Pacific region was flattish (-0.9%) in the 1st quarter of 2024 and amounted to
1,291 million euros . InLarge Industries (-1.0%), the start-up of a new unit in March partially offset weak demand and customer turnarounds. Industrial Merchant’s sales were up by +0.7%, supported by higher prices and increased volumes excluding helium. Electronics revenue decreased by -1.7% against a very high basis of comparison in the 1st quarter of 2023, the growth in carrier gas sales partially offsetting lower sales of specialty materials, equipment and installations. -
Revenue in the
Middle East &Africa region increased sharply by +10.5% to267 million euros in the 1st quarter of 2024. All business lines grew.
Revenue in Global Markets & Technologies totaled 200million euros in the 1st quarter, up +4.7%. Order intake for Group projects and third-party customers amounted to
Consolidated revenue from Engineering & Construction totaled
Efficiencies
(5) reached 112million euros in the 1st quarter of 2024, up +22.2% compared to the 1st quarter of 2023. The price effect in the Industrial Merchant business stood at +3.7% and came in addition to the significant price increase of +12.9% in the 1st quarter of 2023. This price effect eased sequentially. Portfolio management of businesses continued in the 1st quarter with 3 acquisitions in Industrial Merchant in
Cash flows from operating activities
before changes in working capital amounted to
In the 1st quarter of 2024, industrial and financial investment decisions amounted to
The additional contribution to sales of unit start-ups and ramp-ups totaled
The portfolio of 12-month investment opportunities remained stable at a high level of
In order to decarbonize its production units, the Group decided on the electrification of a third Air Separation Unit in
Analysis of 1st quarter 2024 revenue
Unless otherwise stated, all variations in revenue outlined below are on a comparable basis, excluding currency, energy (natural gas and electricity) and significant scope impacts.
REVENUE
Revenue (in millions of euros) |
Q1 2023 |
Q1 2024 |
2024/2023
|
2024/2023
|
Gas & Services |
6,893 |
6,358 |
-7.8% |
+2.0% |
Engineering & Construction |
87 |
92 |
+5.2% |
+6.5% |
Global Markets & Technologies |
194 |
200 |
+3.7% |
+4.7% |
TOTAL REVENUE |
7,174 |
6,650 |
-7.3% |
+2.1% |
Group
Group revenue totaled
The Group’s published sales were down -7.3% in the 1st quarter of 2024, affected by unfavorable energy (-5.5%) and currency (-3.9%) impacts. There was no significant scope impact. The favorable impact on comparable growth of proactive price increases to counter hyperinflation(6) in
Gas & Services
Gas & Services revenue reached
Growth in the Industrial Merchant (+1.5%) business continued in the 1st quarter of 2024 with slightly lower volumes and a price effect (+3.7%) that eased sequentially.
As published revenue for Gas & Services were down -7.8% in the 1st quarter of 2024, penalized by unfavorable energy (-5.7%) and currency (-4.1%) impacts. There was no significant scope impact.
Revenue by geography and business line (in millions of euros) |
Q1 2023 |
Q1 2024 |
2024/2023 published change |
2024/2023 comparable change |
|
2,629 |
2,550 |
-3.0% |
+6.3% |
|
2,639 |
2,250 |
-14.7% |
-1.6% |
|
1,385 |
1,291 |
-6.8% |
-0.9% |
|
240 |
267 |
+11.3% |
+10.5% |
GAS & SERVICES REVENUE |
6,893 |
6,358 |
-7.8% |
+2.0% |
|
2,202 |
1,736 |
-21.1% |
+0.9% |
Industrial Merchant |
3,038 |
2,975 |
-2.1% |
+1.5% |
Healthcare |
1,016 |
1,051 |
+3.5% |
+8.1% |
Electronics |
637 |
596 |
-6.5% |
-2.0% |
Gas & Services revenue in the
Americas Gas & Services Q1 2024 Revenue
-
Revenue from
Large Industries grew by +4.8% and demand strengthened over the quarter. InNorth America , the start-up and ramp-up of Air Separation Units (ASU) offset the impact of customer turnarounds, particularly in Refining. InLatin America , hydrogen volumes were down due to the nationalization of a production unit inMexico at the end of 2023. -
In the Industrial Merchant business, sales increased by +4.8%, supported by a very solid price effect at +6.5%. Gas volumes (excluding hardgoods) remained resilient. In
the United States , gas volumes are increasing mainly in the Industrial Construction and Aeronautics sectors. -
In the Healthcare business, sales were up sharply (+20.4%). The rise in prices in Proximity Care in
the United States and the dynamism ofHome Healthcare inLatin America were the main contributors. - The Electronics business showed solid revenue growth (+3.3%). Carrier gas sales increased, supported by the ramp-up of new units and the increase in helium volumes. High sales of equipment and installations also contributed to the growth, while sales of materials remained low.
