Air Liquide: H1 2024 Results: Strong Margin Improvement and Major Projects to Prepare the Future

In this article:

PARIS, July 26, 2024--(BUSINESS WIRE)--Regulatory News:

Air Liquide (Paris:AI):

Key Figures (in millions of euros)

H1 2024

2024/2023 as
published

2024/2023
comparable(a)

Group Revenue

13,379

-4.3%

+2.6%

of which Gas & Services

12,796

-4.5%

+2.6%

Operating Income Recurring (OIR)

2,601

+4.9%

+10.6%

Group OIR Margin

19.4%

+170 bps

 

Variation excluding energy(b)

 

+100 bps

 

Gas & Services OIR Margin

21.2%

+190 bps

 

Variation excluding energy(b)

 

+110 bps

 

Net Profit (Group Share)

1,681

-2.4%

 

Net Profit Recurring (Group Share)(c)

1,681

+3.3%

 

Earnings per Share (in euros)

2.92

-2.3%

 

Cash flow from operating activities before changes in working capital

3,155

-1.7%

 

Net Debt

€10.2 bn

 

 

Return on Capital Employed after tax - ROCE

9.8%

-20 bps

 

Recurring ROCE(d)

10.7%

+50 bps

 

 

(a) Change excluding the currency, energy and significant scope impacts, see reconciliation and impact of Argentina in appendix.

(b) See reconciliation in appendix.

(c) Excluding exceptional and significant transactions that have no impact on the operating income recurring, see reconciliation in appendix.

(d) Based on the recurring net profit, see reconciliation in appendix.

Commenting on the results in the first half of 2024, Fran?ois Jackow, Chief Executive Officer of the Air Liquide Group, stated:

"Air Liquide once again delivered a very solid financial performance in the first half of 2024 with a significant increase in its operating margin, supported by the acceleration of structural efficiencies. In a persistently subdued market environment, our Group recorded growth in sales on a comparable basis, reflecting the solidity of our business model. We are successfully continuing the rollout of our ADVANCE strategic plan, for which we raised the margin ambition at the beginning of the year. At a time when our Group has never had so many opportunities related to the energy transition and the growth of digital and artificial intelligence, we are also preparing for the future, simplifying our organization to improve our performance and developing major projects that will strengthen our long-term growth momentum."

In the first half of 2024, Group sales were up by +2.6% on a comparable basis(1), with a sequential improvement between the first and second quarters. On a published basis, sales were at -4.3%, due to negative currency impacts and lower energy prices - for which variations are contractually passed through to Large Industries customers. Gas & Services, which represent more than 95% of Group revenue, saw an increase of +2.6%(1) on a comparable basis in the first half of 2024, supported in particular by the dynamism of the Healthcare business and the Americas.

In line with its ADVANCE plan and raised performance ambition, Air Liquide achieved in the first half of 2024 a significant improvement of +100 basis points in its operating margin excluding the energy impact. Efficiencies have now reached 233 million euros, thanks to approximately 1,000 operational efficiency projects, to business portfolio management and to price adjustments in Industrial Merchant, based on the ability of the teams to create added value for our customers.

The Group’s net profit recurring(2) excluding currency impact rose by +16%, and +5% excluding the contribution of Argentina in the first half of 2024. Our cash flow(3) remained very strong with a ratio to sales of 24%, enabling financing of the investments needed for future growth. At 10.7% at the end of June, recurring ROCE(4) has continued to improve, exceeding 10% in line with the ADVANCE objectives.

The investment backlog remains at a very high level of 4.1 billion euros, and is well diversified in terms of geographies. The portfolio of 12-month investment opportunities increased to 4 billion euros, mainly in the Americas and Europe. More than 40% of these are related to the energy transition. The Group is thus successfully pursuing the development of large-scale projects, in particular in the fields of decarbonization 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(5).

Highlights

  • Corporate

    • Governance changes within the Executive Committee

      • Adam Peters, Chief Executive Officer of Air Liquide in North America, appointed member of the Group Executive Committee.

      • As part of the simplification of the Group organization to meet growing needs of the market and increase its performance, an adjusted governance was announced with changes effective September 1, 2024.

    • The divestiture of Air Liquide’s activities in 12 countries in Africa was finalized on July 22, 2024, in line with the agreement announced in March 2024, illustrating the Group’s strategy of regular review of its business portfolio.

  • Industry and Decarbonization

    • Air Liquide was selected for investment of up to 850 million US dollars in the largest low-carbon oxygen production in the Americas, as part of a long-term agreement with ExxonMobil for its low-carbon hydrogen project in Baytown, Texas.

    • Support from the European Union for D'Artagnan through a grant of more than 160 million euros to enable Air Liquide and Dunkerque LNG to decarbonize the Dunkirk basin through a CO2 infrastructure project.

    • Air Liquide's innovative CO2 liquefaction technology, Cryocap? LQ, was selected by Stockholm Exergi, an energy supplier in Sweden, to contribute to its bioenergy project.

    • As part of the renewal of a long-term agreement with Dow, Air Liquide will invest nearly 40 million euros to increase the efficiency and reduce the CO2 emissions of its industrial gas production site in Stade, Germany.

  • Electronics

    • In the framework of a long-term contract, Air Liquide will invest more than 250 million US dollars to build a production unit in Idaho in the United States, which will supply Micron Technology, Inc with high purity industrial gases for the manufacture of memory chips, driven by the growth of Artificial Intelligence.

    • Investment of more than 50 million euros to build an innovative nitrogen production unit in Singapore while transforming existing facilities in the United States to drive greater energy efficiency in the supply of ultra-pure gases to GlobalFoundries.

  • Sustainable development

    • 500 million euro green bond issue to finance projects in the energy transition, in line with Air Liquide’s ambition to combine growth and sustainable development.

    • Announcement by Air Liquide and Sasol of long-term contracts (PPA) with Enel Green Power RSA for a total capacity of 110 MW of renewable electricity for the Sasol site in Secunda, South Africa.

    • Continued expansion of Air Liquide’s biomethane production capacities in the United States, with the construction of two production units based on a circular economy approach.

    • Announcement by Air Liquide and TotalEnergies of their TEAL Mobility joint venture to create the leader in hydrogen distribution with a network of 100 truck stations in Europe.

  • Paris 2024 Olympic and Paralympic Games

    • Announcement by Air Liquide, Official Hydrogen Supporter of Paris 2024, of the reopening of the hydrogen refueling station on Place de l’Alma in the heart of Paris, a showcase for a network of stations that will supply a fleet of 500 hydrogen vehicles.

    • Group support for six athletes - three women and three men, representing five Olympic and Paralympic disciplines on three continents.

Group revenue totaled 13,379 million euros in the 1st half of 2024, posting a growth of +2.6% on a comparable basis. The contribution of Argentina(6) to the comparable growth is of +2.1%. The Group’s published sales were down -4.3% in the 1st half of 2024, affected by unfavorable energy (-3.5%) and currency (-3.4%) impacts. There was no significant scope impact.

Gas & Services revenue reached 12,796 million euros in the 1st half, up by +2.6% on a comparable basis (including a contribution of Argentina of +2.2%). As published revenue for Gas & Services were down -4.5% in the 1st half of 2024, penalized by unfavorable energy (-3.7%) and currency (-3.4%) impacts. There was no significant scope impact in the 1st half.

Growth(7) in the Industrial Merchant business (+2.0%) continued in the 1st half of 2024 with a price effect of +4.2% in addition to the sharp increase (+10.7%) in the 1st half of 2023, and gas volumes down slightly. Revenue from Large Industries (+1.1%) benefited from the start-up of two large units in the 1st quarter and stronger demand from Chemicals customers in Europe and the United States in the 2nd quarter, but was impacted by the sale of a cogeneration unit in Europe and by customer turnarounds. The Healthcare business was the growth driver in the 1st half-year, with an increase in sales of +9.1%, supported by the growth of all therapies in Home Healthcare and an increase in the price of medical gases in an inflationary environment. Finally, in Electronics (+0.3%), sales returned to growth in the 2nd quarter and offset the decline observed in the 1st quarter reflecting the high basis of comparison at the beginning of 2023.

  • Gas & Services revenue in the Americas reached 5,175 million euros in the 1st half of 2024 and increased by +7.9% (including the contribution of Argentina for +5.7%). All businesses grew in the region. Large Industries (+8.1%) benefited from the start-up of a production unit and demand that firmed up in the 2nd quarter. In Industrial Merchant, revenue increased by +5.5%, supported by a price effect (+7.3%) that strengthened in the 2nd quarter. The growth was very strong in Healthcare (+23.3%). In the Electronics business (+9.2%), sales of Carrier Gases and of Equipment & Installations posted double-digit growth.

