Regulatory News:
Air Liquide (Paris:AI):
Key Figures (in millions of
euros)
Q1 2022
2022/2021 as published
2022/2021
comparable(a)
Group Revenue
6,887
+29.1%
+7.9%
of which Gas & Services
6,590
+29.1%
+7.1%
of which Engineering &
Construction
108
+42.4%
+40.3%
of which Global Markets &
Technologies
189
+22.0%
+18.3%
(a) Change excluding the currency, energy
(natural gas and electricity) and significant scope impacts, see
reconciliation in appendix.
Commenting on sales in the 1st quarter of 2022, Benoît Potier,
Chairman and CEO of the Air Liquide Group, said:
“There was strong growth in this first quarter, which reflects a
good level of activity and demonstrates the Group’s resilience in a
context marked, notably, by inflation and the war in Ukraine.
Group sales were up +8% on a comparable basis and
+29% based on published figures, notably reflecting the
sharp rise in energy prices contractually passed on to Large
Industries customers. Sales reached 6.9 billion euros,
including 6.6 billion for Gas & Services. This growth confirms
the strength of the Gas & Services businesses and the strong
momentum of the Engineering & Construction and Global Markets
& Technologies business lines.
Gas & Services, which represents over 95% of Group
sales, was up +7.1% on a comparable basis. This reflects
notably the strong growth of the Electronics business line
as well as Industrial Merchant which demonstrated, once
again, its ability to adapt prices to reflect rising costs. Despite
a high basis of comparison, the Healthcare business line
continued to grow. In terms of geographies, growth was particularly
strong in Europe and the Americas.
Regarding efficiencies, the Group continued to take
action to improve performance. In the 1st quarter of 2022, 77
million euros in efficiencies were generated in spite of a
highly inflationary context, and we confirm our target of over 400
million euros over the year. Cash flow remains high at more than
23% of sales excluding the energy effect.
Investment decisions over the quarter reached the very
high level of 913 million euros, with several Electronics
projects, particularly in Asia. The 12-month portfolio
of opportunities remains stable at 3.3 billion euros. The
proportion of projects linked to the energy transition exceeds
40%.
These investments will foster future growth. They will also
contribute to ADVANCE, Air Liquide’s new strategic plan for
2025. This plan, which combines financial and extra-financial
performance, is structured around four priorities: delivering
strong financial performance, decarbonizing industry, promoting
progress through technological innovation and acting for all. With
ADVANCE, the Group reaffirms its commitment to sustainable
development while continuing its growth trajectory.
In 2022, assuming no significant economic disruption, Air
Liquide is confident in its ability to further increase its
operating margin and to deliver recurring net profit growth at
constant exchange rates.(1)”
Highlights of the 1st quarter
- Corporate:
- Launch of ADVANCE, the new Air
Liquide strategic plan for 2025, which places sustainable
development at the heart of the Group’s strategy and combines
financial and extra-financial performance around four
priorities:
- Delivering strong financial
performance
- A continued sales growth of 5
to 6% on average per year(2).
- A Return On Capital Employed
(ROCE) of more than >10% starting from 2023.
- At the same time, a reduction of our
CO2 emissions in absolute terms starting around 2025, in line
with the Group’s Sustainable Development Objectives.
- Decarbonizing the industry, in
line with the Group’s objective to reduce its CO2 emissions by a
third between 2020 and 2035, and to be carbon neutral by 2050.
- Promoting progress through
technological innovation by focusing on new markets, in
particular hydrogen mobility, electronics, healthcare, industrial
merchant and high technologies.
- Acting for all by including the
perspective of the Group’s direct stakeholders (employees,
shareholders, suppliers, customers), as well as those of
society at large.
- Mobilization of the Group to support
victims of the war in Ukraine, notably through the Air Liquide
Foundation.
- Sustainable Development:
- Publication of Air Liquide’s first
Sustainable Development Report, which set out the Group’s
ambitions for Sustainable Development and its 2021 extra-financial
results.
- Attribution of “A-” rating by the CDP
in both categories of climate change and water management. This
rating recognizes the “Leadership Level” of the Group’s
commitment to the environment.
- In the United States, construction of Air
Liquide’s largest biomethane production plant in the
world.
- Decarbonizing the industry:
- Memorandum of Understanding signed
with Eni to decarbonize hard-to-abate industries in the
Mediterranean Basin.
- Selection of the Air Liquide and
EQIOM project by the European Innovation Fund with the
aim to transform the EQIOM plant in Lumbres, France, into one of
the first carbon-neutral cement plants in Europe.