In
Europe Gas & Services Q1 2024 Revenue
-
In the 1st quarter 2024, revenue for
Large Industries decreased slightly by -1.1%. Hydrogen volumes increased in Chemicals compared to a low level in the 1st quarter of 2023 and were broadly stable in Refining. Demand for air gases from customers in the Chemicals and Steel industries also remained stable. Furthermore, sales were impacted by the divestiture of a cogeneration unit. - Sales in the Industrial Merchant business were down by -6.4%, the price effect stood at -1.9%. The decrease in the price of bulk (indexed to energy prices) was partly offset by the proactive increase in the price of packaged gases, with a specific focus on the creation of value through innovation and on the quality of service to customers. Volumes were affected by an unfavorable working day effect of -1%. They declined in the Metallurgy, Glass and, to a lesser extent, Food markets, but increased in the Manufacturing, Research and Aeronautics sectors.
-
In the Healthcare business, sales increased by +4.3%.
Home Healthcare continued its dynamic growth, with a sharp increase in the number of patients cared for, particularly for diabetes and sleep apnea. Growth in sales of medical gases remained solid, supported by a balanced contribution from volumes and prices in an inflationary context.
|
Revenue in the
Asia-Pacific Gas & Services Q1 2024 Revenue
-
Large Industries revenue was down slightly by -1.0%. InChina , several customer turnarounds were offset by the contribution of the start-up of a new hydrogen production unit in March. InJapan , oxygen volumes for steel production were down, while hydrogen volumes for Refining increased inSingapore . -
In Industrial Merchant, sales increased by +0.7%. The price effect (+1.3%) eased sequentially, in particular due to the marked decrease in helium prices. In
China , the dynamism of the Automotive, Food andSecondary Electronics sectors supported the strong growth in volumes excluding helium, which reached +4%. - Sales in Electronics were down -1.7% in the 1st quarter of 2024 compared to a very high basis of comparison in the 1st quarter of 2023. Sales of specialty materials were impacted by the low activity of memory manufacturers and sales of equipment and installations were down. However, sales of carrier gases continued to be up sharply (+5%), driven by the start-up of two new units in the 1st quarter, and sales of advanced materials returned to growth.
Revenue in the
|
Global Markets & Technologies
Revenue in Global Markets & Technologies totaled 200million euros in the 1st quarter, up +4.7%. The increase in sales of technological equipment (Turbo-Braytons, biogas equipment, hydrogen refueling stations, etc.) and the sharp increase in hydrogen volumes for mobility in
Order intake for Group projects and third-party customers amounted to
Engineering & Construction
Consolidated revenue from Engineering & Construction totaled
Order intake for the Group and third-party customers reached
Investment cycle
INVESTMENT DECISIONS AND INVESTMENT BACKLOG
In the 1st quarter of 2024, industrial and financial investment decisions amounted to
The industrial investment decisions for the 1st quarter of 2024 amounted to
Financial
investment decisions totaled 24 millioneuros in the 1st quarter of 2024. They include several small acquisitions in
The investment backlog stoodat a very high level of 4.1 billioneuros, compared to
Investments
|
START-
The main start-ups carried out in the 1st quarter of 2024 in
The additional contribution to sales of unit start-ups and ramp-ups totaled
INVESTMENT OPPORTUNITIES
The portfolio of 12-month investment opportunities remained stable at a high level of
The portfolio of opportunities at more than 12 months is also stable at a very high level and includes in particular significant projects in the energy transition and the Electronics sector.
