PARIS--(BUSINESS WIRE)--Regulatory News:

Air Liquide (Paris:AI):

Commenting on sales in the third quarter of 2024, François Jackow, Chief Executive Officer of the Air Liquide Group, stated:

"Air Liquide is continuing its trajectory and once again delivered a solid quarter. In a difficult market environment, our sales increased, demonstrating the resilience of our business model. We continued to improve our margin and our investment decisions reached a record level, paving the way for long-term growth. Through the tangible solutions we provide to our customers, our Group supports major transformations, such as the energy transition and those accelerated by digital technology and Artificial Intelligence, which are key growth drivers.

At 6.8 billion euros in the third quarter of 2024, our Group's revenue was up +3.3%(1) on a comparable basis (-0.7% as published, reflecting a negative currency impact and lower energy prices, which variations are passed through to our customers), an increase compared to the previous quarter (+3.1%). Gas & Services, which represent 95% of Group revenue, were up +3.6%(1) on a comparable basis: all activities are growing, demonstrating the strength of our diversified business model. Healthcare in particular increased sharply by +9%(1) on a comparable basis. Geographically, the Americas and Asia were particularly dynamic, with respective growth of +8%(1) and +4%.

Air Liquide also continued to improve its performance. The transformation plan announced in July has now entered the execution phase across the entire Group, in particular through the simplification of our organization. Group efficiencies, up +10%, reached a record level of 353 million euros at the end of September. We also continued the dynamic management of our business portfolio, while adjusting our prices in Industrial Merchant thanks to our ability to create value. All of these actions contributed to the continued improvement of +100 basis points in the Group's operating margin excluding the energy impact since the beginning of the year, outpacing our ADVANCE plan, whose performance ambition was raised early in the year.

Paving the way for future growth, our investment momentum is particularly strong. Well diversified, our investment backlog was still at the very high level of 4.2 billion euros in this third quarter. Reaching a record level, investment decisions amounted to 1.4 billion euros with major projects in Large Industries and Electronics. 12-month investment opportunities remained at a high level of more than 4 billion euros, driven by the transformations that the Group accompanies, whether in the energy transition - for more than 40% of them - or in the field of electronics and semiconductors.

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)."

Group revenue amounted to 6,762 million euros in the 3rd quarter 2024 and posted growth of +3,3% compared to the 3rd quarter 2023, demonstrating the resilience of the portfolio of activities in a challenging environment. Growth was up slightly sequentially compared to the first two quarters of the year. The contribution of Argentina(3) to comparable growth was +2.0%. The Group's published revenue decreased slightly by -0.7%, impacted by unfavorable energy (-0.9%) and currency (-3.1%) impacts. There was no significant scope impact.

Gas & Services revenue in the 3rd quarter of 2024 reached 6,445 million euros, up by +3.6% on a comparable basis (including a contribution of +2.0% from Argentina).

All activities grew(4) in the 3rd quarter of 2024. Revenue from Large Industries posted an increase of +2.8%, supported by the start-up of two large units at the beginning of the year and the strengthening of demand, particularly in Chemicals in the United States. This growth was impacted by the divestiture of a cogeneration unit in Europe in early January and customers maintenance turnarounds. Development continued in the Industrial Merchant business (+1.7%) in the 3rd quarter 2024 with a solid price effect of +4.1% offsetting slightly lower gas volumes and a marked decline in Hardgoods sales in the United States. In Electronics (+5.9%), all segments contributed to growth, with the exception of Specialty Materials. In a difficult industrial context, the Healthcare business (+9.2%) was the main contributor to the growth in the 3rd quarter. It benefited from the dynamic development of Home Healthcare and the increase in volumes and prices of medical gases in an inflationary environment.