- Selection by the European Innovation
Fund of the Kairos@C project, jointly developed by Air
Liquide and BASF, with the objective to develop the world's
largest cross-border carbon capture and storage (CCS) value
chain project around the port of Antwerp.
- Agreement signed with Sogestran to
develop shipping solutions for carbon management, as part of
carbon capture and storage projects.
- Low-carbon hydrogen:
- Support of the French government for
the Air Liquide Normand’Hy project to produce renewable
hydrogen on a large scale. This project will have an initial
capacity of 200 MW and will contribute to creating a French and
European low-carbon hydrogen industry, as well as to the
decarbonization of the Normandy industrial basin.
- Memorandum of Understanding signed
with Airbus, Incheon Airport and Korean Air to study the use
of hydrogen at Incheon International Airport.
- Electronics & Industry:
- Within the context of long-term
contracts with two world leaders in semiconductors for
the supply of ultra-high purity industrial gases in Japan,
Air Liquide has begun a staged investment of more than 300
million euros in four state-of-the-art production plants.
- Long-term agreements signed to supply
a semiconductor manufacturing site in Arizona, United States.
As part of this agreement, Air Liquide will invest nearly 60
million US dollars to build and operate onsite plants and
systems.
- Increased presence in India with
an investment of around 40 million euros in a new air separation
unit dedicated to Industrial Merchant activities, in the state
of Uttar Pradesh in northern India.
Group revenue totaled 6,887 million euros in the
1st quarter of 2022, up a strong +7.9% on a comparable
basis. This performance was delivered in a challenging context
of exceptionally high energy prices, strong inflation, strain on
supply chains and the war in Ukraine. The Group benefited from a
solid business model and proactive actions to increase prices in
the Industrial Merchant business. Introduced in the 2nd half of
2021, the effectiveness of these increases started to be seen from
the 4th quarter of 2021, with stronger pricing in the 1st quarter
of 2022. The Group’s published revenue saw very strong
growth of +29.1% with an energy impact that reached +16.4%
and with favorable currency (+4.2%) and significant scope (+0.6%)
impacts.
Gas & Services revenue totaled 6,590 million
euros, up by + 7.1% on a comparable basis. Sales as
published for the 1st quarter of 2022 showed a strong growth of
+29.1%, with a very high energy impact at +17.2% and with
positive currency (+4.2%) and significant scope (+0.6%)
impacts.
- Gas & Services revenue in the Americas region
totaled 2,331 million euros in the 1st quarter of 2022,
showing a strong increase of +9.0% on a comparable basis.
Growth in Large Industries reached +8.3%, driven by the dynamic
demand, particularly in the Chemicals and Steel industries. Up
+10.0%, Industrial Merchant revenue benefited from the acceleration
of pricing (+9.3%) and the increase in volumes.
Proximity care in the United States and the Home Healthcare
business in Latin America drove growth in the Healthcare business
line (+3.5%) in a context of lower demand for medical oxygen to
treat covid-19. Finally, all business segments within Electronics
contributed to the particularly dynamic growth (+10.0%).
- Revenue in Europe increased by +7.2% in the 1st
quarter of 2022 on a comparable basis and totaled 2,718 million
euros in a context of exceptionally high energy prices and the
war in Ukraine. While Large Industries showed a -4.5%
decrease in sales, growth accelerated in Industrial Merchant to
reach an exceptionally high level of +22.7%, driven by record
pricing of +19.4%. Healthcare continued to grow (+3.0%) despite
a particularly high basis of comparison in 2021, benefiting from
dynamic development in Home Healthcare.
- Sales in Asia-Pacific were up +4.4% on a
comparable basis in the 1st quarter of 2022 and totaled 1,340
million euros, driven by particularly dynamic growth across all
the Electronics business segments (+13.1%). Large Industries sales
were down slightly by -1.1%, impacted by soft demand in China and
by low hydrogen sales in South Korea. Industrial Merchant revenue
grew by +2.7%, benefiting in particular from solid growth in
China.
- Revenue in the Middle-East and Africa totaled 201
million euros, which was stable (-0.2%) on a comparable
basis and compared to the 1st quarter of 2021. Volumes increased
strongly in South Africa with the integration of the 16 Sasol
air separation units whose acquisition was finalized at the end
of the 1st half of 2021: sales of approximatively 35 million
euros in the 1st quarter were recognized as part of the
significant scope impact (and hence excluded from comparable
growth).
Large Industries sales were stable (+0.1%) on a
comparable basis compared to the 1st quarter of 2021, with mixed
activity depending on the region. In the Americas, demand was
robust across all markets, while in Europe and Asia, sales were
lower in the Steel and Refining industries. Demand in the Chemicals
industry remained solid globally. Industrial Merchant
business posted strong comparable growth of +11.9%, driven
by the acceleration of pricing which was up +10.7%,
even reaching +19.4% in Europe, and by solid volumes. Sales
comparable growth was particularly dynamic in Electronics,
at +13.7%, with all business segments showing strong growth.