  • In Europe, sales were down slightly by -1.3% in the 1st half of 2024 and reached 4,475 million euros. In Large Industries (-1.7%), excluding the sale of a cogeneration unit in the first quarter, revenue was up. In Industrial Merchant (-5.2%), volumes contracted but the price effect improved in the 2nd quarter. The Healthcare business posted solid sales growth (+4.4%), supported by the development of Home Healthcare and Medical Gases.

  • Revenue in the Asia Pacific region was nearly stable (-0.8%) in the 1st half of 2024 and amounted to 2,593 million euros. In Large Industries (-0.9%), the start-up of a new unit in March partially offset customer turnarounds. Industrial Merchant’s sales (-0.6%) were impacted by the marked decline in helium sales, which was largely offset by the increase in volumes of other gases. Electronics revenue was also flattish (-0.6%), with growth in Carrier Gases and Advanced Materials sales offsetting the decline in Equipment & Installation sales.

  • Revenue in the Middle East & Africa region increased sharply by +7.1% to 553 million euros in the 1st half of 2024. All business lines grew.

Sales in the Global Markets & Technologies business amounted to 386 million euros in the 1st half of 2024, a decrease of -2.0% due in particular to the divestiture of the technological activities for the Aeronautics sector. Order intake amounted to 416 million euros.

Consolidated revenue from Engineering & Construction totaled 197 million euros in the 1st half of 2024, up +9.9% compared to the 1st half of 2023. Order intake for the Group and third-party customers amounted to 557 million euros in the 1st half.

The Group's operating income recurring (OIR) reached 2,601 million euros in the 1st half of 2024. It increased by +4.9% and by +10.6% on a comparable basis(8), which is significantly higher than the comparable sales growth of +2.6%.

The operating margin (OIR to revenue) stood at 19.4%, a strong improvement of +100 basis points excluding the energy impact (no impact from Argentina).

Efficiencies(9) contributed to this margin improvement and amounted to 233 million euros, up sharply by +13.1% compared to the 1st half of 2023. Management of prices and of the portfolio of activities also contributed to the margin improvement.

Net profit (Group share) amounted to 1,681 million euros in the 1st half of 2024, down -2.4% as published. In the absence of significant non-recurring items(9) in the 1st half of 2024, net profit recurring (Group share)(9) was also 1,681 million euros, up +3.3% on a reported basis. Excluding currency impact, net profit recurring (Group share)(9) was up by +16.0% and increased by +5.0% when excluding the contribution of Argentina. Net earnings per share amounted to 2.92 euros per share, a decline of -2.3% compared with the 1st half of 2023, in line with the change in net profit (Group share) as published. Recurring net earnings per share were up +3.2%.

Cash flows from operating activities before changes in working capital amounted to 3,155 million euros during the 1st half of 2024, down by -1.7%. This amounted to a high level of 23.6% of sales. Calculated from a net profit showing a change of -2.4% as published, the -1.7% decrease of the cash flows from activities before changes in working capital is mainly explained by higher current taxes in the 1st half of 2024 compared with those of 2023 which benefited from favorable exceptional items.

Net debt at June 30, 2024 reached 10,156 million euros, a decrease of 394 million euros compared with June 30, 2023 and an increase of 935 million euros compared with December 31, 2023, following the payment of more than 1.7 billion euros in dividends in May. The net debt-to-equity ratio, adjusted for the seasonal effect of the dividend payment, reached 35.2%.

At 10.7%, recurring ROCE(9) remained above the target of more than 10% in the Advance strategic plan, and was up sharply by +50 basis points compared to the 1st half of 2023.

In the 1st half-year, the Group continued to decarbonize its assets. In particular, Air Liquide announced long-term power purchase agreements (PPAs) for the supply of 500 GWh of renewable electricity per year and has decided on the electrification of a third Air Separation Unit in China. A CryocapTM carbon capture unit is under construction to decarbonize the Group’s largest hydrogen production unit in Europe. Furthermore, in the 1st half-year, Air Liquide continued to develop projects that will significantly reduce the carbon footprint of its customers.

In the 1st half of 2024, industrial and financial investment decisions amounted to 1,630 million euros.

The investment backlog maintained a very high level of 4.1 billion euros in the 1st half of 2024, up compared to 3.5 billion euros in the 1st half of 2023.

The additional contribution to sales of unit start-ups and ramp-ups totaled 108 million euros in the 1st half of 2024.

The portfolio of 12-month investment opportunities reached a record level of 4.0 billion euros at the end of June 2024. This reflects the dynamism of project development, particularly in the energy transition which represents more than 40% of the portfolio, and in the Electronics activity.

The Air Liquide Board of Directors met on July 25, 2024. During this meeting, the Board reviewed the consolidated financial statements ending June 30, 2024. Limited review procedures were completed with respect to the consolidated interim financial statements, and an unqualified review report is in the process of being issued by the statutory auditors.

Table of Contents of the activity report

H1 2024 PERFORMANCE 7

Key Figures 7
Income Statement 8
Change in Net debt 18
Extra-financial performance 19

INVESTMENT CYCLE 20

RISK FACTORS 22

OUTLOOK 22

APPENDICES 23

Performance indicators 23
Calculation of performance indicators (Semester) 24
Calculation of performance indicators (Quarter) 27
2nd quarter 2024 revenue 27
Geographic and segment information 28
Consolidated income statement 29
Consolidated balance sheet 30
Consolidated cash flow statement 31
Sales, Operating Income Recurring and investments key figures synthesis 33

H1 2024 PERFORMANCE

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.

Key Figures

(in millions of euros)

H1 2023

H1 2024

2024/2023
published
change

2024/2023
comparable
change(a)

Total Revenue

13,980

13,379

-4.3%

+2.6%

Of which Gas & Services

13,405

12,796

-4.5%

+2.6%

Operating Income Recurring (OIR)

2,481

2,601

+4.9%

+10.6%

Group OIR Margin

17.7%

19.4%

+170 bps

 

Variation excluding energy(b)

 

 

+100 bps

 

Other Non-Recurring Operating Income and Expenses

33

(87)

 

 

Net Profit (Group Share)

1,722

1,681

-2.4%

 

Net Profit Recurring (Group share)(c)

1,627

1,681

+3.3%

 

Net earnings per share (in euros)(d)

2.99

2.92

-2.3%

 

Cash flow from operating activities before changes in working capital

3,211

3,155

-1.7%

 

Net Capital Expenditure(e)

1,466

1,570

 

 

Net Debt

€10.6 bn

€10.2 bn

 

 

Net Debt to Equity ratio(f)

39.2%

35.2%

 

 

Return on Capital Employed after tax - ROCE

10.0%

9.8%

-20 bps

 

Recurring ROCE(g)

10.2%

10.7%

+50 bps

 

(a) Change excluding the currency, energy and significant scope impacts, see reconciliation and impact of Argentina in appendix.

(b) See reconciliation in appendix.

(c) Excluding exceptional and significant transactions that have no impact on the operating income recurring, see reconciliation in appendix.

(d) Adjusted following the free share attribution in June 2024.

(e) Including transactions with minority shareholders.

(f) Adjusted to spread the dividend payment in the 1st half out over the full year.

(g) Based on the recurring net profit, see reconciliation in appendix.

Income Statement

REVENUE

Revenue

(in millions of euros)

H1 2023

 

H1 2024

2024/2023
published
change

2024/2023
comparable
change

Gas & Services

13,405

 

12,796

-4.5%

+2.6%

Engineering & Construction

180

 

197

+9.3%

+9.9%

Global Markets & Technologies

395

 

386

-2.3%

-2.0%

TOTAL REVENUE

13,980

 

13,379

-4.3%

+2.6%

 

Revenue by quarter

(in millions of euros)

Q1 2024

 

Q2 2024

Gas & Services

6,358

 

6,438

Engineering & Construction

92

 

105

Global Markets & Technologies

200

 

186

TOTAL REVENUE

6,650

 

6,729

2024/2023 Group published change

-7.3%

 

-1.2%

2024/2023 Group comparable change

+2.1%

 

+3.1%

2024/2023 Gas & Services comparable change

+2.0%

 

+3.4%

Group

Group revenue totaled 13,379 million euros in the 1st half of 2024, posting a growth of +2.6% on a comparable basis. The contribution of Argentina(10) to the comparable growth is of +2.1%. Global Markets & Technologies sales were down by -2.0% due in particular to the divestiture of the technological activities for the Aeronautics sector. Engineering & Construction revenue from third party customers increased by +9.9%.

The Group’s published sales were down -4.3% in the 1st half of 2024, affected by unfavorable energy (-3.5%) and currency (-3.4%) impacts. There was no significant scope impact.

Gas & Services

Gas & Services revenue reached 12,796 million euros in the 1st half, up by +2.6% on a comparable basis (including a contribution of Argentina of +2.2%).