• In the Americas, Gas & Services revenue amounted to 2,562 million euros and all businesses contributed to the strong growth of +8.2% (including the contribution of Argentina for +5.1%). Large Industries (+11.6%) benefited from the start-up of a major unit at the beginning of the year and the strengthening of demand notably in the United States. The increase in Industrial Merchant sales (+4.7%) was supported by a price effect that remained high (+6.9%). Growth was dynamic in Healthcare (+25.3%). In the Electronics business (+12.5%), sales of Carrier Gases and of Equipment & Installation posted double-digit growth.
• Revenue in Europe was down -1.5% in the 3rd quarter of 2024 at 2,247 million euros. Revenue in Large Industries (-3.6%) would be up slightly excluding the divestiture of a cogeneration unit in the 1st quarter. In Industrial Merchant (-2.3%), volumes contracted but the price effect improved sequentially to -0.3%. The Healthcare business posted solid sales growth (+3.0%), supported by the development of Home Healthcare and medical gases.

• The Asia-Pacific region returned to growth (+4.1%) in the 3rd quarter of 2024 with revenue of 1,340 million euros. Sales in Large Industries (+6.6%) benefited in particular from the start-up of a large hydrogen unit in China in March. Revenue in Industrial Merchant (-1.8%) was impacted by the marked decline in helium sales in China, while sales in the rest of Asia increased slightly. The dynamism of Carrier Gases and Advanced Materials were the main contributors to growth in Electronics (+6.8%).
• Revenue in the Middle East & Africa region increased by +1.1% to 296 million euros in the 3rd quarter of 2024. It increased by +6.5% excluding the divestiture of businesses in 12 African countries finalized in July.

Global Markets & Technologies posted a -4.6% decrease in revenue on a comparable basis to 207 million euros in the 3rd quarter of 2024. Excluding the divestiture of the technological activities for the Aeronautics sector in the 1st quarter, revenue from the business was stable compared to the 3rd quarter of 2023.

Consolidated revenue from Engineering & Construction amounted to 110 million euros in the 3rd quarter and remained stable (-0.0%) compared to the 3rd quarter of 2023. Consolidated revenue excludes internal projects, in particular for Large Industries and Electronics, which are growing.

Industrial and financial investment decisions saw a record level of 1.4 billion euros in the 3rd quarter of 2024, thus exceeding 3.0 billion euros since the beginning of the year. The investment backlog stood at a very high level of 4.2 billion euros.

The additional contribution to sales of unit start-ups and ramp-ups totaled 185 million euros at the end of the 3rd quarter.

The portfolio of 12-month investment opportunities remained at the very high level of 4.0 billion euros at the end of September 2024 and the portfolio of opportunities at more than 12 months is continuing to grow and has reached a very high level.

The operating margin (OIR to revenue) in the nine first months of the year posted a strong improvement of +100 basis points excluding the energy impact(5), driven by the three levers which are the efficiencies, price management and portfolio optimization.

Efficiencies(6) totaled 120 million euros in the 3rd quarter. They amounted to a record level of 353 million euros in the first nine months of the year, up sharply by +10.3% compared to the same period in 2023. They are well ahead in respect of the annual target of 400 million euros. In an inflationary environment, the Group continued its active price management. Thus, the price impact in the Industrial Merchant business stood at +4.1% in the 3rd quarter 2024 and was in addition to the price increases of +18.0% and +6.5% in the 3rd quarters of 2022 and 2023 respectively. During the first nine months of the year, the Group continued its active portfolio management with 14 acquisitions and 5 divestitures.

Cash flows from operating activities before changes in working capital reached 1,581 million euros in the 3rd quarter 2024, up +4.0% excluding current taxes and +2.4% as published.

Net debt amounted to 9,615 million euros, a decrease of 541 million euros compared to 10,156 million euros as of June 30, 2024.

In terms of extra-financial performance, the Group started up two Air Separation Units in China which were electrified and which had previously consumed steam produced by the customer from coal. This industrial transformation reduces CO2 emissions (scope 2) by approximately 370,000 metric tonnes per year. Air Liquide has also decided to invest in Air Separation Units that will supply oxygen to customers producing essential elements for the energy transition.