Operating Performance
Financial performance
The price effect in the Industrial Merchant business stood at +3.7% and came in addition to the significant price increase of +12.9% in the 1st quarter of 2023. This price effect eased sequentially. The price of bulk, indexed in particular to the price of energy, continued to increase in all regions except
Efficiencies
(7) reached 112million euros in the 1st quarter of 2024, up +22.2% compared to the 1st quarter of 2023. Efficiencies related to purchases, which account for more than a quarter of the total, were high despite an inflationary context. The Group continued its transformation with the reorganization of
Portfolio management of businesses continued in the 1st quarter with 3 acquisitions in Industrial Merchant in
Divestitures
|
Cash flows from operating activities before changes in working capital amounted to
Extra-financial performance
In order to decarbonize its production units, the Group decided on the electrification of a third Air Separation Unit in
Outlook
With a proven resilient business model, Air Liquide delivered once again a solid performance in the first quarter. The Group thus maintained its growth trajectory despite an uncertain environment, and continued to prepare a sustainable future thanks to an investment momentum supported by numerous projects in the energy transition. Air Liquide’s teams are moreover fully mobilized on continuous performance improvement and structural efficiency projects undertaken as part of our ADVANCE strategic plan, of which the original margin increase ambition was doubled at the beginning of the year(8).
Group sales increased by +2.1% on a comparable basis - the first quarter of last year having been particularly dynamic. Published sales were down -7.3%, due to the decline in energy prices - for which costs are contractually passed through to
The Gas & Services business, which represented 96% of the Group’s revenue, was up +2.0% on a comparable basis. Geographically, growth was notably driven by the dynamism of the
In line with the ADVANCE renewed ambition announced in February this year, Air Liquide is pursuing the continuous improvement of its operational performance by implementing new structural actions to deliver savings in the coming quarters. Over the first three months of the year, the Group notably generated efficiencies amounting to
Still very high at
In 2024, Air Liquide is confident in its ability to further increase its operating margin and to deliver recurring net profit growth, at constant exchange rates (9).
Appendices - Performance indicators
Performance indicators used by the Group that are not directly defined in the financial statements have been prepared in accordance with the AMF position 2015-12 about alternative performance measures.
The performance indicators are the following:
- Comparable sales change
- Currency, energy and significant scope impacts
- Efficiencies
Definition of Currency, energy and significant scope impacts
Since industrial and medical gases are rarely exported, the impact of currency fluctuations on activity levels and results is limited to euro translation impacts with respect to the financial statements of subsidiaries located outside the eurozone. The currency impact is calculated based on the aggregates for the period converted at the exchange rate for the previous period.
In addition, the Group passes on variations in the cost of energy (electricity and natural gas) to its customers via indexed invoicing integrated into their medium and long-term contracts. This indexing can lead to significant variations in sales (mainly in the Large Industries Business Line) from one period to another depending on fluctuations in prices on the energy market.
An energy impact is calculated based on the sales of each of the main subsidiaries in
Energy impact =
Share of sales indexed to energy year (N-1) x (Average energy price in year (N) - Average energy price in year (N-1))
This indexation effect of electricity and natural gas does not impact the operating income recurring.
The significant scope impact corresponds to the impact on sales of all acquisitions or disposals of a significant size for the Group. These changes in scope of consolidation are determined:
- for acquisitions during the period, by deducting from the aggregates for the period the contribution of the acquisition,
-
for acquisitions during the previous period, by deducting from the aggregates for the period the contribution of the acquisition between
January 1 of the current period and the anniversary date of the acquisition, - for disposals during the period, by deducting from the aggregates for the previous period the contribution of the disposed entity as of the anniversary date of the disposal,
- for disposals during the previous period, by deducting from the aggregates for the previous period the contribution of the disposed entity.
Comparable sales change
Comparable changes for sales exclude the currency, energy and significant scope impacts described above. The calculations are the following:
(in millions of euros) |
Q1 2024 |
Q1 2024/2023
|
Currency
|
Natural gas
|
Electricity
|
Significant
|
Q1 2024/2023
|
Revenue |
|
|
|
|
|
|
|
Group |
6,650 |
-7.3% |
(280) |
(299) |
(95) |
0 |
+2.1% |
Impacts in % |
|
|
-3.9% |
-4.2% |
-1.3% |
- |
|
Gas & Services |
6,358 |
-7.8% |
(277) |
(299) |
(95) |
0 |
+2.0% |
Impacts in % |
|
|
-4.1% |
-4.3% |
-1.4% |
- |
|
Efficiencies
Efficiencies represent a sustainable cost reduction resulting from an action plan on a specific project. Efficiencies are identified and managed on a per project basis. Each project is followed by a team composed in alignment with the nature of the project (purchasing, operations, human resources...).