Growth in the Industrial Merchant business (+2.0%) continued in the 1st half of 2024 with a price effect of +4.2% in addition to the sharp increase (+10.7%) in the 1st half of 2023, and gas volumes down slightly. Revenue from Large Industries (+1.1%) benefited from the start-up of two large units in the 1st quarter and stronger demand from Chemicals customers in Europe and the United States in the 2nd quarter, but was impacted by the sale of a cogeneration unit in Europe and by customer turnarounds. The Healthcare business was the growth driver in the 1st half-year, with an increase in sales of +9.1%, supported by the growth of all therapies in Home Healthcare and an increase in the price of medical gases in an inflationary environment. Finally, in Electronics (+0.3%), sales returned to growth in the 2nd quarter and offset the decline observed in the 1st quarter reflecting the high basis of comparison at the beginning of 2023.

As published revenue for Gas & Services were down -4.5% in the 1st half of 2024, penalized by unfavorable energy (-3.7%) and currency (-3.4%) impacts. There was no significant scope impact in the 1st half.

Revenue by geography and business line

(in millions of euros)

H1 2023

 

H1 2024

2024/2023
published
change

2024/2023
comparable
change

Americas

5,159

 

5,175

+0.3%

+7.9%

Europe

4,975

 

4,475

-10.1%

-1.3%

Asia Pacific

2,763

 

2,593

-6.1%

-0.8%

Middle East & Africa

508

 

553

+8.8%

+7.1%

GAS & SERVICES REVENUE

13,405

 

12,796

-4.5%

+2.6%

Large Industries

4,060

 

3,457

-14.9%

+1.1%

Industrial Merchant

6,050

 

5,999

-0.8%

+2.0%

Healthcare

2,034

 

2,121

+4.3%

+9.1%

Electronics

1,261

 

1,219

-3.4%

+0.3%

Americas

Gas & Services revenue in the Americas reached 5,175 million euros in the 1st half of 2024 and increased by +7.9% (including the contribution of Argentina for +5.7%). All businesses grew in the region. Large Industries (+8.1%) benefited from the start-up of a production unit and demand that firmed up in the 2nd quarter. In Industrial Merchant, revenue increased by +5.5%, supported by a price effect (+7.3%) that strengthened in the 2nd quarter. The growth was very strong in Healthcare (+23.3%). In the Electronics business (+9.2%), sales of Carrier Gases and of Equipment & Installations posted double-digit growth.

  • Large Industries saw revenue growth of +8.1% in the 1st half-year 2024. In the United States, air gas volumes benefited from the start-up of a major new unit in the 1st quarter. In the 2nd quarter, demand for hydrogen strengthened in the Chemicals sector and there were fewer customer maintenance turnarounds than at the beginning of the year. 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 +5.5%. The price effect (+7.3%) increased over the half-year, from +6.5% in the 1st quarter to +8.1% in the 2nd quarter. It benefited from proactive price campaigns, particularly in the United States (50% of the +8.1% increase in the 2nd quarter) and in Argentina to counter hyperinflation (40% of the +8.1% increase). Gas volumes (excluding hardgoods) remained resilient. In the United States, the trend is improving in most industrial markets, which remain price-driven. Gas volumes were up mainly in the Aeronautics and Research sectors.

  • In the Healthcare business, sales rose sharply by +23.3% in the 1st half-year 2024, driven by the strong increase in prices in the United-States (+5.8%) in Proximity care and in Argentina in a context of hyperinflation. In the 1st semester, medical gas volumes were slightly up in the United-States and the number of new Home Healthcare patients increased in Canada and in Latin America.

  • Electronics posted a sharp increase in revenue of +9.2% in the 1st half-year. Carrier gas sales saw a double-digit increase, supported by the ramp-up of new units and the increase in helium volumes. Sales of Equipment & Installations reached a historically high level in the 1st half-year 2024, while sales of materials remained down.

 

Americas

  • Air Liquide plans to invest up to 850 million dollars to build, own and operate four Large Modular Air separation units as well as related infrastructure in the framework of a long-term binding agreement with ExxonMobil for its planned low-carbon hydrogen project in Baytown, TX. This will enable Air Liquide to increase its oxygen production capacity by 50% in Texas. Pending final investment decision, this major project would mark the largest industrial investment in the history of the Air Liquide Group. This new Air Liquide Baytown low-carbon platform would deliver primarily vast amounts of low-carbon oxygen and nitrogen to ExxonMobil, and also significant volumes of argon, krypton and xenon to other Air Liquide’s customers, notably in Industrial Merchant. This agreement also leverages existing Air Liquide’s pipelines infrastructure to support low-carbon hydrogen development. Thanks to low-carbon electricity supply and Air Liquide’s innovative solution, the CO2 footprint of oxygen production will be reduced by two-thirds. This major investment would represent the largest low-carbon oxygen production platform in the Americas.

  • Air Liquide will build a new industrial gas production facility in the United States to supply a new fab of one of the world’s leading semiconductor manufacturers. In the framework of a long-term contract, the plant will provide large volumes of high purity industrial gases for the production of memory chips. Air Liquide will invest over 250 million dollars in this state-of-the art production unit.

Europe

In Europe, sales were down slightly by -1.3% in the 1st half of 2024 and reached 4,475 million euros. In Large Industries (-1.7%), excluding the sale of a cogeneration unit in the first quarter, revenue was up. In Industrial Merchant (-5.2%), volumes contracted but the price effect improved in the 2nd quarter. The Healthcare business posted solid sales growth (+4.4%), supported by the development of Home Healthcare and Medical Gases.

  • In the 1st half of 2024, revenue from Large Industries was down by -1.7%. Volumes increased in Chemicals compared to a low level in the 1st half of 2023. They remained stable overall in Steel and Refining. The comparable growth would be positive by excluding the divestiture of a cogeneration unit in the 1st quarter (approximately -4% impact in the 1st half).

  • Sales in the Industrial Merchant business declined by -5.2% following growth of +18.1% in the 1st half of 2023. The price effect (-1.2%) improved in the 2nd quarter (-0.5%) compared to -1.9% in the 1st quarter. The decrease in the price of bulk (indexed to energy prices) was largely 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 down with the exception of liquefied CO2. They increased in the Manufacturing, Automotive and Aeronautics sectors but declined in the Food and Glass industry markets.

  • In the Healthcare business, sales increased by +4.4% in the 1st half-year. Home Healthcare continued its dynamic 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 an inflationary context.

Europe

  • The CO? infrastructure D'Artagnan project of Air Liquide and Dunkerque LNG reached a major milestone and received the support of the European Union. This CO2 transportation and exportation infrastructure is part of the "Cap Décarbonation" initiative, which aims to reduce CO? emissions by 1.5?million tonnes each year in the industrial basin of Dunkirk (France). The D’Artagnan project will include an Air Liquide pipeline to transport CO2 from the sites of capture as well as a terminal located in the port of Dunkirk to liquefy and load CO2 on ships. The first CO2 infrastructure project in France to receive support from the European Union, D’Artagnan would benefit from a grant of more than 160 million euros as part of the CEF-E (Connecting Europe Facility for Energy) funding program if the project is implemented.

Asia Pacific

Revenue in the Asia Pacific region was nearly stable (-0.8%) in the 1st half of 2024 and amounted to 2,593 million euros. In Large Industries (-0.9%), the start-up of a new unit in March partially offset customer turnarounds. Industrial Merchant’s sales (-0.6%) were impacted by the marked decline in helium sales, which was largely offset by the increase in volumes of other gases. Electronics revenue was also flattish (-0.6%), with growth in Carrier Gases and Advanced Materials sales offsetting the decline in Equipment & Installation sales.

  • Large Industries revenue was down slightly by -0.9% in the 1st half of 2024. In China, several customer turnarounds were offset by the contribution of the start-up of a large hydrogen production unit in March. In the rest of Asia, demand was relatively stable.

  • In Industrial Merchant, revenue was nearly stable (-0.6%) with a neutral price effect (+0.1%) in the 1st half-year. It turned negative in the 2nd quarter (-1.1%), impacted by the decrease in helium prices. In China, the Automotive, Manufacturing and Secondary Electronics sectors notably drove volume growth excluding helium; in particular, the volumes of packaged gases increased sharply (+12%). In the rest of Asia, the increase in sales benefited from a positive price effect and an increase in volumes, particularly of bulk.

  • Sales in Electronics were flattish (-0.6%) in the 1st half: down by -1.7% in the 1st quarter compared to a high basis of comparison in 2023, they increased by +0.6% in the 2nd quarter. The increase in Carrier Gases sales, with the start-up of three new units in the 1st half of 2024, and advanced materials, almost completely offset the low sales of Equipment & Installations.

Middle East and Africa

Revenue in the Middle East & Africa region increased sharply by +7.1% to 553 million euros in the 1st half of 2024. All business lines grew. In Large Industries, hydrogen volumes in Saudi Arabia and air gas volumes in Egypt were both high. The sharp growth in Industrial Merchant sales was supported by a strong price effect. 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.