Analysis of 3rd quarter 2024 revenue

REVENUE

Group

Group revenue amounted to 6,762 million euros in the 3rd quarter 2024 and posted growth of +3,3% compared to the 3rd quarter 2023, demonstrating the resilience of the portfolio of activities in a challenging environment. Growth was up slightly sequentially compared to the first two quarters of the year. The contribution of Argentina(7) to comparable growth was +2.0%. Global Markets & Technologies sales were down by -4.6% due in particular to the divestiture of the technological activities for the Aeronautics sector. Revenue from Engineering & Construction with third-party customers was stable (-0.0%), while project activity for the Group grew.

The Group's published revenue decreased slightly by -0.7%, impacted by unfavorable energy (-0.9%) and currency (-3.1%) impacts. There was no significant scope impact.

Gas & Services

Gas & Services revenue in the 3rd quarter of 2024 reached 6,445 million euros, up by +3.6% on a comparable basis (including a contribution of +2.0% from Argentina).

All businesses grew in the 3rd quarter of 2024. Revenue from Large Industries posted an increase of +2.8%, supported by the start-up of two large units at the beginning of the year and the strengthening of demand, particularly in Chemicals in the United States. This growth was impacted by the divestiture of a cogeneration unit in Europe in early January and customer maintenance turnarounds. Development continued in the Industrial Merchant business (+1.7%) in the 3rd quarter 2024 with a solid price effect of +4.1% offsetting slightly lower gas volumes and a marked decline in Hardgoods sales in the United States. In Electronics (+5.9%), all segments contributed to growth, with the exception of Specialty Materials. In a difficult industrial context, the Healthcare business (+9.2%) was the main contributor to the growth in the 3rd quarter. It benefited from the dynamic development of Home Healthcare and the increase in volumes and prices of medical gases in an inflationary environment.

Published revenue for Gas & Services was down -0.6% in the 3rd quarter of 2024, penalized by unfavorable currency (-3.3%) and energy (-0.9%) impacts. There was no significant scope impact in the 3rd quarter of 2024.

Americas

In the Americas, Gas & Services revenue amounted to 2,562 million euros and all activities contributed to the strong growth of +8.2% (including the contribution of Argentina for +5.1%). Large Industries (+11.6%) benefited from the start-up of a major unit at the beginning of the year and the strengthening of demand notably in the United States. The increase in Industrial Merchant sales (+4.7%) was supported by a price effect that remained high (+6.9%). Growth was dynamic in Healthcare (+25.3%). In the Electronics business (+12.5%), sales of Carrier Gases and of Equipment & Installation posted double-digit growth.

• Revenue from Large Industries posted strong growth of +11.6% in the 3rd quarter of 2024 despite customer turnarounds. The start-up of a major unit at the beginning of the year and the strengthening of demand from Chemicals customers were the main contributors to the sharp increase in air gas sales in the United States. In North America, the sale of electricity from cogeneration units and of hydrogen also increased. In Latin America, hydrogen volumes were down due to the nationalization of a production unit in Mexico at the end of 2023.
• Sales in the Industrial Merchant business posted an increase of +4.7% in the 3rd quarter. The price effect (+6.9%) remained high. It benefited from proactive price campaigns, particularly in the United States (50% of the +6.9% increase in the 3rd quarter) in the 1st semester and in Argentina to counter hyperinflation (40% of the increase). Gas volumes remained resilient, while Hardgoods posted a marked decline. Growth in industrial markets was still mainly driven by prices, but volumes increased in the Technology, Research, Chemicals and Food sectors.
• In the Healthcare business, sales rose by +25.3% in the 3rd quarter of 2024, driven by the strong increase in prices in the United States (+5.3%) and in Argentina in a context of hyperinflation. Sales growth outside Argentina was significantly higher than that of the 2nd quarter of 2024. In the United States, the volumes of medical gases increased, particularly in Proximity care. In Latin America, the number of patients in Home Healthcare as well as the volumes of medical gases increased significantly.
• Electronics saw an increase of +12.5% in revenue in the 3rd quarter of 2024. Carrier Gas sales posted double-digit growth, supported by the start-up of a nitrogen generator and higher helium volumes. Equipment and Installation sales remained very high, while Materials sales were still down.