Healthcare continued to grow (+2.6%) on a comparable
basis, supported by the momentum of Home Healthcare activity,
despite a particularly high basis of comparison in 2021 related to
the strong demand for medical oxygen to treat Covid-19.
Consolidated revenue from Engineering & Construction
totaled 108 million euros in the 1st quarter of 2022,
posting a strong growth of +40.3% and reflecting the
increase in order intake in recent quarters. Order intake reached
264 million euros.
The sales of Global Markets & Technologies totaled
189 million euros in the 1st quarter, up a strong
+18.3%, driven by the dynamic biogas activity and the
increase of sales for the hydrogen mobility. Order intake for Group
projects and third-party customers reached 214 million
euros, up compared to 2021.
Efficiencies(3) reached 77 million euros in the
1st quarter. This performance was delivered in a context of high
inflation unfavorable to procurement efficiencies. The projects
initiated at the beginning of 2022 are expected to increase their
contribution over the coming quarters, hence confirming the annual
objective set at more than 400 million euros. In this inflationary
environment, the priority of operations was the passthrough of
costs into pricing.
Cash flow from operating activities before changes in working
capital totaled 1,400 million euros, a strong increase
of +12.6% and +8.7% excluding the currency impact. It stood
at 23.3% of sales excluding the energy impact, stable
compared to the 1st quarter of 2021. It allowed, in particular, the
financing of industrial investments, which amounted to 784 million
euros, representing 13.0% of sales excluding the energy impact.
In the 1st quarter of 2022, industrial and financial
investment decisions reached the very high level of 913
million euros, compared to 603 million euros in the 1st
quarter of 2021. They included several carrier gases supply
projects in Asia but also in the United States and in Europe for
Electronics customers. The 12-month portfolio of investment
opportunities is stable at the high level of 3.3 billion
euros at the end of March. Projects related to the energy
transition account for more than 40% of the portfolio.
The additional contribution to revenue of unit start-ups
and ramp-ups amounted to 105 million euros in the 1st
quarter of 2022 and is expected to be between 410 and 435
million euros in 2022, higher than in 2021.
Analysis of 1st quarter 2022 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 2021
Q1 2022
2022/2021 published
change
2022/2021 comparable
change
Gas & Services
5,103
6,590
+29.1%
+7.1%
Engineering & Construction
76
108
+42.4%
+40.3%
Global Markets & Technologies
155
189
+22.0%
+18.3%
TOTAL REVENUE
5,334
6,887
+29.1%
+7.9%
Group
Group revenue totaled 6,887 million euros in the
1st quarter of 2022, up a strong +7.9% on a comparable
basis. This performance was delivered in a challenging context
of exceptionally high energy prices, strong inflation, strain on
supply chains and the war in Ukraine. The Group benefited from a
solid business model and proactive actions to increase prices in
the Industrial Merchant business. Introduced in the 2nd half of
2021, the effectiveness of these increases started to be seen from
the 4th quarter of 2021, with stronger pricing in the 1st quarter
of 2022.
Engineering & Construction posted a strong growth of
+40.3%, which reflects the increase in order intake in
recent quarters. Global Markets & Technologies business
was up +18.3%, driven by strong momentum in biogas and sales
for hydrogen mobility. The Group’s published revenue saw
very strong growth of +29.1% with an energy impact that
reached +16.4% and with favorable currency (+4.2%) and significant
scope (+0.6%) impacts.
Gas & Services
Gas & Services revenue totaled 6,590 million
euros, up by +7.1% on a comparable basis. Large
Industries sales were stable (+0.1%) compared to the 1st
quarter of 2021, with mixed activity depending on the region. In
the Americas, demand was robust across all markets, while in Europe
and Asia, sales were lower in the Steel and Refining industries.
Demand in the Chemicals industry remained solid globally.
Industrial Merchant business posted strong growth of
+11.9%, driven by the acceleration of pricing which
was up +10.7%, even reaching +19.4% in Europe, and by solid
volumes. Sales growth was particularly dynamic in
Electronics, at +13.7%, with all business segments
showing strong growth. Healthcare continued to grow
(+2.6%), supported by the momentum of Home Healthcare
activity, despite a particularly high basis of comparison related
to the strong demand for medical oxygen to treat Covid-19 in 2021.
Sales as published for the 1st quarter of 2022 showed a
strong growth of +29.1%, with a very high energy impact at
+17.2% and with positive currency (+4.2%) and significant scope
(+0.6%) impacts.