Middle East and Africa

  • Air Liquide has finalized the sale to Adenia Partners Ltd of its activities in the following twelve countries in Africa: Benin, Burkina Faso, Cameroon, Congo, C?te d'Ivoire, Gabon, Ghana, Madagascar, Mali, Democratic Republic of Congo, Senegal and Togo. These activities represent a total annual sales of about 60 million euros (less than 10% of the Group’s sales in Africa).

  • Air Liquide and Sasol have announced new renewable Power Purchase Agreements (PPAs) with Enel Green Power RSA for the long term supply of an additional capacity of 110 MW to Sasol’s Secunda site in South Africa. This is the fourth set of PPAs signed by Air Liquide and Sasol after those announced in 2023. Together, these PPAs represent a total renewable power capacity of around 690 MW. For Air Liquide, these contracts will enable an annual reduction of approximately 1.2 million tonnes in its CO2 emissions and will largely contribute to the objective to reduce the local emissions of its air separation units by 30% to 40% by 2031.

Global Markets & Technologies

Sales in the Global Markets & Technologies business amounted to 386 million euros in the 1st half of 2024, a decrease of -2.0% on a comparable basis. The increase in sales of technological equipment (Turbo-Braytons, biogas equipment, hydrogen refueling stations, etc.) and the increase in hydrogen volumes for mobility in the United States partially offset the impact of the divestiture of the technological activities for the Aeronautical sector at the end of February and the decrease in biogas prices.

Order intake for Group projects and third-party customers amounted to 416 million euros. This includes more than 40 Turbo-Brayton LNG reliquefaction units, special systems for the Electronics and Space industries, and equipment for the transportation and distribution of hydrogen and air gases.

Engineering & Construction

Consolidated revenue from Engineering & Construction totaled 197 million euros in the 1st half of 2024, up +9.9% compared to the 1st half of 2023.

Order intake for the Group and third-party customers amounted to 557 million euros in the 1st half. The first phase of the Group’s major project with ExxonMobil in Baytown, Texas (United States), which involves the construction of four large modular Air Separation Units, contributes to this amount. Order intake also includes installations for the hydrogen supply chain. Group orders represent a large majority of new projects.

OPERATING INCOME RECURRING

Operating income recurring before depreciation and amortization totaled 3,828 million euros, an increase of +3.2% as published compared with the 1st half of 2023. Purchases were down significantly by -13.3%, due to the decrease in energy costs. Purchases of materials and equipment were stable and the increase in personnel costs was limited to +2.1% in an inflationary context. The net balance of other operating income and expenses improved by +0.6%.

Depreciation and amortization amounted to 1,227 million euros and were stable (-0.2%) compared with the 1st half of 2023, with the impact of contract renewals and the end of depreciation and amortization offsetting the start-up of new units.

The Group's operating income recurring (OIR) reached 2,601 million euros in the 1st half of 2024. It increased by +4.9% and by +10.6% on a comparable basis(11), which is significantly higher than the comparable sales growth of +2.6%. The operating margin (OIR to revenue) stood at 19.4%, a strong improvement of +100 basis points excluding the energy impact (no impact from Argentina). The increase was +170 basis points as published due in particular to the accretive effect linked to the decrease in energy costs contractually passed through to Large Industries customers.

Efficiencies(12) contributed to this margin improvement and amounted to 233 million euros, up sharply by +13.1% compared to the 1st half of 2023. The Group's transformation programs accounted for a quarter of the efficiencies and included in particular the rollout of digital resources to support operations and the optimization of the supply chain, the implementation of shared service centers and the reorganization of the Home Healthcare businesses in France. The rollout of a single ERP for the Europe region and a new simplified Group organization will contribute to future efficiencies. Efficiencies related to purchases, which account for more than a quarter of the total, were high despite an inflationary context. In addition, the cross-functional program of continuous improvement actively supported the achievement of more than a third of efficiencies. It includes numerous industrial efficiency projects, deployed thanks to a digital platform to help replicate initiatives and a network of committed experts.

Management of prices and of the portfolio of activities also contributed to the margin improvement.

Efficiencies

  • Capitalizing on its ADVANCE strategic plan for 2025, on an enhanced performance ambition and on a record-high number of investment opportunities, Air Liquide has launched a new Group transformation program to foster agility and improve efficiency. To support this program, the Group announced several organizational and governance changes, to be effective September 1, 2024.

Gas & Services

Operating income recurring for the Gas & Services businesses amounted to 2,719 million euros, an increase as published of +5.1% compared with the 1st half of 2023. The operating margin as published stood at 21.2%, a significant improvement of +110 basis points excluding the energy impact compared with the 1st half of 2023.

Prices in the Industrial Merchant business were up +4.2% in the 1st half, demonstrating the Group’s ability to pass through cost increases. Prices were also up in Large Industries and Healthcare.

Gas & Services Operating margin(a)

H1 2023

H1 2024

2024/2023 excluding
energy impact

Americas

19.9%

21.5%

+120 bps

Europe

17.0%

20.6%

+170 bps

Asia Pacific

22.1%

21.7%

-50 bps

Middle East & Africa

20.0%

21.9%

+320 bps

TOTAL

19.3%

21.2%

+110 bps

 

(a) Operating income recurring / revenue as published

Operating income recurring in the Americas reached 1,112 million euros over the 1st half of 2024, an increase of +8.1% as published. Excluding the energy passthrough impact, the operating margin increased by +120 basis points compared with the 1st half of 2023. The Industrial Merchant business and, to a lesser extent, Healthcare made the strongest contribution, notably through significant efficiencies and price increases.

Operating income recurring in Europe amounted to 922 million euros, an increase as published of +8.9% compared with the 1st half of 2023. Excluding the energy passthrough impact, the operating margin improved very significantly by +170 basis points compared with the 1st half of 2023. In Industrial Merchant, significant efficiencies and accretive price management supported margin growth. The efficiencies generated in Healthcare and the payment of an indemnity by a Large Industries customer also contributed to this.

In Asia Pacific, operating income recurring stood at 564 million euros, a decrease as published of -7.7%. Excluding the energy passthrough impact, the operating margin decreased by -50 basis points. In the 1st half of 2023, the payment of an indemnity by a Large Industries customer contributed significantly to the improvement in the margin. Excluding this exceptional effect in 2023, the operating margin increased in the 1st half of 2024, driven by efficiencies generated in the Industrial Merchant, Electronics and Large Industries businesses, despite the dilutive effect of lower helium volumes and prices.

Operating income recurring in the Middle East and Africa region amounted to 121 million euros, representing an increase of +19.6% as published compared with the 1st half of 2023. Excluding the energy passthrough impact, the operating margin grew by +320 basis points. Efficiencies and higher volumes across all businesses contributed to this improvement. The increase in prices, particularly in Industrial Merchant, also contributed to the margin improvement.

Engineering & Construction

Operating income recurring for Engineering & Construction amounted to 19 million euros in the 1st half of 2024, or 9.9% of sales, in line with medium-term business objectives.

Global Markets & Technologies

Operating income recurring for Global Markets & Technologies stood at 63 million euros, a slight decrease of -1.4% compared with the 1st half of 2023. The operating margin reached 16.4%, an increase of +20 basis points compared with the 1st half of 2023.

Research & Development and Corporate costs

Research & Development expenses and Corporate costs totaled 201 million euros, a rise of +6.4% compared with the 1st half of 2023.

NET PROFIT

Other operating income and expenses showed a net balance of -87 million euros in the 1st half of 2024. Other operating expenses amounted to -125 million euros and notably included restructuring costs. Other operating income amounted to 38 million euros and mainly reflected capital gains on the divestiture of businesses. As a reminder, in the 1st half of 2023, other operating income and expenses showed a positive net balance of 33 million euros which benefited from the sales of the Group’s stake in Hydrogenics.

Financial income and expenses amounted to -216 million euros, stable compared with -211 million euros in the 1st half of 2023. It included net finance costs of -129 million euros, up +9.3% compared to the 1st half of 2023, which benefited from the proceeds generated by the early redemption of bonds in US dollars. When excluding this exceptional proceeds from the 2023 comparison basis, net finance costs decrease by -7.8%. The average cost of net debt of 3.4% was only slightly higher than in the 1st half of 2023 (3,3%(13)), despite the increase in interest rates, 81%(14) of the Group’s gross debt being at fixed rates at the end of June 2024. Other financial income and expenses amounted to -87 million euros, compared to -93 million euros in the 1st half of 2023.

The tax expense was 543 million euros, corresponding to an effective tax rate of 23.6%, slightly up compared to the 1st half of 2023 (23.4%). These relatively low effective rates are explained by non-recurring items in the 1st half of 2024 and a reduced tax rate on the capital gain on the divestiture of the Group’s stake in Hydrogenics in the 1st half of 2023.