Europe

Revenue in Europe was down -1.5% in the 3rd quarter of 2024 at 2,247 million euros. Sales in Large Industries (-3.6%) would be up slightly excluding the divestiture of a cogeneration unit in the 1st quarter. In Industrial Merchant (-2.3%), volumes contracted but the price effect improved sequentially to -0.3%. The Healthcare business posted solid sales growth (+3.0%), supported by the development of Home Healthcare and medical gases.

• In the 3rd quarter of 2024, revenue in Large Industries was down -3.6%. Excluding the divestiture of a cogeneration unit in the 1st quarter (impact of approximately -5.5%), it would have been up slightly. Hydrogen volumes for Refining and Chemicals rose slightly. Air gas sales to Steel customers remained stable overall at a low level.
• Sales in the Industrial Merchant business declined by -2.3% following growth of +6.5% in the 3rd quarter of 2023. The price effect improved sequentially at -0.3%. The decline in the price of bulk gas (indexed to energy prices for an estimated decrease of -5.7%) was offset by proactive actions to increase prices (for +5.4%), supported by innovation and quality of customer service. Volumes remained down but the trend improved compared to the previous quarter. Volumes were resilient in the Construction, Food and Water Treatment sectors.
• In the Healthcare business, sales increased by +3.0% in the 3rd quarter. Home Healthcare continued its growth, with a sharp increase in the number of patients cared for, particularly for sleep apnea and diabetes. Growth in sales of medical gases remained solid, supported by a balanced contribution from volumes and prices in line with inflation.

Asia-Pacific

The Asia-Pacific region returned to growth (+4.1%) in the 3rd quarter of 2024 with revenue of 1,340 million euros. Sales in Large Industries (+6.6%) benefited in particular from the start-up of a large hydrogen unit in China in March. Revenue in Industrial Merchant (-1.8%) was impacted by the marked decline in helium sales in China, while sales in the rest of Asia increased slightly. The dynamism of Carrier Gases and Advanced Materials were the main contributors to growth in Electronics (+6.8%).

• Revenue in Large Industries saw a sharp rise of +6.6%. Sales benefited from the start-up of a large hydrogen production unit in China in March and fewer customer shutdowns than in previous quarters.
• In Industrial Merchant, revenue was down -1.8%. The price effect, impacted by the decline in helium prices, particularly in China, remained slightly negative (-0.7%) but improved sequentially. In China, volumes of gas in cylinders were up sharply, also supported by recent acquisitions. In the rest of Asia, sales increased slightly, helped by higher volumes and a positive price effect. Volumes were up in Secondary Electronics, Manufacturing and Food.
• Revenue in Electronics increased by +6.8% compared to a relatively low basis of comparison in the 3rd quarter of 2023. All business segments, with the exception of Specialty Materials, contributed to this growth. The start-up of several production units since the beginning of the year contributed to the strong increase in Carrier Gas sales. Revenue in Advanced Materials saw double-digit growth, while sales in Equipment & Installation were at a high level.

Middle East and Africa

Revenue in the Middle East & Africa region increased by +1.1% to 296 million euros in the 3rd quarter of 2024. It increased by +6.5% excluding the divestiture of businesses in 12 African countries finalized in July. Large Industries benefited from resilient activity in the region. In the 4th quarter of 2024, a major customer in Saudi Arabia scheduled an extended shutdown for maintenance. Industrial Merchant revenue was down due to the divestiture of businesses in 12 African countries at the end of July 2024. Excluding this divestiture, activity posted dynamic growth, supported by the increase in prices (+6.7%). In Healthcare, the rise in medical gas volumes in South Africa and the development of diabetes treatment in Saudi Arabia were the main contributors to revenue growth.

Investor Relations
IRTeam@airliquide.com
+33 1 40 62 51 50

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UPCOMING EVENTS
2024 Full Year results:
February 21, 2025