Revenue by geography and business
line (in millions of euros)
Q1 2021
Q1 2022
2022/2021 published
change
2022/2021 comparable
change
Americas
2,003
2,331
+16.4%
+9.0%
Europe
1,797
2,718
+51.3%
+7.2%
Asia-Pacific
1,150
1,340
+16.5%
+4.4%
Middle East & Africa
153
201
+31.2%
-0.2%
GAS & SERVICES REVENUE
5,103
6,590
+29.1%
+7.1%
Large Industries
1,445
2,413
+67.0%
+0.1%
Industrial Merchant
2,253
2,638
+17.1%
+11.9%
Healthcare
914
955
+4.4%
+2.6%
Electronics
491
584
+19.0%
+13.7%
Americas
Gas & Services revenue in the Americas region totaled
2,331 million euros in the 1st quarter of 2022, showing a
strong increase of +9.0%. Growth in Large Industries reached
+8.3%, driven by the dynamic demand, particularly in the Chemicals
and Steel industries. Up +10.0%, Industrial Merchant revenue
benefited from the acceleration of pricing (+9.3%) and increase in
volumes. Proximity care in the United States and the Home
Healthcare business in Latin America drove growth in the Healthcare
business line (+3.5%) in a context of lower demand for medical
oxygen to treat covid-19. Finally, all business segments within
Electronics contributed to the particularly dynamic growth
(+10.0%).
Americas Gas & Services Q1 2022 Revenue
- Large Industries revenue posted a strong increase of
+8.3%. This growth reflects a good level of momentum in
demand, independently from a favorable basis of comparison in the
United States, as business was affected by a winter storm on the
Gulf Coast in February 2021. Air gases volumes were up, driven by a
high demand in the Chemicals and Steel industries. Hydrogen sales
increased in spite of several maintenance turnarounds at
refineries. The ramp-up of plants in the United States and Latin
America also contributed to this growth.
- In the Industrial Merchant business, the sharp increase
in sales of +10.0% was driven by the acceleration of the
pricing, which stands at +9.3%, as well as by the
robust growth in volumes. Indeed, the increase in volumes of bulk,
cylinders and hardgoods, was partially masked by a decrease in
helium volumes. In the United States, growth was strong in almost
all markets, particularly in Fabrication and the Energy and
Materials sectors.
- Healthcare continued to grow (+3.5%) in the 1st
quarter of 2022, despite a high basis of comparison in 2021 due to
the strong demand for medical oxygen to treat Covid-19. Sales in
Medical Gases rose sharply in the United States, supported by
strong momentum in proximity care and an acceleration of pricing.
In Latin America, sales growth in Home Healthcare offset soft
activity in Medical Gases compared to strong demand related to
covid-19 in the 1st quarter of 2021.
- Electronics posted a very strong growth of
+10.0%, supported by the momentum across all business
segments. Carrier Gases benefited in particular from the ramp-up of
several production plants and their resulting contribution.
Americas
- Air Liquide announces a long term agreement to supply
ultra high purity hydrogen, helium, and carbon dioxide to one of
the world’s largest semiconductor manufacturers. The Group plans to
invest approximately 50 million euros to build, own and
operate plants and production systems at a new manufacturing site
in Phoenix, Arizona, in support of this new agreement. Operations
and supply are expected to start in the second half of
2022.
Europe
Revenue in Europe increased by +7.2% in the 1st quarter
of 2022 and totaled 2,718 million euros in a context of
exceptionally high energy prices and the war in Ukraine.
While Large Industries showed a -4.5% decrease in sales, growth
accelerated in Industrial Merchant to reach an exceptionally high
level of +22.7%, driven by record pricing of +19.4%. Healthcare
continued to grow (+3.0%) despite a particularly high basis of
comparison in 2021, benefiting from dynamic development in Home
Healthcare.
Europe Gas & Services Q1 2022
Revenue
- Large Industries revenue declined by -4.5%. Sales
were soft in Refining. In the Chemicals sector, demand for air
gases remained stable while hydrogen sales were lower, impacted by
customer maintenance turnarounds. Air gases volumes for the Steel
Industry were lower in March, with some customers encountering
difficulties with the supply of raw materials.
- Industrial Merchant business line saw an exceptionally
high level of growth of +22.7%, driven by record high
pricing of +19.4%. Progression in volumes was also
very solid, despite softening bulk volumes during the quarter.
Sales increased across all markets, particularly in the Food,
Fabrication and Energy sectors.
- Healthcare continued to grow (+3.0%) despite a
particularly high basis of comparison in 2021. Oxygen and medical
equipment sales were down compared to the record-high demand that
was seen for the treatment of covid-19 in the 1st quarter of 2021.