The share of profit of associates amounted to -5 million euros.

The share of minority interests in net profit totaled 69 million euros, up from 44 million euros in the 1st half of 2023, amount impacted by the impairment of an intangible asset in a company not 100% owned by the Group.

Net profit (Group share) amounted to 1,681 million euros in the 1st half of 2024, down -2.4% as published. In the absence of significant non-recurring items(15) in the 1st half of 2024, net profit recurring (Group share)(16) was also 1,681 million euros, up +3.3% on a reported basis. Excluding currency impact, net profit recurring (Group share)(16) was up by +16.0% and increased by +5.0% when excluding the contribution of Argentina.

Net earnings per share amounted to 2.92 euros per share, a decline of -2.3% compared with the 1st half of 2023, in line with the change in net profit (Group share) as published. Recurring net earnings per share were up +3.2%. The average number of outstanding shares used for the calculation of net earnings per share as of June 30, 2024 was 576,342,279.

Change in the number of shares

 

H1 2023

H1 2024

Average number of outstanding shares

575,808,001(a)

576,342,279

 

(a) Adjusted following the free share attribution in June 2024.

Change in Net debt

Cash flows from operating activities before changes in working capital amounted to 3,155 million euros during the 1st half of 2024, down by -1.7%. This amounted to a high level of 23.6% of sales. Calculated from a net profit showing a change of -2.4% as published, the -1.7% decrease of the cash flows from activities before changes in working capital is mainly explained by higher current taxes in the 1st half of 2024 compared with those of 2023 which benefited from favorable exceptional items.

The limited increase of 282 million euros in the working capital requirement (WCR) compared to December 31, 2023 reflects in particular the increase in helium reserves stored in the Group’s cavern in Germany, a decrease in trade payables due to the lower energy prices in the period and a slight increase in trade receivables. Net cash flows from operating activities after changes in working capital amounted to 2,845 million euros, a decrease of -3.9% compared with the 1st half of 2023.

Gross capital expenditure totaled 1,699 million euros. It includes payments on industrial investments in the amount of 1,656 million euros and financial investments in the amount of 43 million euros. The proceeds from sale of assets amounted to 97 million euros and notably include the divestiture of technological activities for the Aeronautics sector (Global Markets and Technologies). They compare with 252 million euros in the 1st half of 2023, which included the sale of the Group’s stake in Hydrogenics and of the Large Industries business in Trinidad and Tobago. Net capital expenditure(17) totaled 1,570 million euros.

Net debt at June 30, 2024 reached 10,156 million euros, a decrease of 394 million euros compared with June 30, 2023 and an increase of 935 million euros compared with December 31, 2023, following the payment of more than 1.7 billion euros in dividends in May. The net debt-to-equity ratio, adjusted for the seasonal effect of the dividend payment, reached 35.2%.

The return on capital employed after tax (ROCE) was 9.8% for the 1st half of 2024. At 10.7%, recurring ROCE(18) remained above the target of more than 10% in the Advance strategic plan, and was up sharply by +50 basis points compared to the 1st half of 2023.

Green Bond emission

  • Air Liquide has successfully issued a new 500 million euros green bond, in line with its ambition to combine growth and sustainable development. The Group intends to use the proceeds from the issuance to finance or refinance flagship energy transition and sustainable projects, in particular in low-carbon hydrogen, carbon capture and low-carbon air gases. This new issuance confirms Air Liquide as a regular ESG issuer, after its inaugural 2021 green bond issue.

Extra-financial performance

In the 1st half-year, the Group continued to decarbonize its assets by rolling out actions aligned with the three levers: low-carbon energy supply, asset management and CO2 capture.

In order to reduce its Scope 2 emissions, in the 1st half-year Air Liquide announced long-term power purchase agreements (PPAs) for the supply of 500 GWh of renewable electricity per year for its units in South Africa, Brazil and Germany.

The Group also decided on the electrification of a third Air Separation Unit in China, which will reduce its Scope 2 emissions by around 340,000 metric tons of CO2 per year. Air Liquide announced the construction of more energy efficient carrier gas units for an Electronics customer in Singapore and the United States.

In addition, the Group uses high-performance solutions to reduce its direct CO2 emissions (Scope 1). Thus, a CryocapTM carbon capture unit is under construction to decarbonize the Group’s largest hydrogen production unit in Europe.

Furthermore, in the 1st half-year, Air Liquide continued to develop projects that will significantly reduce the carbon footprint of its customers. In the United States, this includes the first phase of investment in a site for the production of large quantities of low-carbon air gases, allowing the customer to produce hydrogen with a low carbon footprint by capturing and sequestering 7 million metric tons of CO2 per year. In Europe, Air Liquide received support from the European Commission via a 160 million euro grant for the D'Artagnan project, the central link in the CO2 capture and sequestration chain, which aims to reduce emissions from the Dunkirk industrial basin (France) by 1.5 million metric tons per year.

Finally, in order to actively contribute to the decarbonization of mobility, the Group decided to invest in the logistics chain downstream of the Normand’Hy electrolyzer in France and created the TEAL joint venture with TotalEnergies, which aims to roll out more than 100 hydrogen refueling stations for trucks in Europe in the next 10 years.

Sustainable development

  • Air Liquide is taking a proactive approach in sustainable biomethane production with the adoption of an internal charter, defined in collaboration with various field experts and WWF France. With the release of this charter going beyond current regulations, the Group is committed to measure and track progress towards more sustainable production, while contributing to the development of a worldwide production framework.

INVESTMENT CYCLE

INVESTMENT DECISIONS AND INVESTMENT BACKLOG

In the 1st half of 2024, industrial and financial investment decisions amounted to 1,630 million euros, compared with 1,798 million euros in the 1st half of 2023.

The industrial investment decisions for the 1st half of 2024 reached 1,587 million euros. In Large Industries, they concern in particular the first investment phase for 120 million euros (out of a total of 850 million US dollars) for the major project announced with ExxonMobil in Baytown, Texas (United States). This involves building four large modular Air Separation Units (LMAs) as part of a long-term contract to supply low-carbon oxygen and nitrogen allowing the customer to produce, in particular, low-carbon hydrogen for the synthesis of ammonia and the decarbonization of existing facilities. These decisions also include the electrification of an existing Air Separation Unit (ASU) in China, which currently consumes steam produced by the customer from coal. It is the third ASU of this type to be electrified in China and will contribute to the reduction of CO2 emissions accounted for under Scope 2. In the Industrial Merchant business line, the decisions include on-site gas generation units, in particular two units to supply oxygen to a customer in the Pharmaceuticals sector in Europe, as well as investments in the production and distribution of argon in Europe and the United States. The development of the Electronics business continues, notably with the extension of advanced materials production units in the United States and Japan. Lastly, in the Global Markets and Technologies business, decisions mainly concern the logistics chain for hydrogen mobility, downstream of the Normand’Hy electrolyzer in France.

Financial investment decisions totaled 43 million euros in the 1st half of 2024. They included in particular several small acquisitions in Industrial Merchant in China, the United States, Canada and Italy. They also included a small acquisition in Europe in Home Healthcare and a capital contribution to the joint venture created with TotalEnergies, which will deploy a network of refueling stations for the hydrogen mobility of trucks in Europe.

The investment backlog maintained a very high level of 4.1 billion euros in the 1st half of 2024, compared to 3.5 billion euros in the 1st half of 2023. They consisted of more than 80 projects with a balanced geographical distribution. Large Industries accounted for nearly half of these investments and Electronics more than one third.

Investments

  • Air Liquide announced an investment of over 50 million euros to build a new innovative plant in Singapore and revamp its existing facilities in Malta (New York, U.S.), supplying high purity nitrogen to GlobalFoundries (GF). These Air Liquide projects will enable GlobalFoundries to benefit from higher energy efficiencies.

START-UPS

The main start-ups in the 1st half of 2024 included:
- to supply customers in Large Industries and Industrial Merchant: a major hydrogen and CO production unit integrating a CO2 capture and recycling system for Chemicals customers in China, a large air separation unit in the United States, and medium-sized units in Egypt, India and China;
- in the Electronics business, in particular, a large ultra-pure carrier gas plant in Japan and medium scale units in Taiwan and the United States.

The additional contribution to sales of unit start-ups and ramp-ups totaled 108 million euros in the 1st half of 2024. Over the year, it is expected to be between 230 and 250 million euros, a contribution slightly lower than that initially planned, volumes being lower in a context of soft demand and a limited number of start-ups of new units having been postponed for a few months. In 2025, the additional contribution to sales from unit ramp-ups and start-ups should be more than 250 million euros.