Definitions
Portfolio of 12-month investment opportunities: cumulative value of investment opportunities taken into account by the Group for a decision within the next 12 months. Industrial projects with a value of more than
Investment decisions: cumulative value of industrial and financial investment decisions. Growth and non-growth industrial projects, including the renewal of assets, efficiency projects, maintenance and safety, as well as financial decisions (acquisitions).
Investment backlog: cumulative value of investments for projects that have been decided but not yet started up. Industrial projects of more than
Impact of hyperinflation in
Sales and investments key figures synthesis
The following tables gather data already available in this report. They complement the key figures indicated in the table on the first page.
Sales
Q1 2024 split of revenue and comparable growth in % |
Total |
Large
|
Industrial
|
Electronics |
Healthcare |
100% |
14% |
70% |
5% |
11% |
|
|
+6.3% |
+4.8% |
+4.8% |
+3.3% |
+20.4% |
100% |
33% |
33% |
2% |
32% |
|
|
-1.6% |
-1.1% |
-6.4% |
N.C. |
+4.3% |
100% |
35% |
28% |
33% |
4% |
|
|
-0.9% |
-1.0% |
+0.7% |
-1.7% |
N.C. |
100% |
N.C. |
N.C. |
N.C. |
N.C. |
|
|
+10.5% |
|
|
|
|
100% |
27% |
47% |
9% |
17% |
|
Gas & Services |
+2.0% |
+0.9% |
+1.5% |
-2.0% |
+8.1% |
Engineering & Construction |
+6.5% |
|
|
|
|
Global Markets & Technologies |
+4.7% |
|
|
|
|
GROUP TOTAL |
+2.1% |
|
|
|
|
N.C.: Not communicated. |
Investments
(in billion euros) |
Q1 2024 |
12-month portfolio of investment opportunities(a) |
3.4 |
Investment decisions(b) |
0.9 |
Investment backlog(a) |
4.1 |
Additional contribution to revenue of unit start-ups and ramp-ups(b)(in million euros) |
53 |
(a) At the end of the reporting period. |
|
(b) Cumulated value from the beginning of the calendar year until the end of the reporting period. |
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UPCOMING EVENTS
Annual General Meeting of Shareholders:
Dividend Ex-coupon Date:
Dividend Payout Date:
2024 First Half Revenue and Results:
Air Liquide is a world leader in gases, technologies and services for industry and healthcare. Present in 72 countries with 67,800 employees, the Group serves more than 4 million customers and patients. Oxygen, nitrogen and hydrogen are essential small molecules for life, matter and energy. They embody Air Liquide’s scientific territory and have been at the core of the Group’s activities since its creation in 1902.
Taking action today while preparing the future is at the heart of Air Liquide’s strategy. With ADVANCE, its strategic plan for 2025, Air Liquide is targeting a global performance, combining financial and extra-financial dimensions. Positioned on new markets, the Group benefits from major assets such as its business model combining resilience and strength, its ability to innovate and its technological expertise. The Group develops solutions contributing to climate and the energy transition—particularly with hydrogen—and takes action to progress in areas of healthcare, digital and high technologies.
Air Liquide’s revenue amounted to more than
_________________________
1
Op
erating margin excluding energy passthrough impact.
2
Op
erating margin excluding energy passthrough impact. Net profit recurring excluding exceptional and significant transactions that have no impact on the operating income recurring.
3
Se
e definition in appendix.
4
Un
less otherwise stated, all variations in revenue outlined below are on a comparable basis, excluding currency, energy (natural gas and electricity) and significant scope impacts.
5
See
definition in appendix.
6
See
definition in appendix.
7
See definition in appendix.
8
Operating margin excluding energy passthrough impact.
9
Operating margin excluding energy passthrough impact. Net profit recurring excluding exceptional and significant transactions that have no impact on the operating income recurring.
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Source: Air Liquide