However, growth was steady in the Home Healthcare business,
particularly for the treatment of diabetes. The business line also
benefited from the contribution of an acquisition in Poland that
was made in the 4th quarter of 2021. Finally, progression in the
sales of Specialty Ingredients continued to be very solid.
Europe
- Air Liquide receives support from the
French State*, in the requested amount of 190 million euros,
for its Air Liquide Normand’Hy large scale renewable
hydrogen production project. This electrolyzer with an
initial 200 MW capacity, which should notably provide
renewable hydrogen to TotalEnergies’ Normandy refinery, will use
Siemens Energy proton exchange membrane technology. This project,
for which the start-up is planned for in 2025, will significantly
contribute to the creation of a French and European low-carbon
hydrogen sector and to the decarbonization of the Normandy
industrial basin.
- Air Liquide continues its development
along the carbon value chain:
- Upstream, Air Liquide and EQIOM are joining forces with
the aim to transform EQIOM’s Lumbres plant into one of the first
carbon-neutral cement plants in Europe, by using innovative
technologies. Air Liquide will supply oxygen for the EQIOM
production process and leverage its proprietary technology
CryocapTM Oxy to capture and then liquefy CO2 emissions. The
project aims to capture around 8 million tons of CO2 over the
first ten years of operation. The project has been awarded
150 million euros funding by the European Commission, an
important step toward its application.
- Midstream, to support its aggregator role and complete
its offer, Air Liquide and Sogestran have signed an
agreement to form a joint-venture. It will provide
large-scale liquid CO2 shipping and barging solutions to
sequestration sites in Europe.
- Air Liquide and Eni have entered into a collaboration
agreement aimed at assessing decarbonization solutions in the
Mediterranean region of Europe, focused on hard-to-abate
industrial sectors. Eni, leveraging on its experience in gas
fields exploitation and management, will identify the most suitable
permanent CO2 storage locations in the Mediterranean sea, essential
in the downstream part of the carbon management chain. Air
Liquide will develop competitive CO2 abatement solutions, supported
by its experience and its technology.
* subject to a final validation by the
European Commission
Asia-Pacific
Sales in Asia-Pacific were up +4.4% in the 1st quarter of
2022 and totaled 1,340 million euros, driven by particularly
dynamic growth across all the Electronics business segments
(+13.1%). Large Industries sales were down slightly by -1.1%,
impacted by soft demand in China and by low hydrogen sales in South
Korea. Industrial Merchant revenue grew by +2.7%, benefiting in
particular from solid growth in China.
Asia-Pacific Gas & Services Q1 2022
Revenue
- Large Industries sales were down slightly by
-1.1% in the 1st quarter. Activity was soft in China, in
particular due to residual Dual Energy Control measures. In
addition, in South Korea, hydrogen sales for the Chemicals industry
were low this quarter. These lower levels of activity are almost
completely offset by the increase in sales of oxygen for the Steel
Industry in Japan and of electricity in Singapore (produced by a
cogeneration unit).
- Industrial Merchant revenue was up by +2.7%.
Growth in China (+9%) was driven in particular by cylinder gas
sales and the contribution of small on-site start-ups. The
situation was contrasted in the rest of Asia, with sales down in
Japan but up in Singapore and Australia. Sales increased in major
business sectors, including Fabrication, Materials and Energy.
Pricing was up compared to the 4th quarter of 2021 and stood
at +3.1%, with a strong contribution from China.
- The Electronics business showed a particularly dynamic
growth of +13.1%. Growth reached +15% in Carrier Gases,
which benefited from the contribution of a start-up in China in the
1st quarter and the ramp-up of several production plants. The
increase in Advanced Materials sales was above +15%, with strong
growth in activities in Singapore, China and Japan. Revenue from
Specialty Materials and Services also posted double-digit growth,
while the increase in Equipment and Installation sales was more
modest, compared to a high level of sales in China in the 1st
quarter of 2021.
Asia-Pacific
- Two major semiconductor market leaders have awarded Air Liquide
long-term contracts for the supply of ultra-high
purity industrial gases in Japan. In this context, Air Liquide
has begun a staged investment of more than 300 million euros
in four state-of-the-art gas plants in key Electronics
basins to produce nitrogen and other high purity gases.
Middle East and Africa
Revenue in the Middle-East and Africa totaled 201 million
euros, which was stable (-0.2%) compared to the 1st
quarter of 2021. In Large Industries, revenue was down: oxygen
volumes for the Steel industry rose sharply in Egypt, but hydrogen
sales to customers in the Yanbu basin in Saudi Arabia were lower.