INVESTMENT OPPORTUNITIES

The portfolio of 12-month investment opportunities reached a record level of 4.0 billion euros at the end of June 2024. Projects at the heart of the energy transition represent more than 40% of the portfolio and are located mainly in the Americas, with notably the major project with ExxonMobil in Baytown, Texas (United States), and in Europe, where large electrolyzer and carbon capture projects are in an advanced development phase. Opportunities in Electronics are now spread across Asia, Europe and the United States. The portfolio of opportunities at more than 12 months is growing and has reached a very high level. It includes in particular significant projects in the energy transition and the Electronics sector.

RISK FACTORS

There was no change in risk factors during the first half. Risk factors are described in the 2023 Universal Registration Document on pages 72 to 89.

OUTLOOK

Air Liquide once again delivered a very solid financial performance in the first half of 2024 with a significant increase in its operating margin, supported by the acceleration of structural efficiencies. In a persistently subdued market environment, the Group recorded growth in sales on a comparable basis, reflecting the solidity of its business model. Air Liquide successfully continued the rollout of its ADVANCE strategic plan, for which the margin ambition was raised at the beginning of the year. At a time when the Group has never had so many opportunities related to the energy transition and to the growth of digital and artificial intelligence, it is also preparing for the future, simplifying its organization to improve its performance and developing major projects that will strengthen its long-term growth momentum.

In the first half of 2024, Group sales were up by +2.6% on a comparable basis(19), with a sequential improvement between the first and second quarters. On a published basis, sales were at -4.3%, due to negative currency impacts and lower energy prices - for which variations are contractually passed through to Large Industries customers. Gas & Services, which represent more than 95% of Group revenue, saw an increase of +2.6%(19) on a comparable basis in the first half of 2024, supported in particular by the dynamism of the Healthcare business and the Americas.

In line with its ADVANCE plan and raised performance ambition, Air Liquide achieved in the first half of 2024 a significant improvement of +100 basis points in its operating margin excluding the energy impact. Efficiencies have now reached 233 million euros, thanks to approximately 1,000 operational efficiency projects, to business portfolio management and to price adjustments in Industrial Merchant, based on the ability of the teams to create added value for its customers.

The Group’s net profit recurring(20) excluding currency impact rose by +16%, and +5% excluding the contribution of Argentina in the first half of 2024. The cash flows from operating activities before changes in working capital remained very strong with a ratio to sales of 24%, enabling financing of the investments needed for future growth. At 10.7% at the end of June, recurring ROCE(21) has continued to improve, exceeding 10% in line with the ADVANCE objectives.

The investment backlog remains at a very high level of 4.1 billion euros, and is well diversified in terms of geographies. The portfolio of 12-month investment opportunities increased to 4 billion euros, mainly in the Americas and Europe. More than 40% of these are related to the energy transition. The Group is thus successfully pursuing the development of large-scale projects, in particular in the fields of decarbonization 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(22).

APPENDICES

Performance indicators

Performance indicators used by the Group that are not directly defined in the financial statements have been prepared in accordance with the AMF position 2015-12 about alternative performance measures.

The performance indicators are the following:

  • Currency, energy and significant scope impacts

  • Comparable sales change and comparable operating income recurring change

  • Operating margin and operating margin excluding energy impact

  • Recurring net profit Group share

  • Recurring net profit excluding currency impact

  • Net Profit Excluding IFRS16

  • Net Profit Recurring Excluding IFRS16

  • Efficiencies

  • Return on Capital Employed (ROCE)

  • Recurring ROCE

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.

Calculation of performance indicators (Semester)

COMPARABLE SALES CHANGE AND COMPARABLE OPERATING INCOME RECURRING CHANGE

Comparable changes for sales and operating income recurring exclude the currency, energy and significant scope impacts described above.

(in millions of euros)

H1 2024

H1 2024/2023 Published Growth

Currency impact

Natural gas impact

Electricity impact

Significant scope impact

H1 2024/2023 Comparable Growth

Revenue

 

 

 

 

 

 

 

Group

13,379

-4.3%

(471)

(363)

(133)

0

+2.6%

Impacts in %

 

 

-3.4%

-2.6%

-0.9%

+0.0%

 

Gas & Services

12,796

-4.5%

(468)

(363)

(133)

0

+2.6%

Impacts in %

 

 

-3.4%

-2.8%

-0.9%

+0.0%

 

Operating Income Recurring

 

 

 

 

 

 

 

Group

2,601

+4.9%

(142)

-

-

0

+10.6%

Impacts in %

 

 

-5.7%

-

-

+0.0%

 

Gas & Services

2,719

+5.1%

(141)

-

-

0

+10.5%

Impacts in %

 

 

-5.4%

-

-

+0.0%

 

Contribution of Argentina is of +2.1% to the Group’s sales comparable growth and of +4.4% to the operating income recurring comparable growth. For the Gas & Services activity, the contributions are respectively +2.2% and +4.2%.

Contribution of Argentina is calculated by the difference between the amounts consolidated at Group level and these same amounts consolidated excluding data from Argentina. The same method applies to the Gas & Services activity.

OPERATING MARGIN AND OPERATING MARGIN EXCLUDING ENERGY IMPACT

The operating margin is the ratio of the operating income recurring divided by revenue. The operating margin excluding energy impact corresponds to the operating income recurring (not affected in absolute value by the cost of energy contractually re-invoiced to Large Industries customers) divided by revenue excluding the energy impact to which is attached the corresponding currency impact. The ratio of operating income recurring divided by the revenue (whether restated or not from the energy impact) is calculated with rounding to one decimal place. The variation between 2 periods is calculated as the difference between these rounded ratios, which can result in positive or negative differences compared to a more precise calculation, due to rounding.

 

 

H1 2024

Natural gas
impact(a)

Electricity
impact(a)

H1 2024
excluding energy
impact

Revenue

Group

13,379

(380)

(145)

13,904

 

Gas & Services

12,796

(380)

(145)

13,321

Operating Income Recurring

Group

2,601

 

 

2,601

 

Gas & Services

2,719

 

 

2,719

Operating Margin

Group

19.4%

 

 

18.7%

 

Gas & Services

21.2%

 

 

20.4%

 

(a) Including the currency impact attached to the considered energy impact.

RECURRING NET PROFIT GROUP SHARE AND RECURRING NET PROFIT GROUP SHARE EXCLUDING CURRENCY IMPACT

The recurring net profit Group share corresponds to the net profit Group share excluding exceptional and significant transactions that have no impact on the operating income recurring.

 

H1 2023

H1 2024

2024/2023
variation

(A) Net Profit (Group Share) - As Published

1,721.6

1,680.9

-2.4%

(B) Exceptional and significant transactions after-tax with no impact on OIR

 

 

 

- Sales of Group stake in Hydrogenics

156.5

 

 

- Impairment of an intangible asset and of assets held for sale

(61.6)

 

 

(A) - (B) = Net Profit Recurring (Group Share)

1,626.7

1,680.9

+3.3%

(C) Currency impact

 

(205.9)

 

(A) - (B) - (C) = Net Profit Recurring (Group Share) excluding currency impact

 

1,886.8

+16.0%

The net profit recurring (Group share) excluding currency impact is up +5.0% when excluding the contribution of Argentina. Contribution of Argentina is calculated by the difference between the amounts consolidated at Group level and these same amounts consolidated excluding data from Argentina.

NET PROFIT EXCLUDING IFRS16 AND NET PROFIT RECURRING EXCLUDING IFRS16

Net Profit excluding IFRS16:

 

H1 2023

FY 2023

H1 2024

(A) Net Profit as Published

1,765.6

3,188.4

1,749.6

(B) = IFRS16 Impact(a)

(7.1)

(17.8)

(15.5)

(A) - (B) = Net Profit excluding IFRS16

1,772.7

3,206.2

1,765.1

 

(a) The IFRS16 impact includes the reintegration of leasing expenses, less depreciation and other financial expenses booked in relation to IFRS16.

Net Profit Recurring excluding IFRS16:

 

H1 2023

FY 2023

H1 2024

(A) Net Profit as Published

1,765.6

3,188.4

1,749.6

(B) Exceptional and significant transactions after-tax with no impact on OIR

70.2

(266.1)

0.0

(A) - (B) = Net Profit recurring

1,695.4

3,454.5

1,749.6

(C) IFRS16 Impact(a)

(7.1)

(17.8)

(15.5)

(A) - (B) - (C) = Net Profit recurring excluding IFRS16

1,702.5

3,472.3

1,765.1

 

(a) The IFRS16 impact includes the reintegration of leasing expenses, less depreciation and other financial expenses booked in relation to IFRS16.

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...).

RETURN ON CAPITAL EMPLOYED - ROCE

Return on capital employed after tax is calculated based on the Group’s consolidated financial statements, by applying the following ratio for the period in question.

For the numerator: net profit excluding IFRS16 - net finance costs after taxes for the period in question.

For the denominator: the average of (total shareholders' equity excluding IFRS16 + net debt) at the end of the past three half-years.

(in millions of euros)

H1 2023
(a)

FY 2023
(b)

H1 2024
(c)

ROCE
Calculation

Numerator

(b)-(a)+(c)

Net Profit Excluding IFRS16

1,772.7

3,206.2

1,765.1

3,198.6

Net Finance costs

(118.4)

(265.5)

(129.5)

(276.6)

Effective Tax Rate(a)

23.9%

23.6%

24.2%

 

Net Finance costs after tax

(90.1)

(202.9)

(98.1)

(211.0)

Net Profit - Net financial costs after tax

1,862.8

3,409.1

1,863.2

3,409.6

Denominator

((a)+(b)+(c))/3

Total Equity Excluding IFRS16

24,110.1

25,117.5

25,503.1

24,910.2

Net Debt

10,550.4

9,220.9

10,156.2

9,975.8

Average of (total equity + net debt)

34,660.5

34,338.4

35,659.3

34,886.0

ROCE

 

 

 

 

9.8%

 

(a) excluding non-recurring tax impact

RECURRING ROCE

The recurring ROCE is calculated in the same manner as the ROCE using the recurring net profit excluding IFR16 for the numerator.

(in millions of euros)

H1 2023
(a)

FY 2023
(b)

H1 2024
(c)

Recurring ROCE
Calculation

Numerator

(b)-(a)+(c)

Net Profit Recurring Excluding IFRS16

1,702.5

3,472.3

1,765.1

3,534.9

Net Finance costs

(118.4)

(265.5)

(129.5)

(276.6)

Effective Tax Rate(a)

23.9%

23.6%

24.2%

 

Net Finance costs after tax

(90.1)

(202.9)

(98.1)

(211.0)

Recurring Net Profit Excluding IFRS16

- Net financial costs after tax

1,792.6

3,675.2

1,863.2

3,745.8

Denominator

((a)+(b)+(c))/3

Total Equity Excluding IFRS16

24,110.1

25,117.5

25,503.1

24,910.2

Net Debt

10,550.4

9,220.9

10,156.2

9,975.8

Average of (total equity + net debt)

34,660.5

34,338.4

35,659.3

34,886.0

Recurring ROCE

 

 

 

 

10.7%

 

(a) excluding non-recurring tax impact

Calculation of performance indicators (Quarter)

 

Q2 2024

Q2 2024/2023
Published
Growth

Currency
impact

Natural gas
impact

Electricity
impact

Significant
scope impact

Q2 2024/2023
Comparable
Growth

Revenue

 

 

 

 

 

 

 

Group

6,729

-1.2%

(190)

(65)

(37)

-

+3.1%

Impacts in %

 

 

-2.8%

-1.0%

-0.5%

-

 

Gas & Services

6,438

-1.1%

(191)

(65)

(37)

-

+3.4%

Impacts in %

 

 

-2.9%

-1.0%

-0.6%

-

 

2nd quarter 2024 revenue

BY GEOGRAPHY

Revenue

(in millions of euros)

Q2 2023

Q2 2024

Published change

Comparable change

Americas

2,530

2,625

+3.8%

+9.5%

Europe

2,336

2,225

-4.8%

-1.0%

Asia Pacific

1,378

1,302

-5.5%

-0.7%

Middle East & Africa

268

286

+6.6%

+4.0%

Gas & Services Revenue

6,512

6,438

-1.1%

+3.4%

Engineering & Construction

93

105

+13.2%

+13.1%

Global Markets & Technologies

201

186

-8.0%

-8.5%

GROUP REVENUE

6,806

6,729

-1.2%

+3.1%

BY WORLD BUSINESS LINE

Revenue

(in millions of euros)

Q2 2023

Q2 2024

Published change

Comparable change

Large industries

1,858

1,721

-7.4%

+1.2%

Industrial Merchant

3,012

3,024

+0.4%

+2.5%

Healthcare

1,018

1,070

+5.0%

+10.2%

Electronics

624

623

-0.1%

+2.6%

GAS & SERVICES REVENUE

6,512

6,438

-1.1%

+3.4%

Geographic and segment information

 

H1 2023

H1 2024

(in millions of euros and %)

Revenue

Operating
income
recurring

OIR margin

Revenue

Operating
income
recurring

OIR margin

Americas

5,159

1,029

19.9%

5,175

1,112

21.5%

Europe

4,975

846

17.0%

4,475

922

20.6%

Asia Pacific

2,763

611

22.1%

2,593

564

21.7%

Middle East and Africa

508

101

20.0%

553

121

21.9%

Gas & Services

13,405

2,587

19.3%

12,796

2,719

21.2%

Engineering and Construction

180

18

9.9%

197

19

9.9%

Global Markets & Technologies

395

64

16.2%

386

63

16.4%

Reconciliation

-

(188)

-

-

(201)

-

TOTAL GROUP

13,980

2,481

17.7%

13,379

2,601

19.4%

Contribution from Argentina
to comparable sales growth
(in %)

Large
Industries

Industrial
Merchant

Healthcare

Electronics

Total G&S

Americas

 

 

 

 

 

Q2 2024

+8.1%

+3.9%

+21.7%

-

+6.2%

H1 2024

+7.9%

+3.7%

+18.9%

-

+5.7%

Gas & Services

 

 

 

 

 

H1 2024

+1.6%

+2.2%

+4.9%

-

+2.2%

Contribution of Argentina is calculated by the difference between the amounts consolidated at Gas & Services level and these same amounts consolidated excluding data from Argentina.

 

H1
2024/2023
Published

Energy impact

Forex impact

H1 2024/2023 comparable

Growth (in %)

Group

Group

 

Argentina
impact

 

Excl.
Argentina

Group

 

Argentina
impact

 

Excl.
Argentina

Group

 

Argentina
impact

 

Excl.
Argentina

Revenue

-4.3%

-3.5%

 

+0.4%

 

-3.9%

-3.4%

 

-2.3%

 

-1.1%

+2.6%

 

+2.1%

 

+0.5%

Operating Income Recurring

+4.9%

 

 

 

 

 

-5.7%

 

-4.3%

 

-1.4%

+10.6%

 

+4.4%

 

+6.2%

Group OIR margin
excluding energy impact

 

 

 

 

 

 

 

 

 

 

 

+100 bps

 

No impact

Recurring net profit

+3.3%

 

 

 

 

 

 

 

 

 

 

+16.0%

 

+11.0%

 

+5.0%

Consolidated income statement

(in millions of euros)

H1 2023

H1 2024

Revenue

13,980.3

13,378.6

Other income

115.3

138.4

Purchases

(5,736.8)

(4,975.4)

Personnel expenses

(2,545.8)

(2,598.6)

Other expenses

(2,103.1)

(2,114.9)

Operating income recurring before depreciation and amortization

3,709.9

3,828.1

Depreciation and amortization expenses

(1,229.2)

(1,227.0)

Operating income recurring

2,480.7

2,601.1

Other non-recurring operating income

205.3

37.8

Other non-recurring operating expenses

(172.3)

(125.2)

Operating income

2,513.7

2,513.7

Net finance costs

(118.4)

(129.5)

Other financial income

9.8

3.5

Other financial expenses

(102.8)

(90.4)

Income taxes

(538.6)

(542.6)

Share of profit of associates

1.9

(5.1)

PROFIT FOR THE PERIOD

1,765.6

1,749.6

- Minority interests

44.0

68.7

- Net profit (Group share)

1,721.6

1,680.9

Basic earnings per share (in euros)(a)

2.99

2.92

(a) Adjusted following the free share attribution in June 2024.

Consolidated balance sheet

ASSETS (in millions of euros)

December 31, 2023

June 30, 2024

Goodwill

14,194.2

14,447.1

Other intangible assets

1,631.3

1,648.6

Property, plant and equipment

23,652.2

24,529.9

Non-current assets

39,477.7

40,625.6

Non-current financial assets

696.7

728.8

Investments in equity affiliates

180.1

176.1

Deferred tax assets

225.2

266.6

Fair value of non-current derivatives (assets)

35.1

29.8

Other non-current assets

1,137.1

1,201.3

TOTAL NON-CURRENT ASSETS

40,614.8

41,826.9

Inventories and work-in-progress

2,027.6

2,080.4

Trade receivables

2,993.7

3,075.1

Other current assets

862.7

908.3

Current tax assets

42.9

78.3

Fair value of current derivatives (assets)

70.7

39.5

Cash and cash equivalents

1,624.9

1,785.3

TOTAL CURRENT ASSETS

7,622.5

7,966.9

ASSETS HELD FOR SALE

95.1

97.9

TOTAL ASSETS

48,332.4

49,891.7

EQUITY AND LIABILITIES (in millions of euros)

December 31, 2023

June 30, 2024

Share capital

2,884.8

3,179.7

Additional paid-in capital

2,447.7

2,057.5

Retained earnings

16,063.7

17,987.4

Treasury shares

(152.7)

(208.4)