Volumes increased strongly in South Africa with the integration of
the 16 Sasol air separation units whose acquisition was
finalized at the end of the 1st half of 2021: sales of
approximatively 35 million euros in the 1st quarter were
recognized as part of the significant scope impact (and
hence excluded from comparable growth). Growth in the Industrial
Merchant business remained solid, driven by dynamic volumes and a
marked increase of pricing at +4.6%, offsetting the impact of two
small divestitures in the Middle-East. In Healthcare, revenue was
down due to lower Medical Gas volumes for the treatment of
covid-19. Sales in the Home Healthcare business grew in Saudi
Arabia, particularly in diabetes treatment.
Middle East and Africa
- Air Liquide will invest around 40
million euros in a new Air Separation Unit (ASU) in Kosi (Uttar
Pradesh), Northern India, to supply Industrial Merchant
customers and oxygen for the hospitals. This unit will have
a production capacity of 350 tonnes per day, with a maximum
of 300 tonnes of oxygen. Air Liquide India will build, own and
operate this ASU, which is planned to start operating by the end
of 2023 and which should be fully powered by renewable
electricity by 2030.
- Air Liquide announced the sale of its
Industrial Merchant business in the United Arab
Emirates and Bahrain. It is part of the Group’s
strategy to regularly review its asset portfolio and focus on
selected fast developing areas and activities and improve its
return on capital employed. Air Liquide is well-positioned to
further grow its already strong presence in the Gulf
Cooperation Council (GCC) region in Large Industries and
Healthcare businesses and pursue the many opportunities
emerging with clean Hydrogen and Energy
Transition.
Engineering & Construction
Consolidated revenue from Engineering & Construction totaled
108 million euros in the 1st quarter of 2022, posting a
strong growth of +40.3% and reflecting the increase in order
intake in recent quarters.
Order intake totaled 264 million euros, which was down
slightly compared to the high level recorded in the 1st quarter of
2021. Orders for the Group represented more than half of the total
and are mainly related to projects in Asia, including nitrogen
generators for the Electronics and air separation units for Large
Industries.
Global Markets & Technologies
The sales of Global Markets & Technologies totaled 189
million euros in the 1st quarter, up a strong +18.3%.
Biogas enjoyed strong momentum, benefiting from the ramp-up of new
production units in Europe and from the rise in sales prices
relating to the energy price increase and from equipment sales in
the United States. Revenue for hydrogen mobility was up
significantly, driven by the sale of hydrogen filling stations in
China, Japan and Korea.
Order intake for Group projects and third-party customers are
increasing and totaled 214 million euros, up compared to
2021. It notably includes sales of Turbo-Brayton LNG reliquefaction
units, biogas processing equipment, hydrogen refueling stations and
equipment for the Electronics industry.
Global Markets &
Technologies
- Air Liquide continues its development
of biomethane activities with the construction in the USA of its
largest biomethane production unit in the world. This will
bring the worldwide biomethane production capacity of the Group to
1.8 TWh with 21 units. The new production unit in the State
of Illinois will allow Air Liquide to keep providing low-carbon
solutions to its customers in the industrial and transportation
sectors and to accompany them in the reduction of their
emissions.
- Air Liquide, Airbus, Korean Air and
Incheon International Airport Corporation signed a Memorandum of
Understanding to explore the use of hydrogen at Incheon
International Airport. More globally, the collaboration will also
study the development of a Korean airport infrastructure to
support the deployment of hydrogen-powered commercial
aircrafts. This partnership reflects a shared ambition to drive
the emergence of an innovative aviation sector dedicated to
supporting the Korean government's goal of carbon neutrality by
2050. In the Incheon airport, the Group has already invested in two
high capacity hydrogen refueling stations. Since August 2021, they
have been supplying demonstration trucks as well as hydrogen buses
and cars under a long-term contract.
Operating Performance
Efficiencies(4) reached 77 million euros in the
1st quarter, representing a saving of 2.0% of the cost base. This
performance was delivered in a context of high inflation
unfavorable to procurement efficiencies. The projects initiated at
the beginning of 2022 are expected to increase their contribution
over the coming quarters, hence confirming the annual objective set
at more than 400 million euros. In this inflationary environment,
the priority of operations was to transfer cost increases into
pricing.
Industrial efficiencies contributed more than 50% and
included energy efficiency projects in Large Industries and supply
chain optimization projects in Industrial Merchant. The Group's
digital transformation continued: in Large Industries with
the connection of new units to remote operation centers (Smart
Innovative Operations, SIO), in Industrial Merchant with the
acceleration of tools implementation to optimize delivery routes
(Integrated Bulk Operations, IBO) and in Healthcare with the
deployment of remote patient monitoring platforms. The
implementation of shared services centers and the pursuit of
the global continuous improvement program also contributed
to efficiencies.
Cash flow from operating activities before changes in working
capital totaled 1,400 million euros, a strong increase
of +12.6% and +8.7% excluding the currency impact. It
stood at 23.3% of sales excluding the energy impact, stable
compared to the 1st quarter of 2021. It allowed, in particular, the
financing of industrial investments, which amounted to 784 million
euros, representing 13.0% of sales excluding the energy impact.
Investment cycle
INVESTMENT DECISIONS AND INVESTMENT BACKLOG
In the 1st quarter of 2022, industrial and financial
investment decisions reached the very high level of 913
million euros, compared to 603 million euros in the 1st
quarter of 2021.
The industrial investment decisions for the 1st quarter
of 2022 amounted to 880 million euros. Within the
Electronics business line, several carrier gases supply
projects in Asia but also in the United States and in Europe were
decided in the 1st quarter. Investment decisions in Large
Industries included the installation of an air separation unit
in Egypt, which will be connected to existing units with the
creation of a new local pipeline network. In Industrial
Merchant, the investment in a new liquid production capacity
has been decided in the United States.
Financial investment decisions amounted to 33 million
euros in the 1st quarter of 2022 and included several
acquisitions in Industrial Merchant in China.
The investment backlog reached the high level of 3.4
billion euros. Large Industries and Electronics projects
account for the vast majority of the investment backlog. These
investments’ future contribution to annual revenue has also grown,
amounting to approximately 1.2 billion euros per year after
full ramp-up of the units.
START-UPS
Several major units started up during the 1st
quarter of 2022. These include Advanced Materials and Carrier Gases
production plants for Electronics in Asia.
The additional contribution to revenue of unit start-ups
and ramp-ups amounted to 105 million euros in the 1st
quarter of 2022, including sales of 35 million euros from the Sasol
units in South Africa recognized as part of the significant scope
effect (and thus excluded from comparable growth).
In 2022, the additional contribution to revenue of unit
start-ups and ramp-ups is expected to be between 410 and 435
million euros, higher than in 2021. This includes the
contribution of the 16 Sasol units acquired in late June 2021,
which stands at approximately 135 million euros, and recognized as
part of the significant scope effect.
INVESTMENT OPPORTUNITIES
The 12-month portfolio of investment opportunities is
stable at the high level of 3.3 billion euros at the end of
March.
Projects related to the energy transition account for
more than 40% of the portfolio. These include projects for
renewable hydrogen production by electrolysis, facilities for the
capture of carbon dioxide emitted by the Group’s and its customers’
units, as well as hydrogen mobility projects in Europe and Asia.
New Carrier Gases plants have been added to the portfolio for the
Electronics business line, compensating for the projects
decided in the 1st quarter, which therefore left the portfolio.
Europe and Asia represent about 75% of this portfolio.
Europe remains the portfolio of opportunities’ leading
region with numerous energy transition projects. It is
followed by Asia, due to many Electronics projects,
and then by Americas with opportunities in Large
Industries and Electronics.
Outlook
There was strong growth in this 1st quarter, which reflects a
good level of activity and demonstrates the Group’s resilience in a
context marked, notably, by inflation and the war in Ukraine.
Group sales were up +8% on a comparable basis and
+29% based on published figures, notably reflecting the
sharp rise in energy prices contractually passed on to Large
Industries customers. Sales reached 6.9 billion euros,
including 6.6 billion for Gas & Services. This growth confirms
the strength of the Gas & Services businesses and the strong
momentum of the Engineering & Construction and Global Markets
& Technologies business lines.
Gas & Services, which represents over 95% of Group
sales, was up +7.1% on a comparable basis. This reflects
notably the strong growth of the Electronics business line
as well as Industrial Merchant which demonstrated, once
again, its ability to adapt prices to reflect rising costs. Despite
a high basis of comparison, the Healthcare business line
continued to grow. In terms of geographies, growth was particularly
strong in Europe and the Americas.
Regarding efficiencies, the Group continued to take
action to improve performance. In the 1st quarter of 2022, 77
million euros in efficiencies were generated in spite of a highly
inflationary context, and we confirm our target of over 400 million
euros over the year. Cash flow remains high at more than 23% of
sales excluding the energy effect.
Investment decisions over the quarter reached the very
high level of 913 million euros, with several Electronics
projects, particularly in Asia. The 12-month portfolio
of opportunities remains stable at 3.3 billion euros. The
proportion of projects linked to the energy transition exceeds
40%.