Net profit (Group share)

3,078.0

1,680.9

Shareholders' equity

24,321.5

24,697.1

Minority interests

721.6

716.2

TOTAL EQUITY

25,043.1

25,413.3

Provisions, pensions and other employee benefits

2,004.8

1,941.6

Deferred tax liabilities

2,329.0

2,447.0

Non-current borrowings

8,560.5

8,120.2

Non-current lease liabilities

1,046.3

1,102.5

Other non-current liabilities

454.7

468.2

Fair value of non-current derivatives (liabilities)

48.0

31.0

TOTAL NON-CURRENT LIABILITIES

14,443.3

14,110.5

Provisions, pensions and other employee benefits

363.8

440.4

Trade payables

3,310.5

3,188.7

Other current liabilities

2,310.1

2,291.1

Current tax payables

236.4

294.6

Current borrowings

2,285.3

3,821.3

Current lease liabilities

219.7

227.4

Fair value of current derivatives (liabilities)

76.2

50.8

TOTAL CURRENT LIABILITIES

8,802.0

10,314.3

LIABILITIES HELD FOR SALE

44.0

53.6

TOTAL EQUITY AND LIABILITIES

48,332.4

49,891.7

Consolidated cash flow statement

(in millions of euros)

1st half 2023

1st half 2024

Operating activities

 

 

Net profit (Group share)

1,721.6

1,680.9

Minority interests

44.0

68.7

Adjustments:

 

 

? Depreciation and amortization expense

1,229.2

1,227.0

? Changes in deferred taxes

66.3

(25.8)

? Changes in provisions

115.9

(10.3)

? Share of profit of equity affiliates

(1.9)

5.1

? Profit/loss on disposal of assets

(149.4)

33.8

? Net finance costs

90.7

91.7

? Other non cash items

94.4

83.8

Cash flow from operating activities before changes in working capital

3,210.8

3,154.9

Changes in working capital

(298.4)

(282.0)

Other cash items

47.9

(28.1)

Net cash flows from operating activities

2,960.3

2,844.8

Investing activities

 

 

Purchase of property, plant and equipment and intangible assets

(1,713.9)

(1,656.3)

Acquisition of consolidated companies and financial assets

(31.7)

(42.7)

Proceeds from sale of property, plant and equipment and intangible assets

34.8

22.7

Proceeds from the sale of subsidiaries, net of net debt sold and from the sale of financial assets

252.2

97.1

Dividends received from equity affiliates

1.2

11.0

Net cash flows used in investing activities

(1,457.4)

(1,568.2)

Financing activities

 

 

Dividends paid

 

 

? L'Air Liquide S.A.

(1,578.4)

(1,715.1)

? Minority interests

(34.0)

(56.1)

Proceeds from issues of share capital

20.4

22.8

Purchase of treasury shares

(82.6)

(174.3)

Net financial interests paid

(135.4)

(134.2)

Increase (decrease) in borrowings

238.7

1,104.3

Lease liabilities repayments

(116.2)

(116.6)

Net interests paid on lease liabilities

(18.3)

(21.4)

Transactions with minority shareholders

(8.4)

(1.7)

Net cash flows from (used in) financing activities

(1,714.2)

(1,092.3)

Effect of exchange rate changes and change in scope of consolidation

(39.8)

(19.0)

Net increase (decrease) in net cash and cash equivalents

(251.1)

165.3

NET CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD

1,760.9

1,403.6

NET CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD

1,509.8

1,568.9

The analysis of net cash and cash equivalents at the end of the period is as follows:

(in millions of euros)

June 30, 2023

December 31, 2023

June 30, 2024

Cash and cash equivalents

1,712.2

1,624.9

1,785.3

Bank overdrafts (included in current borrowings)

(202.4)

(221.3)

(216.4)

NET CASH AND CASH EQUIVALENTS

1,509.8

1,403.6

1,568.9

Net debt calculation

(in millions of euros)

June 30, 2023

December 31, 2023

June 30, 2024

Non-current borrowings

(8,762.1)

(8,560.5)

(8,120.2)

Current borrowings

(3,500.5)

(2,285.3)

(3,821.3)

TOTAL GROSS DEBT

(12,262.6)

(10,845.8)

(11,941.5)

Cash and cash equivalents

1,712.2

1,624.9

1,785.3

TOTAL NET DEBT AT THE END OF THE PERIOD

(10,550.4)

(9,220.9)

(10,156.2)

Statement of changes in net debt

(in millions of euros)

H1 2023

FY 2023

 

H1 2024

Net debt at the beginning of the period

(10,261.3)

(10,261.3)

(9,220.9)

Net cash flows from operating activities

2,960.3

6,263.0

2,844.8

Net cash flows used in investing activities

(1,457.4)

(3,079.0)

(1,568.2)

Net cash flows used in financing activities excluding changes in borrowings

(1,817.6)

(2,041.6)

(2,062.4)

Total net cash flows

(314.7)

1,142.5

(785.8)

Effect of exchange rate changes, opening net debt of newly acquired companies and others

171.5

150.6

(42.8)

Adjustment of net finance costs

(145.9)

(252.7)

(106.7)

Change in net debt

(289.1)

1,040.4

(935.3)

NET DEBT AT THE END OF THE PERIOD

(10,550.4)

(9,220.9)

(10,156.2)

Sales, Operating Income Recurring 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

H1 2024 split of revenue and comparable growth in %

Total

Large Industries

Industrial
Merchant

Electronics

Healthcare

Americas

100%

14%

70%

5%

11%

+7.9%

+8.1%

+5.5%

+9.2%

+23.3%

Europe

100%

32%

34%

2%

32%

-1.3%

-1.7%

-5.2%

N.C.

+4.4%

Asia Pacific

100%

35%

28%

33%

4%

-0.8%

-0.9%

-0.6%

-0.6%

N.C.

Middle-East and Africa

100%

N.C.

N.C.

N.C.

N.C.

+7.1%

 

 

 

 

Gas & Services

100%

27%

47%

9%

17%

+2.6%

+1.1%

+2.0%

+0.3%

+9.1%

Engineering & Construction

+9.9%

 

 

 

 

Global Markets & Technologies

-2.0%

 

 

 

 

GROUP TOTAL

+2.6%

 

 

 

 

N.C.: Not communicated.

Operating Income Recurring

Operating margin in %(a)

Operating Income Recurring in million euros

H1 2023

H1 2024

 

2024/2023
excluding energy
impact

Operating Income
Recurring H1 2024

Americas

19.9%

21.5%

 

+120 bps

1,112

Europe

17.0%

20.6%

 

+170 bps

922

Asia Pacific

22.1%

21.7%

 

-50 bps

564

Middle-East and Africa

20.0%

21.9%

 

+320 bps

121

Gas & Services

19.3%

21.2%

 

+110 bps

2,719

Engineering & Construction

10.0%

9.9%

 

-10 bps

19

Global Markets & Technologies

16.2%

16.4%

 

+20 bps

63

Reconciliation

 

 

 

 

(201)

GROUP

17.7%

19.4%

 

+100 bps

2,601

 

 

(a) Operating income recurring / revenue as published.

Investments

in billion euros

H1 2024

12-month portfolio of investment opportunities(a)

4.0

Investment decisions(b)

1.6

Investment backlog(a)

4.1

Additional contribution to revenue of unit start-ups and ramp-ups(b) (in million euros)

108

 

(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.

UPCOMING EVENTS

2024 3rd Quarter Revenue:
October 23, 2024

Air Liquide is a world leader in gases, technologies and services for industry and healthcare. Present in 60 countries with 66,300 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 27.5 billion euros in 2023. 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 See appendix for impact of Argentina.
2 Excluding exceptional and significant transactions that have no impact on the operating income recurring, see reconciliation in appendix.
3 Cash flows from operating activities before changes in working capital.
4 Based on the recurring net pro?t, see reconciliation 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.
6 See impact of Argentina in Appendix.
7 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.
8 Including a contribution of Argentina for +4.4%.
9 See definition and reconciliation in appendix.
10 See impact of Argentina in Appendix.
11 Including a contribution of Argentina for +4.4%.
12 See definition in appendix.
13 The average cost of net debt in the 1st half of 2023 does not include the exceptional proceeds related to the early redemption of bonds denominated in US dollars.
14 Temporary increase of Commercial papers (variable rate) in a context of potential liquidity tensions.
15 With no impact on operating income recurring.
16 See definition and reconciliation in appendix.
17 Including transactions with minority shareholders and dividends received from equity affiliates.
18 See definition and reconciliation in appendix.
19 See appendix for impact of Argentina.
20 Excluding exceptional and significant transactions that have no impact on the operating income recurring, see reconciliation in appendix.
21 Based on the recurring net profit, see reconciliation in appendix.
22 Operating margin excluding energy passthrough impact. Recurring net profit 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/20240725996139/en/

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