These investments will foster future growth. They will also
contribute to ADVANCE, Air Liquide’s new strategic plan for
2025. This plan, which combines financial and extra-financial
performance, is structured around four priorities: delivering
strong financial performance, decarbonizing industry, promoting
progress through technological innovation and acting for all. With
ADVANCE, the Group reaffirms its commitment to sustainable
development while continuing its growth trajectory.
In 2022, assuming no significant economic disruption, Air
Liquide is confident in its ability to further increase its
operating margin and to deliver recurring net profit growth at
constant exchange rates(5).
Appendices - Performance indicators
Performance indicators used by the Group that are not directly
defined in the financial statements have been prepared in
accordance with the AMF position 2015-12 about alternative
performance measures.
The performance indicators are the following:
- Comparable sales change
- Currency, energy and significant scope impacts
- Efficiencies
Definition of Currency, energy and significant scope
impacts
Since industrial and medical gases are rarely exported, the
impact of currency fluctuations on activity levels and results is
limited to euro translation impacts with respect to the financial
statements of subsidiaries located outside the eurozone. The
currency impact is calculated based on the aggregates for the
period converted at the exchange rate for the previous period.
In addition, the Group passes on variations in the cost of
energy (electricity and natural gas) to its customers via indexed
invoicing integrated into their medium and long-term contracts.
This indexing can lead to significant variations in sales (mainly
in the Large Industries Business Line) from one period to another
depending on fluctuations in prices on the energy market.
An energy impact is calculated based on the sales of each
of the main subsidiaries in Large Industries. Their consolidation
allows the determination of the energy impact for the Group as a
whole. The foreign exchange rate used is the average annual
exchange rate for the year N-1. Thus, at the subsidiary level, the
following formula provides the energy impact, calculated for
natural gas and electricity respectively:
Energy impact = Share of sales indexed to energy year (N-1) x
(Average energy price in year (N) - Average energy price in year
(N-1))
This indexation effect of electricity and natural gas does not
impact the operating income recurring.
The significant scope impact corresponds to the impact on
sales of all acquisitions or disposals of a significant size for
the Group. These changes in scope of consolidation are
determined:
- for acquisitions during the period, by deducting from the
aggregates for the period the contribution of the acquisition,
- for acquisitions during the previous period, by deducting from
the aggregates for the period the contribution of the acquisition
between January 1 of the current period and the anniversary date of
the acquisition,
- for disposals during the period, by deducting from the
aggregates for the previous period the contribution of the disposed
entity as of the anniversary date of the disposal,
- for disposals during the previous period, by deducting from the
aggregates for the previous period the contribution of the disposed
entity.
Comparable sales change
Comparable changes for sales exclude the currency, energy and
significant scope impacts described above. For the 1st quarter
2022, the calculations are the following:
(in millions of euros)
Q1 2022
Q1 2022/2021 Published
Growth
Currency impact
Natural gas impact
Electricity impact
Significant scope
impact
Q1 2022/2021 Comparable
Growth
Revenue
Group
6,887
+29.1%
225
607
267
35
+7.9%
Impacts in %
+4.2%
+11.4%
+5.0%
+0.6%
Gas & Services
6,590
+29.1%
218
607
267
35
+7.1%
Impacts in %
+4.2%
+11.9%
+5.3%
+0.6%
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...).
The slideshow that accompanies this release
is available as of 9:00 am (Paris time) at www.airliquide.com.
Throughout the year, follow Air Liquide on Twitter:
@AirLiquideGroup.
UPCOMING EVENTS
Annual General Meeting of Shareholders: May 4, 2022
Dividend Ex-coupon Date: May 16, 2022
Dividend Payout Date: May 18, 2022
2021 First Half Revenue and Results: July 28, 2022
A world leader in gases, technologies and services for Industry
and Health, Air Liquide is present in 75 countries with
approximately 66,400 employees and serves more than 3.8 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 23 billion euros in
2021. Air Liquide is listed on the Euronext Paris stock exchange
(compartment A) and belongs to the CAC 40, CAC 40 ESG, EURO STOXX
50 and FTSE4Good indexes.
________________________ 1 Operating margin excluding energy
passthrough impact. Recurring net profit excluding exceptional and
significant transactions that have no impact on the operating
income recurring, and excluding the impact of any US tax reform in
2022. 2 Compound Annual Growth Rate (CAGR) of sales on a comparable
basis over the 2021-2025 period 3 See definition in Appendix. 4 See
definition in Appendix. 5 Operating margin excluding energy
passthrough impact. Recurring net profit excluding exceptional and
significant transactions that have no impact on the operating
income recurring, and excluding the impact of any US tax reform in
2022.
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Investor Relations IRTeam@airliquide.com
Media Relations media@airliquide.com
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